THE STATE OF OUR ECONOMY -- (House of Representatives - September 07, 2004)
The SPEAKER pro tempore (Mr. King of Iowa). Under the Speaker's announced policy of January 7, 2003, the gentleman from New Jersey (Mr. Pallone) is recognized for 60 minutes as the designee of the minority leader.
Mr. PALLONE. Mr. Speaker, I listened attentively to my Republican colleague's remarks, and I do have a great deal of respect for the gentleman, but I have to take issue, I should say, with some of the comments he made.
First of all, as much as he discussed about how the situation has improved in Iraq, and I am not sure that that is the case, but he did talk about how the U.S. has spent so much money on Iraq, in reconstruction in Iraq, and hospitals, schools, other activities, the bottom line is that much of that money I think would have been better spent here.
When I was home during the district work period, I think most people know that the Congress was in recess from the end of July during the time of the Democratic convention until last week during the Republican convention, and I heard constantly in my district office at the forums that I held, at the open houses at my offices, about the problems that Americans were facing, people who had lost their jobs, people who had tried to find another job and found another job that paid less or did not provide the same benefits, people who had lost their health insurance; and I really do not believe that the situation the gentleman described about the economy is at all rosy.
The economy is not doing well. The average person is really feeling squeezed because what is happening is they work harder, and, as the gentleman mentioned, productivity is up, but wages are not keeping up with it, and Americans find themselves working harder, earning less money, and facing increased costs for gas, schools to send their kids to college, and health insurance.
They are really not very optimistic about the future of the economy, because the situation seems to be getting worse over the last 4 years.
So this evening I wanted to really pose, and I see some of my colleagues are here, so I would like to start with some of them, but I would really like to pose the question about whether or not over the last 4 years Americans' lives have improved or gotten worse. I think for most people, the answer is definitely that they have gotten worse.
When you ask people are they better off today than they were 4 years ago when President Bush began his Presidency, the answer is no, they are not better off. I realize that my Republican colleagues spend a lot of time talking about how the situation has improved in Iraq; but, frankly, I think in many ways the money that has been spent in Iraq for reconstruction, for sewers, for hospitals, for education, has been spent at the expense of what could be done here, because as we know, many Americans really face increased costs and the inability to access health insurance, the inability to send their kids to the college of their choice, the inability in many cases even to be able to find an apartment or to pay for the gas so they can go to work.
I know that I do not want to always be pessimistic, I like to think optimistically, but the picture that the Republicans paint and the picture painted at the Republican convention last week about a rosy America and things getting better and jobs being more available, these things just simply are not true. The economy is not doing well. The job situation is not good. Most importantly, Americans feel increasingly that they work harder and that they have to pay more and that they get less.
I have some of my colleagues here tonight. I see the gentlewoman from Texas (Ms. Jackson-Lee) is here. I know she also waited through the last hour listening to our Republican speaker. I would like to yield to her at this time.
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Mr. PALLONE. Mr. Speaker, reclaiming my time, I have to say, when I had the open houses, and at my typical open house I will have 100 people show up at one of my offices, that was the biggest concern. People had lost their health insurance, were not able to get it on the job anymore.
Again, the problem that I see is that this Bush administration talks about how they are going to improve access to health insurance, how they are going to improve access to college, No Child Left Behind. But when you talk to the people, the reality is things are getting worse on every one of these fronts. We saw statistics 2 weeks ago, a report came out, that said we started out with 40 million uninsured 4 years ago. Now it is 45 million. Just an example.
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Mr. PALLONE. Mr. Speaker, reclaiming my time, I just wanted to say if you listen to the President during his acceptance speech at the convention, he said that he was going to do all these things for seniors. Of course, he trumpeted the so-called prescription drug benefit that kicks in in 2 years, in 2006, which I think is a sham.
But when asked about this 17 percent increase in premiums for Medicare part B, he said, oh, that is because health care costs have gone up. But what he neglected to mention was the biggest factor in this increase is the fact that with that prescription drug so-called benefit, which you and I realize is really not going to be a benefit in 2 years, so much money has gone to the insurers that that is resulting in the part B increase in premium going up 17 percent. There is a link between the two.
