[Congressional Record Volume 141, Number 72 (Wednesday, May 3, 1995)]
[House]
[Pages H4534-H4541]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
BARBARIANS AT THE GATE
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 4, 1995, the gentleman from New York [Mr. Owens] is recognized
for 60 minutes as the designee of the minority leader.
Mr. OWENS. Mr. Speaker, we just returned from recess this week, and
it is a fairly slow week here in the Congress. But next week we will
move into the process of finalizing the budget for the coming budget
year, which begins October 1. It is a situation which I am quite
concerned about.
There is a kind of calm around here before the storm. As far as I am
concerned, I feel a sense of dread before a massacre takes place,
because that is what I feel is in store; a massacre of very useful
programs is about to occur in this budget finalization process that is
going to start next week.
We already have a $17 billion rescission package. The majority party,
the Republicans in this House, have already reached into this year's
budget and pulled back $17 billion, mostly from very good programs. So
$17 billion is being cut out of the budget that is now in process, now
going on.
The budget year that will end on September 30, they are trying to
take out $17 billion. The Senate has passed their version of the
rescission package, and a conference is about to occur. There is
nothing to feel optimistic about there. They put back a few vital
items. I heard the Senate is going to restore the Summer Youth
Employment Program. The Summer Youth Employment Program employs
millions of young people across the country every summer. That had been
wiped out by the Republican-controlled House rescission budget. Now the
Senate says they will put it back, and I hope that they do restore
that.
But I hope the President vetoes the whole bill. I hope that he
understands there are numerous other cuts in that same $17 billion
package, for instance, the cutting of the Department of Housing and
Urban Development to the tune of $7 billion. You cut $7 billion out of
the Department of Housing and Urban Development, and most of the money
that is cut is for low income housing. I hope that the President will
veto the whole package. But I dread what is going to happen with that
package, that rescission package.
But beyond that, I dread the budget finalization process, because
what has happened with the rescissions package is a preview of coming
attractions, a preview of where this majority in this House is going.
It is not exaggerating to say that we are about to behold something
similar to a group of barbarians burning down a city. It is not
exaggerating, because we are going to destroy, and maybe this is a
serious flaw, a serious weakness in the Constitution of the United
States, that a party in power for 2 years can wreck havoc. It can
destroy a great deal.
You can destroy the Department of Education by just denying funding.
You can vote the funding out. It is difficult to vote down the
authority for the agency, but if you don't fund it, you can destroy it,
or so cripple it, until to matter who comes into power the next year,
they will have to try to rebuild a crippled agency.
That has been the history of the Department of Education. It has
always been a crippled agency. It came into
[[Page H4535]] being with great controversy. Thank God Jimmy Carter
created the Department of Education finally. But during the years of
Ronald Reagan they tried to destroy the Department of Education, and it
has never been able to function fully. But finally it has begun to
function and do the kinds of things it needs to do in terms of
leadership.
The threat now is in the process of cutting the budget, one of the
items that is being targeted by the Republican majority is the
Department of Education. We are going to eliminate the Department of
Education, in an age when high technology is so important, in an age
when we say that every worker, every student, should strive to go to
college, and in order to do that they have to come out of high school
with the best possible education in order to get a decent job and
function in a very complex society. At this time we are hearing leaders
in this House talk about eliminating the Department of Education.
An invaluable piece of our civilization is about to be assaulted in
this budget making process. A way of life created for Americans by
Americans is about to be wrecked. That is how serious this year is.
Why is this year so different from any other? Because the majority
party in the House, which is the same as the majority party in the
Senate, have made it clear that they want to assault many of the
programs that have been created over the last 60 years. They want to
get rid of what has been painstakingly developed since Franklin
Roosevelt's days. They want
to get rid of the kinds of programs that make our society as great as
it is. They want to get rid of the kinds of programs that reach out and
say to every American that our great wealth, the fact that we are the
wealthiest Nation that ever existed in the history of the world, is to
be shared not equally, and we are not communists, we are not proposing
that everybody should have an equal share, but we are proposing that
everybody should have some share of it and some kind of decent living
as a result of a prosperous America.
Now there is a barbaric philosophy. And I want to just pause for a
minute and say I would like to see us lower our voices and use less
extremist language. So I do not want to call my colleagues who propose
these doctrines barbarians. I think that is a little extreme. I just
want to focus on each act. A decent person can be guilty of a barbaric
act. So you have some decent people who, I will not question their
decency in general, but they are subscribing to barbaric policies,
barbaric actions.
Let me give you one or two examples, and I will come back in more
detail later on. It is a barbaric action to propose that we fund a
Seawolf submarine for about $2.1 billion, and at the same time propose
to cut the school lunch programs by about $2 billion. There is
controversy about whether the school lunch programs have been cut or
not. I think the conservative Congressional Budget Office has put that
to rest. The conservative estimate of the conservative Congressional
Budget Office is at least $2 billion will be cut from the program. It
will lose that much over the 5-year period it is being proposed. So at
least $2 billion. I think it will be more like $6 billion, but we will
take the more conservative estimate.
You are going to cut school lunches by $2 billion, hungry kids will
have less food, and at the same time propose to build a Seawolf
submarine. What is a Seawolf submarine and what does it contribute to
anything? Nothing. A Seawolf submarine would have been useful in a way
with the Soviet Union. But the Soviet Union doesn't exist anymore. No
other nation has these submarines.
What I am trying to do is bring this down to a level where it can be
clearly understood. When I say a barbaric act has taken place when you
propose to fund an obsolete weapon like a Seawolf submarine at the cost
of $2.1 billion, while at the same time cutting school lunches by a
like amount, that is a barbarian's reasoning at work. There is no
sense, no compassion.
What will the Seawolf submarine do for America? It can do nothing
now. It could have been very useful in a war with the Soviet Union.
They have very sophisticated submarines; therefore, we had to prepare a
more sophisticated submarine. We already have Seawolf submarines. Why
build one more? The cold war has been over for several years. The
Soviet Union is not building any more submarines.
This submarine cannot be used for peaceful purposes. If you do not
use it for warfare, you can take the kids on a ride under the sea, you
could put it in New York harbor and use it as a tourist attraction. But
that is too dangerous. They will not use submarines for tourist
attractions, because even the best submarine is risky to the point
where you wouldn't take kids for joy rides underneath the sea. So it
has no peaceful purpose. yet we are going to build another Seawolf
submarine.
