[Congressional Record Volume 143, Number 80 (Tuesday, June 10, 1997)]
[House]
[Pages H3649-H3653]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
NAFTA IS A FAILURE
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 7, 1997, the gentleman from Illinois [Mr. Lipinski] is
recognized for 60 minutes as the designee of the minority leader.
Mr. LIPINSKI. Mr. Speaker, I come to the floor tonight deeply
concerned, deeply concerned about our failed trade policies, deeply
concerned about the plight of American workers, deeply concerned about
the future of America.
Four years ago in this Chamber we had a long, long debate on NAFTA.
NAFTA proponents pushed hard for its passage. They promised that NAFTA
would create 200,000 American jobs. They warned that NAFTA was critical
to the American economy and that American jobs depended on its passage.
After 40 months under NAFTA, we can clearly see that the reality is
vastly different. The reality is that NAFTA worsened our trade balance
with Mexico and Canada. Since NAFTA went into effect, our $10 billion
deficit with Canada turned into a larger $23 billion deficit. Our $1.7
billion surplus with Mexico slid into a $16 billion deficit. Our
growing trade deficits with Mexico and Canada mean that we are buying
more than we are selling. It means that American jobs are being lost.
The reality is that 90 percent of the companies that promised to
create jobs have not. Allied Signal, General Electric, Johnson and
Johnson, Mattel, Procter & Gamble, Zenith and Exxon. The list goes on
and on and on. They promised NAFTA would create American jobs. In a
sense, they signed a promissory note to all the working men and women
of America. The note was a promise that working Americans would be
better off with NAFTA.
It is obvious today that these multinational corporations have
defaulted on this promissory note. NAFTA is a complete and utter
failure for working Americans.
Four years ago, in 1993, we all heard the mantra of 200,000 jobs over
and over again. Guess what? It is now 1997 and we have lost an
estimated 400,000 jobs. This is a net loss. It is a staggering sum.
Bear in mind that this is not just another number. There are real
people behind the statistics, real people with real families and real
problems.
In their blind devotion to free trade, NAFTA proponents lost all
contact with reality, and in so doing sacrificed 400,000 American jobs
at the altar of free trade.
Some folks want to expand NAFTA to Chile and other Latin American
nations. I am absolutely shocked. Can
[[Page H3650]]
they not see what they have already done? It is plain to see that NAFTA
has failed. Yet these blind free trade advocates want to extend it to
other nations. How many more American jobs do we have to lose before
these people come to their senses? NAFTA is a broken trade agreement.
It is an agreement that just does not work.
If we continue to use this framework for future relationships with
Chile and other Latin American countries, it will make a lousy
situation even worse. The working men and women of America have
suffered enough.
Mr. Speaker, I am thinking today of the working men and women of
America, men and women who are proud to give a fair day's work for a
fair day's pay, men and women who work hard to put food on the table
and clothes on the backs of their children, men and women who struggle
to make their mortgage payments, men and women who work longer hours
for less. I am thinking today of the people who make up America. I am
talking about Main Street, not Wall Street. I am talking about people
who care about Medicare, Social Security, crime and education, not
leveraged buyouts, not corporate takeovers, and not stock splits.
I am talking about people who put in a full day's work, attend PTA
meetings, go to church, work a second job, and still see their family
incomes fall, while CEOs sit in their boardrooms and watch stock quotes
with the knowledge that they will get their raises anyway.
I grow tired of hearing empty promises, lofty oratory and abstract
economic theory. I want to see results. I want to see the jobs they
promised us. Instead, I see the 400,000 American jobs that were lost.
Instead, I see a trade surplus slide into a huge trade deficit.
Instead, I see broken promises.
Unfortunately, for us the bottom line is that these huge
multinational corporations focus only on the accountants' bottom line.
To them American workers are an afterthought. I see a mentality where
gold is God today, and that deeply concerns me.
Mr. Speaker, when I graduated from high school in 1956, the world was
a much different place. Thanks to the policies of FDR and the efforts
of the organized labor movement, there was a burgeoning middle class in
America. The New Deal especially brought a higher standard of living to
American working men and women. Jobs were plentiful, workers were
treated well and people were happy and optimistic about the future. The
American dream was alive and well.
