[Congressional Record Volume 150, Number 88 (Wednesday, June 23, 2004)]
[House]
[Pages H4886-H4890]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE GROWING ECONOMY
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 7, 2003, the gentleman from Kansas (Mr. Tiahrt) is recognized
for the remaining time until midnight as the designee of the majority
leader.
Mr. TIAHRT. Mr. Speaker, I thank the gentleman from Maine for giving
us that wonderful quote about all of the benefits that have been
provided to us by veterans. But when it comes to concurrent receipts,
it has been the Republicans that have done the most to provide for
concurrent receipts for veterans by making a progressive step in the
right direction.
I will be glad to yield to the gentleman from New York (Mr. McHugh)
to explain what has happened when it comes to benefits for the
veterans.
Mr. McHUGH. Mr. Speaker, I thank the gentleman for yielding. I am
sorry we were unable to construct a constructive give-and-take
discussion on this very important issue with my 2 colleagues who have
now left the chamber, regrettably, on this issue.
As I said during the time they did yield to me, and I appreciate that
opportunity, the fact of the matter is that when we come to the issue
of concurrent receipt, this is a process that I strongly disagree with,
and I think the majority of the House, Republican and Democrat,
disagree with, and it has existed for more than 140 years. However, the
fact is, in spite of my 2 friends' comments earlier, nothing has been
done in that 140-year period to correct that situation until the last 3
years.
Over the last 3 years, we have taken significant steps to remediate
the inequities that are associated with concurrent receipt. Based on
the hard work of the House Committee on Armed Services controlled by,
yes, the majority party, we have significantly improved the concurrent
receipt situation. I think every veteran service organization in
America would admit that.
What has not happened, however, is total correction. What concerns
me, and what really I think is the key point with respect to the
previous speakers' comments, that while one speaker, the gentleman from
Maine, said he was not here, it was not his responsibility that nothing
had been done, the other speaker, the gentleman from Ohio, was here
and, in fact, was complicit in no corrective action.
I just want to rise tonight to express again my appreciation to the
gentleman from Kansas (Mr. Tiahrt) for yielding to me to assure the
veterans community who have been affected by this, that while we have
implemented what amounts to multiple billions of dollars of corrections
in this concurrent receipt debate, that we are going to continue to
effect even further corrections until the inequity that has existed
through the past 40 years of the minority's rule over this House, until
equity, until the proper circumstance is corrected. And this is the
silly season, the political season, and I just wanted the opportunity
to state that, as the chairman has responsibility over this issue.
{time} 2330
Mr. TIAHRT. Mr. Speaker, I thank the gentleman from New York (Mr.
McHugh), the chairman of the subcommittee that has jurisdiction on this
area for all the progress that he has made for veterans in a long time.
As it was stated here earlier by the Chairman, 140 years has gone by
that this has been an issue, but it took a Republican Congress to act
on it. And we have done more for veterans in the last 10 years since we
have taken over the House of Representatives as the majority party than
happened in the previous generation. So I thank him for his leadership
and appreciate his time on the floor tonight.
Mr. Speaker, tonight I want to speak about three things. First, I
want to talk a little bit about our economy and how it is growing, why
it is growing, why the tax relief that we have passed has been so
beneficial.
Second, I want to talk about what is going to be proposed tomorrow by
the gentleman from Wisconsin (Mr. Obey), the ranking member on the
Committee on Appropriations. He is calling it ``America's Top Ten
Obligations.'' That is the title for a tax increase on what he claims
are the top 1 percent of taxpayers in America. We will tell you who
those people are.
The third thing I want to talk about is how we are going to bring
jobs back into America. It is an agenda we call ``Careers for the 21st
Century.'' It is an eight-point plan to make America more competitive.
But first, Mr. Speaker, let me return to our economy. Our economy is
robust. I have a chart here that shows how our economy is growing. It
starts in the fourth quarter of 2002. As you recall, in the recent
history of our economy, in 1999 we had a tech bust. It resulted in a
dramatic drop in the NASDAQ because a lot of the tech industries lost
value and many people were laid off.
Following that in about November of 2000, prior to George Bush being
sworn in for office in January of 2001, the recession started. We saw
other job losses. Then on September 11, 2001, terrorists attacked our
country using our own technology against us and dealt a severe blow to
our economy.