We are going to continue funding the Central Intelligence Agency to
the tune of at least $28 billion, at least $28 billion. We do not know,
because it is still secret. The Soviet Union has revealed secrets about
their secret intelligence agency, but we haven't divulged the budget to
the American people, so we just guess at $28 billion. It is a barbaric
act to say we should continue the funding of the CIA at that level,
while at the same time you cut the Summer Youth Employment Program, a
program that provides jobs for youth during the summer and costs so
much less. It is a barbaric act.
{time} 1330
I will come back with more examples later on. But this is what we are
up against.
I said that we have high-technology barbarians in charge in the
House. I would like to retract that and say that the people are not
barbarians because they certainly love their families; they do a lot of
things that are decent every day. It is not that they are barbarians,
but they are committing barbaric acts. We need to pinpoint each act one
by one.
In New York City, we have some barbaric philosophy that has been
proposed recently. We have this epidemic of barbarity in public service
breaking out all over in New York State government, New York City
government. We are proposing to give huge tax cuts to the rich while we
are cutting programs for Medicare and Medicaid already.
The mayor of New York, I think, has expressed it openly. He has said
what most of the leaders in the House of Representatives have not been
willing to say. The mayor of New York has come right out and said it:
Poor people, if they would please get out of town, get out
of town and we will not have to be bothered with them. We
would like to have policies which do not encourage poor
people to stay around.
The mayor of New York City actually came out and said that. In the
process of saying he did not say it, he kept saying things which were
just as horrible, that as you cut programs and you squeeze
neighborhoods and you refuse to build more housing and you cut the
hospitals and you make life unbearable for poor people, let them get
out of town, let them go. That is the kind of economic cleansing, it is
a new statement by a public official of what many others are thinking
but they are not stating.
We had a gentleman named Roger Star who was prominent in city civic
circles and once served on the editorial board of the New York Times
even who years ago said we should pursue a policy of ethnic, of planned
shrinkage, that New York City should pursue a policy of planned
shrinkage. That is, do not build any housing for the poor, do not
bother to create infrastructures in a poor neighborhood for new sewer
systems and new water systems, et cetera, do not do those things and do
not build and, therefore, you plan, as a result of pursuing those
policies, there will be a shrinkage of the city. As you shrink the city
and the number of people in it, certainly the
number of poor people, the responsibilities of the city go down and
you can give tax cuts to the rich and take care of them as a result.
That was a private citizen making that statement. It was horrible
enough then, but now we have the mayor of the city, the mayor who was
elected by the people to govern all of the people. As you know, we know
as elected officials here in the Congress, once we are elected, we are
no longer elected to serve the people who elected us or the members of
our party, we are elected to serve everybody. This mayor is openly
saying that he really does not want to take care of a large part of the
population of New York City.
[[Page H4536]] Economic cleansing has been openly admitted, the
philosophy. That is a barbaric philosphy. The thinking is barbaric; the
policy is barbaric. I will come back to that later on.
What I am trying to say here is that I want to emphasize that the
budget-making process that we are about to undertake is the most
important thing that this Congress does. It is the most important event
that happens in Washington. The budget-making process in any government
is very important. I have used the example before of the British
Government; the BBC, the British Broadcasting Corporation takes several
days, used to take several days to just discuss the national budget.
Nothing is more important than the budget-making process, whether you
are making budgets at the Federal level or you are making the budget,
going through the budget making-process at the State level or the city
level.
Citizens should pay close attention because how we spend our money
shows what our priorities are, how we spend our money shows what our
values are. And how we spend our money determines whether our side is
going to function properly or not. So in the budget-making process, all
things that are most important to government and society are in motion
at that time. Everything of value will be impacted by the budget
process. And the budget process takes place first, but the
appropriations process follows that and the two are inseparable.
The budget process sets general guidelines, the appropriations
process spells out the details and they cannot be separated. The budget
and appropriations process are the most important functions of our
Government or any other government.
How and why is this budget and appropriations
process different from all others? I have said it is different from
all others because in power now we have a majority that insists that
America is facing a crisis. They have created a crisis atmosphere. They
have created a goal that is very difficult to attain, the goal of a
balanced budget by the year 2002. If you insist that we have to balance
the budget by the year 2002, then you have to take some drastic
measures to do that. You cannot accomplish that unless you take drastic
measures to cut the existing budget, unless you bring an axe to chop
down programs that were created carefully over a 50- or 60-year period.
We had the New Deal. We had the Great Society. And there is a
tendency to take all of this for granted. The Great Society was sort of
an offshoot of the New Deal. Lyndon Johnson was a disciple of Franklin
Roosevelt, and although we might criticize President Johnson for making
many connections with foreign policy and with the Vietnam war, we
recognize his devotion to the principles of Franklin Roosevelt as
expressed through the Great Society programs: The Community Action
program, the Medicaid program, the Medicare program; these things did
not come from God directly. They did not fall out of heaven. They were
created by Democratic administrations, and they represent an expression
of the very best that is in America.
America, we have some things in our past and our tradition which we
are not proud of, but we certainly can be proud of the tradition that
is reflected in the New Deal and in the Great Society because it
reflects a reaching out and a caring for all of the people of America
and it was all done without a revolution. We have done more for human
beings and for the citizens of our Nation without a revolution than
other countries have done that had revolutions which professed to have
this purpose.
But now we are engaged in a situation where in 2 years, in 2 years
the people who have come to power are going to take advantage of a
weakness in the Constitution. There are no safeguards in the
Constitution against having a 2-year period be a period where you can
destroy what was created in 60 years.
There is something wrong with our Constitution. I do not propose to
talk about it now. I do not know what the remedy is, but it has just
occurred to me as a result of the kind of protestations and the kind of
declarations that have been made by the majority Republicans in the
House this year, it just dawned on a lot of us that in 2 years you
really can have a structure of the policies of the country totally
turned around, totally altered. That is a great deal of change to take
place in 2 years. It is revolutionary.
