[Congressional Record Volume 152, Number 14 (Wednesday, February 8, 2006)]
[House]
[Pages H202-H207]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  2015
                              THE ECONOMY

  The SPEAKER pro tempore (Mr. Campbell of California). Under the 
Speaker's announced policy of January 4, 2005, the gentleman from 
California (Mr. Dreier) is recognized for 60 minutes as the designee of 
the majority leader.
  Mr. DREIER. Mr. Speaker, I have taken out this Special Order this 
evening because in the past several weeks and months we have seen a 
wide range of public opinion polls, including one that came out just 
recently from ABC News and The Washington Post showing that an 
overwhelming majority of the American people believe that we have an 
economy that is, if not in recession, in deep, deep trouble. For some 
reason, there is a perception that the U.S. economy is in the tank.
  Today, in the East Room of the White House, President Bush signed the 
budget reconciliation bill, the first time since 1997 the Congress 
tackled a measure to reduce by $39 billion the so-called entitlement 
spending which goes on without interruption unless the Congress takes 
action, and we did so in this body. It took, unfortunately, only 
Republican votes in both the House and the Senate to do it, but we were 
able to rein in the spiraling increase in spending. More needs to be 
done, but we took that first step.
  Today, in the East Room, as the President prepared to sign that 
measure, he began talking, Mr. Speaker, about the tremendous 
improvement that we have seen in our economy. We all know that everyone 
is entitled to their own opinion, but no one is entitled to their own 
facts. So for that reason, Mr. Speaker, I feel compelled to offer some 
prepared remarks about the state of our economy, the challenges that 
lie ahead, and the work that we have done and the work that we need to 
continue to do.
  It was just last Tuesday night, a week ago last night, that President 
Bush stood right behind where I am here and addressed a joint session 
of Congress, delivering his State of the Union address. Since 1934, 
Presidents have delivered such a speech following the first of every 
year.
  In much that same way that we Americans take stock every new year, 
assessing the present and looking forward to the future, the President 
came here to this Chamber to describe where we stand as a Nation and 
where his leadership will be focused in the coming year. President Bush 
spoke about the strength of our Nation, our economy, our troops, our 
resolve. He also spoke about the challenges we face, the war on terror, 
maintaining our leadership in the global economy; but despite these 
challenges, we face a very promising future.
  As President Bush said, and I quote: ``And so we move forward, 
optimistic about our country, faithful to its cause, and confident of 
the victories to come.''
  During the speech, Mr. Speaker, I was reminded of the optimism of 
Ronald Reagan when his Presidency began exactly 25 years ago last 
month. As my colleagues surely remember, pessimism in January of 1981 
would have been

[[Page H203]]

