[Congressional Record Volume 140, Number 149 (Thursday, December 1, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: December 1, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                THE SUCCESS OF THE CLINTON ECONOMIC PLAN

  Mr. DeCONCINI. Mr. President, despite predictions by Republicans that 
enactment of the Clinton economic recovery package would result in 
economic catastrophe, the opposite has proved to be the reality. 
Republican doom and gloom predictions that the plan would be 
inflationary, kill jobs, stall the economic recovery and end up 
increasing the deficit were dead wrong. The sky did not fall. In fact, 
the economic storm clouds have disappeared and the sun is out. The 
deficit is shrinking, the economy is growing, business is expanding and 
jobs are being created. Alan Greenspan, the Chairman of the Federal 
Reserve, said that the economy is in the strongest shape in two 
decades, and that the deficit reduction plan passed last August had 
contributed to this stronger economy. As you know, this plan was passed 
with NO Republican support. So let's give the President some credit. 
Bill Clinton was right; the Republicans were wrong. The Democrats in 
the House and Senate who supported the plan were right; the opponents 
were wrong.
  Senator Phil Gramm of Texas purveyed the gloom and doom message to 
the Senate.

       I want to predict here tonight that if we adopt this bill 
     the American economy is going to get weaker and not stronger, 
     the deficit four years from today will be higher than it is 
     today and not lower . . . when all is said and done, people 
     will pay more taxes, the economy will create fewer jobs, 
     Government will spend more money, and the American people 
     will be worse off.

  Contrary to Senator Gramm's wishful thinking, the deficit is coming 
down, interest rates and inflation are low; business investment was up 
18 percent in 1993 (the fastest pace since 1972); consumer confidence 
is up; and unemployment is down.
  Senator Grassley asserted: ``I really do not think it takes a rocket 
scientist to know this bill will cost jobs.''
  In the Clinton Administration's first year, the economy created 1.7 
million private sector jobs--70 percent more in one year than had been 
created in the previous four years.
  Majority Leader Dole told us ``President Clinton knows . . . I know, 
and the American people know that the plan does not tackle the deficit 
head on.''
  After a 12 year unstoppable increase, the deficit is now projected to 
decline three years in a row, the first time since Harry Truman was in 
the White House.
  Kudos for the Clinton plan's results has come from some unlikely 
places. In testimony before the House Budget Committee at the end of 
June 1994, the Chairman of the Federal Reserve Alan Greenspan, stated, 
in part: ``The outlook for the U.S. economy is as bright as it has been 
in decades. Economic activity has strengthened, unemployment is down, 
and price trends are subdued.'' And in January 1994, he proclaimed:

       To President Clinton's credit, early last year he rejected 
     an either/or construction for U.S. growth versus deficit 
     reduction. Clinton's blueprint for economic revival had as 
     its centerpiece a multi-year program of deficit reduction, 
     but it promised higher growth in the short run. A move to 
     restrain deficit spending, he wagered, would both lower 
     U.S. long-term rates and energize U.S. interest sensitive 
     sectors. Lower deficits, lower long-term rates and higher 
     real growth were the overall promise. With the data now 
     rolling in for December 1993, it seems clear that 
     President Clinton delivered on all three counts over the 
     second half of the year.

  Let's take a look at the specifics of what has taken place since the 
election of President Clinton. The mid-session review of the budget, 
which was released by the Office of Management and Budget in mid-July, 
demonstrates that the President's economic package continues to be a 
remarkable success.


                              the deficit

  The 1955 deficit is now projected to be 40 percent lower that when 
President Clinton took office in January 1993.
  While policy changes in the deficit reduction package accounted for 
approximately $500 billion in deficit reduction, improvements in the 
economy have helped to raise overall deficit reduction predictions over 
five years to nearly $700 billion.


                             spending cuts

  The historic deficit reduction was achieved by making very tough 
choices about spending cuts. Half of the President's package, or $255 
billion, was devoted to cutting federal programs. The following deserve 
to be mentioned: A reduction of 272,000 in the federal workforce, 
bringing it down to its lowest level since the Kennedy Administration; 
cuts in 300 different programs two years in a row; reductions in nearly 
every entitlement area including Medicare, Medicaid and Farm subsidy 
programs.
  Perhaps the most effective measure of the success of the President's 
economic plan is how it has affected both individual Americans and 
American businesses. By any objective standard, the plan has proven to 
be a resounding success for both these groups. More Americans are 
working; more Americans are confident about their future, and more 
businesses are optimistic about the economic outlook.


