[Congressional Record (Bound Edition), Volume 150 (2004), Part 17]
[Senate]
[Pages 23316-23321]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          UNEMPLOYMENT FIGURES

  Mr. SARBANES. Madam President, on Friday the Bureau of Labor 
Statistics came out with the latest unemployment figures. I commend the 
Bureau of Labor Statistics. They are professionals. They bring us the 
figures. They do not try to put a spin on them. They just lay out the 
facts. That is a kind of unusual thing in our public discourse 
nowadays, I have to say. We do not seem to pay much attention to the 
facts anymore. It is all spin--spin, spin, spin, spin, deception, 
misstatement, so forth and so on. But there are still professionals in 
various parts of our Government, and I simply at the outset commend 
them for sticking to the facts. Members of the Joint Economic Committee 
tried to draw the Commissioner and her associates into the spin 
efforts, and she resisted, as she should.
  I wish to talk this afternoon briefly about some of the figures and 
the facts, and I will try to lay them out as best I can.
  We produced last month 96,000 jobs--I say a mere 96,000 jobs because 
we need to produce about 140,000 jobs per month simply to stay abreast 
of the growth in population. So if we are producing fewer jobs than 
that, we are obviously slipping backward.
  This performance of this administration should be a matter of very 
deep concern for people in the country. Back at the beginning of the 
year, the administration did have a couple of months of good, solid 
production, and I want to put that right up front because, as I said, I 
want to stay with the facts. But what has happened is over the course 
of the year, their job production has fallen very sharply, as this 
chart shows. We are now down to just below 100,000 jobs produced in the 
last month of this Bush administration.
  The cumulative record of this administration over the course of the 
time it has been here has been a loss of 1.6 million private sector 
jobs. Private sector jobs are down 1.6 million. In total jobs, because 
we have had some uptick in Government jobs, the administration is down 
825,000 jobs over the course of its tenure. It is down 825,000 total 
jobs, 1.6 million private sector jobs, and 2.7 million jobs lost in 
manufacturing employment. Manufacturing employment is down 2,700,000 
jobs.
  This job performance--or more accurately put, lack of performance--is 
the worst in 75 years. We have to go all the way back to the 
administration of President Hoover to find another administration which 
lost jobs in the course of its tenure; in other words, failed to 
produce a net gain of jobs. Some administrations in the interim have 
done very well, others fairly well, others not so well. All have had a 
net gain in jobs except for this administration.
  The unemployment rate which was reported on Friday as 5.4 percent 
does not tell the full story of the depth and breadth of unemployment 
which exists in the country. If we count in amongst the unemployed--and 
the Bureau of Labor Statistics keeps this index--if you count in people 
who have dropped out of looking for a job because they are so 
discouraged by how poor the labor market is and a very substantial 
number of people who are working part time for economic reasons--in 
other words, they want to work full time, but they cannot find a full-
time job, so obviously in order to try to support their family, they 
take a part-time job, but they are seeking a full-time job--if you 
factor in that underemployment, and if you factor in the people who 
dropped out of the workforce in terms of seeking employment, we end up 
with an unemployment rate of 9.4 percent--9.4 percent. That is what we 
are confronting. And that rate, of course, is a consequence of failing 
to have a net gain in jobs over the course of this administration.
  I was fascinated to watch the spin artists go out and try to spin 
this 96,000 figure into some big success. Quite to the contrary. It 
shows a serious shortfall in economic performance. And the thing that 
makes it an even deeper concern is the fact that the administration's 
performance over the course of this year in producing jobs has 
seriously weakened. In other words, if we go back to the beginning of 
this year, job creation has dropped markedly.
  Some of the spin is to sort of say 9/11 did it all. They attribute it 
all to 9/11, but obviously this chart indicates to the contrary because 
we had some fair job production here, and then it has fallen. The 
cumulative impact of having that happen is, in fact, now to have an 
administration which does not have a positive job creation performance 
over the course of its tenure.
  Now, we all know that everyone gets up on the Senate floor and they 
make

[[Page 23317]]

long speeches about the best social program is a job. I agree with 
that. I doubt that there is anyone in this body who would disagree that 
the best social program is a job, but the jobs are not being produced.
