[Congressional Record (Bound Edition), Volume 156 (2010), Part 5]
[House]
[Pages 7184-7187]
[From the U.S. Government Publishing Office, www.gpo.gov]




                  WHAT GOT US INTO THIS ECONOMIC MESS

  The SPEAKER pro tempore. The gentleman from Missouri may proceed.
  Mr. AKIN. Mr. Speaker, we are just taking apart a little bit some of 
what has been happening the last couple of years, why the economy has 
been struggling some, and why we are having a lot of unemployment and 
problems. Some people have a hard time

[[Page 7185]]

understanding why it is that we are having a hard time. This little 
cartoon kind of comes along the same lines.
  ``Now, give me one reason why you are not hiring.'' And you have 
coming into the China shop a couple of bulls. You have the health care 
reform and the cap-and-tax and the war on business tax. That is 
basically businesses getting just hammered with taxes.
  Of course, the picture here is we are not doing the right things that 
we need to be doing to keep the economy going and to create jobs. In 
fact, we are creating a perfect storm. People have said we have a war 
going on business, and we really do. We are doing everything wrong to 
try to create jobs and try to get the economy going.
  So, on the one hand, we are making the statement here that families 
across the country are tightening their belts and making tough 
decisions. The Federal Government has got to do the same. What is the 
Federal Government doing? Oh, we are doing the Wall Street bailout, we 
are doing the stimulus bill, we are doing the cap-and-tax bill, we are 
doing the socialized medicine bill. And now we are proposing 
institutionalizing bailouts, so that anytime anything goes wrong, the 
Federal Government takes your tax dollars and goes in and picks the 
winners and losers and bails companies out. That is exactly the wrong 
message.
  I am joined by a good friend of mine from the wonderful State of 
Pennsylvania, and I would yield to him just a moment to share along the 
same line.
  Mr. THOMPSON of Pennsylvania. Well, I thank my good friend from 
Missouri for leading this very important Special Order where we are 
talking about jobs.
  You know, I don't want to misquote, I believe it was President 
Reagan--I will give him credit at this point anyway--that made the 
statement that the best welfare program there is is a job.
  Mr. AKIN. Get him a job, yes.
  Mr. THOMPSON of Pennsylvania. Give him a job. And that is what we 
have not been doing.
  Mr. AKIN. Do you think people want to be bailed out? Do you think 
people want their unemployment to be extended? Would they rather be 
sitting being unemployed, or would they rather have a good job with 
really good prospects and a bright future? I think people would rather 
have a strong economy.
  Mr. THOMPSON of Pennsylvania. I think so, too. I talked with a 
constituent of mine from Lock Haven, Pennsylvania, today, and he was 
calling to talk about the unemployment because he has been without a 
job. And as we got talking, it was very clear that what he wanted was 
not so much the unemployment check, but he really wants a job. We got 
talking about the things that go into that and why we are not seeing 
the job growth. We are still bleeding to death in terms of our jobs in 
this country.
  As I go around the district and I talk with job creators, the job 
creators are, I think as you know, our small business owners. The large 
majority of work is provided through small businesses.
  Mr. AKIN. The gentleman is right. I think, if I recall, if you take 
500 employees or less, that is 80 percent of the jobs in America. So 
500 employees or less, which 500 is kind of more of a medium size, but 
500 down, that is 80 percent of U.S. employment. So policies that 
affect those small businesses are a big deal in terms of jobs.
  Mr. THOMPSON of Pennsylvania. They are. And I heard you use the word 
``uncertainty.'' I guess I kind of fall back on my health care 
background, and when it comes to jobs in this country, my diagnosis is 
we have a psychological problem. We have a total lack of confidence and 
a lack of trust in the Federal Government. And it is earned. It is the 
things you have there on your chart as job killers.
  It is the individual small business people who normally every year 
take a portion, usually a part of their profits, and reinvest it into 
their companies. When they do that, they expand product lines, they 
expand locations, they expand service lines, and they create jobs, good 
jobs. Well, these people are sitting on the sideline right now because 
they are concerned with all the things they have seen for some time, 
especially these past 16 months, many of the things that you have 
identified there, and I heard that message again today.
  I sit on the Small Business Committee, and we had a hearing with five 
or six witnesses that came in that represent small businesses. And we 
were there to talk about specifically the role of taxes in small 
business and what that does to really hurt small businesses.
  Mr. AKIN. I would like to stop you for a minute. If I had to pick one 
on here, because we just had a jobs summit actually on Main Street, 
back in St. Charles in my district. We had to do one on Main Street 
because everybody talks about Main Street.
  I asked a whole bunch of small business leaders--we had probably 30 
or 40 of them, and we created a list of job killers, and this chart was 
made before that time. I asked them to give me their list and then rate 
them in terms of priority which is the most deadly in terms of killing 
jobs.
  They came to exactly what you said, which is excessive taxation 
because when you take that tax out of the hide of the owner of the 
business, you really make it so that he cannot then invest in those 
jobs. So excessive taxation was the deal.
  Of course, what we have done is we have got, what is it, the people 
in the upper tenth of the income bracket are paying something like, 
what is it, 50 percent of all of the taxes in the country or something. 
So we are just hammering these small business owners with taxes. Then 
we wonder why we don't have jobs. And you have the same experience, I 
gather.
  Mr. THOMPSON of Pennsylvania. Yes. This panel that we heard in the 
Small Business Committee just reaffirmed that chart that you have. Each 
of those bullets came up in the discussion today.
  When you look at the taxes, tax increases have been levied in the 
past 16 months. Our colleagues across the aisle said, well, we are 
going after the wealthy. We are going to increase taxes on the wealthy. 
Well, at least 40 percent of the individuals who are experiencing and 
will be experiencing, especially next year come January 1, 2011, 
significant tax increases, are small business owners. They are people 
who are organized as limited liability corporations, S corporations. 
They pay their taxes as individuals, but frankly, they make a payroll 
out of their income, and they create just tremendously important jobs.
  Mr. AKIN. Of course, you know, that is really kind of a thing. Maybe 
people feel safe to say, hey, we are just going to tax all those rich 
guys; don't you worry about all the policies we have got.
  Well, you know, when you do that Wall Street bailout where the 
government is going to pick winners and losers, then you do the big 
stimulus thing, where you are taking taxpayer money and giving it to 
States that don't manage their State properly, and you are increasing 
the number of food stamps and all these other kinds of things that if 
you want to believe in big government they think they need to do, and 
then you are going to do this cap-and-tax thing, so everybody's energy 
cost is going to go up.
  Now, the President said, I guarantee you, I am not going to raise 
taxes on people making less than $250,000, and yet in this Chamber we 
pass a tax that as soon as you flip a light switch you are going to 
start paying more taxes.

