[Congressional Record Volume 151, Number 74 (Tuesday, June 7, 2005)]
[House]
[Pages H4167-H4172]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE FUTURE OF THIS GREAT COUNTRY
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 4, 2005, the gentleman from New Mexico (Mr. Pearce) is
recognized for 60 minutes as the designee of the majority leader.
Mr. PEARCE. Mr. Speaker, I address the body tonight about the future
of this great country, and the previous speaker said we did just have a
chance to celebrate Memorial Day.
In the district that I was in, we recognized the anniversary of the
D-Day landing, and we understand that it is with the sacrifices of
brave young men and women throughout history that a nation is able to
sustain itself, and it is only through those sacrifices in each
generation. One generation cannot pay for the next generation.
But, tonight, I would like to look a little bit at the economic
future that faces us, both in the world and in this country, and would
like to have a discussion about what it is that will allow America to
offer its promise into the future so that our sons and daughters, our
children and grandchildren, would have the opportunities that our
generation has seen.
I am the second-oldest year of the baby boom generation, and I will
tell my colleagues that my mother and father grew up in very difficult
circumstances in West Texas. When my father graduated from high school,
he went to work for a cousin of his farming and actually in the role as
a sharecropper.
I recently had a chance to visit with my mom and dad in the place
where I was born and lived the first 2 years of my life. They were in
circumstances that not many Americans would look to these days and find
satisfactory, and yet I had parents that were willing to work through
all of the circumstances that faced them to raise six children, to give
every one of them the opportunity to attend college and graduate from
college.
My mother went back to school when I was starting college. She
graduated summa cum laude in 3 years, and I graduated somewhat below
that in four and a half years, but their sacrifices in my parents'
generation made possible the potentials in my generation. Now then we
must look beyond our current circumstances into the future, and that is
the discussion that I would like to have tonight.
When I am discussing that, I would, first of all, like to keep track
with numbers on the chart and do some recognition there. So we will
continue the discussion here much like a chalkboard discussion.
[[Page H4168]]
The first number I would put on the chalkboard is the number 2.55.
That is the approximate size of our outlays, the approximate size of
the budget that the United States has every year. It is the approximate
size of the government spending. Now if we need a benchmark, and all
numbers are relative, and so a benchmark that is very handy to the
2.55, that is trillion, is also then $11 trillion, and that is the
approximate size of our economy. So 2.55 is our government size. Eleven
is the size then of our economy.
The important thing to understand about those two numbers is the
relationship, and I simply divide the 11 into 2.55, and that equals
about 23 percent. The 23 percent then is the most important number in
the whole relationship. That is the percent of the 2.55 of our overall
budget, and we, in fact, as people in our individual households are
concerned about that same relationship.
If we want to know how much money that we are saving, we simply take
the amount of money that we earn, we subtract the amount of money that
we spend, and then we would have the rest available either for
discretionary spending or for savings.
If the United States has one weakness going into the future, it is
our savings rate, and that rate generally is about 1 percent. For
instance, in comparing that, if one looked into mainland China, we
would find that the people there, according to recent reports, save
almost 60 percent of their total income. That tells us that there is
much money available for reinvesting. There is much money available in
times of economic downturns. There is much money there for education.
There is much money there for the future.
So as we consider the U.S., we are right now the world's leading
economy. We are, in fact, one-quarter of the entire world's whole
economy, and so we would say that, with that information, that the U.S.
is poised for a good future, and I do not doubt that.
As a business owner, as a person who made payroll checks, who looked
into the future to ensure that I could write the payroll checks the
next 2 weeks and the next month, I always liked to do forecasting. It
is at this point, where we begin to examine some of the relationships
that exist, some of the pressures in our economic system, that we begin
to have deep understandings about things that we should be doing right
now.
Always, wisdom is the taking of a current situation, adding time to
it, extending it as far into the future as possible and discerning
those things, those outcomes from current situations or current
activities.
As we begin to take a look at the competitive pressures that we face
in the world, all of us know and we recognize that our $11 trillion
economy is under duress. Some would say a lot of duress, some would say
less duress. But we would know that China, for instance, is causing
great trade to occur between the U.S. and China. When any one of us go
to the store, we find certain numbers of goods on the store shelves
that actually only originate in China, and we know that with each $15
purchase or each $150 purchase that that money goes towards China. So
we would say that China represents a downward pressure on our $11
trillion.