I have a suspicion of revolutions. We should always be suspicious of
revolutions. Revolutions at best are necessary evils when there is no
other alternative. Revolutions always cause almost as much harm as they
do good because of the very nature of the upheaval of revolutions means
that a lot of people are going to be trampled on, a lot of suffering is
going to take place that would not take place if you follow an
evolutionary process.
We have in America always followed an evolutionary process, even at
the time of greatest crisis during the Depression, the transfer from
Herbert Hoover to Franklin Roosevelt was not a revolution. It was an
evolution. It was a use of the legislative process at its very best.
Franklin Roosevelt did not go into the basement of the White House as
Oliver North did and come up with secret plans about how to make the
American Government operate in a way which was not approved by the
Congress. Franklin Roosevelt came to the Congress, the New Deal
legislation was passed in concert with the Congress.
Step by step we worked our way through a very difficult period. We
entered World War II, and the same process was followed as we moved
through the necessary processes to win World War II under the
leadership of Franklin Roosevelt and Harry Truman. So we have always
moved in an evolutionary way. Sometimes you have to speed up the
evolutionary process, and sometimes the approach to the evolutionary
process has to be comprehensive, across the board you have to move and
move fast, but to move in a way that is being proposed now, where an
artificial crisis is created, an umbrella of emergency has been
created. So we have a situation where extreme changes, extreme radical
changes can be justified because we have created a crisis.
Who is it who said that we have to have a balanced budget by the year
2002? What economist has said that that is absolutely necessary to keep
our economy healthy? Our deficit is coming down already. Our deficit
has never been as great as certain European countries who are not in a
panic and not making their people suffer in order to get a balanced
budget within a 7-year period. Where did this come from? Olympia? Did
some oracle predict that we had to have a balanced budget by the year
2002?
That is an artificial goal. A crisis that is created by setting that,
the rationale for it, we still do not know. It is forcing us into a
revolutionary mode. You are going to have to make $700 billion in
savings. You have to pull out of the process, out of the present budget
over a 7-year period, you have to get $700 billion.
My colleagues previously were discussing the Medicare cuts, because
one of the places where you have the largest Government expenditures is
in health care costs, Medicare being probably one of the highest
expenditures.
Medicare is on the chopping block now because if you have to save
$700 billion over the next 5 to 7 years, where are you going to get it?
It is like slick Willie Sutton who when he was asked, why do you rob
banks, said that is where the money is. They are going to take it from
Medicare because that is where the money is.
They are going to take it from Medicaid, too. Medicaid is a health
care program for the poorest people in the country. And they are going
to rob Medicaid, too. But nobody is discussing that because Medicaid
does not have any defenders in this capital, in the city of Washington
you do not hear from the White House any discussion of drastic cuts
that are being proposed for Medicaid. You do not hear them on the Hill,
here in Congress, but they are going to cut Medicaid for poor people
drastically also.
Cuts are already under way in the States and in cities across America
to cut health care for poor people. What is the problem when you start
cutting health care for poor people? When the Medicaid program was
first developed a statement was made which is still true. The statement
is that there is no such thing as bargain basement, second-class health
care. Health care is either adequate or it is not adequate. You
[[Page H4537]] cannot have second-class, bargain basement health care,
health care where you use old needles to save money because if you use
old needles to give injections, you are likely to create more disease
than you are to create health.
You cannot have health care where the hospitals do not wash the linen
except once a week. You cannot have health care where a doctor makes a
diagnosis that a patient needs a certain medication that exists and we
know it exists and the doctor decides that that is too expensive for
that person. That is not health care. That is making judgments about
human beings that nobody should have the right to make.
So health care costs cannot be trimmed and cannot be cut without
damaging the health care process. It is either adequate health care or
it is not. So when Medicare cuts are made, what we are saying is we are
going to give bargain basement health care to poor people and that is
going to be inadequate health care. And those of us who are here, those
who propose it and those who are against it, we all know that what we
are doing is unethical and dangerous, but there are going to be cuts
for Medicaid and there are going to be cuts for Medicare if they
continue to insist, if they insist that we have to balance our budget
in America by the year 2002.
Now, why does it make sense to balance the budget? They offer this
homespun logic that says every family balances its budget. You know
they have to balance your budget.
{time} 1345
That seems like a great truth, something that Einstein might endorse,
except any mother, any father, anybody in any family knows that you do
not balance your budget, you do not balance your budget year by year.
Your mortgage is not paid for in 1 year. Your mortgage is spread out
over a long period of time. Otherwise you could not afford, you cannot
pay for a house--there are some rich and famous Americans who can, but
most of us cannot pay for a house in 1 year. You cannot pay for your
car in the same year, either. Most of us cannot pay for a car, so you
do not balance your budget.
Balanced budgets are not something that heaven smiles upon because
they work in the economy. They are something invented by the Republican
majority here as a great good that we should all strive for which does
not exist. They say cities and States have balanced budgets. Most
cities and States do not have balanced budgets, they have operating
budgets that are balanced and then they have capital budgets. They take
all the items, like your car and your house and things that have to be
paid for over a long period of time, because they are so tremendously
expensive, and they put that in a capital budget.
What this Government needs to do, if you want to have an intelligent
approach to the budget, is we should have a capital budget for items
that cost a lot of money over a long period of time, and an operating
budget for the items that you pay for on a yearly basis.
I would be the first to support a balanced budget operating budget if
you want to propose it that way, as long as you take the capital items
like the building of airports and highways, and if we need new weapon
systems in the future, weapon systems are a large expenditure that come
out, and you can look at it in a more intelligent way.
However, the people who are in charge now, they have the votes. They
say we are going to have a balanced budget. It is dogmatic, it is not
scientific, it is not logical, but they have the votes, so they have
created a crisis.
I serve as the chairman of the Congressional Black Caucus Alternative
Committee on the Budget. We hope that we are going to be able to offer
an alternative budget on the floor, and show our vision of where
America should be going and how you can deal with the budget versus the
vision of the majority that is in control right now. We are going to do
that, despite the fact that we have been told that no budget will be
allowed on the floor for discussion unless it meets the requirement
that has been set forth to move toward balance.
You have to have a balanced budget, a budget which is going toward
balance, by the year 2002. That means that since our budgets are really
projected on a 5-year period, not a 7-year period, we have to show in
our fifth year in our budget that the deficit is down to $59 billion,
which means that in 2 more years it will be eliminated completely. We
are going to accept their challenge.
