[Congressional Record Volume 141, Number 146 (Tuesday, September 19, 1995)]
[House]
[Pages H9238-H9244]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        PASSAGE OF CAREERS ACT RELATIVE TO ECONOMY IN TRANSITION

  The SPEAKER pro tempore. (Mr. Gutknecht). Under the Speaker's 
announced policy of May 12, 1995, the gentleman from New York [Mr. 
Owens] is recognized for 60 minutes.
  Mr. OWENS. Mr. Speaker, today we passed the CAREERS Act. I was proud 
to vote against the CAREERS Act. The CAREERS Act is a consolation of 
job training programs, some adult education programs, and the programs 
for people with disabilities, the vocational rehabilitation programs. 
It is all merged into one program and given to the States in block 
grants.
  The problem is that even if you agree that these programs should be 
merged, there are many small programs--and small is not necessarily 
bad, small can be very worthwhile--many of the small programs related 
to job training, like the small programs relate to education, were 
developed during the reauthorization processes of various reauthorizing 
committees. They represented a great deal of thought and care and 
interaction with community groups and professionals.
  So many of the small programs that have been wiped out now and 
consolidated in one big set of block grants were good programs. To 
judge them by the fact that there were so many and they proliferated is 
to make a rather primitive assessment of the situation. That, 
nevertheless, has taken place already. I am sorry to say that the 
Clinton administration started some of that small is bad philosophy, 
and it just got of hand.
  I agree that some consolidation was necessary and is desirable, 
especially if you are going to be flexible, and when you consolidate 
and you give the option to the States as to how they are going to run 
the programs, they also have something to work with in terms of 
resources. The problem with this consolidation is that whatever gains 
you acquire through consolidation, you lose because of the fact that 
the overall budget has been cut dramatically.
  The amount of money available for job training and education programs 
has been drastically reduced by the same Congress that has focused on 
consolidation. We have cut $9 billion from the job training and 
education programs. The House of Representatives has passed an 
appropriation bill which cut $9 billion from education and job training 
programs.
  No matter how you consolidate and how you reconfigure, you have a 
situation where less will be done. It is impossible to do as much as 
you were able to do before with such drastic cuts in resources.
  I do not believe that throwing money at a problem is going to solve 
the problem or resolve any problems. Throwing money will not do it 
alone, but I assure you, you are never going to solve any problems 
unless you do have adequate resources. You do need some funds. You do 
need some reasonable amount of resources to deal with a problem.
  Why am I opening with this particular recounting of today's 
activities. Because I think it is very appropriate in terms of what I 
have been talking about for the past few weeks. That is, that we are in 
an economy that is in a state of transition. The economy is changing in 
very rapid ways. It is changing in ways that are generating a great 
deal of upheaval, quite unsettling.
  We have a phenomenon which is contradictory. The economy is robust 
and booming. The profits were never higher on Wall Street. The stock 
market is booming. Corporations are making tremendous profits. Yet at 
the same time the job market is being squeezed. The amount of jobs 
available is dropping dramatically, and the quality of those jobs in 
terms of the income that those jobs produce is changing rapidly. You 
have a contradictory movement, a Wall Street economy on the one hand, 
and on the other hand a job market that are going in different 
directions.
  I had talked about this previously in terms of the very consolidated, 
solidified, economical way in which Lester Thurow stated this whole 
situation. I cannot help but come back to the quote that I have made 
several times in the last 2 weeks from Lester Thurow's article that 
appeared in the Sunday, September 3 issue of the New York Times on the 
op-ed page. I cannot help but begin with that first paragraph, because 
it is very appropriate for what happened today on the floor where we 
were cutting opportunities for people to get education.
  We were cutting opportunities for people to be retrained so that they 
can fit into this new rapidly changing economy. We were cutting 
opportunities for people to move from the industrial age into the age 
of information. We were saying that the Government is going to play 
less and less of a role in preparing people for making these 
adjustments.

  If Government does not provide the resources and the funding for job 
training programs, if Government does not provide the resources and the 
funding for adult education programs, then who will? The corporations 
are not going to do it. The corporations will only train the people 
they need to do the work they have available at a given moment. They 
are laying off these people. They are downsizing and getting rid of 
people who will have to be retrained. They will not devote any 
resources to those people that they are putting out of their doors, the 
people they are giving pink slips to.
  In the more benevolent corporations, those that have some compassion, 
they give people a few months' pay and let them go. Some they may even 
give them half a year or a year of health benefits. In various ways 
some corporations do try to ease the burden of downsizing and 
streamlining which affects human beings. But the manner in 

