[Congressional Record (Bound Edition), Volume 150 (2004), Part 11]
[House]
[Pages 14211-14218]
[From the U.S. Government Publishing Office, www.gpo.gov]




                 THE U.S. ECONOMY AND OUR WAR ON TERROR

  The SPEAKER pro tempore (Mr. Gingrey). Under the Speaker's announced 
policy of January 7, 2003, the gentleman from California (Mr. Dreier) 
is recognized for 60 minutes as the designee of the majority leader.
  Mr. DREIER. Mr. Speaker, several of my colleagues over the last few 
minutes have talked about the fact that we are about to mark 
Independence Day, and virtually all of our colleagues have left the 
Chamber and are en route to their homes, to their districts, for this 
work period.
  But I think that it is very important for us to take a few minutes to 
talk about what is on the horizon. Of course, Independence Day will be 
a week from this coming Sunday, July 4. But there is a very important 
date that we will be marking next Wednesday, and that, of course, is 
the turnover in Iraq from the Coalition Provisional Authority, the CPA, 
to the IIG, the Iraqi Interim Government, and the leadership of the new 
president, Ghazi al-Yawar, and the prime minister, who has been facing 
recently threats on his life, but has stood up courageously talking 
about the importance of the role that the United States of America and 
the coalition forces have played in bringing this about. So Iyad 
Allawi, the new prime minister, is an individual who suffered 
tremendously, faced nearly the loss of his life at the hands of Saddam 
Hussein's forces when he was in London, and he has now emerged as one 
who will be in charge of leading the government there.
  This clearly is an historic effort which is designed to bring about 
peace and stability to what is obviously a very troubled region. And we 
know, Mr. Speaker, that this is going to yield tremendous dividends to 
not only the region, but to the entire world and the security around 
the world and right here at home as well.
  What I would like to do during my period of time here this afternoon, 
Mr. Speaker, is to talk about our economy, but I want to start talking 
about it as it relates to this global war on terrorism and, again, the 
handover that we are going to be facing next Wednesday, on June 30.

[[Page 14212]]

  Clearly, the terrorists attacked us on September 11. When they did 
that, they went after the three very important pillars of America's 
success. What is it that they went after, Mr. Speaker? They went after 
our national defense capability when they launched the attack and flew 
the plane into the Pentagon. We know that they were headed towards the 
government. The report of the 9-11 Commission clearly shows that the 
plane that was courageously taken into the ground by those passengers 
in Pennsylvania were headed right towards this building, the great 
symbol of freedom, the dome that is above us right here, Mr. Speaker, 
the U.S. Capitol. And we know that the first two targets were the 
center of the global economy, the World Trade Center Towers.
  The months following September 11 were obviously very difficult for 
us because in attacking the World Trade Center Towers, what was it they 
were trying to do? They were trying to attack and undermine the 
strength and vibrance of the U.S. economy.
  We all know that our Nation's economy was already in a downturn 
before September 11. In fact, it was the last two quarters of the year 
2000 that we saw the economy begin to slow. And then in early 2001, 
just after President Bush took the oath of office, we saw two quarters 
of negative economic growth, which basically means we were in economic 
recession.
  Thankfully, during that period of time, we had passed tax relief just 
before September 11, and the goal of the tax relief that we provided at 
that point, Mr. Speaker, was to get our economy going again. And The 
Washington Post actually, as they looked at what happened on September 
11, described the tax relief as ``fortuitously well timed,'' is the 
term that the Washington Post used to actually describe the timing of 
the tax relief that we put into place back in 2001.
  Why, one would ask, do we believe that tax relief is important? And 
the fact is that we find that the federal tax coffers do not suffer 
when we bring about tax cuts. They suffer when our economy is not 
growing and revenues are not being created. I know that that is 
counterintuitive, that one believes that somehow if we bring about 
taxes that we lose revenue coming into the Federal Treasury when, in 
fact, the opposite is the case. We know that the combined tax relief of 
the 2001 and 2003 tax package, the two tax packages, had the desired 
effect of growing the economy and generating more revenue for our 
Federal Treasury. In fact, the Treasury Department data that we had 
proves that. Through May of this year, Mr. Speaker, federal tax 
receipts for this fiscal year are running 2.3 percent higher than for 
the same period in 2003.
  Think about that for a minute. We cut taxes last year for millions of 
American workers and businesses, the job creators, and what is it? We 
have been actually getting more money to the Federal Treasury that had 
been anticipated.
  In March of this year, the Congressional Budget Office projected that 
receipts would be up $35 billion this year over the same period of time 
last year. Even further, the Congressional Budget Office noted in a 
recent report: ``Recent trends suggest that the deficit in 2004 will be 
less than what the CBO had projected in March.'' Outlays to date are 
consistent with CBO's expectations, but revenues are running $30 
billion to $40 billion higher than anticipated, meaning that as we move 
towards our goal of getting back to a balanced budget, having dealt 
with the economic recession of 2001, the September 11 attacks on our 
national security, on our government, and on our economy, as well as 
tragically killing thousands of Americans and others, and then the war 
in Iraq, our tax cuts have generated an unanticipated $30 billion to 
$40 billion in revenues to the Federal Treasury.
  Right now our men and women in uniform are overseas fighting to 
protect us, our homeland, from another attack like the one that we saw 
on September 11, 2001. The good news, Mr. Speaker, is that our economy 
right here is working for them, our men and women in uniform, too. 
These increased revenues are what will be used to supply them with 
everything they need to complete their mission just as quickly and as 
safely as possible.
  We need the funds to provide everything from ammunition to Humvees 
and, of course, food and water for our troops.
  Our national security benefits from a strong, dynamic, growing 
economy right here in the United States and, of course, a strong, 
dynamic, growing economy here in the United States ensures to the 
benefit of other economies throughout the world, and that helps us. Tax 
relief creates a strong economy.
  So let us take a more detailed look at exactly how our economy is 
doing.

