The American Economy

THE AMERICAN ECONOMY

Mr. CORNYN. Mr. President, I have sat here for the last 2 hours 15 minutes and listened to a number of speeches by my colleagues on the other side of the aisle. I can only conclude that they are invoking the memory of Mark Twain, who said: "I am not one of those who when expressing opinions confines myself to the facts."

What I mean is I find it curious that speaker after speaker has criticized the Bush administration, and indeed, the majority in this Congress, for our progrowth economic policies when, in fact, the results of those policies worked to the betterment of the American people and create hope and opportunity and not despair and hand wringing. The only thing I believe contributes to despair and hand wringing and increased anxiety among the American people, and indeed the voters who are going to vote on November 2, are speeches made by supporters of the Democratic nominee on this floor and elsewhere, talking gloom and doom and despair as if America was no longer the last best hope on the planet.

First, I wish to talk about the bill that was passed a couple of hours ago, the FSC/ETI bill, more appropriately named the JOBS bill. I was proud to be 1 of the 69 Senators who voted in support of that bill, for a number of reasons. First, we were able to eliminate a 12-percent penalty against exported goods made by American companies exported to the European Union. That is something that was long overdue. We really would not have had to wait this long to do that but for some obstruction on the other side of the aisle.

The second reason I am proud to have voted for this bill is because it ends the discrimination against those States such as mine, Texas, which have no income tax. In Texas, we tend to adhere to the idea that government should not be a burden any bigger than absolutely necessary upon the people who earn the money, so they can save it, they can invest it, and small businesses can create jobs. So we do not have an income tax. We have a sales tax.

But for many years now, Federal laws discriminated against States such as Texas and I believe Washington-I see the Senator from Washington on the floor. I believe her State was also affected by this change. Now taxpayers in Texas can deduct the sales tax they pay from their Federal income tax. I am very pleased that 69 Members of the Senate today saw fit to end that unjustified discrimination.

The reduction in the corporate tax rate for manufacturers that was accomplished by the passage of this bill earlier today has effectively reduced the corporate tax rate for these manufacturers by 3 percent. In other words, the corporate tax rate in the United States, which is 35 percent across the board, has now been reduced 3 percent for this class of taxpayers-manufacturers. This will, no doubt, provide an opportunity for manufacturing concerns to increase their competitiveness in a global economy where they have to compete with much lower wage-paying countries, such as China and elsewhere.

It is curious, though, to me, that America still has one of the highest corporate tax rates in the world. Indeed, the University of Michigan, in a study from the Office of Tax Policy Research, says that in 2002, the last year for which figures were ready available, the average corporate tax rate for countries all across the world was 29 percent across the board-29 percent. America's is 35 percent, except for now when this bill becomes law, it will be reduced for a certain class of taxpayers in the manufacturing business.

This chart shows that, for example, the Slovak Republic has a 25-percent corporate tax rate. Indeed, this past year I was privileged to travel from Bratislava, with other Members of the Senate, to represent the United States at a meeting of the Presidents of the new members of NATO, including the Slovak Republic. We learned from the Ambassador that, indeed because of the low corporate tax rates, that small country had been able to attract three major car manufacturers to the country, creating thousands of jobs, primarily because of the low corporate tax rate and because of the population that is eager and willing to work.

The fact is, our policies do impact our competitiveness in the global economy, and have a direct impact on the quality of life and the prosperity of the American people, something I am afraid is too often ignored.

I am so glad to see some of my colleagues from the other side of the aisle who rail against reduction in taxes for individual taxpayers agreed-all of us combined-by a vote of 69 to 17 that lower taxes promote economic growth and promote greater job creation. That is exactly why I believe we were wise to pass this bill in the Senate today. Unfortunately, what we hear too often when talking about issues such as economics and job creation is a lot of cynicism. I heard someone on the floor today talking about elite corporate interests will benefit when tax rates are lowered, or I think there was a reference made by the Democratic nominee for President about Benedict Arnold corporations are traitors, in effect, of America by taking jobs out of America into other countries. I want to talk about that more in a minute. But what these amount to is a philosophy of claim to love the worker but hate the employer. In other words, speaker after speaker today claimed that the policies of this administration were hurtful to the worker at the same time they claimed that the only ones who benefitted were the big corporations.

The fact is you cannot claim to love the worker and hate the employer who provides the worker their job. That is why I believe we need more progrowth policies. I think we need to look at our tax policies across the board.

We need to look at our civil justice system which imposes a tort tax on every consumer in this country and which stymies innovation and business growth and thus job growth.

We need to look at our regulatory policies which make it difficult for America to compete. And, yes, we need to look at policies which will provide greater opportunities for innovation not by the Federal Government but by the men and women, the risk takers, the investors and people who create jobs all across this great land-indeed, all across the world.

