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“MAKE IT IN AMERICA: THE ECONOMY” mentioning the U.S. Dept. of Commerce was published in the House of Representatives section on pages H1343-H1349 on March 12, 2013.
The publication is reproduced in full below:
MAKE IT IN AMERICA: THE ECONOMY
The SPEAKER pro tempore (Mr. Pittenger). Under the Speaker's announced policy of January 3, 2013, the gentleman from California (Mr. Garamendi) is recognized for 60 minutes as the designee of the minority leader.
Mr. GARAMENDI. Mr. Speaker, thank you very much.
I am John Garamendi from California, and I am joined by several of my colleagues here tonight. We want to go through a couple of things that are of the utmost importance to Americans. I had three townhalls on Saturday in California--it was about a 450-mile drive to get to all three of them--but at each and every one of them the concerns were very, very similar.
The first overriding concern was the economy. In California, there is this desire to get the economy going. There is a pent-up energy in the people--in the businesses, in the small businesses, in the farmers. It's not just because it's spring and the almonds are blossoming--or maybe it's the ``a-munds'' depending on what part of my district you're from. It's that there is this desire to get moving forward.
They keep asking me, What's going on in Congress? Why can't you guys get it together out there?
And we explained what's happening here.
We have been through five crises over the last 18 months--
manufactured crises, things that didn't have to happen. Each and every time, the entire system of America's economy and politics comes to a stop, and we lurch up to that fateful cliff, and then we move on but not with the kind of robust energy that this economy is capable of. We need to get this continuing resolution and all of these fiscal cliffs out of the way to get the economy moving, and there are some very, very good examples of why the economy is poised to take off.
One of them is found here. If you take a look at this chart, these are the job creations or losses beginning way back in 2009, 2008. All of those red lines are the collapse of the economy. When the blue came in, that's when President Obama came in 4 years ago, and things were tough. We were in a free fall here in our economy; but with the stimulus bill, we began to climb out. After about 18 months, we began to see positive job growth--we were no longer seeing those job losses--
and we've seen that all the way through. This last month was a terrific month. There were 247,000 new jobs created, and that was in February.
So what happens in March?
In March, we come up against another cliff; and now we have sequestration, leaving us 750,000 unemployed Americans. It's not a gain in the economy. The unemployment rate went down to 7.7 percent in the previous month, and now we have sequestration. We passed a bill out of here last week that was supposed to solve it. It really didn't. In fact, it maintained sequestration. It took care of a few things, but we've got to get past this. We need to grow this economy, and we need to make the investments. There are really only five critical investments that need to be made year after year after year, and we need to do these things repeatedly--every month, every year, in every budget:
Education--sequestration cuts education at all levels;
Research--sequestration cuts research. In my district, at the University of California at Davis, $45 million of research projects will come to a screeching halt. Ph.D.s and others will be laid off;
Infrastructure--sequestration cuts infrastructure. Manufacturing matters. You've got to make things;
Those are the four. The fifth is you have to be willing to change, but you've got to change in a positive way.
What we're going to talk about with my colleagues here is this issue of how to move the economy forward. As we look at the past and at the success--modest, not enough, but on the right track--we need to keep in mind that it is the role of the government, dating back to George Washington and Alexander Hamilton when Washington asked Hamilton to develop an industrial plan for the United States and Hamilton did. He laid out in that plan the critical role of government in moving the American economy forward, and that was in the very first year of these United States. We should carry that tradition forward. So as we go into this, let's keep in mind that we've made progress and that we have much more to do.
Joining me tonight is a gentleman who has created many, many jobs, and now he has a new one. He is a Member of Congress from the great State of Maryland, and it's Mr. Delaney.
Thank you very much for joining us. You have an exciting district. You have a considerable amount of high-tech in your district.
Mr. DELANEY. I do.
Mr. GARAMENDI. So share with us your thoughts about how we can grow the economy, and maybe share some of your own experiences, because you've employed many, many people during your tenure in business.
Mr. DELANEY. That's right. I appreciate my friend from California for providing me with this opportunity to talk about what I think is important for our economy, to get our economy going to create jobs.
We spend a lot of time, both in this Congress and in Washington generally, talking about the economic challenges that this country faces and about the employment challenges this country faces, and those conversations often evolve into conversations about our tax policy and about the size of our government--two very important things for us to be spending time on as we talk about the fiscal trajectory of the country.
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They are two things that actually have very little to do with what is important for creating jobs in this country, because what has really caused the employment challenges that we face today, what has really caused the economic challenges that this country faces are two things: globalization and technology. They are two trends that are gripping our society and really started about 20 or 25 years ago, and these trends are accelerating.
Many people have been benefited by these trends. Americans with great education have been blessed by these trends. Americans with access to capital have benefited because of these trends. And hundreds of millions of citizens around the world have benefited from these trends because they move from formerly not being in a modern economy to being in a modern economy.
The problem is that the average American has been negatively affected by these trends. It happened too quickly. We weren't quite prepared for it. We didn't invest in our future the way we need to to prepare a broader number of Americans for a world that is fundamentally changed because of these trends.
