[Congressional Record Volume 145, Number 91 (Thursday, June 24, 1999)]
[House]
[Pages H4888-H4895]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         YOUNG AMERICANS MUST PARTICIPATE IN POLITICAL PROCESS

  The SPEAKER pro tempore (Mr. DeMint). Under the Speaker's announced 
policy of January 6, 1999, the gentleman from Vermont (Mr. Sanders) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. SANDERS. Mr. Speaker, it has always seemed to me that the major 
crisis that we face as a country is not that we do not know the answers 
to the most serious problems that we face but rather, for a variety of 
reasons, we refuse to ask the right questions.
  As the only independent in the Congress, I want to raise some issues 
that are usually ignored by most of my Democratic colleagues and most 
of my Republican colleagues and are often ignored by the mass media, as 
well.
  Let me start off with one question that I think is the most important 
of all; and that is, why is it that tens and tens of millions of people 
in our country, most especially the young people, are giving up on the 
political process? Why is it that virtually every day we become a less 
and less democratic and participatory society? Why is it that in the 
last election, in November of 1998, only 36 percent of the American 
people bothered to vote, which was the lowest turnout that we have had 
in many years? And this compares, as my colleagues know, Mr. Speaker, 
with the recent election that took place in Israel, where 90 percent of 
the eligible people voted, compared to 36 percent in the United States.
  It is not uncommon in Canada, in Europe, in Scandinavia to have 
elections in which 70 or 80 or 90 percent of eligible voters 
participate.
  Why is that? Why is that that so many people say, ``oh, democracy, 
oh, voting, oh, participating in the political system, do not be silly. 
I would not think of doing that.''
  Now, as bad as the general situation is, as bad as a 36-percent voter 
turnout is, what is even worse and more frightening is that, in the 
last election, if my colleagues can believe it, only 18 percent of the 
young people under 24 years of age voted. That means 82 percent of 
people 24 years of age or younger did not vote. And that in itself is a 
very serious situation.
  But what is even more frightening is that we know that, by and large, 
if people do not vote and participate when they are young, they are 
much less likely to vote as they age. So that means that, everything 
being equal, as low as our voter turnout is right now, it is likely 
that in years to come it will become even lower.
  Now, not only is the voter turnout among young people distressingly 
low, but what is also very frightening is that polls indicate that 
young people know very little about the political

[[Page H4889]]

process. There was a poll recently done by the National Association of 
Secretaries of State, and what they discovered when they asked young 
people three questions. They said, very hard question, ``Can you name 
the vice president of the United States?'' Pretty hard question. ``Can 
you name the governor of your States?'' Pretty hard question. And 
lastly they said, ``How long is a congressional term?'' ``How long do 
Members of Congress serve?''
  Those are not very hard questions. Those are questions that we would 
hope that kids in the sixth grade would know. And yet, three-quarters 
of the young people 24 years of age and younger were unable to answer 
that question.
  Poll after poll shows not only that young people but people of all 
ages have very little understanding of what our budget is about, of how 
appropriations are made, of how they can participate in the political 
process.
  I go to many, many schools in the State of Vermont because I think it 
is important for a Member of Congress to do that. What we find is that 
people in Vermont, young people, and people all over this country, they 
know the rules of basketball. They know that when you throw a ball 
through a hoop you make two points. They know all about football. You 
score six points when you make a touchdown, one point an extra point, 
two points if you throw a pass. They know all about that. Field hockey. 
They know hockey. They know all of these things.

  And yet they say, ``Tell me something, young people. Are you 
concerned about the high cost of college?'' And young people say, ``Oh, 
yeah. Twenty, thirty thousand dollars. My family cannot afford that.'' 
And then you say to them, ``Okay. From a democratic political 
perspective, how do you change that? How do you make your voice heard? 
How do you make sure that the Federal Government helps middle class and 
working families better able to go to college and to pay for college 
tuition?'' ``Gee, I do not know. I have not got a clue. How do you do 
that? We do not know how to do that.''
  Well, the reason is, if young people came together on this issue and 
they said to the United States Congress, ``get your priorities right, 
put more money into Pell grants, put more money into higher education 
so that middle class and working families can afford to get to college, 
and if you do not do that, Members of Congress, we are not going to 
vote for you,'' and that if a few million young people said, ``you know 
what,'' just like that suddenly Members of Congress would wake up and 
say, ``Oh, golly gee. College education is very expensive. We are going 
to deal with that. Maybe we are going to cut back on corporate welfare. 
Maybe we are going to cut back on tax breaks for the rich.''
  But that is not going to happen unless young people participate in 
the political process. So the first point that I want to make is that I 
consider the most serious problem facing this country is the growing 
alienation of the American people and especially the young people from 
politics and government. And not only does that alienation mean that 
working people and young people are going to be less able to achieve 
their goals through the political process, it means something else.
  In my view, it is an insult to the men and women who have put their 
lives on the line defending American democracy that people are not 
utilizing our democratic system. Clearly, we are not going to have a 
democratic system if people do not utilize it and participate in it. 
And if ordinary folks, if working people, if low-income people, if 
young people do not participate in the political process, who do you 
think is going to fill the gap?
  The answer is quite clear. The people who have the money. The people 
who have the power want nothing more than for the American people and 
for working people and young people and elderly people, they want those 
people not to participate in the political process. Why is that? Well, 
because then their money can have an even greater impact over the 
political process than it has right now.
  Today we have the outrageous situation that the wealthiest one-
quarter of one percent of the American population makes 80 percent of 
the campaign contributions. And then we combine that with the fact that 
only 36 percent of the people vote and we end up with a Congress that 
does exactly what this Congress does, and that is to represent the 
interests of the wealthy and the powerful.
  It seems to me, if young people are serious about education, what do 
they think education is? It means learning how to participate, learning 
how to use their ideas to make this country and their community and 
this world a little bit better place. So they are cheating themselves 
and they are demeaning the education that they have received if they 
are not participating.
  Mr. Speaker, I am delighted that I am being joined this evening by 
the gentleman from Oregon (Mr. DeFazio). I am proud that I chaired the 
Progressive Caucus here in Congress, which now has some 55 members, for 
8 years. I am delighted that the gentleman from Oregon is now chair of 
the Progressive Caucus, and he has been a valiant fighter for working 
people and the elderly and people who do not make the $50,000 
contributions to both political parties. I am delighted that the 
gentleman is with us this evening.
  Mr. Speaker, I yield to the gentleman from Oregon (Mr. DeFazio).
  Mr. DeFAZIO. Mr. Speaker, just to expand on the point of my 
colleague. I think it is a statistic the American people need to pay 
attention to. It is one-quarter of one percent. One-quarter of one 
percent of the people in America gave more than $200 to a political 
campaign last year and yet constituted 80 percent of the contributions.
  So who do we think are in the Republican leader's office when the 
decisions are being made on tax relief or reforming Social Security or 
on whether or not we are going to have HMO reform that gives patients 
rights? Guess what, the insurance company executives are in the office, 
not the patients, not the people who desperately need access to health 
care and cannot get it because their HMO is more interested in profits 
than in their health care. Guess who is in those offices when we are 
talking about tax reform?
  Now, we could do some tax reform around here that would benefit the 
majority of the working people in America. In fact, I have introduced 
some legislation to reform Social Security that would vouchsafe Social 
Security for 75 years, certified by the board of trustees, and it would 
give tax relief to 95 percent of the wage earning Americans in this 
country.
  It is simple. Right now we pay Social Security tax on the first 
$72,600 of income. After that, we do not pay Social Security tax. If we 
earn a million dollars a year, our tax rate under Social Security is 
less than one percent. If we earn $15,000 a year, our tax rate on 
Social Security, which is part of the FICA, is six percent. We make six 
times more out of a meager income on which we cannot make ends meet.

