[Congressional Record Volume 142, Number 115 (Wednesday, July 31, 1996)]
[House]
[Pages H9456-H9457]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      ECONOMIC GROWTH UNDER CLINTON ADMINISTRATION HAS BEEN ANEMIC

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from California [Mr. Dreier] is recognized for 5 minutes.
  Mr. DREIER. Mr. Speaker, I rise this evening to comment on a 
statement that was made throughout the debate on this historic welfare 
reform measure that was passed. I am pleased to see that we did it in a 
bipartisan way, but both sides of the aisle, very appropriately, 
accurately stated that as we look at reducing welfare we are going to 
be faced with an economy that will not have enough jobs for those 
people out there who are going to be moving off of welfare.
  That is a very legitimate concern because economic growth under this 
administration has been anemic. In fact, it has been lower than 21 of 
the last 30 years.
  Now, I believe, Mr. Speaker, that it is very important for us to 
follow up the very historic welfare reform legislation which we passed 
today with an economic growth plan that increases savings and 
investment, which will lead to higher rates of productivity, increase 
worker wages and the creation of more private sector jobs.
  The reason for the anemic growth that we have seen is that 
productivity growth is too low. Productivity is too low because we are 
not investing enough in both physical capital and human capital. 
Unfortunately, this administration is responsible for low productivity 
growth because the tax and regulatory burden has been way too great.
  Every year since Bill Clinton took office, taxes have been higher and 
family income has been lower than when he got elected. In fact, as we 
all have come to find out, the average family has a tax burden which is 
in excess of 38 percent.
  Under the Clinton administration the cost of complying with Federal 
regulations has also been very high. It averages $1,000 per household. 
Obviously, we all know that regulation increases the cost of employing 
workers, and thus acts as a tax on job creation and employment.
  Now, this administration is responsible for low productivity growth 
because the President has fought our efforts to reform the education 
system that we have. Unfortunately, this administration, due to it, 
government spending on education, as we all know, has gone way up, 
while the performance, the school performance and student achievement 
have remained static and are leaving young Americans ill equipped to 
function in today's increasingly competitive global economy.

  What Congress can do to increase productivity and long-term capital 
economic growth is very, very key, and there are more than a few items 
that we can do to address them. Obviously, the first that comes to mind 
for virtually everyone is balance the budget.
  We have been very committed to a balance budget, and we know what 
that will create. It obviously increases domestic savings, it lowers 
interest rates, and increases overall investment, and we know that that 
would be a very, very key and beneficial item as we look towards 
addressing this concern of anemic economic growth and slow 
productivity.
  Another one that is very key is to decrease the tax burden on 
investment.

[[Page H9457]]

Now, so often these things are mislabeled as a tax cut on the rich, but 
every shred of empirical evidence, Mr. Speaker, has demonstrated that 
it will in fact be beneficial in job creation and economic growth.
  A capital gains tax cut will make more venture capital available for 
emerging technologies as we charge toward the millennium. We know how 
important that is. We know that job creation is emanating from the 
private sector and the small business sector of our economy.

                              {time}  2045

  We also need, in looking at the technological changes that are made, 
we need to make the research and development tax credit permanent so 
that this incentive that we need for encouraging innovation in new 
technologies is there.
  We also need to do what we can to increase the skills of the 
workforce in this country, improving basic education through school 
choice, increasing local control and reducing the bureaucracy; creating 
tax deferred or tax-free education savings account similar to 
individual retirement accounts, something that this administration 
admittedly has talked about, but has not acted upon. And we have tried 
responsibly to move ahead with that and have not gotten much support 
from the administration. We have not cut spending on education, nor 
should we continue to throw money at what is a wasteful, broken system.
  We need also to enact significant regulatory reform. The explosion of 
new regulation we have seen since 1988 has raised the cost of labor and 
capital, created barriers to the formation of new companies and jobs, 
and raised the cost of employing Americans.
  The higher cost of employment, in turn, means that in a competitive 
economy the return to labor in the form of wages is greatly reduced. 
The regulatory burden needs to be rolled back, not only to allow wages 
to rise, but also to decrease the cost of hiring workers. And remember, 
again we are trying to address the concern that many have raised that 
will follow on with reforming the welfare structure.
  We also need to have a modest increase in the long-term growth rate, 
which can have a dramatic impact on the standard of living here in the 
United States. A 1 percent increase in long-term economic growth would 
mean 6 million new jobs created over an 8-year-period, $700 billion 
more in tax revenue, enough to balance the budget by the year 2002 
without any spending cuts, and also Social Security would remain 
solvent for 30 more years if we were to have just a 1 percent increase 
in long-term economic growth.
  Also, 200,000 new small businesses would be created over a 4-year 
period.
  With that, I am convinced, Mr. Speaker, that we could go a long way 
towards addressing the concerns that have been raised by Members on 
both sides of the aisle that will following the wake of reforming the 
welfare system, but it must be done, it must be done as expeditiously 
as possible. Unleash this economy and let us do it now.

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