In my home area in south central Kansas, our community had a greater
percentage loss of jobs compared to the total number of jobs in the
community than any other community in the United States. We were hit
very hard. So the terrorist attack had a dramatic impact.
What happened in Congress then is that we passed the President's plan
for tax relief. It was an across-the-board tax relief plan in addition
to some targeted tax relief. That across-the-board plan affected every
individual that pays Federal income taxes in America. Every individual.
All of us got a tax break if we paid Federal income taxes. It was a
very fair and reasonable thing to do. The percentage was equal for
every American.
So that tax increase did one of three things for people who got money
back
[[Page H4887]]
from the government, their money returned to them by the Federal
Government. They either saved it, which was good, because that provided
money for mortgages. As we have known, if one has been paying attention
to new home starts in America, it has been dramatically growing. It has
been the largest surge that we have seen in recent history. Two
reasons: One, low interest rates; the second is there was money
available because people took some of this money available from the tax
relief and they saved it.
The second thing was invest it. By investing it it made money
available to corporations to expand their companies and hire more
people. And the charts will support that.
The third thing is that what Americans did with the tax relief is
they spent the money. They went out there and they demanded goods and
services. Those goods and services in turn created more jobs.
So the tax relief did those three things. All of it was good for our
economy. The results are clear. The growth in our economy going back to
the fourth quarter of 2002 they had a 1.3 percent growth. We were just
seeing the effect of the tax relief. The next quarter, the first
quarter of 2003, 2.0 percent growth. Then it started to climb, 3.1 in
the second quarter. Third quarter spiked at 8.2 percent. It was really
taking off. Then it leveled off to now 4.1 and then 4.4 for the first
quarter of 2004.
The projection is the last half of the chart there looks like it is
going to go to about 4.4. We are anticipating some increases in the
interest rates from the Federal Reserve. So there may be a slight drop
back. But this is the fastest growth that our economy has seen in the
last 20 years, a tremendous advantage, and it was based on tax relief.
This surge has also created jobs. This is a by-month comparison of
the jobs, the base level of jobs and then the month's increase of jobs.
One can see the total number of jobs has grown dramatically in the
last 3 months. We have seen in March of 2004, 353,000 jobs were
created. In April of 2004 an additional 346,000 jobs were created. In
May of 2004, this past May, 248,000 jobs were created. Since August of
last year this economy has created 1.4 million jobs because we have had
some tax relief and people have done one of those three things that I
explained earlier.
Now, what does that mean when jobs increase? It means unemployment
goes down. Unemployment now is down to where the average in 2004 is
lower than the average of the 1970s, the 1980s and the 1990s. In Kansas
where we have had 13,000 aerospace workers laid off, they are coming
back to work. Our unemployment has just dropped three-tenths of a point
in just the last couple months. So we have seen a real reduction in
unemployment, which has been good for our economy. Not only are there
more jobs out there, but the people with those jobs are earning more
money.
Now, we have heard complaints from the other side of the aisle that,
oh, sure, there are some more jobs out there but they are minimum wage
jobs. These are jobs that only poor people can have. It is not a living
wage. The truth is the average wage is going up. The people with these
jobs are getting high-quality, high-paying jobs.
Now, I know we can do better, but the fact is people are making more
money and we have more people working. Exports are also picking up, a
good indication that our economy is doing very well. Also our
investments are very strong. This goes back to what I was saying about
those three points.
The President's tax cut has reduced the marginal effective tax rate
for new investments and that has caused a growth of investments in
America. Very important fact. Housing starts remain strong. We talked a
little bit about that. That is one of the second points I made when
people save money. I guess it is the first point I made, that when
people save money it makes money available for home mortgages. And then
home ownership starts, people buy houses and they build new homes. And
those homes that are vacated are then sold on the market.
We have more people owning homes today than ever before in America's
history. Minority ownership is at an all time high, at 50.8 percent of
families owning houses.
Other indicators in the housing markets are also strong. So this is
good news for our economy. And it goes back to tax relief. Tax relief
is very important to keep our economy strong.
