[Congressional Record (Bound Edition), Volume 150 (2004), Part 9]
[Senate]
[Pages 11457-11459]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         ECONOMIC DISTRIBUTION

  Mr. CORZINE. Madam President, I thank my distinguished colleague from 
Nevada. I very much appreciate him pointing out one of the great flaws 
in the discussion I am hearing on the floor. It seems we only want to 
focus on a very short period of time and a very limited measurement or 
metric on how well the economy is doing.
  I have been on the floor over the last 6 or 8 weeks trying to address 
issues on the budget, taxes, and growth in our economy. I feel very 
strongly that we need to have this debate. I am glad it is happening 
because the American people, I think, actually understand what is 
happening in their pocketbook and their own sense of where we are in 
the economy. It is a lot different than this tsunami of good news that 
is being quoted and cited.
  People like to talk about statistics. We need to deal with what is 
actually going on in people's lives. That is why a whole series of us 
have come down and asked that question Ronald Reagan asked in the 1980 
Presidential campaign: Are you better off than you were 4 years ago?
  Remember, 4 years ago, we had come through a period of creating 22.5 
million jobs. This is an administration that has overseen the loss of 
1.8 million jobs. So we have had the loss of 1.8 million jobs, after 
creating 22.5 million jobs, when we saw real income growing every 
single year. Now we are asked to say: Wow, isn't it wonderful we have 
seen such a change in the last 2 or 3 or 4 months? And at what cost has 
that come?
  As the Senator from Nevada said, we have the largest deficits in the 
history of mankind. You can always spend yourself into economic growth. 
Maybe that is what we are doing, but it is coming at a huge cost to 
this generation and future generations.
  But that is not what I wanted to talk about today. I want to talk 
about who is better off than they were 4 years ago. There is a clear, 
commonsensical view among people, at least in the State of New Jersey, 
whom I live with every day, that things are not so well in their home, 
in their bank accounts, in their financial condition.
  I will go through some of the data. Are they better off? We have had 
flat wages for the last 3 and a half years. To be absolutely accurate, 
average weekly earnings have grown 1 percent over 4 years. College 
tuition costs, on the other hand, are up 28 percent at the same time; 
up 13 percent in New Jersey last year at State schools. Gas prices are 
over $2 a gallon, up 34 percent in a 4-year period. Family health care 
premiums are up 36 percent. These are expenses people have to pay every 
day out of their budgets.
  Some cite macrostatistics such as the GDP is growing. What is 
happening is, individual average weekly earnings are up 1 percent. 
Health care costs are up 36 percent. Gas prices are over $2 a gallon, 
and there has been a 28-percent increase in college tuition. It is off 
the charts.
  State and local taxes in almost every State in the country have gone 
up in the last 4 years. In New Jersey, the average property tax has 
gone up 7 percent each year because the Federal Government is not 
picking up its responsibilities, such as Leave No Child Behind, and 
with other mandates we have put on them for which we then don't provide 
the money. Now we are hearing we are going to be cutting back on some 
of that.
  There is a case for middle-class Americans to say things are not so 
great. Average weekly earnings are up 1 percent. We have everything 
else in our budget going off the charts.
  It is possible, though, when we look at this picture of middle-class 
America getting squeezed, that there are people who are actually doing 
well in this world. That is what I want to talk about because there are 
some people who are better off than they were 4 years ago. It comes 
from the concept that there is a ladder in America. People like to get 
on that ladder and climb up and have great opportunity. This is a 
country that has aspirations that are a part of people's lives.
  But we seemingly want to make sure the people at the top of the 
ladder are doing really well and we are squeezing the folks at the 
bottom. Average weekly earnings, as I said, had relatively flat growth. 
But HMO profits are up 50 percent. There is a correlation between that 
38-percent increase in family health premiums to HMO profits. I used to 
be a CEO so I can talk about this with some knowledge. Compensation for 
people who are leading corporations is up 61 percent during the same 
period--one percent or zero-percent average weekly earnings growth for 
middle-class Americans, while CEO compensation is up 61 percent.
  To give a little perspective, back in 1980 the average CEO made 31 
times the lowest average worker in a corporation. Today it is over 500 
times. It grew 61 percent last year. Somebody is better off, aren't 
they?
  It strikes me that the numbers are working. Somebody is getting it 
and somebody is not. As I said, it is most visible when you compare HMO 
profits versus what is going on with health care costs for average 
Americans. It is tough to argue that things are a lot better when we 
are seeing growth in HMO profits and growth in CEO compensation, and 
you wonder who is better off than they were 4 years ago.