                              {time}  1830

  So if we just lifted the cap and said, fair is fair, all these people 
want to talk about a flat tax, well, let us make Social Security a flat 
tax on all income, not a regressive, super-regressive flat tax which is 
only on the first $72,600 of income. That would vouchsafe Social 
Security into the indefinite future. But you can also use some of that 
money to give a $4,000 exemption from FICA tax. Forty percent or 45 
percent of Americans pay more in taxes to Social Security than they pay 
in income taxes. Ninety-five percent of Americans would benefit under 
that system. Everybody who earned less than $76,000 a year would get a 
tax break. But guess what? The same people are sitting in the leaders 
of the office of the Committee on Ways and Means and the Republican 
leader's office when I talk about a progressive Social Security reform, 
something to make this vital program safe, and saying, ``You better 
worry about your campaign contributions here if you raise my taxes.'' 
They want to tax the little people, and they want tax relief at the 
top.
  It is time to change this system. But it is not going to change, as 
the gentleman from Vermont pointed out, until more people who have more 
on the line choose to vote, and that is the majority of the American 
people, who are losing under the current system. Often I give speeches 
like this on the floor and I have had colleagues and

[[Page H4890]]

friends from the Republican side of the aisle say, ``You're talking 
about class warfare. We don't want class warfare around here.'' That is 
what they say. That is not the truth. What they want is they want to 
continue the current class warfare, which is winning warfare against 
middle-income and working families and the poor in America to the 
advantage of that one-half of 1 percent at the top. That is what they 
want to perpetuate. They do not want to talk about it. They do not want 
the truth out there. It goes to so many issues. It goes to Social 
Security reform. It could be progressive. It goes to trade. I hope the 
gentleman does not mind if I switch to trade for a moment.
  Mr. SANDERS. Before you do, because trade is certainly an issue that 
you and I have worked together very hard on, I wanted to pick up on a 
point that the gentleman made. When we talk about campaign 
contributions, let us be demonstrative and very clear what we mean when 
we talk about the wealthiest one-quarter of 1 percent making 80 percent 
of the campaign contributions.
  One of the issues that I have been working on very hard for the last 
several years and is an issue of great, great concern in my State of 
Vermont among the elderly, among almost the entire population, is the 
outrageously high cost of prescription drugs. In the United States 
today, we have by far, it ain't even close, the highest cost for 
prescription drugs of any country in the industrialized world. Many of 
those drugs are manufactured by American companies. They sell it to 
Canada far cheaper than they sell it to Americans. They sell it to 
Mexicans far cheaper than they sell it to those of us in the United 
States. They sell it throughout Europe.
  Now, how is that? One of the answers lies in the fact that the 
pharmaceutical industry spends more money on campaign contributions and 
lobbying than any other industry in the United States. In the first 18 
months of the last election cycle leading up to the 1998 campaign, they 
spent over $83 million on lobbying and campaign contributions. Today, 
in a Washington publication, there is an article which says that the 
pharmaceutical industry is becoming very nervous. They are becoming 
very nervous because all over this country, people are saying, ``We 
can't afford to pay these outrageously high prices for prescription 
drugs.'' It is obscene that elderly people have to choose between food 
and prescription drugs. Here in Congress many of us are now saying, let 
us have Medicare include prescription drugs, so that elderly people do 
not have to make that choice.
  Well, what do we read in the paper today? We read that the 
pharmaceutical industry is now prepared to spend between 20 and $30 
million on TV ads and on lobbying so that Congress does not protect the 
elderly and the sick in terms of prescription drugs. That is how life 
goes and will continue to go until we have real campaign finance 
reform. So at a time when the pharmaceutical industry last year had the 
biggest increase in profits of any industry, over 18 percent, when the 
top 10 pharmaceutical companies had an average increase in profits of 
over 26 percent, what they do is they take those profits, they put it 
into lobbying, they put it into campaign funds of Members of Congress 
so that their interests are protected, and we continue to have the 
highest price for prescription drugs in the world.
  Mr. DeFAZIO. I would like to expand on that because this is very 
important to my constituents and in a moment I will talk about a study 
that was just done in my district on prescription drug prices. But I 
