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Mr. HATCH. I thank the Chair.
Mr. President, I have to say I always enjoy my colleague from Vermont. He is a very sincere and dedicated man and I like him. There is no use kidding about it; you can't help but like him, in my eyes. But I don't know any Republican Senator who wants to cut Social Security. They want to save Social Security. I don't know anybody who wants to cut Medicare or Medicaid. We want to save Medicare and Medicaid. Anybody in their right mind who looks at this knows we have to do some things and change some things or we are not going to have Medicare and Medicaid for our people and we will not have Social Security continue.
With regard to Mitt Romney, yes, he may not have articulated his thoughts as well as he may have wished. But there is no way in this world Mitt Romney meant his comments to be taken the way they have been taken by the left in this country. All he is saying is there are too many people riding in the wagon and not enough people pulling the wagon and we are going to have to get jobs for those who should be outside the wagon, pulling the wagon, and help them to have the self-esteem that comes from working. That is what the whole welfare bill of 1996 was all about, in having a work requirement: We are going to help you, we are going to subsidize you, we are going to give you job training, but after a certain period of time, if you don't have a job, you are off the dole. Literally two-thirds, almost two-thirds of the people who have been on the dole, some for generations, went to work after incentives were realigned through Republican welfare reform. That is the Republican approach, to get people back to work, to provide efficient incentives, and to get this economy moving again; not to hurt anybody. So these things can be exaggerated to a point where sometimes it becomes confusing to the American people, and that is not right either.
I know Mitt Romney. I know how he cares for people. I know what he did when he was a bishop in the LDS Church, in the Church of Jesus Christ of Latter-day Saints. I was a bishop when I was running for Senate, and I have to tell my colleagues I spent at least 30 hours a week of my own time and expense, because there is no paid clergy in the LDS faith, other than the general authorities and those are very few people, and we all volunteer our time. We help people from every walk of life.
FISCAL HISTORY OF THE 1990S AND 2000S
Mr. President, I am here today to talk about some very important things that are related to what I have just been saying.
There has been much discussion by President Obama about the source of our current economic and fiscal challenges. The President seems to suggest we could easily return to the prosperity of the 1990s by adopting the policies of President Clinton, particularly by raising taxes to the level they were during his Presidency. At the recent Democratic National Convention, President Clinton himself made a similar argument. But the positive economic and fiscal history of the 1990s was not owing to higher taxes, and the economic and fiscal challenges we face today--in particular, our $16 trillion national debt and exploding entitlement spending programs--cannot be fixed by higher tax rates.
During his convention speech, President Clinton claimed that President Obama inherited a damaged economy, put a floor under the crash, began the road to recovery, and laid the foundation for a modern, well-balanced economy. Tell that to the 12.5 million unemployed Americans who continue to struggle with unemployment. Tell that to Americans who have been suffering through unemployment rates above 8 percent for 43 consecutive months. Explain to Americans how redistribution, massive expansion of refundable tax credits, ballooned transfer payments, and an interventionist Federal Reserve represent a foundation for future growth of the economy. Explain how this economy is ``well balanced'' when government spending represents as much as 25 percent of GDP, debt is higher than an entire year's worth of the output of the economy, and we have an activist Federal Reserve that has increased its balance sheet by well over $1 trillion.
President Clinton does admit that, under President Obama, we are not where we need to be. So, instead, he asks whether we are better off than when President Obama took office, and he answers in the affirmative. Putting aside the rhetoric and spin and considering the facts, this is a dubious claim at best.
Relative to the beginning of 2009 when President Obama took office, jobs are down by 261,000 and unemployment remains above 8 percent. But wait. Democrats say the President cannot be held responsible for bad things that happened during his Presidency; those things were inherited or due to Europe or caused by uncontrollable forces. All right, then. Let's look at the President's jobs record after the end of the recession, which the National Bureau of Economic Research says was June of 2009. Since then, job growth under President Obama has been only 73,600 jobs per month on average--far too weak to move the unemployment rate below 8 percent.
Democrats say the only reason we do not have more jobs is because Republicans will not agree to more Keynesian stimulus--never mind that the previous dose, which cost over $800 billion and was promised to deliver unemployment below 8 percent, failed to get unemployment down.
Remember those promised shovel-ready jobs that became a source of amusement to the President? Remember the promised infrastructure? Americans should ask themselves where all those things are. Where are the jobs? Well, the President makes claims of saving millions of jobs because of stimulus magic. And the Federal Reserve claims millions of jobs saved from its so-called quantitative easing. There you have it. The President's foundation of well-balanced economic growth rests on debt-financed Keynesian stimulus and Federal Reserve stimulus.
Absent anything but a dismal record on jobs, President Obama has decided to try to run on President Clinton's record. So let's consider President Clinton's rose-colored nostalgia--a revisionist history adopted by President Obama and his surrogates.
President Clinton's view goes like this: I came into office with a weak economy. I raised taxes. The economy boomed.
