[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

[[Page S6391]]

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.

[[Page S6392]]

  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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