[Congressional Record (Bound Edition), Volume 155 (2009), Part 21]
[House]
[Pages 29027-29034]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        JOB CREATION IN AMERICA

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2009, the gentleman from Missouri (Mr. Akin) is recognized 
for 60 minutes as the designee of the minority leader.
  Mr. AKIN. Mr. Speaker, this evening our topic is going to be 
something that is of interest, I believe, to all Americans, the topic 
of jobs. In the past we've talked something about health care. In fact, 
we've talked about that for a number of months. But it seemed 
appropriate to me this evening to open our discussion on the subject of 
jobs. Everybody in America is concerned about the subject. It is one of 
those things that affects everyone. And something that is not as clear, 
and the solution to the jobs question is not as simple as it might 
appear on the surface. And certainly, we have some examples of 
politicians doing exactly the wrong thing. So I think it's important 
that we start and just analyze what it is that makes jobs and what are 
the enemies of job creation. I have listed about six of them here that 
are the most common things that are destructive to jobs.
  The first would be a bad economy. That seems fairly self-evident. If 
the economy is not doing well, the thing that people tend to do is to 
say, well, things aren't going so well; I need to cut my overhead, and, 
therefore, we will cut some jobs. And so that is one thing that affects 
jobs is a slow or poor economy.
  Another thing that's extremely disastrous and very much basically 
stops the creation of jobs and maybe even gets rid of existing jobs is 
taxation. That also is fairly self-evident. Let's just think for a 
minute. You're an owner of a small business and you have 100 people 
working for you. All of a sudden, you find out, you read in the paper, 
here we go, the politicians, one more time are going to be taxing and 
spending. They're going to increase your taxes and increase the taxes 
to your business. Well, that has the same net effect as a bad economy 
because if all of a sudden you're expecting a big tax increase that 
your company is going to have to pay or you're going to have to pay 
because you own the company, you're thinking, oh my goodness, I don't 
have as much money to work with as I thought I did. I'm going to have 
to figure out ways to tighten the belt. And when you tighten the belt, 
many times that means you get rid of either existing jobs by laying 
people off, or perhaps you were thinking of creating new jobs and you 
decide, I think I'll wait on that expansion and buying that new piece 
of equipment and adding the addition to the building and in adding 
those new jobs. And so tax increases are also enemies of jobs.
  A third problem that can also affect jobs, and that is what sometimes 
people call liquidity; that is, the available supply of money. If 
you're a small businessman, one of the things that you need in order to 
keep your business going is some source of loans or money to work with. 
Most small businesses have loans from local banks, and they get those 
loans at a reasonable interest rate because many small businesses are 
very good and prompt payers. The bank trusts them. The bank knows that 
the small business is solvent, that they run a good operation, that 
they're doing good work in the community, so the bank is taking that 
risk and is loaning that money at a fairly reasonable rate of interest, 
so the small businessman has this money or this liquidity in order to 
start paying for things that he needs in his business.
  Just to give an example, perhaps, of a farmer. A farmer has a nice 
piece of land and he decides he wants to raise some crops. But in order 
to do that, he needs a tractor. He doesn't have enough money to buy 
that tractor right off the bat with cash, and so he gets a loan from 
the bank to buy the tractor, and then he uses the tractor to grow crops 
and to produce a product which we call food. In the meantime, as he 
makes profit on selling his food, he makes payments to the bank to pay 
for his tractor. It's a simple example, but what is required for jobs 
and for small businesses to operate is liquidity. There has to be a 
supply of money that's available at a reasonable interest rate in order 
to facilitate the growth of businesses, particularly small businesses, 
and jobs. If there is not good liquidity, not a good source of money, 
then you're going to have a problem with jobs.
  A fourth enemy of job creation is uncertainty. Again, put yourself in 
the shoes of that small businessman. You look out on the horizon and 
you see all kinds of things that you don't know what's going on, and 
you're worried about what's going on. You know as you look out at the 
horizon that there's talk that these taxes that used to be low are 
going to go up. There's talk about taxes on energy, talk about taxes, 
heavy taxes, on a new health care bill. There's the possibility of 
energy shortages; there's the possibility of anything that might be 
disruptive to your business. Well, that uncertainty is going to have 
the effect of saying, hey, before I stick my neck out and do something 
new, I think I'm going to just instead sit back a little bit and wait, 
because I don't want to be too far leveraged. I don't want to make too 
much of a commitment because I don't know what's going to happen. 
Everybody is buying ammunition and hoarding gold, and everybody's 
nervous and concerned. There's talk about this, that and the other. So 
when you get uncertain, uncertainty makes it hard for business people 
to want to add jobs, and it may reduce jobs. Businesses work well when 
they have a plan. They know that they're going to have so many orders 
for so many years, they know that they're going to build, they can plan 
out, buy their materials, get the equipment they need and get the 
manpower. And so, when you want to mess up job creation and business, 
all you do is introduce a lot of fear and uncertainty and you're 
guaranteed to be hurting jobs.
  A fifth thing that is going to be harmful to job creation is a whole 
lot of regulations and red tape. If you're thinking about taking on 
some new project or something, and you see just mountains of red tape, 
regulations, and all kinds of legal fees and problems in front of you 
that the government has created, then you're going to be a little bit 
more reluctant to jump into that project. I'll give you an example. For 
instance, let's say you're a power company and you have a number of 
coal-fired power plants. You take a look at what's going on, and you 
take a look at the technology that's available and

