[Congressional Record Volume 142, Number 23 (Monday, February 26, 1996)]
[Senate]
[Pages S1310-S1311]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 REPORT CONCERNING THE COUNCIL OF ECONOMIC ADVISERS--MESSAGE FROM THE 
                PRESIDENT RECEIVED DURING RECESS--PM 123

  Under the authority of the order of the Senate of January 4, 1995, 
the Secretary of the Senate, on February 14, 1996, during the recess of 
the Senate, received the following message from the President of the 
United States, together with an accompanying report; which was referred 
to the Joint Economic Committee.

To the Congress of the United States:
  Fifty years ago, the Congress passed and President Truman signed the 
Employment Act of 1946, which committed the U.S. Government to promote 
policies designed to create employment opportunities for all Americans. 
I am proud that my Administration has made President Truman's 
commitment a reality. Over the past 3 years, we have created a sound 
economic foundation to face the challenges of the 21st century.


                      Strong economic performance

  Overall, the American economy is healthy and strong. In the first 3 
years of this Administration nearly 8 million jobs were created; 93 
percent of them in the private sector. The so-called ``misery index''--
the sum of the inflation and unemployment rates--fell last year to its 
lowest level since 1968. Investment has soared, laying the basis for 
future higher economic growth. New business incorporations have set a 
record and exports of American-made goods have grown rapidly. Our is 
the strongest and most competitive economy in the world--and its 
fundamentals are as sound as they have been in three decades.
  This turnaround occurred because of the hard work and ingenuity of 
the American people. Many of the new jobs are high-wage service sector 
jobs--reflecting the changing structure of the economy. The 
telecommunications, biotechnology, and software industries have led the 
high-tech revolution world-wide. Traditional industries, such as 
manufacturing and construction, have restructured and now use 
technology and workplace innovation to thrive and once again create 
jobs. For example, in 1994 and 1995, America was once again the world's 
largest automobile maker.
  Our 1993 economic plan set the stage for this economic expansion and 
resurgence, by enacting historic deficit reduction while continuing to 
invest in technology and education. For over a decade, growing Federal 
budget deficits kept interest rates high and dampened reinvestment and 
productivity growth. Now, our deficit is proportionately the lowest of 
any major economy.
  Today, our challenge is to ensure that all Americans can become 
winners in economic change--that our people have the skills and the 
security to make the most of their own lives. The very explosion of 
technology and trade that creates such extraordinary opportunity also 
places new pressures on working people. Over the past two decades, 
middle-class earnings have stagnated, and our poorest families saw 
their incomes fall. These are long-run trends, and 3 years of sound 
economic policies cannot correct for a decade of neglect. Even so, we 
are beginning to make some progress: real median family income 
increased by 2.3 percent in 1994, and the poverty rate fell in 1994 for 
the first time in 5 years.


                   addressing our economic challenges

  I am firmly committed to addressing our economic challenges and 
enhancing economic security for all Americans. People who work hard 
need to know that they can and will have a chance to win in our new and 
changing economy. Our economic agenda seeks both to promote growth and 
to bring the fruits of that growth within reach of all Americans. Our 
overall strategy is straightforward:
  --Balancing the budget. In the 12 years before I took office, the 
    budget deficit skyrocketed and the national debt quadrupled. My 
    Administration has already cut the budget deficit nearly in half. I 
    am determined to finish the job of putting our fiscal house in 
    order. I have proposed a plan that balances the budget in 7 years, 
    without violating our fundamental values--without undercutting 
    Medicare, Medicaid, education, or the environment and without 
    raising taxes on working families. The plans put forth by my 
    Administration and by the Republicans in the Congress contain 
    enough spending cuts in common to balance the budget and still 
    provide a modest tax cut. I am committed to giving the American 
    people a balanced budget.
  --Preparing workers through education and training. In the new 
    economy, education is the key to opportunity--and the education 
    obtained as a child in school will no longer last a lifetime. My 
    Administration has put in place the elements of a lifetime-learning 
    system to enable Americans to attend schools with high standards; 
    get help going to college, or from school into the workplace; and 
    receive training and education throughout their careers. We 
    expanded Head Start for preschoolers; enacted Goals 2000, 
    establishing high standards for schools; created a new direct 
    student loan program that makes it easier for young people to 
    borrow and repay college loans; gave 50,000 young people the 
    opportunity to earn college tuition through community service; and 
    enacted the School-to-Work Opportunities Act. Now we must continue 
    to give our people the skills they need, by enacting my proposals 
    to make the first $10,000 of college tuition tax deductible; to 
    give the top 5 percent of students in each high school a $1,000 
    merit scholarship; and to enact the GI Bill for Workers, which 
    would replace the existing worker training system with a flexible 
    voucher that workers could use at community colleges or other 
    training facilities.
  --Increasing economic security. We must give Americans the security 
    then need to thrive in the new economy. We can do this through 
    health insurance reforms that will give Americans a chance to buy 
    insurance when they change jobs or when someone in their family is 
    sick. We can do this by encouraging firms to provide more extensive 
    pension coverage, as I have done through my proposals for pension 
    simplification. In addition, we should make work pay by increasing 
    the minimum wage and preserving the full Earned Income Tax Credit 
    (EITC), which cuts taxes for hard-pressed working families to make 
    sure that no parents who work full-time have to raise their 
    children in poverty.
  --Creating high-wage jobs through technology and exports. We must 
    continue to encourage the growth of high-wage industries, which 
    will create the high-wage jobs of the future. We have reformed the 
    decades-old telecommunications laws, to help spur the digital 
    revolution that will continue to transform the way we live. We must 
    continue to encourage exports, since jobs supported by goods 
    exports pay on average 13 percent more than other jobs. My 
    Administration has concluded over 200 trade agreements, including 
    the North American Free Trade Agreement and the Uruguay Round of 
    the General Agreement on Tariffs and Trade, seeking an open world 
    marketplace and fair rules for exporters of American goods and 
    services. As a result, merchandise exports have increased by 31 
    percent.
  --A government that is smaller, works better, and costs less. A new 
    economy demands a new kind of government. The era of big, 
    centralized, one-size-fits-all government is over. But the answer 
    is not the wholesale dismantling of government. Rather, we must 
    strive to meet our problems using flexible, non-bureaucratic 
    means--and working with businesses, religious groups, civic 
    organizations, schools, and State and local governments. My 
    Administration has reduced the size of government: as 

[[Page S1311]]
    a percentage of civilian nonfarm employment, the Federal workforce is 
    the smallest it has been since 1933, before the New Deal. We have 
    conducted a top-to-bottom overhaul of Federal regulations, and are 
    eliminating 16,000 pages of outdated or burdensome rules 
    altogether. We have reformed environmental, workplace safety, and 
    pharmaceutical regulations to cut red tape without hurting public 
    protection. And we will continue to find new, market-based ways to 
    protect the public.


                  the need to continue with what works

  As The Annual Report of the Council of Economic Advisers makes clear, 
this is a moment of great possibility for our country. Ours is the 
healthiest of any major economy. No nation on earth is better 
positioned to reap the rewards of the new era. Our strategy of deficit 
reduction and investment in our people has begun to work. It would be a 
grave error to turn back.
  Our Nation must reject the temptation to shrink from its 
responsibilities or to turn to narrow, shortsighted solutions for long-
term problems. If we continue to invest for the long term, we will pass 
on to the next generation a Nation in which opportunity is even more 
plentiful than it is today.
                                                  William J. Clinton.  
  The White House, February 14, 1996

                          ____________________