[[Page H9239]]
which they do this at best is very limited, very temporary in the lives 
of the people that they are streamlining or downsizing out of a job.
  We cannot depend on corporations. After all, corporations and 
businesses are set up for the purpose of making a profit. They are not 
humanitarian organizations. They are not social organizations. It is 
the Government that has to take care of the welfare of the general 
public.
  But the welfare of the general public is not being taken care of. The 
welfare of those workers that are being victimized by the rapid changes 
of the age of information technology, they are not being taken care of. 
You have the results that Mr. Thurow talks about again in his first 
paragraph, he summarizes it very well.
  I quote from Lester Thurow's article from the Sunday, September 3 
issue of the New York Times:
  ``No country without a revolution or a military defeat and subsequent 
occupation has ever experienced such a sharp shift in the distribution 
of earnings as America has in the last generation. At no other time 
have median wages of American men fallen for more than 2 decades. Never 
before have a majority of American workers suffered real wage 
reductions while the per capita domestic product was advancing.''
  Let me just read another paragraph that I read before:
  ``The tide rose, the real per capita gross domestic product went up 
29 percent between 1973 and 1993, but 80 percent of the boats sank.''
  I repeat, ``The tide rose, but 80 percent of the boats sank. Among 
men, the top 20 percent of the labor force has been winning all of the 
country's wage increases for more than 2 decades.''
  To quote another paragraph from Mr. Thurow: ``With our global economy 
where anything can be made anywhere and sold everywhere, the supply of 
cheap, often well-educated labor in the Third World is having a big 
effect on First World wages. One month's wages for a Seattle software 
engineer gets the same company an equally good engineer in Bangalore, 
India for a whole year.''
  In other words, you can get a competent, effective, well-educated 
Indian engineer for 1/12th of the wages you pay Americans, an Indian 
software engineer.
  Software is very important. I need not dwell on that issue. What is 
driving the information revolution now is not so much the computers and 
the hardware but it is the ability to make use of the hardware with 
ever more creative software.
  One of the second or third richest men in America is the owner of a 
software production company. They do not produce computers or hardware. 
Mr. Gates, Bill Gates, produces software. These software engineers in 
India will work for one-twelfth the wages of the software engineers in 
Seattle.
  We are talking about an information age revolution which has just 
begun, ladies and gentlemen. Those who have college degrees are not any 
safer than those who are unskilled. Nevertheless, today we had a 
program on the floor, a CAREERS program which deals with job training 
and adult education, and we were emasculating the program dramatically 
through the block grant process, we were pushing the responsibility 
away from the Federal Government down to the States, and we were in the 
process of doing that cutting the budgets, also.
  The first ripoff, the first emasculation is by cutting the budget. 
The second ripoff, the second emasculation is to give the power to the 
States, with very little accountability. I had an amendment on the 
floor just saying, at least we ought to hold people accountable for 
mismanagement, patterns of mismanagement. They should be liable, the 
States should be liable.
  That, of course, was a great subject of controversy, just simple 
safeguarding of the taxpayers' money is a problem because in the 
process of pushing the money down to the States, we are holding our 
carrots and incentives to the Governors and the people at the State 
level, no accountability, you accept this reduced package and you tell 
us you want it and you applaud it and you support it and we will let 
you have your way. You do not have to be accountable.
  That is just part of the process of washing the hands, like Pontius 
Pilate washed his hands, washing the Federal Government's hands of the 
problems and the miseries of people who need to be retrained. Like 
Pontius Pilate, it is about as heartless in its cold, calculating 
civilized way. ``Let's forget about the dilemma of the workers. Let the 
States take care of that.''
  Then we know that the States do not have the capacity, they will have 
to deal with reduced money, and the myth of State government being more 
efficient and more effective than the Federal Government is just that, 
a myth. There are no facts to support that.

                              {time}  2030

  State governments have suffered a great deal of corruption, of 
incompetency. The records of history, newspapers, exposes, go on and on 
about various things that have happened at State and local levels. Some 
of the worst corruption in the country has occurred at State and local 
levels. Some of the most embarrassing bureaucratic nightmares will be 
found at the State and local levels.
  But we are pushing that away and washing our hands of the dilemmas, 
of the problems of working people in this fast-changing economy and 
saying that we do not want to be bothered. Let us let the States deal 
with it. And if the States cannot handle it, we really do not care.
  Speaker Gingrich has said we want to remake America. The question has 
not been answered directly, remake America for whom? For whom do you 
want to remake America? For what purpose do you want to remake America? 
Who will benefit after you are finished remaking America? Who benefits 
from your conception of the Contract With America?
  According to Mr. Thurow, 80 percent of the American people are not 
benefited from what is happening now. You cannot blame that on Speaker 
Gingrich or the Republicans who control the House and the Senate at 
this point. It has been going on for 20 years, and so Democrats have to 
take some of the blame also. The rapidity of the technological 
revolution, forces that have very little to do with government, may all 
be blamed and take the greatest share of the blame.
  But that is a 20-year phenomenon. Now we have observed it for 20 
years. Now we understand that something radically different is 
happening. We should be blamed if we do not take hold. We should be 
blamed if we do not develop policies, public policies which are 
designed to counteract and to soften and to make a more compassionate 
situation in the midst of all this turmoil and change that is being 
generated by the technological revolution, economic turmoil.
  During the last campaign, the Clinton campaign wisely focused on the 
economy. ``It's the economy, stupid,'' was the famous slogan that came 
out of that campaign. It is the economy.
  It is the economy. It was the economy during that campaign. It is the 
economy now. When Speaker Gingrich says he wants to remake America, 
what he is saying is he wants to remake the economy of America. That 
comes first.
  We have to keep our eyes on the economy. Keep our eyes on the 
resources. Keep our eyes on the money. Keep our eyes on the taxes. Keep 
our eyes on policies which deal with expenditures, appropriations and 
budgets. Those are the things that matter, and the remaking of America 
is remaking the way America uses its resources, starting with the way 
the Federal Government uses its resources.
  We have to keep our eyes on this, and I cannot stress that too much, 
because right now we are focused on the economy, on money, on budgets, 
on appropriations.
  Today, the Republicans took one step further in issuing their plan 
for Medicare reform. Medicare is going to undergo a traumatic $270 
billion cut; $270 billion over the next 7 years will be cut out of 
Medicare. That is a traumatic upheaval. That is a lot of money that has 
to come out of Medicare.
  They are not talking much about Medicaid, but $180 billion will be 
cut out of Medicaid, and maybe they will go further. Since neither the 
Democrats nor the Republicans are focusing on Medicaid, they will take 
heavier cuts. That is about money and resources and it is about where 
the revenue and the tax dollars of the United States of America are 
going to go.