  As I said, we can go back through our history to every previous 
administration, Democratic and Republican alike, until we get back to 
Herbert Hoover, who had a net positive creation of jobs in the course 
of his tenure. This administration has failed to do that.
  There are now 825,000 jobs less than when this administration came 
into office. There are 1.6 million jobs less in the private sector. 
There are 2.7 million jobs less in manufacturing, which, of course, has 
been the hardest hit of all, and which I think this administration has 
badly neglected in terms of a whole range of policies. But 2.7 million 
jobs less in manufacturing, 1.6 million jobs less in the private 
sector, 825,000 jobs less total, because there has been some increase 
in jobs in the public sector.
  This is the performance of this administration. As I said, if one 
factors in all of the components of unemployment, including those that 
have part-time work but want full-time work, those who dropped out of 
the labor force because they are so discouraged by the job market, we 
have an unemployment rate of 9.4 percent.
  There is one other point I want to make, which I think is highly 
relevant, and it also, of course, affects efforts in this Congress to 
deal with the unemployment insurance benefits question. We define long-
term unemployed as people out of work for more than 26 weeks--in other 
words, more than 6 months. The unemployment insurance benefit program 
is geared to pay 26 weeks of benefits. The assumption is to help people 
through a difficult period to support their families.
  I hasten to point out that one cannot draw unemployment benefits 
unless they have a work record. In other words, one must have worked 
and had a work record in order to qualify to draw these benefits.
  In previous recessions, when the economy has not strengthened and 
jobs have not picked up, we have extended the period of time to pay 
unemployment benefits because how can someone be told, after 6 months, 
well, they should have found a job and gone back to work, when the job 
market has not picked up and there is no job to be found and they find 
themselves in the difficult situation, how are they going to provide 
for their family if the benefits are cut off and the benefits, of 
course, pay only a fraction of what they earn, and there is no job to 
be found?
  So now, we have extended the benefits as a consequence. We have done 
that in this recession, but much less than previously. The 
administration has not been supportive of further extension, even 
though the number of long-term unemployed, amongst all the unemployed--
in other words, people out of work for more than 6 months, has almost 
tripled. It has gone from 680,000 long-term unemployed when George Bush 
took office as President in January of 2001--in other words, we have 
really brought that figure way down because of the high job production 
that had occurred in the Clinton administration. It is now up to 
1,750,000 long-term unemployed.
  As a consequence, the percentage of the unemployed who are long-term 
employed, in other words, a consequence of this incredible growth in 
the long-term unemployed from 680,000 to 1,750,000, is almost triple. 
The percentage of workers unemployed who are long-term unemployed has 
jumped from about 10 percent to over 20 percent. It is now almost at 22 
percent.
  In this period, these high figures above 20 percent of the long-term 
unemployed, this percentage of unemployed workers, this rapid runup and 
then this continuing high figure, is a record. It has been above 20 
percent for 24 continuous months, which is dramatic evidence of the 
failure of the economic policies of this administration.
  These figures reflect real human hurt. These are men and women who 
had jobs, who worked, who lost their jobs, and cannot find another job. 
As a consequence, when their benefits run out and the administration 
and the Congress fail to extend their benefits, they find themselves in 
an incredibly difficult situation. How are they then to support their 
family?
  We have made repeated efforts on the floor to extend the unemployment 
insurance. They have been blocked by the other side. The administration 
has not been supportive of this effort. So we have one and three-
quarter million people long-term unemployed no longer eligible for 
benefits, not able to find work in a job market last month, where they 
produced 96,000 jobs. That is not even close to keeping abreast of the 
growth in population, let alone putting people back to work. In my 
judgment, there is no way that these economic figures can be spun to 
represent some economic success which is, of course, what the President 
has gone across the country to try to do.