Let us say that the 11 becomes 10. Then the important thing is to
understand that we still must do the division. If we have a $10
trillion economy, then our relationship here is 2.55. That is, over 25
percent of our economy at that point would be government spending. So
anything that drives our overall economic size, the $11 trillion of our
economy, to a lower point are things that put us on an unstable ground.
Anything that causes this top figure, the numerator, to increase also
are things that push us in an unstable direction.
As we consider the effects, we must understand the relationship of
what happens when this number begins to increase and what happens when
this number begins to decrease. As the 2.33 gets larger, then we can
understand, and economists of all kinds agree, that we move toward
stagnation if our relationship gets too large.
We have stagnation if the number becomes larger, and if the number
becomes smaller, then we have vitality and growth. So if this number is
lesser on the scale of vitality, if this number begins to get larger
and larger, then we would see stagnation occur.
There are examples of that in the world right now. Our number is .25;
and, of course, we must add State and local taxes, State and local
governments. Because the effect is cumulative. That as we consider
adding about 16 percent State and local, then our number is actually
converted to about .40. Since those State and local taxes and spending
are beyond the capabilities of the Federal Government to affect, we
simply understand that as we approach .25 in this Nation, we move
towards stagnation. As we make the number smaller, we move toward
vitality and growth; and so .25, according to many economists, is an
extremely important position for us.
Now as we look around the globe, we might want to consider other
countries, just to verify the example. Germany is an example, and
Germany at this current point has a relationship not of .23 but of .52.
If the relationship is actually .52, we would say, well, if this theory
holds true, if this economic premise holds true, that we would think
that Germany has a more stagnant economy, one that is less vital, one
that has less potential to create jobs. The Germans themselves say that
they have not created a job in 10 years.
They have economic spending of the government that is too high a
relationship to the overall economy, and what that does is it begins to
soak out the reinvestment dollars. It soaks away the potential for
companies to grow and reinvest in research and development. It soaks
away the pay raises so that even the people are stagnant in their
incomes, and there is not a growth potential.
So we find that, in fact, this number got larger for the European
countries, and Germany is just one of the many European countries that
is stuck at a low growth rate and with very limited capability to
produce jobs and new industries.
If we look even closer, we would have to consider the former Soviet
Union. What Ronald Reagan understood was that the Soviet Union had a
number that was very high. It was almost a fully controlled state
economy, and he understood that, with just a little bit of pressure,
the Soviet Union's economic system would simply collapse. He began to
arm us, watching them arm in return, watching them drive their
government spending higher and higher, knowing that we could sustain it
because we had low percentages and they could not sustain it because
they had high percentages. In fact, during Ronald Reagan's tenure as
President, the economy in the Soviet Union collapsed, the Wall fell
down, and freedom moved to many people.
While an astute observer would ask at this point, what about mainland
China? Mainland China has got a state economy that has the Communist
Party that runs that government exactly the same way as the Soviet
Union. But, in fact, what has happened is that the Chinese have
recognized, after the mistakes the Soviets have made, they have, in
fact, privatized pieces of their economy. So the estimate for China is
actually about .40. Estimates range as high .60, which is not much
above Germany, and not everything is known about the Chinese economy,
but the estimate is that where we are at .23 and, adding in our State
and local economies, about .40, the estimation is that China is very
similar to that .40.
So one would ask, what about their economy? The Chinese economy is
performing very well. There are pockets of poverty throughout China,
but the Chinese economy is growing strongly. They are producing jobs.
They are, in fact, showing that this relationship between government
spending and the entire economic size is, in fact, a very important
measure.
It is not enough to simply know right now what the situation is. We
must look forward into the future. We must forecast where we are going,
and if we allow our economy to decrease down to 10 or 9 because of the
competitive pressures of China, the competitive pressures of the
European Union are also well-known, the competitive pressures of India,
providing much software, those competitive pressures are all realized
as taking pieces of our economy because they are providing as good a
product as we are at a better price. Then we realize that the downward,
the
[[Page H4169]]
long-term trend is for this economy size to decrease, increasing the
relationship of government spending to our economy, moving us towards
stagnation, moving us toward a point where our children might not have
the hopes and the dreams fulfilled that our generation has had.
