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Public Statements

Concurrent Resolution on the Budget for Fiscal Year 2014

Floor Speech

By:
Date:
Location: Washington, DC

BREAK IN TRANSCRIPT

Mr. BRADY of Texas. Mr. Chairman, I yield myself as much time as I may consume.

During the annual debate on the budget resolution, the House assigns 1 hour to the Joint Economic Committee to assess current economic conditions and evaluate how the budget resolution, if implemented, would improve the outlook for America's economy. As chairman of the Joint Economic Committee during the 113th Congress, I'm pleased to lead this discussion.

For more than 2 years, the Joint Economic Committee has demonstrated that the current recovery we're in is the weakest of all recoveries lasting at least 1 year since World War II in terms of economic growth, in terms of jobs, and in personal income for families.

Let's examine the following three charts. In each, the red lines depict the current recovery where we're headed right now; the navy blue lines depict the average of all the other recoveries since World War II, and the sky-blue line depicts the average of these recoveries.

Since the recession ended 3 1/2 years ago, our real economy, the real GDP, has grown by a mere 7.5 percent. That's this one. But during the comparable period, real economic growth averaged more than double that, 17.5 percent in other postwar recoveries. It is a huge gap between where we are today as a Nation and just the average, C-student, middle-of-the-road recovery of the past. We are lagging far behind. There is a serious growth gap.

President Obama often boasts that his recovery has generated 6.4 million jobs in the private sector since we hit a low in February 2010. But if you look at previous postwar recoveries, just apples to apples, the average increase in private jobs over the comparable time would have generated an equivalent of 10.4 million jobs. This is the comparison. These are the jobs of the current recovery. This is just the average. And that blue-shaded area is the range between the very worst, the one we're in, and the very best, which is a lot more jobs. In fact, today, this recovery compared to the average, we're missing 4 million jobs in America. We're missing more than $1 trillion out of our economy because of the current recovery in this growth gap.

In fact, if this recovery had been merely average, middle-of-the-road, instead of having fewer jobs on Main Street than when the recession began, which is where we're at right now, fewer jobs on Main Street, private payroll employment would have been at an all-time high if this would have just been an average recovery.

Sluggish economic growth and job creation have also slowed personal income growth, the money that you earn as a family. In recoveries since 1960, disposable income, real disposable income, apples to apples, per person, grew by $3,500 over 43 months. But during the same period, this is where the average income for families has grown; but look where we are under the current recovery. During the same period, for the current recovery, personal income growth for a family, it isn't $3,500, it's about $416. So this current recovery is taking a real toll on families and taking a real toll on our economy and on jobs.

Now, think what is more worrisome than this economy's weak performance is the ability of our economy to grow and create private-sector jobs in the future. Economic evidence shows that it may have permanently fallen. In the most recent ``Budget and Economic Outlook,'' the Congressional Budget Office lowered its estimate for our long-term growth rate as a Nation, the potential GDP, from its average since 1950 of 3.3 percent. They lowered it and our future to 2.3 percent.

Now, one percentage point may not sound like much, but it has a huge effect on our economy, on our jobs, and on the ability of the Federal Government to pay its bills.

Think about it like this: at America's traditional 3.3 percent growth rate of the past half a century, our real economy doubles every 22 years. But at this new normal, this new slower rate of 2.3 percent, it takes almost 32 years to double in size. That's a decade longer; that's a decade slower.

A permanent growth gap of 1 percent translates into one-third slower growth for our young people seeking to find their first job and for families hoping to reach their American Dream. A permanent growth gap of 1 percent means our economy will be $20 trillion smaller in 2052. That's actually a growth gap for 1 year larger than the entire American economy today.

It also means it will be harder to balance the Federal budget since a permanent growth gap of 1 percent means the loss of a whopping $93 trillion from our Federal coffers, again, over the next four decades. Think about $93 trillion today. The unfunded liability for Social Security, Medicare, and our Federal pensions in today's dollars is only $87 billion. So the prospect of a ``new normal'' for America's economy in which our future growth permanently slows by one-third should be a red flag for all Americans.

We are told in school growing up that in Shakespeare's play, a soothsayer told Julius Caesar to beware the ides of March, the 15th. Ironically, this year, President Obama released his ``Economic Report of the President'' on that ominous date, and buried in this report are some startling admissions and some dire warnings for the American people. Unlike Caesar, this Congress should take heed.

First, the President's report acknowledges that the current recovery is indeed the weakest since World War II, as Republicans on the Joint Economic Committee have been saying now for more than 2 years. This growth gap is real, and it's widening. Second, our economy's ability to grow in the future, the growth rate of potential GDP, has decreased. The President admits that.

Unfortunately, President Obama then seeks to blame this new normal on everything other than his economic leadership. The report attributes two-thirds of the decrease to demographic factors, specifically an aging population and a slower rate of net immigration. The report attributes the remaining one-third to just about everything that's ever occurred in the last 5 years.

Demographic factors account for some of the new normal. But if you think about it, our potential economy for the future, it's a function of how many hours that are worked in America and the growth of the workers, how productive they are. In turn, what drives that productivity of the American worker is if businesses invest in new business, new equipment, new buildings, new software. That drives jobs along Main Street.

