Currency Exchange Rate Oversight Reform Act of 2011

Floor Speech

Mr. BENNET. Madam President, I am here today to talk a little bit about the state of our economy. I have spent the summer and early fall traveling around the beautiful State of Colorado, having townhall meetings and listening to people who mostly start the conversations by saying: What is wrong with you people in Washington? Why can't you work together to actually get anything done there?

They are short of slogans these days, and they are desperate for us to turn this economy around. They know what the consequences have been of living in a country that for the first time in its history has had median family income falling, at a time when their cost of health insurance has been skyrocketing, their cost of higher education is going through the roof.

I thought the Wall Street Journal captured this in a way that I have been unable to. In a very vivid way, on the front page a couple weeks ago, there was an article that was entitled: ``As Middle Class Shrinks, P&G''--that is Procter & Gamble--``Aims High and Low.'' That article is about one of the most iconic middle-class brands imaginable, Procter & Gamble.

Ninety-eight percent of the households in this country have a product in their house that is produced by Procter & Gamble: Crest toothpaste, Head & Shoulders shampoo, Tide water detergent, Pampers diapers, Bounty paper towels. The list goes on: Duracell batteries, Mr. Clean, Pepto-Bismol, Pringles potato chips--stuff that did not even exist before there was a middle class in this country to buy it.

That is the great brand of Procter & Gamble, and it is still a great brand. But this article is about how they are changing their business model to reflect the current economic realities and economic realities they believe are actually going to persist for some time.

BREAK IN TRANSCRIPT

Mr. BENNET. I quote:

P&G's profits boomed with the increasing affluence of middle-class households in the post-World War II economy.

The story I was just telling.

The article starts out by saying:

For generations, Procter & Gamble Co.'s growth strategy was focused on developing household staples for the vast American middle class.

Now, P&G executives say many of its former middle-market shoppers are trading down to lower-priced goods--widening the pools of have and have-not consumers at the expense of the middle. .....

P&G isn't the only company adjusting its business. A wide swath of American companies is convinced that the consumer market is bifurcating into high and low ends and eroding in the middle. They have begun to alter the way they research, develop and market their products.

In other words, they have begun to alter their business plan with the assumption that the middle class is evaporating in this country and that their growth markets are the very richest among us, on the one hand, and the very poorest among us, on the other hand.

Let me close on this part by reading near the end of this story:

To monitor the evolving American consumer market, P&G executives study the Gini index, a widely accepted measure of income equality that ranges from zero ..... to one. ..... In 2009, the most recent calculation available, [there was] a 20% rise in income disparity over the past 40 years. .....

Here is the next quote:

``We now have a Gini index similar to the Philippines and Mexico--you'd never have imagined that,'' says Phyllis Jackson, P&G's vice president of consumer market knowledge for North America. ``I don't think we've typically thought about America as a country with big income gaps to this extent.''

I do not think that is the way we have thought about America either because that is not what America has been for generation after generation, decade after decade, going back to the founding of this country.

Why do I come to the floor to talk about this? It is because the debate in this place is becoming more and more unmoored from the facts, and people need to be reminded, I think, here--not in Colorado--but here about what the problem is we are actually trying to solve.

Here, as shown on this chart, is our current economic challenge. The top line is our productivity index, going back to 1992, that blue line. You will notice it fell slightly during the recession, and then it took off again like a rocket. Why? Because firms all over the country were having to figure out how to do what they were doing, produce what they were producing, with fewer people in order to survive in this recession. The combination of competing in a global economic environment, which was not even present remotely in the way it is today in the 1980s, required us to be more productive. The technological revolution this country has spawned and led has allowed us to become more productive.

You can see from this green line--which is gross domestic product--our economy actually has started to come back. We are about two-thirds of the way back to where we were before this recession started. But what my families are feeling in Colorado and what the Presiding Officer's families are probably feeling in Missouri is in these other two lines. This line represents median family income which, as I said earlier, continues to drop, for the first time in our country's history, in the last 20 years. What that means is people are earning $4,000 and $5,000 less in real income at the end of the decade than they were at the beginning of the decade. Although I guess I should point out here, as well, that during the time median family income was falling, average family income went up, reflecting the widening gap between rich and poor in this country and reflecting a diminishing middle class.

