[Congressional Record (Bound Edition), Volume 151 (2005), Part 4]
[Senate]
[Pages 4428-4431]
[From the U.S. Government Publishing Office, www.gpo.gov]




                            THE REAL CRISIS

  Mr. DORGAN. Mr. President, this week there has been more discussion 
in the newspapers and around the country about the issue of Social 
Security. As you know, the President continues to move around the 
country holding forums on Social Security.
  One week ago today, in fact, Senator Reid and I, Senator Durbin, and 
a couple of other colleagues were in New

[[Page 4429]]

York. We held a forum in New York City on Social Security. We then went 
to Philadelphia, PA, and held a forum on Social Security. Then we flew 
out west and we held one in Phoenix, AZ, and another one in Nevada. So 
there has been a lot of discussion about Social Security.
  The President originally said there was a crisis in Social Security, 
which seemed to me to be a strange choice of words because, in fact, 
Social Security will be solvent until George W. Bush is 106 years old. 
Let me say that again. I think that is important. Social Security will 
remain solvent until this President reaches age 106. But he and others 
in the administration have said there is a crisis, it is going to go 
broke, it is going to be flat busted.
  Look, Social Security is a program that has been remarkably 
successful, that has lifted tens of millions of senior citizens out of 
poverty over many years. The fact is, people are living longer, 
healthier lives these days so we will have to make some adjustments, 
perhaps, in the future; but it is not major surgery that is required 
and it is not justification for saying there is a crisis or it is 
bankrupt or other types of language that the President and others have 
used.
  The kind of adjustments that may have to be made--again they may not 
have to be made if we have robust economic growth in the coming 75 
years--but the kinds of adjustments that may have to be made are not 
major. We can do that. But this ought not be a pretext for taking 
Social Security apart and talking about privatization of Social 
Security.
  I was curious about why this comes up in this context right now. I 
know it is not about economics. President George W. Bush ran for 
Congress in 1978 and he said then that Social Security would be broke 
in 10 years, by 1988, and we ought to go to private accounts. Well, 
almost 30 years later, he is saying the same thing. So I think this is 
not about economics, but rather it is all about philosophy.
  I respect the President. He has every right to have a philosophical 
objection or philosophical concern about the Social Security Program.
  One of the leading voices on the far conservative right said this 
recently:

       Social Security is the soft underbelly of the liberal 
     welfare state.