[[Page H9240]]

  Keep our eyes on that. Keep our eyes on the fact that while we are 
going to take away from Medicare and Medicaid these hundreds of 
billions of dollars, we are proposing a $240 billion tax cut which will 
go mostly to the wealthier Americans. We are moving resources away from 
the sick and the elderly and the children and the people who are 
disabled to those people who are already wealthy and able to take care 
of themselves. That is the remaking of America. It is not so subtle, if 
you just keep your eyes on it.
  The problem is that it is so obvious and so horrendous, that the 
Republican majority has no intentions of allowing us to keep our eyes 
on the economy, on the remaking of America by moving the resources 
around. They will come with diversions later on as we get closer and 
closer to the 1996 election.
  You are going to hear less and less about the economy and more and 
more about affirmative action, and more and more about abortion, and 
more and more about gays in the military, and more and more about set-
asides, and more and more about voting rights acts. More and more they 
will try to divert the attention of the American people by focusing on 
victims and scapegoats. There will be more and more about how the 
immigrants are destroying America.
  Get ready for all of these diversionary issues. The great smoke 
screen will be thrown in our way. Start right now to prepare to look 
through the smoke screen and keep focusing on the economy. Keep 
focusing on the tax dollars. Keep focusing on the appropriations bills.
  Focus on the Contract With America, which never said they were going 
to take Medicare and take $270 billion out of it. Focus on the Contract 
With America which never said that they were going to place a B-2 
bomber in the highest priority, and in two big votes on the floor of 
the House and fight very hard to maintain a B-2 bomber, which nobody 
wants. A B-2 bomber which the President does not want; a B-2 bomber 
which the Secretary of Defense does not want and the Air Force does not 
want; the Joint Chiefs of Staff does not want; only the people who are 
manufacturing the B-2 bomber and making money off of it, they want it, 
and the people whose districts benefit from that, and the people who 
benefit from political action committees that are promoting the B-2 
bombers.