I am not sure what the Democratic minority is going to do as a whole,
but the Congressional Black Caucus, we will accept that challenge. We
will show how, even if you accept the illogical, unscientific approach
of the Republican majority, you can produce a budget that will be in
balance by the year 2002, and you can still do that without making
large numbers of Americans suffer. You can do it without cutting
Medicaid drastically; you can do it without cutting Medicare
drastically. What you have to do, however, is stop the fantasy, stop
the fantasy of increasing
the defense budget because you identify with that in some kind of
romantic way.
The defense budget cannot be increased while you are making all of
these cuts. We do not need to increase the defense budget. We need to
cut, instead, the $100 billion for overseas bases. We are still
supplying bases in Germany and Japan. These are prosperous nations.
They can take care of their own needs if they want to man those bases,
or even if they do not need the bases, they are there for the security
of Europe as a whole, or the bases are there for the security of Asia
as a whole, then Japan should pay their share of maintaining security
in the world.
It is about time. They are rich nations, Germany and Japan. Let them
pay for the security of Europe instead of an egotistical America. Our
ego is costing us billions of dollars, an egotistical sense that we, we
should make sure that Europe is secure by paying for the bases in
Europe. We should make certain that Asia is secure by paying for the
bases in Europe. Ego. That is how Tom Sawyer whitewashed the fence.
Japan and Germany stand back and they chuckle while their economies
go forward, while their workers earn higher pay, they have longer
vacations, their society is much more secure than ours. They chuckle at
our egotism that says we must maintain bases across the world in order
to guarantee security and freedom, we must have a huge Navy that
guarantees the freedom of the sea lanes of the world.
Why do we have to have a huge Navy to guarantee the freedom of the
sea lanes of the world? If we want the freedom and security of the sea
lanes to be guaranteed, let us give more support to the United Nations
and let us have all nations join together to guarantee the security and
the freedom of the sea lanes of the world.
It is our ego that costs us billions of dollars in defense, while
other nations sit back and let us do it and chuckle at us while they
pour their resources into their economy. They pour their resources into
the creation of jobs.
In our budget, if you want to insist on balancing the budget, we say
to the Republican majority, then let us balance the budget by cutting
those things which are not necessary, like $100 billion in overseas
bases.
We have, unfortunately, an attitude, a philosophy, that comes first.
The attitude has to be confronted. We have to confront the fact that we
are dealing with an elitist attitude, an attitude which says that we
want an America which gets rid of all of the people who are a nuisance
to those rich and famous who want to have an opportunity to make more
and more money faster and faster.
We already have the largest corporations in the world. The Fortune
500 corporations are bigger than most of the countries in the world,
their budgets. They have more money, more assets than most of the
countries in the world. We already have more billionaires than any
other country in the world. We do not have maybe the richest person in
the world, maybe Japan or Germany might have him, but we have more
people in the category of billionaires than any other nation in the
world, yet we want to set conditions which will guarantee that they get
rich faster, instead of setting conditions and making policies that
guarantee that the pie is shared.
All of us participated in the building of America. Every soldier that
died in every war made a contribution. Every person that worked in the
factories during the war made a contribution.
[[Page H4538]] Every engineer that took the work of a genius and
translated it into some practical application, you know, everybody
participated in the building of this civilization and this society.
Everybody deserves some rewards. Not everybody deserves to be rich,
but everybody deserves to have a decent opportunity to pursue
happiness, the right to the pursuit of happiness. We have forgotten
that it is our duty as a government to supply the right to pursue
happiness.
Let us just take a moment to look at the study that was reported in
the New York Times on Monday, April 17. The study was reported, and I
also have an editorial, and I am not sure if it was on the same day,
but it was either on the following day or the same day. On Monday,
April 17, the article said ``The gap in wealth in the U.S. is called
the widest in the West.''
In the previous special order with my colleagues, I mentioned this,
and they talked about it, too, we have a situation where the United
States has replaced Great Britain as being the nation where the gap
between the rich and poor is the widest. There is a chart which shows
that over the years, since 1925, in Great Britain, the gap between the
wealthiest people and the poorest people has come down steadily, while
the gap in America has risen steadily, and we are way above the British
at this point. The gap between the average income of the richest and
the poor is wider in America than it is in Germany, in Japan, or
anywhere else in the world.
Mr. Speaker, I will include this article which appeared in the New
York Times on April 17 for the Record:
[From the New York Times, Apr. 17, 1995]
Gap in Wealth in the United States Called Widest in West
(By Keith Bradsher)
Washington, April 12.--New studies on the growing
concentration of American wealth and income challenge a
cherished part of the country's self-image: They show that
rather than being an egalitarian society, the United States
has become the most economically stratified of industrial
nations.
Even class societies like Britain, which inherited large
differences in income and wealth over centuries going back to
their feudal pasts, now have greater economic equality than
the United States, according to the latest economic and
statistical research, much of which is to be published soon.
Economic inequality has been on the rise in the United
States since the 1970's. Since 1992, when Bill Clinton
charged that Republican tax cuts in the 1980's had broadened
the gap between the rich and the middle class, it has become
more sharply focused as a political issue.
Many of the new studies are based on the data available
then, but provide new analyses that coincide with a vigorous
debate in Congress over provisions in the Republican Contract
With America.
Indeed, the drive by Republicans to reduce Federal welfare
programs and cut taxes is expected, at least in the short
term, to widen disparities between rich and poor.
Federal Reserve figures from 1989, the most recent
available, show that the wealthiest 1 percent of American
households--with net worth of at least $2.3 million each--
owns nearly 40 percent of the nation's wealth. By contrast,
the wealthiest 1 percent of the British population owns about
18 percent of the wealth there--down from 59 percent in the
early 1920's.
Further down the scale, the top 20 percent of Americans--
households worth $180,000 or more--have more than 80 percent
of the country's wealth, a figure higher than in other
industrial nations.
Income statistics are similarly skewed. At the bottom end
of the scale, the lowest-earning 20 percent of Americans earn
only 5.7 percent of all the after-tax income paid to
individuals in the United States each year. In Finland, a
nation with an exceptionally even distribution of income, the
lowest-earning 20 percent receive 10.8 percent of such
income.
