Congressional Record, Volume 151 Issue 95 (Thursday, July 14, 2005)

[Congressional Record Volume 151, Number 95 (Thursday, July 14, 2005)]
[House]
[Pages H5889-H5895]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

GOOD NEWS ABOUT AMERICA'S ECONOMY

The SPEAKER pro tempore. Under the Speaker's announced policy of
January 4, 2005, the gentleman from Kansas (Mr. Tiahrt) is recognized
for 60 minutes as the designee of the Majority Leader.
Mr. TIAHRT. Madam Speaker, I plan on spending most of the next hour

[[Page H5890]]

talking about how we are going to create an environment in America to
create and keep jobs here not only tomorrow and in the future, but for
long, long term purposes.
First of all, though, I wanted to talk a little bit about the good
news in our economy that we have seen lately. On July 8, the White
House released some economic information that was very good for
America. In the month of June, 146,000 new jobs were created. The
payroll rose by that much. That makes 3.7 million jobs that have been
created since May 2003.
We have seen steady gains over the last 25 months. And today, more
Americans are working than ever before. It is also important to note
that the average wage of working Americans is now higher than it has
ever been before in the history of our Nation. The unemployment rate
also fell to 5.0 percent in June. That is the lowest rate that it has
been since September of 2001.
So our economy is strong, and it continues to grow. Our economic
indicators show strong sustained growth, both in the real gross
domestic product and in real income. Our durable goods orders are on
the rise. They have increased 5.5 percent in May. That is the largest
increase in 14 months. It is well above our early estimates.
U.S. manufacturing continues to expand for the 25th consecutive
month. U.S. manufacturing expanded in June. The purchasing manager's
index increased 2.4 index points to 53.8, indicating growth above
market expectations. The nonmanufacturing sector has also showed strong
growth. And consumer confidence is up by all indices.
The President's second-term agenda of creating jobs and growing the
economy has been successful. We can attribute this economic growth to
the tax cuts which we hope to make permanent, also to retraining
Federal Government growth. That helps reduce the deficit. But we also
want to go on to make a strong economic environment in the future.
One of the ways that we are going to do that here in the House of
Representatives was started this morning. This morning, we kicked off
the Economic Competitiveness Caucus. We started with a press event this
morning that included the leader of the House, the Majority Leader of
the House, the gentleman from Texas (Mr. DeLay), the Majority Whip of
the House, and the gentleman from Missouri (Mr. Blunt).
We also had the Secretary of Commerce, Secretary Gutierrez, and we
had a representative from the Small Business Association, Tom Sullivan.
We also had former Governor John Engler, the President of the National
Association of Manufacturers, along with about 20 Members of Congress.
For almost two centuries, America has been the envy of the world with
our economy. It has been dynamic. It has been supported by a
hardworking motivated workforce. We have truly been the land of
opportunity where innovation has thrived. But our status is changing,
and we must do something about it to address it. I have established the
House Economic Competitive Caucus to take a long-term vision approach
to addressing competitiveness issues.
Because the best ideas usually come from Main Street and not from
Washington, D.C., we have joined efforts with business leaders to focus
on removing barriers on the American economy, and that way, we can
develop new economic goals for the future and find paths to get there.
The United States has the number one economy in the world. We have
been the envy of the world. It is a dynamic economy. But we want to
make sure that we can continue that status instead of dropping into a
third-rate economy.
Last year, we ran a $670 billion annual trade deficit. It has
contributed to our Federal budget deficit, and it has slowed our
economy the past few years. We have seen other nations move forward,
though, and do things that I think we ought to take into consideration
when we build our future economy.
Ireland, for example, has shifted from a third world nation in
Western Europe to the envy of the European Union, largely due to its
tax policies. The Celtic Tiger, as it is known, has lowered its
corporate tax to 12.5 percent, and that stimulated their economy and
created many jobs.
India was languishing under the burdens of a heavy socialist
government, and now, through a concerted effort, has reduced
regulations, and they have stimulated their economy.
China is currently graduating more English speaking electrical
engineers than graduate in the United States. They have focused on
education, especially in math and science and technology. China is
setting up an environment to create their own Silicon Valley, and they
are trying to attract the world's technological business.