{time} 2030
Now, if the economic size is sustained and we are able to continue
our growth and continue to build our economy against this worldwide
competition, we also have to worry about the size of our government
spending. If we maintain this $11 trillion or even grow it, our number
here could increase simply by increasing the size of our government
spending. That is a very important function as we consider our
relationships right now. We are fighting currently on the Republican
side to hold spending back. We are somewhat hampered because of the
mandatory spending programs which are allowed to escalate without us
being able to give comment on those each year. In this year's budget
process, though, those mandatory programs, welfare, Social Security,
Medicaid, Medicare, those mandatory programs are actually coming to
review to see if we cannot begin to dampen this down because there is
great understanding we are facing increasing economic pressures. Also
there is understanding if we can reduce spending, there is movement
here toward a smaller relationship and toward a more vital economy,
giving promise for the future.
So we have to answer the questions, how are we spending the money and
to what purpose, and are we actually achieving anything. One of the
more distressing things as I look through many of the programs, we are
spending lots of money but we are not coming out with outcomes. The
outcomes desired maybe are never measured by the bureaucracy that puts
the money in. There is not a relationship between money spent and
outcomes, so we have to ask ourselves how can we convert to that sort
of a system.
There are considerations in this Congress that would allow us to
measure benefit for dollars spent and not just talk about the dollars
spent. Many times we in this body are simply urged to spend more money
to cure the problem. The problem is not that we do not spend enough
money, the problem is that we do not always get the outcomes that we
would like.
For instance, there are welfare-to-work programs that for $50 per
person operate and there are programs that for $500 per person operate,
and then we have some programs trying to put some people back to where
the expenditure is $30,000 per person. At some point we can no longer
just throw money at the $30,000-per-person program saying that it is
worth any cost to put people back to work. Instead, we need to put the
most people back to work the most effectively for the fewest number of
dollars. Those are business decisions that anyone in business would
have to make, and they are business decisions that we in this country
are going to have to make. We are either going to make those decisions
while we have a nice future looking at us, or we are going to wait
until we move into stagnation and then try to correct it from a point
of weakness.
For myself as a former business owner, I wish we would go ahead as a
Congress, both Democrats and Republicans, and recognize that
Republicans and Democrats are not enemies of each other. The enemies of
the country are those who would decrease our economic size; they are
those who would force us into greater spending for no greater output;
and they are those, as the terrorists say their ambition is, who would
annihilate America. Those are the enemies of America. Republicans and
Democrats have different philosophies and different points of view, but
in my mind those are simply tensions on the system to pull us back and
forth. But we are not enemies; we each want to see our kids and
grandkids have a future that we ourselves have seen. That is my
commitment in coming to Congress, to see what we can do to ensure that
the future of this great country has the vitality and the vibrancy to
continue to offer promise for new generations.
If we are going to consider the spending, we have to understand the
competitive models of government. We often are very familiar with
competitive models in companies. Formerly, much of the retail buying in
this country was done at Montgomery Wards, maybe Wacker's if we went
back far enough. Today, the great amount of retailing is done by large
chains like Wal-Mart and Target. They provide great avenues for
shoppers to go and satisfy their daily needs; but those companies came
about, replacing other companies that did not see the efficiencies of
greater distribution points, the efficiencies of computerization. So
each one of us in our own way is familiar with competition that
occasionally will drive one company out of business while raising up a
new replacement in its place.
If we are familiar with competition among companies, we also to an
extent have seen competition among States. One State will offer
incentives so that a company would come in and provide jobs in that
State. We find States that will simply bid away jobs from another State
by offering greater incentives. So in our mind-set, we are very
familiar with competition among companies.
We are somewhat familiar with competition among States. What we must
begin to be aware of is that there is competition among countries.
Entire nations are beginning to compete the cost of government. They
are saying we can regulate you in the same way except at a better
price. Large international companies are beginning to move around. They
have flexibility. The Internet allows the exchange of data freely; and
if a company can find a nation that charges a lower tax rate, they are
just as liable to go there to find their home as they are to go to a
nation that provides higher tax rates.