well-founded. Economic growth was erratic, inflation was out of 
control, unemployment was abysmally high, interest rates were soaring 
through the roof, and communism, as we all know, was a global menace. 
Violence and chaos were spreading throughout Central America, right in 
our own backyard, in this hemisphere. Yet, Mr. Speaker, President 
Reagan was optimistic because he believed in the American spirit.
  In his inaugural address on January 20, 1981, again 25 years ago just 
this past month, he said, and I quote: ``If we look for the answer as 
to why for so many years we achieved so much, prospered as no other 
people on Earth, it was because here in this land, we unleashed the 
energy and individual genius of man to a greater extent than has ever 
been done before.''
  Mr. Speaker, Ronald Reagan knew that when Americans are freed from 
the burdens of an intrusive government and are empowered to work hard 
and achieve success, we prosper. That is why Ronald Reagan embarked on 
an 8-year crusade of cutting taxes, reducing burdensome regulation, and 
opening up new global opportunities through free trade.
  When we look at everything that has been accomplished in the 25 years 
since Ronald Reagan spoke those words, we see clearly that he was right 
to be optimistic, to have faith in the American spirit. But while 
Ronald Reagan had little more to go on than that faith, today we do 
have facts.
  If we take a look at all the indicators of the strength of our 
economy, it is clear that we face a very promising future. I would like 
to take the opportunity to review these positive indicators, examine 
the policies that got us here, refute our economic nay-sayers, and 
outline our path to an even brighter future.
  As The Wall Street Journal recently reported, over the past 277 
months, our economy has been in recession for only 15 of those 277 
months. Ninety-five percent of the time our economy has been growing 
and creating wealth. The 25 years since Reagan's first inaugural 
address have brought us 43 million new jobs and $23 trillion in new 
wealth. There can be no question that when Americans are not held back 
by government we fulfill our own best hopes for the future.
  Today, with over 143 million Americans working, more than ever before 
in our history, it is very important to note that. Over 2 million 
payroll jobs were created last year, according to the payroll survey. 
The household survey demonstrated even stronger job growth than that, 
with over 2.6 million new jobs created in 2005 alone. This strong pace 
of job creation has resulted in an unemployment rate of 4.7 percent, 
the lowest rate in 4\1/2\ years, and below the average of the 1970s, 
the 1980s, and the 1990s.
  Not only are more Americans working than ever before, but more of our 
fellow Americans own homes than ever before in our Nation's history. 
Greater household wealth and rising living standards have resulted in a 
homeownership rate of nearly 70 percent. These gains have been achieved 
across a broad demographic range, as minority homeownership is also at 
an all-time high of over 51 percent. Household income and wealth are at 
all-time highs. Household net worth grew 11 percent in the last year 
alone. Real hourly compensation is steadily rising. Real after-tax 
income has grown 7.2 percent since the 2003 tax cuts were put into 
place.
  America's working families are experiencing greater prosperity, 
greater financial autonomy, and an ever-improving quality of life. 
Growth in gross domestic product, the broadest measure of economic 
strength, tells the same story.
  The GDP grew at 3.5 percent in 2005, as the President pointed out 
today in the East Room of the White House. Despite a dip in the fourth-
quarter growth, the annual rate was very strong, and analysts predict a 
growth rate as high as 4 percent or more in the first quarter of this 
year. This robust growth is responsible for tax revenues surging to 
their highest levels ever. Total tax receipts were up 12 percent in 
December as the Treasury Department announced the first monthly budget 
surplus in years.
  Perhaps the most telling and significant indicator of our economy's 
strength is productivity growth. Since the end of 2001, the recession 
that existed in 2001, productivity has increased at the fastest rate 
since World War II. Averaging at a pace of 3.4 percent growth annually, 
workers are now over 17 percent more productive than they were in 2001. 
Let me say that again: productivity, one of the most important gauges 
of success, is up to the point where workers today are 17 percent more 
productive than they were just 5 years ago.
  These numbers are so important because no factor is more critical to 
long-term sustainable growth and increasing standards of living than 
improved productivity. It is essential to maintaining steady creation 
of increasingly better paying, better quality jobs.
  Let me continue in my presentation in which we are talking about the 
level of productivity which has surged in the past several years and is 
such an important, important gauge of the kind of economic success that 
we are enjoying.
  It is amazing. Given the storms of our economy, what we have 
weathered since the stock market bubble burst back in 2000, this level 
of strength and vitality that we have seen in productivity is truly 
astounding. In order to give the numbers some additional context, I 
think it is very useful to compare our current economic circumstances 
with the same point in the previous business cycle just over a decade 
ago.
  In April of 1995, we were 4 years out of the recession that existed 
in the early 1990s, just as we are today 4 years out of this past 
recession. Mr. Speaker, by virtually every measure, our current 
expansion economy is stronger and more promising than the expansion 
economy of the spring of 1995.
  Today, we have an unemployment rate of 4.7 percent, as I said 
earlier. In April of 1995, unemployment was more than a full percentage 
point higher at 5.8 percent. Furthermore, employment is stronger today 
across minority demographics.
  The current unemployment rate for African Americans is 8.9 percent. 
In April of 1995, a little more than a decade ago as we were 4 years 
out of economic recession, this rate was at that point nearly two 
points higher for African Americans than it is today. It was 10.7 
percent versus the 8.9 percent unemployment rate for African Americans 
today.
  The improvement for Hispanics is even greater. Today, the 
unemployment rate for Hispanics is 5.8 percent. At this point during 
the last expansion, April of 1995, the rate was 8.9 percent. That is 
8.9 percent Hispanic unemployment at that point. Today, Hispanic 
unemployment is at 5.8 percent, a difference of almost three full 
percentage points.
  Clearly, minority workers, as well as the workforce at large, are 
facing a much brighter economic outlook. This pattern holds throughout 
nearly every major economic indicator.
  The homeownership rate is nearly four points higher today than it was 
in April of 1995. Minority homeownership is 7.7 percentage points 
higher today than it was in 1995, as I say, at record levels of 
homeownership and minority homeownership. Annual growth in household 
net worth over the past year is nearly 3 points higher than it was.
  Mr. Speaker, real hourly compensation is now growing at a rate of 1.2 
percent versus an actual decline in April of 1995 of seven-tenths of 1 
percent, that is, actually a decline took place 4 years out of the last 
economic recession that we reemerged from in the mid-1990s to today, 
real hourly compensation growing at 1.2 percent today.
  Today, that all-important investor class, those who have investments, 
has grown to include 56.9 million American families as the stock 
ownership rate for Americans has risen to nearly 60 percent of all 
households, or 19 percentage points greater than it was in April of 
1995. Again, that investor class, Democrats and Republicans, all the 
way across the economic spectrum, has grown dramatically. GDP growth is 
1.3 percentage points higher than it was in April 1995, again, when we 
were 4 years out of economic recession.
  Mr. Speaker, annual productivity growth, which is so fundamental, as 
I said earlier, to sustaining rising living standards is a staggering 
10 times greater than it was at this same point in the previous 
expansion. The rate of

