[Congressional Record Volume 140, Number 97 (Friday, July 22, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: July 22, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
               A RESPONSE TO CLAIMS OF A STRONGER ECONOMY

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from New York [Mr. Solomon] is recognized for 5 minutes.
  Mr. SOLOMON. Mr. Speaker, I rise today in response to my colleagues 
on the other side of the aisle, many of whom have taken the well in the 
past week to laud recent economic reports as success symbols for the 
Clinton administration's economic policies. It is extremely important 
that the American people understand the entire economic picture and not 
just a praised and isolated economic statistic extracted from the 
reality of the overall economy.
  First, last week the Office of Management and Budget released its 
midsession review of the budget, citing new deficit level figures of 
$220 billion in 1994 and $167 billion in 1995. Immediately, Democrats 
took the floor and touted the success of the President's 1993 tax bill. 
However, this assertion of success demands further examination. First, 
the new 1994 projected defect level is down $15 billion from $235 
billion projected earlier this year. As has been extensively discussed, 
this is largely due to lower than expected financing for deposit 
insurance, lower interest rates and lower spending in the Medicaid 
program. Nevertheless, the 1994 deficit will still be $200 billion. 
Second, the revised projections for 1995 actually represent an increase 
in the deficit from $165 to $167 billion. While this increase in actual 
dollars may only be $2 billion it still is an increase and mirrors the 
perpetual increase in future deficits stretching from 1995 to as far as 
the eye can see. Even more fundamental, claiming that the U.S. 
Government will only add $200 billion to our Nation's debt this year as 
success, is flawed. While every drop in the deficit is noteworthy, it 
is more noteworthy to understand just what these newly adjusted deficit 
levels continue to symbolize.
  Third, Democrats continue to applaud the perceived increase in the 
total amount of deficit reduction resulting from the President's 1993 
budget. However, it would be more honest to point out that the amount 
of cumulative deficits remaining to be eliminated is twice as much as 
the amount of deficit reduction the Democrats wish to take credit for 
reducing. Yes, even if the 1993 budget reduces the deficit by $700 
billion between 1993 and 1998--as some of my colleagues on the other 
side have claimed--there will still be well over $1.4 trillion in 
projected cumulative deficits remaining in those years. In simple 
layman's terms this means that over $1.4 trillion will be added to the 
$4.5 trillion debt between now and 1998. Are my Democrat colleagues 
taking credit for this increase in the debt? Clearly, praising only 
minor reductions of the deficit is shortsighted.
  Fourth, the administration and my Democrat colleagues continue to 
applaud the strength of our economy based on its awesome job growth. To 
assess this assertion, I think it pertinent to stand back and examine 
this administration's job growth in comparison with that of previous 
Democrat and Republican administrations. During the 1992 campaign, 
President Clinton promised to create 8 million new jobs by 1996. At 
that time the economy was slowly and weakly emerging from a recession. 
However, it must be remembered that every recovery from a recession 
results in job growth. Consequently, the real question must be one that 
asks what is the real ability of this administration's economic program 
to create jobs? According to a study done by the Milken Institute for 
Job and Capital Formation, when viewed in total, this promise 
represents an increase of only 7.4 percent from the final quarter of 
1992. In fact, except for the first Eisenhower recovery of June 1954 to 
June 1957, the brief recovery between the end of the Carter recession 
in September 1980 and the beginning of the Reagan recession in July 
1981, and the Bush recovery, the job creating ability of Mr. Clinton's 
promised economic program will be worse than that of any President 
since 1950. Furthermore, many of the new jobs that have been created 
are low-paying, devoid of fringe benefits and often temporary or part-
time. According to the Los Angeles Times ``about 15 percent of all jobs 
created in the U.S. since the beginning of the recovery have been at 
temporary help services, even though they account for only 2 percent of 
U.S. employment overall.'' I know the true impact of this 
administration's growth program from personal experience. Despite the 
President's great revelations concerning job growth and expansion, the 
unemployment rate in my home State of New York in April of this year 
was 7.6 percent, up .6 percent from April of last year. Even more 
importantly, the April unemployment rate in my hometown of Glens Falls 
was 9.1 percent up 1.5 percent from April 1993. Clearly, the 
President's lauded economic growth program, passed almost a year ago, 
has not benefited families in my district. Mr. Clinton's promise of 
500,000 new jobs per quarter and a 0.45 percent per quarter employment 
growth rate contrasts unfavorably with a post-1950 recovery average to 
date of 570,000 jobs per quarter and a 0.75 percent average quarterly 
growth rate. Moreover, if predictions concerning the President's health 
care reform proposal ring true, the elimination of 3.7 million jobs 
would place the President's job creation efforts in the negative. In 
this light, President Clinton's economic program is much less of a 
prized possession.

  Besides the flaws in both the President's deficit reduction and job 
growth claims, there are many other economic indicators that bare 
disclosure. First, last week the dollar skidded to a new 50 year low of 
96.6 yen and 1.5 marks. This drop in the dollar has been prefaced for 
over a year by President Clinton's threatening the Japanese with a 
weaker dollar. Well, now we have it--the weakest dollar in 50 years. 
The response from both foreign and domestic investors has been one of 
flight. Yes, investors anxious about their holdings of dollar dominated 
assets are diversifying their investments into assets dominated in 
other currencies. As long as the dollar's exchange value continues to 
erode, this currency portfolio shift and the lower American investment 
that comes with it, will continue. Consequently, the stock and bond 
markets have and will continue to lurch in uncertainty.
  Next, we have interest rates which have been on the rise for months, 
due to the upswing in economic growth earlier this year. This has, in 
turn, resulted in an increase in the interest the Government pays on 
the Federal debt which has already been projected to top $200 billion 
in 1995. Furthermore, increases in interest rates results in higher 
costs for loans, capital and opportunity for the family-owned business 
and the young entrepreneur seeking to create new jobs and long-term 
economic growth. Moreover, the increase in interest rates by the 
Federal Reserve may have been justified, if the Clinton 
administration's economic program has resulted in an overheated spark 
of economic strength soon to be followed by a wave of inflation.
  Any discussion of economic indicators cannot overlook the basic rate 
of economic growth which the Clinton administration itself has 
projected, with the passage of its 1993 budget plan, to have stagnant 
growth rates for 1995, 1996, 1997 and declining growth rates in 1998 
and 1999. Most recently, the Council of Economic Advisors has 
championed its forecasts of an anemic 2.6 percent a year growth rate 
for the rest of the 1990's. For the record, this is significantly lower 
than the 2.8 percent average of the 1980's, when the economy 
experienced annual growth rates of 4, 5, and 6 percent in its boom 
years.
  In conclusion, the Clinton administration presently holds an economy 
with $4.5 trillion in Government debt, continuous annual deficits in 
excess of $165 billion well into the next century, the slowest job 
growth since 1950, the weakest dollar in 50 years, rising interest 
rates, and well below average annual economic growth. This is in 
addition to the $330 billion in new deficit spending, $260 billion in 
new taxes and a 1994 Federal Register containing 69,688 pages of 
Government regulations surpassed only by the last 2 years of the Carter 
administration. If my Democrat colleagues wish to claim credit for the 
success of the Clinton economic policy, they must take credit for the 
entire and true Clinton record. Once they do, the American people will 
see the realities of Clintonomics and the fallacies of Democrat 
rhetoric. The entire economic package speaks for itself in the numbers. 
Should my Democrat friends seek to brandish this economy honestly 
before their constituency, I am afraid many of them may find themselves 
searching for a new means of employment come November 8.

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