Brazil has achieved what some believe to be a pipe dream. They are
projected to be completely energy self-sufficient within a couple of
years. It took them years to develop the type of renewable energy that
they needed, but now they are leaders in ethanol production, and their
economy is not suffering from the current high crude oil prices.
Chile has become an economic leader in Latin America by breaking down
the barriers and doing business within their nation. Their emphasis has
been on signing free trade agreements. It has been very fruitful for
them. Last year, they signed free trade agreements with the United
States, with South Korea. Chile is currently working on negotiations
with China, India, New Zealand, Singapore, Japan and Australia. And
they will continue to thrive.
For these reasons, these nations and other world economies are poised
to move ahead of the United States in the next decade. In fact, the
2005 Index of Economic Freedom by the Heritage foundation ranked the
United States 13th in the world. For the first time, we have dropped
out of the top 10. This is due both to other Nation's progress and
economic competitiveness as well as our own barriers that have been
rising up and stopping the growth in our thriving economy.
This development is not a temporary blip on the radar screen; it is
the culmination of a generation of increased regulation, unsound tax
policies, languishing emphasis on math and science education, unchecked
health care costs, rampant lawsuit abuse, unfocused research and
development funds, a lack of comprehensive energy policy, and weak
trade policy enforcement.
In short, our government has made it difficult and undesirable to do
business in the United States. We have put up road blocks to keeping
and creating jobs in America. And we have done this to ourselves. If
these current trends continue, our economy will continue to lag, and we
will no longer remain the most dynamic economy in the world.
Without attention to these matters, the United States is headed
toward a third-rate economy; 5, 10, 20 years down the road, we will no
longer be the world's leader or even in second place. That is why we
need to take these issues seriously today.
Last year, we began with the competitiveness legislative agenda on
the House floor. And over a period of 8 weeks, we discussed and voted
on issues relating to keeping and creating jobs in America. Starting
this week, the jobs action team is again bringing legislation to the
floor to combat this problem. We need to take a longer-term vision. For
these reasons, we have established the House Economic Competitive
Caucus, and this caucus is going to carefully examine issues facing our
ability to compete economically for the coming years.
We will work to focus congressional efforts on removing barriers to
the economy to make America more competitive. We are going to develop
economic goals and find paths to get to those goals.
Now, the areas that we are going to focus on are in eight different
issues. They start here on this placard that I have. We have health
insurance. We have had the highest rising health insurance costs in
recent history. And it has made it very difficult for small businesses
to provide health care to their employees. It has been difficult for
large corporations to meet their health care needs. And so health care
costs has to be an issue that we address in making America more
competitive.
We also have bureaucratic red tape termination as one of the issues
that we need to work on. We have already focused on that earlier this
week. I will talk about it a little more.

[[Page H5891]]

Lifelong learning is one of the issues, because we are seeing now
other economies and other nations focusing on technologies, focusing on
engineering, focusing on math and science.