So, once again, they say we are going to help the seniors, and the reality is that their health care costs are going up tremendously. We have not had an increase like that in part B in anybody's memory. I do not know if there has ever been that much of an increase. A lot of it is linked to this sham Medicare prescription drug benefit because so much money is going to the insurers and not actually coming back to the seniors, not to mention it does not even go into effect for a couple of years.
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Mr. PALLONE. Mr. Speaker, I want to thank the gentlewoman. I know I started out asking the question, are you better off than you were 4 years ago, and I was primarily focusing on it from an economic point of view. But as the gentlewoman points out, from a security point of view as well, we can easily say that in the aftermath of 9-11, we can say that the recommendations of the 9-11 Commission and the idea of making the homeland more secure, we can really not make the case that that has happened either under this administration, so I think that is a good point that the gentlewoman makes.
I yield to the gentlewoman from Illinois.
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Mr. PALLONE. Mr. Speaker, I appreciate the gentlewoman's comments, because we need to point to personal examples to show how the policies of this administration are impacting real people, and I think that that is really one of the best. I am sure that is one of those tax loopholes that was put into the jobs bill, or whatever that bill was called, the tax bill of the Committee on Ways and Means at the request of the small aircraft companies, and it is just incredible.
I want to yield to the gentleman from Maine, but first, one of the people that came into my office when I had an open house one day, and I said it was mostly about health care and the loss of health insurance, was a guy from Edison, New Jersey, which is my largest town, and he worked for the Frigadaire plant, which made refrigerators, air conditioners, that kind of thing, and the plant closed this year and there were 1,500 jobs, they all went to China. And he came to my office because under the Job Retraining Act or something that Republicans, whenever they pass these trade bills, they say oh, do not worry, because we are going to provide all kinds of retraining. And as my colleagues know, President Bush has cut all of the retraining money, so whatever was promised out there when you lost your job that you are going to get retrained, most of that has disappeared. In New Jersey, it has pretty much dried up, the Federal dollars.
So he came in and he actually found a job which paid a little less and did not have quite the benefits of the one he lost, but still was a pretty good job. In order to get it, he had to go through some training program that was supposedly funded by the Federal Government. When he showed up at the training program, they told him that the money had been cut, there was not any more money. So he actually lost the job. It was an opportunity to find a job that paid a reasonable amount, and he lost the job because the training money was not there.
Every promise that we get from this administration, whether it is prescription drugs, or expanded health care, or more opportunities for college, or retraining, if you lose your job, it just all ends up being not true.
I mean I do not know how to say it. I do not want to say it is a lie, but it is just not true. The funding is not there, the programs are not there. It is just a lot of hype, and that is what we are getting and continue to get from this administration. But I want to thank the gentlewoman for providing a really good example. Thanks.
I yield to the gentleman from Maine, one of our champions on the health care issue.
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Mr. PALLONE. Mr. Speaker, I thank the gentleman. One of the things, before me there was a Republican who spoke, and somebody that I admire a great deal, but he cited the reasons why the Republicans feel the economy is getting better. And some of them I thought were so off base. The one that was the most off base was he talked about how productivity had increased over the last 4 years. And that is true. But the problem is it has not benefited the worker.
In other words, when I was home in New Jersey, not only did I hear from people about how they had lost their job or they had lost their health insurance, but I also heard, I found another job, I have a job, but I have to work harder and I am not getting paid as much. And that is the other reality, which is that, yes, productivity is going up, people are working harder, but they are not benefiting from it. Their real wages have decreased significantly over the last 4 years, and they do not have the pension benefits, and they do not have the health insurance benefits.
And my colleague, again, some of the things that the Republican colleague said I agreed with. He talked about character and how important it was for people to have good character and a sense of responsibility. And I think that is all true, but we are talking about people who are willing to work, in many cases work harder by his own acknowledgement than they did 4 years ago, but they should benefit from that. They should not be faced with less income in real dollars or the inability to pay for health insurance.
It is one thing to talk about character. I think Americans have a lot of character in the sense of responsibility, but they just find themselves working two jobs and in some cases three jobs and not bringing home the same amount of money in real terms that they were 4 years ago. That is the tragedy of it. It really is.
I yield to the gentleman.
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Mr. PALLONE. Mr. Speaker, I wanted to mention one other thing. I was so glad my colleague mentioned about the housing market, because one of the other things that the Republican Member who preceded us talked about as to why things were better was he talked about low interest rates and linked that to homeownership. Of course, I am not advocating higher interest rates. I think that low interest rates are a good thing, although they have actually gone up a little bit in the last couple of months. But my colleague pointed out how often times, and this is certainly true where I am in my district in New Jersey, that people simply cannot afford the homeownership, even with the lower interest rates.