[[Page H204]]

growth over the past 4 years at 3.4 percent is not only impressive for 
an expansion economy; it significantly outpaces historic rates.

                              {time}  2030

  From 1973 to 1995, productivity grew at 1.4 percent; 1973 to 1995, 
1.4 percent. At that rate it would take 50 years to double the standard 
of living. But stronger growth has now put us on the path to double 
living standards twice as quickly as it did from that period of time 
between 1973 and 1995, that 22-year period.
  We recently witnessed a symbolic reminder of the 1990s economy as the 
Dow Jones Industrial Average broke through the 11,000 mark on January 
9, closing above 11,000, pierced a barrier that had not been surpassed 
since June of 2001 when our economy was several months into a decline 
that had become a recession.
  And we obviously should not gauge the markets on a daily basis. Today 
we saw the Dow Jones Industrial Average up by over 100 points.
  A great deal of fanfare accompanied the return of the stratospheric 
level of the late 1990s when the Dow hit 11,000. But this milestone was 
significant not only for the symbolism. Whereas what was called by Alan 
Greenspan, the former Chairman of the Federal Reserve, as irrational 
exuberance, it played a great deal in driving the Dow up to this level 
before, back in the 1990s, this time the Dow hitting 11,000, up 100 
points today, as I said, was soundly grounded in sound economic and 
market principles.
  Several years of strong, steady growth, rising incomes, more jobs, 
and a growing and increasingly prosperous investor class have led to 
sustainable gains in the stock market. We did not reach this level of 
economic strength by accident or by chance.
  Many people talk about the cycle. I was listening to the radio this 
morning, and some people were saying, regardless of policies, we still 
see these surges take place in the economy, whether you have had tax 
increases or tax cuts. That is just plain wrong. Our economic strength 
is the direct and predictable result of an aggressive Republican agenda 
of progrowth policies, decreasing tax and regulatory burdens, expanding 
free trade and opening new markets around the world. Empowering 
entrepreneurs and small business owners to innovate, adapt and grow is 
critical to sustaining this kind of success.
  These policies have created an environment that has increased the 
prosperity of Americans, created new opportunities, and brought about 
all of the positive economic news that I have discussed from job 
creation to home ownership. Perhaps the starkest illustration of cause 
and effect comes from those 2003 tax cuts.
  The day the Senate passed those tax cuts, the Dow Jones Industrial 
Average was at 8,601. Again, the Dow was at 8,601 the day that the 
Senate passed those 2003 tax cuts. Today, as I have said, we have seen 
the Dow once again surpass 11,000, up 100 points today. It has remained 
close to that 11,000 mark.
  During that time, the bull market propelled by our booming economy, 
since we put into place the 2003 cuts, has created $5 trillion in new 
shareholder wealth. The total return to stock investors since the tax 
cuts were enacted has been 41.3 percent.
  Now, remember, that is not simply the rich. With nearly 60 percent of 
American families now members of the investor class, the total return 
to stock investors since those 2003 tax cuts has been, as I said, 41.3 
percent.
  We have seen the same direct benefit to job creation. Following the 
2001 recession, the payroll jobs number hit its lowest point the very 
month the 2003 tax cuts were enacted. Since that time our economy has 
added nearly 5 million new payroll jobs. And as I have already cited, 
real after-tax income has increased by 7.2 percent over that same 
period of time.
  Furthermore, we accomplished all of this while increasing Federal tax 
revenues. Revenues to the Federal Treasury have increased as a 
byproduct of implementing those 2003 tax cuts. Total receipts in 2005 
were up nearly 15 percent. In all, tax receipts for last year totaled 
$2.2 trillion, the largest margin, the largest amount of revenues ever 
collected, ever collected in a 12-month period, $2.2 trillion. And that 