                              {time}  1615

  I have been talking an awful lot in the recent months about the 
strength of our economy. One way of illustrating the nature of our 21st 
century economy is to look at it in the context of the past 20 years.
  Certainly a great deal of change has taken place over the past 20 
years, since 1984. The past two decades have transformed not just the 
business world, but our daily lives as well. But while the changes over 
the past 2 decades are striking, the parallels between 1984, the things 
that were said in 1984, and 2004, are perhaps even more remarkable, and 
they are not getting an awful lot of attention; and that is one of the 
reasons that I and my very distinguished colleagues, the gentlemen from 
both Indiana and New Mexico, are joining me here this afternoon.
  Looking at 20 years of change, it becomes clear that the more things 
change, the more they stay the same.
  What I would like to do is I would like at this moment to yield to my 
friend from New Mexico, who has just been sharing with me the fact that 
we have been, as we have looked at these tax cuts that have taken place 
in 2001 and 2003. We have begun to see very, very positive benefits to 
our economy, and he has been sharing with me anecdotal evidence in New 
Mexico of benefits we have seen.
  I would like at this point to yield to my friend from New Mexico.
  Mr. PEARCE. Mr. Speaker, I thank the gentleman for yielding, and I 
would recognize that the Governor of New Mexico really put it in 
perspective before the 2003 session. He declared that tax cuts create 
jobs, and the Democrats need to get over that and pass the tax cuts. 
That was the tax cut in New Mexico passed in 2003.
  Mr. DREIER. If I can reclaim my time just to remind my colleagues, 
the Governor of New Mexico formerly served in this House. He was 
elected to this House one term after I was elected here. It is Bill 
Richardson, who served with great distinction as the Ambassador to the 
United Nations and the Secretary of Energy, and I worked very closely 
with him on global trade issues. He is now the Governor of New Mexico 
and has talked about and put into place important tax cuts to stimulate 
growth in your economy.
  Mr. PEARCE. And he did stimulate growth in the economy. At one point, 
July of last year, New Mexico was number two in job growth. Keep in 
mind, they were like 43rd or 44th in per capita income. So job growth 
that high is tremendous.
  The next thing that I would observe is that since I graduated from 
college, tax freedom day, that is the day which we all work until to 
pay the taxes, tax freedom day has always been in late May, early June. 
And now, because of the tax cuts we have given, tax freedom day this 
year occurred on April 11, and I hear people telling me thank you.
  A gentleman in Ruidoso, New Mexico, grabbed me the last time I was 
there, shook my hand and said, ``I have six kids,'' and he said, ``I 
will tell you that I saw the tax breaks in my paycheck.''
  Watson Trucking Supply in Hobbs, New Mexico, are goods friends of 
mine; I have known them throughout my career there in Hobbs. They were 
set to lay off people before our tax cuts. They had run completely out 
of manufacturing back orders, no new business; they were set to lay 
off. The day that we passed the tax and jobs bill here in Congress, he 
got more back orders than

[[Page 14213]]