  Those are the people that want the B-2 bomber. Not the military. 
There is no smoke screen. You cannot say that we need it in order to 
defeat the evil empire. We do not need it. Russia defeated itself, 
along with some pressure and some preparedness from here. We will not 
take the credit away from American strategy, but it is no longer the 
excuse to use to maintain the B-2 bomber. And yet the B-2, which may 
absorb $33 over the 7-year period, that bomber is given precedence over 
Medicare and Medicaid, and over school lunches and over job retraining 
programs.
  Just stop for a moment and consider, $9 billion was cut from the 
adult education, job training, vocational rehabilitation programs for 
the blind, disabled and the deaf, et cetera, $9 billion. That $9 
billion is just one-third of the cost of a B-2 bomber over a 7-year 
period. Just one-third of the cost.
  That $9 billion is the cost of four Seawolf submarines. A Seawolf 
submarine is $2 billion. They are pushing star wars. You know, we are 
going to go back to the pebbles in the sky to defend us from rockets 
that nobody has the capacity to launch. We are going to have additions 
being made to the budget of millions of dollars for defense systems 
that nobody needs.
  Think about it all. You know, think about the scare tactics of the 
Republicans. Medicaid will go bankrupt if we do not do something about 
it. Yes, Medicaid could go bankrupt if we neglect it, but Medicaid was 
structured to be solvent 2 or 3 years ahead of time, but nobody thought 
that Medicaid would have instant solvency by itself. The Government 
stands behind Medicare and Medicaid.
  Medicaid will be funded if you have a Government that cares about 
health care. We will set our priorities so that we do not waste our 
money on B-2 bombers or F-22's or Seawolf submarines.
  The F-22 program will absorb $12 billion in the next 7 years. We will 
spend $12 billion on F-22's, produced in the Speaker's district of 
Marietta, GA, a district that receives more funds than any other 
district in the country.
  I take time to point that out, because I am from New York City and 
recently the Speaker renewed his attacks on New York City. They are 
nothing new. He has been doing that for the last 8 years, but in his 
new exalted position as Speaker, I thought that he would refrain from 
his attacks on New York City, which made him famous over the last 8 or 
9 years.
  And yet we have again attacks on New York City as being a place of 
welfare waste and you think that it is a danger to the country. The 
simple facts are that New York City and New York State has always 
generated more income for the Federal Government than it has received 
from the Federal Government. The history of New York State is the 
history of giving to the rest of the country.
  There was a time when $22 billion more was being paid into the 
Federal coffers than was received back from the Federal coffers. Now, 
$9 billion more is coming out of New York State into the Federal 
coffers than will go back to New York State through any Federal 
programs.
  That is not true of Georgia. Georgia receives $1 billion more from 
the Federal Government than it pays to the Federal Government. 
Certainly not true of Marietta, GA, if you narrowed it down in terms of 
the Federal contract they have there to manufacture the F-22 fighter 
plane, and probably some other Federal contracts around. You will find 
that they are getting far more than they are paying into the Federal 
coffers.
  So, keep your eyes on the dollar figures. If you took each State of 
the Union and asked yourself the question: How much money does this 
State pay into the Federal coffers, and how much money does it get back 
from the Federal Government, you would be shocked.
  Many of the States that are screaming for States' control of programs 
are going to find in a few years that if you are really serious about 
State control and you lessen the taxation on the States universally 
across the country, and have each State carry its own weight, you will 
find it impossible to maintain your State budgets and your local 
budgets, because the money that you get from the Federal Government, 
which is a loss from New York, flows out of New York, out of some of 
the bigger industrialized States, even though they are not as wealthy 
as they used to be, they are still generating more tax revenue than 
they are receiving back from the Federal Government.
  That money is distributed in programs like Medicare and Medicaid. It 
is distributed in programs like Social Security too. It is distributed, 
certainly, in defense contracts, which New York City has almost none, 
but many of the States that complain about New York City receive very 
lucrative huge defense contracts.
  The money that they receive in the State of Kansas, and some of the 
other surrounding States that have for years gone to the farmers, or 
the so-called farmers, the farming industry, the farmer cartels and 
businesses; the subsidies which average per family between $30,000 and 
$40,000 a year, money that is given not for any service rendered but 
for not planting corn or not planting grain, not plowing up the field, 
money that comes as a subsidy from the Federal Treasury, that money 
comes out of States like New York. That money will not be there if you 
are really serious about letting States carry their own weight.
  Stop and think about it. If you remake America, a lot of people who 
believe that they will benefit under the assumption that they are not 
on some form of government subsidy or welfare are going to find that 
they really are the beneficiaries of a lot of Federal subsidy and some 
welfare. I would call the farm subsidy program a welfare program that 
has gone on and on. We should end farm subsidies as we know them. We 
should get rid of that kind of welfare.
  We have some corporate welfare too we should get rid of. But my point 
today is to keep your eyes on the prize. Focus on the economy. Focus on 
the appropriations bill. Focus on the budget. Do not let them later on 
move you 

[[Page H9241]]
off into a concern for affirmative action, a concern for abortion, a 
concern for pornographic lyrics.
  All of these problems are important. Family values are important. I 
think Mr. Thurow talks about family values in this article. The title 
of Mr. Thurow's article, what I am reading quotes from, is ``Companies 
Merge and Families Break Up.''

                              {time}  2045

  There is a point in here where he talks about the traditional family 
is being destroyed. I am quoting from Lester Thurow's article, the same 
man who started out telling us that this country is undergoing radical 
changes economically and 80 percent of the people are being left out, 
and only 20 percent are benefiting.
  This same Lester Thurow, who is professor of economics at the 
Massachusetts Institute of Technology, who has written 10 or 15 books, 
who has testified in hearings in most of the committees here in 
Congress, such as the Joint Economic Committee, the Committee on 
Energy, the Committee on Economic and Educational Opportunities, he 
appeared many times before our committee, so he is well-known here and 
respected.
  He is not a wild-eyed liberal or a radical. He believes in the global 
economy, he believes in free trade. He was in favor of NAFTA, in favor 
of GATT, a lot of things that I was not in favor of, but even this Mr. 
Thurow, who I would say leans toward the right in his economics, talks 
about the traditional family and ways in which you do not hear 
discussed here on the floor.
  Let me quote from Mr. Thurow's article, which is about the economy. 
It is about what it means to have an economy which is throwing people 
overboard, wages are declining, hope is lessening because of the fact 
that nobody seems to care about the fact that you are undergoing this 
transition that is so devastating.
  Mr. Thurow talks about the traditional family. Let me quote:

       The traditional family is being destroyed, not by misguided 
     social welfare programs coming from Washington, although 
     there are some government initiatives that have undermined 
     family structures, but by a modern economic system that is 
     not congruent with family values.

  Let me quote that again, quoting Mr. Thurow:

       The traditional family is being destroyed, not by misguided 
     social welfare programs coming from Washington, but by a 
     modern economic system that is not congruent with family 
     values. Besides falling real wages, America's other economic 
     problems pale into insignificance. The remedies lie in major 
     public and private investments, in research and development, 
     and in creating skilled workers to ensure that tomorrow's 
     high-wage, brain power industries generate much of their 
     employment in the United States.

  Let me just read that again:

       The traditional family is being destroyed, not by misguided 
     social welfare programs coming from Washington, but by a 
     modern economic system that is not congruent with family 
     values. Besides falling real wages, America's other economic 
     problems pale into insignificance. The remedies lie in major 
     public and private investment and research and development, 
     and in creating skilled workers to ensure that tomorrow's 
     high-wage, brain power industries generate much of their 
     employment in the United States.