                              {time}  1715

  Now, that's not people making $250,000, that's an average guy that 
wants to turn his lights on. So you say, well, shoot, we're going to 
tax the rich guys. The trouble is those rich guys are the ones that are 
hiring you and your kids.
  Mr. THOMPSON of Pennsylvania. If the gentleman will yield, in terms 
of the cap-and-trade, cap-and-tax, or the light switch tax, I guess, in 
Pennsylvania the Public Utility Commission sent a letter to the 
Pennsylvania delegation adamantly opposing cap-and-trade because they 
did their analysis of that bill, and electricity costs in Pennsylvania 
would rise by 30 percent.

[[Page 7186]]

  Now, that 30 percent tax, that increase will not discriminate. It 
will hit the most wealthy of Pennsylvania citizens, but just as much, 
and I think more severely even, it's going to address those who are 
just living paycheck to paycheck today. And even people that aren't 
getting by financially, to see a 30 percent increase in the cost of 
electricity, that's immoral to me.
  Mr. AKIN. The thing that's amazing about that to me, I am an engineer 
by training, and let's assume that all of this global warming 
supposedly science were all true, which we now know, particularly since 
East Anglia and the scandal there that all of these guys were doctoring 
the numbers and everything, but let's just assume for sake of argument 
that CO2 is really a bad gas and aside from the fact that 
all of us have to stop breathing because we breathe out carbon dioxide.
  Aside from that, let's just assume that that's true. If you really 
wanted to get rid of CO2 in America, regardless of what 
other nations in the world are doing, you think this is our moral 
obligation to get rid of CO2, we could get rid of all the 
CO2 produced by all the passenger cars in America, the 
equivalent of that amount of CO2, by simply taking the 
electric generation that's done in our country that's done with coal-
fired plants, we currently have 20 percent of electricity in America is 
made by nuclear, if we were to go from 20 to 40 percent nuclear, we 
would get rid of all the CO2 produced by every passenger car 
in America.
  So if you are a Democrat and you really think CO2 is so 
bad, why not come out here with a couple of page bill saying we're just 
going to gradually phase in nuclear plants in place of these coal-fired 
plants, and we would get rid of all the CO2 produced by 
every passenger car in America. No, that's not what comes out. We come 
out with this thousand-page bill, 300 pages, passed at 3 o'clock in the 
morning. People don't know what's in it. There isn't even a copy of the 
bill on the floor. And we vote for this piece of trash, which 
fortunately the Senate wasn't dumb enough to have passed. And anybody 
who flips a light switch would have been taxed. Your State would have 
gotten a 30 percent increase in electric.
  Now, what does that do to jobs?
  Mr. THOMPSON of Pennsylvania. That kills jobs.
  Mr. AKIN. It just kills jobs. So this excessive taxation, combined 
with things like amount of government mandates and red tape, this 
starts to gang up. And one thing on top of the next on top of the next, 
and you get unemployment.
  Go ahead. I didn't mean to interrupt. We're talking about a light 
switch tax. You were in the business that's getting the wheelchair tax. 
It's interesting to see what people want to tax. Now we are going to 
want to tax wheelchairs. That's with that socialized medicine bill.
  Mr. THOMPSON of Pennsylvania. The medical device tax that is being 
levied on medical devices has such a wide range. And people don't 
understand what medical devices are. We are a country that has just 
benefited tremendously from innovation in terms of medical devices and 
medical advancements. Our health care system as we currently have it, 
now see what happens to it under ObamaCare, but as it currently has it, 
this is a country that develops innovations, life-saving techniques, 
diagnostic procedures, pharmaceuticals.
  With medical devices, it is not just wheelchairs. It's everything 
from bed pans to prosthetic arms. It's insulin pumps. Medical devices 
is a term that really has many, many different applications. And those 
devices really go towards maintaining quality of life, maintaining 
maximal independence for people. Most taxes I would put as immoral, but 
