[Congressional Record (Bound Edition), Volume 157 (2011), Part 1]
[Senate]
[Pages 1244-1247]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              THE ECONOMY

  Mr. SESSIONS. Mr. President, the news broke this morning concerning 
the jobs report for January. The numbers came in that we only added 
36,000 new jobs to the U.S. economy. The Wall Street Journal lead is, 
``Economy Adds Few Jobs.'' It is a difficult matter. Some say maybe the 
weather had something to do with it. The Washington Post report noted 
that job creation was far less than economists had predicted.
  Mr. President, 36,000 might sound pretty good, at least not bad; but 
in truth it is not good. Mr. Bernanke, the Chairman of the Federal 
Reserve, testified before our Budget Committee--of which the Presiding 
Officer, Senator Begich, is a member--that our economy needs to produce 
about 150,000 jobs a month--it needs to add that many--to stay even. We 
need to be adding about 250,000 a month to begin to reduce unemployment 
in a significant way.
  The numbers were mixed. Some people saw some good news in the report. 
The Household Survey showed a drop in unemployment, which was not a 
bad. But I think the low number of actual jobs created was pretty 
troubling.
  I will say a few things I believe are important and need to be 
understood.
  This Congress passed a stimulus package that was supposed to keep 
unemployment from going above 8 percent. It went to 9.6. It has dropped 
some since then, but it is still extraordinarily high. We passed that 
package, and it did not stop unemployment from rising. It was based on 
the Keynesian concept of government borrowing money to spend into the 
economy on the theory that government can create jobs.
  Not long before the vote, Gary Becker, the Nobel Prize-winning 
economist from the University of Chicago, wrote an op-ed. In it he said 
he examined the proposal and that it was far too ineffective in 
creating jobs and economic growth. He warned that it would not be 
effective. He warned that the growth factor was below 1. It should be 
above 1. He said maybe .7, and that this, in his opinion, was not a 
good investment of $800 billion. Every penny of it was borrowed. We did 
not have that money. We decided to borrow the money in an attempt to 
stimulate the economy.
  I know many heard it said, and the President repeated, that this was 
a new infrastructure program; that we were going to fix our crumbling 
infrastructure. We were going to create American jobs and make our 
highways and bridges safer and better.
  That was an inaccurate statement. It became clear before the bill 
passed--I remember pointing it out, as did others--that only 5 percent 
of the $800 billion went to bridges and highways--5 percent. This was 
not a bridge project. It expanded entitlements and bailed out states. 
It created no real growth in productivity. It has not done what it was 
advertised to do.
  I hate to say ``I told you so,'' but when you take $800 billion of 
borrowed money and let it compound at 4 percent, you create a liability 
that will be on our books for the indefinite future, maybe forever--
that we will be forced to pay about $32 billion a year in interest.
  Every year now when we do our budget, we have to figure that first we 
have to pay $32 billion for the interest on that money we borrowed that 
was supposed to stimulate the economy, that did not stimulate the 
economy.
  Mr. President, this amount we spend on the interest cost is roughly 
equivalent to what we spend on highways annually. Rather than paying 
interest on a bill that failed to increase economic growth, we could 
have doubled the Federal highway budget.
  It was, as Bill Gross, the guru behind the PIMCO bond fund--one the 
largest bond funds in the world--said: Emphasis in America and some 
other nations has been on consumption, not effectively enough on 
growth, which is sort of what Professor Becker said and Federal Reserve 
Chairman, Mr. Bernanke, said recently--that there are going to be 
several years before we get to a normal job growth situation, a normal 
unemployment rate in our country.
  Even though the unemployment rate seems to have dropped, it is 
important to note that a number of the people dropping off the 
unemployment rolls are dropping off because they have given up looking 
for work. They have gotten discouraged and they are no longer going 
down to the unemployment office registering and looking for work. That 
is not good. A healthy, vibrant, growing economy attracts more people 
into the workforce.