To me, this is the central issue we face as a country if we want to reverse the employment trends. By the employment trends, I don't just mean the headline unemployment number, which is tragic. I mean what happens if you look behind those numbers, if you look at the standard of living of the average American, which has consistently gone down now for two decades.
In order to reverse these trends, in order to take these trends--
globalization and technology--and bend them to benefit a broader number of Americans, we fundamentally have to do things here in our country that involve investment.
We have to improve our educational system and invest in education. There has never been a stronger correlation in the history of this country between having a good education and one's ability to get a job.
We need a national energy policy that can lead us to the advanced energy economy which will be cleaner and more efficient and more economical. If you look back over the history of modern economies, the two most important numbers for an economy to be successful is the cost of money and the cost of energy. We have an opportunity if we lead in advanced energy to keep the cost of energy down.
We need to reform our immigration system. Half of the Fortune 500 companies in this country were founded by immigrants or children of immigrants. Immigrants fundamentally create jobs in this country.
And we need to invest in our infrastructure. We need to build a modern infrastructure for the future: transportation, communication, energy, educational facilities, all of the things that we need to do to be competitive. This will create jobs in the short term, and it will lay the groundwork for a more competitive America across the long term.
These are the things that we need to do to make our country more competitive so that we can create and attract and sustain jobs that have a high standard of living. That's the sacred trust we've been given as Members of Congress. And to do these things and to make the investments that are important in energy and education and infrastructure and in our immigration system, we need to be in a position fiscally to make investments, and that's a role of government that I strongly believe in.
To do that, we do have to change our fiscal trajectory, but we have to be honest about the drivers of our fiscal condition. We have to acknowledge that we do need comprehensive entitlement reform in this country so that our important entitlement programs don't crowd out all the other priorities we have in the Nation. And we also have to acknowledge that we need to reform our tax system, implement proposals like the Buffett rule that level the playing field and create more revenues. Our revenue as a percentage of our economy has never been lower.
If we do these two things, we create an opportunity for us to invest in our future. We create an opportunity to do the things that we need to do to make this country more competitive.
As someone who was the son of a union electrician, whose parents never went to college, who had the blessing of a good education and started two businesses from scratch that both became New York Stock Exchange companies and created thousands of jobs, I have an appreciation of what's important in terms of entrepreneurship in this country. These are the things that we need to do if we want to make a difference, and these are the things that I care about as we try to work against these important trends.
Mr. GARAMENDI. Thank you very much, Mr. Delaney. Well, you hit it right on the head: education, the technology issues that we have before us, the issue of globalization and how we deal with it here, and our energy policy. We are really blessed in the United States with energy that has suddenly come back to blossom, and that's natural gas. What an enormous asset for this country, and we need to really push that further along. And the immigration issue, all of these things are before us right now.
If we move forward aggressively with the kinds of things that you talked about, and we're spending time here on the floor, we can really move this country. And with the energy that businesses have and the experience that you know from your own experience in business, there is a pent-up demand. There's a lot of cash in the businesses of the Nation. We need the policies laid out there.
Perhaps you can take up the energy piece and elaborate a little more on how you see the use of natural gas as a bridge as you get to those clean energy issues that you talked about.
Mr. DELANEY. I think you made a very good point about the amount of cash in our private sector. There is more cash in U.S. corporations than there's ever been, and there's more cash in our banks than there's ever been.
I believe the private sector creates the jobs, but there is a clear and distinct role for government to level the playing field and make the investments that are needed for the private sector to thrive. The energy industry is a terrific example of that. If we had a national energy policy that pointed us in a common direction where we could say this is where we want our energy production and utilization to be in the future, it would benefit Americans so much in the short term because of the quality of their life in terms of making us more competitive.
If you look back over the history of this country, it takes us about 50 years to change energy sources. It took about 50 years to go from wood to coal; it took about 50 years to go from coal to oil and natural gas; and it will take about 50 years to truly have this advanced, clean, efficient energy economy that we know we should have as a country. We should have policies in place that encourage that. And natural gas can be a fabulous bridge to that future.
There has to be accountability. We need to ensure that it is done in an environmentally sensitive way. I believe there is a role for the Federal Government to do that, and we should be embracing it because it can clearly bridge us in a cleaner way and in a cost-effective and competitive way to the future we all imagine for clean and advanced energy.
It will take time to get there. It is a massive investment to transform our energy infrastructure, and we can do that, which, by the way, will create a lot of jobs while we do it, but we can get there. And natural gas can be a terrific bridge.
Mr. GARAMENDI. I really agree with all you said. And as we make that bridge to that clean energy future--you talked about those 50-year increments as we change from one source of energy to another. In that process, we, American taxpayers, seriously subsidized each and every one of those transitions. We now have to shift, it seems to me, shift some of those subsidies from the old energy sources, specifically oil, and shift that into long-term subsidies, encouragement to those clean energy issues. If we do that, I think we'll see that kind of growth that you're talking about.