[[Page 29028]]

you say, you know, I think that it would really make a lot of sense to 
build a nuclear plant because coal prices are going up. We know that 
nuclear is safe. We know it doesn't generate any CO2, so 
that should make people that are very worried about global warming 
happy, and we think that it makes sense to put a nuclear power plant. 
But then you start to think and say, Wait a minute. What are the 
regulations? What are the red tape? And how does this work? And you 
start looking at the red tape and you find out, oh my goodness, we 
apply for a license, and after we get done building the plant, which is 
going to cost millions and millions of dollars, then the government 
will tell us whether or not we can operate it. Wait a minute. That 
doesn't make sense. Doesn't the government give you a permit to operate 
the plant first, then you put the millions in and run the plant because 
you got the permit? No, you've got to get a permit to begin with, but 
you don't ever get any for sure that you can run that plant until after 
you've built it. Well, that would be an example of red tape and 
regulations making it so, hey, I'm not going to make that decision, I'm 
not going to do the job of building some big plant and a more efficient 
way to generate electricity because of the fact that we've got all this 
red tape and regulations in the way.
  And then I would suggest that there is a sixth thing that's a job 
killer, and that is the excessive spending on the part of the Federal 
Government. When the Federal Government spends a whole lot of money, it 
has the net effect of eventually costing businesses and the taxpayers 
all the money that they spent and all. And so that the idea of doing 
what's sometimes called stimulus or spending actually is an enemy to 
jobs. We're going to get into that a little bit further along this 
evening. But I thought it would be important to start by defining our 
terms. Jobs are important for all of us. That's what you need to pay 
your mortgage. That's what you need to pay the food bill for your wife 
and kids. Jobs are an important thing in America, and Americans are a 
lot happier when they've got something to work on anyway, a good 
project or some work to do and they have a sense of paying off the 
mortgage and working their way toward the dream of a more prosperous 
future. And so these are the enemies of jobs. I'm going to review them 
one more time.
  First of all, a slow economy. Second of all, taxes. The third thing 
is not enough liquidity. That is money. Fourth, uncertainty or fear. 
Fifth, red tape and government regulations. And sixth, the idea of 
excessive Federal spending, because that comes back in the form of 
taxes and reducing liquidity.
  I am joined this evening by a very good friend of mine, Congressman 
Scalise, who has a very good sense of business and a good sense of 
humor and is always a great contributor to our little Wednesday evening 
discussions.
  My good friend from Louisiana, please join us.
  Mr. SCALISE. I want to thank my friend from Missouri. We have been 
having these discussions for I guess the past few Wednesdays for a few 
months now. I appreciate the gentleman for hosting this hour that's 
become a regular tradition, not only to talk about the things that are 
happening in the country, but really to focus in on the actions that 
have been taken here in this Congress by this Democratic leadership 
that have actually led us to the decline in jobs that we're facing 
today.
  Of course, so many Americans remember now back in the beginning of 
this year when President Obama stood right there, right there on that 
well behind you, and talked about the need for a stimulus bill, a bill 
that spent $787 billion of money that we don't have, money that was 
borrowed from our children and grandchildren, and he said it had to 
happen so that we would stop unemployment from exceeding 8 percent.
  Now, of course today, as we look at 10.2 percent unemployment, the 
American people are asking, Where are the jobs? And, of course, when 
the White House came out with this Web site, and the White House and 
the President bragged about the transparency, and, in fact, the 
President talked about the fact that the American people would be able 
to track every dollar, and even said that Vice President Joe Biden 
would be in charge of tracking the money, and the American people would 
be able to go to a Web site and see where that money from that stimulus 
bill is being spent and how it's creating all these jobs. Of course you 
and I opposed that bill because we knew it wouldn't create jobs. In 
fact, we knew it would help actually lead to more unemployment because 
it would add so much more money to our national debt, money that we 
couldn't afford to spend, and money that was going to hurt small 
businesses and in fact did hurt small businesses.
  Mr. AKIN. If I could reclaim my time, I think that the points that 
you're making are very, very good. I just want to recap what you're 
saying. I had, just as we got started, talked about things that kill 
jobs. And one of the things that kills jobs is excessive government 
spending. The first thing that you came to, ironically, was this 
supposedly stimulus bill which the President and the Democrat 
leadership thought was going to improve the economy, or at least they 
said that. That was what they claimed. In fact, the claim was, as you 
and I recall, that if we did not pass this $787 billion unfunded 
supposedly stimulus bill, we might get unemployment as high as 8 
percent. We've seen unemployment go well beyond 8 percent. They passed 
that stimulus bill, and now unemployment is 10.2 percent. So that 
suggests just what we're talking about, that excessive government 
spending is, instead of making the situation better, will make it 
worse. But we were promised, as you were saying, by the administration, 
by the Democrat President, that this was going to create some jobs; and 
so they created a whole Web site, didn't they?
  Mr. SCALISE. Well, in fact, they created a Web site called 
recovery.gov, and this is where the President said people could go and 
find out and track every dollar that's being spent, and it's going to 
be fully transparent. I guess maybe the White House didn't think that 
people were actually going to take him up on his offer. But of course 
the American people did. As people started going to that Web site, we 
had uncovered this about 2 weeks ago. When you would go to the Web 
site, we found out, first of all those of us in Louisiana found out 
that we had about 45 congressional districts because they actually had 
a listing of how many jobs were created in Louisiana's 45th 
Congressional District. And, of course, they showed that more jobs were 
created from the stimulus bill in Louisiana's Eighth Congressional 
District than in the district I represent, the First Congressional 
District. The only problem with that is Louisiana only has seven 
congressional districts. And so many people in Louisiana were not only 
asking, where are the jobs, but where is this Eighth Congressional 
District?
  Mr. AKIN. I just want to stop you because what you're saying, people 
are going to think that this is either a comedy or a fiction.

                              {time}  1845

  You're saying that we put millions of Federal dollars into creating a 
Web site to let people know where the jobs were being created by this 
supposedly stimulus bill, and whoever it was that was hired said that 
the jobs are going into an Eighth and a Ninth and a Tenth Congressional 
District in Louisiana, and you, being from Louisiana, know there's only 
seven districts. So you're saying the Federal Government hasn't figured 
out how many congressional districts there are in Louisiana. That's 
amazing.
  Mr. SCALISE. Not only that--and maybe this would be a comedy if it 
was fiction. The problem is, this is not fiction. This is reality. This 
is what the White House actually had on their Web site that was 
supposedly showing the transparency and accountability for all the tax 
dollars that they said that they would display how that money was being 
used. And so we had actually inquired about this and our local 
newspaper, the Times Picayune of New Orleans, did a little digging of 
their own