you start putting a tax on electricity for everybody, and you put a tax 
on medical devices, it's hard to imagine anything that's going to be 
more immoral than that.
  At the panel today with the small businesses, I asked a specific 
question about where are we in terms, what's the impact, given that 
even before these taxes we have got a tax out there in terms of 
corporate income tax, second highest in the world. And what does that 
do to our small businesses, that alone? How are they supposed to 
compete? Especially, you know, those businesses that are formed as 
corporations. And there are many of them that have to pay that.
  I see my good friend has a great chart there that addresses the 
economic freedom index. The response was that where we have the 
potential for trade, it really puts us at a tremendous disadvantage 
where we have got this tax burden. That's just one more thing that 
keeps businesses from growing, jobs from being created, and for 
economic prosperity.
  Mr. AKIN. I think maybe we could get too negative here, because there 
are solutions to these problems. This stuff is not new. Other 
Presidents and other people in different decades have dealt with these 
problems. There is a solution to getting the economy up and going. And 
the funny thing is it's sad, but the Democrats haven't learned from 
JFK. JFK had the formula right. He reduced taxes. As he reduced taxes, 
what that meant was the private sector started to grow. It created 
jobs. And guess what happened? The government actually got more revenue 
by reducing taxes, which seems a little bit odd.
  But by getting the taxes off the backs of the American public, the 
businesses prospered when they did. The taxes that were there brought 
in more revenue to the government than if they hadn't done that. So by 
cutting taxes, JFK understood that you could get the economy going. 
Ronald Reagan did the same thing. George Bush II did the same thing. By 
cutting taxes, you allow private citizens to invest their money. When 
they do that, it gets the economy going.
  The government doesn't get the economy going. All the government can 
do is to create an environment that helps. So it's not like these 
problems, it's not like there's no answer and doom and gloom. There are 
clear-cut answers. That's what's so terribly frustrating when you see 
our government at war with business and the President saying, oh, we've 
got to be sensitive to jobs and this and that, and every single policy 
proposed is destructive to job creation and the economy.
  Now, here is the funny thing. Here are the regulations. This is 
overall economic freedom index. You see America in 2001, here it's 
sixth. It's already down to eighth. If you take a look at corporate 
taxes, we are the second highest corporate taxes of any country in the 
world, behind only Japan. And so our policies are not set to help us 
with these problems. We are doing all the wrong things.
  And yet the economy could rebound. Why would it rebound? Well, it 
would be a little bit like this. I want you to picture, you've got a 
weak heart. You've had a four-way heart bypass. You also have diabetes. 
You also have several other medical maladies. So you're not feeling too 
super strong. And all of a sudden somebody gives you some crack 
cocaine, and you feel like you're Superman and you're doing great. 
Well, that's what's just happened to the U.S. economy.
  We're doing everything wrong from a point of view of policy. We're 
doing everything to kill jobs. But we are doing one thing that's going 
to make people think everything is okay. And that is the Federal 
Reserve has increased a tremendous amount of liquidity with a very low 
interest rate. And that trumps all of the bad policy decisions we have 
been making. And so you see Wall Street starting to pick up and stock 
prices starting to go up and all. Why is that happening? It's happening 
because we have allowed the Fed to create all this liquidity and 
basically put our economy on steroids. And that's not going to work for 
very long, and it's not going to fix that unemployment problem. And 
before long, we are going to jump from unemployment to an incredible 
level of inflation.
  Again, this stuff isn't so rocket sciencey. We know what's the right 
thing to do, but we are unwilling to do it. We are unwilling to get off 
the big spending kick. That's what really has to change.
  I yield to my friend.