he had ever had, he had 2 years' worth of work laid out in front of 
them; and instead of laying off people, they began to hire people.
  The potash mines in New Mexico have begun to hire because now the 
potash market is lifting with the overall market.
  The copper mines in western New Mexico, Phelps Dodge has put miners 
back to work there mining copper. They have told me in my office that 
if they had regulatory certainty, that is not to roll back regulations, 
but the certainty that they would be able to get the rules that are in 
place and keep the rules that are in place, that they would open a 
smelter and hire 600 people for very good, high-paying jobs in an area 
that has just been decimated.
  We have an MPC plant going into New Mexico, only the second MPC plant 
in the world; and that is going into New Mexico. There are going to be 
about 200 jobs there, all good, high-paying jobs.
  I have seen in New Mexico the fact that these tax cuts have really 
created job opportunities, the job growth in New Mexico continues to 
today, and I appreciate the gentleman yielding time to talk about these 
exact examples.
  Mr. DREIER. Reclaiming my time, I thank my friend for pointing to the 
tremendous benefits that these reductions in the tax burden have had on 
the economy of New Mexico; and, frankly, they could take place in the 
economy of Mexico, too, if we could encourage that, and that is one of 
the other things. Global trade is a very important part of this 
component.
  I thought before yielding to my friend from Indiana that I would take 
a moment to juxtapose, as I was saying earlier, the things that are 
being said and the proposals that were offered back in 1984, to what 
has taken place in 2004.
  As we all know, 1984, like 2004, was a Presidential year. The 
incumbent President, Ronald Reagan, had inherited a very troubled 
economy 4 years earlier. We all spent a great deal of time talking 
about that just a couple of weeks ago as we were memorializing Ronald 
Reagan. You remember the terms that were used, the fact that President 
Carter had referred to our Nation as being in a state of malaise. We 
saw a tremendous, tremendous increase in the interest rates, we saw a 
very high rate of inflation; and we saw, frankly, a devastated economy 
that Ronald Reagan inherited.
  But clearly, and I am very proud, I was elected to the Congress the 
day Ronald Reagan was elected President, and I stood here in this well 
in May of 1981, before my colleagues were born, and at that time when I 
stood here in that well, we were able to cast the deciding vote with 
bipartisan support for, first what was known then as the Gramm-Latta 
budget package, which reduced by 17 percent the rate of growth of 
Federal spending. It did not cut back Federal spending as much as we 
all were trying to do, and we are still working on that effort, but it 
did reduce the rate of growth. Then 3 months later, in August of 1981, 
we passed what was known as the Economic Recovery Tax Act of 1981.
  As we put those very, very important job-creating economic-growth-
stimulating packages into place, we saw by 1984 that the economy had 
been turned around through cutting taxes and by empowering companies to 
become more competitive, and tearing down the barriers, as I mentioned 
when I accidentally said Mexico as opposed to New Mexico, tearing down 
the barriers to the free flow of goods and services and capital.
  Yet inexplicably, the candidate ran a campaign in 1984 of economic 
isolationism. He ran a campaign based on pessimism about the present 
and the future, and he called for America to retreat into its borders 
and restrict the freedom of individuals to engage in the global 
marketplace. We all know that candidate was our former colleague, the 
former Vice President of the United States, Walter Mondale.
  In that 1984 campaign, he said when the American economy leads, the 
jobs are here. The prosperity is here for our children. But that is not 
what is happening today.
  Again, this is Walter Mondale speaking in 1984. He said, ``This is 
the worse trade year in American history. Three million of our jobs 
have gone overseas.'' That is what he said in 1984.
  Speaking of the American companies that were global leaders in fields 
from manufacturing, to finance, to the burgeoning high-tech industry, 
which was in its infancy in the 1980s, Walter Mondale said, ``To big 
companies that send our jobs overseas, my message is, we need these 
jobs here at home, and our country won't help your business unless your 
business helps our country.''
  That is what Walter Mondale said as a candidate challenging Ronald 
Reagan back in 1984.
  2004, Mr. Speaker, is a Presidential election year. We have an 
incumbent President who inherited an economy that was heading for 
recession, shedding jobs and reeling from a stock market whose bubble 
had burst. These circumstances were then compounded by the worst 
terrorist attack in American history, as I was saying, several high-
profile corporate scandals, and the uncertainty and anxiety of the 
ongoing war on terror, including our challenge in Iraq.
  Again, President Bush, like Ronald Reagan in the early 1980s, was 
able to turn the economy around with an agenda of cutting taxes, 
improving the regulatory environment for U.S. businesses, and knocking 
down barriers to trade, both here and abroad.
  Again, despite the tremendous success that these policies have met, 
the challenging candidate, our colleague, Senator Kerry, is running a 
campaign based on raising taxes and reversing our trade liberalization 
agenda. The Mondale quotes that I just shared with our colleagues, Mr. 
Speaker, could easily be slipped into a John Kerry campaign speech, and 
they would be right at home in the midst of that speech.
  In fact, we know that Kerry's whole platform could well be called the 
Mondale legacy campaign. John Kerry's term for the heads of U.S. 
companies that are global leaders, creating jobs, investing in growing 
overseas markets, is, as we all know, Benedict Arnold CEOs. Now he is 
trying to step away from that after having used it in 25 speeches, but 
clearly he described those job creators as Benedict Arnold CEOs.
  Mr. Speaker, these are companies that are America's greatest 
innovators, job creators and growth stimulators, and Kerry has proposed 
raising their taxes as punishment for their leadership. Senator Kerry 
is apparently oblivious to our 5 percent, four-quarter GDP growth; the 
record 69 percent homeownership, we just saw it surge in a report we 
got the day before yesterday; the 4.5 percent productivity growth, 
which is the fastest in four decades; and, of course, what we are 
enjoying is low inflation and low interest rates.
  These economic gains, Mr. Speaker, have resulted in hundreds of 
thousands of jobs being created every month, bringing us an 
unemployment rate which we all know is lower than the average during 
the seventies, eighties or nineties; 1.4 million new jobs created over 
the past 7 months alone, since August of last year. And yet John Kerry 
has said, ``The economy in this country is in the worst shape it has 
been in many, many years. It is the worst jobs record since Herbert 
Hoover was President. It is the worst growth record since World War II. 
And the Bush administration policy is dead wrong.''
  That is what John Kerry has said about the surging, bold, dynamic 
economic growth that Americans are creating because of policies that 
George Bush and this Congress have put into place to create that.
  Now, that makes for very compelling rhetoric; but actually, Mr. 
Speaker, I am more interested in the facts, and I believe the American 
people are as well.
  So let us take a look at some economic numbers from the 2004 economy. 
In keeping with our 20-year theme, I am going to compare them to 1984 
numbers. 1984 was a year that witnessed some of the most dramatic 
economic gains in our country's history. By comparing the 2004 data 
with the 1984 data, we can put our current economic situation into 
context and better understand what the numbers mean.

[[Page 14214]]