Now, tomorrow the gentleman from Wisconsin is going to take a tip off
the sheet of Mr. Kerry, the gentleman running for president, and that
is going to be called America's Top Ten Obligations. Now, this plan,
the intent of this plan is to scale back the tax cuts, the tax cuts
that have been propping up this economy, as these charts have shown,
propping up this economy during the terrorist attacks, the war against
terrorism, it is a worldwide war, and the recession that we are coming
out of.
But the problem is that Mr. Kerry and the gentleman from Wisconsin
(Mr. Obey) wanting to raise the tax burden, which they say is the top 1
percent of America, is actually raising taxes on the people that are
creating the jobs.
Now, the Tax Foundation is drafting a report on the demographics of
the top 1 percent of taxpayers in America. These are the so-called,
quote unquote, ``millionaires.'' And they are millionaires. For
example, 83 percent of taxpayers with an income above $1 million have
it from business income. Well, what does that mean? It means that they
are the people that are out there creating jobs. Many of these jobs
that we have seen on the charts here tonight are created by small
business. 83 percent of these people are small business owners, pure
and simple.
If you look at the statistics, 13.2 percent of them are in finance,
real estate, or insurance. 8.1 percent of them are in manufacturing of
durable goods. 6.9 percent of them are in educational services. 6.8
percent of them are in medical, except hospitals.
{time} 2340
We have 6.0 percent of them that are business and repairs, including
computer processing and business services, and 4.9 of them are in
construction/manufacturing.
These other categories include agricultural, farming in other words,
mining, utilities, wholesale trade, retail trade. These are small
business owners, and in Kansas, it is four out of five jobs.
Now, if you look at Kansas, you will find that in Wichita, for
example, it has the largest facility owned by Boeing outside the State
of Washington. We also have Raytheon which owns Beech aircraft where
they make Beech jets, many different models, and also, their single
engine aircraft. We also have Cessna, which is owned by Textron. All
their aircraft are made in south central Kansas, either in
Independence, Kansas, and a majority of them remain right there in
Wichita.
We also have Lear jet which is owned by Bombardier where they make
the Lear 35, the Lear 45, the Lear 60 and they are looking at some
other Bombardier models that are moving in there.
We also have a design shop for Airbus, designing the wing for the A-
380, their new huge airplane that is going to be sold to airlines for
passenger use. Plus, we have about 150 shops that supply the aircraft
industry.
Well, a majority of those shops are just nothing more than small
businesses. People look at, well, we have got 12,000 people at Boeing,
12,000 people at Cessna, 8,000 people at Raytheon, 4,000 people at Lear
jet, 120 at Airbus, but then you look at all these small shops, and
there are more people working in aerospace for small businessmen than
there are for all the big corporations.
Well, those are the 83 percent of taxpayers in the top one percent
that own those shops and hire those people.
Well, the plan that Mr. Kerry and the gentleman from Wisconsin (Mr.
Obey) have is to raise taxes on those people. What impact will it have
when they have less money available to hire people to run their
business? It will result in layoffs.
Now, if you have listened to the rhetoric during the presidential
campaign, you will find out that the gloom and doom perspective are
coming from Mr. Kerry and from the Democrats here in the House, and
they have sort of this dark, stormy night view of America. I have sort
of the sunshiny day, the optimistic side, where if we can allow people
to have a little more in their pocket, where we can allow small
businessmen to go out there and invest in their companies, they will do
well, they will hire people that will do well, and our
[[Page H4888]]
economy will do well, but instead, we have got to go down the path that
they want to take us which is to raise taxes, take away jobs.
I found it interesting tonight that the gentleman from Maine created
this scenario where rich people, it sounded like they were sitting on a
beach somewhere in the Caribbean, sipping their Margaritas or whatever,
Margaritaville maybe, and that they were just living a life of leisure
and they just had money stuck in their pockets everywhere, and we
should take that money away from them and give it to the veterans which
are having trouble getting health services. Well, in the last 10 years
since I have been here we have doubled the amount of money that
veterans are getting for health care, doubled it, more than they did in
the previous generation.