[[Page 29029]]

and called the White House and said, How is it that you can have this 
Web site and you're showing districts that don't even exist, showing 
jobs created in places that don't exist? What is really going on here?
  The first thing the White House said is, We're not certifying the 
accuracy of the information. That was the quote from the White House. 
The group that said they would be the most transparent administration 
in history, when finally tasked with showing the American people where 
billions of dollars of money that we don't have is being spent, their 
answer was, We're not certifying the accuracy of the information.
  And then, if I can follow up, they actually went further and they 
said, Okay, wait. Hold on a second. Okay, let's say you're not 
certifying the information, but you're actually showing on your Web 
site districts--and this just isn't in Louisiana. We found this in 
Arizona and Kentucky. Probably Missouri.
  Mr. AKIN. I heard Oklahoma had 99 districts.
  Mr. SCALISE. They were showing districts that didn't exist all across 
the country, and they were bragging about the jobs that were created in 
those districts that didn't exist, those phantom districts. So they 
said, Well, how is it that you can show on your Web site a district 
that doesn't even exist? The answer from the White House--and that is 
riveting, because this is taxpayer money, this is money our children 
and grandchildren are going to have to pay back, money that you and I 
said should not have even been spent in the first place because it was 
money we don't have, and it wasn't going to create jobs--and they asked 
the White House to follow up, and they said, How is it that you can 
show information that's false on your Web site? The White House's 
answer was, Who knows, man, who really knows. That was the best they 
could come up with, and the American people deserve better.
  Mr. AKIN. This is a million-dollar Web site created by the White 
House, the Obama administration. They come up with districts that don't 
exist in various States. And when asked--what was the quote again? This 
is brilliant. This is really academic. Who knows, man, who really 
knows. Hey, far out, dude. I mean, Woodstock lives.
  What are we talking about here? They're talking about districts that 
don't exist, claiming that jobs have been created; and yet here we are 
on the floor, we're not necessarily wizards, but we know enough about 
small business that excessive Federal spending is an enemy to it. And 
so what is it that the Obama administration promised? I happen to have 
the promise. Instead of all these jobs and, Who knows man, who really 
knows, here's who really knows. This is what the forecast was going to 
be for the unemployment if we passed the stimulus bill, which we did. 
This was the Obama forecast without the stimulus bill. And what really 
happened?
  Well, the red line is what's going on. This is unemployment after we 
spent $787 billion that we don't have, which really wasn't a stimulus 
bill. As you recall, the chief of staff for the President said, We want 
to use every crisis as a good opportunity to move our agenda. So their 
agenda in the supposedly stimulus bill was to basically get rid of all 
the Republican welfare reforms and add all kinds of money in all kinds 
of various bailouts and things, but there really wasn't even an FDR-
type stimulus in this bill.
  And we stood here on this floor--I think you were with me, what was 
it, 6 months ago--we said, This isn't going to create any jobs. Now 
here we are at 10.2 percent unemployment, and that number is 
conservative because if you've lost your job for more than a year, 
you're not even on the report any more, even though you may be doing a 
little part-time work or don't have a job at all. It doesn't count you. 
And even not counting those people, 10.2 percent unemployment. And so 
what's happened here is just exactly what we talked about.
  I'd yield.
  Mr. SCALISE. Some of the economic experts are actually saying that 
the true unemployment number right now is probably closer to 17 percent 
because there's so many Americans that just stopped looking for work 
because of the tough economic times. And so what we had pointed out 
back then in February, 10 months ago when they first brought this 
stimulus bill, we pointed out that you don't create jobs by growing the 
size of government. You don't create jobs by borrowing money from our 
children and grandchildren. You create jobs by helping small businesses 
enjoy a climate where they can actually go and create jobs. Because 
it's not government that creates jobs, it's small businesses out there.
  The small businesses create about 70 percent of all the jobs in this 
country. They are our job creators. And what they've been saying and 
what American families have been saying is: Government, stop all of 
these policies that are literally shutting down companies and running 
jobs off to countries like China and India.
  And so what we've had this year, we have seen this cap-and-trade 
energy tax. That's been one of their answers that literally would run 
millions of American jobs out of this country to other countries. Then 
they came back with--of course, they had the bailouts and then they had 
the stimulus bill and then they had the budget that doubled the 
national debt in 5 years.
  And then after cap-and-trade they came with the health care bill, the 
government takeover of health care, which they're still putting as 
their top priority. Of course, President Obama is using that as his top 
priority when the American people are saying, We don't want a 
government takeover of health care; we want you to reform things that 
are broken. And we've presented legislation to actually fix the 
problems--to lower costs, to address preexisting conditions--the real 
problems American families are having with health care. But what 
American families don't want to see is the government take over all of 
health care and literally shift the hundred million more people onto a 
Medicare system that's already struggling to make ends meet. And senior 
citizens know that.
  So what they're asking is: stop dealing with all of these policies 
that are actually running more jobs out of our country. Go and help 
create jobs in small businesses by lowering tax rates. And guess what's 
going to happen here on the House floor tomorrow? The Democrat 
leadership is actually bringing a bill to make permanent the death tax 
at a 45 percent tax rate. That's going to kill small businesses in this 
country. And that's their priority instead of creating jobs.
  Mr. AKIN. If I could just ask you to yield back, everything you said 
is exactly spot on, and it is the solution to trying to deal with 
unemployment. But I think what I'd like to, if it's possible, just for 
a minute, get a little philosophical here and talk about the fact that 
when you take a look at the political parties, in general these are two 
different ideas about what you do when you've got problems with 
unemployment.
  One of them was proposed by a little British economist by the name of 
Lord Keynes. He was accompanied in his mischief with a fellow by the 
name of Morgenthau, who was FDR's Secretary of the Treasury. That idea 
was called ``stimulating the economy.'' The idea was that if the 
government will just spend enough money, it's going to create demand, 
and therefore the whole economy will run. It appeals to me as an 
engineer about just as much as the idea of reaching down, grabbing your 
bootstraps, and try to lift yourself so you can fly around the room. 
But the idea is that when you've got a bad economy, the government 
should spend money like mad and it'll ``stimulate the economy.'' And so 
that was one theory.
  Another theory that was developed--and that usually is the Democrat 
theory, although not entirely--the other theory is: get your foot off 
the spending and the taxing, leave enough money in the company and, 
particularly with small business owners, to allow them to invest. When 
they invest, they create jobs and you allow the free market and you 
allow Americans, in the ingenuity of Americans