  In fact, he keeps going into States and saying we have turned the 
corner. I think when one looks around the corner that we have 
supposedly turned, one finds we are moving in the wrong direction. This 
is not the right direction to be moving with respect to the long-term 
unemployed. Who would want to turn a corner and find that the long-term 
unemployed is rising from about 10 percent of those unemployed to over 
20 percent of those unemployed? This steady diet of over 20 percent for 
24 months is unparalleled. Who would want to turn the corner and find 
that the monthly job creation was on this downward trajectory?
  The President says we have turned the corner, and I say to myself, 
well, let us look at what we see when we turn the corner. What we see 
when we turn the corner is this decline in job creation.
  We see, when we take a look in context--in other words, when we look 
over the period--that this administration has not created a net gain in 
jobs. It is no wonder that working people all across America are 
concerned and anxious, not only those who have lost their jobs, but 
those who fear they are going to lose their jobs, or those who maybe 
found another job but found themselves in this situation, that the jobs 
gained on average pay $20,000 less than the jobs lost. In other words, 
you have long-term unemployed who cannot find a job, you have people 
very apprehensive about their job situation because the number of jobs 
produced month by month is on a declining line, and then you have those 
who manage to find a job only to find it is at pay levels far less than 
they were previously receiving. The consequence of this is to put an 
enormous squeezing pressure on working and middle-income people in this 
country.
  The costs of everything are up, wages are almost level, and all 
across the country working families are sitting down at their kitchen 
tables, trying to figure out how they are going to pay their bills.
  I said earlier, when we were having this discussion, that in this 
economic cycle a far greater percentage of the benefits are going to 
corporate profits than are going to wages. When you look at the 
figures, it is absolutely startling the contrast with what we 
experienced at this point in previous economic cycles. So there is a 
tremendous skewing of whatever benefits there are from growth to 
profits and away from working people. This, I submit, ought to be a 
matter of deep concern all across the country.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Texas.


                          The American Economy

  Mr. CORNYN. Mr. President, I have sat here for the last 2 hours 15 
minutes and listened to a number of speeches by my colleagues on the 
other side of the aisle. I can only conclude that they are invoking the 
memory of Mark Twain, who said: ``I am not one of those who when 
expressing opinions confines myself to the facts.''
  What I mean is I find it curious that speaker after speaker has 
criticized the Bush administration, and indeed, the majority in this 
Congress, for our progrowth economic policies when, in fact, the 
results of those policies

[[Page 23318]]

worked to the betterment of the American people and create hope and 
opportunity and not despair and hand wringing. The only thing I believe 
contributes to despair and hand wringing and increased anxiety among 
the American people, and indeed the voters who are going to vote on 
November 2, are speeches made by supporters of the Democratic nominee 
on this floor and elsewhere, talking gloom and doom and despair as if 
America was no longer the last best hope on the planet.
  First, I wish to talk about the bill that was passed a couple of 
hours ago, the FSC/ETI bill, more appropriately named the JOBS bill. I 
was proud to be 1 of the 69 Senators who voted in support of that bill, 
for a number of reasons. First, we were able to eliminate a 12-percent 
penalty against exported goods made by American companies exported to 
the European Union. That is something that was long overdue. We really 
would not have had to wait this long to do that but for some 
obstruction on the other side of the aisle.
  The second reason I am proud to have voted for this bill is because 
it ends the discrimination against those States such as mine, Texas, 
which have no income tax. In Texas, we tend to adhere to the idea that 
government should not be a burden any bigger than absolutely necessary 
upon the people who earn the money, so they can save it, they can 
invest it, and small businesses can create jobs. So we do not have an 
income tax. We have a sales tax.
  But for many years now, Federal laws discriminated against States 
such as Texas and I believe Washington--I see the Senator from 
Washington on the floor. I believe her State was also affected by this 
change. Now taxpayers in Texas can deduct the sales tax they pay from 
their Federal income tax. I am very pleased that 69 Members of the 
Senate today saw fit to end that unjustified discrimination.
  The reduction in the corporate tax rate for manufacturers that was 
accomplished by the passage of this bill earlier today has effectively 
reduced the corporate tax rate for these manufacturers by 3 percent. In 
other words, the corporate tax rate in the United States, which is 35 
percent across the board, has now been reduced 3 percent for this class 
of taxpayers--manufacturers. This will, no doubt, provide an 
opportunity for manufacturing concerns to increase their 
competitiveness in a global economy where they have to compete with 
much lower wage-paying countries, such as China and elsewhere.
