[Congressional Record Volume 153, Number 95 (Wednesday, June 13, 2007)]
[Senate]
[Page S7629]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              CBO STUDIES

  Mr. GREGG. Madam President, today there is a great deal of debate 
about how Americans are doing, in particular those considered low 
income. I rise today to dispel a major misconception about the progress 
of low-income Americans. Those on the other side of the aisle would 
have you believe that when one person does better it must be at the 
expense of another. Nothing could be further from the truth. In fact, 
when Congress adopts policies that encourages individuals to work 
harder, save, take risks, and invest more, the economy does better and 
everyone benefits. Two recent studies I requested from CBO prove a 
rising tide does lift all boats.
  The first report issued in December, entitled ``Changes in Low Wage 
Labor Markets Between 1979 and 2005,'' found that the inflation 
adjusted hourly earnings of U.S. workers was 10 percent higher now than 
back in 1979. Since 1990 those in the bottom 10th percentile of wage 
earners witnessed their inflation adjusted wages increase 12.8 percent, 
more than 2.5 percentage points faster than those in the statistical 
middle.
  CBO's second report entitled ``Changes in the Economic Resources of 
Low-Income Households with Children'' indicates that poor households 
with children experienced real earnings gains of 80 percent since 1991, 
outpacing even those in the top income quintile whose earnings grew 54 
percent. This fact is even more amazing viewed in the context of 
welfare reform.
  Those opposing welfare reforms in the mid 1990s argued that limiting 
direct Government assistance and requiring low-income people to work 
more would prove to be disastrous. However, low-income households with 
children now rely less on the Government, are more self reliant and 
have a higher standard of living. In 1991, low-income households relied 
on the Government for a majority of their income with earnings 
accounting for just 49 percent. Today, low-income households earn 65 
percent of their income and rely on Government assistance for the 
remainder. Female headed households also rely less on the Government 
for their livelihood. In 1991, 35 percent of their income was earned 
compared with 54 percent now. The share of their income derived from 
AFDC or TANF fell from 42 percent in 1991 to 7 percent in 2005.
  These two studies prove that when the Government interferes less in 
the lives of its citizens, they are more productive. Once unencumbered 
by Government, people are motivated to work harder, save, and invest 
more.

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