[Congressional Record Volume 150, Number 65 (Tuesday, May 11, 2004)]
[Senate]
[Pages S5176-S5179]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              THE ECONOMY

  Mr. BENNETT. Mr. President, a recent poll within the last couple of 
days had a fact I found truly extraordinary which I want to talk about. 
It says a very large percentage--maybe even a majority--of the people 
of America believe we are still in a recession. I find that 
extraordinary because the evidence in every area is highly to the 
contrary. The economy, if you will, is firing on all cylinders. Let me 
repeat some of the statistics I have given here before.
  In the first quarter of this year, the economy grew at a 4.2 percent 
annual rate. Added to the growth in the 2 previous quarters, this means 
it has grown over 5 percent in the last 3 quarters, which is the best 
performance in 20 years.
  Some say, Where are the jobs? We may have gross domestic product 
growth, but we don't have any jobs, so we are still in a recession.
  How can we say that in view of the facts which are overwhelming? 
Within the last 8 months, we have increased 1.1 million jobs according 
to the payroll survey, and 1.3 million jobs according to the household 
survey. Every indication is the jobs are coming back, and they are 
coming back very strongly.
  In a recession, you have layoffs. When you have layoffs, you have 
people who apply for unemployment compensation. Those are jobless 
claims. The level of jobless claims is at its lowest level in 20 years. 
How can we be in a recession when the jobless claim level is so up? How 
can people come to this conclusion?
  We have a constant drumbeat in the media about how terrible things 
are.
  I have inquired why certain media figures continue to ignore the 
actual figures, the facts. I am told with a shrug by some of the 
leaders in the media, it is all about ratings. They get better ratings 
on television programs if they rant about American jobs going overseas 
and about the economy being in terrible shape. If they scare people, 
for some reason, people seem to stay tuned in and they get higher 
ratings and a bigger audience.
  We have a responsibility in this Chamber not to scare people. We have 
a responsibility to tell the truth. The truth about the economy is that 
it is doing well.
  Let me review some charts I have presented before to reemphasize the 
facts, not to make any new argument. Apparently, the arguments made 
before are being ignored. So let's make it again until people 
understand the facts. Here is the historical perspective of economic 
growth. On the chart, the green line above the line represents quarters 
of activity. Naturally, there are four quarters for each year. The red 
lines below the line represent quarters when the economy shrank. By 
definition, a recession is when there are two successive quarters in 
red.
  If we look back over history--and this goes back into the years of 
Jimmy Carter's Presidency--we see a lot of red in this period. There 
was a recession at the end of Jimmy Carter's Presidency and then 
another recession in the first years of Ronald Reagan's Presidency--the 
dreaded double dip that people talk about. We go into recession, we get

[[Page S5177]]

some recovery, and we are right back into recession. That was one of 
the most difficult economic periods of our history. We survived it, we 
came through it, and we had a period following it of tremendous 
economic growth.
  During this period we added to the size of the U.S. economy the 
equivalent of Germany. If we were talking companies, it would be as if 
the United States, a corporation, acquired Germany; all of it, and all 
of its profit and economic activity. We grew enough to add the total of 
Germany to the American economy in this period.
  We cannot repeal the business cycle. Inevitably, no matter how well 
managers try to manage their affairs, something will happen, things 
will taper off, and we will have a correction. That is what recessions 
are; recessions are corrections of the excesses that preceded them. 
Plus, there can always be a recession from an external problem such as 
the oil shock that hit in the early 1970s. September 11 is something 
that could cause a recession and other factors. One can never 
anticipate that the upward trend will continue without a correction 
somewhere along the way. That hit in the middle of the Presidency of 
the first President Bush. By comparison to the earlier recession, it 
was mild. But it was not mild for people who lost their jobs. It was 
not mild for people who lost their homes or who had difficulties. But 
otherwise, by comparison, the amount of red below the line was nowhere 
near the amount of red that preceded it in a decade.
  When we recovered from that recession--and the recovery began in the 
Presidency of the first President Bush--we began another period of 
prosperity. Overall, it was probably not as big as the prosperity that 
preceded it, but why quibble about small amounts. It was a period of 
good prosperity. We heard in the 2000 election it was the greatest 
economy in history. In fact, the red had shown up in the third quarter 
of 2000. The signal that this period of prosperity was over, that 
another recession was on its way, was already given before the election 
took place. The signal was correct.