Now, that all needs to be considered in this entire economic
discussion, and so we will flip the chart here. We will begin to look
at one nation. Many of us are aware of the Irish miracle, that is the
miracle of Ireland where they went from an economy of one size and grew
it proportionally larger. What Ireland did was no miracle at all. What
Ireland did was they just recognized that companies are looking for
competitive governments. Their tax rate internally was very similar to
ours, about 36 percent for domestic corporations. They were after the
corporations that would come from outside Ireland, and so they offered
a 10 percent rate of tax to foreign companies. Foreign companies saw
where they could move from the United States, which has a 36 percent
Federal tax rate, plus the local and State rates, so companies from
many nations began to move to Ireland to take advantage of this low tax
rate that was offered to foreign companies.
The European Union saw this as messing up their economic model, and
so they browbeat the Irish and said they needed to review that 10
percent tax rate; that 10 percent tax rate needs to be changed. That
is, we do not want you competing with us, us European nations. You need
to come up to match us, not us begin to figure out how to offer
government cheaper.
The Irish, being the Irish, looked at the proposition that they
should reconsider their tax rate, and they did. They actually were very
accommodating. They went up and said you are correct, the 36 percent is
far too high, and they made that 12 percent, creating an economic boom
on domestic corporations; and they went to 12 percent here. So we now
have, again, the Irish miracle of domestic growth as well as still
being extremely competitive with their foreign corporation rate. In
fact, this past year, just 5 to 10 miles north of my district in New
Mexico, the Irish have come in and are reinvesting in America by
building a cheese plant in the area of Portales and Clovis, New Mexico.
Now, the idea that government can and should operate cheaper, just
like any company can, is one that is going to affect us. If we as a
Nation do not realize that we cannot sustain the high 36 to 45 percent
tax rates that we are charging, if we do not realize that and begin to
lower this number here, we are going to face a future that moves us
toward stagnation and away from economic vitality.
That is extremely important for the next generation, but it is also
important for our generation because as 40 million baby boomers move to
retirement and we begin to retire in 4 years, 3\1/2\ years now, as we
begin to move to retirement, we have to understand that Social Security
is a pay-as-you-go system, that we do not actually have
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money in the bank. We simply have those bonds; but if we do not have
workers in the system here providing the jobs locally, then we are
going to see that pay-as-you-go system under great duress.
If Social Security comes under duress, it is going to have to be
bailed out with more government spending which is going to increase
this number. It is going to increase this number, and we are going to
move toward stagnation just as the Europeans have and just as the
Soviet Union did. The stakes are extremely high for this country to
begin to realize that it must know how its money is spent, and it must
get the value for the dollars that we spend. No company can stay alive
and afloat indefinitely by misspending its money, and now we are into a
situation worldwide where governments will compete; and we in the
United States have to be willing to compete also. Our government has to
run more efficiently, more effectively, and with lower tax rates.
Many of my friends have asked why in the world in a period of
deficits did the Congress offer tax cuts. Again, it is very simple. The
Democrat Governor of New Mexico said it best, tax cuts create jobs. As
we cut the taxes, we were looking at the fact that we only had a couple
of options. If we want to change this relationship and run a deficit,
we either need to cut spending or increase the size of this economy.
That 11 needs to become 12 or 13 or 14. Those are really the primary
objectives. Anything else is simply window dressing.
The hope is that in cutting taxes we make this relationship less, it
moves us toward vitality growth and gives companies and individuals
more income of their own to put back into ventures that are most
promising and into ventures that can sustain research and development
and growth; and so we gave the tax cuts with the anticipation that we
would establish a rate of growth.
The rate of growth that we intended to get was we had hoped for a
sustained 4 percent. Now, if this were the target, it would be nice to
know exactly what kind of growth rate we did get. It is almost 2\1/2\
years since the tax cuts, and the first quarter out after the tax cuts
was about 8.25 to 8.5 percent rate of growth. There was understanding
there was pent-up demand, so we thought this number would actually
settle down; and over time it has settled down into the 4 percent
range.
As we face the elapsing, or the phasing out, while the tax cuts were
temporary, they expire at the end of the year, as we face those
expiring tax cuts, we realize that we are going to have pressure for
this number to decrease back down. What we as a Congress need to do is
be willing to go ahead and continue to extend the tax cuts in order to
give our economy the vitality and the growth that we have seen with the
tax cuts.