has all happened since we put tax cuts into place.
  And I remember vividly debating my colleagues on program after 
program when they would say that if we put into place these tax cuts, 
we would see the U.S. economy go right into the tank, and we would see 
a great reduction in the flow of revenues to the Federal Treasury. The 
exact opposite is the case. In fact, tax receipts have been at record 
highs since last August when the previous 12-month record of $2.1 
trillion was broken.
  So, Mr. Speaker, let us review. By every major economic indicator, 
our economy is booming. Gains are being made by the economy at large, 
and by individuals of all demographics. Across the board the American 
people are benefiting. Our economic strength is remarkable by any 
standard, but it is even more impressive when compared to the same 
point, as I said, that previous postexpansion period, in April of 1995, 
4 years out of the economic recession. The markets are returning to 
their bubble-era levels, but this time these levels are solidly 
grounded, as I said, in real growth.
  And, finally, Mr. Speaker, all of those tremendous gains have been 
achieved through the Republican commitment to a progrowth agenda of 
lower taxes and greater economic freedom.
  And yet incredibly, my colleagues on the other side of the aisle deny 
this good economic news. I have listened to the Special Orders that 
they have taken out here on the House floor, and I can understand if 
the American people simply listen to that message why they believe the 
economy is in the tank. And even more incredibly, they claim that our 
progrowth agenda is actually hurting our economy and bankrupting the 
Federal Treasury.
  Now, it is one thing to predict failure at the outset. It is one 
thing to predict failure as they did when we were looking at 
implementing these tax cuts in 2001 and 2003. It is quite another to 
claim that our agenda has failed amid clear and overwhelming evidence 
of its success.
  Mr. Speaker, our economy has recovered from the bursting stock market 
bubble, a recession, terrorist attacks, and corporate scandals. Our 
economy has weathered storms, literally and figuratively, such as 
Hurricane Katrina, high oil prices and stagnating growth that is 
existing for some of our trading partners in their economies.

  Our economy, Mr. Speaker, has increased the prosperity of Americans, 
and all the while the rhetoric that we hear from the leadership on the 
Democratic side has remained constant. But we in the majority have 
worked, sometimes in a bipartisan way, but unfortunately not in concert 
with the Democratic leadership.
  Well, we have worked to ensure everyone has the opportunity to pursue 
and potentially achieve the American dream. They have worked only to 
advance the myth of, you remember this line, two Americas. They have 
tried to instill that standard old but failed argument of us versus 
them, the class warfare mentality that disregards the truth, and 
tragically, Mr. Speaker, it greatly divides our country.
  Now, Mr. Speaker, when perpetuating this myth that only a privileged 
few have access to the American dream, my colleagues on the other side 
of the aisle will frequently invoke the threat of outsourcing. Do you 
remember that word, outsourcing? You could not turn on cable television 
news without hearing that word outsourcing.
  That is a term that you do not hear all that often anymore. Frankly, 
whenever they tried to explain away all of the positive economic news 
of the past few years, American jobs moving to places like China and 
India were usually held up as Exhibit A. They are still talking about 
it. They tell us of struggling plants such as the Paper Converting 
Machine Company in Green Bay, Wisconsin.
  They tell us about how this company, PCMC, the Paper Converting 
Machine Company, and its workers faced some very, very difficult times. 
We are told that first the recession was bad for business, and then one 
of its biggest customers demanded drastically reduced prices, 
encouraging PCMC to outsource, to move production to China. And then 
when things could hardly get worse, PCMC was acquired by another 
company that cut workers