  After the election, we slipped into a recession that occurred in the 
last three quarters of 2001. However, we came out of it in the fourth 
quarter of 2001, and we have been in recovery ever since.
  It is amazing to me that polls show that Americans think we are in a 
recession, when we are in this green period. This green demonstrates 
that we are going to do at least as well, if not better, than we did in 
this period--maybe even as well as we did in this period following this 
recession. This recession, by historic comparison, has been the 
shortest and the mildest that we have ever had in America.
  For political reasons, it is being talked up as a disaster. I have 
heard in the Senate statements that this is the worst economy in 50 
years. I have heard in the Senate that unemployment is the worst it has 
been since the days of Herbert Hoover. That is almost laughable. 
Unemployment in the Great Depression went over 25 percent. Unemployment 
in this recession and recovery topped out at 6.3.
  Let's put that in historic perspective for a minute. Let me show what 
the unemployment rate has been in previous recessions. Here is the 
dreaded double dip we were talking about. Unemployment hit 10.8 
percent, still less than half of what it was in the Great Depression, 
but it was tremendously difficult. I remember how difficult that was. 
Then it came down. We got the next recession, and unemployment peaked 
at 7.8 percent. Now, the peak of unemployment occurred during the 
recovery, not during the recession. The shaded period on the chart is 
the period of recession. Here it peaks as the recession ended, and here 
it peaked during the recovery. Now we came down and we had this 
recession once again; unemployment peaked during the recovery, but it 
peaked at 6.3 percent. If you put 6.3 percent across the chart and 
compare it to where it was in the previous recession, you say: Not bad, 
not bad at all.
  But we are being told, again, this is the worst economy in 50 years 
because, where are the jobs? Now it is coming down. It is down to 5.6 
percent. As I say, the jobs are coming back at the rate of a million in 
the last 8 months. So project the next 8 months, there is another 
million jobs. If they come back faster, they come back at the same 
level as they have been coming, we will have another million jobs in 
less than 8 months. I don't know what will happen, but I am pretty 
confident this will continue to come down.
  The question is, Why does it take so long for the unemployment rate 
to come down once the recession is over? The answer is very clear. The 
business man or woman wants to be absolutely sure his or her business 
is, in fact, in recovery before he or she goes out and starts to hire. 
They are delaying hiring permanent workers until they are sure the 
recovery is in place. They use temporary workers. They use overtime on 
their existing workers until they are absolutely sure the recovery is 
in place. Then they start a permanent hiring. That has happened and the 
statistics are there and the facts are overwhelming. We are in 
recovery; the recovery is strong. It is robust; it has traction.
  I can only assume it is for political reasons that people stand in 
the Senate and say: No, no, no, we are in the worst economy in 50 
years. That simply is not true. It cannot be sustained.
  As I listened to the rest of the rhetoric--and I will not repeat all 
of the statistics I have used in previous speeches because I want to 
talk about the philosophical basis, but let me make this point. There 
are those who believe the economy is a sum-zero game. By that I mean 
they believe that in order for one person to win, the other person must 
lose an equal amount.
  Now, marbles is a sum-zero game. If we play marbles, and you win 
three, that means I will lose three; and we add your plus three to my 
minus three and we get zero. But in the economy, just because Adam gets 
a job, does not mean Benjamin has to lose his. In the economy, just 
because Charles gets rich, does not mean that Daniel had to be made 
poor. In the economy, it is possible for both to grow simultaneously. 
In the economy, just because jobs are growing in India does not mean 
they are shrinking in America. They can be growing both places. Indeed, 
that is what is going on.
  I see my colleague from Texas wants to speak, and I will be happy to 
yield the floor and give her such time as she needs. But I want to 
leave with this one point, once again: In economic analysis, understand 
that the economy is not static. It is not an either/or. It is not a 
sum-zero game, a plus and a minus. The economy is constantly fluid. 
People are moving up and down the income ladder all the time.
  We hear statistics about all the people at the bottom and how rich 
the people are at the top. If I may, in my own case, in my lifetime, I 
have been at the bottom and I have been at the top and I have gone back 
to the bottom and struggled back to the top. Statistically, there is no 
way to reflect that fact. Statistically, they look how rich the people 
at the top are getting, and look how poor the people at the bottom are, 
as if they are going to stay there all their lives.
  This economy is strong. This recovery is real. No amount of political 
rhetoric to the contrary can change those facts.
  With that, Mr. President, I yield the floor, but I plan to address 
this overall question of the fact that the economy is not a sum-zero 
game at some length in the future.
  The PRESIDING OFFICER (Mr. Enzi). The Senator from Texas.
  Mrs. HUTCHISON. Mr. President, how much time is remaining on our 
side?
  The PRESIDING OFFICER. There is 15 minutes.
  Mrs. HUTCHISON. Thank you, Mr. President. I will yield 7\1/2\ minutes 
to the Senator from Mississippi. Before I do that, though, I do want to 
thank the Senator from Utah, the distinguished chairman of the Joint 
Economic Committee. He has been looking at the economy every month and 
really looking at that progress. I think you can see from his remarks 
that the trend is up on all fronts. All of us knew when the recovery 
was coming, it would not be a true recovery unless it had jobs with it. 
Now we are seeing the jobs coming online following the outstanding 
performance of the stock market, and now consumer confidence is up.