{time} 1600

And here in America we are having more and more problems.
I recently spoke with a college professor in the physics department
of the University of Southern Alabama. He said they were looking for an
associate professor, and they looked all over the United States to find
an associate professor for physics. They were unable to find one to
hire for that slot so they had to go outside the United States and look
at applicants from other nations.
The reasons we are going outside the United States to look for
associate professors of physics at the University of Southern Alabama
is that we have not focused our education system on math and science
and on engineering and on technology like other countries have. We need
to change that in the future and focus our resources to prepare for
tomorrow's economy.
Another issue is energy self-sufficiency and security. We know today
every time we fill up with gas at the pump that our lack of energy
policy has been a detriment to the cost of energy here in the United
States. Five times the House of Representatives has passed an energy
bill. And finally after passing it five times in the House, we have a
piece of legislation in the Senate that is significantly different, but
it is a basis for us to meet now in conference committees.
We hope to have a conference report available before the end of this
year so that we can put into place energy policy that will help us
become more self-sufficient and help us reduce the cost of energy in
America. Because it is not only the fuel pump; it is also with natural
gas prices. We pay more for natural gas than anywhere in the world. We
use natural gas to generate power, to manufacture goods and to make
fertilizer, a whole broad area, including plastics. But because of the
high cost of natural gas, because of the high cost of petroleum
products, we are seeing many of our industries go off shore.
We cannot have a competitive policy without dealing with energy. So
energy is one of the issues that we are going to deal with, and
hopefully we will have less of a need for foreign imports in petroleum
products. Then we can lower our natural gas prices as well as our gas
prices at the pump and continue to manufacture things such as plastics
and fertilizer.
Another issue we will be dealing with is research and development so
we can spur innovation. Our research and development is different than
how they approach research and development in the European Union, for
example.
What we see in America is a very open research and development
policy. For example, in Wichita State University in Wichita, Kansas at
the National Institute of Aviation Research, we do research on
composite manufacturing, on stress loads for composites, on composite
repairs; and that research is available to anybody inside the United
States, anybody in the world. They can get online and find out the
data, find out information that can be applied in Europe or in China or
in Australia or anywhere.
If you look at Airbus and how they are focusing the research and
development that they get from their member nations, such as Germany,
France, Spain and the United Kingdom, they get research and development
that helps them develop new products that is not readily available
across the borders. It is not available to Boeing, for example. So we
have a research and development policy that we need to focus to make
ourselves more competitive in the future.
We also have trade fairness as one of the issues. We have seen time
and time again where other economies are focusing their resources to
try to drive certain American manufacturers out of the business, that
way they can have a corner on the market and they can then raise the
prices and make a higher profit level than they would necessarily get.
So we have to have a trade policy that continues a fair, level playing
field that does not allow our industry to be targeted.
One of the resources that we have in America, and we have plenty of
it here, we have more of it in America than we have anywhere else in
the world that we do not export, is lawsuits. Some people say, how do
you export a lawsuit? Well, we have a lot of legal activity here in
America, and it is driving up our costs; but the way you export
lawsuits is through trade packages. When you see an unfair trade
policy, then you go to the World Trade Organization or you go through
an international court and you file a lawsuit in order to get a level
playing field.
The other two issues we have are tax relief and simplification, and
the other one is ending lawsuit abuse. Those are part of the eight
issues that we will be dealing with in the Economic Competitive Caucus.
I am joined here today on the floor with the majority leader of the
U.S. House of Representatives, the gentleman from Texas (Mr. DeLay),
and I yield to him for his remarks about competitiveness in the United
States.
Mr. DeLAY. Madam Speaker, I appreciate the gentleman for taking this
Special Order and particularly for his incredible hard work in pulling
together the 21st Century Careers Initiative that he has been working
on for a couple of years and certainly has brought it now to where we
are actually making things happen starting this week and the following
weeks to deal with these kinds of issues. It is incredibly important.
Last Friday, news came from the Bureau of Labor Statistics that
American businesses, mostly small businesses, produced 146,000 new
jobs; and that unemployment for June 2005 fell to just 5 percent, the
lowest since 9/11, and many economists call that full employment.
Tuesday, the Office of Management and Budget reported that a surge in
tax revenue due almost entirely to the economic growth created by
recent Republican tax relief had cut the Republican deficit by almost
$100 billion. The Congressional Budget Office for the same reasons
believes that the 2005 deficit will now be even lower. And now just
this morning we have received news that the consumer price index, the
lead indicator of inflation, has unchanged in June, meaning that the
robust economic growth that we are experiencing is occurring without
any sign of inflation.
All of this good news is on the heels of the Bureau of Economic
Analysis report late last month that first quarter economic growth was
at a 3.8 percent annual rate, revised up from a 3.5 percent.
Manufacturing industrial production is up 3.4 percent this year and 9.5
percent since 2003.
Business equipment investment has increased 13.5 percent over the
last 2 years. New home sales are at record highs. And the homeownership
rate, now 69 percent, is at an all-time high. Retail sales are better
than expected in June and new jobless claims for the week indicate yet
again an expanding job market. Put simply, Madam Speaker, the economy
is growing, the deficit is shrinking, jobs and opportunities are being
created, and unemployment and inflation are under control.
Rather than resting on the laurels of these successes, the House
Republican Conference this week under the leadership of the gentleman
from Kansas (Mr. Tiahrt) announced the 21st Century Careers Initiative,
which is a far-reaching, far-sighted agenda for the economic reform
that will remove eight barriers between the American people and the
American Dream; and he has gone over them already. Removing this
friction from our economy while holding the line on Federal spending is
not only how we can reduce the deficit; it is how we can transform the
role of government in our national economy and the role of the United
States in the global economy.

This is a noble and necessary goal of the 109th Congress. So this
week, as the gentleman has mentioned, we took up a resolution declaring
the House's acknowledgement ``that improving the competitiveness of the
United States economy depends on congressional action to remove
barriers'' to prosperity, and all but 17 Democrats voted against it.
One hundred, seventy-seven Democrats voted against a resolution
announcing this initiative promoting economic growth, security and
prosperity, against opening new markets to our small business owners,
against easing

[[Page H5892]]

