[Congressional Record (Bound Edition), Volume 152 (2006), Part 14]
[Senate]
[Pages 18704-18706]
[From the U.S. Government Publishing Office, www.gpo.gov]




                   U.S. ECONOMY CONTINUES TO PROSPER

  Mr. HATCH. Mr. President, I have been very interested in the remarks 
of the distinguished Democratic leader, my friend, and I approach this 
issue from not just a slightly different perspective but from a very 
different perspective. I think it is important that we get our facts 
straight.
  The robust health of the U.S. economy becomes more apparent with each 
passing day. Yet it is something about which we hear precious little 
except criticism, especially on the Senate floor. I would like to take 
just a few minutes to remind my colleagues about some of the positive 
aspects we are seeing about the state of the economy.
  As we complete the fifth year of economic expansion, all signs 
indicate that the economy is as strong as it has ever been, and that we 
can expect continued economic growth for the foreseeable future. When 
President Bush became President, we were in the throes of an economic 
recession at the end of the Clinton years. He inherited that, and the 
first year of his Presidency was filled with a recession. But in the 
last 5 years, we have had an economic expansion. The U.S. economy grew 
at an annual rate of 4.6 percent in the first half of this year, and 
that is an impressive clip at any time, but particularly so for a 
mature economy approaching full employment.
  Economic forecasters estimate the gross domestic product in the 
current quarter will come close to 3 percent. While initially we may 
not welcome a reduction in the rate of growth, a 3-percent rate is 
actually very positive news. This is because a growth rate of around 3 
percent would put us at a level of growth that many economists believe 
can be sustained indefinitely without risking inflationary pressures.

[[Page 18705]]

It is mystifying to me that an economy this strong that has grown 
steadily for 5 full years now is not being recognized by everyone for 
what it is; namely, a remarkable jobs-producing machine. We have 
created 3.5 million jobs in the last 3 years and have more people 
employed today than ever before in the history of this country.
  The unemployment rate is only 4.7 percent, a level that is below any 
rate seen in the United States between 1970 and 1997. Think about that: 
a rate below any rate seen in the U.S. between 1970 and 1997.
  No matter how one cuts the numbers, the news on the job front of late 
has been good. The number of long-term unemployed is down, as is the 
unemployment rate for teenagers, women, African Americans, Hispanics, 
people without a high school degree, and people with only a high school 
degree.
  While energy prices might have pushed the Consumer Price Index up a 
bit earlier in the year, I believe there was never a risk of higher 
inflation, and the financial markets now discount this possibility 
almost entirely. As Nobel Laureate Friedman put it:

       Inflation is always a monetary phenomenon. As long as the 
     Federal Reserve commits to contain inflation, we should not 
     worry.

