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“THE REAL CRISIS” mentioning the U.S. Dept. of Commerce was published in the Senate section on pages S2510-S2513 on March 11, 2005.
The publication is reproduced in full below:
THE REAL CRISIS
Mr. DORGAN. Mr. President, this week there has been more discussion in the newspapers and around the country about the issue of Social Security. As you know, the President continues to move around the country holding forums on Social Security.
One week ago today, in fact, Senator Reid and I, Senator Durbin, and a couple of other colleagues were in New York. We held a forum in New York City on Social Security. We then went to Philadelphia, PA, and held a forum on Social Security. Then we flew out west and we held one in Phoenix, AZ, and another one in Nevada. So there has been a lot of discussion about Social Security.
The President originally said there was a crisis in Social Security, which seemed to me to be a strange choice of words because, in fact, Social Security will be solvent until George W. Bush is 106 years old. Let me say that again. I think that is important. Social Security will remain solvent until this President reaches age 106. But he and others in the administration have said there is a crisis, it is going to go broke, it is going to be flat busted.
Look, Social Security is a program that has been remarkably successful, that has lifted tens of millions of senior citizens out of poverty over many years. The fact is, people are living longer, healthier lives these days so we will have to make some adjustments, perhaps, in the future; but it is not major surgery that is required and it is not justification for saying there is a crisis or it is bankrupt or other types of language that the President and others have used.
The kind of adjustments that may have to be made--again they may not have to be made if we have robust economic growth in the coming 75 years--but the kinds of adjustments that may have to be made are not major. We can do that. But this ought not be a pretext for taking Social Security apart and talking about privatization of Social Security.
I was curious about why this comes up in this context right now. I know it is not about economics. President George W. Bush ran for Congress in 1978 and he said then that Social Security would be broke in 10 years, by 1988, and we ought to go to private accounts. Well, almost 30 years later, he is saying the same thing. So I think this is not about economics, but rather it is all about philosophy.
I respect the President. He has every right to have a philosophical objection or philosophical concern about the Social Security Program.
One of the leading voices on the far conservative right said this recently:
Social Security is the soft underbelly of the liberal welfare state.
That is part of the political debate, I guess. If you are on the far right, you have a right to say that, and a right to think that, and a right to manifest your belief that we ought to take Social Security apart. But I don't happen to share that. I think Social Security has been a remarkable program that every worker pays into, and when you retire, you get something back at a time when you have reached declining income years in your life. That is the one portion of retirement security you can count on.
In most cases you aspire to have retirement security by doing three things. No. 1, you pay into Social Security for this insurance. Yes, it is insurance, not investment. In the FICA tax that comes out of your paycheck, the ``I'' is for ``insurance,'' not ``investments.'' It stands for insurance. So one part of retirement security is the guaranteed portion, Social Security. It will be there. You know it will be there. You know how much it is going to be. It is the guaranteed portion.
The second part is hopefully you work for a company that offers a pension. Only half of the American workers do, but we would like more companies to offer a pension. But that is a second part, a pension, private pension: a pension from your work.
The third part is private investments: 401(k)s or IRAs or the kinds of private investments that you make, much of which go into the stock market. I strongly support that. But that is not a pretext for taking apart Social Security. It is one of the three legs of retirement security: Social Security, the guaranteed portion, the portion without risk; pensions from your job; and then private investment accounts, such as 401(k)s and IRAs.
We are going to have a robust discussion about this in the weeks and months ahead. It is a worthy discussion for our country to have. This is a great country, made better, in my judgment, because of some of the things we have done to address some of our problems. When Franklin Delano Roosevelt saw that one-half of our senior citizens were living in poverty, he believed something should be done about that. So we created a Social Security Program that workers paid into and retirees are able to draw from, and now less than 10 percent of America's senior citizens are living in poverty. Why? Why that success? Because of Social Security, that is why. I think the task for all of us is to not take it apart but to strengthen it and nurture it and preserve it for the long term. At least that is my interest.
I started by talking about the fact that the President describes Social Security as a crisis. It is not a crisis. However, our country does face a very real, very imminent crisis, in the area of international trade.
This morning it was announced by the Department of Commerce that the trade deficit for the month of January was $58.3 billion. Let me say that again: a $58.3 billion trade deficit in 1 month. That means nearly every single day, Americans have bought about $2 billion worth of goods from other countries in excess of the amount of goods we sold those countries. Said another way, every day in the month of January other countries ended up owning 2 billion more dollars of our country. Their claim on our country was increased by $58.3 billion, nearly $2 billion a day, nearly $60 billion in 1 month of increased foreign claims against American assets. China and others end up owning more and more of our country as a result of these pernicious trade deficits.
We have a growing, serious, abiding crisis in our international trade and this country seems willing to sleep through it. By ``this country'' I mean the President and the Congress. They are perfectly willing to sleepwalk through this, while every single day and every single month China and Japan and others end up owning more of America.