$850 billion in regulatory burdens annually foisted on American small
businesses, against ``innovation and investment,'' against ``health
care security,'' against ``lifelong learning,'' against simplifying a
Tax Code that takes the American people 6\1/2\ billion hours every year
to comply with, against liberating our legal system from abusive
predatory lawsuits, and against energy self-sufficiency.
Now, how can anyone anywhere be against these things?
This is what has become of the once-great Democratic Party. The idea-
driven policy colossus of FDR and JFK that gave us Social Security, the
New Deal, the Marshall Plan, the space program, and civil rights is now
led by a peanut gallery that has surrendered the field of public
discourse and taken up residence as the backseat drivers of American
politics.
On every issue now facing our Nation, from the war on terror to
Social Security to economic reform, the Republicans have forged into
that arena with bold and innovative proposals while Democrat leaders
have sat back and heckled, offering nothing constructive to the debate,
more pundit than party. No idea. No agenda. No cooperation. Nothing.
Well, faced with this partisan obstruction, House Republicans have no
choice but to move forward with our positive agenda for reform, an
agenda that has been affirmed by the American people in six straight
elections. They can gripe. We will govern. Democrats can keep making
noise, and with the new 21st Century Careers Initiative and the rest of
our agenda, Republicans will keep making history.
I appreciate the gentleman for all the work that he has done and
particularly for this Special Order so that we can talk about this in
very real terms.
Mr. DREIER. Madam Speaker, will the gentleman yield?
Mr. TIAHRT. I yield to the gentleman from California.
Mr. DREIER. Madam Speaker, I would like to engage in a colloquy with
my dear friend from Texas and with the gentleman from Kansas (Mr.
Tiahrt).
First of all, let me join in extending congratulation to my friend
from Kansas for his focus on Careers for a 21st-Century America. As we
look at the litany of items, health care security, bureaucratic red
tape termination, lifelong learning, energy self-sufficiency and
security, spurring innovation, trade fairness and opportunity, tax
relief and simplification, and ending lawsuit abuse, I think those are
very, very important goals.
The majority leader and I yesterday had the opportunity, the
gentleman mentioned the space program and the vision, of course, that
Democratic President John F. Kennedy had for the space program, we
yesterday were traveling to Florida; and, unfortunately, we did not get
to see the space shuttle Discovery launched, but we know that we will.
We hope very soon. But when we sat down on the plane, the majority
leader had a copy of the New York Times. And it is not often that we
spend time focusing on the great headlines in the New York Times, but
in the upper left-hand column of yesterday's New York Times it said:
``Tax Revenues Surge and Will Cut the Deficit.'' That was the headline
in the New York Times. And, frankly, both of us were shocked for about
15 minutes having seen such an accurate headline in the New York Times,
but it is very true.
And the thing that immediately came to mind was the fact that since
Ronald Reagan was President of the United States, Democrat after
Democrat would take to the well of this House, Madam Speaker, and
proceed to say, if we put into place a tax cut, what is going to
happen? Two things. We will see our economy head into the tank, and we
will see the deficit surge.
Now, during the decade of the 1980s, we all know that because of the
Economic Recovery Tax Act that President Reagan put into place with a
bipartisan majority here in the House of Representatives, because we
were then in the minority, we were able to see a tax cut which doubled
the flow of revenues to the Federal Treasury through the decade of the
1980s.
People are regularly rewriting history around here. I constantly here
that Ronald Reagan presided over all this deficit spending. Well, what
happened was we were able to put together this fragile working majority
to pass the tax cuts; but, unfortunately, because of the Democrat
majority, we saw spending continue to increase in a wide range of
areas. One very important area that we all supported, that was of
course the defense build-up which brought an end to the Cold War, it
brought the Soviet Union to its knees. We saw the Berlin Wall crumble
because of what took place in the 1980s, but we had those revenues
because of those tax cuts.
My friend from Texas knows very well, and we were discussing this
yesterday, one of the things that is important, and that is why I am so
proud of the work that this effort, the work being done by this group
put together by the gentleman from Kansas (Mr. Tiahrt), is focused on
rather than simply pointing our finger elsewhere, and I see the chart
that the gentleman has there, juxtaposing Mexico's and Canada's
regulatory burden as a percentage of gross domestic product versus
ours. We have unfortunately in this country failed to spend time
looking at ourselves. We are constantly pointing the finger outward
saying, they have caused our problems here. This country has caused our
problems.
We need to look ourselves at the tax and regulatory burden that
jeopardizes the kind of growth that we need to have. In spite of these
restrictions that exist, we have done phenomenally well.

{time} 1615

And I will tell you, I am glad to see trade is one of those items on
the agenda for our competitiveness, because we know that the world has
access to the U.S. consumer market today.
One of the great things we have done is we have made sure that the
American consumer can have access to the best quality products at the
lowest possible price. One of the things that needs to be done is we
need to recognize prying open new markets, when 94 percent of the
world's consumers are outside of our border, is the right thing to do.
That is why inclusion in the Central American Free Trade Agreement is
absolutely crucial to this economic growth agenda.
The other day I had a former college classmate of mine come in, and I
did not know this, but he has been living and working in Cambodia for
the last 15 years. I said, well, what brings you to Washington? He
said, I am here to make sure that you all pass the Central American
Free Trade Agreement. The guy is in Cambodia and he is coming here to
ask Members of Congress to support the Central American Free Trade
Agreement. Why? Because he said the people of Cambodia are concerned
that if you do not pass that market-opening opportunity for U.S. goods,
then we will see this overall agenda for global leadership by the
United States and free trade jeopardized. So we know this is a benefit
to the U.S.
Again, that is a policy that we can pursue, and we have been very
fortunate in being able to work with those five democratically elected
presidents in Central America and the president of the Dominican
Republic and their parliaments in making sure that we implement this.
They understand that market-opening opportunities are very, very key.
Another thing that struck me was, I was reading a study the other day
by a guy who actually had been associated with President Bush No. One,
President Bush 41 we like to call him, one of his economic advisers.
His name is Todd Buchholz, and he did this study in which he showed
that 20 percent of the jobs in the United States of America require
some kind of licensing to get that job. For example, in the City of New
York, if you want to repair a video cassette recorder, you have to have
a license to do that. In the State of Louisiana, anyone in the State of
Louisiana who wants to arrange flowers has to be licensed by the State
of Louisiana to be able to arrange flowers.
If you look at those kinds of constraints that are government
imposed, that is the kind of thing that we as a Congress need to look
at and focus on. And that is why focusing on the 21st-century economy,
as the gentleman from Kansas is doing so well, is the right thing to
do.
I would just like to see if my friend from Texas or friend from
Kansas agree or disagree with the arguments I am trying to propound
here.

