[Congressional Record (Bound Edition), Volume 149 (2003), Part 4]
[Senate]
[Pages 4993-4995]
[From the U.S. Government Publishing Office, www.gpo.gov]




                             TRADE DEFICIT

  Mr. DORGAN. Mr. President, I also want to mention something I talked 
about yesterday. That is on the subject of the trade deficit. My 
colleagues know that we face a fiscal policy budget deficit of well 
over $400 billion this year, and we also face at the same time the 
largest trade deficit in American history, $470 billion; over $400 
billion in our budget deficit and $470 billion in our merchandise trade 
deficit in the past year. That is nearing $1 trillion in combined 
deficits for our country.
  I don't know. I thought that we were about to enter a period of 
fiscal responsibility. Two years ago we had what was alleged to be 
surpluses as far as the eye could see. It was good times; following the 
1990s, budget surpluses nearly forever. The fact is, now we see budget 
deficits that exhaust all of our patience as far as the eye can see; 
spending money we don't have, in some cases on things we don't need, 
year after year after year. It won't go away because we ignore it. We 
ignore it at our peril. We ought to deal with both.
  We are preparing for armed conflict. Our thoughts and prayers go with 
those who wear this country's uniform. We face severe and stiff 
challenges in foreign policy with North Korea, Iraq, the threat of 
terrorism against our homeland, and the war against terrorism abroad.
  At the same time that exists, we have an economy that is stuttering 
and in trouble. Then we are told that on top of fiscal policy, budget 
deficits of over $400 billion in this year, at a time when we increased 
defense spending by $45 billion, increased homeland security spending 
by over $30 billion, we are told at the same time by the President that 
he wants a tax cut of $675 billion over the next 10 years on a 
permanent basis.
  I don't understand how that adds up. Then, in addition to that fiscal 
policy dealing with the Federal budget, we have these abiding trade 
deficits. Those deficits at their root are about jobs.
  It is about jobs that used to be here that are no longer. Millions of 
people are out of work and their jobs are elsewhere. We have a large 
trade deficit with China. Most people don't know that our trade deficit 
with China is now over $100 billion a year. China sends us all their 
trinkets, trousers, shirts, shoes. They flood our market with Chinese 
goods. Then we try to get goods into China, and their markets are not 
very open to ours.
  Our trade negotiators negotiated an agreement with China and 
everybody said we have a bilateral agreement with China. I don't know 
who negotiated it. I would love to get names and pictures so I could 
give them credit.

[[Page 4994]]