Mr. DELANEY. I absolutely agree with you.
Mr. GARAMENDI. Mr. Delaney, I know you have to leave, but thank you so very much for joining us.
Mr. DELANEY. Thank you for giving me this opportunity.
Mr. GARAMENDI. Also joining us tonight is Representative Higgins from the great State of New York.
We have talked here on the floor from time to time, Mr. Higgins, and you have a very serious issue about our infrastructure--or lack of good quality infrastructure in the United States. You have some plans for that. I don't know if that's what you want to talk about tonight, but I'm going to take you there either sooner or later. So please share with us your thoughts on growing jobs here in America.
Mr. HIGGINS. I thank the gentleman from California.
I think the infrastructure piece, as has been mentioned here previously, is a vehicle for growth. It is refreshing to see that this discussion tonight between three Members is about how to grow the economy. There is not an example in human history of an economy growing out of a recession from austerity measures. It didn't happen in Japan in the 1990s. It's not happening in Europe today, and it didn't happen in this country in 1937. So what we have to do is invest in education, as the gentleman has said, scientific research, and infrastructure.
This weekend, former Republican candidate for President Rudy Giuliani talked about the importance of investments that have a return, that grow jobs and reduce debt and deficit. He talked about transportation infrastructure and rebuilding the roads and bridges of this country.
The Republican budget that was released today, the Ryan budget, proposes to cut infrastructure spending over the next 10 years by $5.7 trillion. I would submit to you that we are moving in the wrong direction. We need to make investments in this economy.
Mr. GARAMENDI. Mr. Higgins, if I may interrupt you for just a second, I can't believe the number you just gave us. You said the Ryan Republican budget that will come out this week does what to infrastructure?
Mr. HIGGINS. It cuts infrastructure spending by $5.7 trillion over 10 years.
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It doesn't do anything to the defense spending. So while we, the advocates of increased infrastructure spending, want to nation-build here at home, in America, the Ryan budget wants to continue to nation-
build in Afghanistan and Iraq and other places.
World War II ended in 1945. We still have 52,000 U.S. soldiers in Germany. We still have 49,000 U.S. soldiers in Japan. We still have 10,000 U.S. soldiers in Italy. We need to bring them home and nation-
build here.
And that's the Paul Ryan budget, not the Tim Ryan budget.
Mr. GARAMENDI. Mr. Higgins, you've really hit upon something that caught my attention. Also, we should be aware that this year, that is October 2012 until October 2013, we will spend $100 billion in Afghanistan.
To what effect? To have our soldiers killed by Afghan policemen? To create an ongoing conflict in that area with the people that are living there?
To what effect? $100 billion.
You talk about bringing home the soldiers, we should bring the soldiers home from Afghanistan. There will be some small unit left there to deal with al Qaeda and other terrorist organizations, but it's simply not working.
Think what $100 billion could do to solve the sequestration issue, which is only $85 billion.
Mr. HIGGINS. Can I just make another point before you turn it over to the distinguished gentleman from Ohio (Mr. Ryan)?
A lot of people here, in the majority, do a lot of complaining about spending. The irony is, they did all the spending.
At the end of 2000 we had a budgetary surplus of $258 billion. They took that surplus and financed two wars that took $1.2 trillion out of the American economy. They financed a drug prescription program, unpaid for, that will cost us $1 trillion over 10 years.
And they financed two tax cuts that didn't produce the kind of growth they were said to produce. In fact, after those tax cuts were enacted, disproportionately for the wealthy, we had the worst period of economic growth in the past 75 years.
The Clinton administration produced 22 million private sector jobs. We had 4 percent annual economic growth, sustained over an 8-year period. That produces budgetary surpluses and reduces the debt.
So that's the lesson that we should embrace, not the measures that the Republicans are proposing, because historically it hasn't produced the kind of growth that they promised that it would produce.
Mr. RYAN of Ohio. If the gentleman would yield too, I'd just comment on the infrastructure piece.
So here we are today, needs abound in the country, both rail, combined sewer, highways, bridges--I mean, each of our counties, you pull out how many bridges in our counties aren't up to specs; I think it's like 50 or 60 just in one of my bigger counties.
These projects are only going to get more expensive. The energy costs going in are going to get more expensive, the labor costs are going to get more expensive. Everything associated, the materials, everything associated with what needs to get done is going to become more expensive. So I think the good business move, on behalf of the taxpayer, would be to get this done now, get people back to work.
And I recognize that we're still running deficits. But the interest rate at which we're borrowing the money is minimal, 1, 2 percent.
So we're going to wait. Here's what's going to happen. We're going to wait. Accidents are going to happen, bridges are going to collapse, things are going to just need to get done, and then these local governments, State governments, we're going to have to go out and borrow the money at 4 or 5 percent, as opposed to 1 or 2.