  There was an article in Baron's financial magazine recently that 
noted that as of December, the number of hours being worked by 
employees had

[[Page 1245]]

not gone up. Normally if unemployment goes down and businesses hire 
more workers, they will show average hours worked going up. It was in 
the low thirties, and it was not going up. They said maybe that is a 
signal that some may be too optimistic.
  They also noted that wages were basically flat, just a minor increase 
in wages. Whereas, the price of gasoline, which we are so thankful 
Alaska is producing for us, and food are going up. Cotton prices, 
soybean prices, corn prices are at record levels. This will translate 
into rising costs. If wages are flat and the number of people working 
is flat and costs are rising, then this is not good for the economy.
  If government cannot borrow money and create real employment of a 
sustained nature, what should government do? Recently, at a Baron's 
roundtable, Mr. Gross said loose monetary and fiscal policy has had 
some benefit, but it is a sugar high. It will not last. We cannot keep 
it up. Do we not all know that this is a sugar high that we cannot 
continue?
  What can we do? Are there things we can do? Is it hopeless? Should we 
do nothing? I do not think so. I think there are a number of things 
that I will mention that I absolutely believe we can do that will 
create jobs for people who are hurting this very moment, who are 
unemployed. It could help them have a new and better life, and it would 
not cost the U.S. Treasury anything. I believe these actions are 
significant.
  First, we need to take actions that have the tendency to create 
mechanisms that will bring down energy costs. Energy is a hidden tax--a 
hidden tax. Rising energy costs are a tax on your current income. You 
get nothing more for it. You get the same number of gallons, the same 
assets you got before, but you just have to pay more for it. You don't 
have the same amount of money for your family, your rent, your 
automobile payment; you get less money to use toward that.
  We need to produce more of it at home for two reasons: One, it helps 
contain the growing cost of fuel, which is a secret thief of the 
American citizen's income, and two, it creates American jobs. Wouldn't 
we rather have thousands more jobs in Alabama producing oil offshore or 
in Alaska, producing oil in Alaska, rather than sending our money to 
Venezuela, Nigeria, Saudi Arabia, and creating jobs there? It would be 
an additional supply source that helps bring down the cost, and it 
would create American jobs. Plus, it would keep that American wealth at 
home. It would keep that wealth at home. Sixty percent of the oil we 
are using to make the gasoline that goes into our automobiles is 
imported. That wealth is going abroad. That is not good.
  So we need to take actions that will produce American energy at the 
lowest possible cost. Yes, it needs to be safely produced. We saw the 
accident on the gulf coast. I have been on those beaches, and thank 
goodness they are cleaned up now, but it was a mess, and everybody was 
worried. It hammered our gulf coast tourism industry and our fishing 
industry for months, although fishing is coming back, and I think our 
tourism will be back. But it was an unnecessary disaster, and it can be 
prevented, and steps have already been taken to ensure it will not 
happen again. We can do that.
  I like the Boone Pickens plan. We have discovered how to drill down 
into the ground and then turn that drill bit horizontally and go 
through shale rock to produce huge amounts of natural gas. Natural gas 
burns about 40 percent cleaner than gasoline or diesel fuel. It can 
produce energy that can even be used for vehicles. So that is all 
American. It is energy produced here in America. And we will have to 
have Americans to drill the wells, to move the natural gas, to process 
it and do all the things that go into that instead of importing oil 
from Venezuela. This makes sense.
  This is not a theoretical vision for an energy program. The Energy 
Department has now projected that we have maybe 200 years of natural 
gas--twice what we projected just a few years ago because of the new, 
improved way to drill. We should be doing more of that to create 
American jobs. It would provide a new energy source that hasn't been 
there before that could be used for electricity. And natural gas prices 
are low--pretty surprisingly low, actually--compared to other sources 
of energy, and we ought to use more of it.