[[Page S5178]]

  I think the distinguished Senator from Utah was on this trend for a 
long time before others were focusing on it. We certainly appreciate 
his leadership.
  The PRESIDING OFFICER. The Senator from Mississippi.
  Mr. LOTT. Mr. President, I join the Senator from Texas in thanking 
the Senator from Utah for the leadership and information he has been 
providing about what is happening with the economy, and helping us to 
understand all the data. As chairman of the Joint Economic Committee, 
he has been the most aggressive chairman I have seen in recent years. 
He is doing a fantastic job.
  I would describe this economic recovery we are going through now as 
the ``just say it ain't so recovery.'' When I listen to many of the 
speeches around Washington--and even out across the country in some 
areas--I sometimes get the feeling some people think that if you just 
keep saying the economy is not good, maybe it won't be. Only in 
Washington do you have that sort of perverse thinking, that too much 
good news about the economy is either not true or it is unhelpful.
  Many people try to look at the stock market to assess whether the 
economy is doing well. Well, in the long term this may be true, but at 
some points in time, I think it is a reverse indicator of what is going 
on in the economy. Sometimes, bad news in the stock market is really 
good news. We saw that just yesterday. Because the economy is growing, 
because jobs are being created, because orders are going up, because 
manufacturing is going up, the stock market said: Wait a minute now. 
Maybe the economy is beginning to get a little too hot, and maybe the 
Federal Reserve System is going to have to raise the historically low 
interest rates a little bit. Oh, this must be bad news, so let's sell 
now.
  So when the stock market reacts like that, you can bet good things 
are happening in the economy. The list of good economic news is very 
long and is growing.
  I think a lot of credit should go to the Federal Reserve Chairman, 
Alan Greenspan. He has been careful in his language. Low interest rates 
have been fantastic for automobile sales and housing starts. The 
American dream is now available to more Americans than at any time in 
the history of this country. Americans have access to a variety of 
choices in homes. More and more people are owning their own home. Of 
course, a lot of the credit for this should go to the availability of 
quality housing, a good area of the economy. Home building is done by a 
lot of really good people who are very capable. But you have to 
acknowledge that low interest rates have really helped the housing 
sector.
  I think credit should also go to the President for his leadership, 
and to the Congress. The President knew when he was sworn in that 
January in 2001, that we were already in a recession. We were already 
in one, it did not start then. The President came to the Congress and 
said: We have to do some things to encourage the economy to grow. One 
of the best ways to do that is to carefully cut taxes. We needed tax 
cuts that put money in the pockets of working Americans, and incentives 
for business and industry to create jobs. The Congress heard the 
President and passed tax cut legislation. We did it in 2001, 2002, and 
2003.
  Now, Mr. President, we are getting the benefit--the tremendous 
benefit--of those tax cuts because they boosted the economy when we 
needed it most. Just look at the numbers. If you have doubts about what 
is happening in the economy, look at the numbers published by the 
experts, not as cited by a Member of Congress.
  For instance, with respect to jobs, the administration announced on 
May 7 that 288,000 net new jobs were created in April; and 308,000 were 
created the month before--over a half million jobs in 2 months. Since 
last August, an estimated 1.1 million jobs have been created. I think 
it is probably more like 1.3 million jobs when you take into account 
the Household Survey. But either way, that is a significant increase.

