Volume 157, No. 17 covering the 1st Session of the 112th Congress (2011 - 2012) was published by the Congressional Record.
The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“THE ECONOMY” mentioning the Environmental Protection Agency was published in the Senate section on pages S566-S569 on Feb. 4, 2011.
The publication is reproduced in full below:
THE ECONOMY
Mr. SESSIONS. Mr. President, the news broke this morning concerning the jobs report for January. The numbers came in that we only added 36,000 new jobs to the U.S. economy. The Wall Street Journal lead is,
``Economy Adds Few Jobs.'' It is a difficult matter. Some say maybe the weather had something to do with it. The Washington Post report noted that job creation was far less than economists had predicted.
Mr. President, 36,000 might sound pretty good, at least not bad; but in truth it is not good. Mr. Bernanke, the Chairman of the Federal Reserve, testified before our Budget Committee--of which the Presiding Officer, Senator Begich, is a member--that our economy needs to produce about 150,000 jobs a month--it needs to add that many--to stay even. We need to be adding about 250,000 a month to begin to reduce unemployment in a significant way.
The numbers were mixed. Some people saw some good news in the report. The Household Survey showed a drop in unemployment, which was not a bad. But I think the low number of actual jobs created was pretty troubling.
I will say a few things I believe are important and need to be understood.
This Congress passed a stimulus package that was supposed to keep unemployment from going above 8 percent. It went to 9.6. It has dropped some since then, but it is still extraordinarily high. We passed that package, and it did not stop unemployment from rising. It was based on the Keynesian concept of government borrowing money to spend into the economy on the theory that government can create jobs.
Not long before the vote, Gary Becker, the Nobel Prize-winning economist from the University of Chicago, wrote an op-ed. In it he said he examined the proposal and that it was far too ineffective in creating jobs and economic growth. He warned that it would not be effective. He warned that the growth factor was below 1. It should be above 1. He said maybe .7, and that this, in his opinion, was not a good investment of $800 billion. Every penny of it was borrowed. We did not have that money. We decided to borrow the money in an attempt to stimulate the economy.
I know many heard it said, and the President repeated, that this was a new infrastructure program; that we were going to fix our crumbling infrastructure. We were going to create American jobs and make our highways and bridges safer and better.
That was an inaccurate statement. It became clear before the bill passed--I remember pointing it out, as did others--that only 5 percent of the $800 billion went to bridges and highways--5 percent. This was not a bridge project. It expanded entitlements and bailed out states. It created no real growth in productivity. It has not done what it was advertised to do.
I hate to say ``I told you so,'' but when you take $800 billion of borrowed money and let it compound at 4 percent, you create a liability that will be on our books for the indefinite future, maybe forever--
that we will be forced to pay about $32 billion a year in interest.
Every year now when we do our budget, we have to figure that first we have to pay $32 billion for the interest on that money we borrowed that was supposed to stimulate the economy, that did not stimulate the economy.
Mr. President, this amount we spend on the interest cost is roughly equivalent to what we spend on highways annually. Rather than paying interest on a bill that failed to increase economic growth, we could have doubled the Federal highway budget.
It was, as Bill Gross, the guru behind the PIMCO bond fund--one the largest bond funds in the world--said: Emphasis in America and some other nations has been on consumption, not effectively enough on growth, which is sort of what Professor Becker said and Federal Reserve Chairman, Mr. Bernanke, said recently--that there are going to be several years before we get to a normal job growth situation, a normal unemployment rate in our country.
Even though the unemployment rate seems to have dropped, it is important to note that a number of the people dropping off the unemployment rolls are dropping off because they have given up looking for work. They have gotten discouraged and they are no longer going down to the unemployment office registering and looking for work. That is not good. A healthy, vibrant, growing economy attracts more people into the workforce.
There was an article in Baron's financial magazine recently that noted that as of December, the number of hours being worked by employees had not gone up. Normally if unemployment goes down and businesses hire more workers, they will show average hours worked going up. It was in the low thirties, and it was not going up. They said maybe that is a signal that some may be too optimistic.
They also noted that wages were basically flat, just a minor increase in wages. Whereas, the price of gasoline, which we are so thankful Alaska is producing for us, and food are going up. Cotton prices, soybean prices, corn prices are at record levels. This will translate into rising costs. If wages are flat and the number of people working is flat and costs are rising, then this is not good for the economy.
If government cannot borrow money and create real employment of a sustained nature, what should government do? Recently, at a Baron's roundtable, Mr. Gross said loose monetary and fiscal policy has had some benefit, but it is a sugar high. It will not last. We cannot keep it up. Do we not all know that this is a sugar high that we cannot continue?