Now, you would ask what is happening in some of the rest of the
world. Again if we look at Europe, all of industrialized Europe is
about at the 2 percent range.
{time} 2045
So we have been for the last year and a half almost double the rate
of growth of the industrialized countries in Europe.
Another factor would have to be the job creation. Initially, our
recovery, there was concern that we were not producing enough jobs.
That is a valid concern, and so you would have to look at a couple of
things. Why did we not create jobs at the beginning of the recovery?
Again, as a business owner, I would tell you that the last thing I
wanted to do was hire permanent employees because permanent employees
might have to be laid off. As we went through periods of expansion, the
first thing we as a company would do was we began to extend overtime
hours and asked people to just come in and work a couple of hours a day
extra and we will be okay, we will be able to meet the increased demand
with that sort of expansion of labor.
When we could no longer ask our employees to work overtime, they all
would like to spend time with their families, then the next step that
we would do is to hire temporary people, hire people to come in on a
part-time basis, people that if the economy began to slow back down,
you really have not given them the full promise that they were going to
be here for you.
As we then would work our way through temporary employment and still
find that we could not solve the demand with overtime and temporary
employment, then my wife and I would go out looking for new employees;
and then the third step that we would take would be to hire full-time
employees.
We were able to do that over a period of years. When we bought the
company, we had four employees. We sold the company in late 2003 and we
had almost 50 employees. So we had judiciously expanded ourselves
through 14 years, one small increment at a time.
One of the most critical times in our business life occurred in the
1999 to 2000 range. We were in the oil and gas business. We did down
hole repairs in oil wells. We did not actually own any of the oil
wells. We simply repaired them. In 1999 and 2000, the price of oil and
gas dropped tremendously. The price of oil in our location had fallen
from about $25 down to about $6. Our revenues as a company at one point
fell 80 percent. We were working at 20 percent the income rate that
previously we had.
It was not just our company. Many companies that were competitors and
friends of ours worked in the same industry, and they saw the same 70
and 80 percent declines in their revenues.
We made a decision, my wife and I, that we could not lay off
employees, that we would sacrifice the company, if need be, in order to
keep the people who had made a promise with us. They had invested their
lives with us. We had, in turn, invested our lives with them. So we
said, we are not going to lay you off; we will give you 60 days' notice
before we actually begin to lay people off or give pay cuts. We
continued that line of thinking for almost 11 months.
If companies will take care of their cash, if companies will live
within their means, then you have got the capability to do that. But if
you have expended every single dime all the way through, then you do
not have the means to withstand these deep drains when they
occasionally occur.
A nation is exactly the same way. A nation must carefully guard its
cash, its reserves. It must carefully, carefully spend its money and
understand that it is getting value for every dollar spent, that we are
building infrastructure, that we are making our Nation more competitive
as a nation and as a government with other governments, because we will
at some point in the near future be held to a standard of competing
with nations.
Our rate of growth at this point is good, but if we look into the
future and see the threats to our economic size, to see the pushes to
increase our government spending, then we will understand that there
are some dynamics that we must be very aware of because they affect the
outcomes of this Nation. Literally the military sacrifices, the
sacrifices of our young men and women who are soldiers and who are
fighting for freedom, who have fought for freedom in the past, their
sacrifices will be somewhat less useful if government does not
adequately spend its resources. We must understand that we have got to
progress on all fronts and that we simply do not have a path into the
future based on what we have done in the past.
If we are to consider another one of the dynamics that is loose in
the world today, one of the competitive measures that we have to be
concerned with is governments who begin to review their entire
government spending, who begin to make changes and make their
government more effective. Again, those are competitive pressures from
one nation to another. Because a nation that adapts itself to a more
lean government, producing the same results with fewer dollars, is
going to be a nation that has economic vitality; and a nation that does
not carefully marshal its own spending, its own government spending,
will be a nation that is moving toward stagnation and toward a
noncompetitive situation into the future.
As we consider that particular ramification, one must look at the
example of New Zealand. The government in New Zealand several years ago
decided to really carefully look at their own situation. As they
reviewed industrial economies throughout the world, they said, our
economic vitality is not so great. We would like to improve our lot.