But we also realize that these people that they are talking about,
the top 1 percent, are not sitting on the beach somewhere drinking a
Margarita, they are out there working 60, 70, 80 hours a week. They are
creating jobs. They are trying to keep their businesses together. They
are giving people opportunities by hiring them, letting them get
skills, letting them work, letting them buy clothes for their kids, buy
cars for themselves, putting their kids through college. They are
letting their employees live the American dream, but that is going to
change if Mr. Kerry or the gentleman from Wisconsin (Mr. Obey) have
their way. They are going to take away the money that they have in
order to make their businesses healthy and grow.
So, the proposal the Democrats have is to kill the jobs. The tax
breaks we have obviously have created jobs by just the charts I showed
you earlier. It seems the House Democrats want to bring up a page out
of the Kerry economic playbook to raise taxes on job creators and grow
the size of government, and Mr. Speaker, Republicans welcome this
chance to debate and defeat this job-killing bill tomorrow, along with
the spending proposals.
The third thing I wanted to talk to you tonight is something that is
very exciting because I showed you how well the economy is doing, but
we know we can do better. When things got tough in America, I started
talking to the CEOs back in my area, and I met with them several times.
I listened to their concerns, their problems, and I realized that they
basically control only a couple of different variables in their
businesses.
Number one is wages, and that is the thing that we seem to always
talk about, and I think the reason we do is probably because unions
feel that that is their prime objective in life today. It is not about
whether the lights are on or off or how warm it is in the workplace
anymore. It is about wages, and they feel like they are unjustified
unless they get a good wage package for their workers. That is what
they are there for, and what I found is that the employers basically do
not mind paying a good wage. They want high quality workers. They are
willing to pay for them, but that is one of the few variables they have
that they can control. So there is a lot of pressure on employers to
try to keep wages down. It is very unfortunate, but I will tell you why
later on.
The second thing, though, is overhead. Overhead is a variable. That
is how many square feet they have in a building. That is how new of
machines they have. That is basically keeping the lights on and having
the equipment for their employees to work on. They can control how big
the building is. In fact, they can sell it off if they have to. Right
now, the Boeing company is looking at selling off a large part of the
facility they have in Wichita. They have about 12.5 million square feet
under roof in Wichita. They could spin off as much as half of that and
have another company buy that, and that would reduce their overhead
burden. That is one of the two variables that they have to look at.
The other variables are things that they do not get a vote on. They
cannot really have much control over, for example, the health care
plan. Right now, employers must have a health care plan to be
competitive, but they do not get to vote on how much it grows each
year. In fact, some of them have told me in Wichita that the growth in
their health care costs for their employees have gone up by 30 percent
in the last year, 30 percent. Now, they are looking at ways that they
have to increase deductibles, trying to put more of the burden back on
the employees. Well, that is a very unfortunate thing, but it is
something that they have very little control over.
So what do they do? They look at wages and overhead. The result of
that has been a job loss. They have been looking at going overseas
because it is more difficult. Well, health care is just one issue.
We have divided the issues up into eight categories. Now, these
issues have really been a problem created by Congress over the last
generation. They have created costs and expenses that businesses have
to put up with just by the sheer structure of the system, and it has
limited their ability to do business in America, and it has caused job
loss, jobs going overseas.
The eight categories are health care security. We have talked about
health care a little bit. The other one is bureaucratic red tape.
Educational policy, we call it lifelong learning. Energy self-
sufficiency, research and development/innovation. Trade fairness is the
sixth one. The seventh one is tax relief and simplification. The last
one is ending lawsuit abuse and litigation management.
We have a scorecard on what we have done to change the business
environment in America and make it more competitive. We have taken on
the first four of these eight issues.
The first one was health care security. With health care security, we
passed three pieces of legislation. Let me say up front that we have
not solved the problems in health care all together, but we have put
policies in place that will help lower the costs. We will not see the
same dramatic growth we have seen in the past.
The three pieces of legislation we passed were flexible spending
accounts that allowed employees to control part of this money. The
employer would set aside an amount of money like $1,000. If the
employees did not use that money, they could carry it over to the next
year, and by doing that, then eventually, as we worked with this
policy, it could be a system where an employee, if they stay healthy
their whole lives, they could use that money for long-term health care
in their elder years. That is always a worry that people have.