  Today we have on the floor a bill which turned its back on the effort 
to create skilled workers to ensure that tomorrow's high-wage brain 
power industries generate much of the employment in the United States.
  The CAREERS bill is going in the opposite direction. The 
appropriations bill which reduced the funds available for education and 
job training by $9 billion is going in the opposite direction. The 
people in charge of the Government are not acting to promote the 
general welfare as they are charged with in the Constitution. They are 
not acting to take charge and understand that we are going through a 
transitional period, and because we are going through a transitional 
period, the Government and public policies must step in and do what the 
private sector can never do, what the private sector is not created to 
do, what the private sector has no duty to do. It is Government's duty.
  Before I go on, let me just go back and read a complementary passage 
from Mr. Thurow related to the family. ``Falling real wages,'' a quote 
from Mr. Thurow again:

       Falling real wages have put the traditional family into 
     play as the one-earner, middle class family becomes extinct. 
     With children needing ever-more costly educations for ever-
     longer periods of time, the cost of supporting a family is 
     rising sharply, just as earnings plunge.

  I repeat:

       Falling real wages have put the traditional American family 
     into play, as the one--earner, middle class family becomes 
     extinct. With children needing ever-more costly educations 
     for ever-longer periods of time, the cost of supporting a 
     family is rising sharply, just as earnings plunge.

  Continuing to quote Mr. Thurow:

       Children exist, but no one takes care of them. Parents are 
     spending 40 percent less time with their children than they 
     did 30 years ago. More than 2 million children under the age 
     of 13 have no adult supervision, either before or after 
     school. Paying for day care would use up all or most of a 
     mother's wages.

  This is not a minister talking, it is not a politician talking, this 
is an economist. This is an economist looking at the hard, cold facts 
of the way our society has been altered, the radical changes that are 
being forced on society by the changes in technology and by economic 
changes. It is not just somebody's morality is automatically lower or 
his character is no good, there are economic forces at work which are 
creating a situation where children exist, but no one takes care of 
them:

       Parents are spending 40 percent less time with their 
     children than they did 30 years ago. More than 2 million 
     children under the age of 13 have no adult supervision, 
     either before or after school. Paying for day care would use 
     up all or most of a mother's wages.

  I think it is important to emphasize the fact that Mr. Thurow is not 
a minister, he is not a politician, or an opportunistic politician, 
trumpeting family values because that is the appealing message of the 
day. Mr. Thurow is a hard-core economist, and we should take a look at 
what he is focused on: The resources, the opportunities to earn a 
living, income, jobs, and who is the technological revolution going to 
benefit? That is the question.
  Let me just go back for one more minute and repeat again:

       Besides falling real wages, America's other economic 
     problems pale into insignificance. The remedies lie in major 
     public and private investment and research and development, 
     and in creating skilled workers to ensure that tomorrow's 
     high-wage brain power industries generate much of the 
     employment in the United States.

  I am going to talk about that for the rest of this evening, the 
remedies. What are the remedies for a transitional economy which has 
produced a phenomenon where Wall Street and corporations are making the 
highest profits they have ever made, the economy is booming for Wall 
Street, while at the other end, workers are getting lower wages, and 
there are fewer jobs available. The streamlining or the downsizing 
which creates more profits as you replace human beings with machines 
creates misery on the bottom.
  Nobody wants to stop the information revolution. The industrial 
revolution could not be stopped. It is foolish to try to stop it, it is 
foolish to try to put chains on capitalism. Capitalism is the order of 
the day. But it is up to Government to understand that this is a 
transition period with an upheaval taking place which is causing a 
great deal of dislocation and misery, and it is going to escalate and 
get worse at a more rapid pace, and we as Congressmen, Senators, 
mayors, everybody elected to office anywhere, we have the 
responsibility, and if we do not take hold of the burden of the 
catastrophe that is coming, it will be on our shoulders. We deserve to 
be blamed.

  Mr. Thurow says,

       The remedies lie in major public and private investment and 
     research and development and in creating skilled workers to 
     ensure that tomorrow's high-wage, brain powered industries 
     generate much of their employment in the United States.

  I think Mr. Thurow is naive if he thinks that private industry is 
going to invest in that endeavor. Private industry will invest only if 
they see an immediate profit, and when that is over, they will let it 
go. It is Government. The remedy lies in major public investment. We 
have to, the Government has to do it. We have to go in the opposite 
direction of the bill on the House floor today.
  The CAREERS bill should have been doubled in size. Oh, yes, there are 
problems in making it effective and efficient, there are problems in 
making 

