[Congressional Record Volume 150, Number 66 (Wednesday, May 12, 2004)]
[House]
[Page H2885]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        A TALE OF TWO ECONOMIES

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Illinois (Mr. Emanuel) is recognized for 5 minutes.
  Mr. EMANUEL. Mr. Speaker, the past 3 years show a tale of two 
economies and an unprecedented redistribution of wealth in this country 
resulting in one economy for middle-class families and one for the 
special interests.
  While there is a profits boom for corporations and a compensation 
boom for the CEOs, there is a growing wage and benefits recession for 
the middle class. To those who say redistribution of wealth is wrong, I 
agree. I say redistributing the wealth to the wealthy is wrong and bad 
economics.
  The tale of two economies is a contrast fueled by executive 
compensation that too often bears no relation to performance and 
regressive tax policies that punish work and reward wealth, creating an 
upside-down economy that has shifted the tax burden from wealth to 
work, burdening middle-class families already facing skyrocketing 
health care costs, skyrocketing and rising tuition costs, job 
uncertainty, and retirement insecurity.
  While this administration creates tax loopholes for corporate jet use 
and has reduced the audits of millionaires, it is auditing hundreds of 
thousands of people and families earning $30,000 or less. This is the 
essence of class warfare. And as the famed investment adviser, Mr. 
Buffet, once said, ``There is class warfare and my class is winning.''
  A report this week, recently out and reported by Bloomberg in the 
Chicago Tribune showed U.S. corporate profits have increased by 87 
percent between the third quarter of 2001 and the end of 2003. 
Compensation for the average CEO got a big raise of 8.7 percent while 
salaried employees have seen an anemic increase of 1.5 percent. That is 
the lowest salary and wage growth since World War II in the beginning 
of an ``economic boom.''
  Bill McDonough, the former chairman of the New York Fed, and now 
chairman of the Public Accounting Oversight Board, describes the gap 
between CEO and worker pay as ``immoral.'' That is his quote. And the 
New York Fed is not a bastion of liberalism. He notes that in 1980, CEO 
pay was 40 times higher than the average salaried employee and now is 
500 times higher. He sums it up, and I quote, ``I know a lot of CEOs 
from 1980, and I can assure you the CEOs of 2000 are not 10 times 
better.''
  The performance of Ken Lay from Enron, Dennis Kozlowski of Tyco, and 
Bernie Ebbers of WorldCom bear his statement out. At every turn the 
administration tells us the economy is coming along. That may be true 
in the executive suites and board rooms, but the other economy has 
created the largest income disparities in this Nation.
  David Rosenberg, chief economist at Merrill Lynch, one of the leading 
investment banking firms on Wall Street, said, and I quote, ``The 
income from the recovery has been locked up in the corporate sector. We 
have had a redistribution of income to the corporate sector.''
  This redistribution has been accelerated by the President's economic 
and tax policies. A study cited by The New York Times this week found 
that Americans are being taxed more than twice as heavily on earnings 
from work as they are on investment income, even though more than half 
of all investment goes to the wealthiest 5 percent of taxpayers.
  While this administration has been cutting taxes, the rest of working 
America have been literally going from paycheck to paycheck and having 
a tax increase. As paychecks have often been effectively frozen for 
many, what has happened to their lives? Health care costs have gone up 
from $6,500 for a family of four in 2001 to $9,000 today. College 
tuition costs have gone up 10 percent in 2001, 10 percent in 2002, and 
14 percent in 2003. $180 billion worth of retirement securities locked 
in 401(k)s have lost their net value.
  We have literally put a squeeze on the middle-class family, and what 
we have today is the end of the middle class as we know it.
  As President Bush seeks reelection, he can say he kept his commitment 
to the top 1 percent of America. The other 99 percent has not made out 
quite so well. This administration has two books, two sets of values, 
two sets of priorities, and a single economic strategy that divides the 
country along class. Compared to how Americans view their futures, we 
cannot deny the middle-class families the same dreams of affordable 
health care, quality education, a safe place to live that the most 
fortunate in this country have today.
  A government that pays no heed to the yawning gap between rich and 
the middle class does it at its own peril.
  As Louis Brandeis, a famous Supreme Court Justice, once said, ``We 
can either have democracy in this country or we can have great wealth 
concentrated in the hands of a few, but we cannot have both.''

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