And they set about having deep
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discussions internally about what functions should be in government and
what functions should not be in government.
That is a discussion that this Nation needs to engage in heartily. I
do not know exactly where the balance is. Government always has a
function. There is always the need for regulation. There is always the
need for oversight. But sometimes I think that our government is
delving into things that are not inherently governmental, and other
nations are beginning to sort through those pieces, and we will face
the competition.
So New Zealand began to look and in their own circumstance, at the
time I forget, the numbers are maybe not exactly correct, but they are
close enough. They had between 50 and 60,000 people in the Department
of Labor. I often ask my audiences, and I did just this last week when
I spoke about this in New Mexico, if you think of a government agency
that began to trim away fat, began to push nongovernmental projects
outside the government back into the private sector where they
belonged, how deeply do you think they would cut? How deep do you think
that New Zealand went?
Mr. Speaker, that is a question that we must ask ourselves. I will
tell you that the answer is New Zealand cut from between 50 and 60,000
employees in the Department of Labor to one. That, by the way, was the
individual doing the study. I suspect if he were not getting his own
paycheck he might have even eliminated that. When governments begin to
get so efficient that they move from 50,000 down to one, I will tell
you that the United States in the long term has to answer that same
question. Because if we do not recognize that we are under competitive
pressure from other nations, if we do not recognize that and begin to
lower our government spending, keeping us in a position of vitality,
then we are going to be moved by other nations into stagnation, and our
children and grandchildren will find that they just do not have the
opportunities that we in my generation have had.
If New Zealand can offer those kinds of benefits, we have to ask
ourselves what are we doing in the United States. I will tell you that,
in my district, there are many national forests. New Mexico is not
often identified as a State with water and forests, but we actually do
have many national forests. As I go into the Forest Service and I look
and I talk to people who are retired and I talk to current people, I
think that we have got great people in the field, but we have adopted
and adapted programs and philosophies in our Forest Service that make
us not so lean as this.
In fact, if we are to look at one particular office that operates in
my district to see the relationship that is going on in the United
States, and I have been told by a retired forest ranger, he says that I
used to work this whole forest. I cut timber, I provided the
restoration, I had projects that would clean up streams, clean up the
forest, I had some economic enterprises that were going on in and
around that I supervised, and I handled all the grazing. He said, it
was myself and one person half time in addition to me.
Now, that was maybe 30 years ago. To find out the benefit that we are
reaping today from our efforts to control or not control the size of
government, you would ask today what are we doing and how many people
is it taking. I would tell you that that gentleman says in the area
that he and one half-time person formerly operated that now then there
are 142.
So when New Zealand went from 50 to 60,000 down to one, in the U.S.
we went from one up to 142, and that has occurred over and over and
over again throughout many agencies. So that you can see that maybe we
are not 142 times a larger government overall, but we are moving and
trending in the wrong way.
If we have gone from one to 142, you would think, well, we are
running our forests much better, that our forests now are just the
examples of forestry that we would like to have. But I will tell you
that the exact opposite is true. That when this gentleman was in
charge, we were not burning hundreds of thousands and millions of acres
of forest land, but we are today. It is not because we are not spending
enough money. It is because we have adopted a philosophy that says that
we can no longer cut a tree.
At one point in New Mexico 20 years ago, there were 22 lumber mills;
and today there are two. Many of the forests in New Mexico have not had
a timber sale in decades. If you have not had a timber sale, that means
you have not cut timber. So you would think, well, those trees are out
there growing and we are not cutting, so they are probably now becoming
crowded and, in fact, that assumption is entirely accurate and valid.
The historic function of New Mexico forests had fire cleaning out the
forest every 8 years. If we look at the tree rings, you will see about
every 8 years a very hot fire would come through and with our arid
climate and the fires, we would find that New Mexico generally hosted
between 30 and 50 trees per acre.
If New Mexico's 142:1 relationship were to be looked at and you think
if we are doing a better job or a worse job, you would want to know how
our forests are growing, so historically our arid climate would relate
to 30 to 50 trees per acre. And again I ask my constituents when I am
in New Mexico, what do you think is the population of trees per acre
now? We have got 142 people in this one circumstance to 1\1/2\. Are we
doing a better job?
