[Congressional Record (Bound Edition), Volume 151 (2005), Part 18]
[House]
[Pages 24907-24909]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              {time}  1245
                THE FAVORABLE ECONOMIC GROWTH IN AMERICA

  The SPEAKER pro tempore (Mr. Dent). Under the Speaker's announced 
policy of January 4, 2005, the gentleman from California (Mr. Dreier) 
is recognized for 60 minutes as the designee of the majority leader.
  Mr. DREIER. Mr. Speaker, I have taken this Special Order out to talk 
about a number of very specific issues, and I would like to begin by 
referencing an article that I read earlier this week in Agence France, 
the publication, and that article had to do with the issue of 
outsourcing.
  Mr. Speaker, a year ago at this time we had people in the mainstream 
media, we had commentators all over the United States referring to the 
issue of outsourcing. There was a sense somehow that Americans were 
losing their jobs en mass. Why? Because their jobs were all going to 
Mexico, their jobs were all going to other countries in Latin America, 
their jobs were all going to China, their jobs were going to India, 
their jobs were going to Pakistan; and we have continued to hear time 
and time again that the issue of outsourcing is one which is wiping out 
and devastating the U.S. economy.
  Well, this article to which I have referred was reporting the fact 
that outsourcing, outsourcing, has actually created a net increase in 
jobs here in the United States. This report found that offshore 
outsourcing resulted in the creation of more than 419,000 jobs, 
compared to the 162,000 technology jobs that have been displaced from 
the United States. So when people look at the fact that, yes, some jobs 
have gone overseas, they forget to look at the fact that we have had a 
surge in job creation that is in fact a by-product of so-called 
outsourcing. The chief economist at Global Insight said no one is 
denying that there are job losses, but the net effect is that you 
create more jobs than you lose.
  So I think it is a very important point, Mr. Speaker. My friends who 
were just talking on the other side of the aisle are among those who 
cry the loudest when they refer to this issue of outsourcing. Again, we 
are not saying there has not been some displacement. Change is 
inevitable. But one of the arguments I like to make on this, Mr. 
Speaker, is that the United States of America is providing the global 
leadership that we need when it comes not only militarily and 
geopolitically, but economically; and if we do not shape that global 
economy, the United States of America will be shaped by it.
  So when we have hand-wringing over outsourcing, we, of course, are 
saddened that anyone would possibly see the shift of a job. But as the 
chief economist at Global Insight said, no one is denying that there 
are job losses, but the net effect is that you create more jobs. That 
report concluded that the net benefit to the U.S. gross domestic 
product from outsourcing and a stronger economy was over $68 billion in 
2005 alone, $68 billion. By 2010, this net effect will rise to over 
$147 billion.
  Now, I am pointing to this issue, Mr. Speaker, because of the fact 
that I have listened to these arguments that are being made by my 
friends on the other side of the aisle that the United States of 
America is going to hell in a handbasket, is basically what they are 
arguing, and that the United States economy is devastated, we are not 
competitive, we are not creating jobs.
  Mr. Speaker, I wonder what kind of world I am living in when elected 
representatives of the American people can come to that kind of 
conclusion. It is absolutely preposterous. It is outrageous that anyone 
could come to a conclusion like that.
  Why? A week ago today, Mr. Speaker, a week ago today we got the 
report that the U.S. economy in the last quarter grew at a rate of 3.8 
percent, 3.8 percent GDP growth. That is a very impressive figure, a 
very impressive figure by any standard. But it is an incredible figure 
when you look at what it was up against.
  One of the worst days in our Nation's history will have been just 2 
months ago when we saw what has been described as the worst natural 
disaster to ever hit the United States, that being, of course, 
Hurricane Katrina. Then we have seen Hurricane Rita and Hurricane 
Wilma. And what happened when these disasters hit, and our thoughts and 
prayers continues to be with all of those who were victimized by those 
horrible natural disasters, but when we heard the news and saw the 
pictures of this devastation, what was the sense that most people had? 
This is going to be a solid blow at the U.S. economy. It is going to 
really, really hurt the U.S. economy.
  The projections were that as soon as numbers began to come in on the 
issue of the impact of Hurricane Katrina, there would be a net job loss 
in the United States of 200,000, maybe even higher than that.
  Then we got the report from the payroll survey. Tragically, 35,000 
was the net job loss, according to the payroll survey. That is not 
great news. But when you look at the fact that we had just shouldered 
the worst natural disaster in our Nation's history, it was incredibly 
positive news.
  Then when you look at the household survey, which is a much better 
gauge, a much better gauge because it takes into account small 
businessmen and -women, those who are self-employed, a lot of people in 
especially the biotech industry who are not included in the traditional 
establishment payroll survey, the household survey found a great surge 
of about a quarter of a million net jobs gained during that period of 
time since Hurricane Katrina.
  So as I listen to my colleagues say that we are running the United 
States of America into the ground and that our country is in deep 
trouble, it is just a mischaracterization. I know we have challenges. I 
read the newspaper. I watch television. I experience going to 
California, listening and talking to people from all across this 
country, looking at our challenges internationally, looking at what is 
going on in Iraq, looking at the fact that we are daily fighting the 
global war on terror. I recognize that we have serious problems.
  But, Mr. Speaker, one of the most important things that we can do in 
dealing with every single one of those problems is make sure the U.S. 
economy continues to grow.
  The other day I shared an anecdote of an experience I had just a few 
weeks after Hurricane Katrina hit. I was visiting my family in my 
original hometown of Kansas City, Missouri, and was