  That is part of the political debate, I guess. If you are on the far 
right, you have a right to say that, and a right to think that, and a 
right to manifest your belief that we ought to take Social Security 
apart. But I don't happen to share that. I think Social Security has 
been a remarkable program that every worker pays into, and when you 
retire, you get something back at a time when you have reached 
declining income years in your life. That is the one portion of 
retirement security you can count on.
  In most cases you aspire to have retirement security by doing three 
things. No. 1, you pay into Social Security for this insurance. Yes, it 
is insurance, not investment. In the FICA tax that comes out of your 
paycheck, the ``I'' is for ``insurance,'' not ``investments.'' It 
stands for insurance. So one part of retirement security is the 
guaranteed portion, Social Security. It will be there. You know it will 
be there. You know how much it is going to be. It is the guaranteed 
portion.
  The second part is hopefully you work for a company that offers a 
pension. Only half of the American workers do, but we would like more 
companies to offer a pension. But that is a second part, a pension, 
private pension: a pension from your work.
  The third part is private investments: 401(k)s or IRAs or the kinds 
of private investments that you make, much of which go into the stock 
market. I strongly support that. But that is not a pretext for taking 
apart Social Security. It is one of the three legs of retirement 
security: Social Security, the guaranteed portion, the portion without 
risk; pensions from your job; and then private investment accounts, 
such as 401(k)s and IRAs.
  We are going to have a robust discussion about this in the weeks and 
months ahead. It is a worthy discussion for our country to have. This 
is a great country, made better, in my judgment, because of some of the 
things we have done to address some of our problems. When Franklin 
Delano Roosevelt saw that one-half of our senior citizens were living 
in poverty, he believed something should be done about that. So we 
created a Social Security Program that workers paid into and retirees 
are able to draw from, and now less than 10 percent of America's senior 
citizens are living in poverty. Why? Why that success? Because of 
Social Security, that is why. I think the task for all of us is to not 
take it apart but to strengthen it and nurture it and preserve it for 
the long term. At least that is my interest.
  I started by talking about the fact that the President describes 
Social Security as a crisis. It is not a crisis. However, our country 
does face a very real, very imminent crisis, in the area of 
international trade.
  This morning it was announced by the Department of Commerce that the 
trade deficit for the month of January was $58.3 billion. Let me say 
that again: a $58.3 billion trade deficit in 1 month. That means nearly 
every single day, Americans have bought about $2 billion worth of goods 
from other countries in excess of the amount of goods we sold those 
countries. Said another way, every day in the month of January other 
countries ended up owning 2 billion more dollars of our country. Their 
claim on our country was increased by $58.3 billion, nearly $2 billion 
a day, nearly $60 billion in 1 month of increased foreign claims 
against American assets. China and others end up owning more and more 
of our country as a result of these pernicious trade deficits.
  We have a growing, serious, abiding crisis in our international trade 
and this country seems willing to sleep through it. By ``this country'' 
I mean the President and the Congress. They are perfectly willing to 
sleepwalk through this, while every single day and every single month 
China and Japan and others end up owning more of America.
  Let me describe why we have this trade deficit that is growing at an 
alarming rate, over a $600 billion trade deficit last year. Why does 
this exist? Let me give you some examples.
  American corporations in most cases no longer consider themselves 
just American if they are doing business around the world. They want to 
maximize profits for their shareholders and they have discovered 1 
billion people in the rest of the world--1 billion out of a population 
of 6 billion--1 billion people whom they can employ quite easily for 20 
or 30 or 40 cents an hour, because technology and capital is instantly 
moveable now to any place on Earth.
  That is exactly what has happened. It has happened time and time 
again in recent years. That is why the American people who used to have 
good manufacturing jobs have now discovered themselves all too often 
jobless, and when they search for a new job they get a job that pays 
only 70 percent or 80 percent of what their old job used to pay because 
the good jobs are moving overseas.
  We have a provision in our Tax Code that says if you move your jobs 
overseas--if you are a company and you shut your American manufacturing 
plant and move your American jobs overseas--we will give you a tax 
break. It is unbelievable, unbelievably stupid, that our country would 
have in its Tax Code incentives for people to shut their American plant 
and move it overseas. Yet that exists. I have tried to close it here on 
the floor of the Senate with an amendment and I have lost. But we are 
going to vote on that again this year and we will see whether any minds 
have changed.
  Let me give some examples of what is happening. Levis--everybody 
knows about Levis. People like to wear Levis; put on Levis for the 
weekend. Except now Levi doesn't make Levis anymore, not one. Levis 
used to be American. They made Levis in America. Then they moved Levis 
to Mexico and to other parts of the world. Now they don't make any 
Levis. All they do is contract with foreign companies who make Levis 
for the Levi Company.
  Fig Newton cookies. I grew up eating Fig Newton cookies. All 
American, right? Want to have some Mexican food

[[Page 4430]]