  We can use it in vehicles, too, particularly larger trucks, city 
buses, and vehicles like that. It would take an infrastructure 
capability to be able to travel around the country and be able to get 
it to our truckers, but the city buses, the garbage trucks, and things 
such as that can be done all over America. That would reduce our 
imports, create jobs here, and create wealth in America without sending 
it abroad.
  I know the President has said--and we are going to have to confront 
this and talk about it--that we are going to create green jobs by 
developing the solar and biofuels industries. But, really, it hasn't 
gone nearly as well in the United States as we had hoped. One big plant 
that had millions of dollars--in Massachusetts--put into it has gone 
bankrupt. China is undercutting prices and is producing things that 
were supposed to be produced by Americans. So it is not going so well, 
frankly.
  I have to give this cautionary tale. No nation in the world is 
committed more to green jobs and this idea that you can create jobs in 
the energy sector by doing more windmills, solar and biofuels than 
Spain. And Spain has had a terrible time. It has the highest 
unemployment rate in Europe. They drove up the price of their energy, 
and it adversely impacted the whole economy of Spain. They created some 
jobs in some of these new programs, but one study said they lost I 
think 2\1/2\ jobs for every 1 job that was created. Now, I wish this 
weren't so. I wish we could have a plan to invest in solar panels or 
corn ethanol, and it would create lots of jobs and create energy at a 
competitive cost. But it produces these energy sources at much higher 
cost, and someone has to pay for them. When businesses pay more for 
energy, they can't hire as many people, they can't make widgets in 
Alabama and sell them abroad if their energy prices go up as a result 
of these policies. You can't do it. There is no free lunch here. So I 
think we need to look at what happened in Spain.
  I met with a group of pulp and paper workers--union members--
yesterday. I knew a couple of them from the past at pulp and paper 
mills around where I grew up in rural Alabama. They are worried about 
Environmental Protection Agency regulations. There are a lot of these 
regulations, but the one that is hammering the timber industry and the 
pulp and paper industry is the boiler MACT proposal. They convert waste 
to wood product at these paper mills. They burn it and create steam and 
energy, which reduces their demand on the grid from the power companies 
that are creating energy through coal and natural gas. So they are 
using a renewable source, but they are being required to expend 
millions of dollars for new boilers.
  I was at a sawmill in Alabama, in a rural area--good people--that 
exports half of what they produce. They produce a high quality of 
lumber for export, and they say this boiler MACT regulation will hammer 
them so hard, they may not be able to continue in business. And what 
would that do? All the people who go out in the woods and harvest 
timber, those who bring it in, those who work at the mill to saw it and 
plane it and produce it will be out of work. There would be less 
competition within the United States for wood products and less 
production of it, so the price might go up for the consumers. So this 
is not a good plan. This regulation went too far. It has to be 
repealed.
  But there are a lot of regulations like that driving up costs. They 
could be eliminated at no cost to the government. It would reduce the 
number of bureaucrats who are out there enforcing them and allow 
industries to be more productive. There are lots of them out there. And 
a regulation that gets passed--sometimes that regulation might be 
beneficial to a narrow sector, but often it gets applied to 10 times or 
100 times as many companies and businesses than is necessary or

[[Page 1246]]

beneficial, and it adds extra cost, reducing their productivity for no 
good benefit whatsoever.
  All wasteful regulations need to be eliminated. I think the President 
has finally understood that. He has made some statement about it, but 
we need to be sure that it happens and it happens quickly because we 
have people unemployed today as a direct result of excessive 
regulation.
  A lot of people may not realize that our corporate taxes--once Japan 
reduces theirs, as they plan to do--will be the highest corporate tax 
of any developed nation in the world. This is not a healthy place to 
be.
  You can learn a lot in an airport. A businessman started talking to 
me about this, and we got on the plane together. I had an open seat, 
and so I asked him to sit by me. He was very impressive--a CEO for a 
North American division of an international corporation. They were 
going to produce a product in that company that would be sold in the 
United States and worldwide that would be energy efficient--a chemical 
product they wanted to produce. It would mean about 200 employees.