will just give a personal example. There is a drug called Lomotil that 
you take if you get an intestinal problem and you are traveling 
overseas. My wife and I on a private trip were traveling overseas. My 
doctor said, ``You ought to take some of this with you.'' He gave me a 
prescription. Okay. I went to a local pharmacy. The pharmacies are not 
the ones that are ripping us off on this and that is something the 
American people need to know. They need to know where to focus their 
anger and it is not on the pharmacist because they are paying more than 
the drug company is selling the drug for to other customers. The pills 
were about a buck each. I got to India. I was sick. I was out of the 
pills. I went into a local pharmacy there, same manufacturer, exactly 
the same drug, made in America, that was good, I was happy to have a 
made in America drug, six cents per pill.
  Mr. SANDERS. Compared to a dollar.
  Mr. DeFAZIO. Somehow that pill is shipped from the United States to 
India and sold, with all the middle men, to India at a profit at six 
cents, but here in America I have to pay $1. You go just north of the 
border to Canada and, in fact, because the government is exacting some 
controls and scrutiny on the pharmaceutical industry, the drugs cost 
between 20 and 40 percent less, sometimes even more. It is 
extraordinary. These are life-saving drugs that Americans need. I have 
talked to seniors who say, ``Congressman, I've got to choose between 
paying my light bill and my heat, eating, the mortgage, and my drugs 
for my high blood pressure, or my cholesterol, or my heart condition,'' 
or whatever ails them. They say, ``You know what goes.'' I say, ``I 
know what goes, the prescription.'' Some of them are taking 
prescriptions and they will buy half the prescription and they will 
take drugs at half the dose, because they cannot afford a full dose of 
the drugs. The funny thing is that these same drugs, even in America, 
are sold for less. Now, that is getting really peculiar. You can 
understand there is some government scrutiny overseas and the 
governments there are not allowing the pharmaceutical companies to rob 
people blind, but here in America you find in my district, in Oregon, 
we just did a drug study. Let us take one drug, called Zocor, which is 
made by Merck, it is used for high cholesterol, quite commonly by 
seniors, and for favored customers, that is, for companies that will 
promise to only buy that drug, as there are competing drugs, from 
Merck, some insurance industries, HMO plans and others who will make 
their insureds buy that particular drug no matter what the doctor wants 
to give them, that will be the formulary, it is $34.80 a dose. Now, if 
a senior walks in with Medicare which does not cover prescription drugs 
today, the price in my district is $106.12. That is interesting. We 
know Merck is not giving it away at $34.80. They are making money to 
their best customers. But somehow the poor little old senior who walks 
in, who does not have one of those plans, is paying $106.12, 205 
percent more. That is a scandal. That needs to change. But it is not 
going to change in this body because, as the gentleman from Vermont 
pointed out, that industry is a very generous contributor to campaigns, 
not mine, but to other Members. And the executives of that industry are 
very generous givers to campaigns, and they have got the ear of many 
powerful Members of Congress. Here is something that cries out for 
regulation. Here is something that is being done in other democracies 
and republics around the world, but not in the United States of 
America. It is outrageous.

  Mr. SANDERS. I know the gentleman shares with me the outrage that 
people throughout this country are suffering and dying and are forced 
to take money out of their food budget or their heat budget in order to 
pay for the outrageously high cost of prescription drugs. What we have 
learned is that in terms of the drugs that seniors use, I do not know 
that it is different for the general population, but in terms of 
seniors' needs, in my State of Vermont, the most commonly used drugs by 
seniors cost 81 percent more in the State of Vermont than they do in 
Canada, same exact drugs, manufactured by companies, American 
companies, and they cost 112 percent more in Vermont than they do in 
Mexico.
  Let me also mention some other information. You mentioned about how 
the cost of drugs in India, at least one particular drug, was 
significantly cheaper, the same exact product, in the same exact 
bottle, than you purchase here in the United States. In terms of the 
drugs most commonly used by seniors, if we use a figure of $1 for a 
drug paid in the United States, in Germany that same product would cost 
71 cents, in Sweden 68 cents, in the United Kingdom 65 cents, in Canada 
64 cents, France 57 cents, and Italy 51 cents. Half price in Italy. 
Meanwhile, the drug companies are experiencing record-breaking profits 
and they spend that money very freely here in Washington in campaign 
contributions and in lobbying.

[[Page H4891]]

