[Congressional Record Volume 142, Number 9 (Wednesday, January 24, 1996)]
[Extensions of Remarks]
[Pages E72-E73]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   PRESERVING AMERICA'S MIDDLE CLASS

                                 ______


                       HON. ROBERT G. TORRICELLI

                             of new jersey

                    in the house of representatives

                      Wednesday, January 24, 1996

  Mr. TORRICELLI. Mr. Speaker, I am inserting for the Record an opinion 
piece I wrote concerning the need to take action to preserve the 
American middle class:

                   Preserving America's Middle Class

                   (By Congressman Robert Torricelli)

       Some 50 years ago president Harry Truman asked his 
     assembled economic advisors for their interpretation of his 
     economic policies. The economy was faltering, and he needed 
     answers. They told him on the one hand what was right, and on 
     the other hand what was wrong. Harry Truman said that what he 
     needed was more one-handed economists.
     
[[Page E73]]

       The massive layoffs at AT&T reminded us again this week 
     that indeed, the American economy is in two very different 
     and often contradictory hands. We are, on the one hand, an 
     extraordinary innovative people. We have the world's most 
     productive workers. Our stock market is booming. We have 
     captured the technological edge in vital and lucrative 
     fields. We are the world's largest exporter. In many ways, 
     the United States is the marvel of the international economy.
       But there is another side to our rapidly changing economy. 
     In the last decade there has been a loss of 20 million jobs 
     due to corporate downsizing. One half of all Fortune 500 
     companies have seen dramatic changes in their employment. In 
     the 1980s, 50 percent of those who lost their jobs and found 
     new employment, did so at reduced wages. Twenty percent found 
     themselves out of the workforce permanently. And a million of 
     these newly unemployed found themselves without health care 
     benefits or pensions.
       A slow motion downsizing is taking place in many 
     corporations across America which never makes the headlines. 
     Middle class America hangs by a very thin and precious 
     thread. Few of our families are more than a serious illness, 
     a technological breakthrough, or a corporate downsizing away 
     from losing a standard of life that took generations to earn.
       We are becoming a nation of smaller, leaner, and much more 
     competitive corporations. The layoffs at AT&T are the most 
     dramatic expression of a growing phenomenon of corporate 
     restructuring. But unlike General Motors or I.B.M. who were 
     in serious financial crisis, AT&T is strong and profitable. 
     Yet, AT&T has made a prospective decision about a problem it 
     might or might not face in future years.
       The impact in New Jersey of the loss of 7,000 jobs will be 
     exacerbated by the loss of work for hundreds of contractors 
     in the community that depend on the health of the company. 
     These layoffs will impact families, communities, and state 
     and local governments.
       The question is not whether we can adapt to the changing 
     economy, but whether we can do so fairly, while protecting 
     our families, and remaining consistent with our sense of 
     community. To do so, we must re-examine our responsibilities 
     as corporate citizens, individuals, and government.
       Every corporation has the right and the responsibility to 
     control costs, maximize returns to its investors, to survive 
     and to prosper. But, corporate responsibility was never to 
     its sources of capital alone, but also to its employees, its 
     suppliers, and to its community. Today's laid off workers are 
     having a hard time understanding why their companies allow 
     their chief executive to collect 200 times what their average 
     employee makes per year. And community leaders are having a 
     hard time understanding why they provided lucrative tax 
     breaks to corporations to move into their areas, only to see 
     their neighbors thrown out of work with little justification.
       There had always been a sense of balance among these 
     interests. Today's CEOs, however, have lost sight of that 
     importance balance, and their responsibility to maintain it. 
     In order to succeed in this new economy, corporations must 
     correct the dangerous imbalance between the interests of 
     financial capital and human capital.
       For individual workers, it is increasingly unlikely that 
     the corporation they join early in life will be the same one 
     they end their careers with. The age of freelance workers is 
     upon us. People must now identify less with a corporation and 
     more with their skills. It means constant re-eduction, 
     flexibility, and mobility. It means greater self-reliance.
       And we in the government have a responsibility to adapt our 
     tax incentives and educational culture in order to succeed in 
     the 21st century. That means making innovative changes to our 
     tax code and making education and training programs more 
     accessible. Here's what government can do:
       Establish Individual Training Accounts, where employees in 
     good times can save money tax free so they have the resources 
     available to receive retraining and continuing education to 
     keep up with technological advances. Maintaining competitive 
     skills is as important to individuals now as it is to 
     corporations.
       Give preferential corporate tax treatment for worker 
     training. Ninety percent of all training of employees in 
     America today is being done by only one percent of our 
     corporations. We need to create incentives to make training 
     American workers a rational business decision again.
       Change the way we asses corporate taxes. Our current tax 
     code treats equally: excessive executive bonuses; excessive 
     compensation; and expenses like compensation for workers and 
     retraining of employees. However, these expenses are not of 
     equal value to society, they are not of equal value to the 
     future of this country, and they should not be treated 
     equally by our tax code.
       Reduce capital gains taxes, to ensure that the middle class 
     can invest and save, to finally get some security by 
     accumulated savings. Only family savings will afford the 
     American workforce the financial security it needs to change 
     jobs.
       Increase the availability of federally-backed student 
     loans, and broaden them to apply to retraining, vocational, 
     and continuing education programs. Universities must become 
     more open to all generations who will need re-education, and 
     their classes must become more relevant to the local economy.
       Ensure that workers' pensions and health care plans are 
     portable. Losing a job must not mean losing the security of a 
     pension and health care coverage. Workers should be able to 
     carry their pensions to other companies throughout their 
     careers.
       We are all in this new economy together. These are neither 
     good times nor bad times. They are different times. And if we 
     are like all Americans that came before us, we can make them 
     work for our families, our community, and our country. 
     Together we must develop good ideas and make sound decisions 
     that help our people deal with rapid economic change. We must 
     not allow the modernization of America to become the 
     downsizing of America.

                          ____________________