Nowadays the average American worker changes jobs several times
during the course of a lifetime. Jobs are scarce and people are
insecure about the future. Pessimism and cynicism rule the day. Things
have really changed in the last 4 decades. Where has the American dream
gone?
I understand that the world has evolved. It is a world economy now,
and we cannot shy away from that. But we must make the world market our
market. We must make it work for all Americans, not just the
multinational corporations who care only about the bottom line. We must
make it work for the plumber in Chicago, the fisherman in Maine, the
assembly worker in Detroit and the taxicab driver in D.C.
Let us rebuild the American dream for working men and women. Let us
begin by establishing free and fair trade relationships with foreign
nations and ensure they play by the same rules as we do, rules that
cover labor, environmental and human rights issues that must be
included in core trade agreements, not as an afterthought.
We must treat these issues as importantly as businesses treat
intellectual property rights and rule of law. We must level the playing
field and get away from the ``gold is God'' mentality that some folks
cling to so fervently.
Let us put people before profit. What happens to the American middle
class happens to America. Let us do all we can to make sure that the
working men and women of this country can live out the American dream.
As I mentioned earlier, there are proposals now to expand NAFTA to
other countries, such as Chile. To do that, they will need Congress to
grant the administration the authority to negotiate trade agreements
and submit them to Congress under expedited procedures for an up-or-
down vote.
Article 1, section 8 of our Constitution vests Congress with an
extremely important responsibility, and that is the responsibility to
regulate commerce with foreign nations. It is our responsibility to the
American people as well as to the people of the world to enter into
fair, responsible trade agreements that respect labor, the environment
and human rights.
Proponents of free trade argue that placing such restrictions on
trade is counterproductive. The rallying cry of laissez faire
economists may be tempting to the ignorant and the blind, but not to
those who remember and understand our history.
Let us not forget the numerous social upheavals, economic crashes and
depressions that the U.S. has experienced. Let us not forget the
lessons learned through those times that government regulation has
played a vital and necessary role in the free market. Do we so quickly
forget that it was because of government intervention that the social
abuses of the late 19th and early 20th century were ended, child labor,
sweatshops, substarvation labor wages, widespread pollution and
atrocious working conditions?
{time} 2145
Thanks to the government and labor unions, we were able to stamp
these abuses out.
Some folks have been misled into thinking that government regulations
must be bad. History is supposed to provide us with valuable lessons.
How quickly some forget.
Mr. Speaker, NAFTA is a failure. It failed because it put profits
before people, multinational corporations before families. It failed
because NAFTA does not adequately address industrial relations, the
right to strike, the right to organize and the right to freely
associate. It is clear that Mexican workers do not enjoy the same level
of labor rights as we do here in America.
To make a bad situation worse, their wages are essentially capped
under an agreement known as el pacto, and a large number of owners also
privately set minimum and maximum wages so that they do not compete for
workers on this basis.
All of these factors combine to create a downward pressure on wages
in Mexico. Since NAFTA began, the wages and living conditions of
Mexican workers have not improved. In fact, the exact opposite has
occurred. They have declined. The percentage of Mexicans considered
extremely poor rose from 31 percent in 1993 to 50 percent in 1996. Real
manufacturing wages have declined 25 percent since NAFTA went into
effect. Environmental conditions have deteriorated. Instead of moving
into the 21st century, they are sliding back to the dark ages.
The unfortunate end result of all this is that Mexican workers are
viewed simply as a source of cheap labor by multinational corporations,
which creates a serious problem for us in America. With a large pool of
cheap labor a short distance away, multinational corporations have a
great deal of freedom and incentive to move manufacturing facilities to
Mexico, and fewer environmental regulations there means even more money
saved. Moving production to Mexico results in low overhead which means
higher profits for corporations.
Here is a case in point. During the NAFTA debate in 1993, Zenith
Electronics Corp. denied the report that they would transfer all of
their production facilities to Mexico as a result of NAFTA. On the
contrary, Zenith said NAFTA offers the prospect of more jobs at the
company's Melrose Park, IL facility. Needless to say, Zenith announced
late last year that it was laying off 800 of its 3,000 workers at the
Melrose Park facility.