[[Page H9242]]

certain that there are jobs for people that are going to be there 10 or 
20 years ago. All of those problems are soluble. It is like winning a 
war, it is like fighting a war, you do what you have to do, you develop 
the weapons you have to develop, you develop the systems you have to 
develop. You institute the policies for the training and for the 
recruitment, everything that has to be done. We are in a war to save 
America from economic chaos.
  One of the things we have to do in order to win this war is to have a 
new approach to revenue. We have to have the money, the resources 
necessary. Taxpayers have to take a look at the revenue side of the 
problem and not just at the expenditure side. Yes, we need some cuts. I 
am in favor of cutting waste from government. Yes, it may be a good 
idea to have a balanced budget in 10 years, probably, or a longer 
period, not 7 years, but we ought to go toward a balanced budget as a 
way of getting accountability and squeezing the waste out of 
Government.
  Yes, expenditures are always important. We must always be vigilant 
and make certain that we do not waste our resources, do not waste 
money, do not waste the taxpayers' dollars. On the other hand, there is 
a need for tax revenue, there is a need for a fair system of 
accumulating the revenue you need. The problem is that we are not 
looking at all at the revenue side enough.
  We should take a look at the fact that revenue in America has been 
left in the hands of the Senate Finance Committee and the House 
Committee on Ways and Means. Mr. Speaker, these entities are part of a 
legislative body, but they have far too much power and the power has 
been abused and misused. They have done a horrendous job over the last 
50 years.
  The example I give over and over again, and any sophomore in high 
school can take a look at it, if you take a look at the revenue burden, 
the way the tax burden was structured in 1943, in 1943, corporations 
were paying 40 percent of the tax burden, were shouldering 40 percent 
of the tax burden in 1943, Individuals and families were shouldering 27 
percent of the tax burden in 1943. From 1943 to 1995, today, 
individuals have gone from 27 percent of the tax burden to 44 percent 
of the tax burden. We are carrying 44 percent of the tax burden instead 
of 27 percent. In the same period of time, corporations have gone from 
40 percent of the tax burden to 11 percent of the tax burden.
  The people who are making the money on Wall Street, the profits are 
going to corporations. The folks who are making the money and getting 
the benefits of all of the years of science and technology and military 
research and development and law and order in the United States and 
wars that have been fought and won by American boys and the American 
total effort, those benefits are flowing to Wall Street, they are 
making the profits, yet they are paying the smallest share of the 
taxes. They are paying only 11 percent of the tax burden, while 
ordinary families and individuals are paying 44 percent of the tax 
burden.
  One of the things we should be discussing is the way to balance the 
budget is to balance the tax burden, bring it down. Yes, give tax cuts. 
Families and individuals need tax cuts. I am certainly not in agreement 
with the Republican proposed tax cut which will give tax cuts to the 
people who are the owners of the corporations and the beneficiaries to 
the stocks and bonds.
  We are giving the tax cuts to the wrong people. People, individuals 
and families do need a tax cut. We need to bring taxes down for 
individuals and families. But we do not have to drastically cut the 
flow of revenue, because we should be bringing up taxes for 
corporations from the 11 percent, we should go slowly up over a 10-year 
period and from the 44 percent for individuals and families, we should 
come down.

                              {time}  2100

  We should reach a point in 10 years where the burden is equally 
shared by corporations and individuals and families. In the process of 
doing that, you will find more revenue will be generated and less of a 
burden will be on individuals and families.
  Additional revenue generated should be used to do what Mr. Thurow 
says needs to be done: Major public investment in job training, in 
research and development and creating new skills, new skilled workers. 
The money that you get from increasing the share of the tax burden 
borne by corporations should go into creating skilled workers, adult 
education, job training programs. That is where the answer lies.
  We do not know exactly what the future holds in terms of which 
industries are going to prevail and what the exact specific 
occupational titles are going to be. But we have an idea that you are 
going to need very educated people. People are going to have to have a 
great deal of computer literacy. There are things we know already. 
There are things we can do already. But you need resources. You need 
finances. You cannot be cutting the budget for job training and adult 
education at a time like this. You should be using the increase in 
revenues coming from a fairer tax structure to finance the transition.
  A massive program is needed. The GI Bill of Rights and the GI program 
that put thousands of men returning from World War II into colleges and 
universities and into trade schools, that massive endeavor, that 
massive undertaking by the American Government has been one of the best 
investments of public money ever in the history of the Nation or in the 
history of governments all over the world. They should show you where 
those trained GI's went, where they went after they left the 
universities and the colleges, where they went after they left the 
trade schools, what they did for the American economy. It should be a 
lesson, how a concentrated effort in the area of jobs training, adult 
education, and academic education, many of them went to colleges and 
universities, how it pays off. We need that kind of massive, 
intensively financed program now. You can do it without increasing the 
deficit. By raising the revenue that is produced by corporations, at 
the same time you can be bringing down the tax burden on individuals.
  Several tax plans have been proposed. I want to conclude tonight by 
saying, my staff is preparing a bill which would call for the creation 
of a creative revenues commission, a creative revenues commission. We 
cannot leave it to Ways and Means. The Ways and Means Committee of the 
House of Representatives has shown that they will take us from a burden 
of 40 percent for corporations to 11 percent. At one time, under 
President Reagan in 1982, it went down as low as 8 percent. I serve on 
that Committee on Ways and Means and I might be accused of shirking my 
responsibilities. I am a Member of Congress. I stand on this floor. I 
vote for the bills that the Committee on Ways and Means brings here. 
But for your edification, it is important that you know that whenever a 
bill comes from Ways and Means which deals with taxes, there are no 
amendments allowed. We have never had on the floor of the House of 
Representatives an open rule for a Ways and Means bill, for bills that 
relate to taxation. You cannot amend. You can debate, but you have to 
debate what is brought to you by the committee.
  The Senate Finance Committee, I suppose it may be a little different 
over there, but bills related to revenue and taxation have to originate 
here. The Constitution, they all come out of Ways and Means first. So 
Ways and Means and Members of Congress and Members of the House of 
Representatives and the Senate, we have betrayed the American people, 
some directly, some indirectly, by allowing a situation to develop 
where the burden of taxation borne by corporations has gone down from 
40 percent to 11 percent. We have swindled the American people. We let 
the burden on them go up from 27 percent to 44 percent. We need to 
correct that. We need to address that.
  If we cannot address it through the Ways and Means, then perhaps we 
should do what we are doing with the base closing. Base closings were 
such a difficult issue until we came up with a formula for retaining 
the power and the ultimate authority of Congress while at the same time 
taking advantage of the wisdom of more objective, nonpolitical, 
nonpartisan people out there. A Base Closing Commission was created. 
They go through a process. The President is involved and then we have 
the final say. They come back with rational recommendations. We 