  It is curious, though, to me, that America still has one of the 
highest corporate tax rates in the world. Indeed, the University of 
Michigan, in a study from the Office of Tax Policy Research, says that 
in 2002, the last year for which figures were ready available, the 
average corporate tax rate for countries all across the world was 29 
percent across the board--29 percent. America's is 35 percent, except 
for now when this bill becomes law, it will be reduced for a certain 
class of taxpayers in the manufacturing business.
  This chart shows that, for example, the Slovak Republic has a 25-
percent corporate tax rate. Indeed, this past year I was privileged to 
travel from Bratislava, with other Members of the Senate, to represent 
the United States at a meeting of the Presidents of the new members of 
NATO, including the Slovak Republic. We learned from the Ambassador 
that, indeed because of the low corporate tax rates, that small country 
had been able to attract three major car manufacturers to the country, 
creating thousands of jobs, primarily because of the low corporate tax 
rate and because of the population that is eager and willing to work.
  The fact is, our policies do impact our competitiveness in the global 
economy, and have a direct impact on the quality of life and the 
prosperity of the American people, something I am afraid is too often 
ignored.
  I am so glad to see some of my colleagues from the other side of the 
aisle who rail against reduction in taxes for individual taxpayers 
agreed--all of us combined--by a vote of 69 to 17 that lower taxes 
promote economic growth and promote greater job creation. That is 
exactly why I believe we were wise to pass this bill in the Senate 
today. Unfortunately, what we hear too often when talking about issues 
such as economics and job creation is a lot of cynicism. I heard 
someone on the floor today talking about elite corporate interests will 
benefit when tax rates are lowered, or I think there was a reference 
made by the Democratic nominee for President about Benedict Arnold 
corporations are traitors, in effect, of America by taking jobs out of 
America into other countries. I want to talk about that more in a 
minute. But what these amount to is a philosophy of claim to love the 
worker but hate the employer. In other words, speaker after speaker 
today claimed that the policies of this administration were hurtful to 
the worker at the same time they claimed that the only ones who 
benefitted were the big corporations.
  The fact is you cannot claim to love the worker and hate the employer 
who provides the worker their job. That is why I believe we need more 
progrowth policies. I think we need to look at our tax policies across 
the board.
  We need to look at our civil justice system which imposes a tort tax 
on every consumer in this country and which stymies innovation and 
business growth and thus job growth.
  We need to look at our regulatory policies which make it difficult 
for America to compete. And, yes, we need to look at policies which 
will provide greater opportunities for innovation not by the Federal 
Government but by the men and women, the risk takers, the investors and 
people who create jobs all across this great land--indeed, all across 
the world.
  What I have heard earlier today with regard to condemnation of elite 
corporate interests and the like also reminds me of some of the debate 
we heard earlier about outsourcing. It is my view that a lot of the 
debate on outsourcing is largely based on the same sort of 
fearmongering and anxiety and hammering we have heard generally today 
in attacks against this administration and its economic policies, not 
on the facts. The facts are that markets are rational.
  In other words, if a company can open a business here in the United 
States or increase the size of its business, but because of a higher 
tax burden and more litigation risk environment, more regulation and 
the like, they are going to take a look at places such as India, China, 
and Mexico, and other places that do not have a lot of those same 
regulatory and legal burdens and tax burdens.
  One reason why America continues to prosper is because, of course, we 
have what many places in the world do not have; that is, stability in 
the rule of law that promotes security of investment. So we can 
continue to attract foreign dollars in this country.
  For example, the Congressional Research Service has produced a 
document entitled ``Outsourcing and Insourcing Jobs in the United 
States Economy, An Overview of Evidence Based on Foreign Investment 
Data.''
  This research document reveals that by 2003 U.S. firms accumulated 
$1.5 trillion worth of direct investment abroad compared to the $1.4 
trillion foreign investors spent to require or establish businesses in 
the United States. For 2003 alone, foreign direct investment in the 
United States was about $82 billion, whereas U.S. direct investment 
abroad rose to about $155 billion in 2003.