What I have heard earlier today with regard to condemnation of elite corporate interests and the like also reminds me of some of the debate we heard earlier about outsourcing. It is my view that a lot of the debate on outsourcing is largely based on the same sort of fearmongering and anxiety and hammering we have heard generally today in attacks against this administration and its economic policies, not on the facts. The facts are that markets are rational.

In other words, if a company can open a business here in the United States or increase the size of its business, but because of a higher tax burden and more litigation risk environment, more regulation and the like, they are going to take a look at places such as India, China, and Mexico, and other places that do not have a lot of those same regulatory and legal burdens and tax burdens.

One reason why America continues to prosper is because, of course, we have what many places in the world do not have; that is, stability in the rule of law that promotes security of investment. So we can continue to attract foreign dollars in this country.

For example, the Congressional Research Service has produced a document entitled "Outsourcing and Insourcing Jobs in the United States Economy, An Overview of Evidence Based on Foreign Investment Data."

This research document reveals that by 2003 U.S. firms accumulated $1.5 trillion worth of direct investment abroad compared to the $1.4 trillion foreign investors spent to require or establish businesses in the United States. For 2003 alone, foreign direct investment in the United States was about $82 billion, whereas U.S. direct investment abroad rose to about $155 billion in 2003.

As I said, markets tend to be rational. People, unlike the Federal Government, have to look at the bottom line and make sure that they don't operate in the red and thus go bankrupt and risk going out of existence. They have to be rational. They cannot make the kinds of emotional decisions that are made too often in the political realm.

But it is no wonder because of the regulatory environment, the tax, the high taxes in this country, because of the legal system which unfortunately rewards a few at the expense of the many, that we are finding more jobs going overseas. And there is something we can do about it. The fact is we in this Congress are well situated to enact progrowth policies which will decrease the likelihood that companies will go overseas or outsource jobs to other countries and other locations around the globe. But we are not doing the things we need to do to promote growth right here at home and ensure greater employment opportunities for the American people.

For example, we know that one of the biggest drags on the economy and on job creation is expensive oil imports. We know a barrel of oil is currently selling on the spot market in excess of $50 a barrel. We had an opportunity-and unfortunately we didn't avail ourselves of that opportunity-to pass an energy bill which I think would have created more domestic production here in America, and we would have had a greater supply, and thus bring the price down. But we didn't do it.

We have high natural gas costs because we simply have put too much of the domestic supply out of our reach by moratoria and other policies which said we may have the gas but we are simply not going to explore and drill for it. It should be no surprise that the cost of natural gas is at historic highs.

It is no surprise that gasoline is so expensive when regulations have resulted in no new refineries being created in the United States since about the early 1970s. The fact is most of the refiners are operating at maximum capacity.

One reason for oil and gas being expensive is because emerging economies such as China and India and others are consuming more and more energy and thus driving up the price.

We had a chance to do something about that by passing an energy bill this year, and we simply have been unable to do that because of objections on the other side of the aisle.

We also know one reason companies don't come to America or don't expand jobs here in America relative to other countries is because of our legal system. Unfortunately, we have a mentality in this country that says frivolous lawsuits are simply the order of the day. We know that the costs of those lawsuits are passed on ultimately to the consumers who pay in effect a tort tax. We also know that it affects access to health care which is another cost that businesses incur when they do business in the United States as opposed to other countries.

We had a chance to pass medical liability reform to improve access to OB-GYN doctors, emergency room doctors, and the like. We had a chance to reduce the paperwork that adds about a quarter of the cost to the health care expenses incurred by Americans and by American businesses when they provide health care coverage to their employees. Unfortunately, these policies resulted in a large number of people simply going without health insurance because of the cost.

If no one believes what I have said to this point about low taxes being progrowth and being in the best interests of the American people, and people who want to work, I think all we would have to do is look at what happened after we passed the historic tax relief and growth package in 2003. We know in June 2003 unemployment rates in this country were at 6.3 percent. Today, they are 5.4 percent, a .9-percentage point difference lower.

We remember hearing day after day discussions about the jobless recovery. The fact is, since August 2003, as a direct result of the progrowth economic policies of this administration and the leadership of this Congress, according to the payroll survey, 1.9 million new jobs have been created in the United States.

I heard one of the distinguished Senators refer earlier to "we" produced new jobs. I am sure they did not mean to suggest that the Federal Government produced the jobs because we know the Federal Government does not produce jobs. More often than not, it is the burdens imposed by the Government on employers that kill new jobs. The fact is, if you look at the household survey-of course, we will get into the difference between the payroll survey and the household survey-more and more Americans are no longer working in a traditional employer-employee relationship. Indeed, they are pursuing their own dream by starting their own business. According to the household survey, 2.2 million new jobs have been produced since August of 2003.

We are seeing a restructuring of the economy not only in the United States but globally. Obviously, we know there is going to be some human pain associated with that. None of us likes, regardless of whether we are Republicans or Democrats or Independent, when anyone wants to work and they cannot find a job. Our goal should be to keep our eye on opportunities for everyone to live up to their potential, to get a job, to provide for their family.