President Clinton's depiction of the roaring 1990s is missing a few chapters. In his first years in office, Democrats controlled Congress. He and the Democrats raised income taxes and gas taxes. He tried to impose a Btu energy tax, attempted a government takeover of health care--known as HillaryCare and proposed a $31 billion stimulus while putting off welfare reform.
The first few years of the Clinton Presidency can fairly be characterized as prioritizing tax-and-spend economic policy. But HillaryCare failed, and American voters decided to make some changes. They faced uncertainty over taxes, health care, energy costs, deficits, and runaway government spending. After 2 years of complete Democratic control of Washington, American voters decided in 1994 that Republican control of the Senate and House was desirable.
Does this sound familiar? A new Democrat in the White House, complete Democratic control of Congress, prioritizing higher taxes, a government takeover of the Nation's health care system, and more spending, followed by a popular uprising that gave some Republican balance in Congress. It was the first Republican Congress in over 40 years.
But in contrast to President Obama's refusal to heed the message of the 2010 election, President Clinton listened to the American people and moved to the political center. He embraced a Republican goal of a balanced budget and, after two vetoes, signed GOP welfare reform legislation shortly before the 1996 election. In 1996 President Clinton was reelected, but Republicans retained control of Congress.
Now, President Obama claims these were the good old days because President Clinton raised taxes. Let's consider that tax landscape. President Clinton did raise the top income tax rate in 1993, and Democrats credit that increase for shrinking the deficit and unleashing future economic growth. However, he also agreed with Republicans in 1997 to cut the capital gains tax rate to 20 percent from 28 percent, which contributed to revenue and economic growth. I know because it was the Hatch-Lieberman bill that they followed in doing that. Joe Lieberman had the guts to stand up on that issue, as did I, and it happened. The Democrats said we would lose revenues. The revenues went up because people did not feel gouged anymore. Funny how that chapter gets left out of the Democrats' 1990s story.
In 2000 President Clinton left office with Federal receipts measuring 20.6 percent of GDP--well above the 17.5 percent seen in 1992 before he took office. But those receipts were boosted by capital gains realizations associated with the Internet stock bubble that formed toward the end of the Clinton Presidency.
But even more notable and something Democrats do not discuss in relation to the Clinton Presidency is that he left office with Federal outlays measuring 18.2 percent of GDP--significantly below the 22.1 percent seen in 1992 before Clinton took office. Significant reductions in Federal outlays as a share of GDP occurred once Republicans gained control of the Congress. In contrast, President Obama has presided over the largest spending spree since World War II, with outlays as high as 25.2 percent of the entire economy--something that has not happened since the years surrounding World War II.
In his 1996 State of the Union speech, President Clinton took credit for budget improvements and spending restraint imposed by Republicans in Congress. He famously stated that the era of big government is over. But in a nod to the Republicans' role in containing the budget, in that same speech, he said: ``I compliment the Republican
leadership and membership for the energy and determination you have brought to this task of balancing the budget.'' Compare that to the sentiment of President Obama: We tried it their way, and it did not work.
President Obama and those Democrats who embrace the history of the 1990s also conveniently neglect to give any credit to Ronald Reagan, whose ending of the Cold War led to a peace dividend which helped allow President Clinton to curtail growth in Federal defense outlays.
In summary, the Democratic nostalgia for the 1990s is based on a very limited recollection of events. They see that Clinton raised taxes, the economy grew, and the budget improved. Apparently, correlation is all that is necessary to establish causality in their world, particularly when it works in their favor.
What also gets left out of the standard Democratic history is a stock-price bubble that was actually the basis of much of the growth in the 1990s. So let's consider the Clinton bubble further and ask what it could possibly mean for the recent financial crisis.
One of the charges levied by President Clinton, which echoes a familiar Democratic talking point, is that Americans should be wary of Republicans because we champion deregulation that ``got us into this mess.'' But who generated the mess? The mess was a devastating financial crisis, and who sowed the seeds of that crisis?
First, consider the significant financial deregulation under the Bush administration. The fact is there was not any. So where did the deregulation in finance come from? Whose policies promoted financial markets prone to bubbles and irrational exuberance and bailouts?
It was under President Clinton's watch that warnings were ignored about the riskiness of derivatives. It was under his watch that risky derivatives led to the collapse of the hedge fund Long-Term Capital Management--or LTCM and to an eventual bailout arranged by the Fed. It was under his watch that the Fed left market participants with a belief that should there be significant market turbulence, the Fed would be there to bail them out. It was under his watch that the Gramm-Leach-Bliley Act was signed into law, which many Democrats believe contributed to the crisis by repealing part of the Glass-Steagall Act of 1933. I think that they misunderstand the financial crisis by making that claim, but since they and President Obama appear to believe it, through their promotion of the so-called Volker rule, then the deregulation they decry came under Clinton.
As a basis for strong fundamental growth in the economy, President Clinton's stock bubble was lacking, and numerous companies crashed. A bursting stock bubble, along with corporate accounting scandals, which included the Enron debacle, left a mess for President Bush, who, by the way, did not whine about it for 4 straight years.