The top 20 percent of American households in terms of
income--$55,000 or more--have 55 percent of all after-tax
income.
``We are the most unequal industrialized country in terms
of income and wealth, and we're growing more unequal faster
than the other industrialized countries,'' said Edward N.
Wolff, an economics professor at New York University. He will
publish two papers in coming months that compare wealth
patterns in Western countries.
Liberal social scientists worry about poor people's
shrinking share of the nation's resources, and the
consequences in terms of economic performance and social
tension.
Margaret Weir, a senior fellow in government studies at the
Brookings Institution, called the higher concentration of
incomes and wealth ``quite divisive,'' especially in a
country where the political system requires so much campaign
money.
``It tilts the political system toward those who have more
resources,'' she said, adding that financial extremes also
undermined the ``sense of community and commonality of
purpose.''
Robert Greenstein, executive director of the Center on
Budget and Policy Priorities, a Washington research group,
observed, ``When you have a child poverty rate that is four
times the average of Western European countries that are our
principal industrial competitors, and when those children are
a significant part of our future work force, you have to
worry about the competitive effects as well as the social-
fabric effects.''
Conservatives have tended to pay less attention to rising
inequality, and some express skepticism about the statistics
of their significance. Marvin H. Kosters, an economist at the
American Enterprise Institute here, said he thought the gap,
as measured, was being used as a false villain. ``I think we
have important sociological problems,'' he said, ``but I
don't think this gets at it all that well.''
Murray L. Weidenbaum, professor of economics at Washington
University in St. Louis and chairman of the Council of
Economic Advisers under President Ronald Reagan in 1981-1982,
said he thought the measures tended to overstate the gap by
overlooking Government programs like food stamps or Medicaid.
Still, he said he was uncomfortable with greater
concentration of wealth ``unless there's a rapid turnover''
in which ``this year's losers will be next year's winners.''
He noted that many wealthy people have bad years and that a
lot of middle-class people, like graduate students, briefly
look statistically as if they are starving. The United States
does have ``very substantial mobility,'' he added.
Mr. Weidenbaum said he doubted that the Republican agenda,
if it became law, would have any substantial effect on the
gap. He added that the ``static'' impact might be somewhat
more concentration, but that the ``dynamic'' impact would
produce a bigger economic pie for all to share.
There is no agreement as to why inequality is rising faster
in the United States than elsewhere. Explanations include
falling wages for unskilled workers as automation spreads,
low tax rates on the rich during the 1980's, relatively low
minimum wages, the decline of trade unions and the rapid rise
in the 1980's of the stock and bond markets, in which rich
people are heavily invested.
The most common view seems to be that the United States has
witnessed the more extreme effects of several international
trends toward greater economic inequality. ``While many of
the countries experienced many pieces of inequality, the
United States is the one country that seems to have
experienced all the pieces,'' said Peter T. Gottschalk, an
economics professor at Boston College.
Mr. Wolff's papers are based on data that run through 1989.
But Census Bureau figures show that the trend toward greater
income inequality continued during the first year of the
Clinton Administration. While incomes rose for the most
affluent two-fifths of the nation's households as the economy
expanded in 1993, the rest of the country suffered from
falling incomes, after adjusting for inflation.
``U.S. wage distribution is more unequal than other
countries and we do less in terms of tax and transfer
policy'' to cushion the disparities, said Timothy M.
Smeeding, an American who is director of the Luxembourg
Income Study Project. Mr. Smeeding is writing two papers
drawing international comparisons of income.
The project, based in Walferdange, Luxembourg, is supported
by the national science foundations of nearly two dozen
countries including the United States, and has gathered
Government data from the member nations showing that the
United States has the greatest inequalities in income
distribution.
Most economists believe that wealth and income are more
concentrated in the United States than in Japan. But while
data show that wealth is more equitably distributed in Japan,
the Government there has not released enough detailed
information to make statistical comparisons possible.
Anecdotal information strongly suggests that Japan has a
more equal distribution of income. The chief executives of
Japanese manufacturing companies, for example, make an
average of 10 times the pay of their workers. American chief
executives in manufacturing are paid 25 times more, according
to a 1994 study by Towers Perrin, a management consulting
company.
Professor Gottschalk said Canada and the Netherlands seemed
to have avoided the trend toward relatively higher wages for
high-skilled workers because they had sharply increased the
number of college graduates. But other trends toward
inequality, like a widening wage gap between experienced and
inexperienced workers, have affected these two countries, as
well.
The time American inequality began to increase is also
debated, with various economists putting it anywhere from the
mid-1970's to the early 1980's. The double-digit inflation
and stock market slumps that followed the quadrupling of oil
prices in 1973 temporarily produced greater equality, as the
stocks and bonds of the rich lost value. But that effect
gradually disappeared, with Mr. Wolff's data showing that the
concentration of wealth among the richest has consistently
exceeded Britain's level since 1978. British records are
especially complete, making such comparisons easier.
The comparison with Britain is all the more striking
because President Reagan and
[[Page H4539]] former Prime Minister Margaret Thatcher
pursued broadly similar economic policies in the 1980's.
Rising housing prices have helped the British middle class
and limited the growth in inequality there. Still, Mr.
Gottschalk said most evidence indicated that income
inequality rose much faster in the United States and Britian
than elsewhere.
Richard V. Burkhauser, an economics professor at Syracuse
University, said that in studying thousands of people in
Germany and the United States over seven-year periods in the
1980's, he found that the two countries had roughly the same
level of social mobility.
As part of the Contract With America's tax provisions, the
House on April 5 approved an increase in individuals'
exemptions from the estate tax, which is the main Federal tax
on wealth. By the Treasury's estimate, this could cut in half
the number of people subject to the tax, to one-half of 1
percent of the estates of those dying each year.
Republicans have argued that the overall tax-cut provisions
would reduce annual tax bills by roughly equal percentages
for rich and poor. Democrats say that because the annual tax
bills of rich Americans are much larger, reducing them by
about the same percentage means that most of the money goes
to the rich rather than the poor or the middle class, further
concentrating wealth and income.