  Mr. DeFAZIO. I would like to just congratulate the gentleman on 
legislation he has tried to pass here in the House a couple of times 
which embarrassingly enough for the House of Representatives we have 
yet to be successful on, which is to say, when the drug is developed 
with public research, that the government, the taxpayers, would be 
reimbursed. Many of the most successful drugs were not from the 
pharmaceutical companies. That is what they say, we need those obscene 
profits to invest in research. That is not where the money goes. It 
goes to the stockholders, the chief executive officers, and other 
places. Yes, some of it goes into research, but not an inordinate 
amount. In fact, many of the most successful drugs are a result of 
research done by the National Institutes of Health. When a private 
company takes their research and produces and markets a drug with 
exclusive rights for 8 to 10 years, as happened recently with a drug 
for uterine cancer, this was doubly ironic, not only was the research 
done and the drug developed by the National Institutes of Health, at 
total taxpayer expense, the product, before they developed an 
artificial one, which produced the drug was harvested off of Federal 
lands, yew bark. So this company was given not only the exclusive right 
to use and sell these drugs which were taxpayer-created but they were 
also given exclusive rights to go out and harvest the yew bark off of 
Federal lands, and no controls were put on their profits. None. That is 
absolutely obscene.
  The gentleman has tried over a number of years to say, here is a 
simple principle. If a drug company takes the public research, patents 
it and puts it into a drug, then we should get some reimbursement, the 
taxpayers should get some reimbursement for that drug development. You 
might even talk about that.
  Mr. SANDERS. I thank the gentleman. The bottom line is very simple. 
The taxpayers of this country have spent, appropriately, billions of 
dollars in research through the National Institutes of Health to 
develop very important anticancer drugs, anti-AIDS drugs and many other 
types of drugs. We have had a good result. What the outrage is, is that 
after the taxpayer pays for the development and the research of that 
drug, what we have right now is the government then simply gives over 
that product to the private pharmaceutical company which can charge any 
price it wants. So the taxpayer gets screwed twice. After you pay for 
the research, then you have to pay some outrageous price to purchase 
that product.
  We are going to continue on that legislation, and we are going to 
bring it up as soon as we can on the floor of the House. But I want to 
mention another piece of legislation that we have recently introduced, 
and that is that given the reality of what goes on right now, that the 
price for American prescription drugs are sold in Canada and Mexico 
far, far cheaper than the United States, I have legislation which would 
do a very simple thing.
  We are going to talk about trade in a minute, and a lot of the folks 
here think, oh, free trade is a great idea. You and I have problems 
with certain aspects of, quote-unquote, free trade. But here is 
something very interesting. If a prescription drug distributor in the 
United States wanted to do business with a distributor in Canada and 
wanted to purchase a prescription drug there at the same price that the 
Canadians are able to purchase it from American companies, that is 
currently illegal. The theory of free enterprise is that a 
businessperson can go shopping around and get the best price and the 
consumer benefits and everything else. It is a nice theory, I guess, 
except it does not apply, NAFTA notwithstanding, to prescription drugs.

                              {time}  1845

  So right now an American distributor cannot negotiate with a Canadian 
distributor to purchase a prescription drug at the same price as the 
Canadians are getting it. So we have very simple conservative 
legislation in that says: Let the free market work, and when you have 
exactly the same product approved by the FDA, let American prescription 
drug distributors get the best price, sell it to the pharmacist, and as 
the gentleman from Oregon (Mr. DeFazio) indicated a moment ago, the 
problem is not with the pharmacist in the United States; he or she is 
paying significantly higher prices than pharmacists all over the world, 
and we are saying: Hey, let us have a level playing field, let us have 
a little free trade when it comes to protecting the American consumers.
  So this is a piece of legislation that we look forward to bringing to 
the floor of the House and passing.
  Mr. DeFAZIO. In fact, in speaking further to that issue, some seniors 
in border States have actually formed little clubs and rented buses to 
go across the border to pick up their needed drugs, their lifesaving 
drugs, at an incredibly cheaper price, and now, of course, I understand 
the border patrol is starting to crack down on that.
  Mr. SANDERS. Well, we have actually worked with the Customs people, 
and in fact I am planning to do just that. We border on Canada, and 
already we had a hearing in Montpelier, Vermont, well attended, and a 
number of folks were coming up and they say, ``You know, Bernie, we go 
over the border. We have a particular problem. The drug there is 50 
percent, so we are going to organize a little bit of a trip to our 
neighbors to the north and bring back some prescription drugs.''
  And the goal of all of that is to highlight the absurdity, the 
outrageous situation, and let us reiterate this once again in case 
people get confused. We are not talking about generics, we are not 
talking about look-alikes. We are talking about the same exact product 
often in the same exact bottle sold all over the world at significantly 
lower prices than the United States, and we are going to do something 
to change that situation.
  I am tired of seeing we are also asking for a study. Can you imagine 
how many folks, in fact, have died in this country because they cannot 
afford the prescription drugs? Can you imagine the absurdity of elderly 
people or sick people in general not being able to pay relatively small 
sums for their prescription drugs; what happens when they are ill? They 
end up in emergency rooms, they end up in the hospital, and Medicare 
kicks in thousands of dollars that could have been saved if these folks 
had their prescription drug in the first place.
  Bottom line of this situation is that people are dying, people are 
suffering while pharmaceutical companies are enjoying record breaking 
profits and spending their cash all over Washington trying to prevent 
the Congress from doing the right thing, and the gentleman from Oregon 
(Mr. DeFazio) and I are going to do our best to turn the tables and 
finally give the American health care consumers a break, and we are 
going to save lives, and we are going to ease suffering, and we are 
going to finally help lead the effort in standing up to this very, very 
greedy industry.
  Mr. DeFAZIO. Well, I do not want to get too far afield, but I think 
at this point, as I said earlier, I would like just to address the 
issues of trade a little bit because we do seem to have these kind of 
strange standards. If it would benefit American consumers to be able to 
purchase their drugs, the exact same drugs manufactured mostly in 
America, in Puerto Rico for the most part, in Canada seems trade law 
does not allow that. But if an American firm wants to export jobs, 
export capital, if an American firm wants to blackmail their suppliers 
into moving to Mexico to get cheaper labor, now that is okay. It is 
kind of an odd world.
  I mean when are the American consumers and workers going to truly 
come out ahead on trade, or is it all just about corporate profits and 
driving down wages in this country? I have got to believe that that 
maybe is more of the agenda.
  I just, as my colleagues know, have been watching for years our trade 
balance, and we are headed toward a record trade deficit this year. The 
funny thing is that the Commerce Department loves to talk about trade 
and how much trade benefits American people, and they say: Hey, every 
billion dollars of trade is worth 20,000 jobs. But if you are running a 
$200 billion trade deficit and you apply the ruler of our own Commerce 
Department, that means we have just lost a lot of jobs.
  Mr. SANDERS. Is the gentleman actually suggesting that we should look 
at both sides of the equation?
  Now that is a radical concept.