[[Page 29030]]

and freedom, to motivate and to build a country bigger and stronger 
than it was before. And by doing that the economy gets stronger because 
individual citizens, not the government, are the ones that create the 
jobs.
  And so that was another formula that was tried by, among others, by 
JFK. Also by Ronald Reagan and G.W. Bush. All got off the taxes, left 
more money in the pocket of the small businessman, and voila, the 
economy takes off like a rocket in all three instances.
  The other example, I want to run back to it. You've got this guy 
Morgenthau and here it is 1939. Now we have turned a recession into the 
Great Depression. And Morgenthau comes before the Ways and Means 
Committee. This is something that happened long enough that people 
around here should know something about it. This was the buddy of 
little Lord Keynes. And this is what he says: we have tried spending 
money. We're spending more than we have ever spent before--and it does 
not work. And he goes on to say, After 8 years of the administration, 
we have just as much unemployment as when we started, and an enormous 
debt to boot. This is FDR's guy that was one of the original stimulus 
people.
  So when I hear people say stimulus--this is the result of stimulus: 
it's unemployment. It turns a recession into a Great Depression. So 
what did we try in April or May of this last spring? We tried the same 
dumb idea. And guess what? We're getting the same lousy results. No big 
surprise.
  So there are two ways to approach unemployment when you've got a 
problem in the economy. And the idea of spending a whole lot of money 
that you don't have, like $787 billion, it never worked for him. And 
all of these nice predictions that we saw show that it just hasn't 
worked the way the administration said that's where we're going to be.
  Here's where we are. You see the trend of that line? That's not 
exactly a hopeful trend.
  I'd yield to my friend.
  Mr. SCALISE. I thank my friend from Missouri for pointing that out. 
And when you go back to those comments by Henry Morgenthau, the 
Treasury Secretary for FDR, the comments that he made in 1939, there's 
an old saying: history repeats itself. And the unfortunate part of that 
is we're standing at a very critical point in our Nation's history. 
We're at one of those crossroads. And are we actually going to be here 
in Congress and try to perpetuate the great legacy of America, and that 
is that every generation has inherited a better Nation than the one 
that was passed down to them by the previous generation.
  And that's a great tradition our country has always enjoyed. And that 
tradition is at risk right now. It's at risk because of the spending 
and the borrowing that's being perpetuated by the liberals that are 
running Congress right now.
  When you show that comment from FDR, it's very telling because when 
this administration came in, President Obama made a point everywhere he 
went, and he still talks about it today, saying he inherited the worst 
economy since the Great Depression. Well, first of all, if you go back 
and look at the Great Depression and the signs there, they were much 
worse than the signs he inherited. The signs he inherited weren't as 
bad as what Jimmy Carter created that ultimately led us to Ronald 
Reagan. When Jimmy Carter was President we had double-digit 
unemployment, we had double-digit interest rates, and double-digit 
inflation. In fact, they created a new term for it called 
``stagflation.''
  When President Obama came into office, we were less than 8 percent 
unemployment. So it was single digit. It was still a high number, but 
it was a single-digit number. We had very low inflation and very low 
interest rates. Right now, because of President Obama's policies, these 
policies like cap-and-trade, like the spending and the stimulus bill 
and the health care government takeover, they have led us now to 
double-digit unemployment; but what we're starting to see are the 
telltale signs also of creeping up interest rates and inflation because 
of the policies of President Obama.
  So when he talks about this being the worst economy since the Great 
Depression, I think what he was trying to do was set up an event so 
that he knew his policies probably would create double-digit 
unemployment and double-digit inflation and double-digit interest 
rates, because history does repeat itself. So he tried to set the stage 
that he was walking into something worse than what he walked into, but 
he's created an economy that virtually is leading us back to the 1930s, 
when we did have the Great Depression, and it's because of his policies 
that are spending, taxing, and borrowing our country into oblivion.
  I yield back.
  Mr. AKIN. Just reclaiming my time, the fact is that history does not 
have to repeat itself. It repeats itself if people make the same dumb 
mistakes over and over again. That's when it repeats itself. What we're 
doing here is we're doing the same things over and over again that have 
not worked in the past. But it doesn't have to be that way.
  I really thank my friend, Congressman Scalise, for his perspective 
and for joining us. I'm also joined here on the floor by my good 
friend, Mr. Thompson of Pennsylvania. I'd like to yield time to the 
gentleman.
  Mr. THOMPSON of Pennsylvania. I thank my good friend for yielding and 
for also taking the leadership on this very important debate. I think 
of all the things that are going on across this Nation--and there are 
no shortage of issues--the issue that cuts directly to the heart, the 
economic well-being of our citizens, are jobs. We know that we are in 
dire straits with jobs in this country, the first time in decades the 
unemployment rate has gone over double digits, at 10.2 percent.

                              {time}  1900

  Now looking back, I see my good friend has a chart there that talks 
about the stimulus and talks about the percentage of unemployed. I 
remember vividly sitting in this Chamber where we were talking about--
and it was a mandate that we had to do something because unemployment 
was at 8 percent, and if we did nothing, perhaps it would go over 8.5 
percent. What was done and what the Democratic Party did was to just 
spend, and I think misspend.
  I believed in my heart back then that it was not the right thing to 
do, that, frankly, it would make matters worse, that it would drive up 
unemployment, because as people would lose confidence, those 
entrepreneurs, those people that are small business people, those folks 
who were willing to take that risk and work long days--sometimes 
without taking a salary themselves to create prosperity--weren't going 
to have the confidence to be able to do that.
  Usually I like being right. But unfortunately, I'm sad to say that we 
were correct, that I was correct, when unemployment went to 10.2 
percent.
  Mr. AKIN. Just reclaiming my time, gentleman, you were here on the 
floor with me when we were talking about this very thing. It wasn't so 
many months ago. It isn't that we are great wizards of economics. It's 
just that we've learned something from history. The fact is is that the 
method and the approach of ``stimulating the economy'' or, effectively, 
tremendous levels of government spending and money that they don't 
have, does not help an economy that's ailing, and it's not going to 
help unemployment. We were here at this 8 percent unemployment, and we 
were told that, Hey, if you don't get this stimulus bill through, why, 
it's going to go above 8 percent. We passed the stimulus bill, and here 
we are at 10.2 percent. But that's not a coincidence.
  Now of course the Obama administration would love to try to blame 
that on President Bush and everything. But what he has unfortunately 
not done is learned from--even if he didn't want to learn from a 
Republican, he could learn from a Democrat. He could go back to JFK. 
JFK was faced with this problem. He had a problem with unemployment. 
And what did he do? He did something that was not intuitive to 
Democrats. He actually lowered taxes. He did a tax reduction just the 
same way Ronald Reagan did.