[[Page 11458]]

  Another way to look at this is to focus on the oil companies. Are 
they better off or not? In New Jersey, we have the average cost of 
gasoline at $2.04 cents a gallon. We see over $40-a-barrel oil. We 
could think about supply and demand conditions and maybe tap into the 
Strategic Oil Reserve, but that is a story for another day.
  The fact is, middle-class Americans are paying the freight, $2.04 a 
gallon, and somebody is benefiting from that. Are the people paying the 
$2.04 better off or are the oil companies that have seen their profits 
soar as the price of a barrel of oil has gone up enormously right in 
front of our eyes? British Petroleum's earnings are up 165 percent, 
year over year; Chevron-Texaco, 294 percent; Conoco only got 44 
percent; and Exxon is up 125 percent.
  Thirty-four percent was the increase in the cost of gasoline for 
Americans. That is middle-class folks going in, pulling up to the gas 
pump, putting it in, paying for it. That is coming out of their pocket. 
Remember, those are the people who are getting a 1-percent increase in 
weekly earnings. And Chevron-Texaco has a 294-percent increase in 
profitability.
  I am not against profitability. We want people to be profitable. But 
there needs to be some balance in how the economic pie is actually 
working for folks in America. It is very troubling that some are huge 
winners and other people are getting the scraps, with a zero-percent to 
1-percent increase in real weekly earnings.
  There is another group besides HMOs and CEOs and oil companies. There 
is the issue of those who actually despoil our environment. It sort of 
goes at the oil company topic. Instead of debating how we are going to 
get the price of oil down, House Republicans are now insisting on 
giving oil companies immunity in cases where they have contaminated 
ground water with MTBE. In New Jersey, there is a serious problem 
because we have MTBE all over the State, and it is increasingly thought 
to cause all kinds of health problems. We are proposing to give a break 
to the oil companies--the ones making 294 percent higher profits this 
year than they did last year--a $29 billion break in damages in 43 
States around the country.
  Who is better off today than they were 4 years ago? Is it the oil 
companies or the people potentially exposed to MTBE? By the way, I 
could go on to ``polluter pays'' taxes; who is paying, who is not 
paying, for clean air. You could go through a whole series of 
environmental applications and ask, who is winning, who is losing.
  This is not about class warfare. This is about who is winning and who 
is losing: a 294-percent profit increase, or are we actually going to 
deal with MTBE? Are we going to have the resources to clean it up? Or 
are we going to take the $29 billion in damages and lay it on the 
shoulders of working Americans? Are we going to pass it along?
  Let me talk about another issue. This gets at some of the tax 
discussion I hear so much about as being so beneficial to everyone in 
the world. You could talk about where the tax breaks go. Those making 
$1 million or more are getting $123,000. Those in the top 1 percent are 
getting about a $34,000 tax break, almost $35,000. If you do the 
analysis, the middle 20 percent of Americans is getting about $647. 
That is the average.
  Anybody can talk about statistics. They can pick it out different 
ways. They can mush all this together. They can put the 7 footer with 
the 5'4'' person and come with an average height that sounds as if you 
are 6'2''. But the fact is, so much of the tax break is actually going 
to the people who make $1 million or more, the top 1 percent, and very 
little is going to middle-class Americans.
  But that fits. We are only getting a 1-percent increase in mean 
weekly earnings to the middle class. We are creating tax breaks that 
primarily go to those who are already doing well. Again, the aspiration 
of Americans to try to work their way up the ladder is perfectly 
acceptable. That is the American dream. I know a little bit about it 
because I know how it happened in my life. But when you get the ladder 
down and you put it up, why roll it down?
  That is what we are doing here. We are giving tax breaks to people 
who could always use them. Everybody could always use a tax break. But 
how are we going to fund Leave No Child Behind? How are we going to 
deal with making sure special education is properly funded? When are we 
going to get it that we need to make sure we share the benefits in this 
society? This makes almost no sense.
  It is not an issue of class warfare. It is how do we make sure every 
American has an opportunity to have access to the American dream.
  It is incredible to hear some of the discussions that go on. By the 
way, I want to take this one step further. One of the reasons this 
number is so high and this is so low is so much of that income comes in 
the form of capital--capital gains, dividends--and people with capital 
gains and dividends are paying 15 percent. But if you are working and 
you are up in the $40,000, $50,000, $60,000 area, you are paying 28 
percent; your marginal rate is significantly higher.
  We are charging more for working people's earnings than we are for 
capital. I don't think that is right. I don't think it is right that we 
turn around and allow situations where somebody pays a 15-percent 
marginal rate against some kind of income--i.e., capital income--and we 
charge much higher rates for the poor guy who has to go to work every 
day. Why are we advantaging capital over wages? It makes no sense and 
we end up with a distribution like this.
  Again, there is nothing wrong with getting good returns on capital or 
with people working their way up the ladder and being successful. But 
we have a lot of choices in this country, and we are making them so 
that these guys up here are ending up with most of the benefits--unless 
you are one of those oil companies that get an MTBE break and huge 
growth in profits. But the wages are not growing. The cost of living is 
going up, as is health care, college tuition, and State and local 
taxes, and there is so much need that I don't understand why we are 
turning around and skewing everything the way we have.
  That is why I think it is fair to ask who is better off in 2004 
versus 2000. Is it the people who were at the top of that chart, the 
top of the ladder or is it the people in the middle of the ladder, who 
are aspiring to get up the ladder? Who is benefiting from this $400 
billion or $450 billion budget deficit? I think it is a very hard case 
to make.
  As the chief economist from Merril Lynch said, ``We've had a 
redistribution of income [in this country] to the corporate sector.'' 
It is through this capital gains distribution of dividends and cutting 
of the marginal tax rates. It is very clear that somebody is winning, 
but somebody is getting a little less of that break. I think it is very 
hard to answer the question ``who is better off today'' without going 
back through those HMOs, CEOs, oil companies, and a lot of the folks 
who are gaining their income from capital as opposed to wages.
  I believe that is a tough way to argue to the American people that 
things are going really well in the economy. I think we have an answer 
to the question. We have seen someone do better, and it is those who 
have had that redistribution to them through the tax system. That is 
something we need to debate on the Senate floor, we need to debate it 
among the American people, and we need to come to a conclusion about 
who really deserves to have the fair benefits as we go forward.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Nevada is recognized.
  Mr. REID. Madam President, I direct a question to my friend from New 
Jersey. Would my friend agree that these huge deficits that are piling 
up at unprecedented rates are also, long term, very damaging to our 
economy?
  Mr. CORZINE. The Senator from Nevada asks a particularly appropriate 
question. Anytime the Federal Government is competing for money in the 
capital markets, instead of us having that money go into the private 
sector, instead of being invested in the kinds of growth you see in 
Nevada or what we