Unfortunately, the antigrowth policies pursued by many of our friends on the other side of the aisle in terms of bigger government, greater taxation, more regulation, runaway litigation, have exactly the opposite effect. They limit opportunity;
they limit jobs; they limit investment.

I have heard the President criticized time and time again today and elsewhere for his economic policies. But I remind my colleagues when this President came into office, we were in a recession. Not only that, a short time after he came into office, we had the terrible events of September 11. Osama bin Laden himself said his goal was to establish about $1 trillion of cost to the American economy. Indeed, we know that much of the economy suffered a body blow as a result of that tragedy over and above the human loss of life that we suffered on that terrible day.

Then we also know that the birds came home to roost, so to speak, on corporate scandals, some of which are still being prosecuted, that caused a tremendous loss of public confidence in our markets and in businesses, resulting again in further economic distress.

The truth is, during this administration the American economy and the American people have had many challenges. One of those challenges has been the attacks not only on us as human beings but on our economy and on the economy's ability to generate new jobs.

Despite all the hand wringing, despite the naysaying, despite those who would claim there is no hope unless we get a new President on November 2, the fact is there is tremendous reason for hope and, indeed, tremendous reason to believe that it is the policies of this administration and the leadership in this body as well as the House of Representatives that have caused, have created the conditions whereby the risk takers, the investors, those who create jobs, do so, and they have done so at remarkable levels.

I used to be very skeptical of the speeches I have heard of the Senator from North Carolina, the Democratic Party's nominee for Vice President, who talks about two Americas. Indeed, sometimes in listening to the debate in the Senate today and elsewhere, maybe he is right-but not quite in the way he says. There is one America that is hopeful, that seeks opportunity and believes that everyone, no matter who they are, where they come from, or how they pronounce their last name, is entitled to pursue their dream, the American dream. On the other side, there must be another point of view, another America, so to speak, for those who believe they should pursue their political objectives by fearmongering, by hand wringing, and increasing the anxiety of the American people when it comes to their job security by making fallacious claims about how good the economy really is and the policies that have produced tremendous growth in the economy and tremendous opportunity for people who have previously been out of work.

Ultimately, we have to do two things: Continue to do what we have done with regard to people who are out of work and provide temporary benefits until they can get back on their feet and get back in the workforce-not a permanent subsidy for not working but provide help for those who are truly looking for work, and then we need to continue to provide educational opportunity to every American.

We need to change our frame of mine when we think about education. When I was growing up, I somehow got this idea that I would go to school and graduate from high school and then I would go to college and I would "finish" my education. The truth is, that is not what happened. The truth is, it cannot happen in today's economy and in today's competitive work environment. The truth is, we need to change our frame of mind and commit ourselves to life-long learning. That is one reason I appreciate the President's emphasis on community colleges, which in many areas of the country are working in conjunction with the private sector to learn what sort of skills need to be taught to a workforce in order to get the good high-paying jobs that exist. Indeed, community colleges are working closely with the private sector to do just that in places such as the State of Texas and elsewhere.

We need to recommit ourselves to education because the one area that America has always surpassed its competition anywhere in the world has been in the area of innovation. It is our brain power, our spirit, our freedom and opportunity that have made us the envy of the rest of the world.

I cringe when I hear my colleagues on the other side of the aisle, or when I hear on the political stump about hope being lost, about those people not having opportunities anymore, about the American dream leading to a nightmare, because the facts, No. 1, contradict that; and, No. 2, the only way that America can be defeated in a global competition is if we defeat ourselves and give up.

It was Professor Harold Laswell who called politics a fight over who gets what, when, and how. If all we are going to talk about in the Senate and in Washington, DC, it is about who gets what, when, and how, we will be defeating ourselves. Indeed, we need to continue to enact progrowth policies that will provide opportunity for everyone in this country. If we ever lose sight of our vision as America being the last best hope of freedom-loving people around the world, we will have hurt ourselves and hurt the American people at the same time.

Finally, those in this Senate who complain so mightily about lower taxes for individual taxpayers and use class warfare to talk about the rich not paying their fair share, these are the same people in many instances who voted for this tax cut for corporations that manufacture goods.

I think their vote today was right. I think their rhetoric, when they talk about the President's policies and tax relief being wrong, is wrong, because it is higher taxes, more regulation, out-of-control litigation, and a burdensome regulatory environment that are hurting America's ability to compete in the global economy and are hurting the opportunity for American employers, including small businesses, to create those new jobs.

Indeed, I think any fair observer would conclude that it is the policies of this administration and this Congress that have created greater opportunity. I do not believe we should give in to the hand wringing, to the anxiety-provoking rhetoric, or, indeed, the fearmongering that happens way too often in our political discourse because the facts point to the fact America is still and-as long as we retain our commitment to progrowth policies-will continue to be the last best hope of the world.

Madam President, I yield the floor.