[[Page 29031]]

  And the effect of that tax reduction was to allow the small 
businessman to have more money to invest in their business. And guess 
what happens? When small businessmen have the liquidity and they have 
more money to invest in their business, they add a wing on the 
building, they add a new machine, a new process, a new invention, a new 
idea. And freedom works. What happens is, you create jobs, and the 
economy takes off.
  Now here are some numbers that--to my good friend, Congressman 
Thompson from Pennsylvania, you weren't here at the time. But when I 
came in at the beginning of 2001, people don't realize--just because 
the Federal Government doesn't like to balance their budget--they don't 
like to realize how much these recessions and a bad economy hurts the 
Federal Government in terms of taxation, in terms of revenue.
  And what was going on was, you know, the liberals were crying and 
moaning about how much money we spent on tax reduction, and Oh, we're 
giving the rich guys a deal, and you're reducing taxes, and that's 
going to cost the Federal Government all its revenue, because they 
calculated that if you lower taxes, then you're going to collect less 
revenue. That was the logic. It seems intuitive when you just look at 
it superficially. But what you found was--and this was an interesting 
number--as we reduce taxes, the businessmen, the owners of small 
businesses, then created more jobs because they had money to spend. 
They created more jobs, and the economy turns around. What happens is, 
we take in more revenue than we had before.
  But let's just say that, even in the most pessimistic sense, what 
surprised me was this: If you added the cost of--supposedly the cost of 
the Bush tax cuts, and you added the cost of the wars in Iraq and 
Afghanistan together, that total dollar value was less than what we had 
lost by the recession and what the recession had cost the Federal 
Government in revenue. You see this, gentleman, in Pennsylvania--and we 
do in Missouri, all the other States around the Union, particularly 
that have balanced budget amendments--and that is, when the recession 
comes, boy, the States are hurting. They have to really scramble 
because their revenues drop dramatically when we enter a recession. But 
that's also true of the Federal Government. Our revenues drop 
tremendously.
  So this formula of excessive government spending is the exact wrong 
thing to do. And what it does is, it turns a recession into a 
depression. That's why these charts are going the way they are. This 
should be a warning sign that what we should not be doing is a whole 
lot more taxing on small business, yet it seems that every time you 
turn around, here comes another tax. We've got to hit somebody, so why 
not tax?
  Let's take a look at just one other thing, and this will be something 
I would like to get your impression on because Pennsylvania is a good 
industrial State. You've got a lot of jobs, a lot of good hardworking 
people there. It's kind of a theoretical question. But does the 
government really create jobs? You know, on the surface, it seems like 
if the government takes the money and hires somebody to build a 
building or something, it seems like they have created a job, because 
somebody's got to build the building, and they took some money, and 
they paid somebody, and the somebody did something.
  So can the government really create jobs? What we find is that you've 
got to be careful. I just wanted you to talk about that a little bit, 
if you would like to, gentleman.
  Mr. THOMPSON of Pennsylvania. I would, and I appreciate that 
opportunity. The government cannot create jobs. Unemployment is now 
10.2 percent. I would admit that I'm sure within that, even despite the 
bad unemployment, there are jobs that are temporarily subsidized by the 
Federal Government, even some of the projects that I originally thought 
would be good stimulus infrastructure projects. Well, those are not 
sustainable jobs. Those jobs are only there as long as the government 
is subsidizing them. As soon as that subsidy goes away, as soon as the 
stimulus money is spent, those folks are laid off.
  A job, as I define it, is a good family-sustaining job that is there, 
that grows, that not only grows but that is working in a business, 
mostly small businesses is my experience, that is creating other new 
jobs. So this really has been fiscally irresponsible in terms of the 
spending that has gone on. It hasn't gone on for the right reasons. I 
think you and I are both supporters of a better plan. Now this is going 
back to when we were debating the stimulus originally, and the 
Republican alternative we had recognized that the true economic engine 
of this country is small businesses.
  Mr. AKIN. Right.
  Mr. THOMPSON of Pennsylvania. And we had proposals that were put on 
the table to ask for a vote that would provide tax deductions of up to 
20 percent for small businesses, benefits that went to businesses with 
500 employees or less, which effectively employ a large majority of 
Americans throughout this Nation. They are economic engines that create 
prosperity, create new jobs and not jobs that will go away when 
government subsidies stop. These are jobs that are sustainable because 
they are based on real economics. They are employing people that are 
hardworking Americans, and most of these are small businesses owned by 
individuals who are willing to make the sacrifices, take the risks to 
go after that.
  Now as I travel around my district right now, I've talked with a 
number of people that I consider my heroes in terms of small 
businessmen and -women, people who have started with nothing, but 
they're willing to work hard to take that risk, and they had that 
American dream.
  Mr. AKIN. Put everything on the line.
  Mr. THOMPSON of Pennsylvania. Absolutely. And year after year, these 
folks have been the ones that have gone out, and they've created new 
jobs every year by taking what they've invested, the return on their 
investment, and put it back into their small business. They reinvest 
there.
  And you know what, I can't believe how many of them I'm talking with 
right now that are sitting on the sidelines because they're afraid of 
what's been going on in this country since January. They're afraid of 
the deficit spending they've seen. They're afraid of the regulations 
we've seen. These are small businessmen that--most of them pay their 
taxes as a limited liability corporation or an S corporation. So they 
pay their taxes on their businesses through their personal income tax. 
These are the folks that my friends on the Democratic side of the aisle 
have been piling on in terms of new taxes, more taxes, claiming these 
are the rich, and they can afford to pay more taxes. Well, actually 
what these are are the job creators, and when we pile on them, it 
forces them to sit on the sidelines.
  Mr. AKIN. Just reclaiming my time, what you're talking about is the 
old proverb of killing the goose that lays a golden egg. Here is the 
thing that's a little bit tricky, because if you think about it, the 
government goes to hire somebody to build a highway. You say, Well, 
that's a good job. Somebody is building a highway. Well, it's true that 
for some period of time--and you put the emphasis on temporary--that 
job is there as long as we are taxing somebody to get the money in 
order to hire that guy. The way that economics works is that for every 
job, by taking taxpayers' money and creating a job with the government, 
what we do is we kill 2.2 jobs in the private sector.
  So effectively, what you're doing is a very inefficient means of 
bleeding part of the sector that creates the real jobs and creating 
temporarily a government job. My son is in Afghanistan. We have places 
where the Federal Government hires people. They're legitimate jobs that 
need to be done, but all of those things are balanced on the back of 
the private sector. If you get too greedy and you start to squeeze the 
private sector enough, not only do you make it sick, you can kill it. 
And that's what was done during the Great Depression. They started 
taxing those small businesses so much and put so many regulations on 
them that they killed them, and they went out of business.