This line is unemployment. It does not take a genius to figure out that when the green line crosses again and our GDP is where it was before we even had this recession--and it will--we do not have an answer for people who have been dislocated as a consequence of our economy becoming more efficient and more productive. These jobs are going to be created not by legacy firms from the last century but by businesses that are going to be started tomorrow and the week after that and the week after that.

Rather than having a partisan debate here in Washington, we should be having a bipartisan discussion about how to change our Tax Code and change our regulatory code to make it easier--not harder--for small businesses to be created and to compete and to make sure we are creating jobs here in the United States that are actually lifting median family income rather than driving it downward.

This is what has happened to manufacturing in the United States since 2001. I invite anybody to look on our Web site if they want to look at these charts themselves or use them in their own meetings. But this top line is our manufacturing output. You can see that has been rising. This other line, going back from 2001 to today, is manufacturing employment. Output rising; employment falling.

People in my State know we did not get here yesterday. This has been happening to them for the last decade or so. They want us to be responsive to that.

This is the median family income chart: In 1999, median family income was roughly $53,000. In 2010, it was $49,000--a $4,000 drop in real dollars since 1999; a 7.1-percent decrease. People are coming to me and saying: Michael--they may not know it is a 7.1-percent decrease, but they know they are earning less. They know that 10 years ago when they set out to save for college for their 8-year-old, they were expecting to be earning more at the end of the decade. Now their kids are going to school, and they are saying: I can't afford it. Tuition has skyrocketed. I can't send my kid to the best school they got into. What a waste.

I would ask you, Madam President, whether any of us think we can afford another decade like that at the beginning of this new century. If we consume a fifth of the 21st century driving American middle-class income down, we are going to have a very tough time recognizing ourselves. This next chart is something that is not noted by many, but I used to be a school superintendent, so I have an interest in our education. This chart shows unemployment during this recession based on educational attainment. The worst it ever got for folks with a college degree in this country was 4.5 percent during this recession. For people who had less than a high school diploma, it was 15 percent. For people with a high school degree, it was around 12 percent.

Here is what else we have done over the last 10 years. This chart shows our poverty rate in this country.

This is why we have to move past the politics and into a substantive conversation about where we want to take this country as Republicans and Democrats together. These lines are people who are Republicans and Democrats and Independents, who are seeing their income driven down, who are seeing their wealth destroyed, and expect us to at least be able to have a civil conversation about it on the floor of the Senate.

Did you know that poverty has increased by 46 percent since the year 2000 in the United States of America? There are 46 million people in our country of 300-and-some million that live in poverty today. Thirty-five percent of them are kids. Two percent of the children in the United States today are living in poverty. One-fifth of the children in our country are living in poverty.

As I mentioned earlier, this has not affected everybody the same in our economy. This is the average income growth for the top 1 percent of income earners in the United States. This is the top 5 percent. This is the top 10 percent. And it seems almost insane to describe it this way, but the bottom 90 percent, 9 out of 10 income earners--9 out of 10 income earners--this is what has happened to their income since 1967 in real dollars, inflation-adjusted dollars. It has been absolutely stuck and flat at the bottom of this curve, all of which leads me to show the most disturbing slide of all, which I know is hard to read. But let me tell you what it says--and you can find it on the Web site.

It says we have not seen this level of income inequality in the United States of America since 1928. That is the last time that the so-called bottom 90 percent of earners--9 out of 10 earners--earned roughly 45 percent of the income in the country. Here in 1928, and here in 2011. I do not think our democracy can sustain itself with another decade or two of numbers such as this. We have to do better.

The bottom 90 percent of earners, as I mentioned a minute ago, are Republicans and they are Democrats, they are Independent voters, and they expect their government to work together. We cannot create their jobs, but we can create the conditions under which we can create high-paying jobs in the United States that are lifting family incomes rather than driving them down. That is what we should be debating in Washington.

Like you, Madam President, I have a deep concern about the fiscal condition of the country. We have $1.5 trillion of deficit, and we have $15 trillion of debt, and we do not have the apparent will to address that problem. We can address that problem. We should be adopting the kind of policies that were recommended by the bipartisan commission, Bowles-Simpson, that together combines to take $4 trillion out of our deficit situation over the next 10 years.