[[Page H5893]]

Mr. DeLAY. Well, Madam Speaker, if the gentleman would yield, I
appreciate the comments of the gentleman from California because he is
right on.
The thing that I was thinking about as he was speaking is, number
one, the headline that he referred to in The New York Times on the
front page yesterday is the same sort of headline on the front page of
The Washington Post today. I know both papers hated to write those
articles. And if you read the articles, they always qualify things and
say, yes, things are good, the deficit is going down, revenues are
going up, they are holding down spending, but there are some things out
there that are going to throw cold water on this burgeoning economy. We
have gotten that over and over again in this Chamber.
I can remember when we first started out with this majority in 1995,
when we were committed to a balanced budget and this majority in this
House led us to a balanced budget through the Balanced Budget Act of
1997, oh, the fear-mongering was absolutely outrageous. Hardly any
Democrat voted for that bill, including President Clinton, who vetoed
it one or two times, if I recall, and finally he signed it for
political reasons.
But the point is, they fought us every step of the way. They fought
the philosophy of letting people hang on to more of their money and
invest it and spend it and try to hold down Federal spending, the key
to bringing a balanced budget. We thought the budget would be balanced
in 5 to 7 years, but it was balanced in 2 years because the philosophy
worked. We started gaining surpluses and started paying down on the
debt because we had surpluses.
We did run into economic problems because of the war and the bubble
burst and recession and other things, and 9/11; but we are coming back.
And the reason we are coming back is we are sticking to that philosophy
that the gentleman is laying out here. We understand that the American
business is overtaxed, overlitigated, overregulated. We understand that
the government is too big and doing things it should not be doing,
forcing monies out of the pocket of the private sector and families in
this country and into the pockets of bureaucrats to do things that are
unproductive; and we are attempting to get at that.
We just passed the toughest budget that we have passed in a very,
very long time that gives us the opportunity to look at entitlement
programs, which are the biggest spenders in this Federal Government. So
we are doing that. We are attempting to bring not only fiscal
responsibility to this government but understanding how we can get
government out of the way of entrepreneurs and families to let them do
what they do best, which is to create jobs and create wealth.
But the kinds of comments that are reported time and time again and
never checked to see if they actually work, that come from the other
side of the aisle, from the Democrat leadership, is just incredible.
And now is the time to compare those kinds of comments, talking about
the fact that our approach to the economy is going to drive up the
deficit, when the deficit is going down; that cutting taxes takes money
away from very important programs in the government, when revenues are
going up and we are still able to fund those programs that make sense.
Mr. DREIER. If the gentleman from Kansas will yield.
Mr. TIAHRT. Madam Speaker, I will be glad to yield to the gentleman
from California.
Mr. DREIER. Madam Speaker, I think an important point that was
actually included in that New York Times article about which we have
been referring from yesterday is who is it, which taxpayer is in fact
providing this dramatic increase in the flow of revenues to the Federal
Treasury?
I would ask my colleagues if they could guess which taxpayer is in
fact providing that flow of revenue. Does the gentleman know?
Mr. DeLAY. Let me guess, Madam Speaker. It must not be the rich.
Could it be the rich?
Mr. DREIER. In fact, if the gentleman will yield further, the New
York Times made it very clear, it is wealthy Americans. Wealthy
Americans, those in the upper income brackets, who have provided that
great surge of revenues to the Federal Treasury.
Why? Because of the economic growth that President Bush and this
Republican Congress predicted would in fact happen. And it was not
simply a prediction. We are clearly the party of ideas. We have made
that clear with all the proposals that are out here. But the bankrupt
ideology, the ideological baggage of the past, more spending and higher
taxes as a panacea of the future, is obviously a failed policy.