  The national unemployment rate has edged down to 5.6 percent. I 
remember years ago, when I first came to Washington--I admit that was a 
long time ago, 30 or so years ago--6-percent unemployment was 
considered ``full employment.'' Well, my attitude is, any unemployment 
is unacceptably high. But it is now down to 5.6 percent, falling .7 
percentage points, from a peak of 6.3 percent in June of 2003. I 
believe it is going to continue to go in that direction, partly because 
manufacturing employment increased 21,000 jobs in April. The February 
and March job numbers were also corrected upward. So, manufacturing 
employment has risen for 3 consecutive months.
  One of the most interesting statistics I have come across is that we 
have more Americans employed now than at any time in history. More 
Americans are working today than at any time in history. Is it enough? 
No. We want more, and we want better paying jobs with greater 
opportunities. But still, you have to say, the fact that more Americans 
are working than ever before is a very impressive statistic.
  Weekly unemployment claims have fallen to their lowest level since 
the year 2000. The economy grew at a strong annual pace of 4.2 percent 
during the first quarter of 2004. I think, when the assessment is done, 
it will be adjusted upward to 4.5 percent. That is very strong growth. 
Most of the countries of the world would be delighted to have even half 
of that kind of growth.
  Household spending continues to be strong. Retail sales are up. 
Consumer confidence is at the highest level in 3 months, and rising. In 
March, new housing construction surged to levels near those of December 
2003, when we had the highest levels in almost 20 years. American 
companies are, across the board, reporting historic levels of growth. 
Productivity levels are up.
  So the administration's policies have been working, and we are making 
great progress. Every economic statistic now is moving in a positive 
direction. Now, we also need to pay attention to making sure inflation 
does not creep in, while keeping interest rates as low as possible.
  The downturn in the economy, our response to 9/11, the war in 
Afghanistan and Iraq, and additional expenditures for homeland security 
have contributed to deficits, but even that projection has fallen. Last 
year, we were told that the current fiscal year deficit would be more 
than $500 billion. Now it looks like it will be down to $417 billion. I 
think it may end up below that because the economy is growing. This is 
good news, but we have to continue to address the budget deficit 
problem. I think we are going to have to make some tough choices in the 
next couple of years to get the deficit back down to where it can be 
eliminated. I think deficits do matter. They will affect interest rates 
over a period of years if we ignore them.

  One other thing. You might say, well, all right, that is good, but 
what have you done for me lately? What are you going to do to add to 
the growth we are trying to achieve? The Senate is doing it today. 
After fits and starts, four different attempts, we are going to get an 
international tax bill today. Hallelujah, a bill; an important bill, 
finally, after 3 years of ignoring the problem of increasing European 
tariffs on American exports.
  Mr. President, this bill will create jobs and address the problem of 
the WTO ruling. It includes incentives for manufacturing jobs and 
manufacturing tax credits, and incentives to grow the energy sector of 
the economy. This is a jobs growth bill. I am glad we are going to get 
it done. I commend all of those Senators who were involved, including 
Finance Committee Chairman Grassley and his ranking member, Senator 
Baucus from Montana.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Idaho is recognized.
  Mr. CRAIG. Mr. President, let me pick up where the Senator from 
Mississippi left off. What he has been saying about the economy and the 
figures out there is certainly accurate. The gloom and doom story we 
have heard over the last 6 months has all of a sudden gone quiet. The 
reason for that is the very reason the Senator from Mississippi spoke 
of: the tax incentives we put into place, the investments that are 
beginning to work, and unprecedented levels of hiring and job creation 
are underway.
  There is something I come to speak about that is of growing concern 
to me, and I think to thousands of American consumers, if not millions, 
and the impact it could have on a growing economy, and that is energy 
and the cost of energy.

