[Congressional Record Volume 150, Number 76 (Thursday, June 3, 2004)]
[Senate]
[Pages S6390-S6392]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE ECONOMY
Mr. COLEMAN. Madam President, I rise today to talk about continued
progress for the American economy, especially back home in Minnesota.
I have been coming down to the Senate floor now from time to time to
talk about how the policies of President Bush and a Republican
majority, working across the aisle with some like-minded Democratic
friends in the Congress, are putting America's economy back on track
and Americans back to work.
I remember back in October when I came down to the floor and talked
about early signs of economic growth that would set the stage for the
job creation we have been witnessing in the last 8 months. Right after
I spoke, my friend the assistant Democratic leader challenged me a bit,
questioning whether my prediction for a brighter economy were not a
little premature.
As the saying goes, ``There is nothing more horrible than the murder
of beautiful theory by a brutal gang of facts.''
What may have been a trickle of good economic news last October has
cascaded into a steady stream of good news. Even that most persistent
critics of the President's economic program must now concede. The
economic engine of America is humming. Job growth is a reality.
Two weeks ago, I talked about a Minneapolis Star Tribune article
appropriately entitled, ``Minnesota Jobs Roar Ahead,'' which reported
that Minnesota broke all kinds of jobs records in April when Minnesota
experienced the largest one-month drop ever in its unemployment rate
and more manufacturing jobs were created at a record pace as well.
Today, I want to talk a little about an article in my home town
paper, the Saint Paul Pioneer Press, entitled ``Factories on a Roll.''
The article highlights that U.S. Manufacturing activity expanded for
the 12th consecutive month last month, and factories boosted employment
to meet strong demand for their products.
This is true back home in Minnesota. A regional survey by Creighton
University economists found that Minnesota's ``Business Conditions
Index'' rose to a 10-year high.
Also, Minnesota enjoyed its best month-to-month gain in jobs in April
since October of 1999. The progress of the last few months has led
number of economists to describe Minnesota's economy as ``spectacular''
and ``breathless,'' and indicates that employment opportunity in the
manufacturing sector will continue to improve.
I stand by what I said in October. The President's commonsense tax
relief has played the crucial role in helping the economy to rebound
from the recession that began during the final months of the Clinton
presidency.
More than 1.9 million Minnesota taxpayers saw their taxes decline
this year under the President's tax relief. More than 1.2 million
couples in Minnesota will benefit from the reduced marriage penalty and
more than 475,000 couples and single parents will see an increase in
their child tax credit.
I wonder if some folks on the other side of the aisle would still
prefer I hold my tongue while we wait for more evidence. If so, I would
suggest that perhaps ``irrational exuberance'' has given way to
``unreasonable pessimism.''
I would even go so far to say that one of the economy's chief risk
factors today is those who continue to talk it down. And why? Could it
be perhaps that for some, economic good news might be political bad
news? Much of the howling about the economy has fallen silent. But
where is the consistency? If the President was to blame for the economy
before, isn't he to be praised for its performance now? I can't wait to
see how this one is spun.
The economy has overcome great obstacles and is firing on all
cylinders in Minnesota and elsewhere. No, we have not died and gone to
economic heaven; problems remain. There is good and bad in every
economic period. But considering where we are and what we have come
through, this is solid, broad-based and even historic progress.
I was optimistic last October. Why? Because this is what always
happens when you give people control of more of their own paychecks.
Federal programs are not the engine of economic growth: Regular folks
who save, invest and consume are. But that doesn't mean there aren't
things we can do right now to help.
For the sake of working families across the country, we need to focus
on maintaining that economic growth and jobs creation through a forward
looking legislative agenda. We need to pass an energy bill, a highway
bill, and important legal reforms that alone would create 3.5 million
new, and good paying jobs.
We need to make permanent the President's tax code in enforcing this
economic growth. We need to keep the economy going down the track it is
on.
The optimist sees the light at the end of the tunnel. The pessimist
assumes it is an oncoming train. With all the evidence in hand, it is
time to doubt the doubters and call them to account.
Although we saw the signs last fall for the economic growth and jobs
creation that was beginning to unfold, some folks had doubt. But, as
President Franklin Roosevelt put it better than a half century ago,
``The only limit to our realization of tomorrow will be our doubts of
today. Let us move forward with strong and active faith.'' Hopefully
this continued good news from Minnesota and across America will help
the doubting Thomas's still among us.
I yield the floor.
The PRESIDING OFFICER. The Senator from Georgia.
Mr. MILLER. Madam President, I rise today to join with my colleagues
in celebrating this anniversary. In 2001 and again in 2003, Congress
had the wisdom to pass two bold tax cut plans. I firmly believe they
were the key to turning around this economy.