What can we do? Are there things we can do? Is it hopeless? Should we do nothing? I do not think so. I think there are a number of things that I will mention that I absolutely believe we can do that will create jobs for people who are hurting this very moment, who are unemployed. It could help them have a new and better life, and it would not cost the U.S. Treasury anything. I believe these actions are significant.
First, we need to take actions that have the tendency to create mechanisms that will bring down energy costs. Energy is a hidden tax--a hidden tax. Rising energy costs are a tax on your current income. You get nothing more for it. You get the same number of gallons, the same assets you got before, but you just have to pay more for it. You don't have the same amount of money for your family, your rent, your automobile payment; you get less money to use toward that.
We need to produce more of it at home for two reasons: One, it helps contain the growing cost of fuel, which is a secret thief of the American citizen's income, and two, it creates American jobs. Wouldn't we rather have thousands more jobs in Alabama producing oil offshore or in Alaska, producing oil in Alaska, rather than sending our money to Venezuela, Nigeria, Saudi Arabia, and creating jobs there? It would be an additional supply source that helps bring down the cost, and it would create American jobs. Plus, it would keep that American wealth at home. It would keep that wealth at home. Sixty percent of the oil we are using to make the gasoline that goes into our automobiles is imported. That wealth is going abroad. That is not good.
So we need to take actions that will produce American energy at the lowest possible cost. Yes, it needs to be safely produced. We saw the accident on the gulf coast. I have been on those beaches, and thank goodness they are cleaned up now, but it was a mess, and everybody was worried. It hammered our gulf coast tourism industry and our fishing industry for months, although fishing is coming back, and I think our tourism will be back. But it was an unnecessary disaster, and it can be prevented, and steps have already been taken to ensure it will not happen again. We can do that.
I like the Boone Pickens plan. We have discovered how to drill down into the ground and then turn that drill bit horizontally and go through shale rock to produce huge amounts of natural gas. Natural gas burns about 40 percent cleaner than gasoline or diesel fuel. It can produce energy that can even be used for vehicles. So that is all American. It is energy produced here in America. And we will have to have Americans to drill the wells, to move the natural gas, to process it and do all the things that go into that instead of importing oil from Venezuela. This makes sense.
This is not a theoretical vision for an energy program. The Energy Department has now projected that we have maybe 200 years of natural gas--twice what we projected just a few years ago because of the new, improved way to drill. We should be doing more of that to create American jobs. It would provide a new energy source that hasn't been there before that could be used for electricity. And natural gas prices are low--pretty surprisingly low, actually--compared to other sources of energy, and we ought to use more of it.
We can use it in vehicles, too, particularly larger trucks, city buses, and vehicles like that. It would take an infrastructure capability to be able to travel around the country and be able to get it to our truckers, but the city buses, the garbage trucks, and things such as that can be done all over America. That would reduce our imports, create jobs here, and create wealth in America without sending it abroad.
I know the President has said--and we are going to have to confront this and talk about it--that we are going to create green jobs by developing the solar and biofuels industries. But, really, it hasn't gone nearly as well in the United States as we had hoped. One big plant that had millions of dollars--in Massachusetts--put into it has gone bankrupt. China is undercutting prices and is producing things that were supposed to be produced by Americans. So it is not going so well, frankly.
I have to give this cautionary tale. No nation in the world is committed more to green jobs and this idea that you can create jobs in the energy sector by doing more windmills, solar and biofuels than Spain. And Spain has had a terrible time. It has the highest unemployment rate in Europe. They drove up the price of their energy, and it adversely impacted the whole economy of Spain. They created some jobs in some of these new programs, but one study said they lost I think 2\1/2\ jobs for every 1 job that was created. Now, I wish this weren't so. I wish we could have a plan to invest in solar panels or corn ethanol, and it would create lots of jobs and create energy at a competitive cost. But it produces these energy sources at much higher cost, and someone has to pay for them. When businesses pay more for energy, they can't hire as many people, they can't make widgets in Alabama and sell them abroad if their energy prices go up as a result of these policies. You can't do it. There is no free lunch here. So I think we need to look at what happened in Spain.
I met with a group of pulp and paper workers--union members--
yesterday. I knew a couple of them from the past at pulp and paper mills around where I grew up in rural Alabama. They are worried about Environmental Protection Agency regulations. There are a lot of these regulations, but the one that is hammering the timber industry and the pulp and paper industry is the boiler MACT proposal. They convert waste to wood product at these paper mills. They burn it and create steam and energy, which reduces their demand on the grid from the power companies that are creating energy through coal and natural gas. So they are using a renewable source, but they are being required to expend millions of dollars for new boilers.