So I think as we're thinking about this, it's not that we're sitting here saying, oh geez, we don't have anything better to do, let's just spend a bunch of government money. No, these are strategic investments. Like in Virginia, they're going to increase productivity so people aren't sitting in their cars. They're more productive, have a higher quality of life, more time with their families, all these things that we say are very important.
So, to your point, we're going backwards, because at some point this stuff's got to get done.
Mr. HIGGINS. According to Transportation for America, there are 69,000 structurally deficient bridges in this Nation. In my State of New York there are over 2,000 bridges that are structurally deficient. In western New York there are 99 bridges that are structurally deficient. Every second of every day, seven cars drive on a bridge that is structurally deficient.
And as the gentleman from Ohio had pointed out, public infrastructure is the public's responsibility. It's as old as Lincoln. He called them land improvements and railroads at the time.
So it's not a question of whether or not the public is going to improve the infrastructure. The question is when does it make the most sense. And we believe that money is as cheap as it's ever going to be, labor is as cheap as it's ever going to be, and equipment is as cheap as it's ever going to be.
Mr. GARAMENDI. Mr. Higgins, you've raised, and Mr. Ryan, you've also raised the very same issue about the infrastructure. We can do this. We can really do it.
I couldn't believe that Paul Ryan's going to introduce a budget in the next couple of days that's going to take $5.7 trillion out of the infrastructure.
I often hear our Republican colleagues talk about the Founding Fathers, and we ought to hearken back to the founding fathers. And indeed we should.
His first month in office, George Washington asked Alexander Hamilton, his Treasury Secretary, to develop an industrial plan for the United States. In that plan that Hamilton produced 3 months later was an infrastructure component. It said the United States Government should support the creation of ports, canals, and roads.
So right back to the very first days of this government, we have seen the role of the Federal Government in the infrastructure sector, and that is an investment.
And one thing I'll add before I turn it back to you gentlemen is that all of that's our tax money, all tax money from all 360 million Americans, coming in in one way or another, sometimes through the Federal excise tax on gasoline or income tax or other taxes. If we used that money to buy American-made steel--I think that's near your district, isn't it, Mr. Ryan?
Mr. RYAN of Ohio. I think the gentleman from Buffalo knows a little bit about that too.
Mr. GARAMENDI. So we're talking about American-made steel for those bridges, or concrete or other kinds of equipment. And so if we do that, we'd create jobs in the United States.
The manufacturing sector lost 9 million jobs between 1990 and last year. This last year we've seen an additional about 600,000 new jobs coming back into manufacturing, but if we pass Buy American or Make It in America legislation, so that our tax money supports American-made products from American-made workers made in America, we can see a boom in manufacturing. It's certainly going to be important in my district, and I'm sure it is in yours.
Gentlemen, you're right on target here. These are the investments that George Washington and Alexander Hamilton said we ought to make.
Mr. Ryan, I know you have a few other things you'd like to toss into this.
Mr. RYAN of Ohio. Well, one of the things that you were talking about--and I just started to learn more and more about this new additive manufacturing. And there's a center in Youngstown, Ohio now that's a regional center for additive manufacturing.
So the old school manufacturing is you would cut things out, and they called it subtractive manufacturing. The new stuff is a printer that you have that would be like the printer you have in your office, except you pump material into it, and instead of ink on a piece of paper, it's a material that would make a component part. And the cost is down now to about $700 or $800 for these things. So this is the next generation of manufacturing.
And I bring it up because the President put together a proposal, Department of Energy, Department of Commerce, Department of Defense, to partner with the private sector to create one of these innovation institutes. And he wants to do 15 more for a billion dollars.
If you would see the activity going on in Youngstown, Ohio now, the companies that are partnering with us, with the private sector, with Carnegie Mellon, it goes all the way to Pittsburgh, Carnegie Mellon, Case Western Reserve, Youngstown State, University of Akron, Lehigh, Penn State, West Virginia--we've got to get Buffalo in this somehow.
But the point is, public/private partnership to expedite the development of new technologies. And the President and his team get this. And Democrats, we get this.
We've got to get away from this narrative that anything the government spends money on is bad; it's a waste of your tax dollars. Whether it's infrastructure, whether it's public/private partnerships like this additive manufacturing institute or the other institutes that we need to create, that's the seed corn for the next generation of alternative energy, windmills, solar panels, whatever the case may be.
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We don't know what it is. That's why the recipe has always been to invest in this basic research, put these public-private partnerships together, and magic will happen. Because you have the basic scientific intellect and intelligence there, partnering with the private sector, who has a profit motive, and magic happens. And now we've gotten a scenario where government has no role here. No role at all. And it's not either/or. So I'd like to ask my friends who think it's either/or, what other relationship with another human being do you have that that's that black and white?
This stuff is complicated. It's complex. It takes nuance. And that's what's happening in Youngstown, and I think it's a good example of what can happen around the country in older areas where we don't have the local tax base that we used to have, to have the Federal Government come in. And you should see the ripple effect already happening--and it's a beautiful thing--but it takes that kind of comprehensive plan.
Mr. GARAMENDI. Mr. Higgins.