Time and time again the very distinguished ranking minority member of
the Committee on Appropriations comes before the Committee on Rules and
requests, on virtually every appropriations bill, to increase spending.
And how does he propose to pay for that? By imposing a surtax on those
upper-income wage earners. Well, the fact of the matter is, those
upper-income wage earners are, by virtue of having made more and more
investments with their income, are increasing their tax responsibility
to the Federal Treasury.
So if you couple the economic growth policies along with, as my
friend from Texas has just said, our passing appropriations bills that
have real spending cuts for the first time in a long period of time, we
are going a long way towards getting our fiscal house in order.
But being the party of ideas, we are not satisfied to stop right here
and sit on our laurels. And that is why this Careers for a 21st-Century
America agenda is such an important one, because we want to expand on
the great success that we are enjoying today.
I thank my friend for yielding to me and for taking out this Special
Order.
Mr. DeLAY. As I do, Madam Speaker, and I greatly appreciate the
gentleman's efforts, as I said before; and we are looking forward to
implementing his agenda and the agenda of the Economic Competitiveness
Caucus that he has put together and kicked off today. We are looking
forward to working with them to bring this very important agenda to the
floor of the House.
It is only because we are in the majority that the gentleman is able
to bring this agenda to the floor of the House, and we need to
constantly remind the American people of that fact.
Mr. TIAHRT. Madam Speaker, I would like to thank the majority leader
for joining me here this afternoon, and also I would like to thank the
chairman of the Committee on Rules chairman, the gentleman from
California (Mr. Dreier), for spending time with us on the floor talking
about the importance of the future economy and how the ideas that we
have in keeping and creating jobs in America are going to get an
opportunity to be openly debated on the floor of the House.
One of the things I deeply appreciate about the chairman of the
Committee on Rules (Chairman Dreier) is that he has been fairhanded. He
has guaranteed open debate on the floor, and he has ensured that each
and every American has had a chance for their Representative to have
time on the floor to speak freely about issues they believe are
important to them.
We have talked about how good our current economy is. We have talked
about the issues that are very important for the future economy and how
these eight issues will bring legislation and ideas to the floor that
we can implement to ensure we have a strong economy in the future.
But, Madam speaker, let me talk a little this afternoon about the
problems we are facing with regulatory costs. That is one of the issues
that we are dealing with this week, the bureaucratic red tape
termination. Why do we need to deal with that? One reason is the
tremendous cost that the regulatory burdens have put on our economy.
If you look at what we have in this chart that is provided to us by
the Competitive Enterprise Institute, it says that in 2004, the
regulatory cost in the United States is $860 billion. That is $860
billion, with a ``B.'' Now, that is the cost of implementing the
regulations.
If we look at where that is evidenced in our economy, we do not have
to look far. It is part of the cost of calculating taxes, part of the
cost of implementing environmental procedures, and some of it is
keeping up with health care regulations. Let us just talk a minute
about health care.

[[Page H5894]]

If you look at health care regulations in America, you will find out
that, according to the Kansas Hospital Association, for every hour of
health care that they provide to a patient, it takes 1.1 hours to
comply with the regulatory paperwork. More time to comply with
paperwork than they provide in giving health care. There is something
wrong with a system that demands more time to provide paperwork than it
does to provide health care in our health care industry.
Last year it was $860 billion, as I said. Now, let us just compare
that to the gross national product of Mexico. They only had $574
billion as their gross national product. Canada had $701 billion in
their gross national product. We spent more complying with regulations
than they saw in their total economies in both Mexico and Canada.
The message we should gain from this is that we need to put some
commonsense applications to our regulatory burden. A good example
occurred just a couple of years ago in Wichita, Kansas. I received a
call from the Wichita Builders Association. They said that OSHA had
targeted Sedgwick County, Kansas, Sedgwick County being the county
Wichita is located in. They had been targeted by OSHA. The homebuilding
industry had been targeted by OSHA. OSHA had sent their representatives
down and made unscheduled visits to work sites; they set off a block or
two from work sites and took pictures. They ended up sending citations
and levying fines against some of the subcontractors and contractors
that were responsible for building homes in Kansas.
The net impact is that many employers just shut down their
homebuilding. If you think about it, if you are a subcontractor and
doing framing for a house, the most profit you may possibly see on that
job would be $1,000, maybe $2,000. So when you compare that to the
$7,000 fine they were getting, which could have gone up to $50,000, it
was cheaper for them to stay home than to go to work. And when it
becomes cheaper to stay home because of regulatory burdens, we are not
going to have a strong economy.
So I spent time with the Wichita Building Association and I spent
time with OSHA, and I found out they both had the same goal. They
wanted a safe work environment.
Think about a lot of the small employers and subcontractors in the
homebuilding industry. They employ their friends, their relatives,
sons, uncles, and cousins; and they certainly do not want them getting
injured on the job. I do not think any of them want to go to the next
Thanksgiving reunion they would have with their family and try to
explain why their brother-in-law got injured on the job. Instead, they
want to have a work environment that is safe.
We know that when there is an on-the-job injury, workmen's
compensation kicks in, their insurance costs go up. Economically it is
not good for small employers to have an injury on the job. So we knew
they wanted to have a safe work environment. OSHA is tasked with trying
to create a safe work environment here in America.