Mr. OWENS. Mr. Speaker, I will read from the editorial a few excerpts
that I did not have a chance to cover before. The New York Times is not
a radical publication. The New York Times editorial says the following:
``After years of little change, inequality exploded in America starting
in the 1970's. According to Prof. Edward Wolff of New York University,
three-quarters of the income gains during the 1980's and 100 percent of
the increased wealth went to the top 20 percent of the families.'' In
America, the top 20 percent got three-quarters of all the income gains.
The 80 percent on the bottom, 8 out of 10, shared the rest.
I continue the quote from the New York Times: ``The richest 1 percent
of households control about 40 percent of the nation's wealth.'' One
percent versus 99 percent. The other 99 percent take the rest. ``. . .
1 percent control 40 percent of the nation's wealth--twice as much as
the figure in Britain, which has the greatest inequality in Western
Europe.''
In Britain, which used to have the greatest inequality between the
rich and the poor, now we have twice as much inequality in the New
World, in America. We fought the British, we got rid of that system,
that privilege and wealth. Now we have twice as much inequality as
Britain.
``In Germany,'' and I am quoting from the New York Times editorial,
``High-wage families earn about 2.5 times as much as low-wage
workers,'' 2.5 times. The number in Germany has been falling. In
America the figure is that the high-wage families in America earn four
times as much as low-wage families, and the high-wage families'
percentage of income is rising.
The difference between the high-wage families and the low-wage
families, people who work every day for wages, we are not talking about
wealthy people who have stocks and bonds and they get their income from
their investments, we are talking about wage earners, people who work
every day, the highest wages in America have been going up for the top
and down for the bottom, so you have the top wage earners, the
difference is four times as great.
I continue to read from the editorial in the New York Times: ``The
best guess about the factor behind the burgeoning inequality is
technology; the wage gap between high- and low-skilled workers in
America doubled during the 1980's. College graduates used to earn about
30 percent more than high school graduates, but now they earn 60
percent more.'' College graduates used to earn 30 percent more than
just mere high school graduates, and now they earn 60 percent more.
Why is it barbaric that the Republican budget proposals are going to
cut the student loan program by $12 billion over 5 years? Why is it a
barbaric act, an act that has no vision, no logic, no science? Because
you limit, when you make those kinds of cuts and make it more difficult
for people to go to college, you limit the number of people who can
enter the high-technology job market, and you cut off the possibilities
of their earning livings at that level.
I go back to the New York Times article: ``Prof. Sheldon Danziger of
the University of Michigan estimates that trends in private pay rates
explain about 85 percent of recent increases in inequality; Reagan-Bush
tax cuts for the rich and spending cuts for the poor explain much of
the other 15 percent.''
However, even if government is not the main factor, and this is the
New York Times, not me, I think government policies are certainly not
what makes the economy, but government policies are the main factor in
the way a society operates, including the economy. To quote the New
York Times, ``Even if government is not the main factor, it could be a
part of the solution. Changes in the Canadian economy during the 1980's
also hit hard at low-wage workers,'' changes in the Canadian economy.
In Canada, there the government stepped in to keep poverty rates on a
downward path. In the United States, poverty rose, but in Canada,
poverty dropped, because the government policies were used to intervene
in their economy in ways to help the poor.
``House Republicans are now,'' and I am still quoting the New York
Times, ``House Republicans are now pushing the Federal budget in the
wrong direction. At a time when employers are crying out for well-
educated workers, the GOP proposes to cut back money for training and
educational assistance. America needs better Head Start, primary and
secondary education. It needs to train high school dropouts and welfare
mothers. The GOP policy would leave the untrained stranded. That would
harm the Nation's long-term productivity--and further distort an
increasingly tilted economy.''
{time} 1400
Mr. Speaker, I imclude the New York Times editorial in its entirety
at this point in the Record:
The Rich Get Richer Faster
The gap between rich and poor is vast in the United
States--and recent studies show it growing faster here than
anywhere else in the West. The trend is largely the result of
technological forces at work around the world. But the United
States Government has done little to ameliorate the problem.
Indeed, if the Republicans get their way on the budget, the
Government will make a troubling trend measurably worse.
Some inequality is necessary if society wants to reward
investors for taking risks and individuals for working hard
and well. But excessive inequality can break the spirit of
those trapped in society's cellar--and exacerbate social
tensions.
After years of little change, inequality exploded in
America starting in the 1970's. According to Prof. Edward
Wolff of New York University, three-quarters of the income
gains during the 1980's and 100 percent of the increased
wealth went to the top 20 percent of families.
The richest 1 percent of households control about 40
percent of the nation's wealth--twice as much as the figure
in Britain, which has the greatest inequality in Western
Europe. In Germany, high-wage families earn about 2.5 times
as much as low-wage workers; the number has been falling. In
America the figure is above 4 times, and rising.
Interpreting these trends requires caution. Inequality rose
here in the 1980's in part because the United States created
far more jobs--many low-paid--than did Western Europe. Low-
paying jobs are better than no jobs. Rising inequality in the
United States has also been caused in substantial part by
middle-class families that moved up the income ladder,
opening a gap with those below them.
About half of Americans move a substantial distance up or
down the income ladder over a typical five-year period. In a
mobile society, where workers rotate among high-and low-
earning jobs, earning gaps are less frightening because any
given job would be less entrapping.
But mobility has offset none of the increased inequality of
income. Studies at the Maxwell School at Syracuse University
show that mobility in America is not higher than in Germany.
Nor does mobility here appear to be higher today than it was
in the early 1970's.
The best guess about the factor behind burgeoning
inequality is technology; the wage gap between high- and low-
skilled workers in America doubled during the 1980's. College
graduates used to earn about 30 percent more than high school
graduates, but now earn 60 percent more. Prof. Sheldon
Danziger of the University of Michigan estimates that trends
in private pay rates explain about 85 percent of recent
increases in inequality; Reagan-Bush tax cuts for the rich
and spending cuts for the poor explain much of the other 15
percent.
But even if government is not the main actor, it could be
part of the solution. Changes in the Canadian economy during
the 1980's also hit hard at low-wage workers. But there the
Government stepped in to keep poverty rates on a downward
path. I the United States, poverty rose.
House Republicans are now pushing the Federal budget in the
wrong direction. At a
[[Page H4540]] time when employers are crying out for well-
educated workers, the G.O.P. proposes to cut back money for
training and educational assistance. America needs better
Head Start, primary and secondary education. It needs to
train high school dropouts and welfare mothers. The G.O.P.
policy would leave the untrained stranded. That would harm
the nation's long-term productivity--and further distort an
increasingly tilted economy.