My parents are having that same concern. They have gone out and
bought long-term care insurance. It costs them a lot of money a month,
and it grieves me because they have to cut back on their lifestyle. It
costs them almost $400 a month. My father is 85. My mother is 77. So it
is a little difficult for them to fit that in their budget, but they
are so worried about being a burden on their children that they have
gone out and purchased this insurance.
Well, if an employee working chose a healthy lifestyle, was allowed
to put this money away through their working career, it would go into
an annuity that could pay for long-term health care insurance through
flexible spending accounts.
We also passed medical malpractice liability limits, and that was a
very good thing because it limited the amount of liability, and it
allowed lower costs for insurance, for physicians and hospitals, and
those who provide health care services, and that, in turn, helps keep
costs down.
Now, you can look on a State-by-State basis where people have not
limited medical malpractice, and we have had some outrageous
settlements that have gone way beyond what any medical costs were
associated for the loss or the injury and basically made a lot of
lawyers rich. Well, this is a reasonable way that we have capped
liability costs, and we followed some of the States.
{time} 2350
And in those States where this has occurred, they have seen dramatic
lower costs in their medical malpractice insurance, and the cost of
health care has gone down. It has been a good example. So we adopted
here in the Congress and passed medical malpractice liability limits.
We also passed the Small Business Health Fairness Act, or AHPs,
associated health plans. These are plans that allow associations to go
out and procure, especially small businesses,
[[Page H4889]]
through their associations. They can go out and buy health care plans
as a group rather than as an individuals.
If you take a small shop, like a small machine shop that is supplying
the aircraft industry in Wichita, Kansas, they may have 10 employees.
Well, those 10 employees have to buy their own package. The insurance
company would come in and assess the risk for those ten employees. But
through the associated health plans all the machine shops in Wichita,
Kansas, some 40,000 employees, if they bought one package through the
AHP it would not just be ten employees they would be looking at, it
would be 40,000 employees. That would mean lower rates for all of them.
Because all that has that has to happen in a small shop of, say ten
employees, is one of the spouses of one of the employees to contract
cancer and go through a long severe medical treatment, and that would
drive up the cost for the entire group. It may even make it so
expensive they could not afford health the care costs. So by having
AHPs, or associated health plans, its allows them to mitigate their
costs over a larger group and lower the whole cost.
The next week we addressed the issue of bureaucratic red tape
termination, and we focused on OSHA, or the Occupational Safety and
Health Administration. We started out with the OSHA Small Business Day
in Court, we went to OSHA Review Commission Efficiency Act, then we
passed the OSHA Independent Review and OSHA Citations Act, and then we
passed the OSHA Small Employer Access to Justice Act, and then we
completed the week by passing the Paperwork and Regulatory Improvement
Act.
All of this effort was designed to do two things: Number one is to
remove the bureaucratic red tape; to limit it. What we found by talking
to groups like the National Association of Manufacturers and employers
themselves was that these costs are getting buried into our products
and they are making us less competitive.
The National Association of Manufacturers says that 14 percent of the
cost of any item manufactured in America is regulatory compliance.
Well, just imagine if we could just cut that in half. We would be 6
percent more competitive worldwide. And I think that was the goal here.
The second part of what we were trying to do is to look at government
agencies and realize that they do not have to work against our
employers, against our small business owners, against our employees.
They can work with them to achieve a common goal.
We still have legislation pending that will continue this process,
but basically it will say to OSHA, let us go out to a facility and work
with them to make it safer without any fines. Right now the way the
system works is OSHA comes in and they do not leave until they have
found something wrong. And it seems like they have to write a fine all
of the time. Sometimes they stand off from the work site, through
pictures or some kind of a judgment call, and they will decide that
they need to assess some fine and they will send it to the employer in
the mail. Sometimes they will go to a job site which has a contractor,
a general contractor and ten or twelve subcontractors, and they will
fine everybody there, even if there is just one of the subcontractors
at fault.
Well, the new system we need to put in place would have OSHA go in
and say, we have a ladder being improperly used and it is a danger to
this work site, so we will educate your workers as to how to place it
properly. They can come back in 6 months and see how people are
handling ladders. That way both the employer and OSHA achieves the goal
of safety on the workplace without assessing fines.