I was at a sawmill in Alabama, in a rural area--good people--that exports half of what they produce. They produce a high quality of lumber for export, and they say this boiler MACT regulation will hammer them so hard, they may not be able to continue in business. And what would that do? All the people who go out in the woods and harvest timber, those who bring it in, those who work at the mill to saw it and plane it and produce it will be out of work. There would be less competition within the United States for wood products and less production of it, so the price might go up for the consumers. So this is not a good plan. This regulation went too far. It has to be repealed.
But there are a lot of regulations like that driving up costs. They could be eliminated at no cost to the government. It would reduce the number of bureaucrats who are out there enforcing them and allow industries to be more productive. There are lots of them out there. And a regulation that gets passed--sometimes that regulation might be beneficial to a narrow sector, but often it gets applied to 10 times or 100 times as many companies and businesses than is necessary or beneficial, and it adds extra cost, reducing their productivity for no good benefit whatsoever.
All wasteful regulations need to be eliminated. I think the President has finally understood that. He has made some statement about it, but we need to be sure that it happens and it happens quickly because we have people unemployed today as a direct result of excessive regulation.
A lot of people may not realize that our corporate taxes--once Japan reduces theirs, as they plan to do--will be the highest corporate tax of any developed nation in the world. This is not a healthy place to be.
You can learn a lot in an airport. A businessman started talking to me about this, and we got on the plane together. I had an open seat, and so I asked him to sit by me. He was very impressive--a CEO for a North American division of an international corporation. They were going to produce a product in that company that would be sold in the United States and worldwide that would be energy efficient--a chemical product they wanted to produce. It would mean about 200 employees.
This is the story he told me, and he was so frustrated about it. Now, remember, this is a very intelligent, sophisticated man. He said they had the best price. These big companies, if they are going to make a new product, they ask every plant in their system who can build it the best, the cheapest, and the one that wins the competition gets the process. Well, he had won the competition--200 new jobs to the Alabama plant--until he got a call from the European headquarters. They said: You haven't considered the taxes. Well, what about that? You have to consider taxes. That is a cost of doing business. You have to recalculate it and do the taxes. And when they did, the United States lost. So this process is going to be built in another country that has lower taxes.
The idea that you can raise taxes on corporations and not have an impact on the competitiveness of America is utterly false. We just have to take a minute or two to think about it. Of course, that is damaging to our competitiveness, and we compete worldwide, not just within the United States. But producers can move to Mexico and they can move to Canada.
By the way, our corporate tax rate is 35 percent. Canada has already reduced theirs to the low twenties, and they are talking about going to 16\1/2\ percent. My colleague from Alaska understands that his state's firms can choose between building a plant in Alaska or Canada. And when they add up the numbers and you have to pay substantially more tax in the United States, that could be the tipping point to make the difference in where that plant is built. So it is not that we are trying to help corporations by proposing that taxes be reduced; it is that we are becoming uncompetitive.
Ireland has had a financial crisis. Their banking system reached a real crisis. But a number of years ago, they reduced their corporate tax rate to the lowest in Europe and had an economic boom. This boom didn't have anything to do with the financial crisis. When the Europeans said, we are going to help bail you out but we want you to raise some revenue. The Irish responded that they would include some taxes increases in their budget, but they would not raise their corporate tax rate. They refused because they said it was helping them economically. And I really believe we need to do that.
So Canada is reducing theirs, Ireland has reduced theirs, the U.K.--
the Brits--are reducing theirs. I think they are going to about the midtwenties, and we are at 35.
I know there is this idea that you can just eliminate the loopholes and bring down the overall rate to the high twenties in the United States and this will be the equivalent of a tax cut, but I really don't believe it is. I believe that all you have done is maybe created a little more efficient and simpler tax, which is not bad, but it hasn't gotten the economic tax burden off the American businesses that are trying to compete in the world marketplace.
What else could we do to create jobs? Eliminate the health care bill. I know, people are dug in on this, they don't want to talk about it. It was passed by one single vote. Had Scott Brown been elected 2 weeks sooner, the bill would not have been passed; it would not be law today. But it is law.
