[Congressional Record Volume 142, Number 104 (Tuesday, July 16, 1996)]
[Senate]
[Pages S7882-S7883]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          THE CLINTON ECONOMY

  Mr. ABRAHAM. Mr. President, I rise today to draw my colleagues' 
attention to recently released facts on the condition of our economy, 
and the fate of the American people in that economy.
  For too long, Mr. President, we have been subjected to the old canard 
that tax cuts favor only the rich, while intrusive government programs 
help the poor. The experience of this administration proves that this 
is not so. Under the high-tax, high-spending policies of the current 
administration, the rich have gotten richer while the rest

[[Page S7883]]

of America has been caught in a Clinton crunch of stagnating wages and 
increased taxes, finding it increasingly hard to make ends meet.
  Federal taxes have risen under this administration to their second 
highest level in U.S. history. Federal revenues have risen from 19 
percent of gross domestic product in the first quarter of 1993 to 10.5 
percent in the first quarter of 1996. Taxes reached their highest level 
in 1981, just before the Reagan tax cut took effect, at 20.8 percent of 
GDP. At the peak of World War II, in 1945, taxes consumed just 20.1 
percent of GDP.
  Have this administration's high taxes produced a more equal income 
distribution in America? Hardly. As the rich have become richer, most 
Americans have seen their incomes stagnate. The average real income of 
the top 5 percent of households rose by 19.8 percent between 1992 and 
1994. Those in the top 20 percent of households experienced an increase 
of 10.1 percent. Meanwhile, those in the bottom 80 percent of 
households saw an average increase of only 0.6 percent. The result: The 
share of total income going to the top 5 percent increased from 17.6 
percent in 1992 to 20.1 percent in 1994, and the share going to the top 
20 percent rose from 44.7 percent to 46.9 percent.
  Republicans are not the party of envy. We do not believe it is 
government's job to penalize Americans for doing well in a free market 
economy. However, we can tell that something is wrong when the already 
well off are the only ones to see their incomes go up. And that is 
exactly what has happened under this administration.
  Real median family income in 1994 dollars has fallen from $40,890 in 
1989 to $38,782 in 1994. So far in the Clinton administration real 
median family income has averaged just $38,343, compared to $39,632 in 
1992. Real compensation per hour, wages plus benefits actually fell 0.7 
percent in 1993 and 0.5 percent in 1994, and grew only 0.3 percent in 
1995. This compares with a 2.1 percent growth rate in 1992.
  Why have most Americans experienced stagnant wages? Because the 
Clinton expansion, held back as it is by excessive taxes, has been 
lackluster at best. In 1995 real GDP grew at only a 1.3-percent rate. 
Growth in output per hour has fallen from 3.2 percent in 1992 to 0.1 
percent in 1993, 0.5 percent in 1994 and 0.7 percent in 1995.
  And the much-vaunted drop in the unemployment rate from 5.6 percent 
in May to 5.2 percent in June hides a deeper problem. The broader 
measure of unemployment, the U-6 rate, actually rose from 9.5 percent 
to 10 percent. This rate includes discouraged workers who have left the 
labor force and those working part time who cannot find full time work. 
Indeed, Mr. President, much of the decrease in the unemployment rate is 
illusory because 7.7 million workers now must hold down two jobs to 
make ends meet.
  Even holding down two jobs is proving insufficient for many Americans 
to survive the Clinton crunch. The personal saving rate has fallen from 
5.9 percent in 1992 to 4.5 percent in 1995. Consumer debt has 
skyrocketed from $731 billion in 1992 to over $1 trillion in 1995. And 
the American people cannot shoulder that much debt. The credit card 
delinquency rate reached 3.53 percent in the first quarter of 1996, 
compared with 2.93 percent in the fourth quarter of 1992. And personal 
bankruptcies reached 252,761 in the first quarter of 1996, only 
slightly below the yearly rate in the early 1980's. At this rate, 
personal bankruptcies will reach 1 million this year, an all time high.
  What we have, then, is a weak recovery held back by an astounding 
burden of taxation. I am not engaging in mere hyperbole, Mr. President. 
Federal taxes would have to be cut by $111 billion this year just to 
get the tax burden back to where it was when President Clinton took 
office. Worse, this extra tax burden has brought us greater 
unemployment than would otherwise be the case, along with consumer 
hardship for all but the wealthiest Americans.
  Mr. President, my friends on the other side of the aisle are fond of 
claiming that their's is the party of working families. But the 
economic news of recent months shows this to be false. Those who know 
how to hide their incomes do better under their high tax policies, 
while other Americans must take on extra work and go into debt just to 
hold ourselves and our families together. It is my hope that we can 
learn from this experience and set our Nation back on a course of lower 
taxes, less government and greater opportunity for the ordinary working 
families of America.

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