[[Page H4892]]

  Mr. DeFAZIO. Well, they do not, but, as my colleague knows, I think 
that I mean they want to use the ruler for our exports, let us use the 
ruler on the imports which exceed our exports by 200 hundred million 
dollars. So then you multiply 200 times 20,000. I am not really very 
good at math, but it seems like that is going to come out to about a 
lot of jobs, like probably a job for just about every American who 
would want one and then more.
  But, as my colleagues know, our greatest trade deficit has been with 
Japan, but that probably will be eclipsed this year by China, and the 
extraordinary thing is, of course, we have got a few problems with the 
way the Chinese behave in the international community. They are 
identified as the least fair trading Nation on earth. They have been 
identified as a Nation that provides weapons and nuclear technology to 
rogue States. You know, they have committed a few human rights abuses, 
running over students with tanks and a few other things, have, as my 
colleagues know, basically destroyed the country of Tibet and taken it 
into their country. Of course we said nothing about that because it 
would interfere with business.
  Well, what are we so desperate about in terms of business when we are 
running an $80 billion trade deficit with the Chinese, an $80 billion 
trade deficit is what we are heading toward this year; what do they do 
with that money? They use that money to go around the world and buy 
technology to become our economic and military competitor in the next 
century. Credibly they are using American dollars. They allow, as my 
colleagues know, in a few critical American goods where they can use 
the technology, but for the most part they keep our goods out, but 
their goods are flooding into the United States.
  And now the President apparently is going to propose making this 
situation permanent, to give China permanent, as my colleagues know, 
Most Favored Nation status, and secondly, to allow them to get into the 
World Trade Organization because the theory is some day, some how we 
will whip them into line and they will drop all those trade barriers 
and we will start to sell them Coca-Cola or something else in the 
billions, and we will make a lot of money.
  But right now it is just a few American corporations that are in 
China making a bundle of money, trying to drive down wages here. Boeing 
has time and time again threatened to export jobs to China to their 
workers here in the United States as they export the technology. Of 
course Chinese say do not worry, we will not build airplanes, we are 
not going to use your technology in any critical way, and then, of 
course, they lied again.

  Mr. SANDERS. The gentleman forgets one very important point. China is 
a very good place to do business. It is a wonderful place to do 
business. Why would you want to pay an American worker $15 an hour or 
$20 an hour? Why would you have to live up to and obey environmental 
standards and work safety standards? Why would you have to deal with 
workers who might actually be members of unions? Why would you want to 
deal with workers who have the freedom to vote and to elect or un-elect 
their officials when you can go to China and pay workers 20 cents an 
hour, 25 cents an hour, where workers cannot form unions, where workers 
cannot go out on strike, where workers cannot protect their safety on 
the job?
  It is an absolutely outrage, prima facie, right on the surface, that 
you have tens of billions of dollars being invested in China by the 
largest American corporations who at the same exact time have laid off 
millions of American workers, and they are going there because they can 
pay desperate people slave wages.
  And that is the essence of our trade policy which is what? Two 
hundred billion dollars deficit this year? And yet when you hear the 
administration or you hear the Chamber of Commerce or the National 
Association of Manufacturing, they tell us about all the jobs that we 
are creating by exporting, and, as you just indicated a moment ago, 
they forget to tell us about the millions of jobs that we have lost.
  Not only have we lost jobs, but another very important factor is 
taking place, and that is that if an employer has the option to run to 
Mexico and pay a desperate person there 50 cents an hour through NAFTA 
or runs to China and pays a worker there 20 cents an hour, what do we 
think this does to the wage structure in the United States? All over 
this country workers are given a proposition. They say either you are 
going to take a wage cut, take cuts in your health insurance, or we are 
going to move to Mexico, we are going to move to China.
  So our whole trade policy has not only cost us jobs, it has lowered 
wages in the United States.
  Mr. DeFAZIO. Well, we just do need to expand on that point a little 
bit; as my colleagues know, the fact that these companies are chasing 
the lowest labor around the world and the least enforcement. As my 
colleagues know, actually I saw, not to be humorous about a serious 
subject, but I saw a cartoon once, and it was one a guy asked another, 
``Why do you think it is we are spending all this money on NASA, 
National Aeronautics and Space Administration?''
  And the other guy said; well, he says no because we know somewhere 
out there in the universe there are people who work for less than a 
dollar a day.
  As my colleague knows, I mean it is kind of a sad commentary, but 
unfortunately there is some truth in it. Under this guise of free trade 
American corporations are chasing around the world, and multinational 
corporations, after the cheapest labor from the most desperate people 
or from children, as we have seen in many countries where children are 
exploited in horrible conditions as young as age 7 and 8 in some 
countries, basically indentured into their jobs, deprived of an 
education or any opportunity to get ahead, to make products that are 
marketed in the United States and other developed countries. And trade 
law does not allow us to prohibit those goods from coming into our 
country.
  Mr. SANDERS. You are not suggesting that we should interfere with, 
quote, unquote, free trade just because we are importing products made 
by children who are virtual slaves; the gentleman is not suggesting 
that, is he?
  Mr. DeFAZIO. Well, I understand it is not the policy of this Congress 
or this administration to interfere in those workings of the market, 
but as an individual Member of Congress and someone who is concerned 
about humanity worldwide, I kind of would like to see us take a stand 
there. I mean slave labor, prison labor, child labor; it seems to me 
these are sort of basic things that should be allowed and should be 
part of your trade policy. Project your values, and, yes, this is even 
more radical to talk about maybe looking toward the people at home and 
protecting their jobs.
  Now say, oh, well, you are talking about protectionism. I say no, I 
am just talking about leveling the playing field. Let us not have 
unfair competition. Let us not let American firms go south of the 
border and dump their pollutants out the back-door into the rivers in 
Mexico. Let us have them follow the same environmental laws there. Let 
us allow the Mexican people to organize and strike and not be bullied 
or even killed sometimes by their own government because they are 
trying to organize and help their wages. If we get level playing field, 
then workers all around the world will benefit, and I think these 
companies will ultimately do well too. They forget something:
  In America, in our country, we have kind of a compact. As the middle 
class grew, the companies did better because they could consume the 
goods. They seem to have forgotten that now because with families 
desperate more and more to make ends meet, they are becoming less and 
less capable.
  Mr. SANDERS. The gentleman has led us in an interesting direction, 
and he talks about families making ends meet. But wait a second. I 
looked at the newspaper this morning, and I watched television. We are 
in the greatest economic boom in the history of this country.
  Is the gentleman suggesting that not all of the people in Oregon or 
in Vermont are doing extraordinarily well? Gee, that is what I saw on 
television. What is the reality of this great economic boom?
  As my colleagues know, when I speak in the State of Vermont, I go 
from one end of our State to the other, and I talk to a lot of middle 
class audiences and working class audiences, I talk to