                                  jobs

  Since President Clinton took office in January 1993, the job 
situation has dramatically improved, giving hope to millions of 
Americans.
  Since January 1993, the economy has created 3.1 million private 
sector jobs--almost two million more private sector jobs than in the 
previous four years combined.
  The economy has created more than 1.237 million total jobs in the 
first five months of this year, 96 percent of which have been in the 
private sector. The bottom line is that this Administration has created 
nearly two million more private sector jobs than the last 
Administration in one-third the time.

  After serious declines in manufacturing jobs over the past few years, 
they were up in six of the past eight months, an increase of 56,000.
  Construction employment, one important measure of the health of the 
economy, has increased for eleven straight months.
  The current job growth rate puts the economy well ahead of schedule 
to meet the President's goal of 8 million new jobs in four years.
  One of the most impressive statistics of all is that more than 60 
percent of the new jobs created since 1993 were professional, 
managerial or technical jobs which paid 45 percent above the average 
wage.
  Finally, unemployment is down from 7.7 percent in January 1993 to 6.0 
percent in May, 1994. There are names and faces associated with this 
dramatic decline in unemployment. Many individuals now have jobs; they 
have hope for the future; their families feel the security that comes 
with full time employment.
  The success of the economic plan has had an equally impressive impact 
on the business sector. Fortune magazine found that CEOs of both large 
and small companies are more optimistic about the future than they have 
been in nearly a decade. And the most recent Business Week/Harris 
Executive Poll demonstrates broad-based, growing optimism among 
business executives around the country, 90 percent of whom have a 
positive outlook about the country's economic future, and 44 percent of 
whom believe the gross domestic product will increase more in the next 
12 months than it did over the last year. Of the executives polled, 94 
percent reported making a profit in 1993, and over 80 percent say they 
expect increased profits in 1994. And the good news continues, with 
more than 40 percent indicating their intention to hire new employees. 
Dunn & Bradstreet confirms the optimism within the business sector. It 
reported that ``In 1993, the United States posted the greatest number 
of yearly business incorporations since Dunn & Bradstreet began 
reporting this data in 1946.'' In addition to increased business 
confidence, business investment in equipment in 1993 was at its highest 
level in 20 years; and in 1994, it is at its highest level relative to 
GDP in the postwar period. Equally important, consumer confidence is up 
as well--up over 50 percent since enactment of the Clinton economic 
plan last summer.
  Finally, I cannot let this moment pass without again pointing out, as 
I did when I cast my vote last August, that all the rhetoric about the 
plan simply being a tax bill on middle income Americans is simply 
that--rhetoric. The taxes contained in the plan, a fact confirmed by 
H&R Block, fell on only the wealthiest 1.2 percent of Americans. And 
according to Citizens for Tax Justice, 81 percent of those taxes will 
come from Americans with incomes in excess of $200,000. In reality, 
middle class Americans were exempt from the tax, and low income 
Americans, through the expansion of the Earned Income Tax Credit, 
received a tax cut. This is not fiction; this is fact. In Arizona, 26.9 
percent or 255,800 families received a tax cut. This is not fiction; 
this is fact.
  I supported the Clinton economic package because I felt it was the 
right thing to do. I believe this President deserved to have an 
opportunity to implement his plan for the economic future of America. 
There is no doubt in my mind that I made the right decision. The report 
card is in. The President gets an A in economics. In fact, he should 
get an A plus because the plan has been successful beyond any of our 
expectations. And any objective observer would have to reach the same 
conclusion.
  Although the recent election did not lead to the same conclusion. 
That is the political reality. But leadership means first doing what 
you think is right and then taking that issue to the people and 
leading. I think the President must and will take the issue of reduced 
deficit and continue again to ask the Congress to reduce the deficit 
again. He must and I believe will lead. It's the right thing to do.
  I thank my colleagues for their indulgence.
  The PRESIDING OFFICER. The Senator from Ohio [Mr. Glenn] is 
recognized.

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