  I think Ben Bernanke has demonstrated his determination to keep the 
scourge of inflation under control, and for that he deserves 
commendation. I believe his decision today to leave the short-term 
discount rate where it is makes perfect sense, given the recent data.
  The benefits of sustained economic growth, the likes of which we have 
seen over the last 5 years, cannot be overstated. We are just now 
beginning to reap its benefits in the form of higher incomes for 
American workers. Median household incomes, stagnant since the 2001 
recession, went up by 1.1 percent after adjusting for inflation in 
2005. Now, that is median household income.
  Contrary to the gloom and doom we are hearing from the other side on 
this floor, it went up by 1.1 percent, after adjusting for inflation in 
2005. That is after the adjustment for inflation.
  The preliminary data for 2006 suggests that income growth has 
accelerated strongly, with even the New York Times reporting an 
estimate that inflation-adjusted wages and salaries have gone up an 
annual rate of 7 percent thus far this year. This is a pattern that 
would be entirely consistent with what we witnessed during the 
expansion of the 1990s, one that ultimately lifted millions of 
households out of poverty. Yet all we hear is doom and gloom. That is 
what happens when people want to gain power.
  The Federal Government has also benefitted from the sustained 
economic growth. Tax revenues--and this is with the tax cuts that we 
put in, and because of the tax cuts we put in over the past 5 years--
have grown at the fastest rate since the inflationary 1970s. You can't 
discount that, no matter how much doom and gloom you spread all over 
this body. Revenue went up by nearly 15 percent last year, and as we 
approach the end of the current fiscal year, it is likely it will go up 
12 percent this year. That is phenomenal.
  In 2006, we will collect over a half of a trillion dollars more than 
we did in 2004--a truly awesome amount. The budget deficit has shrunk 
rapidly over these same 2 years, from $412 billion in 2004 to roughly 
$260 billion in 2006. Now, it is still too high, but as a percentage of 
GDP, it is one of the lowest over the last 40 years. That can't be 
discounted, in spite of the doom and gloom that we hear consistently on 
this floor.
  The Congressional Budget Office was forecasting a budget deficit of 
$100 billion larger than that as recently as March. Let me repeat, $100 
billion larger than the $260 billion it was projected to be as recently 
as last March. Again, the strong budget growth we have benefitted from 
of late is reminiscent of what occurred in the late 1990s once the 
economy reached full employment and productivity growth picked up. It 
is also instructive to look at exactly where the additional tax 
revenues are coming from.
  Now, let's get this straight because I get so tired of hearing the 
rich are getting richer and the poor are getting poorer. That is a 
slogan that really is pure folly. The top 1 percent of all earners--the 
top 1 percent of all earners--receive about 16 percent of all income 
but pay over 34 percent of all taxes. Let me repeat that. The top 1 
percent of all earners receive about 16 percent of all income but pay 
over 34 percent of all taxes. The top 10 percent of all earners are 
paying two-thirds of all the taxes paid in this country--the top 10 
percent.
  Mr. President, 97 percent, all but 3 percent, 97 percent of all 
income tax revenue comes from the top 50 percent of all wage earners. 
That doesn't sound to me like the rich are getting richer. What the 
other side always seems to forget is that, in this great country, the 
middle class consistently rises to a higher position because of the 
opportunities in this country if we continue to provide opportunities 
for economic growth through tax rate reductions and other 
methodologies.
  When you say that the top 50 percent of all earners pay 97 percent of 
all income tax revenues, this means that the bottom half of income 
earners in this country are paying only 3 percent of all income taxes 
collected. Many of them do not pay anything. Many of them get money 
from the Federal Government for living. No one can correctly say that 
the rich are not paying their share of taxes.
  Let me go over that again. The top 1 percent pay 34 percent of all 
income taxes. The top 10 percent are paying two-thirds of all income 
taxes. The top 50 percent pay 97 percent of all income taxes. The 
bottom 50 percent pay only 3 percent, and many of those do not pay 
income taxes at all.
  No one can correctly say that the rich are not paying their share of 
taxes or that this economy is not a good economy. We all wish it could 
be even better, but when you have an economy as diverse as ours, as 
complex as ours, it is hard to say that this is not a good economy.
  Those who have complained that income growth lagged behind the rest 
of the economy in the early years of the current economic expansion 
were absolutely correct. I share their frustration that it takes so 
long for income growth to permeate throughout all income levels. It is 
not enough to tell someone who is out of work or has been forced to 
take a pay cut that once the unemployment rate falls a bit more wages 
should pick up.
  The Government should do what it can to help lift people out of 
poverty. Republicans and Democrats agree on this. It is not just the 
Democrats. We all agree on that. So to present this like only Democrats 
care, that is pure bunk.
  However, the answer to this problem is not to take actions that would 
jeopardize economic growth. The solution is to keep the economy as 
strong as possible while making sure that those who get hurt by a 
faltering economy have the means to get up again, to help those who are 
underemployed or who are unemployed. We improved and expanded the 
earned-income tax credit, provided new funds for training and 
education, and during the recession we increased the duration of 
unemployment insurance.
  Let's be honest about it. Both Republicans and Democrats care for 
those who are suffering or those who have not been doing as well. But 
the Democratic solution seems to be, let's increase taxes so we can 
spend more from the Federal Government. We know what that is going to 
do. That is going to stifle this economy and economic growth and hurt 
all those who are paying into the system. Above all, it will hurt those 
who aren't paying into the system, who are the poor. That seems to be 
the only solution they have. They don't dare say that is their 
solution, but it is.
  Should the Democrats take control of the Congress, you can absolutely 
bet that the tax cuts that we enacted will not be continued and that 
the economy is going to go into the tank. You can absolutely guarantee 
it.
  Ultimately, it is productivity growth that improves the standard of 
living, plain and simple. Productivity growth has been exceptionally 
high for the last

[[Page 18706]]