  As I said, markets tend to be rational. People, unlike the Federal 
Government, have to look at the bottom line and make sure that they 
don't operate in the red and thus go bankrupt and risk going out of 
existence. They have to be rational. They cannot make the kinds of 
emotional decisions that are made too often in the political realm.
  But it is no wonder because of the regulatory environment, the tax, 
the high taxes in this country, because of the legal system which 
unfortunately rewards a few at the expense of the many, that we are 
finding more jobs going overseas. And there is something we can do 
about it. The fact is we in this Congress are well situated to enact 
progrowth policies which will decrease the likelihood that companies 
will go overseas or outsource jobs to other countries and other 
locations around

[[Page 23319]]

the globe. But we are not doing the things we need to do to promote 
growth right here at home and ensure greater employment opportunities 
for the American people.
  For example, we know that one of the biggest drags on the economy and 
on job creation is expensive oil imports. We know a barrel of oil is 
currently selling on the spot market in excess of $50 a barrel. We had 
an opportunity--and unfortunately we didn't avail ourselves of that 
opportunity--to pass an energy bill which I think would have created 
more domestic production here in America, and we would have had a 
greater supply, and thus bring the price down. But we didn't do it.
  We have high natural gas costs because we simply have put too much of 
the domestic supply out of our reach by moratoria and other policies 
which said we may have the gas but we are simply not going to explore 
and drill for it. It should be no surprise that the cost of natural gas 
is at historic highs.
  It is no surprise that gasoline is so expensive when regulations have 
resulted in no new refineries being created in the United States since 
about the early 1970s. The fact is most of the refiners are operating 
at maximum capacity.
  One reason for oil and gas being expensive is because emerging 
economies such as China and India and others are consuming more and 
more energy and thus driving up the price.
  We had a chance to do something about that by passing an energy bill 
this year, and we simply have been unable to do that because of 
objections on the other side of the aisle.
  We also know one reason companies don't come to America or don't 
expand jobs here in America relative to other countries is because of 
our legal system. Unfortunately, we have a mentality in this country 
that says frivolous lawsuits are simply the order of the day. We know 
that the costs of those lawsuits are passed on ultimately to the 
consumers who pay in effect a tort tax. We also know that it affects 
access to health care which is another cost that businesses incur when 
they do business in the United States as opposed to other countries.
  We had a chance to pass medical liability reform to improve access to 
OB-GYN doctors, emergency room doctors, and the like. We had a chance 
to reduce the paperwork that adds about a quarter of the cost to the 
health care expenses incurred by Americans and by American businesses 
when they provide health care coverage to their employees. 
Unfortunately, these policies resulted in a large number of people 
simply going without health insurance because of the cost.
  If no one believes what I have said to this point about low taxes 
being progrowth and being in the best interests of the American people, 
and people who want to work, I think all we would have to do is look at 
what happened after we passed the historic tax relief and growth 
package in 2003. We know in June 2003 unemployment rates in this 
country were at 6.3 percent. Today, they are 5.4 percent, a .9-
percentage point difference lower.
  We remember hearing day after day discussions about the jobless 
recovery. The fact is, since August 2003, as a direct result of the 
progrowth economic policies of this administration and the leadership 
of this Congress, according to the payroll survey, 1.9 million new jobs 
have been created in the United States.
  I heard one of the distinguished Senators refer earlier to ``we'' 
produced new jobs. I am sure they did not mean to suggest that the 
Federal Government produced the jobs because we know the Federal 
Government does not produce jobs. More often than not, it is the 
burdens imposed by the Government on employers that kill new jobs. The 
fact is, if you look at the household survey--of course, we will get 
into the difference between the payroll survey and the household 
survey--more and more Americans are no longer working in a traditional 
employer-employee relationship. Indeed, they are pursuing their own 
dream by starting their own business. According to the household 
survey, 2.2 million new jobs have been produced since August of 2003.