[[Page 24908]]

out having lunch on a Sunday. I talked to one of the people working 
there, and I said, Well, how has business been? And this man said to 
me, I don't know. I have only worked here for a few days.
  I said, Oh, really? Okay.
  He said, I was the chef at Brennan's in New Orleans, and my entire 
family has been able to move here to Kansas City, Missouri. We are 
staying with other family members. We like it here. I have this job 
here now, and we are very grateful for that. The point being that the 
overall strength of the U.S. economy has been able to deal with the 
challenge of 1.2 million of our fellow Americans who were displaced and 
devastated by these natural disasters.
  So that is why I argue, Mr. Speaker, that as we look at how we deal 
with the aftermath of the hurricane, the single most important thing we 
can do for everyone involved is to ensure that we continue the growth 
of the U.S. economy.
  Now, thinking back to some of the arguments I heard just a few 
minutes ago from my colleagues on the other side of the aisle, they 
were talking about our deficit reduction bill we are going to be voting 
on here next week.
  Mr. Speaker, we are going to be voting on that measure. Why? Because 
we know very well that reforming government, doing everything that we 
can to reform our Nation's government, to ensure that those who are 
truly in need are able to receive the assistance necessary, but at the 
same time making sure that those who are not truly in need and those 
who do not qualify, those who abuse the system, areas where we see 
waste and fraud, that we tackle those.
  Mr. Speaker, we are poised with the deficit reduction bill that we 
are going to work on next week to do just that.
  I listened to my friend on the other side of the aisle talk about the 
fact that we are going to be throwing starving people out into the 
streets, preventing people from getting educations and doing all of 
these things. Once again, nothing could be further from the truth.
  We are looking at the issue of Medicaid, a program that is designed 
to provide health care for those who are truly in need. They will be 
talking about this over the weekend and next week as the debate 
proceeds on our Deficit Reduction Act, and they will say that we want 
to pull the rug out from under people who are very much in need.
  Mr. Speaker, while I believe sincerely as a Republican that the 
Federal Government should be the last source to which people look for 
assistance, we do have a Medicaid program that is in place, and not one 
of us wants to do anything to see someone who is desperately in need 
hurt. But when we have those who are not desperately in need, who abuse 
the system, it is something that needs to be addressed; and that is 
exactly what this legislation is all about.
  My friend, the gentleman from Texas (Mr. Barton) who chairs the 
Energy and Commerce Committee, has gone into great detail, and he will 
next week, about the Medicaid provisions. They came from his committee.
  Right now, the rate of growth of spending in the area of Medicaid is 
7.3 percent a year. By looking at these reforms, the measure that we 
are going to be voting on next week will provide an increase in 
Medicaid spending of 7 percent. Not 7.3 percent, 7 percent. Three-
tenths of one percent. That simply is slowing the rate of growth of 
spending in this program. So the notion that somehow we want to turn 
our backs on people who are in need is just plain wrong and inaccurate.
  Now, in looking at these reforms, what do we want to do? We want to 
take issues like asset dumping. Asset dumping is a scenario whereby 
people will take their home, which has a great deal of value, and they 
will get rid of that home. Why? So that they can qualify for this 
Medicare program that is designed to assist the indigent, the very 
poor. Having someone with an asset of half a million dollars benefit 
from basically a welfare program was never the intent of the Medicaid 
program at all, but there are people who are doing that now. So it is 
our goal to ensure that people who are truly, truly in need, will be 
the ones who receive this much-needed assistance.
  Mr. Speaker, a lot is going to be said about these issues; and I 
believe when we look at our Deficit Reduction Act, our goal is, as I 
like to say, Mr. Speaker, not simply to try and reduce spending by $50 
billion, if that is what the number ends up being. Of course, those are 
savings for the American people. Our goal is to try to work and bring 
the deficit down. Democrats and Republicans alike decry deficit 
spending. That is something that is great. That is something we want to 
work on in a bipartisan way. That is what this Deficit Reduction Act is 
about. I hope Democrats will join with us in support of this measure to 
reduce the deficit by passing the Deficit Reduction Act.
  It is not simply about dollars; it is about the reach of the Federal 
Government. I have been listening over the last few days to some horror 
stories of the kinds of things that the government does. Many of those 
things discourage individual initiative and responsibility.
  It brought to mind for me 1996 and 1997 when we were working very 
hard to pass important welfare reform. We know, Mr. Speaker, that we 
have seen a generational cycle of welfare, going back to the much 
lauded and very well intended Great Society of Lyndon Baines Johnson. 
We have seen trillions of dollars, trillions of dollars, spent on 
perpetuating the welfare state, and yet the level of poverty has 
continued in this country in many areas. Why? Because it has been a 
generational cycle of welfare.
  So in 1996 and 1997, we began the effort to alter that, to change 
that generational cycle of dependence; and we passed welfare reform.
  I can remember instances where people who have been receiving for 
generations welfare, they have been discouraged from working because of 
their dependence on Federal Government assistance, that many of these 
people were, because of our reforms, able to move to the working side 
of the economy rather than being on the receiving side of the economy; 
and, Mr. Speaker, they have been able to be self-sufficient, they have 
been able to support their families.
  But the most important thing, the most important thing, and I will 
never forget a woman from Long Beach, California, that talked about 
this, she had the pride back that she had lost. She had the pride back 
that she had lost for generations because of the fact that she was now 
able to be on the productive side of the U.S. economy.

