State Of The Economy

STATE OF THE ECONOMY -- (Senate - February 14, 2007)

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Mr. CORNYN. Madam President, on Monday the distinguished majority leader took to the floor and bemoaned the state of our economy, calling our economic future bleak. As surprised as I was by those comments, I thought it was even more important to come down to the floor and to respond and to provide, I think, a much different picture than that depicted by the distinguished majority leader.

It is ironic the same date those comments were made, the Associated Press reported a story that leads with this paragraph:

The deficit for the first four months of the current budget year is down sharply from the same period a year ago as the government continues to benefit from record levels of tax collections.

The Treasury Department reported Monday that the deficit for the budget year that began October 1 was down 57.2 percent from the same period a year ago.

That same article goes on to say:

The continued strong growth in revenues reflects the record profits corporations have been recording in recent years and the low levels of unemployment, which means more Americans are working and paying taxes.

If this is ``bleak' economic news, I would love to see what good economic news might look like.

I have a few charts that provide a more accurate picture of exactly where we stand in terms of the American economy today. This first chart demonstrates for 21 consecutive quarters we have seen the U.S. economy grow, including the latest quarter where the economy grew by 3.5 percent.

We have seen since August 2003, employment has expanded over 41 consecutive months--creating 7.4 million new jobs in America. This timeframe is not accidental. In 2003, we passed some of the tax relief which is largely responsible for giving the American worker greater incentive to work hard and to save their money and invest it in their small business, thus creating jobs and opportunity for all Americans. This has created the sort of freedom that is always demonstrated in the strength of our burgeoning economy. It is as a result of not Government action per se but, rather, the freedom we have given the economy and the hard-working American taxpayer to keep more of what they earn and creating an incentive for them to work hard and be able to earn more to support their family and their way of life.

The third chart demonstrates the economic picture is not as the distinguished majority leader said, ``bleak' but demonstrates that revenue to the Federal Treasury has exceeded all historical precedent. Indeed, this last projection is that in 2007 we will see it increase by 18.5 percent, and you can see above the line on this chart that represents historical averages. Each of the following years leading up to 2012 will exceed that historical average. Again, the economy is stronger than ever and continues to grow because of our current low tax and progrowth policies.

Unfortunately, this is a lesson that Washington sometimes forgets because when given the opportunity, the instinct of Washington is to increase Federal revenue by increasing taxes. I don't think you need to know much about human nature to know that high taxes decrease the incentive we all have to work hard. What that does is actually have a wet-blanket effect on the economy and on the ability of small businesses and employers to create jobs which create the kind of economic growth and the kind of revenue our tax system generates as a result of strong economic activity.

I am worried that even with the current continuing resolution that is in the Senate now that cuts $3.1 billion from defense spending at a time when we are trying to bring our troops home from Europe and Asia and to provide them a place to come home to, that the solution offered by the distinguished chairman of the Committee on Appropriations is ``Don't worry, we will add that money back in when we get to the supplemental appropriations bill.'

The problem with that is the $3.1 billion that has been spent out of the current continuing resolution or Omnibus appropriations bill on things other than our military, that money has now been spent on other programs that are favored by the new majority. What they are saying is, instead of spending $3.1 billion, we will spend $6.2 billion--the $3.1 on things other than defense, but we will come back later and make the defense budget whole but in a way that aggravates the budget deficit.

Of course, the consequence of that kind of spending policy which has a tendency to aggravate the deficit lays the groundwork for our colleagues on the other side to say, the American people are not taxed enough. We need to actually raise taxes in order to generate more revenue to pay for this additional spending.

This is exactly the kind of response we do not need. As demonstrated by the charts, as demonstrated by the booming economy, we have, as a result of the low tax policy and the progrowth policies of the last 6 years, the American economy could not be stronger or better.

I hope we will all be edified by this factual data demonstrated on the charts and that the misimpression that the distinguished majority leader was under when he called the economy bleak will be now disabused. I hope he will see from the charts and from my comments--not because I said it but because this is what the facts demonstrate--the low tax and progrowth policies we have had over the last 6 years have served the American people very well and that 7.4 million new jobs have been created in America since August 2003. That, indeed, should be what we are all about.

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