  We are seeing a restructuring of the economy not only in the United 
States but globally. Obviously, we know there is going to be some human 
pain associated with that. None of us likes, regardless of whether we 
are Republicans or Democrats or Independent, when anyone wants to work 
and they cannot find a job. Our goal should be to keep our eye on 
opportunities for everyone to live up to their potential, to get a job, 
to provide for their family.
  Unfortunately, the antigrowth policies pursued by many of our friends 
on the other side of the aisle in terms of bigger government, greater 
taxation, more regulation, runaway litigation, have exactly the 
opposite effect. They limit opportunity; they limit jobs; they limit 
investment.
  I have heard the President criticized time and time again today and 
elsewhere for his economic policies. But I remind my colleagues when 
this President came into office, we were in a recession. Not only that, 
a short time after he came into office, we had the terrible events of 
September 11. Osama bin Laden himself said his goal was to establish 
about $1 trillion of cost to the American economy. Indeed, we know that 
much of the economy suffered a body blow as a result of that tragedy 
over and above the human loss of life that we suffered on that terrible 
day.
  Then we also know that the birds came home to roost, so to speak, on 
corporate scandals, some of which are still being prosecuted, that 
caused a tremendous loss of public confidence in our markets and in 
businesses, resulting again in further economic distress.
  The truth is, during this administration the American economy and the 
American people have had many challenges. One of those challenges has 
been the attacks not only on us as human beings but on our economy and 
on the economy's ability to generate new jobs.
  Despite all the hand wringing, despite the naysaying, despite those 
who would claim there is no hope unless we get a new President on 
November 2, the fact is there is tremendous reason for hope and, 
indeed, tremendous reason to believe that it is the policies of this 
administration and the leadership in this body as well as the House of 
Representatives that have caused, have created the conditions whereby 
the risk takers, the investors, those who create jobs, do so, and they 
have done so at remarkable levels.
  I used to be very skeptical of the speeches I have heard of the 
Senator from North Carolina, the Democratic Party's nominee for Vice 
President, who talks about two Americas. Indeed, sometimes in listening 
to the debate in the Senate today and elsewhere, maybe he is right--but 
not quite in the way he says. There is one America that is hopeful, 
that seeks opportunity and believes that everyone, no matter who they 
are, where they come from, or how they pronounce their last name, is 
entitled to pursue their dream, the American dream. On the other side, 
there must be another point of view, another America, so to speak, for 
those who believe they should pursue their political objectives by 
fearmongering, by hand wringing, and increasing the anxiety of the 
American people when it comes to their job security by making 
fallacious claims about how good the economy really is and the policies 
that have produced tremendous growth in the economy and tremendous 
opportunity for people who have previously been out of work.
  Ultimately, we have to do two things: Continue to do what we have 
done with regard to people who are out of work and provide temporary 
benefits until they can get back on their feet and get back in the 
workforce--not a permanent subsidy for not working but provide help for 
those who are truly looking for work, and then we need to continue to 
provide educational opportunity to every American.
  We need to change our frame of mine when we think about education. 
When I was growing up, I somehow got this idea that I would go to 
school and graduate from high school and then I would go to college and 
I would ``finish'' my education. The truth is, that is not what 
happened. The truth is, it cannot happen in today's economy and

[[Page 23320]]

in today's competitive work environment. The truth is, we need to 
change our frame of mind and commit ourselves to life-long learning. 
That is one reason I appreciate the President's emphasis on community 
colleges, which in many areas of the country are working in conjunction 
with the private sector to learn what sort of skills need to be taught 
to a workforce in order to get the good high-paying jobs that exist. 
Indeed, community colleges are working closely with the private sector 
to do just that in places such as the State of Texas and elsewhere.
  We need to recommit ourselves to education because the one area that 
America has always surpassed its competition anywhere in the world has 
been in the area of innovation. It is our brain power, our spirit, our 
freedom and opportunity that have made us the envy of the rest of the 
world.
  I cringe when I hear my colleagues on the other side of the aisle, or 
when I hear on the political stump about hope being lost, about those 
people not having opportunities anymore, about the American dream 
leading to a nightmare, because the facts, No. 1, contradict that; and, 
No. 2, the only way that America can be defeated in a global 
competition is if we defeat ourselves and give up.