When the President came to office, the economy was already taking a
turn for the worse. Job growth was slowing down, the stock markets were
moving in the wrong direction. A dose of strong medicine was needed.
Our President came up with a bold plan for tax relief, to get more
money out of Washington and put it back into the pockets of workers and
the small business owners who earned it.
President Bush knows, as President Kennedy knew, and as President
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Reagan knew, the best way to jump-start the economy is to leave more
money in the hands of the American people.
When people and businesses can keep more of their own money in their
own pockets instead of having to send it to the ``National Center for
Income Redistribution on the Potomac,'' it follows they will spend more
and they will invest more and they will expand their businesses more.
When that happens, the result is new jobs and a growing economy. That
is exactly what has happened.
I was proud to be a cosponsor of those tax relief plans which lowered
the tax bills for 111 million taxpayers, including 25 million small
business owners. Americans have been using this extra money to pay
their bills, get the kids in new clothes, or start a saving plans for
themselves. Small businesses are investing in new equipment and
expanding their operations. Workers are opening their 401(k) statements
to see the numbers are going up instead of down.
As a result, our economy is on the upswing. We have had 10
consecutive quarters of economic growth. In the last 3 quarters, the
economy has been stronger than any 3 consecutive quarters in nearly 20
years. Jobs are coming back, too. More than 1.1 million jobs have been
created since last August and more are on the way. Manufacturing
activity is picking up, and the business community is more confident
than ever that they feel this turnaround taking root.
President Bush has done an outstanding job shepherding our economy
through these tough times. I have one wish as we celebrate this
anniversary. I wish this Congress would take one more step with these
tax cuts. I wish we would do what we should have done in the first
place, make these tax cuts permanent.
I have asked this question before and I will ask it again: How can
anyone, how can any business, make any long-range plans for a business
or for a family with a ``here today, gone tomorrow'' tax cut, a tax
policy that has a perishable date on it, like a quart of milk?
The fastest way to show our taxpayers we are serious about tax
relief, the fastest way to ensure this economic growth continues, is to
make the tax cuts permanent.
I yield the floor.
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. NICKLES. Madam President, I compliment my colleague, Senator
Miller from Georgia, for his statement, but also for his courage last
year in not only supporting this package but cosponsoring this package
with me. Every once in a while we do something in Congress that makes a
difference. Last year, Senator Miller helped pass a budget that enabled
the Senate to pass a tax bill.
The tax bill we passed we called the economic growth package 2003. It
did a lot of things. It accelerated some tax cuts that were already
passed in 2001 that were being phased in very slowly. We accelerated
those. We made the maximum tax rate 35 percent. It accelerated tax
changes for families, moved tax credits for children from $700 to
$1,000. It gave marriage penalty relief. It meant married couples would
pay 15 percent on taxable income up to $58,000. It expanded the 10-
percent tax bracket. It cut capital gains tax rate from 20 percent to
15 percent. It cut the tax rate on corporate dividends. We tax the
distribution of dividends from corporations higher in the United States
than any other country in the world. It cut that tax by more than half.
It cut it from ordinary rates to 15 percent.
It would not have happened if it were not for Senator Miller. He
cosponsored the bill. He made it possible. By passing a budget, we
passed a bill. We passed it with the Vice President breaking a tie. The
net result is we have had economic growth, very significant economic
growth as a result of that tax bill, as a result of the budget we
passed last year.
The proof is in the pudding. We have now seen the results. Both
sides, Democrats and Republicans, said, We need to do something to
stimulate the economy. We did. We passed the package. The President
signed it a little over a year ago, May 28 of last year. Now we can
look at the results. The results are outstanding. So we ought to
acknowledge it.
We have had the most rapid expansion of gross domestic product in 20
years. The last 4 quarters averaged 4-point-some-odd percent: 3
percent, 8 percent, 4.1 percent, 4.5 percent--the highest in 20 years.
That has happened since we passed our package a little over a year ago.
The results in the stock market have been dramatic. The Dow Jones
industrial average, when we introduced this bill, I believe it was in
February of last year, was less than 8,000. It is over 10,000 now--an
increase of 27 percent from when we introduced the President's budget
and introduced his bill. That is dramatic. I remember telling my
colleagues, if we eliminate double taxation on dividends, we might have
a Dow Jones industrial average above 10,000. That is the way we passed
it in the Senate, but the way it came back from conference, we said the
tax on dividends would be 15 percent. That is a big improvement over
ordinary tax. Corporations have to pay 35 percent on their corporate
profits. Then we pay individual tax of 15 percent. But as a result, we
now have a Dow Jones industrial average that has risen 27 percent. The
NASDAQ is actually up even more than that. It surged from about 1350 in
March to today almost 2000. That is a 47-percent increase since
February. That is very significant. That means the market cap has
increased by trillions of dollars.