[[Page H9243]]
can vote them up or down. So the power of the representatives of the 
people is the final power. But we have a rational product produced by 
people who are not on the phone with lobbyists, lobbyists in their ears 
promising all kinds of things that they can deliver on. We are not 
overwhelmed by the almighty might of corporate wealth in the process of 
making decisions.

  We can deal with the situation rationally. Let the revenue 
commission, the creative revenue commission take a look at all the 
proposals for tax reform that are now being proposed.
  Senator Lugar and the CATO Institute have proposed a national sales 
tax. They propose to replace personal and corporate income tax taxes 
with a 16 to 24 percent national sales tax on all consumable items 
except stocks and bonds. The benefits of this, according to Senator 
Lugar and the CATO Institute is that it eliminates any complicated tax 
filing system.
  Some of the problems with this is that it is regressive. Wealthy 
people would pay a smaller share of their income in taxes than lower 
middle income tax people. We would end up with people with the real 
wealth paying a smaller percentage of their income, and you probably 
would have the corporations bearing no greater proportion of the tax 
burden.
  But that is a plan that has been put forward by Senator Lugar and the 
CATO Institute. It deserves to be looked at by an objective, rational 
group of Americans who are chosen for their expertise and their 
knowledge of the economy and taxes, and they can constitute a creative 
revenue commission.
  The gentleman from Texas, Mr. Armey, and Senator Specter have 
proposed a flat tax. The flat tax concept you have heard a lot about. 
It is not revenue neutral. In the process of enacting the flat tax, as 
the gentleman from Texas, Mr. Armey, is proposing and Senator Specter 
is proposing, if you enact it now the way they propose it, you will end 
up with a deficit of $187 billion.
  We do not need a taxing plan which creates a greater deficit. The 
Armey-Specter plan would not treat all income the same. Only wage and 
pension income would be taxed, wages, the thing that hourly people work 
for, not the big executive compensation packages and great amounts of 
money. They would not be taxed. Only wages and pension income would be 
taxed.
  Interest, capital gains, and other forms of unearned income would not 
be taxed. Wage and pension income would be taxed at a flat 20 percent 
rate in the first rate, dropping to 17 percent when the proposal is 
fully phased in. This tax would only apply to earned wages and pension 
income, as I said before. Corporate income tax would be replaced by 
modified value-added tax.
  In the Armey-Specter flat tax plan, corporations will get away with 
even more than they get away with now. They are going to not have to 
pay any corporate income tax. We are going to have a value-added tax. 
Businesses would pay a 17-percent tax on their gross sales minus wages 
paid to employees.
  The current deduction for entertainment expenses capped at 15 percent 
would be 100 percent. Tax withholding would be eliminated. Taxes would 
be paid monthly by each individual like any other bill. That is the 
Armey-Specter flat tax plan.
  Send the plan on. I do not agree with it. I think it is a 
continuation of the advantages to the rich and advantages to 
corporations. But let us send it on. Send the Armey-Specter tax plan to 
the commission, the creative revenues commission.
  There is a value-added tax proposed by the gentleman from Florida 
[Mr. Gibbons]. He does not have a specific proposal, but his basic 
concept is that you can replace income and corporate income taxes with 
a consumption or value-added tax administered at point of sale by 
businesses.
  Value-added taxes are being used in many industrialized countries, 
and there is a lot of experience with value-added taxes. Australia and 
the United States presently are the only Western nations that do not 
have broad based consumption taxes. All European nations use both 
consumption and income taxes.
  All European nations use both consumption and income taxes together, 
but they are able to charge less, have less of a burden borne by income 
taxes because they have the value-added tax which is based on 
consumption. And generally it discourages people from consuming so 
much.
  Americans consume more than any other industrialized nation. That is 
why our balance of payments, while we import so much more than we 
export, because we are always consuming, consuming, and we need more 
and we buy more from those places which do not consume quite as much. 
One of the reasons they do not consume as much is because the value-
added tax increases the cost of consumption.