[[Page 29032]]

  And that's what's starting to happen, and that's what frightens me 
terribly about the approach that we've got here. As I started this 
evening, I talked about what are the things that destroy jobs, and you 
just intuitively--you are talking about the people of Pennsylvania and 
about the businesspeople, you know, those courageous, quiet souls that 
go out and take the risks, not knowing whether they're going to end up 
sleeping under a park bench if their business goes out. They've put 
their whole life into it. They've invested in a new piece of equipment. 
And in the process, they create wealth and create jobs and stuff, those 
people.
  Well, what do we do if you really want to hurt them? Well, what we do 
is everything we've been doing for the last year. First of all, it's 
this out-of-control Federal spending on all kinds of wasteful things. 
For instance, that stimulus bill had billions of dollars for community 
organizers like ACORN. We had money in that bill to produce that Web 
site that created congressional districts that don't even exist, 
claiming the jobs were created. That's a waste of money. The next 
thing, as you properly pointed out, is that you start taxing people, 
not only for the stimulus bill, but you tax them on energy.
  So now this guy that's got a business, perhaps he uses a fair amount 
of energy, thinks, uh-oh, I'm going to have taxes on energy now. Then 
the issue that you properly pointed out is that you start creating this 
sense of fear and uncertainty. So now you've got red tape and more 
taxes and more taxes. The guy thinks, How in the world am I going to 
make a living with that? That's what's being done not just in Missouri 
and Pennsylvania, but it's being done to our economy because we're 
doing the wrong things. And it's not so complicated because other 
Presidents have shown the right way to go.
  Let's just take a look at what we're doing, just hammering them 
fiscally. You started to list them off. First of all, there's the death 
tax, and there's dividends and capital gains. Those are taxes that were 
cut by Bush back in 2001 and '03 in order to get those small 
businessmen up and going. So those have been cut temporarily, and now 
that's going to expire, and what have the Democrats told us? I yield.
  Mr. THOMPSON of Pennsylvania. I think this week, tomorrow we're going 
to be voting on the estate tax here.
  Mr. AKIN. You mean the death tax.
  Mr. THOMPSON of Pennsylvania. The death tax.
  Mr. AKIN. Death is a taxable event, is the way they want it to be.
  Mr. THOMPSON of Pennsylvania. It's not only a taxable event, but it's 
double taxation because all the money the government will be taxing has 
already been taxed at one time or another.
  Mr. AKIN. So we'll get them coming and get them going. If they're 
dead, they don't complain as much.
  Mr. THOMPSON of Pennsylvania. I think that's an excellent point, but 
that still doesn't make it right, and it's just absolutely wrong. I 
think the rate that we're looking at was 45 percent.
  Mr. AKIN. Okay. So let's just run this logic. How logical is this if 
you want a decent economy? A guy is a farmer. Let's say he's got 200 
acres of ground, maybe it's 2,000 acres of ground, and some tractors, 
and he dies. Now his son wanted to run the farm. So now when he dies, 
what does the son have to do?
  Mr. THOMPSON of Pennsylvania. He's got to sell part of the farm 
because there is certainly no large fortune in farming sitting back 
there in liquid assets to be able to pay the death tax.
  Mr. AKIN. So he has got to pay 45 percent of the value of the farm. 
If he's got 2,000 acres and a couple of tractors or whatever it is, he 
will have to sell almost half of that. Then it will get to the point 
where the farm is no longer selling half of what it makes it so that it 
doesn't really work. So what happens then?
  Mr. THOMPSON of Pennsylvania. Well, I can't imagine. And today 
farming is such a challenge. We just had a hearing earlier today with 
one of the Agriculture subcommittees on the impact of the climate 
change on farmers. I was relating the plight of the average dairy 
farmer in my district. Dairy farming is a big industry. It's certainly 
an important industry to our Nation. Farms range in sizes, but the 
average size of a farm in my district is about 80 head of cow, 80 to 
85. They tend to have enough acreage just to grow their own corn, to 
grow their own feed. Beyond that, that's the operation they run. And 
today on a dairy farm--and this is a Nationwide statistic--because of 
the problems we have with the pricing of milk, the fact that the 
Federal Government got involved in that decades ago, the average farmer 
loses $100 per cow per month.
  Obviously, when, unfortunately, a dairy farmer passes away, there is 
no reserve sitting there to pay off the death tax. What are you going 
to sell from a dairy farm to pay that tax? Are you going to sell the 
cows? Well, you're not going to be a dairy farmer. Are you going to 
sell off the acreage? You're not going to be a dairy farmer. Are you 
going to sell the barn? You can't do that. You need the tractor. I 
think that just represents the plight of our farmers with that type of 
tax. There is nowhere to go.
  Mr. AKIN. Reclaiming my time, it's interesting you mention that. I 
have a nephew that worked on a dairy farm in upper New York State. What 
you mentioned, 80 cow. The number I recall then was about 90 cows, 90 
to 100 cows. It's kind of the standard lot size. It's about how much 
one man can kind of operate with his family.
  So if you all of a sudden have to sell half of that, even if you 
could--say you could sell half the cows, half the farm, half the 
equipment, the problem is that half of it doesn't work. It no longer 
works. So if with every generation, you've got to cut the business in 
half, and give half to the Federal Government, how in the world are we 
going to have jobs and a strong economy? It's just nuts.