Mr. OWENS. Mr. Speaker, I just want to reemphasize something I read
from the editorial earlier:
Some inequality is necessary if society wants to reward
investors for taking risks and individuals for working hard
and well. But excessive inequality can break the spirit of
those trapped in society's cellar--and exacerbate social
tensions.
We are not proposing a change in capitalism. We are not proposing an
attack on capitalism. Capitalism is the way of the world. It is the
best economy that mankind has been able to fashion. But capitalism
should be tempered by democratic government. Democratic government
should extol the necessity to make sure that there are safety nets,
that the wealth is shared. When people go to work for Xerox or IBM or
Microsoft, they do not take an oath to uphold the Constitution of the
United States. They do not have to be true to the doctrine expressed in
the Declaration of Independence. The pursuit of happiness is not a
concern of a corporation, per se. The pursuit of happiness of the
American people is not their concern. The pursuit of profit is their
business. But government must make certain that in the process of
pursuing profits, corporations are part of a total society and that
policies are promulgated where everybody is properly taken care of, not
everybody shares equally but we have public policies which guarantee
that everybody will have decent housing, public policies which
guarantee that the opportunity to get an education will be provided.
We cannot afford to have a budget like the budget that is about to be
proposed by the Republican majority that is going to slash job training
programs tremendously, they are going to slash education programs, and,
of course, there is a notion existing that they may completely
eradicate the Department of Education.
What does it say to the world, to the civilized world, to the other
industrialized nations that the United States of America is going to
eliminate the Department of Education? What does it say to the other
competitors that we have in the world about our future competitiveness?
I think they will chuckle and say we are going to have less of a
problem with a competitive America in the future if they are going to
eliminate a Department of Education at the Federal level which gives a
sense of direction for education in the country as a whole.
It is not responsible, we do not have a system like France or Great
Britain or most of the European countries, we do not have a centralized
system of education. The education budget in this country, most of it
is paid for by State and local governments. The proportion of the
budget of the Federal Government's share of the budget is about 8
percent now, fluctuating between 8 and 6 percent. Under Ronald Reagan
it went down to about 6 percent. But at most it is 8 percent of the
total budget. Of the more than $360 billion spent on education from
kindergarten to higher education last year, the Federal Government only
paid for about 8 percent of that. So it is not our contribution
financially that is so important. It is the leadership that the Federal
Government offers in terms of giving a sense of direction to where we
have to go in the global economy in order to be competitive. It is the
leadership of the Federal Government that brought forth a document
called ``A Nation At Risk'' where we said this Nation cannot survive
unless we pay more attention to how our children are educated in order
to be able to compete in the modern world. It is the leadership that
led George Bush to put out America 2000, his own program for improving
education.
Behind George Bush came President Clinton with Goals 2000. Goals 2000
is not so different from America 2000. They were both at the same
conference where the Governors came up with the same six ways to
improve education.
We were moving forward, we are moving forward in terms of Federal
participation without Federal domination of education. The Federal
Government offers leadership. But now I dread the budget that is coming
because that budget proposes to eliminate the Department of Education.
That is a barbaric act. It would be a barbaric act, an unreasonable
act, an unscientific act to eliminate the Department of Education at
this time.
I say the barbaric philosophy, people who are committing barbaric
acts are a real danger. They are not barbarians themselves but each act
should be examined by itself. I think I mentioned before a philosophy
of economic cleansing that has been proposed by the mayor of New York
City. The mayor of New York City is a nice guy when you get to know
him. He is a decent fellow, he has a family, he has kids.
I cannot call him a barbarian, but I can think of no more barbaric
thinking than to believe that poor people should get out of town, they
should leave, in order to make the city's economic situation better.
That is barbaric in the extreme. It is a philosophy of ethnic cleansing
that has been expressed by an elected official. Those who think it, I
consider that bad enough, but this has been expressed and it must be
challenged.
The mayor of New York City cannot say to the poor people of New York
City, ``You don't belong here.'' He cannot say to the African-Americans
in New York City, ``You don't belong here.'' New York City was a major
slave port. Millions of slaves were poured into New York City in its
early days. As New York City was built starting at the waterfront and
moved back up to Central Park, even when Central Park was cleared,
there are photographs of slaves working to clear the ground. That city
was built in its infancy by slave labor. There is a Negro burial ground
that was unearthed as they were building a new Federal building in a
downtown section of Manhattan, and the Negro burial ground revealed
massive numbers of graves, there must have been epidemic sickness,
large numbers of people died, large numbers of children died. In order
for there to be so many graves and so many people dying, there had to
be many slaves there and they were the ones who cut down the trees,
made the lumber, did the construction. Long before the white immigrants
came, the slaves who were kidnapped and who were the hostages and not
immigrants, they helped to build New York City. And now to say to the
descendants of those slaves who built New York City, ``Get out of town,
you're not wanted.''
Where will they go? Where will the poor people of New York City go?
Who else wants them if New York City does not want them? Will they go
to Marietta, GA, where they are building the F-22 fighter plane? The F-
22 fighter plane is one of those obsolete weapon systems that we do not
need. We do not need a fighter plane more sophisticated than the one we
already have because the Soviet Union is not building another one. We
have the best already, so why build another one? It is going to cost us
$12 billion over the next 5 years to continue creating, building the F-
22.
Can you give us some jobs in the F-22 plant in Marietta, GA, which
happens to be the Speaker's district? Can you give us jobs for the poor
of New York City? Can we send them to Marietta, GA?
Where will they go? Can we send them to Groton, CT, where they are
building another Seawolf submarine? Can you give the poor people of New
York jobs at Groton, CT, where they are building another Seawolf
submarine?
Can they go to Texas where they made a killing? Texas is responsible
for the savings and loan debacle. Half of the savings and loans that
collapsed, half the swindles took place in Texas.
But they benefited even from the collapse because, since they have
most of the problem in their State, the Resolution Trust Corporation
and all of the effort to straighten out the debacle created by the
savings and loan swindle, half of it is in Texas. So workers are hired
by the Resolution Trust Corporation, by those people who are trying to
straighten out the savings and loan mess. They are Texas workers, so
Texas benefits twice.