[[Page H4893]]

family farmers. I always ask one question. I start off, and I would 
like to ask the people of America this question, and that is you see on 
the television and you read in the newspaper that the economy is 
booming.
  So my question is: Is the economy booming for you? And in the State 
of Vermont you ask that question of 300 people in an audience, one or 
two people raise their hands. What does a booming economy mean? A 
booming economy for you means that you are making more money and 
working fewer hours; that is what a booming economy is. You have better 
health care, you are better able to send your kids to college. Your 
housing situation is better.
  What is the reality? Well, let me say first the good news, and we 
have to be honest about this. The good news is that last year Bill 
Gates had a very good year, and I mean a very good year. Bill saw his 
wealth increase by $40 billion, increase up to 90 billion.
  What is 40 billion? Let me put it in a context. In my State of 
Vermont, which is a small State, we have our entire state budget which 
covers all of the needs of the people of 580,000 people in the State of 
Vermont. It is a little over $1 billion. That means that in Gates' 
increase in wealth in 1 year, could run the State of Vermont for 40 
years, which brings him to a total, by the way, of 90 billion.
  So Gates had a good year; what about the average American? Let us go 
over some facts here.

                              {time}  1900

  During the period of 1979 through the present, the growth in income 
has disproportionately flowed to the top. The bottom 60 percent of the 
population actually saw their real income, that is inflation-accounted 
income, decrease in 1990 dollars. The top 20 percent saw modest gains, 
but the wealthiest 1 percent saw their incomes explode over 80 percent.
  In other words, when we talk about the great economic boom, most 
people today are worse off in terms of what they earn than they were in 
1979. People are working longer hours for lower wages, and a lot of 
that reason has to do with the absurd trade policy that the gentleman 
described. We have 43 million Americans with no health insurance. And, 
here is a fact that is not very much discussed: today, the average 
American is working 160 hours a year more than was the case 20 years 
ago.
  We had hoped as we entered the 20th century, and remember, the unions 
were saying 40 hours, they wanted a 40 hour work week 100 years ago; 
that is what workers were fighting for. Today we are lucky to find the 
workers only working 40 hours. People are working 50 and 60 hours; 
people are working two jobs, three jobs. So how do we have an economy 
booming when people are forced to work 50 or 60 hours at wages less 
than was the case 20 years ago; when they do not have health insurance 
and they cannot afford their basic needs.
  Mr. DeFAZIO. Mr. Speaker, I have talked to a lot of people in Oregon 
and different places and I just remember one young man, I pulled into 
the gas station late one night after I flew back across the country, as 
I do almost every week, and he was kind of almost apologetic about it; 
he recognized me, and he said, I got to tell you, Congressman, I am not 
doing too good, I am not making it. And Oregon has the highest minimum 
wage in the United States, and guess what, our economy is booming, all 
the companies have not fled the State as we heard they would with the 
highest minimum wage in the country.
  But he said I have two jobs, my wife has a job, and he said, we are 
really not making it. We want to have a kid. We are not really sure we 
can afford to have a kid, because, he said, I have two minimum wage 
jobs at the Oregon minimum wage, the highest minimum wage in the United 
States; my wife has a minimum wage job, but after we pay the rent and 
the car payment and the other stuff, he said, there is not much left 
over. That is the unfortunate reality for many Americans.
  There have been a lot of jobs created, but compare the salaries and 
wages and benefits of those jobs. The largest employer in the United 
States of America now is not General Motors, it is not even Microsoft; 
it is something called Manpower, Inc., which is a temporary employment 
firm, with no benefits and, obviously, very little security and not the 
greatest wages in the world for most of the people they place. That is 
the largest employer in America. There is something wrong with that 
picture.
  It goes to trade policy, it goes to tax policy; it goes back to who 
funds the elections in this country. I mean there are a whole host of 
things contributing to this. It is very complex. It also goes to the 
Federal Reserve Board, who are a bunch of bankers who meet downtown at 
the largest, heaviest, most expensive marble and exotic hardwood table 
in the world, in secret, by the way, to determine monetary policy for 
the United States of America. And now, they are obsessed. They are 
obsessed. It is now, will a one-rate increase satisfy the Fed? What are 
they worried about? Another cartoon, I saw it. There are all these old 
guys, pretty much older guys, bankers and stuff, standing around behind 
Frankenstein, who is tied town, and Frankenstein's label is inflation, 
and one of them says, his eye lid twitched, his little toe moved, I 
think he is starting to breath.
  They are worried about inflation that does not exist; the lowest real 
rate of inflation in the last 50 years in the United States. Highest 
real interest rates, though, if we borrow money, and guess what? If 
there was a little bit more inflation, debtors, which is most of the 
people in America, the ones certainly I care the most about; everybody 
has a credit card, a mortgage, a home loan, a car loan, if inflation 
ticked up a half percent or 1 percent, guess what, you come out a 
little bit ahead, but your banker, your banker loses a little bit on 
the margin.
  So the obsession is we have to worry that wages might go up. The Fed 
is petrified, petrified that wages might go up. We have a law that says 
we are supposed to work to our full employment and keep down inflation. 
They do not look at the full employment side, and they particularly 
look negatively upon the idea of a real increase in wages. They do not 
want that to happen. And they are willing to drive up interest rates, 
which raises the credit card of virtually every American who has credit 
card debt, makes car loans more expensive, makes housing loans more 
expensive, because they are worried that the profits of the banks, that 
some of them who actually sit there and make policy in secret work for, 
might go down a little bit.
  There is a very strange system we are running here. What happened to 
the policymakers? What happened to the Congress? What happened to the 
President? Why can we not make monetary policy to drive up wages in 
this country, to create full employment? Why are those things anathema. 
Something is very wrong. Why can they make policy in secret? How can 
they do this?
  Mr. SANDERS. Mr. Speaker, my friend obviously misses the main point 
about what the function of the United States Congress is supposed to 
be. Does the gentleman not think that the function of the Congress is 
to represent the interests of the large banks and the rich? Does he 
really have the radical idea that the United States Congress is 
supposed to represent the vast majority of the people, the working 
people, the elderly people, the people who are struggling?
  Ah, he forgets. Those are not the people who contribute $50,000 a 
plate at fund-raising dinners, so those are not the people who are 
going to get a fair shake.
  If my friend will allow, I want to quote something from a very 
interesting book. It is called Shifting Fortunes, the Perils of the 
Growing American Wealth Gap by Chuck Collins and some other people, and 
it touches on an issue that we very rarely talk about, and that is the 
fact that the United States has by far the greatest disparity of wealth 
and income in the industrialized world; that we now have the obscene 
situation where the wealthiest 1 percent of the population owns more 
wealth than the bottom 95 percent. And in the book, and let me quote 
it, he says, ``The top 1 percent of households have soared, while most 
Americans have been working harder to stay in place, if they have not 
fallen further behind.''
  Now, this is not income, this is all together what you own.
  Well, since the 1970s, the top 1 percent of households have doubled 
their