They apparently, in a room with the Chinese, negotiated a circumstance 
that said, in the future, when we have trade with automobiles from the 
United States and China--and incidentally this is a country with 1.3 
billion people who will need a lot of cars--when we have an agreement 
with China on the trade of automobiles, we will agree, our negotiators 
said, to allow China to have a tariff that is 10 times higher in China 
on automobiles than we will have on Chinese cars coming to the U.S.
  Our Government said: We will agree to have a tariff on U.S. cars 
being sold in the country of China that is 10 times higher than the 
tariff that would be imposed on a Chinese car sold in the United 
States. Does that make sense? It doesn't.
  My point is, the root of all of this is about jobs, about economic 
opportunity. Our economy is not going to get well unless it has some 
resurrection of strength in the manufacturing sector. We are, every day 
in every way, trading away manufacturing jobs.
  The trade ambassador said: We are losing manufacturing jobs, but we 
have cable television.
  I don't understand that at all. Where does a statement like that come 
from? We lose some manufacturing plant and pick up some cable 
television signals? Good for cable television. But the fact is, it is 
not a replacement for manufacturing. No country will remain a strong 
international economic competitor if its sector dissipates. That has 
been happening.
  I talked yesterday about the workers abroad with whom American 
workers are required to compete: Those who make 14 cents an hour--and, 
yes, they do--at age 14, working 14 hours a day--yes, they do employ 
those people in some parts of the world. Then the product of their 
labor is sent to Pittsburgh, Denver, Los Angeles, Fargo, Topeka. It 
goes on the store shelf, and it is all about profit.
  People say: Isn't that wonderful for the consumer to have a lower 
priced product? It is not such a lower priced product. It is just that 
the people who used to have the income to buy it lost their job when 
the plant went overseas.
  I also made a mistake yesterday. I mentioned the companies that 
renounced their American citizenship to save on taxes. They not only 
moved their plant overseas, but they renounced their American 
citizenship so they could save on taxes. I talked about them becoming 
Bahamian citizens. I should have said Bermuda. I guess some of them 
become citizens of the Bahamas, but it is more typical that they became 
citizens of Bermuda. The Bahamas has a navy with 26 people--I guess 
that is the Bermuda Navy. I want to correct that. The Bermuda Navy has 
26 people.
  So if an American company that wants to become a citizen in Bermuda 
and renounce its citizenship runs into trouble someplace, and some 
disparate country out there decides to expropriate the assets of this 
company that used to be American, but is now Bermudan, my feeling is, 
when they say let's call out the navy, I think they should call Bermuda 
and say call out your 26-member navy.
  One of these companies actually had one ship grounded on a sand bar 
near Cuba. Would you please call out the navy to help? That is what we 
ought to tell them to do the next time they need assistance.
  We have public policies both in fiscal policy dealing with the 
Federal budget and in trade policies that are in desperate need of 
attention. There is no attention paid to it at all at this moment, 
except for some of us in the Congress who want to see if we can do a U-
turn on some of these policies and put us back on track towards more 
economic growth and more jobs for this country. The sooner we get to 
that real debate, the better.
  This economy of ours can't run on paper. It can't run on promises. 
This economy needs a shot in the arm by a Congress that is willing to 
stand up to these issues and say: Our fiscal policy doesn't add up.
  I come from a very small school. My senior class was 9; 40 kids in 
all four grades of high school in a town of 350 people that I came 
from. But there is only one way they teach math. They taught math the 
same way in that small school they teach it in the biggest and best 
school in the United States. That is, 1 and 1 equals 2, not 3.
  I studied hard and I learned that. Some in this town with advanced 
degrees have decided that 1 plus 1 is 3. In fact, you can find it in 
the budget documents. The fact is, the American people all understand 
it is a mirage. None of this adds up. This is a tough time and it 
requires tough choices. I wish it weren't. I wish it was a time when we 
had unparalleled economic growth, when the economy was rebounding, the 
stock market was moving up, and everybody was employed. But the fact is 
that is not the case.
  We face serious, abiding economic challenges. This President needs to 
send a program to this Congress and this Congress has a requirement, it 
seems to me--if this President won't act, the Congress has a 
requirement to act to say we need to put this country back on track. 
The current circumstances simply do not add up.
  I used to teach economics in college for a couple years. Everyone 
talks about the business cycle. We have been hit with things in this 
economy that are pretty unparalleled. Some of us warned about this 2 
years ago when the President proposed a $1.7 trillion tax cut. Some of 
us said maybe we ought to be a little conservative here. What if the 
bottom falls out and we run into tough times, or turbulence, or get 
some bad economic news? They said not to worry. We have blue skies as 
far as you can see, straight ahead--budget surpluses forever, the 
President said. We passed that--not with my vote--long-term permanent 
tax cut, and then immediately we found out we were in a recession. We 
got hit with the terrorist attack of 9/11, and we were at a war with 
terrorists; and we now have the largest budget deficits we have seen. 
We had the largest corporate scandals in history. All of this is coming 
together at the same time, at the same intersection, and the budget 
surpluses turned into deficits, and the deficits got bigger and bigger.
  The President says the antidote is to give more tax cuts and make 
them permanent. It seems to me he requires all of us to say we all like 
tax cuts. It would be nice if nobody had to pay any taxes. Count me in. 
I expect my constituents would appreciate the fact they would not have 
to pay taxes. Part of the cost of what we do together as citizens in 
building roads, schools, and providing for the common defense--part of 
the cost of that is the taxes we must pay. What the President is 
proposing in his budget is, by the way, let's be a bit short next 
year--about $400 billion short--and we will charge it over to the kids. 
We will let the kids assume that role of paying for it. We will consume 
more than we are willing to raise, and we will let the kids pay it off 
some time later. That doesn't add up, either.
  By the way, the President also says, well, the economy is 
fundamentally sound, we don't need to do much right now in terms of 
stimulus. The fact is, when we teach about the contraction and 
expansion side of the economy in the business cycle, you teach about 
confidence. The expansion and contraction side of the business cycle is 
all about confidence. If people are confident in the future, they do 
the following: Buy a house, buy a car, take a trip. They do the things 
that manifest their confidence in the future because they have a job 
and they feel good about the future. And that confluence of individual 
acts around the country creates the expansion side of the business 
cycle. But when they are not confident about the future, they do the 
opposite. They defer the purchase of that appliance for their home, or 
that automobile they were looking to purchase, or the home, or the 
trip. When they defer that purchase, the economy contracts. It is all 
about the confidence with which the people view the future.
  At the moment, the people are not confident about the future. There 
is not a lot we can do about the mechanics of the economy, because now 
the lead stories are about war, so there will never be confidence until 
we get through this period. We cannot ignore what is happening in our 
country with

[[Page 4995]]

fiscal policy, trade policy, and a whole series of issues that some 
apparently feel we should pretend are all right but, in fact, are not 
all right--are seriously amiss.
  That brings me back to the point I started with. The agreement that 
will be on the floor of the Senate this week dealing with the Moscow 
Treaty is just another piece of pretend policy. Everybody will vote for 
it. Why wouldn't you? What is wrong with it? But it does nothing. It 
says the U.S. and Russia are going to reduce the number of nuclear 
weapons, not by getting rid of them, but by putting them into storage. 
So what does that do to make the world safer? The answer is nothing. 
Most people know it.
  There is the other piece of responsibility that is required--yes, of 
this President and of this Congress--and that is to provide world 
leadership and reduce the number of nuclear weapons, reduce the threat 
of nuclear war; and stop the spread of nuclear weapons around the 
world. It is the President's and our responsibility here in Congress. 
We ought not to pretend that we are taking action that really has very 
little impact with respect to fiscal policy, trade policy, nuclear arms 
control policy, because that will not ensure the future of this country 
and will not give our children confidence about the future of this 
country or this world.
  So, Mr. President, my hope and expectation is that we can make tough 
decisions and come together and decide, yes, if it is heavy lifting, it 
requires all of us to do it together. I am tired of ``let's pretend.'' 
That is what is happening all too often both at the White House and 
also here in the Congress. Let's pretend on nuclear arms policy. Let's 
pretend on fiscal policy and trade policy. That, in my judgment, is a 
foolish approach. We need to do better.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Nevada is recognized.
  Mr. REID. It is my understanding that morning business is going to 
end in a couple minutes; is that right?
  The PRESIDING OFFICER. In about 2 minutes.
  Mr. REID. Mr. President, I direct a question to my friend from 
Virginia. The Senator from Virginia is here and wishes to speak; is 
that right?
  Mr. ALLEN. Yes, on the issue of Miguel Estrada.

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