Not only are companies moving their facilities to Mexico, leaving
hundreds of thousands of hard-working Americans in their wake, it is
now commonplace for them to use it as a threat. They use it as a scare
tactic in order to undermine the efforts of workers to improve their
wages, benefits and working conditions through collective bargaining.
A recent Cornell University study found that a significant number of
companies threatened to move work to Mexico as part of their efforts to
intimidate workers who want to unionize. I find it morally
reprehensible to resort to such tactics. It undermines the legal right
of American workers who want to form unions. It
[[Page H3651]]
undermines the basic right of American workers who want to provide a
better living for themselves and their families.
Proponents of NAFTA touted it as a win, win, win situation. It sure
has been a win, win, win situation. It is a win for big business in
Mexico, it is a win for big business in America, it is a win for big
business in Canada. It is the working families who lose.
Mr. Speaker, this is an important and complex issue. As the world
economy becomes increasingly interwoven and trade continues to grow as
an important part of our national economy, we must ensure that we enter
into trade agreements that are fair and equitable to the American
worker. We must evaluate trade relationships from this perspective. As
such, we have got to take a long hard look at NAFTA and what it has
done to the working men and women of America. We must think about
granting fast track authority to the administration and what it will
mean for the American middle class. We should closely examine the
arguments for the expansion of NAFTA to Chile and other Latin American
nations.
As the gentleman from Michigan, David Bonior, noted, there are more
people in this Congress who voted against NAFTA 4 years ago than voted
for it, and many of those who voted for it say they would never vote
for it again. The evidence against NAFTA is growing, and it is becoming
just too hard for folks to ignore.
Mr. Speaker, I would now like to yield to the gentleman from Vermont
[Mr. Sanders] who is going to engage me in a colloquy about NAFTA trade
and numerous other issues that affect the American working man and
woman. Mr. Sanders.
Mr. SANDERS. Mr. Speaker, I applaud the gentleman's remarks, and I
especially congratulate him for focusing his thoughts on what is
happening to ordinary working people rather than just the very wealthy
and the very powerful.
One of the aspects of modern life which concerns me very much is that
when we turn on the television or we read the newspapers, as you well
know we hear about the booming economy; do we not? We hear about how
some Wall Street folks tell us that the economy has literally never
been better in our lifetimes, and they wonder just how long it will
continue to be so good.
And then I go back to the State of Vermont, and I talk to working
people from one end of the State to the other, and I say to them tell
me about the booming economy. And what they say is, Bernie, I am
working two jobs or three jobs, and my wife is out working long hours
just to pay the bills. So we do not have too much time to consider the
booming economy. We are just working hard to keep our heads above
water.
And the reality is, according to the official statistics, that in the
midst of all of this great boom, what is going on for the average
working person? Well, I do not hear this too much. Yes, we know
recently, we read recently, that the CEO's of major corporations are
now earning over 200 times what their workers are making, so we can see
for the CEO's, the chief executive officers of major corporations,
things are booming. That is true.
And we also read recently that compensation for the CEO's last year
was 54 percent higher than the previous year. We concede that too. If
you are a CEO of a major corporation, I guess the economy is booming.
But when you read through the fine print, you find that for the
average American worker last year, wages went up on average by about
3.8 percent. Inflation is about 3 percent. And we know that low-wage
workers got a bit of a boost because we raised the minimum wage a
little bit. We know that the higher income workers generally do better
than the middle-class workers.
So you add it all together, and what you discover is that in the
midst of this great boom the standard of living of the average middle-
class worker continues to decline, and if the standard of living of
working-class people declines today in the midst of a boom, I wonder
very much what will happen when our boom ends, as it is sure to end.
I am also concerned that in the midst of all of this so-called boom,
the United States continues to have, by far, not even close, the most
unfair distribution of wealth and income in the industrialized world.
We do not talk about that too much; we do not see this too much on the
corporate media's television stations or in the newspapers, but the
facts are pretty clear. The wealthiest 1 percent of the population now
owns over 40 percent of the wealth of America, and the richest 1
percent owns more wealth than the bottom 90 percent, and we have the
greatest gap between the rich and poor of any other country in the
industrialized world.