tonight? Eat a Fig Newton cookie because that left America. Why? 
Cheaper wages in Monterrey, Mexico. Eat a Fig Newton cookie and you are 
eating Mexican food.
  What about Huffy bicycles? Twenty percent of the American bike market 
is Huffy bicycles. You buy them at Sears, Kmart, Wal-Mart. We had folks 
in Ohio who made $11 an hour who made Huffy bicycles, but they got 
fired. Do you know why? Because Huffy bicycles are now made in China at 
30 cents an hour and American workers can't compete with 30 cents an 
hour and should not have to. But nonetheless they lost their jobs and 
Huffy bicycles are now made in China to ship back to our country, so 
consumers conceivably have an advantage of a lower cost bicycle.
  I am not certain the bicycle costs less. I know the profits of the 
middlemen are inflated, and I know Americans who honored their 
manufacturing jobs and loved their jobs got fired from their jobs 
because they couldn't compete with a Chinese worker working 7 days a 
week, 12 to 14 hours a day, who is paid 30 cents an hour. That is what 
is happening to American jobs. And people say, well, that is the new 
economy, Senator Dorgan. You just don't understand it. No. I don't. We 
spent a century, we spent 100 years in this country fighting about 
important things: about child labor, about whether you should go down 
to a coal mine and work next to 12-year-old kids. We decided that is 
not fair; about whether you should expect to be able to work in a safe 
workplace and about whether you have the right to organize in America. 
We had people dying in the streets of this country demonstrating for 
the right to organize. They died in the streets of America for the 
right to organize as workers and for the right to a fair wage. We went 
through all of those things for over a century. It was hard and tough.
  Now a company can decide: You know something, we don't have to care 
about any of that. We can hire 12-year-old kids, work them 12 hours a 
day, pay them 12 cents an hour, build a manufacturing plant, and throw 
chemicals in the water, throw chemicals in the air, and the 
manufacturing plant doesn't have to be safe, and if the workers decide 
they want to organize, we can fire them right now. We can get over all 
of this, we pole vault over all those issues and produce where it is 
cheaper. We are not encumbered by our ability to pollute the air and 
water. We can fire kids and ship the products to America and have 
American consumers go to Kmart, Wal-Mart, Sears, or Toledo or Fargo or 
Los Angeles or New York, and buy that product, which was in fact 
produced by someone who took a job from the neighbor of that consumer.
  This country has not decided whether there is an admission price in 
the American marketplace. We sign all these trade agreements, and none 
of them is complied with at all. This country has no nerve, no 
backbone, no will to stand up for its own economic interest. I am not 
suggesting that we build walls around our country, but I am saying we 
ought to pay some attention to the basic conditions of production that 
we fought over for 100 years. If corporations decide, we can now go to 
Bangladesh or Sri Lanka or China and ignore all of those issues and 
have people fired if they try to organize for collective bargaining, 
then there is something fundamentally wrong.
  Question: Why is it that in this country we imported nearly 600,000 
Korean cars from the country of Korea in the past year but are only 
able to sell 3800 U.S. cars in Korea? Answer: Because the Korean 
government doesn't want U.S. cars in Korea. They want to ship all of 
their cars to America, but they don't want U.S. cars to be sold in 
Korea. And our country says that is OK; we will not do anything about 
that. Our country doesn't have the nerve or the will to stand up for 
its own economic interest.
  We have a dispute with Europe over beef, so our ranchers and farmers 
and others suffer as a consequence of that dispute. In a rare display 
of backbone, American negotiators decided to get tough with the 
Europeans, by applying retaliatory tariffs. So what did they do? They 
decided they were going to impose tariffs on truffles, goose liver, and 
Roquefort cheese. That is going to scare the devil out of our trade 
adversaries--a trade adversary that is taking advantage of us. We are 
going to slap tariffs on truffles, goose liver and Roquefort cheese.
  This country has to decide finally to stand up for its economic 
interests.
  I haven't talked about Japan. We have had a $60 billion to $80 
billion trade deficit with Japan every single year, year after year 
after year. They are guilty of horribly unfair trade with this country. 
The same is true with China. It is even worse with China. There are 
massive copyright violations going on, counterfeiting, and piracy. But 
in addition to that, their markets still, in many cases, are largely 
closed to our market.
  I have raised this issue on the floor several times, but no one seems 
to care very much about this issue of bilateral automobile trade with 
China.
  Let me give you an example of what recently happened. Time magazine 
says that China is revving up a huge new automobile export industry--a 
big industry to export automobiles from China. We just had a bilateral 
trade agreement with China about 3 years ago, and our negotiators 
agreed to this. They said to China: You can impose a tariff on U.S. 
automobiles we try to sell in China that is 10 times higher than we 
would impose on automobiles China sends to us.
  This is a country with which we now have a $130 billion to $140 
billion trade deficit, and we have a trade agreement that was 
incompetently negotiated by our negotiator, who said to China, on 
bilateral automobile trade: You can impose a tariff that is 10 times 
higher than the tariff we will impose on Chinese automobiles coming 
into the United States.
  I do not know who did this, but it is unbelievably incompetent. 
Somebody ought to be fired summarily for negotiating this kind of trade 
agreement with respect to bilateral automobile trade with China.
  This morning when the announcement was made that we had a $58.3 
billion trade deficit in the month of January, if this doesn't wake up 
the White House and if this doesn't wake up this Congress, shame on all 
of us. That is an annual trade deficit of over $700 billion.
  Warren Buffett, by the way, in his message to shareholders at 
Berkshire Hathaway this year, said what is going to happen is we are 
going to become a nation of sharecroppers, because every single day 
when we buy $1 billion more from foreign countries than we sell to 
them, this means that China, Japan, Korea, and other countries own that 
much more every single day of our country, of our stocks, of our 
assets, of our real estate.
  Even as the value of the dollar has been declining, our trade deficit 
is spiking up, up, way up, and there is no economist in this country 
who teaches that when your currency declines, your trade deficits 
should go up. But I think I understand why it is happening--it's 
because we don't have the backbone, the will, or the nerve to stand up 
for this country's economic interests.
  If you all read the papers last week about textiles coming in from 
China, the first month the limits were off on textiles, you see what is 
happening to exacerbate that dramatic increase in trade deficit with 
China.
  President Bush wants to travel around the country and talk about 
Social Security, a Social Security system that will remain solvent 
until George W. Bush is 106 years old. There is no crisis there. But 
there is a crisis with our trade deficit. And it requires--demands, in 
my judgment--that this President and this Congress get serious.
  I am sending another letter to the President, suggesting that he hold 
an emergency summit on the trade deficit.
  This is a serious, abiding crisis that weakens our country 
significantly. It is all about jobs.
  We are going to debate the budget next week. There is no social 
program as important as a good job that pays well. That is just a fact. 
The fact is, good jobs are marching out of this country at an alarming 
rate, and they are moving to parts of the world where