Let me describe why we have this trade deficit that is growing at an alarming rate, over a $600 billion trade deficit last year. Why does this exist? Let me give you some examples.
American corporations in most cases no longer consider themselves just American if they are doing business around the world. They want to maximize profits for their shareholders and they have discovered 1 billion people in the rest of the world--1 billion out of a population of 6 billion--1 billion people whom they can employ quite easily for 20 or 30 or 40 cents an hour, because technology and capital is instantly moveable now to any place on Earth.
That is exactly what has happened. It has happened time and time again in recent years. That is why the American people who used to have good manufacturing jobs have now discovered themselves all too often jobless, and when they search for a new job they get a job that pays only 70 percent or 80 percent of what their old job used to pay because the good jobs are moving overseas.
We have a provision in our Tax Code that says if you move your jobs overseas--if you are a company and you shut your American manufacturing plant and move your American jobs overseas--we will give you a tax break. It is unbelievable, unbelievably stupid, that our country would have in its Tax Code incentives for people to shut their American plant and move it overseas. Yet that exists. I have tried to close it here on the floor of the Senate with an amendment and I have lost. But we are going to vote on that again this year and we will see whether any minds have changed.
Let me give some examples of what is happening. Levis--everybody knows about Levis. People like to wear Levis; put on Levis for the weekend. Except now Levi doesn't make Levis anymore, not one. Levis used to be American. They made Levis in America. Then they moved Levis to Mexico and to other parts of the world. Now they don't make any Levis. All they do is contract with foreign companies who make Levis for the Levi Company.
Fig Newton cookies. I grew up eating Fig Newton cookies. All American, right? Want to have some Mexican food tonight? Eat a Fig Newton cookie because that left America. Why? Cheaper wages in Monterrey, Mexico. Eat a Fig Newton cookie and you are eating Mexican food.
What about Huffy bicycles? Twenty percent of the American bike market is Huffy bicycles. You buy them at Sears, Kmart, Wal-Mart. We had folks in Ohio who made $11 an hour who made Huffy bicycles, but they got fired. Do you know why? Because Huffy bicycles are now made in China at 30 cents an hour and American workers can't compete with 30 cents an hour and should not have to. But nonetheless they lost their jobs and Huffy bicycles are now made in China to ship back to our country, so consumers conceivably have an advantage of a lower cost bicycle.
I am not certain the bicycle costs less. I know the profits of the middlemen are inflated, and I know Americans who honored their manufacturing jobs and loved their jobs got fired from their jobs because they couldn't compete with a Chinese worker working 7 days a week, 12 to 14 hours a day, who is paid 30 cents an hour. That is what is happening to American jobs. And people say, well, that is the new economy, Senator Dorgan. You just don't understand it. No. I don't. We spent a century, we spent 100 years in this country fighting about important things: about child labor, about whether you should go down to a coal mine and work next to 12-year-old kids. We decided that is not fair; about whether you should expect to be able to work in a safe workplace and about whether you have the right to organize in America. We had people dying in the streets of this country demonstrating for the right to organize. They died in the streets of America for the right to organize as workers and for the right to a fair wage. We went through all of those things for over a century. It was hard and tough.
Now a company can decide: You know something, we don't have to care about any of that. We can hire 12-year-old kids, work them 12 hours a day, pay them 12 cents an hour, build a manufacturing plant, and throw chemicals in the water, throw chemicals in the air, and the manufacturing plant doesn't have to be safe, and if the workers decide they want to organize, we can fire them right now. We can get over all of this, we pole vault over all those issues and produce where it is cheaper. We are not encumbered by our ability to pollute the air and water. We can fire kids and ship the products to America and have American consumers go to Kmart, Wal-Mart, Sears, or Toledo or Fargo or Los Angeles or New York, and buy that product, which was in fact produced by someone who took a job from the neighbor of that consumer.
This country has not decided whether there is an admission price in the American marketplace. We sign all these trade agreements, and none of them is complied with at all. This country has no nerve, no backbone, no will to stand up for its own economic interest. I am not suggesting that we build walls around our country, but I am saying we ought to pay some attention to the basic conditions of production that we fought over for 100 years. If corporations decide, we can now go to Bangladesh or Sri Lanka or China and ignore all of those issues and have people fired if they try to organize for collective bargaining, then there is something fundamentally wrong.
Question: Why is it that in this country we imported nearly 600,000 Korean cars from the country of Korea in the past year but are only able to sell 3800 U.S. cars in Korea? Answer: Because the Korean government doesn't want U.S. cars in Korea. They want to ship all of their cars to America, but they don't want U.S. cars to be sold in Korea. And our country says that is OK; we will not do anything about that. Our country doesn't have the nerve or the will to stand up for its own economic interest.