What kind of boom is that? We know that during the last 20 years,
while we have seen a significant increase in millionaires and
billionaires, 80 percent of all American families have seen either a
decline in their net income or, at best, economic stagnation. In fact,
adjusted for inflation, the average pay of four-fifths of American
workers plummeted 16 percent in 20 years. Twenty years ago in the
United States of America, as you well know, the United States led the
world in terms of the wages and benefits we provided our workers. We
were number one. And now in the midst of the great boom, we are down to
13th place.
In Germany, for example, manufacturing workers there earn over 25
percent of what manufacturing workers in the United States earn. In
1973 the average American worker earned $445 a week. Twenty years
later, with inflation adjusted dollars, that same worker was making
$373 a week. People today are working far longer hours than they have
to, than they were 20 years ago. So you are seeing people working two
jobs, three jobs, over time, women who would prefer to be home with
their kids being forced to work in order to pay the bills.
Where is the boom for the middle class or the working class of this
country? It is not there. And one of the reasons, as you so aptly
pointed out in your remarks, is the disastrous and failing trade policy
which this country is currently experiencing. And in my opinion it is
not just NAFTA, it is GATT, it is Most Favored Nation status with
China, it is the huge trade deficit that we have.
And as I think you indicated, the issue is not too complicated. If an
American company is forced to choose between paying an American worker
a living wage of $10 or $15 an hour providing decent benefits, having
to protect the environment, or run to Mexico where you can get a good
worker there for 70 or 80 cents an hour, you do not have to worry about
the environment, you do not have to worry about unions, what choice is
that employer going to make? And the evidence is pretty clear, the
choice that that employer made, which is why we have lost hundreds of
thousands of jobs.
So I would just say as we begin our discussion here, I know in my
State of Vermont, and I suspect throughout the country, there may be a
boom, but it certainly is not applying to the middle class or the
working families of my State.
Mr. LIPINSKI. I appreciate the gentleman's remarks, and I want to say
that we do not necessarily agree with everything that this man had to
say, but for me one of the highlights of the last presidential election
was when Pat Buchanan was running, and he was running on the issue of
insecurity, the economic insecurity of the American middle class, the
American working class. He spoke about it a great deal, he articulated
it very well, and he forced President Clinton and Senator Dole to talk
about it also. And I think they got wide dissemination; a lot of the
media picked up on it. Unfortunately, when he went out of the race,
President Clinton stopped talking about it, Senator Dole stopped
talking about it, and the issue has just drifted away.
And I say to you, you know, I do not understand why the issue drifted
away. It is the most significant, important issue facing this Nation
today.
I said that when international communism ceased to exist, the Cold
War was over and we were in an economic war. And by that, I meant a war
to improve the standard of living of the American working and middle
class, and to me, I believe we are losing that war, we are losing it
more each and every day, each and every week, each and every month, and
no one in this Nation, other than a very few voices, seem to have
anything to say about it.
What is your opinion on that?
[[Page H3652]]
Mr. SANDERS. I think you raise a very, very important point, and I
tell you that it is a very--the theme that you are talking about
suggests to me very frightening and dangerous times, and this is why.
The average worker reads in the paper that the economy is booming;
right? That things are going well? And he says to himself or herself:
What is the matter with me? Everybody must be doing well except me. My
wages have gone down, I do not have health care, I cannot afford to
send my kids to college, I am working longer hours, and I do not see it
on the paper. So it must be me; right? I must be the only person in
America who is suffering economically.
And as you indicate, of course, it is the vast majority of the people
who are hurting.
Now you raised the question: Why is it not talked about?
{time} 2200
Well, let me offer the gentleman a suggestion on another issue
equally important that we also do not discuss. Where do we get our
information from?
Mr. LIPINSKI. From the news media.
Mr. SANDERS. Yes, we turn on the television. Let us look at that for
a moment. Who owns NBC? Well, General Electric Corp., one of the
largest corporations in America. The gentleman mentioned them, among
others.
Mr. LIPINSKI. Yes, I did.
Mr. SANDERS. General Electric is one of the companies who is busy
running to Mexico, I think they have been investing in China, they have
laid off significant numbers of workers. They come before this body
every day trying to figure out a way not to have to pay taxes, leading
the efforts against organized labor.