decade, and I aim to work to keep it that way by encouraging companies 
to invest in new plant and equipment, by encouraging workers to invest 
in training and education, and to do my part to say that Government 
keeps spending and taxes low and allows our businesses to compete as 
best they can.
  The rewards may not be immediate. But the incredible engine that is 
the U.S. economy owes its success to these simple precepts.
  Mr. President, I also know, and I notice the distinguished Senator 
from Nevada made the point, that energy is a very important matter to 
us. He said gas prices are going to go up again. That is going to be 
true if we do not have a consistently good energy policy. In the 
Republican energy bill, I put five bills in there myself. One to give 
incentives to recover the almost 1 trillion barrels of oil from oil tar 
sands and oil shale deposits in western Colorado, southern Wyoming, and 
eastern Utah. There are 3 trillion barrels of oil there, but we, 
according to the experts, can recover 1 trillion barrels of oil.
  To put that in perspective, the whole Middle East's proven reserves 
are 760 billion barrels. So we have more oil in tar sands and oil shale 
than all of the Middle East. The problem is it is going to cost us 
about $34 a barrel under current methodology and current technology to 
produce that oil, where it costs only 50 cents a barrel for Saudi 
crude.
  If we move in that direction, we are going to be able to be less 
dependent upon other countries' oil, especially countries that hate the 
United States of America, like Venezuela--at least the leadership does. 
I don't think the people of Venezuela do.
  We also put in better permitting language. The radical 
environmentalists have made it almost impossible to get permits to be 
able to develop these resources.
  Third, we put in that bill incentives to develop our geothermal 
resources. It is estimated that Utah geothermal wells alone could 
produce electricity for upwards of 22 million homes. That is about 66 
million people. That is almost the whole West, right from one small 
State. Big in geography, small in population: only 2.5 million people. 
The fact is we can do that. Now the incentives are in that bill. They 
are not as good as I would have had them, but they are better than what 
we had before that bill.
  Most people do not realize that we have lost 250 oil refineries over 
the last 40 years and only built one. It is almost impossible to build 
an oil refinery because of radical environmentalists. The fact is, we 
have to build more oil refineries as long as we are dependent on oil 
refineries for our major source of fuel, for automobiles, trucks, 
trains, planes, et cetera. We have to wake up and start doing some of 
these things.
  Last but not least, my little CLEAR Act is in that bill to give 
economic incentives to develop alternative fuels, alternative-fuel 
vehicles and alternative-fuel infrastructure. It is a little bill that 
helped drive the hybrid auto industry into existence. Now we are 
talking about plug-in hybrids. We are talking about hydrogen cars. To 
get the hydrogen--we only have 9 million tons of hydrogen in this 
country. We need 150 million tons before we can actually make that a 
viable fuel and put it in real cars. We are capable of doing it now, 
but it would be the equivalent of about $3.60 a gallon of gas.
  We are going to have to develop cookie-cutter nuclear powerplants so 
we can develop this hydrogen and have totally clean fuel in our 
country, from hydrogen cars that will work just as well as gasoline-
driven cars. We are a few years away from that, but it is possible to 
do that if he we wake up and start really thinking about the 
environment the way we should.
  If there is such a phenomenon as global warming--I believe there is--
this will be one of the ways of making our contribution to reducing the 
greenhouse gases, among other things.
  We hear a lot of complaints on the other side about the economy. My 
gosh, these figures have not been met hardly at all in the last 50 
years--until now. I think the President, the Republican Congress, and a 
number of Democrats who have supported us deserve a lot of credit for 
at least having us where we are. Can we improve? We hope so, and we are 
going to do everything in our power to do it, but I know one way we 
can't improve is increasing taxes, increasing Government or having more 
Government controls, having more regulations, which always seems to be 
the case when the Democrats take over the Congress. It is certainly 
going to be the case if they do it this time, and I don't believe the 
American people are going to put up with that.
  I think what I am saying here today is that we cannot listen to 
cliches and slogans and doom-and-gloom prophecies. We have to work hard 
to get things done. We have the elements here to do it.
  There were comments made about the minimum wage, that we haven't had 
an increase in 10 years. The so-called trifecta bill would have 
increased it to $7 an hour, and maybe, if it was a true debate, the 
Democrats could have won on even a higher minimum wage. All we asked 
for is that we have some modest estate tax reform, which almost 
everybody admits would be beneficial to the economy at large and to our 
families, and especially small businesses that could lose their 
businesses--small farmers, family farmers, who could lose their farms. 
But, no, that was stopped by a filibuster, which has become the 
principal means of obstruction ever since the George Mitchell days when 
he filibustered.
  I thought he was a great majority leader. Don't anybody misconstrue 
what I am saying. He was, but he was tough. But he started to 
filibuster everything he disagreed with, or the Democrats disagreed 
with. Of course, here we are today doing the same thing.
  I would like to see us get rid of partisanship, where we can work 
together in the best interests of our country, without the mouthing off 
about how bad one side or the other side is, and really do what we were 
really sent here to do. I admit that we are in an election year and 
people want to win. So things are said that probably wouldn't be said 
in a non-election year. I would like to even tone that down a little 
bit and let's recognize the economy is a good economy. Could it be 
better? I doubt under the circumstances, but we can all work to try to 
make it better.
  Are some people suffering in our society? I said in my remarks today 
that there are, and we ought to work to try alleviate that. We have 
done a lot to alleviate that.
  As I have said, the bottom 50 percent only pay 3 percent of all 
Federal income taxes, and many of them don't pay taxes at all. A goodly 
number of them get help from the Federal Government. And that is from 
both parties, not just the Democratic Party. That is because in the 
past we have worked in bipartisan ways to do these things.
  I hope we can continue that. I wish we could get rid of the 
obstructionary tactics that we have had on judges and some other issues 
over the last number of years.
  I wish we could get behind whoever the President the United States 
is, and especially right now. President Bush is trying to do the best 
he can to stem the tide of terrorism in the world, but he also is doing 
a good job with regard to the economy with hopefully our help.
  Whoever the President is the next time, I hope, whether it is a 
Democrat or a Republican, that we can work together in the best 
interests of our country. It would be a wonderful, pleasant change from 
the last 10 years that I have seen. Both parties are at fault. I am not 
saying equally, but both parties have reason to improve. All I can say 
is, how do you knock an economy that is clearly as good as this one is 
and continue to bad-mouth it when in fact the facts all show otherwise? 
I don't know how they can continue to drumbeat this day in and day out 
by some on the other side who know that is wrong.
  I yield the floor.

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