  It was Professor Harold Laswell who called politics a fight over who 
gets what, when, and how. If all we are going to talk about in the 
Senate and in Washington, DC, it is about who gets what, when, and how, 
we will be defeating ourselves. Indeed, we need to continue to enact 
progrowth policies that will provide opportunity for everyone in this 
country. If we ever lose sight of our vision as America being the last 
best hope of freedom-loving people around the world, we will have hurt 
ourselves and hurt the American people at the same time.
  Finally, those in this Senate who complain so mightily about lower 
taxes for individual taxpayers and use class warfare to talk about the 
rich not paying their fair share, these are the same people in many 
instances who voted for this tax cut for corporations that manufacture 
goods.
  I think their vote today was right. I think their rhetoric, when they 
talk about the President's policies and tax relief being wrong, is 
wrong, because it is higher taxes, more regulation, out-of-control 
litigation, and a burdensome regulatory environment that are hurting 
America's ability to compete in the global economy and are hurting the 
opportunity for American employers, including small businesses, to 
create those new jobs.
  Indeed, I think any fair observer would conclude that it is the 
policies of this administration and this Congress that have created 
greater opportunity. I do not believe we should give in to the hand 
wringing, to the anxiety-provoking rhetoric, or, indeed, the 
fearmongering that happens way too often in our political discourse 
because the facts point to the fact America is still and--as long as we 
retain our commitment to progrowth policies--will continue to be the 
last best hope of the world.
  Madam President, I yield the floor.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Washington has 8 minutes.
  Ms. CANTWELL. Madam President, I rise today to address the 
legislation we passed earlier, but I say to the Senator from Texas, it 
has been a pleasure working with him and the senior Senator from Texas 
on issues that we are going to talk about, the sales tax deduction for 
individual States.
  But I also say that I know this side of the aisle very much believes 
in pro job-creation activities. As somebody who has been in the private 
sector and seen the job creation that can happen in the private sector, 
no, I do not believe Government creates jobs, but I do believe 
Government has an investment strategy, that we are a partner with the 
private sector; and a good investment strategy then allows for capital 
to flow to people who need it most.
  I guess I would say that this bill is not the perfect solution, and 
not what 51 Members on this side of the aisle would have drafted, as 
there are certainly things that have been overlooked. I think we have 
heard about them, including Senator Landrieu's language about a $15,000 
tax credit to employers that would help them maintain their employees 
who have been called up by the National Guard and Reserve on their 
payrolls.
  As the Senator from Maryland has articulated, another item is the 
unemployment benefits that would have worked to benefit many Americans 
while they can't find jobs, because jobs the job growth we have been 
promised has not happened. Unemployment benefits are, therefore, 
something to help keep economic stimulus in our communities.
  Another is the fact that when we talk about community colleges and 
job creation, we really are not keeping pace with the training and 
retraining dollars from the previous years' budgets to actually help 
make this transition.
  I would just point out that while we are having this discussion today 
about where we go further with the policy, it is a fact that this side 
of the aisle definitely believes in investing in the human 
infrastructure, not just in the corporate side of the equation but in 
individuals, for unemployment, for job training, for our National 
Guard, for people who need the help and support to continue to do their 
jobs.
  But let me address, if I may, the key issue I wanted to talk about; 
which is, the issue of tax fairness. It is ironic. My colleague talked 
about this side of the aisle and tax fairness, the two issues about 
which I am going to talk.
  The first one was actually implemented under a Republican 
administration and a Republican Senate. That was in 1986, not allowing 
the State of Washington and six other States in the Union to be able to 
deduct their state and local sales taxes in lieu of state and local 
income taxes from their Federal income tax.
  Now, since I have been in the Senate, since 2001, I have worked to 
make the deduction of state and local sales taxes from their federal 
tax liability permanent for my constituents. When I entered the Senate, 
I first worked with the Senator from Tennessee, Mr. Thompson, who had 
introduced legislation, and then later with Senator Kay Bailey 
Hutchison from Texas with whom together we have introduced legislation 
in the 108th Congress to reinstitute the state sales tax deduction. 