[[Page H205]]

and cut pay. Throughout this whole process, sales for PCMC plummeted by 
40 percent, and jobs were slashed from 2,000 American jobs to 1,100 
jobs. Times were indeed very hard.
  But, unfortunately, Mr. Speaker, what my Democratic colleagues, when 
they hold up that example of PCMC of Green Bay, Wisconsin, they do not 
tell the rest of the story. The story of PCMC does not end with lost 
jobs and plunging sales. They at PCMC had a strategy for reversing 
these losses and prospering once again, and it included the process of 
outsourcing to India.
  They saw that they were losing orders because of the limits in their 
engineering department. So their chief engineer developed plans to 
utilize an engineering center in Chennai, India. Because U.S. and 
Indian engineers can now collaborate around the clock, PCMC has been 
able to expand their engineering services while making the whole 
process more cost-effective.
  The result has been a strengthened U.S.-based company that continues 
to grow in Green Bay, Wisconsin. The CEO, Robert Chapman says and I 
quote, we can compete and create great American jobs, but not without 
offshoring or outsourcing.
  This is the true story, Mr. Speaker, of the American economy. It is 
not a story of the haves and have-nots. It is not a story of doom and 
gloom. Mr. Speaker, the American economy thrives and grows, because 
when entrepreneurs face adversity, they have the freedom and 
flexibility to innovate, pursue new strategies and prosper. Allowing 
business owners to tap into the vast resources of the global economy is 
essential to our continued economic strength right here at home.
  But you do not have to just take my word based on one anecdote of 
PCMC and their success. If all the positive economic data demonstrating 
the strength and vitality of the U.S. economy is not enough, the 
Information Technology Association of America, the ITAA, recently 
conducted a study on the direct impact of trade in services, otherwise 
known as offshoring or outsourcing. The study looked specifically at 
outsourcing in the IT field, the information technology field, and it 
found that trade in IT services is a clear net benefit for our economy. 
The new economic activity generated by increased trade in services 
ripples throughout the economy, creating jobs, boosting growth and 
increasing exports.
  Specifically, this study that the ITAA did found that offshore 
outsourcing resulted in the creation of 257,000 net new jobs in 2005. 
Let me say that again, Mr. Speaker, because I realize it is 
counterintuitive. I was actually talking to the President today about 
this study, and I know that people have a difficult time understanding 
this. Offshoring, outsourcing, actually in 2005 created a net new job 
increase of 257,000 jobs, meaning if we had taken action here and 
somehow tried to stop that, it would have cost 257,000 new jobs that 
were created right here. And more than 337,000 net new jobs are 
expected to be created within the next 5 years, just from this issue of 
outsourcing.
  It is true that greater engagement in the global economy contributes 
to a considerable churn in our workforce and accelerates the rate of 
change. And I am not going to stand here and claim that there has been 
no American who has been detrimentally impacted from this change. But 
we all know that change is inevitable, and we also know that the net 
increase in jobs that has taken place because of so-called outsourcing 
or offshoring has been dramatic, in excess of a quarter of a million 
net new jobs created in the last calendar year alone.