                              {time}  1300

  Mr. Speaker, I think that we should do all that we can to continue 
encourage more and more Americans to be on the productive side of the 
economy. And I have to say that we have the highest number of Americans 
working today. One hundred forty-two million Americans are working. 
Never before in the United States of America have we had so many 
Americans who are working. We have what has been traditionally 
considered to be full employment.
  The news just came out: The unemployment rate remains steady at 5.1 
percent. Well, that 5.1 percent is lower than the average rate for 
unemployment through the decade of the 1970s, the 1980s, and the much-
heralded 1990s.
  Years ago, full employment for the United States was considered to be 
6 percent. If you had a 6 percent unemployment rate, it basically meant 
that every American who wanted to work and could work was working. 
Today, we have a 5.1 percent unemployment rate. So this notion that 
somehow the U.S. economy has gone to hell in a hand basket is again 
just plain wrong. You cannot only anecdotally but you can factually 
look at this.
  That is not to say that there are not people in the United States who 
are facing challenges, who are facing problems, who are facing 
difficulties. That has existed since the beginning of time, and we will 
always be expending time and effort trying to encourage people to work 
for themselves, and we will constantly try to put into place policies 
that will assist people in that goal of trying to be self-sufficient 
and to work and all.

[[Page 24909]]

  Mr. Speaker, as I look at these challenges, what is it that we can do 
to keep this economy growing? Well, there are a lot of things that we 
can do. Making sure that we make permanent those important, important 
measures that repeal the marriage tax penalty, that provides for the 
per child tax credit, a critically important thing, and at the same 
time recognize that we must have growth-oriented tax cuts.
  Now, as I stand here in this well, I am thinking about just the last 
few years when Members on the other side of the aisle said to us: If we 
cut taxes, the U.S. economy is going to go right down the drain and the 
U.S. budget deficit, our Federal deficit, will go sky high.
  Mr. Speaker, we have cut taxes, we have put into place the very, very 
important growth-oriented tax cuts for dividends and capital gains, and 
what is it that has happened? We have seen a surge of revenues, to the 
point where the Federal budget deficit has been improving. We have 
gotten basically a $108 billion spending reduction by virtue of the 
fact that the increased flow of revenues to the Federal Treasury has 
reduced the Federal deficit from the February projection by $108 
billion.
  Now that came as a shock to many people, and unfortunately many of my 
friends on the other side of the aisle have failed to even recognize 
that. When they said, if you cut taxes, the economy will go into the 
tank and the deficit will go sky high, the exact opposite has happened. 
Our economy has surged to this very low unemployment rate, virtually 
full employment, tremendous numbers of jobs being created, fewer people 
on welfare and depending on the government for their sources of 
survival, and a reduction in the deficit itself.
  So these are things that, frankly, are real, Mr. Speaker. These are 
things that are out there, and these are things that the American 
people should understand.
  We will next week vote on this deficit reduction measure, and it will 
be mischaracterized. But, Mr. Speaker, the deficit reduction measure 
that we are putting into place designed to decrease the size of our 
deficit, cut Federal spending, and diminish that cycle of dependence on 
government and the reach of government is absolutely critical to our 
goal of sustaining economic growth. All of the benefits to which I 
referred over the last few minutes are there because of the strong 
economy, and next week's vote for deficit reduction will be a vote that 
will play a big role in seeing the U.S. economy continue to move boldly 
and dynamically into the 21st century.
  Now, Mr. Speaker, there is another aspect of economic growth that I 
think is very important. At this moment, the President of the United 
States and 34, all 34 of the democratically elected leaders in this 
hemisphere are in Argentina at the very important meeting of the Summit 
of the Americas. President Bush is there talking about a very important 
component of U.S. economic growth, and that happens to be the goal of 
establishing a free trade area of Americas within this hemisphere.