And what I find is happening where I am in New Jersey, I live along the coast, so the housing market has gotten so ridiculous in terms of the price of a home or even an apartment or a condo or co-op, that what is happening is any new construction is being purchased by people who have a lot of money for investment. So the people who need a new home are not able to afford it, but the people that are buying the homes are investors, or a condo or co-op unit, who then seek to rent it out or something.
And I am not saying this is always the case, but my colleague is right about the prices for homes. It is just completely out of reach. What is happening is that the people who live in my hometown of Long Branch, but it is not just Long Branch, are traditionally losing their homes and have to leave. And I do not know where they are going, certainly going to leave the district because they simply cannot afford the high prices.
So even though low interest rates help many times, they help the wealthier person who will buy a second or third home rather than the younger person who is trying to buy something because they cannot afford the prices. It is absolutely true.
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Mr. PALLONE. Mr. Speaker, I thank the gentleman for coming. He is always out there in front on all the health care issues and certainly tonight was no different in that respect.
Mr. Speaker, I wanted to go back to this issue that I mentioned a couple times this evening about how people are working harder but not sharing in the gains. And I particularly mention this because I guess 2 days ago was Labor Day and my Republican colleague tonight talked about productivity and increased productivity, that that was such a positive value in the economy.
There was an article in the New York Times that was actually on Labor Day this past Monday, that was essentially trying to highlight this issue of increased productivity, or Americans working harder but not sharing in the gains. It was an op-ed piece by Bob Herbert that was entitled "An Economy That Turns American Values Upside Down." Why Americans are "working harder but not sharing in the gains."
I thought that that was so relevant because it kind of goes back to the whole issue of the middle-class squeeze that many of my Democrat colleagues were talking about tonight. I just wanted to reference certain sections of this article by Bob Herbert because I thought it was so much on point.
He begins by saying that the Labor Department reported last week that 144,000 payroll jobs were created in August. And he wants to put that, of course, in perspective: "The number was below market forecasts. It was also below the number of jobs needed to accommodate the growth in the unemployment age population. In short, this was not good news. It is only by the diminished job creation standards that have prevailed since the last recession that any positive spin could be put on last month's performance."
President Bush has been out there talking about how great it was that these 144,000 jobs were created in August. And what Bob Herbert is saying is that this is a spin that has been put on it when the reality is that over the last 4 years we have lost so many jobs.
He says, and I quote again, "After almost 3 years of recovery, our job market is still too weak to broadly distribute the benefits of the growing economy. Unemployment is essentially unchanged, job growth is stalled, and real wages have started to fall behind inflation. Prolonged weakness in the labor market has left the Nation with over 1 million fewer jobs than when the recession began."
Of course, when President Bush first took office, this is the worst position in terms of recouping lost jobs in any business cycle since the 1920s. Essentially we have to go back to Herbert Hoover in order to see a situation where so many jobs have been lost.
Then Herbert goes on to say what is happening is nothing less than a deterioration in this standard of living in the United States. And this is what I really wanted to talk about is that regardless of the number of jobs, the bottom line is that the standard of living is going down because people have to work harder and make less money.
He says, "Despite the statistical growth in the economy, the continued slack in the labor market has resulted in a decline in real wages for anxious American workers and a marked deterioration in job quality."
From 2000 through 2003, there was a $1,500 loss in median household income, or basically a 3.4 percent decrease. We have a 3.4 percent loss in real income juxtaposed with a jump in productivity. "This is the part of the story that spotlights the unfairness at the heart of the current economic setup in the U.S. While workers have been remarkably productive in recent years, they have not participated in the benefits of their own increased productivity. That does not sound much like the American way.
"Today's workers have lost power in many different ways through the slack labor market, government policies that favor corporate interests, the weakening of unions, the growth of lower-paying service industries, global trade capital mobility, the declining real value of the minimum wage, immigration and so on.
"The end result of all this is a trait of American families struggling just to hang on rather than to get ahead. The benefits of productivity gains in economic growth are flowing to profits, not worker compensation. The fat cats are getting fatter while workers, at least for the time being, are watching the curtain come down on the heralded American dream."