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those who are producing products find they can hire people for 20 cents 
an hour or 30 cents an hour.
  Nobody wants to hear these questions much about trade, but it is 
gripping when you understand what is actually happening.
  I talked on the floor about the young women dying in the 
manufacturing plants in China. How about the young children who are 
making rugs and carpets who have their fingertips burned with 
gunpowder? They put gunpowder on their fingertips, light it with a 
match in order to create scarring on their fingertips--these little 
kids that are 10 years old--so when they sew with needles and stick 
their fingertips with a needle, they can't feel it because they have 
been scarred by burned gunpowder, so the kids can continue to sew and 
not bleed. Then that product, that carpet, is sent to the United 
States, and someone shows up and says: I would like to buy that carpet, 
wouldn't I? It is made with slave labor, in many cases, with children 
whose hands have been burned to prevent the bleeding from needles to 
make that carpet. Is that really what we want? Is that really the 
construct of trade that we believe represents a free market? I don't 
think so.
  There is much more to say, and I will say it at some future point.
  I think today's announcement--just an hour and a half ago now--about 
the devastating January trade deficit numbers ought to at least justify 
calling Air Force One back to this town and asking the President to 
join us, join labor, and join the National Association of Manufacturers 
in a meeting, a summit to talk about what on Earth we do to repair this 
trade deficit that is just crushing to the future economic 
opportunities in this country.
  I will have more to say. I hope that this weekend, the White House 
and the Congress will reflect on what this announcement means for the 
future of our country and begin to deal with the crisis that does 
exist. No, not Social Security--it is not a crisis--but the crisis 
exists in these crippling, devastating trade deficit numbers.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Arkansas.

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