[Congressional Record Volume 141, Number 2 (Thursday, January 5, 1995)]
[Extensions of Remarks]
[Page E50]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                           ``POVERTY'S TRAP''

                                 ______


                          HON. JOHN D. DINGELL

                              of michigan

                    in the house of representatives

                       Wednesday, January 4, 1995
  Mr. DINGELL. Mr. Speaker, I agree with your statement before the 
House that today is an historic day. In the elections of 1992 and 1994, 
Americans gave their elected leaders a clear signal that they expect 
the Federal Government to do a better job in spending the Nation's 
treasure and tending to the needs of its citizens.
  As we continue the debate begun by President Clinton, Vice President 
Gore, and the 103d Congress to reform the operations of the Federal 
Government, I believe it is important that we not lose track of needs 
of ordinary Americans. People who must live with the fears and 
anxieties created by job insecurity, global competition, and rapid 
technological change clearly feel caught in the middle of these forces. 
Their faith in Government to help solve these problems is badly shaken.
  Two years ago, the President and Congress began a process of deep 
budget cuts and Government reorganization. Contrary to assertions made 
about failure, the 103d Congress put forth a $500 billion deficit 
reduction plan which has more than met its target--it is now estimated 
that the 1993 deficit reduction plan will result in close to $700 
billion in savings. Congress achieved true reductions in Government 
spending in a manner which lessened the deficit, reduced interest 
rates, and allowed capital expansion and vigorous economic growth--
while containing growth-killing inflation.
  What does this mean for middle Americans? Employment levels are at 
their highest in years. In fact, between January, 1993 and September, 
1994, more jobs were created than in the previous 4 years combined. 
Lower interest payments on the Federal debt meant banks could make 
loans to small businesses and families at lower rates. Millions of 
homeowners were able to save thousands of dollars on their home 
mortgages. Retail sales were up more than four times as compared to the 
previous 4-year period. By all indications, the 1993 deficit reduction 
plan continues to give direct benefits to American families.
  As the 104th Congress begins its debate to further reduce the deficit 
and make Government services more effective, it is crucial that the 
changes adopted by this Congress help those Americans who are still 
trying to catch up from the excesses of the failed supply-side economic 
strategies. Mr. Speaker, I commend to your attention to an editorial 
published earlier this week in the Detroit Free Press, which very 
succinctly lays out my belief that Congress must fight to protect the 
interests of our Nation's working families. As this debate about our 
future begins, let us not forget them.
              [From the Detroit Free Press, Jan. 2, 1995]

  Poverty's Trap--The Poor Still Get Poorer, Even in a Healthy Economy

       When Michigan's unemployment rate is at an unprecedented 
     low, why are so many people in our state still poor?
       By 1988, as the supply-side Reagan administration drew to a 
     close, some observers were fretting that the share of 
     national income held by the poorest fifth of U.S. households 
     had dropped to 4.6 percent. But that figure has declined even 
     further, to just 3.6 percent by 1993.
       Meanwhile, the richest 20 percent of U.S. households now 
     control nearly half the nation's income, the highest 
     percentage recorded since this statistic has been kept. The 
     numbers also show a deterioration in the proportion of wealth 
     held by people in and around the middle.
       Some analysts argue that this divergence reflects an 
     educated, well-paid elite pulling ahead of the rest of 
     American society. But the statistics also may suggest how 
     many jobs are not what they used to be: More jobs are part-
     time, or temporary, or full-time but without benefits. Even 
     solid jobs can vanish in the blink of an eye; ask your 
     neighbors who work at Kmart and Perry headquarters about 
     that.
       Michigan has had plenty of experience with what happens 
     when factory jobs dwindle and corporations downsize. The next 
     job is rarely as good. So it's not surprising that our 
     cities, where these trends come together, are especially 
     afflicted by poverty and the maldistribution of income.
       Among the nation's 10 biggest cities, Detroit ranked second 
     only to New York in disparity of income between rich and 
     poor, according to an analysis of 1990 Census figures 
     recently prepared for the New York Times. Detroit's top fifth 
     of earners had the lowest average income among their 
     counterparts in the largest cities. And Detroit's poorest 
     group was an even more distant also-ran in its category.
       We dare not underestimate the economic difficulties facing 
     urban residents and people who struggle everywhere else in 
     Michigan. Good jobs may not be where they live. It may take a 
     succession of jobs, or a combination of jobs, to sustain a 
     family. And job loss can hit anywhere, anytime.
       A booming overall economy may be a necessary condition for 
     reducing poverty. But as too many Michiganians know, it is 
     not by itself a sufficient condition. Elected officials, and 
     the people who put them in office, ought not forget that.
     

                          ____________________