                              {time}  1915

  So, first off, we've got the death tax. We've got dividends capital 
gains. All of those are expiring and going back, which is going to have 
the exact opposite effect on the economy as what it had a couple years 
ago when we put it in place and it helped the economy get going.
  Then on top of that, we've just spent $787 billion on that silly 
stimulus bill, $700 billion for the Wall Street bailout. And now we're 
talking about the biggest tax increase in the history of the country 
for global warming, an energy tax, along with tons of redtape that goes 
along with it, telling everybody in the country they've got to have an 
electrical outlet in their garage for their golf cart or whatever it 
is.
  I mean, this is an awful lot of redtape, regulations, and taxes, all 
with the effect it's going to just kill those jobs. So there's a reason 
why that red line is going up, isn't there?
  Mr. THOMPSON of Pennsylvania. If the gentleman would yield.
  Mr. AKIN. I yield.
  Mr. THOMPSON of Pennsylvania. Certainly, we cannot forget the taxes 
from the health care bill.
  Mr. AKIN. Of course that's a couple of additional taxes on top of the 
small business men.
  Mr. THOMPSON of Pennsylvania. Over $700 billion in taxes, much of 
that balanced on the backs of small businesses.
  Mr. AKIN. So you're telling the small business man now we're going to 
tell you what kind of health insurance your employees need and you're 
going to have to pay for it, and if you don't do that, we're going to 
fine you and we're still going to tax you for it. And on top of that, 
that isn't quite enough to take out of your hide, we're also going to 
put an additional 5-something percent tax on top of any profits that 
you make in your business. So for sure you won't be able to invest that 
money back into your business because we're going to get that, too.
  So on top of all of this, the redtape, the uncertainty, the lousy 
economy, tax after tax after tax, now we're going to hit them and tell 
them, by the way, any employee you've got, you're going to have to pay 
for their health care and

[[Page 29033]]