  So I think it is one that really ought to be looked at very carefully 
and worked into some total scheme of taxation, of revenue production.
  Let the commission take a close look at it. There is the Nunn-
Domenici tax. The basic concept is that all income, wages, interest, et 
cetera, would be treated the same and subject to tax. The taxpayer 
would not pay any taxes on savings. In other words, savings would be 
deduced from income before calculating the tax. What you put in the 
bank as savings would be deducted from your income before calculating 
the tax. Individual exemptions and deductions would be eliminated.
  This plan is silent on what the tax rates for individuals would be. 
It could maintain progressive rate structure. It might tax the rich at 
a greater percentage than it does the middle class and the poor, but it 
might not. We do not know. It is not spelled out.
  They do say that businesses would be taxed at a 10-percent flat rate 
and will retain most of the current deductions that they have already. 
I think it is a grand ripoff. If you are going to let businesses and 
corporations not only do what they are doing now but get away with even 
more, right now they are paying 11 percent of the tax burden. We are 
going to give them a 10-percent flat rate, which means they will be 
paying less. And while we give them the flat rate, we are going to let 
them deduct what they deduct now. If they decide to pay the chairman of 
a corporation or the president of the corporation $10 million, that is 
deducted from their tax bill. That is a tax deduction.
  There is no way to stop them. It they decide that they are going to 
up their budget for training and have a vast network of sumptuous 
training quarters all over the world and move their employees around 
from one beach to another and call it training, that is deductible. 
Anything that they decide to do they can make a little sense with, it 
is deductible.
  So not only do they pay a very small percentage, 11 percent of the 
total tax burden, but they get away already with deductions which are 
horrific. If individuals could get away with those kinds of deductions, 
everybody's tax bill would go down a great deal.
  What this Nunn-Domenici bill does do is create a powerful incentive 
for saving. And it is simpler than current law. The great problem with 
it is what I have just stated. Only the wealthy can save. The wealthy 
can save. Middle-income people can save. Those who can save more would 
benefit more. But those who can save the most would be the wealthiest 
people. So you would have again a skewed system where the system is 
advantageous for the people who are most wealthy.
  Then there is the Gephardt flat tax. The Gephardt flat tax is revenue 
neutral. It would not increase the deficit as the Armey flat tax would. 
The Armey flat tax would increase the deficit by $187 billion. The 
Gephardt would not increase the deficit. All income, wages, interests, 
income, et cetera would be treated the same under the Gephardt flat tax 
plan. All income would be taxed except Social Security benefits.
  A 10-percent flat rate would apply to 75 percent of all taxpayers. 
But progressively higher rates of 20 percent to 34 percent would apply 
to higher income taxpayers, and all of these rates are lower than the 
current rates. The only deductions that would be retained by the 
Gephardt flat tax are the mortgage interest deduction and job related 
expenses. You could deduct your mortgage interest as you do now and job 
related expenses.
  That coincides with Mr. Thurow's remedy of jobs and job training 
being a 

[[Page H9244]]
priority. If it is a priority, then one way the Government can show it 
is a priority is by allowing individuals to deduct any expenses related 
to job training. The Gephardt plan eliminates $50 billion in corporate 
welfare tax benefits that exist now.

                              {time}  2115

  The Gephardt plan requires a national referendum to raise taxes in 
the future. The Gephardt plan has a great benefit. It would actually 
reduce taxes for most Americans. You probably have guessed by now that 
I would say that the Gephardt plan is a superior plan. That is my 
individual opinion, but let it go to a tax revenue commission. We do 
not need my individual opinion, we do not need the opinions of the 
Committee on Ways and Means and the Committee on Ways and Means' 
schemes that have resulted in a drastic, uneven tax burden being borne 
by individuals and families versus corporations.
  We do not need anybody's opinions. Let them all take a very close 
look at what is happening with these plans. Let them all examine these 
plans. They may look at some other creative proposals that have come 
forward, like we have proposed to tax--instead of selling the 
frequencies in the air, lease them. Why not lease them and tax the 
income on them? Why not, if you are going to sell them, put them in a 
trust fund and use that revenue for some purpose, as they are proposing 
with the public broadcasting?
  Public broadcasting wants a certain portion of the revenue we get 
from selling the bands in the air, frequencies. There is another word 
for that. I cannot get it right now. We have auctioned off about 9 
billion dollars' worth. Why not have trust funds which generate income? 
Why not have the savings and loans contribute, at least the $250 
billion that they took out of the taxpayers' coffers, out of the 
Treasury? Why not have a tax on the financial industry, a temporary tax 
which is a surcharge on everybody connected with the financial 
industries, and get back our money that we put into the savings and 
loan industry? Why not take a look at that?
  Why not look at a more rapid reforming of the mining laws, so we stop 
giving away gold mines and copper mines and coal mines for pennies? We 
sold a mine recently for $250 which is expected to generate billions of 
dollars in gold. There are a lot of things that this tax commission 
could look at. We need a creative revenue commission to take a look at 
all these possibilities, to come back to the American people with a new 
revenue generation plan which will be a plan with enough money to 
finance the transition.
  We are transitioning from the industrial age to the information age. 
The money to pay for the transition for the job training, for the 
research and development, can come out of a new, creative revenue tax 
plan. We can balance the budget at the same time we generate that 
income, and this commission is the key. We should accept the 
responsibility that has been given to us as elected officials, and 
understand that the problem is our problem. We have to solve it. A 
creative revenue tax commission would be a great step forward in 
solving this monumental problem.

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