Mr. HIGGINS. I was just going to mention where Tim was talking about infrastructure, the New America Foundation has a study out called,
``The Way Forward.'' And they propose spending $1.2 trillion on infrastructure, primarily because of the reasons that we stated here. Money is as cheap as it's ever going to be. Labor is cheap and equipment is cheap. But they further explain that it will create 25 million jobs over the next 5 years--$5 million the first year, reducing the unemployment rate from its current rate to 6.4 percent; $5 million in the second year, reducing the unemployment rate further to 5.4 percent. These are proven growth vehicles. And that's exactly what the economy does. And it will also put people back to work.
All the construction trades, to their considerable credit, have a program called Helmets to Hardhats, where they take veterans returning from Iraq and Afghanistan and they expedite their apprenticeship training and put them to work making $60,000, $70,000 a year. Do you really want to say thank you for your service on behalf of a grateful Nation? Put them to work rebuilding this Nation.
We will spend--the Federal Government--in transportation infrastructure this year $53 billion. It's a disgrace. We're a Nation of 300 million people. You just spent as a Nation, the United States,
$89 billion rebuilding the roads and bridges of Afghanistan. You spent
$69 billion rebuilding the roads and bridges of Iraq. Those are nations of 30 million and 26 million respectively. But for a Nation of 300 million people you're going to spend $53 billion.
Mr. RYAN of Ohio. And you look at what our top competitors are spending as a percentage of their GDP. I think we're at 1 percent of our GDP that we spend on infrastructure. It maybe went up to 2 during this recovery package. But if you look at India and China, it's 7 or 8 percent of their GDP. Now, granted, they're still developing in so many different ways. But for us to be at 1 and they're at 6, 7 or 8, how are we going to be able to keep up when our infrastructure is so much older?
It's time to rebuild America. And I don't know anybody in my district, Democrat or Republican, who's really not for that. I've had Republican friends of mine have the light bulb go off and they say, Wait a minute. We're going to have to do this at some point. And we've got a high unemployment rate and we've got low interest rates. This doesn't make any sense to put it off.
Mr. GARAMENDI. If not now, when?
Mr. RYAN of Ohio. When?
Mr. GARAMENDI. When are we going to do it? We can do these things. We can do the wind turbines for the clean energy, as Mr. Delaney was talking about, solar panels, and, of course, the transportation systems, which we're discussing here.
Mr. RYAN of Ohio. As you said, you've got to ship that stuff. That stuff needs to be shipped. It needs manufactured and then it needs to be shipped somewhere on a road and over bridges and ports and airports and logistics facilities and everything else. You've got to make that investment, and that'll grease the wheels of the commerce.
Mr. GARAMENDI. George Washington and Alexander Hamilton at the very start of this Nation said, Build the infrastructure. Grow the economy.
Mr. HIGGINS. We need them back here.
Mr. GARAMENDI. We can use that again. The President has put it out there, too. In his State of the Union speech he spoke very clearly to the advanced manufacturing centers that you talked about, Mr. Ryan. He talked about infrastructure. He's made proposals that have just been pushed aside by our Republican colleagues here, but there are proposals that would grow this economy and give us the foundation upon which we can then have additional growth.
I see that the Representative from the District of Columbia is here. Ms. Norton, thank you very much for joining us. Gentlemen, thank you very much for this evening. Eleanor Holmes Norton, thank you very much for joining us this evening.
Ms. NORTON. I want to thank my good colleague from California for keeping before the Congress the notion of making jobs in America. You were just talking about infrastructure. Infrastructure is all made in America, if we make sure that we don't build bridges, for example, from materials from China. But when it comes to the roads, when it comes to the cement, we don't get those from abroad. We make those here. And that's why infrastructure has always been the foremost way to stimulate an economy. It's interesting that it stimulates not only the construction trades, but it's best because it stimulates other parts of the economy below it. It's the way to get everything going.
I couldn't agree with you more in pointing out--and you and I are on the Transportation and Infrastructure Committee--the importance of infrastructure. That used to be the great bipartisan issue of the Congress of the United States. And I think there is some chance it will be again. We note that the bill that we just passed in the last Congress, the Surface Transportation bill, will have to be renewed next year; and I certainly hope that becomes an opportunity to do a Surface Transportation bill for more than 2 years. That's where we have to get to work right now.
But I wanted to come to the floor today, in particular because the Ryan budget has come forward. And I note the very good news of the 246,000 jobs that the private sector, on its own, with no help from the public sector and no help from the Congress, has produced, cheering all of us up.
Mr. Speaker, I want to note that we are about to countermand all that the private sector is doing alone. The reason is that the Federal and the State sectors are doing just the opposite. They are reducing spending, the States and the cities are causing layoffs, and the result is that for every job that the private sector makes, we are moving in exactly the opposite direction because all oars are not in the water. Thank goodness we have a private sector that is beginning to say, we won't wait for the other oars--the Federal and the State oars. We're going in now. The rest of you should join us.
