Congressional Budget for the United States Government for Fiscal Year 2005

CONGRESSIONAL BUDGET FOR THE UNITED STATES GOVERNMENT FOR FISCAL YEAR 2005

Mr. CONRAD. Madam President, I yield myself such time as I may consume off the resolution.

The PRESIDING OFFICER. Without objection, it is so ordered.

Mr. CONRAD. Madam President, I thank the Senator from California for this very important amendment. It is becoming increasingly clear jobs are very much an endangered species in this economy. It is the No. 1 subject. When I go home and go from town to town, the No. 1 subject is economic opportunities, jobs, economic growth, and a deepening concern that we are not seeing the kind of economic growth and job opportunities all of us would like.

We saw yesterday in the very steep selloff in the stock market an increasing concern that economic growth is already stalling out.

We have seen in the jobs reports that job growth is badly lagging behind what all of us would like to see, and badly lagging behind what we have seen in other recessions.

On March 9 in the New York Times, Paul Krugman, the noted economist, had this headlined article: "Promises, Promises." The subheadline was "Wishful Thinking on Jobs." He went back and looked at the job history from 1999 to 2004 and then looked at the forecasts of the administration. He pointed out that back in 2002, the administration said by this time, or January of 2005, we would have 138 million jobs. Obviously we do not have 138 million jobs. We are at 130 million jobs now.

Then in 2003 they refined that estimate and lowered it substantially and said, Well, no, we will not have 138 million jobs; we will have 135 million jobs. Now this year they revised the estimate again and said, Whoops, we were wrong again. We are not going to have 135 million jobs; we are going to have 132.7 million jobs. As of the end of February, we are nowhere close to that. We are at 130.2 million jobs.

I will go to this chart that shows what has happened in every recession since World War II. In every one of these recessions, we have seen on average, 17 months after the business cycle peaked, the job recovery really took off. That has been the pattern of the nine recessions since World War II.

Let's compare it to what is happening this time. That is the black line. Here we are 36 months since the business cycle peaked and we still see almost no jobs recovery. Something is wrong and it is seriously wrong. We are now 5.4 million jobs short of the typical recovery going all the way back to World War II. Look at nine previous recessions. In those other recessions, the job market was soaring by this time. Not now. Something is wrong.

Even when the administration dramatically altered and lowered their projection of jobs by January of next year, they still said there would be 2.6 million more jobs by the end of 2004 than 2003. If that forecast is to come true, they will have to generate 520,000 jobs a month between now and the end of the year. The most recent month was not 520,000 jobs; it was not 420,000 jobs; it was not 120,000 jobs; it was 21,000 jobs and every one of them was a Government job. There was no growth in the private sector. Something is wrong.

Mr. SARBANES. Will the Senator yield for a question?

Mr. CONRAD. I would be happy to yield.

Mr. SARBANES. The quote stating that they expected 2.6 million more jobs, was that by the Chairman of the Council of Economic Advisers?

Mr. CONRAD. That was Mr. Mankiw, the Chairman of the Council of Economic Advisers.

Mr. SARBANES. Is that the same administration official, high economic official, who told us in the annual report, the one President Bush signed off on, that outsourcing jobs was a good thing for America?

Mr. CONRAD. He did say that. It is a rather remarkable statement. He thought it was good for the country that jobs were outsourced overseas.

Mr. SARBANES. Yes.

Mr. CONRAD. I think he has regretted that remark, but that is what he said. He is the Chairman of the Council of Economic Advisers to the President. He is the same person who said there were going to be 2.6 million more jobs in 2004 than the jobs we saw in 2003. We can see that to achieve that goal, they would have to be generating 520,000 jobs a month. In February, they had 21,000, and not a single one of them in the private sector.

If we think about it, the President says his tax policies are working. If his tax policies were working, the jobs that would be generated would not be in the Government. The Government jobs are not developed by his tax plan. One would expect he would be generating jobs in the private sector, and yet if we look at February there were no new jobs in the private sector. The only new jobs that were created were Government jobs, and it was only 21,000.

By the way, they would have to add 128,000 jobs a month just to keep pace with the new people coming into the job market, just to stay even. In February there were only 21,000 new jobs, and none of them in the private sector-all of them in Government. As I say, that is 500,000 jobs short of the necessary number of new jobs that would have to be generated to meet the President's chief economic adviser's forecast.

Mrs. BOXER. Will my friend yield for a quick question before my colleague continues? I find this give-and-take very helpful.

I read an economic report that said although the jobless rate is officially at 5.6 percent, if one factors in the people who have given up, it is well over 9 percent. I wonder if my friend could comment on that, because he talked about how important it is to just keep up with the people who are coming in. What about the people who have given up?

Mr. CONRAD. If we just think in our own lives who do we know who is out of work, and I started thinking about my extended family and my close friends, and you start adding up the number of people who are out of work, in my own family there are people who are highly educated, have had really excellent careers who now are approaching 60 years of age, are out of work and finding it extraordinarily difficult to find new work. These are people with advanced degrees who have had very successful careers, and yet, because of outsourcing, because of this job weakness, they are out of work and cannot find new jobs. Not only do we see it in these statistics, but there is another statistic that also tells us something is wrong, and that is the wage growth of production workers is now starting to fall behind inflation. I think that is why people feel under so much pressure.

The Senator from California mentioned the number of people who have given up looking for work. Once one gets past a certain point, they are no longer counted as unemployed because they have been unemployed so long they are no longer included in the statistics. Being out of work is not just a statistic; it is not just a number on a page; it is a real person living a real life with a real family who has lost hope, who has lost an opportunity, who has lost a chance. That is why I think there is such growing concern about what is happening.

I had a gentleman who is an executive in the machine tool industry who told me, Senator, at this stage of a recovery our order books ought to be full. They are not. Something is happening that is structurally different than previous recoveries. He said he believes the jobs are being created, but the jobs are being created in China, in India, in Mexico. They are not being created in America.

That is why I have to say I believe the amendment of the Senator from California is important. We need to be much more aggressive and proactive at creating job opportunity in this country.

The Senator from California is offering amendments to provide incentives for businesses to create jobs in America. She is also paying for it, which is the responsible thing to do, instead of just sticking it onto the debt. I might remind my colleagues that the budget resolution before us runs up the debt by almost $3 trillion over the next 5 years, and at the worst possible time, right before the baby boomers retire.

Mr. SARBANES. Will the Senator yield on that point?

Mr. CONRAD. I will be happy to yield.

Mr. CONRAD. I would say in response to the inquiry of the Senator, in terms of what I found at home, North Dakota has one of the lowest unemployment rates in the Nation. We have a very low rate of unemployment in our State. Yet job anxiety is growing there. Why? It is not because the unemployment rate is high; it is because good jobs are not available. It is because people who are more highly educated, more highly trained, are not able to get jobs commensurate with their training and education, and this is creating a whole level of people who are what we would call underemployed-underemployed based on their previous job experiences, underemployed in terms of their education and training.

I say to my colleagues, there was a cartoon in the New Yorker magazine that my wife drew to my attention the other day. The cartoon was two guys who kind of looked like deadbeat guys.

One guy says to the other: You know, you are out of work, aren't you?

He said to the gentleman: I have quit looking. I understand that's good for the economy.

No, it is not good for the economy. That I think is what is increasingly of concern to people. These are middle-class people, people with good education, with good training, who had good jobs.

I have a relative who was very advanced in a major corporation and his entire division was laid off. These are very highly skilled people, very highly trained, very highly paid. They found all of their jobs were being shipped to India. To add insult to injury, they were asked to go to India to train the people to take their jobs.