Well, great shock of all shocks. NBC does not have a feature on the
decline of the middle class. They do not talk about it too much. O.J.
Simpson, we can get thousands of hours. Every airplane crash that ever
happened, we can see the great visuals. But the fact that the average
American worker has seen a decline in their standard of living,
struggling just to keep their heads above water, somehow that story,
gee, they just did not get it.
Well, what about ABC? We flip the dial and maybe ABC will give us the
story. But who owns ABC? Why, that is the Disney Co. The Disney Co. is
busy running to China, they are in Haiti, they are paying people in
those countries pennies an hour to produce products that come back into
America. I do not recall seeing too many features on their station
about the trade issue, or about the exploitation of Haitian or Chinese
workers. I do not recall that.
Maybe we will go to CBS, we will get a better story. Well, I guess
not. That station is owned by Westinghouse, or maybe we will go to the
Fox network that is owned by that strong, progressive Rupert Murdoch
worth many billions of dollars. No, I do not think we will see it there
either.
So I would argue that one of the reasons that the American people are
not seeing the pain of their lives being reflected in the media is that
the media is owned by very large multinational corporations, many of
whom are taking our jobs to Mexico and China, and the media would
rather, what is the word, obfuscate, perhaps, rather give us a lot of
entertainment and game shows and soap operas rather than discuss with
the American people the important issues, and that would be one
reflection I would have on the gentleman's question.
Mr. LIPINSKI. Mr. Speaker, that certainly is a very interesting
reflection. I will have to take that under consideration and I will
certainly do that, and perhaps I will come to the same conclusion that
the gentleman has come to.
But I want to say that I admire the fact that the my colleague the
gentleman from Vermont [Mr. Sanders] and the gentleman from Michigan
Mr. Bonior] and the gentleman from Oregon [Mr. DeFazio] and the
gentlewoman from Ohio [Ms. Kaptur] and the gentleman from New York [Mr.
Owens] and a number of other people come down here on Tuesday night and
try to get this message out to the American people. I think it is a
wonderful effort and I applaud my colleagues for it. I am very happy to
participate with the gentleman from Vermont [Mr. Sanders] tonight in
that effort.
But I have to say to the gentleman in all candor, we need to get a
much bigger microphone. We have to have these conversations amplified
significantly, I believe, in order to have any real impact on this
Nation. I believe that we have to find ourselves a presidential
candidate who is willing to articulate the issue about economic
insecurity in this Nation, because I do not think there is any other
way we can once again get this issue back to the front burner, make the
American people aware of the fact that we know what their problem is.
There are some people willing to jump into this battle and try to aid
and assist them, but I think the only way we get them motivated,
mobilized, is by having someone running for President in this Nation
who is going to articulate that issue.
I ask the gentleman his opinion on that.
Mr. SANDERS. Mr. Speaker, I think that would be of enormous
importance, and I think as the gentleman knows, I am an Independent.
Mr. LIPINSKI. And I am not asking the gentleman to support anyone
here tonight.
Mr. SANDERS. Mr. Speaker, one of the reasons that I am an Independent
is that I feel that to a large degree, both political parties are
dominated by big money interests and it would be very hard for that
candidate who is prepared to stand up to the large multinational
corporations who have so much influence over our economy and over the
politics of what goes on, it is no great secret.
I mean as the gentleman well knows, we hear a whole lot of discussion
about the influence of big labor on the political process, the
gentleman is aware that corporate America puts in seven times more
money than labor does.
Mr. LIPINSKI. Absolutely.
Mr. SANDERS. Mr. Speaker, the gentleman is aware that when we talk
about NAFTA or MFN with China that there is a massive lobbying effort
going on by corporate America trying to influence the Members of this
body. They will put ads in newspapers throughout this country telling
everybody how good these trade policies are. Whether or not the two-
party system can give birth to a candidate who is prepared to take on
these moneyed interests I frankly have my doubts.