  1984: Real GDP growth was at a rate of 7.2 percent in that year, the 
fastest annual growth rate in 30 years. 2004: real GDP growth has been 
at 5 percent during the last four quarters, the fastest growth rate in 
20 years.
  Back in 1984, productivity grew at a 4.5 percent rate, the fastest 
annual rate on record at that time. Today, 2004, productivity has grown 
at a 4.5 percent annual rate, which has taken place over the past 3 
years, which is the fastest productivity growth rate in 4 decades.
  Business investment surged 18 percent in 1984, the highest annual 
percentage on record; and this year, business investment surged 12.5 
percent in the last four quarters alone.
  Back in 1984, CEO confidence in the U.S. economy reached an all-time 
high in the second quarter of 1983, according to the Conference Board's 
CEO Confidence Index, which covers more than 100 CEOs in a wide range 
of industries across the country. This year, 2004, CEO confidence in 
the U.S. economy is at the highest level in the past 20 years, 
according to the Conference Board's CEO Confidence Index.
  Back in 1984, capacity utilization, which is the Federal Reserve's 
monthly estimate of the percentage of factory capacity that is being 
used, increased 8 percent in the 12 months ending in February of 1984, 
which was the largest 12 month jump on record. In 2004, capacity 
utilization is at its highest level since July of 2001, and it has 
increased 2.9 percent since June of 2003, so just about a year ago 
right now.
  Back in 1984, Mr. Speaker, shipments of manufactured durable goods 
increased 14 percent in 1984 as a whole, one of the largest yearly 
increases on record. December 1983 saw one of the highest readings in 
the history of the ISM manufacturing index at 69.9 index points.
  This year, 2004, industrial production saw its largest quarterly 
increase in nearly 4 years, 6.2 percent at an annual rate during the 
first quarter of 2004, and it increased further in April. The ISM 
manufacturing employment index increased to its highest level since 
April of 1973.
  Back in 1994, non-farm payroll employment in the first 5 months of 
1984 increased by 1.9 million, Mr. Speaker. Now, 2004, the first 5 
months of this year, non-farm payroll employment has increased by 1.2 
million, on pace for nearly 3 million new jobs to be created in 2004, 
which is the highest since 1999.

                              {time}  1630

  Back in 1984, the unemployment rate fell 3.5 percentage points from 
10.8 percent. Remember that: 10.8 percent in the early 1980s was our 
unemployment rate, December of 1982; and it dropped 3.5 down to 7.3 
percent in June of 1983. That is an unemployment rate, Mr. Speaker, 
from 10.8 percent in December of 1982 down to 7.3 percent in June of 
1983.
  What is it today in 2004? The unemployment rate is 5.6 percent, not 
an acceptable level by any means; but it is down from the peak that we 
saw of 6.3 percent. And as I have said, it is lower than the average 
unemployment rate during the 1970s, 1980s, and the 1990s.
  Mr. Speaker, back in 1994, housing starts surged to 1.8 million, the 
highest level in 11 years. 2004, housing starts remained near record 
levels, new-home sales surged by 15 percent last month, and are up over 
25 percent from just a year ago. Despite a recent uptick in interest 
rates, mortgage rates remain near historic lows, making home buying 
continually easier.
  Back in 1984, real disposable personal income increased 7.6 percent 
in 1983 as a whole, the fastest yearly growth on record. This year, 
2004, two decades later, real disposable income increased at a 4.9 
percent annual rate in the first quarter of 2004, faster than its 
annual pace in 1999 through 2003.
  Now, Mr. Speaker, clearly our 2004 economy is strong on all counts, 
from GDP growth, to job creation, to personal income, to homeownership, 
right down the line. In fact, our economy is so strong, that even 
Senator Kerry is having a hard time insisting that we are facing tough 
economic times.
  Now, I suspect that we will continue to hear references, and we 
actually heard it here on the floor of the House earlier today, to the 
worst economic record since Herbert Hoover; but that tune is changing 
just a little. Instead of trying to claim that no jobs are being 
created, what we are hearing from Senator Kerry is that only bad jobs 
are being created.
  The hamburger-flipping jobs, remember that back to the 1980s, Mr. 
Speaker? The term ``hamburger-flipping jobs'' was first coined by a New 
York Times piece in, surprise, surprise, what year? 1984. And has been 
resurrected time and time again by people like Ross Perot, Pat 
Buchanan, John Sweeney, Lou Dobbs; and now John Kerry is trying to 
breathe new life into the rhetoric of the past by telling Americans 
that the only jobs being created are those in the local fast-food 
joint.
  John Kerry sent out a press release just last week stating, ``The 
economy has failed to create the new jobs that Bush said his stimulus 
package would create, and the jobs that have come back pay lower 
wages.''
  Now, Mr. Speaker, the fact is real incomes and real purchasing power 
have been steadily rising for months. Average after-tax income is up 
nearly $2,000 since the start of the Bush administration.
  Real disposable incomes are growing at an annual 5 percent rate. Job 
creation in 2004 has been strong in every single occupation category 
except government work; and it has been particularly strong in high-
wage sectors, like professional and business services.
  In fact, two-thirds, Mr. Speaker, of all job creation in 2004 has 
been in industries that pay above the average wage. Americans are 
finding jobs in amazing fields that years ago did not even exist; but 
they are very important fields, fields like health care, biotechnology 
and pharmaceuticals, education, movies, entertainment and digital 
gaming, recreation, telecommunications, cable, satellite, TV and radio, 
phones, cellular phones and wireless networks, fashion, insurance, real 
estate, autos, maintenance and repair, mass transit, investments, 
whether you call it in the stock market, in pensions or securities and 
other areas, leisure, hospitality and tourism. Then there are the 
businesses that service other businesses, like engineering, 
environmental protection services and technologies, risk management, 
export and import financing, express delivery.
  Now, there are jobs that are directly related to the increasingly 
global forces and the focus of the U.S. economy, like this entirely new 
field, this entirely new field of logistics specialists. As supply and 
production lines become more and more complicated and diverse, 
businesses are relying on the expertise of this entire new field of 
logistics experts to coordinate and manage these complex systems.
  In fact, the Massachusetts Institute of Technology, MIT, has 
established this new, entirely new department of logistics studies 
because of the movement of all these goods. More and more Americans, 
Mr. Speaker, are also following their entrepreneurial spirit by 
starting their own businesses and working as independent contractors.
  In the example that I pointed to time and time again, and I was 
thinking of when a moment ago I mentioned the fact that some of those 
businesses did not even exist, certainly in the 1980s or even a decade 
ago. There are 430,000 Americans who make their full-time strong 
living, good income living doing what? Selling full-time on eBay.
  Now, again, a decade ago no one would have even contemplated this. 
The 21st-century economy is affording more and more people the freedom 
and flexibility to work independently, far from becoming a Nation of 
hamburger flippers, which was said back in that New York Times article 
and then through the Presidential campaigns of 1984 and then Michael 
Dukakis. In 1988, I remember he used the line ``McJobs'' to describe 
the jobs that were being created, and now we are hearing that exact 
same argument coming at us again from John Kerry.
  So Americans are actually instead putting innovation and creativity 
to work making a living in these cutting-edge fields and dramatically 
improving their quality of life.