Washington and Texas have known a long time that we needed to restore 
tax fairness to the people of these States. And while we have passed, 
this afternoon, legislation that restores that fairness temporarily for 
the next 2 years, we need to continue to work to make it a permanent 
resolution for people in those States.
  Restoring that sales tax deduction will help strengthen our economy. 
What people do not realize is that when the 16th amendment to our U.S. 
Constitution was ratified, in 1913, it said you could make the way for 
a Federal income tax, and Congress allowed taxpayers to deduct State 
and local taxes so that income would not be taxed twice. That was what 
the exemption was about.
  So why, in 1986, after 74 years of a precedent, was this tax equity 
abruptly ended? As I said, I am just pointing out to my colleague, it 
was actually done by a Republican Senate, a Republican administration. 
I am saying that only because we need to move forward in correcting 
these policies, as the previous speaker said, and work together on 
commonality.
  The taxpayers from the States that were given this raw deal--I 
believe because it was a budgetary squeeze, not based on, I think, 
really valid principles--it was a great impact to States such as mine, 
which has just over 60 percent of our State revenue coming from sales 
tax--about 61-point-three percent. So for us, that is a huge impact. 
When you are asking constituents not to be taxed twice by what they 
paid to the State and what they pay to the Federal Government, not 
being able to deduct that was an inequity in our tax laws. We know that 
for Washington State this could mean as much as $421 million that would 
be saved by taxpayers. I am sure the number is higher in many other 
States around the country.

[[Page 23321]]

  But it also means job creation. The Economic and Revenue Forecast 
Council in our State says that it would create as much as 2,000 to 
3,000 jobs, and it would be about a 50-cent stimulus for every $1 spent 
in Washington State. So for an economy that has been hard hit by this 
recession and continues to have one of the highest unemployment rates 
in the nation, this is the kind of tax policy we think helps us grow 
our economy and create jobs.
  But the bottom line is that after this period of time, after 18 
years, Washington State is finally--instead of getting a raw deal--
going to get a fair deal, in the fact that residents are going to be 
able to deduct their sales tax from their Federal income tax 
obligation. So I think that is the kind of job-creation stimulus and 
fairness we need to be focusing on as we look at these tough choices.
  Another issue that is bringing tax fairness to our State and to many 
other rural parts of our country is an issue that Senator Craig Thomas 
and I worked on, the National Health Service Corps Loan Repayment 
Program. That also was passed this afternoon as part of this 
legislation.
  What this bill did was to focus on the fact we are trying to get and 
continue to push rural health care needs.
  We have a deficit in some parts of our country in getting doctors 
into rural communities. We have had a great program on the books for a 
number of years. I am proud that a previous Senator from our State, 
Warren Magnuson, actually created the National Health Service Corps 
Program. What it did was, it said to physicians, if you will go 
practice in rural communities, we will either give you a scholarship 
for doing that or we will give you loan repayment assistance.
  Well, I can tell you, in talking to physicians throughout my State, 
the cost of repaying those loans can start off a career in hundreds of 
thousands of dollars of debt. Somewhere along the process we ended up 
taxing the National Health Service Corps scholarship and loan money to 
these physicians, as the IRS saw the payments as taxable income. In 
fact, later Congress realized: Well, that was not such a great idea of 
taxing, so we will give more money to the National Health Service Corps 
to pay for those taxes and then tax that money on top of it. We ended 
up paying 40 percent of the program in taxes instead of creating the 
opportunity for those physicians. So this program will help get about 
67 percent more physicians into rural health care in America.
  The last thing I would like to say is that as we continue to move 
through the rest of how we finish up this year, we want to continue to 
give an opportunity to make sure the National Guard and Reserve men and 
women in our country are well taken care of. I am proud the Senate 
passed back to the House a bill that also included Senator Landrieu's 
language about helping the National Guard.
  Washington State is a State that is greatly impacted, and we 
certainly need to help and support taking care of our National Guard.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Alabama.

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