The very least we should do, however, is to cease making it worse for the private sector to keep doing what it's doing. The sequester, of course, will do that. The markets have not reacted yet, but there is no way in which people in the private sector, particularly small business, is going to continue to add jobs if they see that the Federal and State governments are doing just the opposite. The reason the State governments are doing that is because when we make cuts, they pass through directly to them. So they're trying to protect themselves because they must produce annual balanced budgets. Since they must have a balanced budget, they are making cuts every single day, or at least reducing spending.
The Ryan budget comes forward and in a real sense it looks a lot like it's always looked. But look what it does: it makes half of its so-
called savings from health care--Medicare, Medicaid, and, of all things, the Affordable Health Care Act. I guess we ought to say a budget is what, indeed, it always has been: it's a hope-for document. I hope that we don't get the Ryan budget. But I cannot believe that Mr. Ryan believes that at this late date, with an election having already taken place, with the benefits of the Affordable Health Care Act, flowing every day, that we're about to repeal that. Half of his savings are from Medicare, Medicaid, the Affordable Health Care Act, and he caps food stamps.
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I want to say to my good friend from California, I think we ought to stop slapping the private sector in the face every time it makes jobs, making sure that we do cuts that take away the effects of those jobs. That's what we're doing.
I note that you have one of the posters that show how we hurt people. We ought to also understand we are hurting people and we are hurting the economy at the same time, and that's why CBO said 750,000 jobs are at risk because of the sequester alone, leave aside what the Ryan budget would do.
Mr. GARAMENDI. Well, thank you very much, Representative Norton, and for your years of service here.
You were just moving to the Ryan budget, which I suspect he'll introduce maybe in the next day or two. This is the same old, same old, but this time it's worse than the old. He's talking about an austerity budget, a very stringent austerity budget on steroids that will clearly decimate the economy as those cuts are made.
You just said if the Federal Government makes a reduction, it comes right down to cities and States laying people off. We've had this growth just last month, 247,000 jobs, and here we go.
Let's understand what is being discussed by Mr. Ryan. Who are these people on Medicaid? He proposes to cut Medicaid by a third and block-
grant it to the States, which means just give the States some money. But who are those people on Medicaid? Now, we call it Medi-Cal in California, but you can see that two-thirds of the Medicaid money goes to seniors and disabled. So, Mr. Ryan, what are you doing? Who exactly are you pointing out for the reductions? You're going after seniors and the disabled.
Ms. NORTON. I think that point you just made about Medicaid needs to be said again. People think of Medicaid as somehow poor people, we'll let them fend for themselves. It turns out that almost all of the funds--two-thirds--go to seniors and disabled people. We're targeting the wrong people.
Mr. GARAMENDI. They think it's welfare. Well, these are seniors and disabled people that can't work, or people that are retired.
So, what does it mean? It slashes that budget for seniors that provides them with nursing homes. Principally, these folks are in nursing homes. So you're going to take a third of the money out of nursing homes. Now, just what are those seniors going to do? What are they going to do? You're taking a third of the money out by 2022.
You mentioned Medicare. Oh, yeah, Medicare. Mr. Ryan, proposes to end Medicare as we know it. He's going to give seniors a voucher. They can stay on Medicare, but they have a voucher to buy Medicare. The guarantee of affordable health care, quality health care for seniors terminates with the Ryan Republican budget.
Who are those people on Medicare? Well, let's see. About 3 percent earn over $100,000 a year; 1 percent, somewhere around $90,000 to
$100,000; but down here, here's where the Medicare beneficiaries are. They're earning somewhere, $10,000 to $20,000, or $30,000--right here, 28, 20, 16. You're getting up to 50 percent right there of people below
$40,000. These are not wealthy people.
Medicare is there to provide people with the ability to have quality health care in their retirement years. But Mr. Ryan would end that and give them a voucher, and shift the cost to the individuals who would then have to go out and buy private health insurance.
I was the insurance commissioner in California for 8 years and I understand what the private insurance companies are all about. The private health insurance companies are all about their bottom-line profit. It's not people, it's profit. If that's what Mr. Ryan wants to do, we're going to fight vigorously and successfully to say no, no; the promise of Medicare is here to stay.
Ms. NORTON. Isn't that, by the way, exactly why we got Medicare--that seniors were left to the private market, and finally the Congress understood that the private market cannot accommodate people with
$22,000 annual income.
Mr. GARAMENDI. Exactly right. When I was young, before Medicare, we lived in a rural community, there was a county hospital. My dad took me to the county hospital to visit a rancher. We were ranchers. On the other side of the hill was another rancher that was elderly and was at the county hospital. I will remember forever in my life going to that ward with maybe 15, 20 elderly people side by side in beds, the stench. The care was almost nonexistent. Poverty was everywhere. It was worse than horrible.
But in 1964 this Nation did something very, very important. Together with Social Security, they brought seniors out of poverty because it was the medical expenses that forced them into poverty. So Medicare brought seniors out of poverty. It went from, I don't know, I think it was almost 80 percent of seniors were in poverty to a situation today where maybe 8 to 10 percent are in poverty. Social Security, Medicare; absolutely critical. But any attempt to change that goes right to the heart of our values as Americans.