[[Page 14215]]

  And John Kerry keeps reaching for something, anything that he can 
possibly use to convince the American people that our economy is in the 
doldrums and that our lives are getting worse and worse.
  One of his most recent gimmicks, of course, has been this misery 
index, which I know my colleague from Indiana has seen, that was put 
forward back in the 1970s when our economy was in real trouble. Jimmy 
Carter came up with the misery index, the sum of the national 
unemployment and inflation rates. It has been used ever since to 
unofficially gauge the Nation's economic health, that combination of 
unemployment and inflation. In fact, during the 1996 Presidential 
campaign, Democrats touted the low misery index as a reason to reelect 
Bill Clinton, and even many of our colleagues here in the Congress used 
that.
  John Kerry, running for the Senate that year, that year when he was 
running, he proudly proclaimed that he was proud to run in a year when 
the misery index was at its lowest level that it had been in 27 years.
  Mr. Speaker, it is 2004. The misery index is not very high, because 
inflation is low and the unemployment rate is low and getting lower, in 
decline. So what is it that John Kerry has done? He makes up a new 
misery index because, obviously, the misery index that he was proud to 
run on, the best in 27 years when he was running in 1996, is a misery 
index that is even better today than it was when he was so proud. So he 
has come up with a new idea, and he is trying to tell Americans how 
miserable they are.
  Kerry's new index is, of course, much more complicated than that old 
favorite which was simply the combination of inflation and 
unemployment. It is based on seven factors rather than the two that I 
mentioned: median family income, college tuition, health care costs, 
gasoline prices, bankruptcies, the homeownership rate, and private 
sector job growth.
  But, Mr. Speaker, the facts just do not wash. According to Senator 
Kerry's new misery index, President Carter received a higher rating 
than President Reagan on the misery index, and I would venture to guess 
that most Americans who lived through the Carter and Reagan years would 
certainly say that they were better off during Ronald Reagan's term 
than they were during the Carter Presidency, which plagued them with 
over 10 percent unemployment rate, as I said, 10.8 percent; and 
remember, because we know gasoline prices are very high; we do not have 
the kinds of lines that we had back then in the 1970s when Jimmy Carter 
was President.
  Lower taxes and expanded trade opportunities are the policies that 
Ronald Reagan vigorously pursued, and they were the exact same policies 
again that George W. Bush has pursued and that have led to the latest 
increases that we have seen in job creation. Senator Kerry would do 
just the opposite of those policies that have continued to create 
historic, dynamic, bold, job-creating, economic growth.
  The policies of Kerry's proposals are to raise taxes, to discourage 
open trade. He said of the North American Free Trade Agreement that he 
voted for it back then; but if he had to do it over again, he would 
vote against it. As I said in my exchange earlier with the gentleman 
from Ohio (Mr. Brown), we now enjoy a quarter of a trillion dollars of 
two-way trade between Mexico and the United States. It needs to get 
better. We still have very serious problems. But this notion of trying 
to blame the notion of free trade and John Kerry calling for a 
renegotiation is really pandering to the lowest common denominator. 
And, of course, that kind of talk does play a role in creating a degree 
of misery.
  This made-up misery index of Senator Kerry's actually ignores some 
key facts about our growing economy. After-tax incomes are up by 11 
percent since December of 2000, just before President Bush took office, 
substantially higher than following the last recession; and household 
wealth is near an all-time high. Inflation is low, as we discussed, and 
interest rates and mortgage rates are near historic lows. Homeownership 
rates, as I have mentioned, are near record highs, with minority 
homeownership at its highest rate ever.
  I underscore that again for our colleagues on both sides of the aisle 
who regularly try to create this very, very divisive view. Minority 
homeownership today, Mr. Speaker, is at its highest level in our 
Nation's history. Homeownership rates, as I have discussed, continue, 
continue to grow all the way across the board. The Dow Jones Industrial 
Average rose by 25 percent in 2003, and the NASDAQ rose by 50 percent. 
Consumer confidence is on the rise again, according to an ABC News 
Money Magazine Consumer Comfort Index.
  In case you are wondering what the old misery tells us about the 
economy today and the economies of the past, here are the numbers. And 
remember, the higher it is, the more miserable we are supposed to be. 
In 1976, it was 13.5 percent; in 1996 it was 8.4 percent; and today, 
the misery index is 7.7 percent. Sounds like Mr. Kerry is the only one 
who is actually miserable these days.
  Another gimmick that has been used by Senator Kerry that he likes to 
talk about are the ``glory days'' of 1996 when Bill Clinton was running 
for reelection. He likes to talk about what a strong, vibrant economy 
we had back then, and he likes to claim that today, we are far worse 
off than we were then. We have already taken a detailed look at the 
parallels between 1984, 2 decades ago, when Walter Mondale was the 
candidate for President of the United States for the Democrats, and 
2004; but since John Kerry is so fond of reminiscing about 1996, I 
would like to, in just a moment, after I yield to my colleagues, talk 
about a juxtaposition between what Senator Kerry and Senator Kennedy of 
course would describe as the glory days of 1996, and compare those to 
what we are witnessing today.
  So I would be happy to yield to either of my colleagues, the 
gentleman from Indiana or the gentleman from New Mexico, if they would 
like to actually enlighten our colleagues on these issues. So since he 
is on his feet, I am happy to yield to my friend, the gentleman from 
New Mexico (Mr. Pearce).
  Mr. PEARCE. Mr. Speaker, I have just a couple of comments. As the 
gentleman is talking about the actual economy and the country right 
now, what I have found is that the continued harping from the other 
side here in this body has caused the Nation to be a little suspicious 
that maybe their success is the only success. I have found in my 
district that people come up and say, you know, I know they are not 
having too good results in the rest of the country, but I am having my 
best year ever. A window manufacturer in my district told me that exact 
thing, that they have had their best year ever and they have been in 
business for several years.
  We have another business in Berlin that is beginning to export very 
high-quality welding across the world; and again, they are saying, we 
are having a tremendous year.
  One of the things that I would like to point out is that during the 
committee hearings yesterday on the soda ash industry, we found that 
back about 3 years ago, arbitrarily, the government raised taxes from 4 
percent to 6 percent on soda ash.