  This is the story he told me, and he was so frustrated about it. Now, 
remember, this is a very intelligent, sophisticated man. He said they 
had the best price. These big companies, if they are going to make a 
new product, they ask every plant in their system who can build it the 
best, the cheapest, and the one that wins the competition gets the 
process. Well, he had won the competition--200 new jobs to the Alabama 
plant--until he got a call from the European headquarters. They said: 
You haven't considered the taxes. Well, what about that? You have to 
consider taxes. That is a cost of doing business. You have to 
recalculate it and do the taxes. And when they did, the United States 
lost. So this process is going to be built in another country that has 
lower taxes.
  The idea that you can raise taxes on corporations and not have an 
impact on the competitiveness of America is utterly false. We just have 
to take a minute or two to think about it. Of course, that is damaging 
to our competitiveness, and we compete worldwide, not just within the 
United States. But producers can move to Mexico and they can move to 
Canada.
  By the way, our corporate tax rate is 35 percent. Canada has already 
reduced theirs to the low twenties, and they are talking about going to 
16\1/2\ percent. My colleague from Alaska understands that his state's 
firms can choose between building a plant in Alaska or Canada. And when 
they add up the numbers and you have to pay substantially more tax in 
the United States, that could be the tipping point to make the 
difference in where that plant is built. So it is not that we are 
trying to help corporations by proposing that taxes be reduced; it is 
that we are becoming uncompetitive.
  Ireland has had a financial crisis. Their banking system reached a 
real crisis. But a number of years ago, they reduced their corporate 
tax rate to the lowest in Europe and had an economic boom. This boom 
didn't have anything to do with the financial crisis. When the 
Europeans said, we are going to help bail you out but we want you to 
raise some revenue. The Irish responded that they would include some 
taxes increases in their budget, but they would not raise their 
corporate tax rate. They refused because they said it was helping them 
economically. And I really believe we need to do that.
  So Canada is reducing theirs, Ireland has reduced theirs, the U.K.--
the Brits--are reducing theirs. I think they are going to about the 
midtwenties, and we are at 35.
  I know there is this idea that you can just eliminate the loopholes 
and bring down the overall rate to the high twenties in the United 
States and this will be the equivalent of a tax cut, but I really don't 
believe it is. I believe that all you have done is maybe created a 
little more efficient and simpler tax, which is not bad, but it hasn't 
gotten the economic tax burden off the American businesses that are 
trying to compete in the world marketplace.
  What else could we do to create jobs? Eliminate the health care bill. 
I know, people are dug in on this, they don't want to talk about it. It 
was passed by one single vote. Had Scott Brown been elected 2 weeks 
sooner, the bill would not have been passed; it would not be law today. 
But it is law.
  What does the Congressional Budget Office say about its impact on 
jobs in America? CBO says it will reduce employment by half of 1 
percent. Former CBO Director Doug Holtz-Eakin estimates that this 
translates into a loss of 700,000 jobs as a result of the health care 
bill. Actually, I believe it is quite a bit larger than that. I visited 
with small business people in Phoenix City, AL, Jasper, AL, 15 or 20 in 
each, and they told me it was going to cause them to reduce employment. 
There is no doubt about it. One man said: I have 10 fast food 
restaurants, 200 employees. I believe I am heading toward a reduction 
of 70 workers.
  If it is a reduction of 10 workers, it is too many. Even if it is a 
reduction of five. We need growth in jobs, not a reduction in jobs. The 
health care bill is killing jobs.
  The Congressional Budget Office Director is hired by the Congress. 
Mr. Elmendorf, who does that, was selected by the Democratic majority. 
I like him. I think he is an honest man. He said it will cost jobs in 
America to continue the health care bill. I believe it is going to be 
far more significant than he suggests.