  Back in November of 1979, when Ronald Reagan announced that he was a 
candidate for the President of the United States, he envisaged this 
accord of free trade among all the Americas; and he was laughed at by 
many. Just the notion of establishing a free trade agreement with 
Canada, with Mexico was something people thought impossible.
  Mr. Speaker, it did take a long period of time, but we in 1993 did 
pass the North American Free Trade Agreement. We just 3 months ago 
passed the Central American Free Trade Agreement, building on the 
success of the North American Free Trade Agreement.
  And I know that my friends on the other side of the aisle will say 
the North American Free Trade Agreement has devastated the economy. 
Every ailment, every ailment of society, every single problem that we 
face is because of the North American Free Trade Agreement. I hear that 
constantly. Again, it is important to look at the numbers.
  The top priority for us: Border security, and national security. 
Border security is a very important part of national security. Economic 
growth in Latin America is essential to our stemming the flow of people 
coming illegally from Latin America and other parts of the world into 
the United States. Mr. Speaker, were it not for the North American Free 
Trade Agreement, more than a few people have told me that the problem 
of illegal immigration would be twice as bad as it is today were it not 
for the North American Free Trade Agreement.
  I know how serious it is. I am privileged to represent California 
here and will tell you that the problem of illegal immigration is a 
very, very important issue for us to address. And we are addressing it. 
I have legislation, H.R. 98, that calls for the establishment of a 
counterfeit-proof Social Security card so that the magnet of jobs that 
draws people illegally into the United States will not be able to be 
utilized because people will have a counterfeit-proof Social Security 
card, rather than using the 94 different documents that today are used 
by people here illegally, fraudulently in cases, to get jobs.
  Making sure that we do all that we can to continue to see the economy 
in this hemisphere grow is important. That is what President Bush is 
doing right now. As we see that growth, economic growth in Latin 
America, again, that will help us deal with the problem of border 
security.
  People come to this country, 98 percent of them at least, for one 
reason and one reason only, looking for jobs, looking to feed their 
families. We all know that. Everyone acknowledges that. So if we can 
see job opportunities throughout Latin America, it will lead people to 
do what they would rather do and that is stay in their home countries.
  So what has happened now? Because of the trade that we have seen take 
place between our two countries, we have seen the economies of both 
Mexico and other countries in Latin America and the United States grow. 
In fact, a third of $1 trillion in cross-border trade takes place 
between Mexico and the United States.
  I know that there has been this constant sense that there are only 
very rich or very poor in Mexico. You are either a multi-billionaire or 
you are impoverished. Not many people recognize, Mr. Speaker, that the 
middle-class population in Mexico is larger than the entire Canadian 
population, and it is growing. There are more people moving into that 
middle class in Mexico, and that is in large part because of the trade 
relationship between the United States and Mexico and the elimination 
of tariff and non-tariff barriers that are taking place within the 
region with things like passage of the Central American Free Trade 
Agreement.
  Mr. Speaker, as you look at the challenges that we have here at home, 
it really sickens me that people mischaracterize the positive things 
that have taken place. I do not diminish the problems that we have in 
any way. I do not diminish them at all. But I will say that we do have 
a lot that needs to be done, but we also have a lot of great things 
that have been done. It is imperative that, as we deal with these 
challenges that are out there, that we do not in fact eliminate the 
very positive steps that have been taken to see us have the success 
that we are enjoying in the global war on terror, see us enjoy the kind 
of prosperity that is enjoyed across the United States of America.
  With that, Mr. Speaker, let me say that I look forward anxiously to 
our passage of the Deficit Reduction Act next week, and I hope the 
Democrats will join with us in that goal.

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