                              {time}  1645

  Now, that soda ash industry made $700 million in revenue last year, 
they made no profit but they paid $100 million in taxes. We are losing 
business to China because China, in the same number of $700 million in 
revenue, actually in the soda ash industry, paid no taxes. And so our 
companies make no profit and yet they pay $100 million in taxes.
  I will augment what the gentleman said about free trade, that free 
trade is beginning to point out the deficiencies of our tax systems 
here that we do actually have a repressive tax system that is costing 
us jobs in the soda ash industry, in the potash industry, in every 
manufacturing industry that there is.
  And I think that it is time for us to begin to try to help American 
manufacturers, American miners, and American oil companies rather than 
hurt them.
  Mr. DREIER. Mr. Speaker, I thank my friend for that very helpful 
contribution, again underscoring the fact

[[Page 14216]]

that many of our colleagues have a tendency to point the finger outward 
and blame everyone else as to why we have economic challenges here at 
home.
  It is one of the reasons that we dealt with last week the American 
Jobs Creation Act, a very important piece of legislation designed to 
decrease the tax that we have and, later, the regulatory burden, 
continuing on that road towards creating more and more incentive right 
here at home, opportunity for job creators to be able to succeed and 
compete globally. We need to shape the global economy. I regularly 
argue that if we do not shape the global economy, we will be shaped by 
it. And that is very important for us.
  Now, another very, very hard working and thoughtful new Member of 
Congress who is now a veteran having served almost 2 years ago, the 
gentleman from Indiana (Mr. Pence), I am happy to recognize him.
  Mr. PENCE. Mr. Speaker, I thank the chairman for yielding. It is an 
honor to be able to join the most energetic voice for growth and 
prosperity in America in this Congress today. I commend the chairman 
for his leadership and his passion, so evident to anyone looking in 
today.
  But it is not really about the passion or eloquence that people have 
been exposed to today, Mr. Speaker, it is just simply about the facts 
and has been stated and quoted on this floor. Facts are stubborn 
things. And the reality is that because of the leadership of George W. 
Bush and because of this Congress's willingness in the wake of both 
recession that took hold in the waning days of the Clinton 
administration, and a horrific national tragedy that took place on a 
day that I was in this building in September of 2001, this President, 
nevertheless, has led this Nation on the world stage to a place where 
we will celebrate, as the chairman said moments ago, an Independence 
Day for a free and democratic Iraq this week, just a few days before we 
celebrate the 228th anniversary of our own Independence Day.
  And because of the leadership of that very same president, George W. 
Bush, we are, despite the best efforts of the likely democratic 
nominee, Senator John Kerry and many in his party on this floor who 
would wish it away or talk it away, we are in the midst of an 
extraordinary recovery that is as my colleague just suggested, being 
experienced by Americans in real ways in New Mexico, in the State of 
Indiana, in the State of California where the chairman serves, and all 
across this Nation.
  But I was very intrigued by the comments of the gentleman from New 
Mexico that he is hearing from citizens that he serves that they are 
sorry that things are not better elsewhere, but they are really good 
here. Because I am going home to my heartland district in eastern 
Indiana hearing much the same thing.
  It is as though, when the statistics that the gentleman from 
California (Chairman Dreier) just went over, Mr. Speaker, 1.5 million 
new jobs since August, 257,000 new jobs per month, I pulled the Indiana 
statistics in preparation for this, Indiana, where manufacturing is 
really right there with agriculture, Indiana is the second leading 
exporting State in the union. And manufacturing and exporting in our 
state, rather than the 11 percent of the national average, is 20 
percent of our State's economy.
  And in the State of Indiana in the last year alone, international 
exports from Indiana increased nearly 10 percent in 2003. And it is 
because of the President's lean-forward approach to tax relief, 
deregulation, and an issue that probably no one champions here more 
than the gentleman from California, Mr. Speaker, is this business of 
expanded international trade.
  Hoosiers know that trade means jobs. And it is contributing mightily 
to these undeniable statistics that the chairman has cited so 
eloquently and passionately today. America's standard of living is on 
the rise. Real after-tax income up 11 percent since December of 2000, 
consumer confidence at its highest level in the past 4 months alone, 
mortgage rates remain near historic lows, and yet it is as though many 
of our colleagues on the other side of the aisle and their democratic 
presidential candidate would say to us what Groucho Marx said famously 
in his career, ``Who are you going to believe, me or your own eyes?''
  And it seems to me all together fitting that as we approach this 
Independence Day recess, that the gentleman from California (Chairman 
Dreier) would pull this special order together as many of us are 
outbound back to our States, as I and my family are, to go to work and 
to enjoy picnics and have family times to say one last time before we 
go into this break what the reality is.
  The reality is that freedom is expanding at home and abroad, a free 
market economy is expanding because of the policies and practices of 
George W. Bush and a Republican majority in the House and in the Senate 
that have doggedly and determinedly pursued economic freedom at home 
and abroad.
  And for all those reasons, as the chairman said, I think very 
eloquently in his opening remarks, for all of those reasons, the United 
States of America is able to be the arsenal of democracy, is able to 
come along side the people of Iraq and even 30 years of despotism by a 
murderous, barbaric, dictator who literally claimed the lives, snuffed 
out the lives of over 1.2 million men and women, boys and girls over 
the last 30 years. 400,000 bodies have been found, 600,000, 700,000 
remain missing. These are the facts. Facts are stubborn things.
  But we are able, and the families of American servicemen and women 
are able, to project forward the interest of the advancement of liberty 
because we are prosperous at home.
  It seems to me, as I close and prepare to yield back my time, that 
freedom is contagious, economic freedom is contagious, political 
freedom is contagious, but it is only contagious when freedom at home 
is vibrant. What my colleague understands and what the gentleman from 
Illinois (Speaker Hastert) understands, and President George Bush 
understands, and I hope anyone looking in today understands, is that 
that Republican majority and this Republican President believe in 
freedom. They believe in a vibrant freedom at home and a contagious 
freedom across the world, economic and political, and are prepared to 
make the sacrifices and take the blows from the left to achieve that.
  So I thank the chairman for his dogged optimism and vision.
  Mr. DREIER. Mr. Speaker, let me express my appreciation to the very 
thoughtful and provocative remarks by my friend from Indiana. He put it 
extraordinarily well. The interdependence of economic and political 
freedom are so clear.
  And getting back to this notion that a strong, bold, dynamic vibrant 
U.S. economy is going to have a positive ripple effect, and it directly 
itself is going to help provide the revenues necessary for us to help 
in our continued quest to bring about political pluralism, self-
determination, the rule of law in Iraq, we know full well that it is 
going to be a continued painful time.
  We got the tragic news yesterday of the death of nearly 100 Iraqis. 
But that will lead us to strengthen our resolve. And, again, the 
important thing we need to do is underscore our commitment right here 
at home to keep this economy growing so that we can help others.
  Before I yielded to my friend from Indiana, I was talking about 
earlier the juxtaposition of 1984 and what was said by Walter Mondale 
at that time, who was running against Ronald Reagan, what is taking 
place today in the campaign between John Kerry and George W. Bush and 
the fact that John Kerry and many others referred to 1996 as the glory 
days.
  And we were talking about this misery index, the traditional one that 
has existed which is a combination of unemployment and inflation, and 
this new one which has five criteria that are included in the mix here.
  What I would like to do is to focus back on 1996 and compare that to 
2004. In 1996, Mr. Speaker, the average monthly payroll job creation 
was 233,000, as was just said by my colleague, the average monthly 
payroll