                              {time}  2045

  But as we saw with the manufacturer in Green Bay, PCMC, it creates 
new opportunities for American workers and ultimately leads to stronger 
job growth right here at home. Again, remember, we have a 4.7 percent 
unemployment rate, Mr. Speaker. So all of those people who predicted 
that outsourcing was going to wipe out the U.S. economy have got to 
recognize that we have the lowest unemployment rate that we have had in 
4\1/2\ years, lower than the average for the 1970s, the 1980s, and the 
1990s.
  The study also demonstrates overall gains in economic growth. ITAA 
estimates that IT offshore outsourcing contributed an additional $68.7 
billion in real GDP growth in 2005; $68.7 billion in real GDP growth 
right here in the United States of America because of so-called 
outsourcing, offshoring. Greater global engagement in IT services is 
expected to create another $147.4 billion in real GDP growth by 2010, 
within the next 5 years, 4 years now I guess.
  Exports are boosted as well, Mr. Speaker, with an additional $5.1 
billion in exports in 2005 and another $9.7 billion predicted by 2010. 
Again, $5.1 billion in new exports that have been a byproduct of 
policies that have included offshoring. These gains are an obvious and 
direct benefit to the workers who gain jobs and the business owners who 
boost both sales and revenue.
  But the increased efficiencies and economic activities spread 
throughout the economy at large. These disbursed benefits, as I said to 
everyone, by lowering inflation, increasing productivity, and helping 
to keep interest rates low, the economic benefits of greater engagement 
impact every single one of us. We as Americans reap the benefits 
through higher wages, new opportunities, and rising living standards.
  Opponents of open trade and a policy of global economic engagement 
paint outsourcing as an effort by, and you will recall this term that 
was used in the 2004 Presidential campaign, ``Benedict Arnold CEOs'' 
who supposedly exploit cheap labor overseas while American workers are 
suffering. But as I discussed, Mr. Speaker, the empirical as well as 
the anecdotal evidence proves precisely the opposite. When American 
entrepreneurs are free to leverage all of the world's resources, the 
result is new and better opportunities for workers right here in the 
good old United States of America.
  The benefits of being free to globally engage are just further 
demonstration of what has always been true of the American economy: our 
strength lies in our ability to innovate. Change has always been an 
inescapable part of the American economy. We have grown from an 
agrarian economy, as we all know, to an industrial economy, to what is 
today's 21st century high-tech Information Age economy. We prosper not 
because we have resisted change. We prosper because we have used change 
as an opportunity to innovate, to think creatively, to adapt, and to 
grow. Outsourcing simply presents a new opportunity for the United 
States to maintain its role as the world's leading innovator.
  The cost savings of outsourcing have enabled businesses to remain 
competitive and have spurred new economic activity. But business 
analysts agree that the real power of outsourcing is in enabling 
companies to innovate and transform themselves. The new buzz word in 
the business world is ``transformational outsourcing.''
  Business Week recently noted: ``Many executives are discovering 
offshoring is really about corporate growth, making better use of 
skilled U.S. staff, and even job creation in the United States, not 
just cheap wages abroad.'' They go on to say: ``True, the labor savings 
from global sourcing can still be substantial, but it's peanuts 
compared to the enormous gains in efficiency, productivity, quality and 
revenues that can be achieved by fully leveraging offshore talents.'' 
Meaning that we can take advantage right here at home of utilization of 
offshoring.
  Mr. Speaker, outsourcing provides an opportunity for businesses to 
stage 24-hour-a-day, 7-day-a-week operations. U.S. workers can 
collaborate with other skilled workers around the world. New solutions 
to old challenges can be explored. Limited resources can be shifted 
from routine low-tech processes to higher value-added activity. By 
tapping into all the resources the global economy offers, American 
entrepreneurs have the opportunity to revitalize struggling businesses, 
spur innovation, and develop new projects that would otherwise be 
impossible.
  All of this potential has led many business analysts to believe that 
U.S. companies are on the cusp of a new burst of productivity, driven 
by this transformational outsourcing. We saw this worked for that 
manufacturing company that I have used as anecdotal evidence, PCMC, in 
Green Bay, Wisconsin.
  Now let me go close to home for me. IndyMac Bancorp, Inc., which is a

[[Page H206]]