They did it by asking everybody to have a share in the sacrifice. We should be debating that on the floor of the Senate. We should be supporting the work that the Gang of 6 has tried to do, not just because it will help us with our fiscal situation, which is critical, but because it will help us with our jobs situation.

There is $2.3 trillion of cash, by some estimates, sitting on the balance sheets of America's corporations that is not being invested now because people are deeply worried that they cannot predict what interest rate environment we are going to be in because we cannot get our fiscal house in order and because the government is financing its debt on short-term paper, which easily could rise. Every rise in our interest rate will add $1.3 trillion to the debt over the next 10 years.

These are the facts. I have a list of what we could be doing today. I will not dwell on it. We could be reforming and simplifying our Tax Code. We could be adopting a long-term research and development strategy. We could be investing, as Republicans and Democrats have done for decades if not centuries, in our infrastructure. We could bring our public education system into the 21st century, which would matter a lot not just to our middle-class kids but to kids living in poverty as well.

Did you know that today, if you are a child born in poverty--whether you are rural or urban, it does not matter--your chances of getting a college degree are 9 in 100--9 in 100--which means that the day you are born, if you are among those 100 kids, out of the shoots 91 of you are consigned to the margins of the democracy, the margins of our economy.

If we do not change the way we educate our kids, and even if we do not care from their point of view what the implications of that are--and I deeply do care about that as the father of three little girls. I think everybody should have an opportunity to graduate from high school, go on to college and succeed. Even if you did not care from that perspective, look at what happens if you do not have an education in the 21st-century economy. Look at the unemployment rates people are having to suffer through if they do not have a high school degree or a college degree compared to if they do have a degree. That is not going to change.

The last time we were creating jobs in this country we created roughly 5.3 million for people with a college degree, 3.5 million for people with something north of a high school diploma. No new jobs for people with a high school degree, and we lost jobs for high school dropouts.

So if you care about the strength and success of the American economy, if you care about maintaining the mantle of the land of opportunity, if you care about the idea that the job of one generation is to put another generation into a position to succeed and contribute in the economy and the democracy, you need to care about what we are doing with our education system.

We could be talking about that. We could be doing regulatory review to make sure we have a process to get rid of old regulations that do not make sense and put in ones that do. I know in Colorado we have a huge interest in ending our reliance on foreign oil. Everywhere I go people talk about that. Everywhere I go people wonder whether it would not be better to have an energy policy that created energy independence for this country instead of having one--or a lack of one may be a better way of saying it--that forces us to shift billions of dollars a week to the Persian Gulf for the privilege of buying their oil because we do not have a policy.

We could be thinking about advanced manufacturing. We could be eliminating the technology gap. We could be modernizing the FDA. There is no shortage of things we can do if we come together to do it.

I see my colleague from Oregon is here, so I will wrap up in 1 minute. But in order to be able to get to any of that, in order to get to any of that, we have to knock off the political games and actually start working together around this place.

Two days ago there was an article in the Washington Post--I think it was--that said that the United States Congress has a 14-percent approval rating, and the joke around here is, well, who in the world are those 14 percent who think we are doing a good job? But it is not a joke. This is serious. There is a reason our approval rating is in the basement. It is because instead of working on the things that actually would drive productivity in this country, would drive job creation in this country, would most importantly drive median family income up instead of down, we are fighting with each other.

I want to go back to Colorado and have an answer for the people in my townhalls who could care less--could care less--whether I am a Democrat or I am a Republican and just want me to do my job. The ones who are doing their jobs want me to do my job. The ones who do not have jobs want me to do my job. They want all of us to do our jobs.

I know there are people of goodwill on both sides of the aisle that if given the chance will work together to do this. The last thing I will say is this, and then I will stop. The rest of the world is not waiting for us to get our act together. The rest of the world is not waiting for us to decide whether we are going to have another debate that leads to us blowing up the credit rating of the United States. They are not waiting for us to decide whether we want to sacrifice for the first time the full faith and credit of the United States of America. They are not waiting for us to decide whether we are going to invest in 21st-century manufacturing.

My colleague from Ohio just showed up. He talked about that. They are not waiting for us to decide whether we are going to let them own the 21st-century energy economy. They are going right ahead, and so our failure to act has consequences. I believe it is time for us to come together--even though we are in a political season, even though we have a Presidential campaign--and do our work on behalf of the American people and the people of my State of Colorado.

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