[[Page 14217]]

job creation has been in excess of 238,000. He referred to the 257,000 
number that we saw last month, but it has consistently been in excess, 
higher than it was back in those glory days of 1996.
  Back in 1996 the number of manufacturing jobs created was 15,000. In 
2004, so far, the number of manufacturing jobs, manufacturing jobs 
created has been 91,000. In fact, last month we saw the largest 
manufacturing job growth in 45 months. Again, that compares to the 
glory days of 1996 where we saw 15,000 created.
  Back in 1996, the percent of new jobs paying above the median wage 
was 60 percent. Actually in 2004 the number is exactly the same. The 
percent of new jobs paying above the median wage is 60 percent.
  In 1996, Mr. Speaker, the glory days of 1996, to which John Kerry 
refers, guess what the unemployment rate was? Mr. Speaker, it was 5.6 
percent. Those were the glory days. Today the unemployment rate is 5.6 
percent. Again, not an acceptable level at all. We want it to get 
better. But as people juxtapose 1996 and those glory days to the 
horrible miserable days of 2004, we need to recognize that those 
numbers are the exact same.
  Mr. Speaker, the unemployment rate back in 1996 for African Americans 
was 10.2 percent. Today, again, not an acceptable level, but a full 
percentage point lower, 9.2 percent. Back then the unemployment rate in 
the Latino community, much of which I am privileged to represent in 
southern California, was 9.6 percent back in the glory days of 1996. In 
the miserable time as described by Mr. Kerry of 2004, the unemployment 
rate for Latinos is 7 percent.
  Back in the glory days of 1996, as described by Mr. Kerry, the 
average GDP growth over the previous three quarters was 3.1 percent. 
This year, 2004, what is described again by Mr. Kerry as the miserable 
time, the average GDP growth rate over the previous three quarters has 
been 5.4 percent.
  Back in 1996, again, the glory days as described by Mr. Kerry, the 
inflation rate was 2.8 percent. Today, 2004, this miserable time, the 
inflation rate is only 2.2 percent.
  Now, John Kerry likes to talk about how strong the economy was during 
Bill Clinton's reelection campaign and this current economic situation. 
But a look at the actual facts reveals that despite a recession, a 
massive terrorist attack, corporate scandals, and this ongoing war on 
terror, our economy weathered these storms and came out even stronger 
than those so so-called booming days of 1996.
  Now, I have gone through, Mr. Speaker, along with my colleagues a lot 
of economic data to demonstrate the strength of our economy and the 
success of an economic agenda based on cutting taxes and tearing down 
barriers to the worldwide economy. But it is easy to get lost in these 
numbers and lose sight of what exactly all of this means.
  So I would like to talk about some real life examples as my colleague 
from New Mexico did, examples of how granting Americans greater 
economic freedom empowers them to prosper and create new opportunities. 
In March of this year, President Bush travelled to New Hampshire to 
meet with small business owners. One of the people he spoke with was a 
first generation American, George Kassas, a native of Lebanon. Mr. 
Kassas founded his own company, founded his own company back in 2001, 
shortly after President Bush took office. He was his own boss and the 
only employee.
  Today Mr. Kassas employs 100 people in Derry, New Hampshire. The 
company is called Cedar Point Communications. It produces voice-over IP 
switching technology which is used by broadband service providers like 
cable operators so that they can provide telephone service over cable 
wires.