What does the Congressional Budget Office say about its impact on jobs in America? CBO says it will reduce employment by half of 1 percent. Former CBO Director Doug Holtz-Eakin estimates that this translates into a loss of 700,000 jobs as a result of the health care bill. Actually, I believe it is quite a bit larger than that. I visited with small business people in Phoenix City, AL, Jasper, AL, 15 or 20 in each, and they told me it was going to cause them to reduce employment. There is no doubt about it. One man said: I have 10 fast food restaurants, 200 employees. I believe I am heading toward a reduction of 70 workers.
If it is a reduction of 10 workers, it is too many. Even if it is a reduction of five. We need growth in jobs, not a reduction in jobs. The health care bill is killing jobs.
The Congressional Budget Office Director is hired by the Congress. Mr. Elmendorf, who does that, was selected by the Democratic majority. I like him. I think he is an honest man. He said it will cost jobs in America to continue the health care bill. I believe it is going to be far more significant than he suggests.
At the Budget Committee hearing yesterday, I asked the witnesses if temporary extensions of tax rates add uncertainty to the economy? Would the economy be better with permanent rates? They said yes. Everyone--
liberal, conservative--said this uncertainty is not good for economic growth and job creation in America. Congress must get together, and it is going to take a bipartisan effort to try to get these tax rates permanent and all of us are going to have to work on it. But permanent tax rates would clearly be helpful.
I believe the President is going to have to help us in Congress to reduce the surging deficit spending that is well on the path to doubling the entire debt of America in 5 years and tripling it in 10. I know people think that is not true but it is. We are entering into the third year of a 5-year trend to double the debt. It will triple again in 5 more years. The President announced he would freeze a small portion of our spending, discretionary spending, at its current 2010 levels--which surged in the last 2 years by double-digit increases. He would freeze it at that level. That is very small and will not alter the path we are on to doubling the debt in 5 years and tripling in 10. It will not alter that. That is how small an impact that proposal would have.
We have to get together here in Congress and wrestle with it, but we need some leadership. If we could get at the cloud of debt and fear that is out there among a lot of Americans on the street and fear among a lot of the world's best financial minds who move money around in huge amounts--they are afraid too. The only people who do not seem to be quite sufficiently grasping this are our Washington bureaucracy. I think the Congress is beginning to get it. I think Congress is thinking about it. I believe the Washington establishment is still sort of in denial. They think we can somehow make a few token changes in what we do and everything is going to be OK, but it won't.
I am saying, how do we create jobs now? Take some real firm steps, and the world says: Wow, the United States has gone off an unsustainable path to a path that could lead to prosperity and growth, and we are willing to invest in the country again.
Let me mention one more thing. We have a border that is still wide open and lawless. Thousands, millions of people are coming in illegally still, and they are taking jobs from American citizens. We arrested 500,000 people at the border last year. How many more got by? We just added 36,000 jobs this month. Some think that was a good number. It is below what we have to add. But we had that many illegal people coming into the country and seeking work and taking jobs from American citizens, providing competitive employment that drives down wages.
One of the things you do in a time of high unemployment is you reduce guest worker programs and you reduce illegal immigration.
Mr. Bernanke testified before our Budget Committee a couple of weeks ago that we are treading water. We need 150,000 jobs added every month to stay even, and to change the dynamic of high unemployment we need at least 250,000 a month. We have had that coming out of previous recessions. We are just not seeing it in this one. An economy that only creates 36,000 jobs, even if that number is somewhat low because of bad weather, is in bad shape. It is below what the experts projected. I believe we can say now with great confidence that the Federal Government's attempts to borrow money--on which we pay interest as long as we live on this Earth--to pump into the economy as a short-term stimulus, a sugar high, is not effective. It is not working.
We have to do the kinds of things I mentioned, and there are a lot more that would actually create productivity, make our corporations and businesses more competitive, and therefore allow them to compete against foreign competition, create jobs, growth, exports--reduce our imports of oil and gas that are helping drive up our energy costs and moving jobs out of the country and moving American wealth out of the country.
If we do those kinds of things, we can make real progress. I think we can. We need help from the administration. I believe the American people are open to these ideas. The idea is that this is not a popular plan because we are talking about cutting taxes on corporations and nobody wants to do that, they don't believe that, the American people won't support that. But I think the American people will understand we cannot tax our corporations more than they are doing in Canada--35 percent to 16 percent--and expect to win competition for jobs and business. We have to look at the taxes that are killing jobs and try to make our tax policy nurture growth and prosperity.
Spending restraint is necessary now because of our profligate habits and the situation we find ourselves in. But it is not the future, if we do the right thing. This country can compete if we take on good policies in an effective way.
I yield the floor.
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