[[Page H4894]]

share of the national wealth at the expense of everyone else. The top 1 
percent have doubled their share of the national wealth. Using data 
from the Fed, Federal Reserve Survey of Consumer Finances, economist 
Edward Wolf of New York University says that 40 percent of the Nation's 
household wealth as of 1997, the top 1 percent of households have more 
wealth than the bottom 95 percent. And in fact, what we are seeing 
today is a greater concentration of wealth than at any time in the 
modern history of this country.

  Mr. DeFAZIO. Mr. Speaker, there are some policy issues at stake here. 
We talked about trade and we will not go back to that, but we could 
have a trade policy that helped in those areas. But the other issue is 
tax policy.
  The majority party here in the House very much wants to give a tax 
break to the American people, and the question becomes first off, are 
they going to give that tax break out of the Social Security surplus; 
that is a question and a problem; or, are they going to give a tax 
break by cutting programs like Pell grants and other things the 
gentleman talked about. But maybe it can be justified, but we can only 
justify it if we look and see where those tax benefits are going to 
flow. There are ways that we can provide substantial tax relief to the 
majority of the American people, but I fear, as in the last several tax 
bills since I have been here, the wealth and what they are talking 
about, the people at the top are going to do very well, and those 
average people are not.
  They want to reduce the capital gains tax again. Now, this is not 
quite clear to me, but let me see if I totally understand this. If I 
invest for a living, my effective tax rate is just slightly more than 
half of a retail check-out, unionized check-out clerk or a teacher, is 
that correct? A teacher is paying at 28 percent on the margin and if I 
do capital gains, I do not have them, so I do not know, but I think it 
is 18 or 19 percent, as I recall.
  So what are we saying to the American people? Is this like the Leona 
Helmsley theory of taxation, only the little people pay taxes? I mean 
they are talking about a world in which they would do away with the 
inheritance tax, and let us say we were lucky enough to be Bill Gates' 
kids. But he says he is going to give most of the money away and not to 
his kids. So maybe he only gives his kid $1 billion. So his kid only 
gets $1 billion. The rest, the other $89 billion goes to charity. That 
would be nice. But then the kid goes to college and vests that $1 
billion and becomes an investor for a living. Does not work for wages.
  Guess what? That person would not pay any inheritance taxes under the 
brave new world of tax reform they are talking about, and would pay no 
income taxes, because they would exempt capital gains from income 
taxes. So the guy selling the burgers down on the corner, well, they 
are paying FICA tax, Social Security, they are paying income tax; they 
are subject to all of these taxes, but the person who inherited and 
invests for a living does not.
  What is wrong with this picture? If they want to talk about leveling 
the playing field, why should it be that people who invest for a living 
pay a lower rate of taxes than people who earn through blood, sweat and 
tears and time away from their home and their families, wages? Let us 
equalize the two. Why would we not do that? What is wrong with that 
idea? Would that not help most people?
  Mr. SANDERS. Mr. Speaker, it makes a lot of sense to me, but 
unfortunately, those people who make $10 or $12 an hour are not making 
the huge contributions to both political parties and to their Members 
of Congress, or to the United States Senate.
  The gentleman a moment ago, and maybe we can get back to this point, 
touched on a very important issue that I do not think is very widely 
known by the American people. That is when some of our friends talk 
about taxes, talk about income taxes, two points to be made. Number 
one, when we hear somebody on television saying, let us have an across-
the-board reduction in income tax, it sounds pretty good. But please 
understand that the bulk of those tax breaks are going to go to upper 
income people.
  Now, the gentleman a moment ago touched on the FICA tax and Social 
Security. It seems to me that if we want to make our tax system a bit 
fairer and protect middle income and working families, we might want to 
take a hard look at the Social Security tax, which is extremely 
regressive. As the gentleman said a moment ago, somebody makes $1 
billion a year, somebody makes $72,000 a year, who contributes more 
into the Social Security system? Answer: they both contribute exactly 
the same. A worker making $20,000 a year pays 6.2 percent; somebody 
making $1 million a year pays 6.2 percent on the first $72,000. Very 
regressive system.
  I know that the gentleman has brought forth a proposal which is far 
more progressive, and maybe he might want to say a word on it, which 
not only protects middle and low-income workers, but it does something 
else very interesting. When we hear all of our friends telling us how 
Social Security is falling apart, the gentleman's approach would extend 
the life of Social Security for many years.
  Mr. DeFAZIO. Mr. Speaker, it is pretty simple. They are talking about 
destroying the system to save it; moving toward a privatized, sink-or-
swim, on-your-own system, but there is one simple fact. If we just 