                              {time}  1700

  Mr. Speaker, again, this is a new technology, something that 
consumers could not have even imagined two decades ago, but George 
Kassas came up with an idea and built a business out of it. His 
burgeoning company is flourishing, and it is an economic environment 
that is specifically geared towards expanding the economy and creating 
more jobs. Lower taxes and more investment opportunities like business 
expensing have made it possible.
  Mr. Kassas is hoping to start exporting his products this year and to 
continue to do so well into the future. Now, that means he needs and 
wants the opportunity to export his product so that his company can 
grow and grow and hire more people.
  It is a fact. Economic isolationism would prevent George Kassas from 
growing his company. We need to continue pursuing open trade policies 
through trade agreements that create exporting opportunities for small 
business owners like George Kassas.
  Another prime example of small business success in this economy is 
D.G. O'Brien, Incorporated, another high-tech company in New Hampshire. 
D.G., Incorporated, is an older company than Cedar Point, but it has 
thrived thanks to lower taxes and greater investment opportunities.
  D.G., Inc., employs 175 people. They produce electrical and optical 
interconnection systems for high pressure, highly corrosive, sub-sea 
and nuclear systems. D.G., Inc., is a medium-sized company that pays 
its taxes in the top 35 percent tax bracket.
  Thanks to the tax relief that we have passed in the last 3 years, 
D.G., Inc.'s, tax burden has lowered, and it was able to spend $400,000 
in capital equipment in 2003 and will be spending $500,000 in capital 
equipment this year. With that money they have bought everything from 
machine tools to computers, all of it helping improve their 
productivity and the health of their company.
  Under John Kerry's economic plan, companies like D.G., Inc., would 
see that tax relief totally erased. A higher tax burden would translate 
into fewer investment dollars and would otherwise enable this growing 
company to create new jobs.
  A higher tax burden would derail the strong growth that we have been 
witnessing for many months, powered by both small and large companies, 
as well as entrepreneurs who are out there creating opportunities for 
themselves.
  The Bureau of Labor Statistics Payroll Survey shows not only robust 
job creation of payroll jobs for the past several months, but these 
gains are widespread, spanning over all sectors and all parts of our 
country. Net job creation is up in 44 of the 50 States over the last 
year, and the unemployment rate is down in all regions and in 46 of the 
50 States.
  The most recent payroll jobs data show that for the month of May this 
widespread net job creation continues: 10,700 new jobs in Pennsylvania; 
8,300 new jobs in Michigan; 4,100 new jobs in Connecticut; 23,600 new 
jobs in my State of California; 13,400 new jobs in North Carolina; 
9,700 new jobs in Massachusetts; 8,400 new jobs in Arizona; 1,100 new 
jobs in Ohio; 25,400 new jobs created in New York; 12,900 new jobs 
created in Texas; 6,800 new jobs created in Florida; 12,100 new jobs 
created in Wisconsin; 9,500 new jobs created in New Jersey; 8,300 new 
jobs created in Virginia; 5,700 new jobs in Oklahoma; 8,100 new jobs 
created in Maryland; 4,100 new jobs in Kansas.
  The list goes on and on and on, Mr. Speaker. Furthermore, these jobs 
numbers encompass every single category of work except government 
employment. Every field, from manufacturing to construction to business 
services, witnessed the creation of thousands of new jobs.
  Again, these numbers that I share with my colleagues are just from 
last month alone, and these numbers do not even take into account the 
fastest growing sector of our labor force, self-employment and 
independent contracting. Those numbers were not even included in the 
figures that I gave my colleagues, which make up a third of all new job 
creation.
  There is simply no denying the fact that we have a strong, growing, 
bold, dynamic economy that is creating good jobs in every corner of our 
Nation. John Kerry wants to deny the facts. He wants Americans to 
believe that we are in a state of economic crisis. He wants us to 
believe that there are no

[[Page 14218]]

good job opportunities out there. He wants us to believe that our lives 
are getting worse.
  Of course, things can get better, but pessimism is not based in 
reality. It is not based on the strong growth, rapid job creation, 
thriving small businesses and climbing incomes that we are witnessing 
across this country.
  This pessimism, Mr. Speaker, is also dangerous. Our prosperity is 
helping us to wage a global war on terrorism.
  Next Wednesday marks this very important handover. We are going 
through difficult times, there is no doubt about it, but our economic 
strength right here at home is part of the foundation of our security 
as a Nation, and that clearly has a ripple effect across the world.
  The evidence shows of the inextricable tie between our growing 
economy and peace and stability and growing job-creating economies 
throughout the world. It is the right thing do.
  I appreciate the fact that my colleagues have participated in this. I 
appreciate the forbearance that the Speaker has shown, as well as those 
of the staff who have joined us here.

                          ____________________