We will take care of our seniors. That's not to say changes are not possible. Of course changes ought to be public. For example, we ought to be negotiating with the drug companies over the price of prescription drugs. But, oh no. When the prescription drug benefit was passed, added into it and signed by George W. Bush was a paragraph that said the Federal Government is a price taker; it cannot negotiate the price of drugs. So we spend billions and billions where it's not necessary.
Ms. NORTON. And of course there are some agencies that do negotiate the price of drugs.
Mr. GARAMENDI. Exactly.
Ms. NORTON. I do want to point out, when you talk about the transfer of the expense, the cost of Medicare to seniors themselves--the costs we know they can't possibly bear--notice that hopes went up when Mitt Romney said, during the campaign, that we should reduce the loopholes. Well, note what Mr. Ryan does: he reduces the loopholes in order to give rich folks a further tax reduction.
So, where does the money go? The top rate now is 39.6 percent. Well, he wants to bring that top rate down to 25 percent. So he wants to close the loopholes all right--I'm not sure which ones he has in mind--
but that savings would go back into the same 1 percent sector that already has gotten all the benefit from tax cuts until what we finally did in January, when others got some relief as well.
Mr. GARAMENDI. I'm going to pick up another chart. The issue you raised is one that we really ought to chart. Let me go get another chart. Just keep going there.
Ms. NORTON. I'm very glad my good friend from California does have a way to illustrate all of these points.
Not only does Ryan reduce the top rate from 39.6--that's how much the very richest would pay--to 25 percent, but you may say, well, but he's got a 10 percent rate essentially for everybody else. Well, if everybody else paid 10 percent and the very richest paid 25 percent, there would be little revenue for the Federal Government. So what we're saying about Medicare and Medicaid is this would mean that there would not be the revenue to fund them. And that seems to be his point: get so little revenue coming into the Federal Government that in and of itself that will mean you do not have to worry about cuts. You'll get rid of these programs that we have been building for 50 years.
Mr. GARAMENDI. I ran over and got this chart. I wasn't going to talk about this this evening, but you brought the issue up about where the money has gone and the issue of tax breaks.
{time} 2000
This chart begins in 1979, and it shows the basic growth in income. So it starts down here in 1979, and the bottom 20 percent have really seen very, very little growth in their income. The next 20 percent, a little better, and this is the next quartile. These are the 1-
percenters. We talked about the 99 percent. This is the 99 percent down here. These are the 1-percenters. These are the people that have seen extraordinary income growth. And it just happens to coincide right here, this income growth has coincided with the Bush tax cuts in the early 2000's. So we've seen this enormous percentage income, almost a 300 percent growth, 277 percent growth in their income, so that you're beginning to see the skewing of wealth in America.
This is the annual income. But if you take a look at wealth and you put another chart of wealth here, you'll see something the very same. So the rich get richer and the poor stay where they are, that old song.
Here we are. This is a result of multiple effects, but one of the principal ones is tax policy. And if Mr. Ryan's budget passes, as you have suggested, and the top tax rate goes from 39 to 25 percent, then that means that those who already have a lot will get a whole lot more. And I'm reminded of a quote by Mr. Roosevelt, President Roosevelt, and he said--this is a paraphrase. I wish I had it with me to be exact. He said: We're not measured by how much those who have get more, but rather by what we do for those who have little.
This is our great challenge. This is where the great buying power for America should be, in the bottom 99 percent, really in the bottom 50 or 60 percent.
I thank you for raising that point about the tax policy in the Ryan budget, but it will make this line just continue to go like that; and the rest, because of the elimination of the deductions, are going to see a stalling of their income.
Ms. NORTON. So he does get balance within 10 years, and look at how he gets it. You still do not have anything like a contribution, a real contribution from those who have benefited the most from the tax cuts. You're saying it continues to come from the lowest part of the income stream, income groups in the United States. I don't know when people will let the Congress know they're not going to take it anymore, but it seems to me the time has come.
Frankly, I was encouraged by the fact--I hope this works out--that the President reached out to at least some Senators to see whether or not there's somebody somewhere, and since Democrats controlled the House, perhaps we could get to a greater balance by bringing more people into the equation.
The Republicans are fond of saying that you can't spend yourself into prosperity. Well, you can't cut yourself into prosperity, either. That's why the notion of balance makes the most sense. That's why the President was elected because that apparently made the most sense to the American people.
Mr. GARAMENDI. Exactly. The President has proposed a balanced approach to sequestration, as well as to the long-term deficit plan, a combination of additional revenues, many of them from closing loopholes, and also some very wise cuts. There are things that can be done in Medicare. I talked earlier about the prescription drug benefit. But there's also the way in which Medicare is organized. The fee-for-
service system encourages additional and often unnecessary procedures. There's a lot of fraud in the system. We need to deal with that. And the Affordable Care Act, interestingly enough, went right after every one of those, yet they want to repeal the Affordable Care Act.