  At the Budget Committee hearing yesterday, I asked the witnesses if 
temporary extensions of tax rates add uncertainty to the economy? Would 
the economy be better with permanent rates? They said yes. Everyone--
liberal, conservative--said this uncertainty is not good for economic 
growth and job creation in America. Congress must get together, and it 
is going to take a bipartisan effort to try to get these tax rates 
permanent and all of us are going to have to work on it. But permanent 
tax rates would clearly be helpful.
  I believe the President is going to have to help us in Congress to 
reduce the surging deficit spending that is well on the path to 
doubling the entire debt of America in 5 years and tripling it in 10. I 
know people think that is not true but it is. We are entering into the 
third year of a 5-year trend to double the debt. It will triple again 
in 5 more years. The President announced he would freeze a small 
portion of our spending, discretionary spending, at its current 2010 
levels--which surged in the last 2 years by double-digit increases. He 
would freeze it at that level. That is very small and will not alter 
the path we are on to doubling the debt in 5 years and tripling in 10. 
It will not alter that. That is how small an impact that proposal would 
have.
  We have to get together here in Congress and wrestle with it, but we 
need some leadership. If we could get at the cloud of debt and fear 
that is out there among a lot of Americans on the street and fear among 
a lot of the world's best financial minds who move money around in huge 
amounts--they are afraid too. The only people who do not seem to be 
quite sufficiently grasping this are our Washington bureaucracy. I 
think the Congress is beginning to get it. I think Congress is thinking 
about it. I believe the Washington establishment is still sort of in 
denial. They think we can somehow make a few token changes in what we 
do and everything is going to be OK, but it won't.
  I am saying, how do we create jobs now? Take some real firm steps, 
and the world says: Wow, the United States has gone off an 
unsustainable path to a path that could lead to prosperity and growth, 
and we are willing to invest in the country again.
  Let me mention one more thing. We have a border that is still wide 
open and lawless. Thousands, millions of people are coming in illegally 
still, and they are taking jobs from American citizens. We arrested 
500,000 people at the border last year. How many more got by? We just 
added 36,000 jobs this month. Some think that was a good number. It is 
below what we have to add. But we had that many illegal people coming 
into the country and seeking work and taking jobs from American 
citizens, providing competitive employment that drives down wages.

[[Page 1247]]

  One of the things you do in a time of high unemployment is you reduce 
guest worker programs and you reduce illegal immigration.
  Mr. Bernanke testified before our Budget Committee a couple of weeks 
ago that we are treading water. We need 150,000 jobs added every month 
to stay even, and to change the dynamic of high unemployment we need at 
least 250,000 a month. We have had that coming out of previous 
recessions. We are just not seeing it in this one. An economy that only 
creates 36,000 jobs, even if that number is somewhat low because of bad 
weather, is in bad shape. It is below what the experts projected. I 
believe we can say now with great confidence that the Federal 
Government's attempts to borrow money--on which we pay interest as long 
as we live on this Earth--to pump into the economy as a short-term 
stimulus, a sugar high, is not effective. It is not working.
  We have to do the kinds of things I mentioned, and there are a lot 
more that would actually create productivity, make our corporations and 
businesses more competitive, and therefore allow them to compete 
against foreign competition, create jobs, growth, exports--reduce our 
imports of oil and gas that are helping drive up our energy costs and 
moving jobs out of the country and moving American wealth out of the 
country.
  If we do those kinds of things, we can make real progress. I think we 
can. We need help from the administration. I believe the American 
people are open to these ideas. The idea is that this is not a popular 
plan because we are talking about cutting taxes on corporations and 
nobody wants to do that, they don't believe that, the American people 
won't support that. But I think the American people will understand we 
cannot tax our corporations more than they are doing in Canada--35 
percent to 16 percent--and expect to win competition for jobs and 
business. We have to look at the taxes that are killing jobs and try to 
make our tax policy nurture growth and prosperity.
  Spending restraint is necessary now because of our profligate habits 
and the situation we find ourselves in. But it is not the future, if we 
do the right thing. This country can compete if we take on good 
policies in an effective way.
  I yield the floor.

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