We have a dispute with Europe over beef, so our ranchers and farmers and others suffer as a consequence of that dispute. In a rare display of backbone, American negotiators decided to get tough with the Europeans, by applying retaliatory tariffs. So what did they do? They decided they were going to impose tariffs on truffles, goose liver, and Roquefort cheese. That is going to scare the devil out of our trade adversaries--a trade adversary that is taking advantage of us. We are going to slap tariffs on truffles, goose liver and Roquefort cheese.
This country has to decide finally to stand up for its economic interests.
I haven't talked about Japan. We have had a $60 billion to $80 billion trade deficit with Japan every single year, year after year after year. They are guilty of horribly unfair trade with this country. The same is true with China. It is even worse with China. There are massive copyright violations going on, counterfeiting, and piracy. But in addition to that, their markets still, in many cases, are largely closed to our market.
I have raised this issue on the floor several times, but no one seems to care very much about this issue of bilateral automobile trade with China.
Let me give you an example of what recently happened. Time magazine says that China is revving up a huge new automobile export industry--a big industry to export automobiles from China. We just had a bilateral trade agreement with China about 3 years ago, and our negotiators agreed to this. They said to China: You can impose a tariff on U.S. automobiles we try to sell in China that is 10 times higher than we would impose on automobiles China sends to us.
This is a country with which we now have a $130 billion to $140 billion trade deficit, and we have a trade agreement that was incompetently negotiated by our negotiator, who said to China, on bilateral automobile trade: You can impose a tariff that is 10 times higher than the tariff we will impose on Chinese automobiles coming into the United States.
I do not know who did this, but it is unbelievably incompetent. Somebody ought to be fired summarily for negotiating this kind of trade agreement with respect to bilateral automobile trade with China.
This morning when the announcement was made that we had a $58.3 billion trade deficit in the month of January, if this doesn't wake up the White House and if this doesn't wake up this Congress, shame on all of us. That is an annual trade deficit of over $700 billion.
Warren Buffett, by the way, in his message to shareholders at Berkshire Hathaway this year, said what is going to happen is we are going to become a nation of sharecroppers, because every single day when we buy $1 billion more from foreign countries than we sell to them, this means that China, Japan, Korea, and other countries own that much more every single day of our country, of our stocks, of our assets, of our real estate.
Even as the value of the dollar has been declining, our trade deficit is spiking up, up, way up, and there is no economist in this country who teaches that when your currency declines, your trade deficits should go up. But I think I understand why it is happening--it's because we don't have the backbone, the will, or the nerve to stand up for this country's economic interests.
If you all read the papers last week about textiles coming in from China, the first month the limits were off on textiles, you see what is happening to exacerbate that dramatic increase in trade deficit with China.
President Bush wants to travel around the country and talk about Social Security, a Social Security system that will remain solvent until George W. Bush is 106 years old. There is no crisis there. But there is a crisis with our trade deficit. And it requires--demands, in my judgment--that this President and this Congress get serious.
I am sending another letter to the President, suggesting that he hold an emergency summit on the trade deficit.
This is a serious, abiding crisis that weakens our country significantly. It is all about jobs.
We are going to debate the budget next week. There is no social program as important as a good job that pays well. That is just a fact. The fact is, good jobs are marching out of this country at an alarming rate, and they are moving to parts of the world where those who are producing products find they can hire people for 20 cents an hour or 30 cents an hour.
Nobody wants to hear these questions much about trade, but it is gripping when you understand what is actually happening.
I talked on the floor about the young women dying in the manufacturing plants in China. How about the young children who are making rugs and carpets who have their fingertips burned with gunpowder? They put gunpowder on their fingertips, light it with a match in order to create scarring on their fingertips--these little kids that are 10 years old--so when they sew with needles and stick their fingertips with a needle, they can't feel it because they have been scarred by burned gunpowder, so the kids can continue to sew and not bleed. Then that product, that carpet, is sent to the United States, and someone shows up and says: I would like to buy that carpet, wouldn't I? It is made with slave labor, in many cases, with children whose hands have been burned to prevent the bleeding from needles to make that carpet. Is that really what we want? Is that really the construct of trade that we believe represents a free market? I don't think so.
There is much more to say, and I will say it at some future point.
I think today's announcement--just an hour and a half ago now--about the devastating January trade deficit numbers ought to at least justify calling Air Force One back to this town and asking the President to join us, join labor, and join the National Association of Manufacturers in a meeting, a summit to talk about what on Earth we do to repair this trade deficit that is just crushing to the future economic opportunities in this country.
I will have more to say. I hope that this weekend, the White House and the Congress will reflect on what this announcement means for the future of our country and begin to deal with the crisis that does exist. No, not Social Security--it is not a crisis--but the crisis exists in these crippling, devastating trade deficit numbers.
I yield the floor.
The PRESIDING OFFICER. The Senator from Arkansas.
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