I mean, I understand what my Republican colleague said earlier when he was trying to paint a rosy picture of the economy getting better. I do not even think that is true, but the bottom line is, regardless of any growth in the economy, it is not benefiting the average worker. That is why when we go home, myself and my Democratic colleagues, and we hear from our constituents, they are very pessimistic about the future because they realize that even if they have a job, that they are working harder and not making any more money in real terms and the prices for everything continue to go up.
Mr. Speaker, in the time that I have left, I just wanted to be critical, because I do not know how else to put it, of the President and the Republican convention and the way they portrayed the sort of rosy picture about America.
If you think about it, 24 years ago when Ronald Reagan was running for President, he asked American people the same question that I asked tonight, and that is, are you better off today than you were 4 years ago, but last week at the Republican national convention, every speaker that came to the podium simply ignored that question. President Bush refused to highlight any meaningful domestic accomplishments in his acceptance speech at the Republican convention.
My question, Mr. Speaker, is why are Republicans so afraid to ask the American people if they are better off than they were 4 years ago, and I think that the reason is because both the President, as well as the congressional Republicans, are smart enough to realize that if they ask the American people that question the answer for the most part would be a resounding, no, we are not better off. This is what my Democratic colleagues were saying this evening.
In fact, Mr. Speaker, President Bush's leadership on the economy has been lacking since the very early days of his administration, and I just want to get into some of these statistics about the job losses because I think they are so important.
As I said, last Friday the Department of Labor announced that 144,000 jobs were created during the month of August. That number is more than 100,000 jobs fewer than the 250,000 jobs the Bush administration estimated would be created each month this year. Over the last three months, the administration has not come close to hitting any of these estimates.
President Bush will certainly now be the first President since the Great Depression, since Herbert Hoover, to have lost jobs on his watch. Unless the economy creates 900,000 over the next few months, which is not possible really, the President will not have created one net job over the last 4 years, and if we contrast that with the economic record of President Clinton, before President Bush, Clinton created more than 20 million net jobs during his 8 years in office.
It is no wonder that the Republicans do not want to talk about their economic record and did not talk about it last week at the Republican National Convention.
Last year when the President was touting another round of his tax cuts, which I think clearly benefited the elite and more than the average American, the White House predicted that the cuts would create 2.1 million jobs in the 7 months after the passage of that tax cut bill. But what actually happened during that period? Only 296,000 jobs were created, 1.8 million short of the President's prediction. There is no indication that the tax cuts are helping the economy or that they are helping create jobs, none whatsoever.
The economic reports were so bad that President Bush's advisers refused to endorse the President's own Economic Report in which the administration predicted 2.6 million jobs would be created this year, and I think it is a good thing that the administration backed away from those estimates because there is no way its policies can create 2.6 million jobs this year.
One of my Democratic colleagues tonight talked about outsourcing, and I think that is an important factor in the issue of job loss under this administration. One of the major reasons for the current job recession is the increased exporting of high-paying, white and blue collar jobs overseas.
I mentioned an example with the gentleman who came to my office who lost his job with Frigidaire, an air conditioning plant in Edison, that basically moved to Brazil, and we lost 1,500 jobs in my district. Earlier this year, the Ford plant in my district closed, leaving more than 900 New Jersey employees without jobs.
We do not even hear President Bush talking about the outsourcing issue or the fact that jobs from New Jersey and other States are being shipped overseas. Earlier this year, we learned the Bush administration views the movement of American factory jobs and white collar work to other countries as a positive transformation that will, in the end, enrich our economy. This is the whole free-trade theme, if you will, or spin that the President puts on the whole issue of jobs going overseas, but I mean, the bottom line is our economy can continue to grow; but if it does not grow by creating jobs here and the jobs are created overseas, that seems like that is okay with President Bush but it is not okay with me. It is certainly not okay with my constituents.
If you listen to what the congressional Democrats and Senator John Kerry have been saying, we support abolishing tax breaks for companies who ship jobs overseas, and I do not know what to say. I do not know how you force the President to address this issue of outsourcing. He simply does not want to do it because I do not think he thinks that it is really a bad thing, and so he is not going to address it.