But one of the things that does concern me is that what does go on
here in this body is, instead of addressing the real issue of the fact
that in many ways this Nation is becoming an oligarchy dominated by a
relatively few large corporations and wealthy individuals, instead of
recognizing that reality and trying to deal with it and develop
policies which address that problem, what we see is a lot of
scapegoating. What we see is black being played off against white,
native versus immigrant, gay versus straight, everybody against
everybody, rather than figuring out how we can come together as a
people to try to address the difficult problems that the gentleman
articulated about the global economy, can we create, with all of this
new technology, every day we hear about the information highway, right,
how important the computers are.
Well, if all of that stuff is so valuable, as I expect that it is,
why are we not seeing increased wealth going to the middle class and
the working class? Why are we not seeing people working fewer hours
rather than longer hours? Why are we not seeing more people covered by
health insurance rather than fewer? Why do we have by far the highest
rate of childhood poverty in the industrialized world? Why are we in
the process right now, as some would have us, cutting Medicare by $115
billion, lowering the quality of health care for our senior citizens?
So the issue becomes how do we come together as a people, black and
white, immigrant and native born, woman and men, gay and straight, all
of us come together and say how do we create decent jobs for our people
rather than seeing jobs going to China where workers are being paid 20
cents an hour? How do we use technology to lower the workweek rather
than to put American workers out of their jobs?
We are not doing that. We are not addressing that. I think the reason
is that we need to begin to come up with some of the answers to those
questions by challenging big money interests and to a large degree, and
my feeling is in this body it is almost an issue people
[[Page H3653]]
feel uncomfortable talking about. We are just not allowed to talk about
the power of the wealthy.
Mr. LIPINSKI. Mr. Speaker, that seems to be the case. A lot of people
are very uncomfortable talking about it. I am a capitalist. I believe
in the free market system. But I also believe that an economy should be
run for the benefit of the overwhelming majority of the members of that
society, and that really should be the principle that guides us in all
the legislation we put forth here, in the other body, in legislation
that the President signs into law. Do what is best for the overwhelming
majority of the American citizens economically and in every other way.
It may sound very simplistic, and perhaps it really is. But that is
the way the country should be governed; that is the way the legislation
should come forward. Unfortunately, the longer I am here, the less and
less I believe that is happening.
So I would say to the gentleman, I would like the gentleman to
conclude if you have any concluding remarks. I am finished for the
evening. I hope to be back next Tuesday, but does the gentleman have
anything to say in conclusion?
Mr. SANDERS. Mr. Speaker, I would just certainly agree with the
gentleman that clearly the task of Congress is to represent the vast
majority of the people and not just the very few who are wealthy and
powerful. But I think that that is very often not the case.
Let me just point out one example of that in terms of tax policy. In
fact, we are debating that right now in terms of the budget that was
recently proposed by the gentleman from Texas [Mr. Archer], which would
give huge tax breaks to the wealthy while at the same time we would cut
back on Medicare, certain Medicaid programs and very significantly, by
the way, on veterans' programs.
In terms of tax policy what has gone on in this country people should
know that from 1977 to 1990, the Social Security tax was raised nine
times, and today, people are paying, if one is self-employed, one is
paying 15 percent before one pays any income tax and a FICA tax. And
yet during that same period, while taxes on working people through the
FICA tax went way up, taxes for the wealthy and the large corporations
went way down, and the Federal Government ended up collecting
significantly less money, which helped cause us the deficit problem
that we are trying to address right now.
I would just conclude by saying that the gentleman is absolutely
right in suggesting what I think the vast majority of the people would
agree with at a moment's notice, and that is the function of this
institution is to represent the overwhelming majority of our people who
are not wealthy, who work hard, who are struggling to keep their heads
above water.
Unfortunately, that is not the case now. The people have the money,
have enormous power and enormous influence over this institution. What
I would hope is that in the towns and cities all over this country,
people begin, must begin to get involved in the political process, must
study the issues. What is our trade policy? Is it working? Is it not
working? Why is it that we have such an unfair distribution of wealth?
What about our tax system? Does it favor the corporations and the
wealthy, or the middle class and working families?
I would hope that ordinary people begin to study the issues, get
involved in the issues, and play a much more active role in the
political process, because God only knows, we certainly need their
strength and their energy in order to influence what goes on here.
I thank the gentleman very much for allowing me to join him in this
special order.
Mr. LIPINSKI. Mr. Speaker, I appreciate the gentleman joining me
tonight.
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