Now, then, the average number of trees per acre, 1,500, whereas
nature by itself kept that number around 30 to 50. We can look at
pictures from 100 years ago and realize that nature had a size or had a
population density of trees that its area and its climate would
support. But we have now, because we have stopped putting out all
forest fires and we have stopped cutting trees, 1,500 trees per acre
average and some areas are up to 2,500.
If you had people in the same circumstance crowding in like that, you
would expect a couple of things. You would expect nutrition to be
decreasing. If we had in the same place 30 people per acre used to live
and now 1,500 to 2,500, you would expect that disease would be somewhat
more prevalent and you would expect catastrophes to be always on the
edge. The same is true with our forests. We have now the threat of
disease. We have the threat of malnutrition. The trees are starved for
light, so they stay small diameter and they grow toward the same height
as the big mature trees; and as they get very tall and very small, they
do not have enough nutrients to grow larger and they, in fact, are
susceptible to insects, to disease.
But the worst susceptibility that they have is to fire. Previously, a
fire that would burn along in the grass underneath and char the trees
and leave the tree rings, it showed us that every 8 years a hot fire
would come, those trees now have enough kindling, they have enough
small diameter trees that any fire becomes explosive. The fire spreads
up those small diameters. It burns in the top of the trees now, not in
the bottom. So that we have the cap fires that run across the top of
the forest killing the green part while leaving the tree standing and
we have burned millions of acres.
{time} 2100
We are succeeding in this example to make our forests less healthy
with 142 workers where formerly we had one. Those kinds of
inefficiencies must be dealt with in the long term because as we grow
to this proportion and we are finding the New Zealand model that pushes
away from 50,000 to one, the relationships back here are influenced and
affected so that if we cannot control these costs, we have no economic
future. It all begins to relate at some point.
The discussion needs to be even far more complete than this. As we
consider the effect of our economic size, we must take a look at the
number of workers that we have available. Again, we have got about $11
trillion in our economic size right now. We must understand that 40
million workers, baby boomers, are on the verge of or beginning to
retire. As we retire, we have to ask ourselves what about the
replacements; do we have enough replacements. I will tell the Members,
Mr. Speaker, that everywhere I go, I hear the same comment: we need
workers. We need workers who will show up tomorrow. We need workers who
can pass a drug screen. We need workers who can read and write, and we
need workers who are productive. If we are not
[[Page H4172]]
able to provide those workers or if the workers are not capable of
doing the jobs and competing with other nations, our 11 becomes
smaller, our relationship becomes larger, and stagnation and even
economic collapse are all in the potential field of vision.
So as I go around my district, we begin then to talk where are the
workers coming from. Now, we have a great discussion right now about
immigration, and I have got good conservative friends who say we need
to stop the borders, we need to plug off the borders. For me, I am
simply looking at our economic future and saying we have got to replace
these 40 million workers. We are about 5 percent unemployment right
now, and 5 percent unemployment leaves employers everywhere telling me,
Please, Congressman, we need workers, we need people who can show up,
people who can be productive, people who can reason and think.
If we do not bring workers in, that is called immigration, I will
tell the Members that we have one other choice, and we will do that if
we do not bring workers in. The other choice is to send the jobs to
where the workers are. Companies cannot work without employees. So we
understand if we begin to export jobs to where the workers are, our 11
becomes 10, becomes nine, becomes eight; and again the economic promise
of our future is limited because we have a budget right now that is
providing very much inflexibility and decreasing. We have shown very
little capability to decrease this number.
In my freshman year, the first month we were here, Republicans
suggested a 1 percent decrease in the discretionary spending, which
would not have even been nearly 1 percent of this overall figure, and
the outcry from the American public was tremendous: please cut someone
else's program; do not cut mine. We have shown a very deep
incapability, either Democrats or Republicans, of reducing the size of
the budget. If we also begin to export our jobs to where our jobs go to
where the employees are rather than bringing employees into this
country and providing jobs, our economic life is equally very
difficult.
It is not just that we are needing the workers. We do desperately
need them. But the new thoughts, the new ideas, the new inventions,
that this Nation was built on immigrants and this Nation will continue
to be built on fresh, innovative ideas that come in to us, it is that
understanding that must drive us to the final conclusion: that for our
economic vitality, for our economic future, this Nation must be open to
immigration.