The other thing I wanted to talk about, and I talked about briefly when I mentioned this Bob Herbert article, about how the jobs that are being created, they pay substantially lower than the jobs that they replace. If you can, imagine losing your job and then searching and searching for another comparable job, only to realize that you are going to have to take a big pay cut. Well, that is what constituents who came to my office during the August break told me that was happening to them.
The new jobs being created are paying more than $9,000 less than the old jobs that they replaced on the average in the United States. Families are being squeezed by falling incomes and rising costs. According to a Census report released last month, the typical family's income has fallen more than $1,500 under George Bush, and essentially what you are seeing is Americans are worse off today because of the President's economic policies.
Now, this is not true if you are wealthy. If you are a wealthy individual, you are doing fine, but it is the middle class that is essentially struggling, and instead of coming up with proposals that will help the middle class, the President chooses tax breaks for companies that ship jobs overseas. Overall, you end up with a 1.6 million job loss.
I talked tonight about how on many fronts we hear from the President or from the congressional Republicans that they are going to address some of these problems and that they are going to deal with some of the problems of the middle class squeeze. Of course, if you listened to President Bush's acceptance speech at the Republican Convention, he certainly puts a spin to suggest that somehow he is going to address health care costs, he is going to address the high cost of education, he is going to address the need for job training when someone loses their job.
But if you look at the actual record, and this happens to be true on so many domestic policy issues, you find that, in reality, what the Bush administration says is not what they actually do, and I just wanted to give a couple of examples that relate back to some of the issues that my colleagues mentioned tonight, and then I will conclude, Mr. Speaker.
I mentioned the whole job training issue, about how the President promised that there was going to be money for job training when people lost their jobs. In a second term, this was again in the President's acceptance speech last week at the Republican Convention, the President pledged to "double the number of people served by our principal job training program."
I talked about the guy who worked for Frigidaire in my district who was not able to get the job training that he was promised and ended up not being able to get another job when he lost his job at Frigidaire. In his 2005 budget, that is, the budget that we are now working on, the President proposed to cut job training and vocational education by 10 percent.
That is $556 million from what Congress pledged to those programs in 2002. So the President says in his acceptance speech at the Republican Convention that if he is re-elected he is going to double the number of people served by principal job training programs, but his current budget proposal would actually cut job training by 10 percent. Absolutely inconsistent.
He talked in his acceptance speech about increased funding for community colleges because we know that a lot of people who are middle class send their kids to community college because they cannot afford a 4-year college, not to mention private 4-year college.
Last year, the Bush administration proposed cutting the largest direct aid initiative to community colleges, the Perkins Program for technical vocational training, from $1.3 billion to about $1 billion. So here he is again, the President is saying in his acceptance speech at the Republican Convention, increased funding for community colleges. In reality, his budget that was proposed for the next fiscal year cuts money for community colleges.
The biggest program that middle class people rely on in terms of direct funding for college education is the Pell grant proposal. In his speech he pledged to expand Pell grants for low and middle income families, but for the last 3 years, Bush has proposed freezing or cutting Pell grants, and that despite pledging in 2002 to raise Pell grants to a $1,500 limit, the maximum Pell grant is currently $4,050.
So, again, I can mention the health care issues, I could mention Medicare prescription drugs, education, job training. In every one of these areas, every one of these domestic what I would call priority areas, if you listened to the President's speech last week, he said we are going to address this and we are going to help the average American, but in reality, the policies for the last 3 or 4 years have done exactly the opposite.
Finally, I just want to say, if you listened to the President's speech last week at the Republican Convention, he renewed his calls to make his tax cuts permanent. This morning again I listened to the gentleman from Texas (Mr. DeLay) talk about how over the next few weeks we are going to extend the tax cuts.
The reality is that the only people that are going to benefit from these policies are high-income households. Estimates based on data from the Urban Institute, the Brookings Institution, a tax policy center, show that if the tax cuts are made permanent that the top one percent of households will gain an average of $58,200 a year. By contrast, people in the middle of the income spectrum will secure just a 2.5 percent increase in the after-tax income, with average tax cuts of $655, a little more than 1/90th of what those in the top 1 percent would receive.
So, again, these tax policies have failed. They have not turned around the economy. The economy is not improving by any standard. The only people that are benefiting from the tax policies and the Republican economic policies are essentially the very wealthy, the people that are in the top 1 percent income bracket.
I started out this evening, Mr. Speaker, by asking the question, are you better off than you were 4 years ago. Clearly, the answer is no.