The policies of the Obama White House--higher taxes; the unwillingness to propose real solutions to save Social Security and Medicare for future generations; the prospects of higher costs and regulations due to the President's new ObamaCare law; how we regulate our local banks; global warming regulations; and suppression of energy production on Federal lands and waters, America's lands and waters--have generated so much uncertainty, and it's really squelched new business investment in America. Unlike real personal consumption, nonresidential investment from the business community still remains below what it was before the recession began.

Mr. Chairman, this new normal for America, the growth gap that we're in today, the prospect that America will grow slower in the future is unacceptable. Republican Members of this House are working to accelerate growth. A big step we can take forward tonight is to pass the House budget. It is a responsible, balanced budget.

By estimations, it will raise our economic growth by 1 percent in the next year. That's significant. It will add $1,500 in new purchasing power for households. And if you look over the long term, the next 10 years, the House budget could well add up to 3 percent to our economic growth and $4,000 per household in real income people don't have today, real gains that they don't have today.

The truth of the matter is the roadblocks to America's future are still in place: the prospect of higher taxes; the failure to reform and save our entitlements; ObamaCare with all the new taxes, new regulations; higher costs for families; and the fact that we're not pursuing tax reform, at least from this White House, with the Ways and Means Committee and House Republicans in this budget to move toward a fairer, simpler tax code that closes tax loopholes and does it not to fuel spending but rather to fuel lower rates for families and small businesses and make us competitive again as a Nation.

This budget resolution, this responsible and balanced budget developed by the Budget Committee chaired by Paul Ryan, is the first step toward a brighter economic future for our children and grandchildren.

I reserve the balance of my time, Mr. Chairman.

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Mr. BRADY of Texas. Mr. Chairman, I yield myself as much time as I may consume.

You know, we did have an interesting hearing in the Joint Economic Committee about the growth gap in America, about the thought and prospect that America's future growth could shrink by as much as a third, the damage it would do for families, to our economy, to our ability to pay our bills as a Nation.

And when we asked the four witnesses, all from different backgrounds and different philosophies, we asked them a simple question.

One, do you believe higher tax increases, more tax increases, would help the American economy today? Not one of them said it would.

And we asked them, what do we need to reassure our investors and put America back on a firm financial path? They all said, you need to act now on reforming Social Security and Medicare for the long haul.

And I said, so when is now? And they generally agreed by June or July. I mean, now.

The Republican budget does that. The Democrat budget ignores our problems, ignores the advice of four distinguished economists.

Earlier tonight a claim was made that some of the budgets are indifferent to the suffering of many. I want to address the suffering of many in today's America, under today's recovery.

Take a look at this. Since the bottom of the recession, the President often likes to boast that he has created over 6 million jobs along Main Street in America. But what he doesn't talk about much is that, in that same period, this Nation has forced over 8 million families on to food stamps, simply to have food on their table, simply to keep hunger from their door.

You are more likely, as a family under this recovery, to be forced to apply for food stamps than to actually walk into the door of a company that's offering you a job. That's not the sign of a healthy recovery. That's the suffering that occurs under today's recovery that this President has led. That's the growth gap's impact on real people.

Let's take a look at families income, because that's so important to paying bills today, not just that you have a job, but, you know, are you getting ahead? Are you falling behind?

Look at this chart. This shows the growth gap and the impact on families. Up to this date, the worst economic recovery that we had since World War II, a family, by now, would have gained back almost $2,000 in disposable income, real income they can spend. Under the best recovery, they would have almost $5,000 in their pocket. Just average, middle-of-the-road, C-grade recovery, nothing to talk about, a family ought to have now over $3,500 more gained back in their paycheck.

But look what they have--$461, and that's all, in the last 3 1/2 years. That's what they've gained back, $10 a month. So more families are being forced to go on food stamps. Those who have jobs are going nowhere in this recovery.

Let's look at Wall Street. The Federal Reserve is printing money right and left, buying our own debt, buying up credit, allocating, picking winners and losers around this country, continuing to pour money into the system.

So what's happened?

Let's put that family income against the Wall Street income. In this economic recovery, look at Wall Street. Look at the Standard & Poor's total return, look how high it is. It continues to grow.

But look at Main Street. Look at a per-person income, where it's gone over the last 3 1/2 years. Again, almost nowhere.

If you like this economic recovery, if you like the fact that, as Wall Street roars, Main Street families are left behind, then don't change anything. Continue higher taxes, more stimulus spending, borrowing every dollar it seems that we spend.

You'll leave the President's health care law in place, put new regulations on Main Street, and this is what we'll get more of, families that continue to fall further and further behind, families who are looking for a job, and they either drop out completely and give up working, or they're forced onto food stamps, families that watch Wall Street grow wealthier as they gain what, $10 a month in their paycheck?

The Republican budget changes the course of not just our financial position as a country, it changes the course for our economy, adding immediately 1 percent growth, closing that growth gap here in this first year, adding more income, $1,500 to a family, and over the next 10 years, doing dramatically more, both for families and the economy.

That's what the Republicans' budget is about. It's about changing the growth gap, closing it, and giving our families a fighting chance again.

I reserve the balance of my time.

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