{time} 1630

But the problem is we have this adversarial relationship where they
work against each other for the same common goal. So by getting OSHA
together with the Wichita Building Association, they figured out a way
to work cooperatively to create a safe working environment. To do that,
they had the OSHA representatives come on an announced visit, walk
together with the subcontractor or the small business owner, walk
through the workplace and list potential safety violations. After the
visit, they would list the potential violations, and then the OSHA
representative would give them some period of time, between 6 weeks and
6 months, to go out and fix that inequity in safety. Then OSHA came
back and went through the checklist to see how they were doing to make
sure that there was a safe work environment.
That was a cooperative effort, and people went back to work and had a
safer work environment. A common goal was achieved by cooperation
rather than an adversarial role.
Too much of our regulatory burden in America is created by an
adversarial goal. Our Environmental Protection Agency, the way the law
is structured, one company when involved in a potential violation of
environmental law, is forced to sue all of their surrounding neighbors
to get them involved in the lawsuit which comes from the Environmental
Protection Agency to correct the problem. That drives up the cost of
getting any potential environmental violation rectified.
Over half of the money spent by the Environmental Protection Agency
goes to lawyers. That does not clean one drop of pollution. If we could
work together in a cooperative fashion, we would have a cleaner
environment, do so with less money, and it would make us more
economically competitive, and it would bring jobs back to America.
Looking at other areas of our economy, for small firms that have less
than 20 employees, the annual regulatory burden in 2000 was estimated
at $6,975 per employee. That is 60 percent higher than it is for the
$4,463 estimated for firms with more than 500 employees. What that
means is small employers have a greater burden in trying to comply with
regulation than larger companies. Larger companies have more resources.
They can dedicate people to regulatory compliance. That means smaller
employers have a harder time competing in a world market or in a local
market.
In Kansas, four out of five jobs are small employers. If it is more
difficult for them to be in business, there are less jobs not only in
Kansas but across the United States. Over the past decade, 60 to 80
percent of new jobs in the United States economy came from small
businesses. During the last two recessions, 1990 through 1992 and 2000
through 2001, small businesses created almost all of the net job
increases. So it is important that we focus on how to have a
competitive advantage for small businesses as well as large businesses
so we can create jobs in the future.
According to the Mercatus Center, the budgetary cost to taxpayers for
funding regulatory agencies topped $25 billion in 2002. So by applying
some common sense reforms, we could save money in the Federal budget
and reduce the amount of money going toward regulatory burdens.
The Code of Federal Regulations extends 19 running feet. From 1991 to
2002, the number of pages in the Code of Federal Regulations increased
by 28 percent. Not long ago, FDIC Vice Chairman John M. Reich, said
that there are 65 words in the Lord's Prayer, 286 words in the
Gettysburg Address, 1,322 words in the Declaration of Independence, and
26,911 words in the Federal regulation governing the sale of cabbage.
When you think about those documents that are very succinct and very
clear, they do not take a lot of time or space. But when you look at
regulations, it is cumbersome and burdensome, and it is keeping us from
being competitive in the future. It is a tremendous burden on our
economy. Of the $860 billion, part of that could be going to research
and development, part of it could be going to creating new jobs and job
training. It could be doing a lot of things that would help make
America more competitive in the future.
To give some idea of how we can focus some of our efforts in the
Economic Competitive Caucus toward reducing this regulatory burden, we
can look at our tax laws. According to the Competitive Enterprise
Institute in 2002, the Federal regulatory cost of $860 billion, $132
billion was complying with tax regulations. It takes a lot of money for
people to comply with how they withhold taxes, pay their own taxes,
State taxes, local taxes, Federal taxes. It is a big burden.
Environmental regulations, $201 billion. The workplace regulatory
burden was $84 billion. The economic burden for regulatory cost, $444
billion. This is an area that is very important for us to focus on. It
is just one of the eight areas that we are going to be dealing with to
make America more competitive.
To review, the eight areas are health care security; bureaucratic red
tape termination; lifelong learning; energy self-sufficiency and
security; research and development so we can spur innovation and
investment; trade fairness; tax relief and simplification; and ending
lawsuit abuse.
The last thing I want to talk about today is the agreement that is
coming

[[Page H5895]]