So that is a good place to work through bureaucratic red tape,
reducing the amount of red tape and achieving the goals that are
necessary.
The next week we went into life-long learning. In order to be
competitive around the globe, we have to have people who are preparing
themselves for the technical future we have coming up. We need people
to be fluent in math and science and in engineering capabilities. They
will have to have high-tech degrees. They will also have to be fluent
in languages, as we are finding out today.
But we need to have a plan to create an environment so that people
can get the skills they need in order to become ready for tomorrow, for
the future, because it is going to be more and more technical, not
less. So we passed the Teacher Training Enhancement Act, we passed the
Priorities for Graduate Studies Act, the Back to Work Incentive Act,
and the Workforce Research Investment and Adult Education Act. We had
conferees appointed for that legislation.
The next week we went on to energy self-sufficiency. We passed the
Energy Policy Act of 2004, the Renewable Energy Project Siting
Improvement Act, and the U.S. Refinery Revitalization Act.
It is funny, because we have tried to pass energy policy several
times. In fact, I have a chart that shows the activity of the House
Republicans and what they have done to pass an energy bill. Back in
January 1, 2001, shortly before George Bush took office, gas prices
were about $1.32 in America. President Bush sent his energy plan to
Congress and it was passed for the first time by the House on August 2,
2002. It then failed across the Capitol. We passed it again on April
11, 2003. We passed it a third time, after it failed again on the other
side of the Capitol. We passed it a third time on November 18, 2003,
and then we just passed it on June 15, 2004 for a fourth time.
Why is an energy bill so important? It is important because you can
see, without it, gas prices are continuing to climb. We are now over
$2. We must have a comprehensive plan where we can open up more energy
reserves, where we can capitalize on renewable energy, and where we can
open up new sites for refineries. We have not built a new refinery
since 1976 in America. Even if we could produce more oil right now, we
probably could not process it because we need more refineries to do
that. So we are going to go into old sites, where old refineries are,
and allow them to be opened up.
In the following month of July we are going to take on the last four
issues that we have on this package of careers for the 21st century. We
are going to take on tax relief and simplification. We are going to try
to set up a system that is not so volatile in the way that it
approaches businesses.
There is one success story I want to briefly mention before I run out
of time, and it is called accelerated depreciation. In the aircraft
industry, when you sell a business jet, it can cost $6 million. Well,
through accelerated depreciation they can write off two-thirds of that
aircraft in the very first year. Now, I have heard people on the other
side of the aisle talk about what a great tax break for rich
individuals and corporations that is. What they do not talk about,
though, is all the jobs that are created in America.
Cessna Aircraft, which has seen the greatest benefit from accelerated
depreciation, has sold every aircraft they had in the backlog, they are
now building jets that are already sold, and it has put all their laid-
off workers back to work, plus they have hired an additional 400
people. It is a jobs act. We need to get some more tax relief that will
create more jobs in America, because we can do better.
Then we are going to move on to trade fairness and opportunity so
that we can have a fair and equal trade policy and an enforceable trade
policy. Then we are going to look at research and development and how
we can spur innovation, and we are going to complete this with ending
lawsuit abuse.
One of the beautiful things about trying to limit litigation is that,
again, it will create jobs. And a good example back in the Fourth
District of Kansas, back in 1994, Congress passed the statute of
limitations which said basically that you cannot sue an airplane
manufacturer for the design of the airplane after it has been flying
for 23 years, if it is a heavy jet, or 18 years if it is a smaller
aircraft. Now, think about that. If an airplane has been flying for 18
years, there is nothing wrong with the design. Yet every time a plane
went down, these aircraft manufacturers always had to have some kind of
defense system.
In fact, Raytheon told me that at Beech it cost them $300,000 for
every crash, whether they were sued or not. So limiting liability is a
very important part because, again, it will create jobs in America.
[[Page H4890]]
Well, these barriers, these eight barriers have been put in place by
Congress. We can change the environment. The results of changing this
environment will mean more jobs here in America, and it means we will
have greater exports, we will be more competitive worldwide, and we
will have a brighter future for ourselves and our children.
So, Mr. Speaker, I thank the staff tonight and the Speaker for
hanging around. I think this is a very important issue, and I think it
is the right debate to be having today.
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