lifted the cap and said every American will pay the same amount of 
Social Security tax on all of their wages, that sounds pretty fair to 
me. It is not progressive, even. It is not. We are not saying low 
income people will pay less, we are saying everybody would pay the same 
amount on every dollar, and that would provide more than enough money 
to make Social Security solvent beyond the 75-year window.
  But I went a step further in my bill. I said okay, I like that, that 
is pretty good. We do not have to cut benefits, raise the retirement 
age or do things that hurt working people, and we do not have to roll 
the dice on some sort of individualized accounts, which have not worked 
out real well in Great Britain and in Chili, but what we could do also 
is exempt the first $4,000 of income. I would like to give a little tax 
relief.
  So the plan I have would lift the cap and use some of that money to 
provide tax relief by exempting the first $4,000 of income for self-
employed and for wage-earning Americans who pay FICA taxes.
  Now, guess what that means? That means 95 percent of the people in 
the United States of America who work for wages would get a tax cut, 
and they would still collect their full Social Security. But 5 percent, 
those who earn over $76,600 a year, would pay the same amount as the 
other people who earn less than them.
  Now, would that not be a fairer way to fix Social Security?
  Mr. SANDERS. Mr. Speaker, if I could interrupt the gentleman, what he 
is suggesting is that his proposal would lower taxes for 95 percent of 
the American people and in fact would provide a very substantial tax 
break for lower income working people, and at the same time, we would 
be able to extend the life of Social Security for the 75 years that the 
actuaries think we need; is that what the gentleman is saying?
  Mr. DeFAZIO. Mr. Speaker, that is correct.
  Mr. SANDERS. Now, Mr. Speaker, that sounds like a pretty good 
proposal to me, and let us see how many of our colleagues here who tell 
us day after day how the Social Security system is going bankrupt, 
which certainly is not true, let us see how many of them are going to 
join us in that type of an approach.
  Mr. DeFAZIO. Mr. Speaker, I thank the gentleman. In fact, I went 
before the Committee on Ways and Means. They would only accept bills 
that the actuaries had certified as meeting the 75-year requirement, so 
they only had testimony I believe on five pieces of legislation before 
the Committee on Ways and Means, and mine was one of the five certified 
by the trustees of Social Security. The chairman of that committee, who 
is also I believe for a flat tax, he did not just like latch on to it. 
I said, well, Mr. Chairman, this is going to be right down your alley; 
this is a flat tax. People are going to pay the same if they earn $1 
million, if they earn $75,000 a year. Would that not be fair? And, we 
fix the system and we do not have to go through this whole disassembly 
and reassembly and rolling the dice and taking chances on whether 
something else would work, and whether the ``something else'' that they

[[Page H4895]]

might put in place of Social Security, the system that is responsible 
for lifting millions of Americans, older Americans out of poverty, 
disabled Americans out of poverty, survivors of workers who died at a 
young age; we would lose or risk all that in the newly fractioned, 
independent sort of account kind of system.

                              {time}  1915

  Yes, a few people would do better, but most would not. Here is an 
option that would provide tax relief and save the system, but it just 
somehow did not capture the chairman's attention right off. I do not 
intend to drop the idea. I have final legislation and I am ready to 
introduce it soon. I am hoping to begin a debate about a better way to 
fix social security.
  Mr. SANDERS. Mr. Speaker, we are running out of time, and I want to 
thank the gentleman from Oregon (Mr. DeFazio) for joining me this 
evening.
  The bottom line of this discussion is the following, that unless 
ordinary people, working people, middle-income people, young people, 
get actively involved in the process and fight and stand up for social 
justice, what will happen is that the people who have the money, the 
people who make the campaign contributions, they will continue to call 
the tune here in the Congress and in the administration.
  What will happen is that the policies, whether they are trade 
policies, health care policies, prescription drug policies, labor 
policies, environmental policies, whatever, those policies will be 
heavily influenced by the interests of those people who have the money, 
and they will work against the interests of the vast majority of the 
people.
  The bottom line of this whole discussion is that we are a great and 
wealthy Nation. If we all stood together and became actively involved 
in the political process, we could create a society where every man, 
woman, and child had a decent standard of living. That is not utopian 
vision, that is concrete reality. That is what we could do. We could 
join the rest of the industrialized world and provide health care to 
every man, woman, and child, including prescription drugs.
  We will not do that unless people stand up and be prepared to fight 
for what is right. I just want to thank the gentleman from Oregon (Mr. 
DeFazio) for joining me this evening.

                          ____________________