up before the August break to deal with the Central America Free Trade
Agreement, commonly called CAFTA. It deals with five Central American
countries plus the Dominican Republic.
There has been a lot of opposition to CAFTA in Washington, DC. Much
of it is by labor unions and by people who want to become more
isolationist in their view of America. I think we need to look at some
things, that not only are economic but also geopolitical, related to
CAFTA.
On the economic side, America has been open to trade. We have a 2
percent tariff on anything that is imported into America. In the
Central American areas, they have a tariff that would be reduced by
CAFTA, but that tariff can be as high as 15 percent. Textron owns
Cessna Aircraft in Wichita, Kansas. Cessna makes single-engine
aircraft. Cessna told me they have lost $43 million worth of sales just
last year because of the trade barriers in Central American countries.
That $43 million would have been jets and single-engine airplanes that
could have been built in Kansas, built in America, and exported to
these Central American countries.
The reason they had to face a 15 percent tariff, that increased the
price of those airplanes by 15 percent, they were competing with a
Brazilian company which does not have that 15 percent tacked on because
they have a free trade agreement with these Central American countries.
So it is 15 percent less costly to buy from a South American company
than buying from a North American company. That is unfair. The way to
change that is to get CAFTA in place so that economically it makes
sense.
According to the Chamber of Commerce, we could increase our sales
next year by $3 billion by passing CAFTA. The Farm Bureau estimates we
would increase agricultural sales by $1.5 billion by opening up trade
through CAFTA. Economically it makes sense, but we also need to look at
the geopolitical implication of CAFTA. We want to have strong economies
in these free countries in Central America and in the Dominican
Republic. We see now a lot of effort on the part of Mr. Chavez in
Venezuela, who is a socialist who is working cooperatively with Fidel
Castro from Cuba. With Mr. Chavez funding efforts and Mr. Castro
putting people behind it, there are at least 35,000 Cubans in Central
America trying to impact the effort to overcome CAFTA. Why would Mr.
Chavez or Mr. Castro want to overcome this trade agreement with
America? Because he wants to weaken the economies in these five Central
American countries so he can take over and put a friendly socialist
government in place. It is important to think about what kind of impact
a trade agreement with America would have on these economies. Their
economies will become weakened and vulnerable.
Right now, we see money being spent by a socialist in Venezuela
through his oil money, and people coming from Cuba to activate that.
They are putting up health care clinics in rural Central American
countries, giving money to political candidates and funding efforts to
try to defeat any relationship these countries would have with America.
We are either going to deal with this issue through trade or through
troops. If we do it through trade, we are going to have a strong
economy down there. The people in Central America will tend to stay in
their home countries rather than try to migrate to America.
If not, we are going to have people in the Central American countries
that are pro-Castro, pro-Chavez, and they will be running these
economies. And they will be socialists, communists, and they will be
unfriendly to America. It could create a further problem down in that
area. So we can deal with this issue with trade or troops. My view is
to do it with trade. The way to do that, we pass CAFTA on the floor of
the House.
Who opposes in Central America besides the Castro troops? It is the
labor unions. The labor unions in Central America are opposed to a free
trade agreement. I do not know why they are joining with American labor
unions. I guess they have the same isolationist view. Maybe there is
some common thread between the socialists in the labor unions in
Central America and the labor unions in America.
I think by having free trade agreements, we are going to see very
strong economies in the Central American countries, and that will keep
people involved in jobs that can make their dreams come true in their
home country. And they will be less likely to migrate to America.
One of the things that we grow in Kansas is cotton. A lot of people
do not know cotton is grown in Kansas. We have always been known as the
Wheat State, but when former Congressman Pat Roberts, now Senator
Roberts, when he was chairman of the Committee on Agriculture in the
House, he was essential in passing the Freedom to Farm Act. The Freedom
to Farm Act allowed Kansas farmers to not have to maintain a wheat
base, and they could experiment with new products.
They decided they could make money by raising cotton. Kansas State
University came up with a way to have a shorter growing period for
cotton. Combining those two things, we started growing cotton in
southern Kansas. We now have over 50,000 acres. They are building their
fifth gin mill to separate the cotton fiber from the cotton seed. That
cotton is then put into a bale that is shipped to the Carolinas where
it is manufactured into cloth stock or thread, and then it is sent to
Central America where it is made into clothing and imported back to
America. And we buy shirts and clothing made out of Kansas cotton that
was put together by people in Central America.
That relationship is jeopardized if we do not pass CAFTA. The reason
is because we will see these economies falter. We will not be able to
keep the same supply chains, and that work will then migrate to
southeast Asia. We will not be using Kansas cotton stock, it will be
something that is grown in a different part of the world.
So CAFTA is very important to even remote areas of our economy, such
as the cotton growing area; but also for south central Kansas. It is
also important for the aerospace industry.
So one of the things that we are dealing with here is trade fairness
and opportunity. The way we can see that as a reality is through the
free trade agreement we have with Central America.
Just to summarize, this morning, we launched the Economic
Competitiveness Caucus. We did it with the support of Republican
leadership, with the support of the administration, with the support of
strong groups like the National Association of Manufacturers that is
represented by former Governor John Engler. We had the Secretary of
Commerce there. The Majority Leader, the gentleman from Texas (Mr.
DeLay) and the Majority Whip, the gentleman from Missouri (Mr. Blunt)
were there.
We kicked off this effort to deal with these eight issues: Health
care security; bureaucratic red tape termination; lifelong learning;
energy self-sufficiency and security; spurring innovation and
investment; trade fairness; tax relief and simplification; and ending
lawsuit abuse so we can create an environment that will be conducive to
keeping and creating jobs in America.
When we look around the world, we see there are other economies that
have done some things right. We want to make sure that we take those
things and do them right here in America. These eight issues are going
to be part of the agenda that we are going to deal with this year so
the future economy will be strong.

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