What are they thinking? We know the Affordable Care Act works. We know that the inflation rate in Medicare, since the Affordable Care Act went into effect, has dropped precipitously. It's still growing, but it's growing slower than the general health care inflation rate in the Nation.
Ms. NORTON. That's the first time we've seen that in decades.
Mr. GARAMENDI. In decades. But we're seeing the changes.
The Affordable Care Act, a major part of that is an annual well person visit to the doctor, so critically important. Why? What's your blood pressure? How's your sugar? What's happening in your life? Can we prevent you from getting diabetes? Can we give you some really--some cheap pills to keep your blood pressure down, or are we going to have the blood pressure go up so you get a stroke and pay big-time for years and years with disabilities and medical care?
So the Affordable Care Act has the right incentives in it to bend the cost curve. And it is. It is actually working.
Ms. NORTON. It's working. And because it's working, we know good and well the last thing the American people would approve is snatching it back, particularly since, by 2014, it's going to reach everybody.
I agree with you. There are ways to cut. And unlike my friends on the other side, this side has never said no cuts. Their view is only spending cuts, but we have never had that view, only this or that. We really are open to the kinds of negotiation, tough negotiation it's going to take to come out with something.
Now, I'll say for the Ryan budget, he says he was questioned, ``Well, do you really think any of this is going to happen?'' and he said words to the effect, ``Well, you have to put down what you really want,'' I don't have any problem with that if they come to the table this time so that there can be a real negotiation and we can get to the kind of budget that I think really is doable.
Mr. GARAMENDI. I notice that our time is nearly over. If you'd like a few closing comments, I'm going to end in just a few moments, too.
Ms. NORTON. First, I want to thank my friend for keeping jobs before us. That's the bottom line. That's really what we've been talking about even as we talk about the Ryan budget.
I simply wanted to come forward because, when I heard you on the floor, it seemed to me almost everything you were saying fed into the news today from the Ryan budget. I ask people to try to follow the explanation of what that budget does when you hear that he can close the budget in 10 years rather than 25 years, understand that that is impossible if you want to grow this economy.
I thank you, once again, my good friend from California, for making all the important points this evening.
Mr. GARAMENDI. From Washington, D.C., your leadership in this community has been known for some time. I thank you very much for joining us tonight.
I want to do two things before I end. First of all, Medicare is back on the table. The Ryan budget takes up Medicare once again and provides a voucher which will basically destroy it.
I used this last time around. I'm going to change this. It says, Medicare 1965--that was President Johnson--until 2013; created by LBJ, destroyed by the GOP. I don't think so. Seniors don't want it. Americans don't want it. In the last campaign for the Presidency, this was one of the major issues, and yet Mr. Ryan is coming back with it. Bad idea, bad timing.
I want to end with this. This is a great country. There is no other place in the world like the United States. It is one terrific country. There's enormous energy in this country, the energy where people want to get a job, they want to go to work, businesses want to grow, and they want to hire people. All of that is waiting for Congress to get its act together, to get the sequestration out of the way, which is an austerity budget that has 750,000 jobs to be lost in it, get that out of the way. Look at the balanced proposal, as the President has suggested. End some tax loopholes. Make some cuts. Make wise, thoughtful cuts. And it's possible. It can be done, and it should be done.
Along the way, we can grow the economy. We can, once again, ``Make it in America.'' Because when we make things in America, when we use our tax money to buy American-made equipment, supplies, and products, we're creating jobs here. We're putting people back to work.
George Washington said we ought to do it. Alexander Hamilton as Treasury Secretary said we ought to do it. And we, the Democrats, say we ought to do this. We ought to have a buy American.
Mr. Rahall, the ranking member of the Transportation and Infrastructure Committee, has made it clear that, as a major part of the new transportation bill, there's going to be a major ``Make it in America'' component so that we're buying American-made goods once again. He's supported by every one of the ranking members of every subcommittee, and I add myself to that list.
For the last 3 years, I've carried specific bills that say our tax money, transportation tax money, would be used to buy American trucks, buses, bridges, and steel made here in America. If you're going to put up a solar panel on your house or a wind turbine and you expect a subsidy--and you should have one--then it should be an American-made solar panel or wind turbine.
We can make it in America when Americans, once again, make it. So, that's our message. Our message is to be wise about the cuts. Yes, we're going to make cuts. Balance it with appropriate revenue increases, which should be basically the elimination of many of the unnecessary subsidies that go out even to American corporations still receiving subsidies for offshoring jobs. No more. The President was right. Give a break to American companies that bring jobs back to the United States.
All of this is possible. This is what we are here for, 435 of us in the House of Representatives, to set policy. Mr. Delaney talked about education, technology, energy policy, and we were joined this evening by our other friends, Mr. Higgins from New York, Mr. Ryan from Ohio, and Ms. Norton from Washington, D.C. It's been a good evening.
Mr. Speaker, I yield back the balance of my time.
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