People ask, what does that mean? It means the value in your 401(k)
funds has risen from $11 trillion to over 15 some trillion, an increase
of about $4.5 trillion. That is phenomenal growth, that is phenomenal
wealth creation, due in large part to the tax bill we passed last year
because we tax corporate profits differently, because we allowed
corporations to have a bonus depreciation up to 50 percent.
We made tax changes and there are consequences to those changes we
made, positive changes. There are positive changes on employment and
the unemployment rate. The unemployment rate has declined dramatically
from over 6.3 percent in June of last year. Keep in mind, we introduced
this bill in February when the unemployment rate was about 5.9
percent. It went all the way up to 6.4 percent. And now, today, we are
looking at an unemployment rate of about 5.6 percent--a very
significant reduction in the unemployment rate. So that is positive.
Payroll growth has increased dramatically. That is usually a lagging
indicator. The stock market moved up earlier, and now payrolls are
starting to increase, with over 1.1 million jobs in the last 8 months
alone. You can see the growth trend is very positive. We had a decline
in jobs for some time. We were experiencing significant job losses. We
said: We need to do something to stimulate the economy. We did. We
introduced the tax cut bill in February. We passed the bill in late
May. Now you can see it is really starting to take off. We have had
very significant job growth as a result of that.
Even in manufacturing--if you look at the trend in manufacturing over
the last 40 years, it has been on a decline. Because of some of the
changes we implemented--primarily the bonus depreciation, and, again, a
change in the way we tax dividend distribution--you are now seeing
investments in manufacturing plants and facilities. Investments are up
in manufacturing, and investments in companies, dramatically. Now we
are seeing growth in manufacturing output, which has been significant.
We have had very significant manufacturing output.
We are also seeing, for the first time in a long time, actual growth
in manufacturing employment. I used to be a manufacturer. That is good
news. That is reversing a trend that has been on the books and,
frankly, in progress for a long time.
The point I am making is a year ago we passed a bill. The bill was a
big change in tax policy, a big change I think that has had very
positive economic results. Senator Miller said: Well, there is one
thing we should do. This bill was passed, and it was passed under
reconciliation, which means, by law or definition, it had to be for a
set period of time. It sunsets. We need to make it permanent. We want
these growth trends to continue. We want the growth in the number of
jobs to continue. We want to see manufacturing continue to increase. We
want to see GDP continue to increase.
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Some people have said: Well, no, we want to take away some of those
tax cuts. We want to take away some of the tax cuts for the upper 1 or
2 percent. I will tell you, that will not work. I was one of the
architects of that plan. I was the principal sponsor, with Senator
Miller, to cut taxes on capital gains and dividends. If you try to do
that and say, ``We will leave the rate at 15 percent for everybody in
America except for the upper 1 or 2 percent,'' that will not work.
To tell everybody in America, ``Your capital gains rate is going to
be 15 percent, unless you make over $200,000, and your rate is going to
be 25 percent higher,'' that is a real disincentive. Or to tell
corporations, ``We are going to tax proceeds on corporate dividends at
15 percent, and, oh, if you have income over $200,000, we are going to
tax yours at 35 percent''--and under some proposals it would be much
higher than that; they want to increase maximum rates maybe well beyond
39.6 percent--that is distorted, and it will undermine the whole idea
of saying: Wait a minute; let's not tax corporate dividends twice.
If you tax some corporate dividends at 39.6 percent on the corporate
side, and have a corporate rate of 35 percent on top of it, you are
taxing corporate dividend distributions of 75 percent plus, and you are
discouraging people from making investments in corporations and
distributing those proceeds to their owners. Therefore, it would be
very counterproductive.
So those who are making those recommendations have not thought them
through. I do not think they will work. Or if they did work, it would
be very counterproductive, and you would see GDP declining; you would
see jobs declining, and you would see a very stalled or stagnated
economy.
I think we can be proud of the fact we passed the tax bill last year.
The President signed it, and it has had a positive impact. Those are
the facts, just the facts. I compliment my colleagues, and particularly
Senator Miller, who made it happen.
Madam President, I yield the floor.
Mr. REID. Madam President, how much time is left on the majority
side?
The PRESIDING OFFICER. There is 2 minutes remaining on the majority
side.
Mr. REID. We will wait until their time expires.
Madam President, how much time is remaining on the majority side?
The PRESIDING OFFICER. There is 10 seconds.
The Senator from Nevada.
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