[[Page S5179]]

  Yesterday, I came to the floor to speak on that issue. The senior 
Senator from Nevada, Mr. Reid, came later to say I was unnecessarily, 
righteously indignant about the Energy bill. You are darn right I am 
righteous and sometimes indignant when the American consumer is paying 
$2 per gallon at the pump--and some more than that--and they should not 
have to be. But they are, and the reason is because the Senate has not 
acted. No, passing the Energy bill tomorrow is not going to bring the 
price of gas down at the pump. But if you are in a hole and it is 
getting deeper and you are still digging, you ought to stop digging. 
But we have not stopped digging. We have not put policy in place that 
would begin to fill in the hole that will get us into production and 
that won't be a major risk to this economy in pulling this growth down 
because the American consumer is going to have to rejuxtapose some of 
their budgets. If they are paying $400 or $500 a year more for gas at 
the pump, let alone the cost of electricity and home heating fuel, they 
are going to be spending less in the market, and that is just the 
consumer.

  I get righteously indignant when the farmer in Idaho--or in Nevada 
for that matter--goes to the bank and gives his budget or her budget 
for the year, and they have not factored in a 30- or 40-percent cost of 
energy because diesel fuel went through the roof. The bill--if we pass 
it tomorrow--won't make a difference. The bill will encourage 
production of domestic oil. It will encourage the development of more 
natural gas. It will encourage and incentivize the building of 
necessary infrastructure, such as the Alaskan natural gas pipeline. It 
will encourage the use of renewable fuels such as ethanol. It will 
encourage more renewable energy. It will strengthen the future of the 
nuclear energy option. It will promote clean coal technology. It will 
promote hydrogen as a new technology for surface transportation. It 
will promote energy efficiency. It will increase the R&D on a variety 
of technologies. It will establish mandatory reliable rules for our 
electricity grid. It will promote investment and expansion of 
electricity.
  No, it is going to take a while for this country to get back into 
production. But we have not placed the tools in the tool box to allow 
us to get back into production. So we have become increasingly reliant 
on foreign sources for our energy. On March 22 of this year, you were 
paying $1.74 at the pump. On April 4, you were paying $1.78. In May, 
you paid $1.84, and now you are paying $1.94--in some instances nearly 
$2, and in other States more than $2.
  Some are suggesting that we ought to quit filling the Strategic 
Petroleum Reserve, that we ought to cut that off. That would not make a 
difference in the price of oil at this moment because we have lost the 
capacity to produce. We have to reinvest if we are going to gain that 
capacity.
  Yes, the Saudis are being a bit duplicitous. They said here is our 
baseline and what we want, and we only need to make $28 on our barrel 
to fund our country's needs. They are making well over $30 today. 
Finally, just yesterday, the Saudi oil minister said the OPEC producers 
ought to increase the official output ceiling. Well, that statement 
alone knocked the price of crude oil off $1 and, slowly but surely, 
that will be felt back at the pumps again. What that echoes is that we 
are not seeing the price of energy improve in our country or 
determining the future of energy. The Saudi oil minister, by his 
statement alone, is making that decision and fixing the price, or 
impacting the price at the pump.
  Why do we need a national energy policy? Here is another reason. From 
1981 to 2003, we lost a huge chunk of our oil refining capacity. In 
1981, we had 324 refineries. Today we have 149 refineries, and they are 
operating at between 92 percent to 94 percent capacity. The Clean Air 
Act, the cost of retrofitting, the regulations, and the ability to 
finance simply took us out of the market and brought down those 
refineries.
  My time is up. The reality is this Senate ought to vote on a national 
energy bill, and it ought to vote now so we quit digging the hole 
deeper. Put the tools in the tool box and get this country back into 
production. And you are darn right I am righteous about it because I 
don't think our consumers ought to have to pay the bill.

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