[[Page 11459]]

hope will happen in New Jersey, it undermines the economic health of 
the country, and we have fewer jobs, wages are less, and you get a 
negative cycle. It is absolutely dangerous to the longrun health of 
this country.
  Mr. REID. Would the Senator also agree that during the last 3 years 
of the Clinton administration, we were actually spending less money as 
a Federal Government than we were taking in--meaning we were paying 
down the debt? Was that not a good sign for the economy, to the rest of 
the world, and to our own taxpayers?
  Mr. CORZINE. The Senator from Nevada is leading the witness because 
at that point in time we were in the process of creating 22.5 million 
jobs over that 4 years--10 million in the last sector. People would 
earn money and spend money, and it would multiply through the economic 
system. We were creating wealth in the greatest single period of time, 
when the Federal Government was running from the pulling down of 
capital and stayed out of the capital markets and put money where it 
was most efficient.
  What we are doing right now is setting up a dynamic that will reverse 
that. We are going to see less investment over a period of time because 
the Federal Government has taken up all the dough and it is going to 
show lower growth in jobs, lower creation of wealth, and nobody will 
argue that the longrun deficits at the level we are running them now 
make any sense for this country. I don't think anybody would argue 
that--with the kinds of policies we have now, our taxes are about 15.5 
percent of GDP. They were about 18 percent when this administration 
came in. But we have grown spending under this administration and the 
Congress, led by the other side of the aisle, up to about 21 percent. 
President Clinton's administration cut that to about 18 percent--a 
little lower, because we were running surpluses. The track we are on is 
absolutely a potion for disaster.
  Mr. REID. Madam President, everybody within the sound of my voice 
should understand that the distinguished Senator from New Jersey is a 
person who understands the business world. Before coming to the Senate, 
he was one of the Nation's leading economic advisers, a person who had 
been so distinguished in the economic world that he was known all over 
the United States and in many parts of the world. When the Senator from 
New Jersey speaks about aspects of our economy, people should really 
listen.

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