[[Page 7187]]


  Mr. THOMPSON of Pennsylvania. I share your concern. In fact, I guess 
the artificially induced high from the crack cocaine description that 
you used, I think that's going to describe 2010. I think that because 
we have infused a tremendous amount of taxpayer money, and I think in a 
very careless and reckless way into the economy, that's going to help 
mask the symptoms of the problems that we have in terms of jobs for 
2010. And we may all feel better in 2010.
  Here is my concern. I think with the amount of deficit spending that 
we have done that come January 1, 2011, this country falls off a cliff 
financially. The tax increases that will be implemented, the ramping up 
of an Environmental Protection Agency that has been tripled in size. We 
have already seen abusive behavior on their part in terms of them 
trying to legislate through their authority as an agency, redefining 
what a hazardous gas is, superseding all of their normal procedures 
they use in terms of scientific process to decide that carbon dioxide 
is a hazardous gas. All those things, I am very concerned with where 
that takes us in 2011.
  I think deficit spending, things never work out well when you do that 
type of borrowing, that type of debt, especially when we are indebted 
principally to other countries with much of that debt.
  Mr. AKIN. You are absolutely right. 2010 should be a little better 
year because of a weird thing. And that is the Bush cuts in capital 
gains expire next year. So if you have any capital gains in something, 
there is a huge incentive this year to sell whatever it is and get your 
capital gains tax paid this year at 20 percent because in 2011 it's 
going to jump to 35 percent. Because you know the Democrats are not 
going to allow that tax cut to stay. And so you are creating an 
artificial opportunity for 2010 to look better, when we are going to 
get hammered in 2011 because everybody's going to sell everything that 
they have capital gains on that they're going to take that tax hit on.
  But here is what's really going on. If you take a look, these are the 
receipts. This is the money coming into the Federal Government. That's 
this blue dot. And this pink and red dot is how much we are spending. 
You take a look at the size of the two, and you are going uh-oh, 
something's wrong here. And that's why I said that when we spend a 
dollar, the dollar we spend of Federal money, 41 cents is borrowed.
  You take a look over here at our outlays, what's going on? Social 
Security, Medicare, and Medicaid. Those are the three big entitlements. 
They are now bigger than all the rest of the spending. I am on the 
Armed Services Committee. Guess what I am seeing. We are gutting 
defense. Why? Because we don't have enough money here and we have too 
much over here.
  Now obviously the Democrats are not that worried about balancing the 
budget. They are spending a ton on all kinds of entitlements and 
bailouts and all that kind of stuff. But sooner or later with this 
amount of entitlement, this amount of defense, we are going to pick up 
the other problem, which is we are not going to be able to defend 
ourselves. And you are seeing severe cuts in defense spending now, 
particularly missile defense and our offensive weapons, which have 
always been the thing that have kept Americans safe.
  All of these problems don't stay tightly inside a box. One thing 
spills over into the other. But these huge outlays of big government 
have got to be brought under control for our Nation to survive. And 
just another infusion of running the printing presses and dropping the 
interest rate, that crack cocaine works for a little while, but it 
comes back with a whale of a hangover.
  Mr. THOMPSON of Pennsylvania. It's deadly in the end.
  Mr. AKIN. The trouble is that it's people in your and my district 
that are going to get hung with the cost of this deal. They are the 
ones that are struggling to make ends meet. They are the ones whose 
families are having a hard time. They are the ones that are getting 
taxed out of house and home. And they are the ones that are saying, I 
don't trust what Washington, D.C. is doing. I don't trust what Wall 
Street is doing. I don't know what to do with the last of my savings 
that just shrunk out from underneath me because of all of these 
policies.
  We have to get back to some sanity and do the basic things that work. 
We have got to stop taxing the people who run the businesses. We have 
to get liquidity to business owners so that they have money to invest. 
What we have to do is to stop all the red tape. We have to basically 
change the banking rules so that there is some liquidity that way. And 
particularly, we have got to get off of the big spending. We just can't 
keep running this kind of deficit. This is just something that will not 
work mechanically. And so we are going to have to make some tough 
decisions. What we are going to have to do is let free enterprise work 
again, because that's the thing that pulls us out of this mess is good 
old American freedom, just allowing the U.S. citizens to be unfettered, 
have a chance to keep some of what they make, invest in their 
businesses, invest in Americans, and stop this whole sort of 
covetousness idea that any time somebody makes any money, the 
government's got to take it away from them.

                              {time}  1730

  If we want jobs, if we want a strong economy, and if we want money 
for the government to be able to spend to pay the government's bills, 
we are going to have to allow freedom to flourish in America instead of 
trying to stomp it out, which is what we are doing. We are following 
the failed model of the Soviet Union, and we are stomping out freedom.
  Thank you, gentleman. I really appreciate Pennsylvania for sending GT 
down. It is a treat to serve with you.
  Thank you all.

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