Can we get some jobs for New Yorkers in Texas so that they can
benefit from the savings and loan swindle, jobs that are created as we
try to straighten it out? Where can the New York City poor people go?
[[Page H4541]] Can they go to Kansas? In Kansas you have families who
are farm families, and they have been averaging $30,000 to $40,000 in
government checks over the last decade. According to an article in the
New York Times, they get $30,000 to $40,000 for doing nothing, except
what they do raises the price of food, and we pay more for food in New
York because we are keeping the price of farm products high by
subsidizing them with taxpayers' money.
There is something barbaric about paying people not to grow food and
driving up the price so the poorest people have to pay more money. The
farm price program was created by the New Deal, by Franklin Roosevelt,
when farmers were poor, to save poor farmers, when large numbers of
people lived on the land. But now we have less than 2 percent of the
population of the United States living on farms, and we are spending
billions of dollars to take care of those pretty well-to-do farmers and
the agribusinesses.
I want to read one more editorial from the New York Times about the
farm program. This is a program which we all accept nobody wants to
cut. Recently the President made a trip to Iowa, and he pledged that he
would defend Federal farm subsidies to the end.
The New York Times editorial says that farmers, quoting the New York
Times, farmers are the Nation's richest welfare recipients.
Farmers are the Nation's richest welfare recipients. Full-
time farmers typically earn four times as much as nonfarm
families.
The Federal Government pays farmers and huge agribusinesses
not to grow crops or send food abroad. Mr. Clinton says that
is a nifty way to boost exports, but taxpayers who foot the
bill might take exception.
The Federal program stifles food production, which jacks up
prices and hurts both consumers and the economy. The farm
program costs taxpayers about $10 billion a year and adds an
equal amount to food bills, driving up the price of milk,
fruit, sugar and many other necessities by about 10 percent.
That quote was from the New York Times editorial, which is entitled
``Mr. Clinton Bows to Farmers.''
Many of those farmers live in Kansas, the State of Kansas. Can we
send New York City's poor to Kansas to share in the welfare checks that
the farmers get? Our welfare checks average no more than $600 for a
family of three a month, so surely the welfare recipients in New York
would greatly benefit if they could get welfare checks at the level of
the checks that are being received by the farmers in Kansas.
Mr. Giuliano should know that there is nowhere else for the poor to
go. They will not take them in Kansas; in Texas; in Groton, CT; in
Marietta, GA. They have a right to stay in New York City. The
inhabitants have a right, the citizens have rights.
If a government cannot take care of the needs of their citizens, they
cannot provide decent services, they cannot provide educational
opportunities, then that government should resign. The public officials
who cannot do that should resign. Do not exhort the people to leave.
That is barbaric. That is not ethnic cleansing, it is economic
cleansing, since you want all the poor to go.
First we had the tax on the illegal immigrants. Then we had a tax on
the legal immigrants. Now we want all poor people to go. That is
barbaric. We must resist that kind of barbarism.
In closing, what I am saying is that the budget process is taking
place at every level in the country. In New York State, the budget was
supposed to be completed and submitted on April 1. Now it is more than
a month later and it is not completed because there is a struggle under
way in New York State between the elite oppressive minority--you have
the same elite oppressive minority with the philosophy that the poor
are expendable, that you can throw overboard certain people. You have
the high-technology barbarians in control in New York State, and in New
York City, in city hall you have the same philosophy in the mayor.
Yes, there are budget cuts that have to be made. Yes, there is a need
to balance the budget, and Democrats should not get off the hook. We
should come forward with proposals about how the budget should be
balanced. We should not hesitate to talk about revenue.
In New York City, the State has always robbed the city blind in terms
of revenue, doing very little for the city. They have taken far too
much from the city. In New York City, you have a Port of New York City,
a Port Authority of New York-New Jersey which owns all the most
valuable land where the airport is and the ships dock. Revenue that
ought to be going to the city is going to the Port Authority. That
ought to be corrected.
In New York City, you have two- and three-family homeowners who pay
taxes which are far lower, about one-fourth the taxes that are being
paid by the people who live in the suburbs surrounding New York. You
have a number of ways that revenue could be increased.
Yes, we do need to decrease expenditures. Yes, we do need to adjust
programs. There is not a program that has ever been invented that could
not be trimmed, could not be adjusted, could not be refined. All that
should take place in an atmosphere of an evolutionary process, and not
a revolutionary process which says that ``We are going to destroy, we
are going to slash and burn, we are going to have a blitzkrieg attack
on all the social programs that were invented, that were developed over
the last 60 years.''
We do not need to go into the budget process next week with so much
dread, so much fear, so much foreboding. We do not have to look forward
to a process that is going to tear down and wreck the best that America
has ever built.
{time} 1415
It could be very different. We could go forward with a philosophy of
FDR ringing in our ears. There is nothing radical or new. The ``FDR's
Economic Bill of Rights,'' I ran across it in a magazine the other day,
and I will just close with this. Franklin Delano Roosevelt said many
years ago:
In our day these economic truths have become accepted as
self-evident. We have accepted, so to speak, a second Bill of
Rights under which a new basis of security and prosperity can
be established for all regardless of station, or race or
creed.
Among these are:
The right to a useful and remunerative job in the
industries, or shops or farms or mines of the nation;
The right to earn enough to provide adequate food and
clothing and recreation;
The right of farmers to raise and sell their products at a
return which will give them and their families a decent
living;
The right of every businessman, large and small, to trade
in an atmosphere of freedom from unfair competition and
domination by monopolies at home or abroad;
The right of every family to a decent home;
The right of adequate medical care and the opportunity to
achieve and enjoy good health;
The right of adequate protection from the economic fears of
old age, and sickness, and accident and unemployment;
And finally, the right to a good education.
All of these ideas were espoused by Franklin Roosevelt many years
ago. You have heard the Speaker of this House quote Roosevelt and speak
of him admirably as a person who created new order in our society. Why
does he want to tear down an order that was created by Franklin
Roosevelt as we go forward in the budget process and appropriations
process? This Nation is great because carefully, painstakingly we built
a system that demonstrated we care about everybody in America. Let us
not let the oppressive elite minority destroy what has been put there
by and for a caring majority.
____________________