Pasadena, California-based financial services company, is an example of 
a 21st-century services company that has made offshore outsourcing an 
integral part of its business model, and it is thriving.
  Three years ago, IndyMac was the 22nd largest mortgage issuer in the 
United States. Today, Mr. Speaker, it is number nine and I believe 
moving up. IndyMac's consumer banking CEO credits its success in large 
part to their strategy of aggressive outsourcing. He has said that 
outsourcing has made IndyMac ``more productive, cost efficient and 
flexible than our competitors with better consumer service.''
  Now, Mr. Speaker, by working with an Indian firm, IndyMac is 
developing new software platforms and applications that it expects will 
boost efficiency another 20 percent at least over the next 2 years. 
They have also moved 33 back-office functions offshore. Thirty-three of 
those back-office functions have moved offshore. And what has been the 
impact on job creation right here in the United States?
  Mr. Speaker, by moving 33 of their operations offshore, IndyMac has 
doubled its American workforce to almost 6,000 in the past 4 years, and 
at this moment they continue to hire more Americans. All of this is 
possible because of the openness and flexibility of our wonderful U.S. 
economy.

  Now, Mr. Speaker, our goal as Republicans is to reduce the burdens on 
workers and business owners and increase their access to the global 
economy.
  Now, I mention the fact that Democrats have assailed, they talk about 
Benedict Arnold CEOs, they would say the CEO of the consumer bank 
operation, IndyMac, is some sort of Benedict Arnold CEO I am sure. And, 
of course, Democrats have proposed a massive tax increase and barriers 
to innovation and entrepreneurship. We as Republicans have pursued 
greater engagement. We have cut taxes, regulation, and other market 
barriers of entry. We have continued a policy of greater trade 
liberalization. We have worked to reduce the size and scope of 
government so that Americans are increasingly free to prosper.
  In short, Mr. Speaker, we have continued the Ronald Reagan vision of 
hope and optimism in the American spirit. We have carried Ronald 
Reagan's legacy of empowerment and prosperity through greater economic 
freedom. Mr. Speaker, I wish that President Reagan could have seen last 
year's great milestone in the fulfillment of his vision, the passage of 
the Dominican Republic-Central American Free Trade Agreement. He had 
envisioned, as we all know, and announced it on November 6 of 1979 when 
he proposed his candidacy, he put forward his candidacy to be President 
of United States, he at that point did something that many thought was 
heresy. He proposed a free trade area of the Americas stretching from 
the Arctic to Tierra del Fuego, as President Reagan used to love to 
say.
  When he first spoke, as I said, of this FTAA when announcing his 
candidacy, the idea seemed even more far-fetched than his optimism for 
the U.S. economy at his first inaugural address 25 years ago last 
month. Much of the Americas at that time, particularly Central America, 
as we all will remember, was ravaged by violence and dictatorship; and 
yet these last 25 years have seen the birth and growth of democracy and 
free markets in the region.
  The passage of DR-CAFTA last year was hugely significant in pursuing 
that ultimate goal and vision that President Reagan put forward: first, 
as a further commitment to the region of greater political and economic 
freedom and liberalization; and, second, as a major stepping stone, as 
I said, towards implementation of that vision of the FTAA.
  There may still be those who believe the idea of a free trade area of 
the Arctic to Tierra del Fuego to be farfetched, and it is being 
undermined, we all know, by some leaders in this hemisphere; but Ronald 
Reagan and the continued Republican legacy have proved that any people 
can prosper when given the freedom to do so. We have seen this 
demonstrated right here at home throughout this region and, Mr. 
Speaker, in this hemisphere when we have seen improvements in trade 
opportunities developed.
  We have seen it demonstrated worldwide, Mr. Speaker. Every year 
Canada's Fraser Institute publishes a report on economic freedom 
throughout the global, documenting the direct link between economic 
freedom and quality of life. The 2005 report finds that economic 
freedom continues to be determinative in individual well-being and 
opportunity. The report's authors at the Fraser Institute, in 
conjunction with nearly 70 public policy organizations from around the 
world, found that life expectancy in the world's economically freest 
countries is more than 25 years longer than in countries with the least 
economic freedom.
  Freer countries have lower unemployment; those living in the poorest 
10 percent demographic have much higher incomes and a much better 
standard of living in countries with high economic freedom than in 
those countries that are most restrictive.
  Corruption in public office goes down as freedom goes up. Political 
rights, political stability, and civil liberties all go hand in hand 
with increased economic freedom. Year after year, the economic freedom 
of the World Annual Report finds the same thing. Everyone experiences 
greater prosperity with greater economic freedom while the world's 
poorest gain the most. By pursuing greater liberalization abroad 
through free trade, we help to increase prosperity for our allies and 
our neighbors. By reducing taxes, regulation and other economic burdens 
here at home, we increase the prosperity of Americans. And as we all 
engage in the global marketplace, we prosper together.
  Ronald Reagan knew this to be true and then went on and proved it. 
President Bush and our Republican majority have built on this success 
by continuing to liberalize our own economy as we encourage our trading 
partners to do the same.