Again, looking at the German models, the European models, immigration
is not a word that is friendly there. We find that their societies are
not replacing themselves any better than we are. Our birth rate is
about .8 for every couple of two. We are not even getting the 50
percent replacement rate in our growth, and the European countries are
doing somewhat worse, and they are affected with the problem even worse
than we are so that their aging generations do not have the hope,
unless they change their immigration policies, that they will actually
be able to sustain the high cost of retirees, the high cost of the
aging on a decreasing economic pie.
As we then look into the future, we see the need for our economy to
sustain or to grow. We need the vitality of new ideas and new workers
coming into the system. We must explore the ways that we can restrain
our spending. We must look at the ways to make departments more
effective and efficient. We must realize the mistakes that we are
currently making in our policies that move us toward stagnation, and we
must differentiate those policies from the ones that would move us
toward vitality.
We need to recognize that nations begin to compete with nations. We
need to realize the economic model of Ireland in lowering its tax rates
to both domestic and external corporations, creating a tremendous boom
there. We must understand that if we cut taxes, it helps us to create
growth and jobs; and if we raise taxes, it actually decreases our
capability to grow the economy and create jobs.
We must look at the economic models of other nations who are
beginning to see how they can run government more effectively than any
other nation is operating government. Nations will compete just as
States have competed, just as companies have competed. This Nation must
understand that it will compete. We need to be able to move to that
model of competition before we move into stagnation, before we run into
the deep budget problems that come if we allow our jobs to continue to
be taken away by high tax policies, by anti-growth policies. Finally,
we must understand that the climate for businesses is one that is
extremely critical.
I met recently in this building with foreign economic chairmen,
chairmen of boards, CEOs of nations from outside this country that are
operating in this country. They said that the factors that affect them
are overregulation, overtaxation; but one of the most important things
they said and the most destructive thing they find is the
overlitigation, that in this Nation they will find their litigation
costs to be tremendously higher. So we as a Nation must look to the
economic numbers. We must look to the relationship between the size of
government and the size of our economy. But we must also be aware of
those factors that would cause people to say, Even in the stable
environment of the United States, I am going to operate somewhere else
because of the fear of litigation.
And not litigation to hold them responsible for things that they have
done wrong. Many times the class action lawsuits are not intended to
stop anything. Class action lawsuits have been in order to create a
litigation solution. That is, they did not create a solution in
operation, but they simply brought an economic solution, which then
generally the trial lawyers have benefited from to the tremendous
disadvantage of the people for whom they are suing.
That is one reason this body did two things in the early part of this
year that have helped the business climate tremendously: we reformed
the class action task load. We have reformed the way that class action
lawsuits are allowed to come to the courts. We have given people the
capability to present their problems without allowing the abuse of the
process. And the second thing that we did that is so pro-business is we
began to reform bankruptcy. No longer can people hide assets inside
their estates and preserve mansions while not paying their bills. These
are two things that generally have great effect on the economic promise
of this Nation, two changes that were made by this Republican Congress
in this year, both of which have been signed by the President.
We have got more work to do. We must deal with health costs, with
both health insurance and with the cost of health care in the Nation. I
think that we have committees that are working on that. We must deal
with the question of extending the tax cuts if we are going to make the
tax cuts permanent or if we are going to allow them to phase out and to
realize that we are tampering with the future of the economic vitality
of this Nation if we do not recognize the value of lower tax rates.
We need to understand that we also should deal with the regulation.
Every day I talk to business owners. They tell me that they are
overwhelmed with the paperwork of simply meaningless documents that
many times are filled out and sent in and sometimes no one ever looks
at them.
These are functions that we must review. We must review the cost of
our government. We must review the effectiveness of our government.
There are always things that we will do by government and we should do
by government, but we must understand that we are going to be competing
and that those functions must be done properly and with the best
resources available, without waste in the governmental process. And at
the end of the day I think all of us have the same ambition: to pass
along a Nation that is just as vital as the Nation that we inherited.
Mr. Speaker, I appreciate the opportunity to address this body
tonight. I appreciate the indulgence in allowing me to speak on such
important matters.
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