[Congressional Record Volume 141, Number 197 (Tuesday, December 12, 1995)]
[House]
[Pages H14352-H14353]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    RICH GET RICHER, POOR GET POORER

  (Mr. GENE GREEN of Texas asked and was given permission to address 
the House for 1 minute and to revise and extend his remarks and include 
extraneous material.)
  Mr. GENE GREEN of Texas. Mr. Speaker, I would like to recommend to 
all members an article that appeared in the Washington Post business 
section last week, which I will insert in the Record.
  The article reported on a bipartisan round-table discussion on the 
rising gap between rich and poor, and the shrinking middle class in our 
country.
  This trend is no secret. Ask any working American. We have been 
downsized, laid-off, cut pay, cut jobs to the point that even the 
Business section reports it.
  I was pleased to read that some of the speakers--notably Jack Kemp--
emphasized economic growth and economic development as the way to 
narrow the income gap in our country, not just balancing the budget.
  Mr. Kemp continues to be one of the few Republicans willing to 
address the issue of income inequality and the poor condition of our 
cities instead of treating them as inconvenient facts that should be 
ignored or denied.
  Beyond balancing the budget, we need to emphasize education and 
training for our children and make the necessary public investments to 
help create economic growth.
  It is a shame that programs such as the School-to-Work program--which 
connects high school students to the world of work--could be eliminated 
by this Congress.
  I invite those from the other side of the aisle who believe that the 
income gap is a real problem to speak up--as Jack Kemp has--and give 
this issue the attention it deserves.

                [From the Washington Post, Dec. 7, 1995]

               Income Gap Is Issue No. 1, Debaters Agree

                         (By Steven Pearlstein)

       The growing income gap between the rich and the poor has 
     become the central issue in American politics, and the party 
     that figures out what to do about it--or that makes the right 
     noises about it--will dominate American politics.
       That was the message from the left and the right, Democrat 
     and Republican, politician and pollster, economist and 
     financier at a forum on inequality held yesterday on Capitol 
     Hill.
       ``The main cause of America's anxiety is the growing gap 
     between the haves, the have-nots and those in the middle who 
     feel they are on a treadmill in which they have to run faster 
     and faster merely to say in place,'' said Rep. Charles E. 
     Schumer (D-N.Y.), who organized the event with retiring Sen. 
     Bill Bradley (D-N.J.).
       Stanley Greenberg, who conducts polls for the White House 
     and the Democratic National Committee, told the gathering 
     that nearly all recent elections have been decided by 
     ``downscale'' voters who swing between Republicans, Democrats 
     and independents such as Ross Perot in a desperate search for 
     an answer to their declining economic fortunes.
       ``There is no more central subject in politics today,'' 
     Greenberg declared, ``and no party will be successful without 
     addressing it successfully.''
       Kevin Phillips, a free-ranging Republican theorist and 
     author of ``The Politics of Rich and Poor,'' said the 
     reluctance of Republicans to face up to the inequality issue 
     was now costing them the support of one-third of their 
     natural base of voters.
       Rather than signaling the rise of a new Republican era, 
     Phillips predicted, last year's Republican takeover of 
     Congress will go down as the last gasp of a Republican era 
     that began with the election of Richard Nixon in 1968, but 
     has now been taken over by a coalition of right-wing 
     ideologues and Wall Street interests. He noted that two 
     earlier Republican eras, the Gilded Age of the 1880s and 
     1890s and the Roaring Twenties, ended when progressives were 
     able to ride into office on the inequality issue.
       Treasury Secretary Robert E. Rubin opened the session by 
     declaring that rising inequality has so torn the social 
     fabric that fixing it amounts to not only a moral or 
     political imperative, but also an economic one.
       If no solution is found, Rubin said, angry voters will soon 
     turn to radical measures such as restoring trade barriers or 
     re-regulating entire industries--moves that he predicts would 
     slow economic growth and ultimately be self-defeating.
       And former representative Jack F. Kemp, who now heads a 
     Republican tax reform commission, warned that the plight of 
     the urban poor had become morally ``unconscionable'' 

[[Page H14353]]
     and politically unacceptable. For that reason, Kemp said Republicans 
     should make boosting economic growth rates, not balancing the 
     budget, their top political priority.
       Nobody at yesterday's session took issue with a raft of 
     recent reports showing that the household incomes of those in 
     the bottom 40 percent of the economy have slipped over the 
     last 20 years, when adjusted for inflation, while all the 
     income growth has been concentrated in the households in the 
     top 20 percent.
       But there was a spirited and, in the end, unresolved debate 
     over what to do about it.
       Steven Rattner, a managing partner at the Wall Street 
     investment firm of Lazard Freres & Co., argued that they key 
     to narrowing the income gap was more and better training 
     programs to get a better match between the jobs demanded by 
     the new economy and the skills of workers at the bottom of 
     the income scale.
       But Louis Jacobson, a researcher at Westat Inc. in 
     Rockville, said his studies found that such programs 
     inevitably reach only a small portion of the work force that 
     could benefit from them.
       And Cornell University economist Robert Frank argued that 
     many labor markets now exhibit a ``winner take all'' quality 
     to them that gives disproportionate salaries to whoever is at 
     the top, no matter how much education and training the people 
     below them have.
       Kemp, along with Rattner, argued that it would be folly to 
     address the problem of rising inequality by expanding 
     government efforts to transfer income from the rich to the 
     poor.
       ``I don't think poor people are poor because rich people 
     are rich,'' said Kemp in arguing against welfare and other 
     ``redistributionist'' programs.
       But not everyone agreed.
       ``Redistribution is not a naughty word,'' said Gary 
     Burtless, an economist at the Brookings Institution in 
     Washington,
       Burltess noted that the long-term shift in the government's 
     income support programs from the poor to the elderly middle 
     class was a major contributor to growing inequality in recent 
     years. And he noted that countries such as Germany and Japan 
     had been able to finance much more generous social programs 
     than the United States while still turning in as good or 
     better economic performance over the past 20 years.
       Burltess's comment was seconded by Timothy Smeeding, an 
     economist at Syracuse University whose recent study found 
     that although the United States is the richest nation, its 
     poor have a lower standard of living than the poor of all 
     other industrial countries.
       ``I think we have no choice now but to take greater account 
     of the losers,'' said Smeeding.

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