It was under President Clinton's watch that significant growth began in risky subprime mortgage lending, which ended up at the heart of the recent financial crisis. And warnings were ignored--even the warning by the Clinton-appointed Federal Reserve official Edward Gramlich. Clinton's presidency pushed financial deregulation, and it showed inattention to the beginnings of speculative excesses in housing and mortgage markets.
The financial crisis was indeed severe. Seeds of the crisis were sown during President Clinton's Presidency and then nurtured by many years of regulatory inattention. Failure of regulators to do their job during the Bush administration has nothing to do with deregulation. There was no deregulation. There were plenty of regulations to go around, but the regulators failed to use their authority as bubbles and irrational exuberance was tolerated by the unaccountable regulators. To say that Republican deregulation caused the recent crisis is simply false.
We have faced crises before. President Obama is not unique in this respect. What is unique is how poorly he has handled our economic and fiscal crisis.
In February 2009 President Obama said his Presidency would be a ``one-term proposition'' if the economy did not recover within 3 years. Well, it has been over 3 years and the economy has not recovered; therefore, by the President's own metric, his administration should be a one-time proposition. No, he wants 4 more years to do more of the same.
The President has no plan.
The President claims to want to get our deficit under control by raising taxes on the wealthy and keeping the tax burden on middle-class Americans where it is. But the President's tax proposals do not work, as we learned from his Buffett tax, which fell over $800 billion short of his plan to use the tax to pay for a long-term alternative minimum tax patch. The unpleasant fact facing the President is that there simply is not enough revenue from taxing the so-called rich to fill his desires of permanently larger government.
Taxing business owners who the President thinks are undeserving of their success will simply not pay for his redistribution dreams. Of course, contrary to President Obama's disdain for business, Americans who own and operate businesses did build them, and they also paid taxes, which built the roads and bridges they use. And make no mistake, business owners and American workers did build America. They did build it.
Mr. President, let me go back just a little bit here. I made the comment, with regard to all of this media criticism of Governor Romney, that he was inarticulate in a private meeting, where no press was invited, and he is the first to admit that.
He certainly has tried to explain himself. But he is right. He is right. There are at least 47 percent of Americans who do not pay a nickel or a penny of income taxes. The standard answer by my friends on the other side is, well, they pay payroll taxes. Well, everyone does that. But those are unlike income taxes. With payroll taxes, workers pay into Social Security and Disability Insurance and the like. Which is to say, they pay in; but they also receive benefits. To equate the payroll tax system with the income tax system is simply misleading.
But in the income tax system, 23 million or so people get refundable tax credits which are more than they pay in payroll taxes, and a little less than 16 million get refundable tax credits that are more than they and their employers pay in payroll taxes.
Now, do Republicans want to tax the truly poor? Heavens no. This is a great country. We can take care of the truly poor. The question is, Are all of those in the--according to Joint Tax Committee, recently the bottom 51 percent did not pay any income taxes--are all of those in the truly poor category? The answer is no.
Well, what does Governor Romney mean? He means that, as I said at the beginning, there are too many people who are riding in the wagon and not enough pulling. Many people simply have no skin in the game in the income tax system, which means they really don't care much if income taxes on others are raised. And it is not their fault in many cases, except there are millions who will not find a job in the Obama economy, or they just become discouraged given the bleak labor market. I do not blame them, with the economy, but they ought to be looking for jobs anyway. I would do anything if it were me. I would do anything to be able to support my family other than be on Federal largesse. But that is the way it is today.
Governor Romney's goal in this life is to pull us out of this mess, get spending down to no more than 20 percent of the GDP, which would be a remarkable downturn in spending compared to what we have today, and also to get people to work, get them to where they have the self-esteem that comes from working, which we did on welfare reform in 1996. I worked hard on that bill, as did so many others at that time. Give them the self-esteem that comes from supporting themselves. That is what he meant. That is what is meant here. He will create jobs, and a vibrant economy where all workers prosper and can find work.
Frankly, let's just be honest, the mainstream media is not for Governor Romney. We all know that. Anybody with brains knows that. All you have to do is watch it. And that is the way it has been here ever since I have been in the Congress. Frankly, they are not going to treat Governor Romney fairly. But I will tell you this: Mitt Romney will put America to work. He knows how to do it. This man has been successful in everything he has ever undertaken to do. He does not need this job as President, but he is running because he knows this country is in trouble. He knows it is not following good economic practices. He knows this administration is a disaster from a jobs standpoint, among other things. He could have the most lovely life, and he is taking this kind of unmitigated barrage of assaults in trying to do that which he knows is right for this country.
I think we ought to be more fair in these Presidential elections. I wish the media was split 50/50. It is not. Everybody knows it. I care a great deal for my friends in the media, but there is no one with brains who does not understand that especially the mainstream media right here in Washington, DC, New York, Los Angeles, et cetera, is heavily stacked in favor of President Obama.
I like President Obama too. I have known him as a Senator. I have known him as a friend. I have known him as a President. And what I am saying here is that he has not done the job. I do not believe he is going to do the job. I do not think he has the background to do the job, and for us to not put somebody who does in there may be catastrophic for the future of our country.
I yield the floor.
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