we're going to tax you heavily for that. What's that going to make a 
small business man do?
  I yield.
  Mr. THOMPSON of Pennsylvania. That's a great point.
  There was a headline in The Wall Street Journal just yesterday that 
said ``Job Cuts Loom as Stimulus Fades,'' and I think that speaks to 
the original point that we've made that the stimulus is unsuccessful. 
It has failed.
  I know the President is having a jobs summit tomorrow. I'm hoping, 
actually praying, that when he does that, that better minds prevail and 
he hears from people attending that summit the types of things that 
we've been talking about. And we have been talking about this since 
January because we know we've had this issue. We have been talking 
about things such as cutting taxes for small businesses, of reducing 
the burdens that we put on those job creators. I mean, those are the 
types of things that we should be doing in terms of economic stimulus. 
And I know that our friends, the Democratic colleagues, are going to be 
looking at a stimulus two here, and my concern, my big fear is it's 
going to another special interest, big spending bill that really isn't 
about creating jobs, but it will be in the name of jobs.
  Mr. AKIN. Reclaiming my time, I appreciated your optimism. The 
President has declared that he's going to have a meeting to get 
together and talk about the economy and everything, but I happen to 
know something about the invitation list. I don't know who was invited, 
but I have a pretty good idea.
  I know who was not invited. The U.S. Chamber of Commerce. They 
represent businesses and small business. They weren't invited. The 
National Federation of Independent Business. These are all over. I 
assume you have them in Pennsylvania.
  Mr. THOMPSON of Pennsylvania. Oh, yes.
  Mr. AKIN. I have them in Missouri. These are coalitions of lots and 
lots of small businesses. You think they were invited? No, they're not 
invited. Who is invited? All the people who got money under the first 
stimulus bill.
  So, first of all, the whole idea of the stimulus bill is wrong 
economics. You're not going to get the economy going by spending more 
money. If getting the economy going by spending money were how you did 
it, holy smokes, our economy would be red hot and on fire. We've been 
spending money like there's no tomorrow. And the economy is not doing 
so well. Look at that unemployment line. Spending money is not the 
solution. Yet the idea of more stimulus, more stimulus, it's just nuts.
  Who was it, Einstein, that said if you keep doing the same thing and 
expect a different result, it's insanity? We're getting close.
  I yield.
  Mr. THOMPSON of Pennsylvania. There's a two-part penalty to this. One 
is that we're spending all this money, but this is not even money that 
we have. This is deficit spending. This is spending that we have to 
reach out to creditors and to take out loans. And who is our number one 
creditor? Who's the number one entity that's lending us money? It's 
China. So it's not just spending; it's deficit spending.
  The last time I remember a situation like this specifically was back 
at the tail end of the President Carter years, and my wife and I were 
young. We had just married. We were looking to purchase that first 
home. And we weren't making a whole lot of money, but it looked like, 
actually, as we looked around, that real estate wasn't particularly 
very expensive, and the reason for that was because of the inflation 
and stagflation that was going on at that point in time. So we actually 
applied for a first-time homeowner's loan from the State, and we 
thought we were in the money. We got that, and our interest rate was 14 
percent.
  Mr. AKIN. Fourteen percent.
  Mr. THOMPSON of Pennsylvania. Fourteen percent. But that was a great 
interest rate, because at that point, the banks commercially were 
lending at 19 and 20 percent. But it was because of where we were in 
terms of high inflation and high unemployment, stagflation.
  Mr. AKIN. Of course, the inflation is created by the Federal 
Government basically dumping more and more money into the money supply.
  Mr. THOMPSON of Pennsylvania. Absolutely.
  Mr. AKIN. I was just looking at a chart from 1960 up through this 
year, and you go along and it looks like a little saw tooth. It's 
running along. It's called M1, or the money supply, and last year we 
had a 10-times' increase in the government's release of that liquidity. 
Now, so far it hasn't turned into inflation yet, but every time that 
people have done that in the past, sooner or later it comes around to 
bite you as inflation.
  We were just talking about spending. Here's kind of a chart of it. 
Here's the Wall Street bailout part two, and here's the stimulus bill, 
and then there's the SCHIP and then there's the appropriations bill. 
There's another bill. And then there are the other two that have not 
been passed yet, the cap-and-tax and the health care. To estimate that 
as a trillion is being generous.
  I think it's helpful to compare a couple of things that are similar. 
As you recall, the Democrats were critical that Bush spent too much 
money. In fact, I was here some of those years. I voted against some 
things that the administration wanted because I thought it was too 
expensive. But let's take President Bush's biggest spending year. His 
biggest deficit was in 2008. That's when the Democrats ran the House 
here. That was about $450 billion or so, and that was 2008. If you took 
the $450 billion as a percent of our gross domestic product, that was 
about 3.3 percent.
  This year they just calculated the numbers, and the spending is $1.4 
trillion. That's three times more spending in the first year than 
President Bush's was in his worst year out of 8 years. Three times 
more. And it puts the level of debt that we have created not at 3.3 
percent of GDP but at 9.9. So we've more than tripled that ratio. It's 
the highest it's been since World War II because of this, because we 
just can't seem to say no to spending. And that's not the formula to 
help with the jobs problem.
  I yield.
  Mr. THOMPSON of Pennsylvania. It's almost like our Democratic 
colleagues look at it as a candy store and that there's no end to it. 
It's an endless supply. And I suspect that at some point where--I know 
that we're probably coming up on the debt ceiling in terms of the 
amount of debt that we're able and allowed by law, by statute, to 
accumulate as a country. And I don't know that exact total, but I 
believe it's somewhere around $14 trillion, and the fact is that we are 
fast approaching that just after this past year.
  I came here in January. Frankly, I think both parties were fiscally 
irresponsible in years past. I would be the first to admit that in 
terms of my party. And that's one of the reasons I was motivated to 
come, because if we were running a household, we would not be fiscally 
irresponsible. We'd live within our means. And the Federal Government 
has not done that under the leadership of either party in years past 
and certainly this year with my Democratic colleagues in control.
  The fact is that this is not a candy store, and in terms of raising 
that debt ceiling, I think that's just providing a license for more and 
more deficit spending going forward into the future. And I would 
encourage all of my colleagues that we need to be bringing that debt 
down. We need to be working towards being debt free. That is fiscal 
responsibility. That is running this House the way we run our houses at 
home, and that is something that we need to restore. We have not had 
that for a very long time in this country, but I think that is 
something that we need to be committed to.
  Mr. AKIN. You're absolutely right.
  The reason that we're getting off the wrong track here is just 
because of this whole liberal Democrat concept of economics. They're 
trying to make two plus two equal five. They're trying to basically 
repeal the law of economics.
  If you and I in our household, if we thought, oh, we're getting tight 
on money, we're starting to have economic hard times in our family, so 
let's

[[Page 29034]]

go out and just run up a huge credit card bill and that will somehow 
make it better, people would lock us up. They'd put us in little white 
suits and lock us away somewhere and say these people are crazy.
  Mr. THOMPSON of Pennsylvania. And we did that. Unfortunately, that 
does happen in our Nation, and what happens is people experience 
bankruptcy. They ruin their lives by doing that.
  Mr. AKIN. Right. Except in this case, when the Federal Government 
does it, we bankrupt the entire Nation.
  Mr. THOMPSON of Pennsylvania. Correct.
  Mr. AKIN. And one of the effects of the bankruptcy is unemployment, 
among other things, but it also is impoverishing everybody.
  You cannot repeal the basic laws of supply and demand, and you cannot 
basically give away housing where people can't afford to pay for it 
without expecting to have consequences. Kind of going back to the 
beginning of things, that's what got us into this trouble not so many 
years ago.
  Here's something I think a lot of people aren't aware of but we need 
to understand, how did we get into this problem? It was because of this 
idea that somehow we think that we are able to repeal the laws of 
economics.
  This is September 11. It's not 2001. This is September 11, 2003. It's 
an article in The New York Times, not exactly a conservative source of 
information. And here is the author of the article, and it says: ``The 
Bush administration today recommended the most significant regulatory 
overhaul in the housing finance industry since the savings and loan 
crisis a decade ago.''
  Let's get this straight. This is The New York Times. This is bad 
President Bush's saying that we need to have a significant regulatory 
overhaul in housing finance and the strongest thing since the savings 
and loan crisis.
  ``Under the plan disclosed at a congressional hearing today, a new 
agency would be created within the Treasury Department to assume 
supervision of Fannie Mae and Freddie Mac, the government-sponsored 
companies that are the two largest in the mortgage lending industry.''
  So this is 2003, Bush sees irregularities in Freddie and Fannie in 
how they're managing the business. Why would there be irregularities? 
Because they were mandated and allowed to make loans to people who 
couldn't afford to pay the loans.
  What's the Democrat response to what President Bush wanted to do? 
Well, what happened was he passed a bill in the House to do this. I was 
here. We voted for this bill. It went to the Senate. It was killed by 
the Democrats in the Senate.
  What was the Democrat response in the House to Bush's saying we've 
got to get on this Freddie-Fannie problem or we're going to have an 
economic crisis on our hands? Well, with respect to Fannie and Freddie, 
I did not want the same kind of focus on safety and soundness that we 
have in----
  The SPEAKER pro tempore. The gentleman's time has expired.
  Mr. AKIN. Thank you, gentlemen, for joining me. It seems like the 
time has flown, and I look forward to our next evening.

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