                              {time}  2100

  The result has been a strong and growing economy, new job 
opportunities, and a rapidly rising standard of living.
  So when we look to the coming year, what is the path that we will 
choose? First and foremost, Mr. Speaker, we must remain committed to 
the agenda that gave us this tremendous success. This Republican 
Congress will continue to reduce the tax burden on America's working 
families. We will continue to reduce the size and scope of the Federal 
Government, as was evidenced today by the President's signing of that 
$39 billion reduction by signing the budget reconciliation package. We 
will work hard to reduce the size and scope of government, as I said, 
and to rein in the reach of the government by minimizing regulation and 
decreasing the bureaucratic red tape that strangles job creation. And 
we will continue to liberalize our trade relationships. We will 
continue to pursue more free trade agreements.
  This agenda will not only continue to increase our prosperity; it 
will enable us to maintain our global competitive edge through 
innovation. The lesson of trade and outsourcing has been that global 
engagement has helped us to remain competitive. President Bush spoke a 
great deal about competitiveness at the State of the Union address. He 
spoke about it today when he announced, first here and again he is 
continuing to talk about this moving across the country, referring to 
his American Competitiveness Initiative. The President's plan will 
contribute an additional $136 billion to scientific research and the 
promotion of math and science education.
  By strengthening the fundamentals of education, research, and with a 
well-educated, highly skilled workforce, we can ensure that we will 
continue our global competitiveness far into the future. As President 
Bush said when he stood right here in this Chamber last week, Mr. 
Speaker: ``The American economy is preeminent, but we cannot afford to 
be complacent.'' The President said: ``In a dynamic world economy, we 
are seeing new competitors. To keep America competitive, one commitment 
is necessary above all. We must continue to lead the world in human 
talent and creativity.''
  Now, Mr. Speaker, in the coming months and years, this Republican 
majority remains committed not only to expanding economic freedom at 
home and abroad. We are fully committed to an agenda of competitiveness 
and innovation. As we begin this new legislative

[[Page H207]]

year, it is important that we recognize where we are and how we got 
here, and look optimistically, as Ronald Reagan did, to the future.
  I am very proud of the fact that we have achieved such economic 
success. As I said, everyone is entitled to their own opinion, but no 
one is entitled to their own facts. I am even prouder of what we have 
been able to achieve through our Republican pro-growth, pro-economic 
freedom agenda. And, Mr. Speaker, as Ronald Reagan said so well, he 
believed that the American spirit has the ultimate potential when it is 
unleashed, and that is why I join that spirit of Ronald Reagan, as I 
know President Bush and our Republican colleagues do, and we certainly 
welcome Democrats to join in this effort as we look optimistically, 
hopefully, and very confidently to our future.
  As I said, Mr. Speaker, it is very important for us to note that many 
people have tried their darnedest to claim that somehow the U.S. 
economy is in the tank. I hope that what I have shared over the past 
few minutes, which provides both anecdotal, through companies like PCMC 
in Green Bay, Wisconsin, and IndyMac Bank in Southern California, that 
that anecdotal information shows the success that we are enjoying.
  I also hope that the empirical studies done by the Information 
Technology Association of America, the ITAA, showing that a net 257,000 
new jobs were created in 2005 because of so-called outsourcing and 
offshoring, and that the Fraser Institute study from Canada 
demonstrating that when you unleash potential through greater economic 
liberalization, standards of living grow, and even those at the lowest 
end of the economic spectrum in those countries have higher standards 
of living than those who live in restrictive societies, that those 
facts are understood by the American people so that the American people 
will have an understanding that the gloom and doom negativism consists 
of nothing but words, because the facts belie them.

                          ____________________