Rep. Maloney's Statement on the House Budget Resolution
WASHINGTON, DC - As the senior House Democrat on the Joint Economic Committee, Rep. Carolyn Maloney (NY-14) controlled one hour of floor debate for the Democrats.
Rep. Maloney said the following:
"Mr. Speaker, I am pleased to speak in the time reserved by the Budget Act for a discussion of economic goals and policies and traditionally led by members of the Joint Economic Committee. If you listen to the President and his supporters on the other side of the aisle, you get a very upbeat assessment of the American economy. But if you listen to the American people you get a very different assessment.
"The President likes to talk about how fast the economy is growing and how successful his policies have been in stimulating an economic recovery from the 2001 recession. But the American people are saying 'what economic recovery?' and, 'when am I going to see any benefits from this President’s economic policies?' Mr. Speaker, we should listen to the American people and we should adopt economic policies that promote the economic well-being of all Americans—not just those at the very top of the economic ladder.
"The President’s FY 2007 budget and the House budget resolution do not do that. Instead they perpetuate economic policies that have produced a legacy of deficits and debt that leaves us unprepared to deal with the budget challenges posed by the retirement of the baby-boom generation and that weakens the future standard of living of our children and grandchildren. This chart shows how the President inherited a budget situation with large projected surpluses but we have ended up with a string of large deficits.
"Economic policy over the past five years has not served the interest of the typical American family. The resilience of the American economy has allowed it to recover from the 2001 recession, but we are still experiencing the labor market effects of the most protracted jobs slump in decades. Job creation has lagged far behind what is typical in a strong economic recovery, there is still evidence of hidden unemployment, and the benefits of productivity growth have been showing up in the bottom lines of companies rather than in the paychecks of workers. Finally, there is a growing gap between the "haves" and the "have-nots" in this country as income and earnings disparities have widened.
"Yes, workers have become more productive—they produce more and more in each hour that they work. But they haven’t been getting rewarded for that productivity. Average hourly earnings have not kept up with inflation for the past two years and they barely kept even the year before that. Median family income has failed to keep up with inflation every year under President Bush.
"Those who are already well-to-do are doing very well in the Bush economy. But the typical American family is struggling to make ends meet in the face of high costs for energy, health care, and a college education for their children.
"This chart illustrates the problem very clearly. The red bars show the growth in the inflation-adjusted usual weekly earnings of full-time wage and salary workers under President Bush at different points in the earnings distribution. You have to be in the upper half of the distribution to have seen any gain. Earnings at the top have grown fastest relative to inflation and earnings at the bottom have fallen farthest behind inflation. I would note the contrast with the last 5 years of the Clinton Administration (the blue bars) when earning gains were strong and spread throughout the earnings distribution.
"The budget we are debating tonight does not address any of these problems. In fact, it makes things worse. An analysis by the Democratic staff of the Joint Economic Committee shows that budget cuts in programs that provide payments for individuals are concentrated among lower-income families, while the tax cuts go overwhelmingly to those at the top of the distribution. The blue bars in this chart show that more than a third of the costs of spending cuts for families go to those in the bottom 20 percent of the distribution (families that together have only 3 percent of aggregate income). Meanwhile those at the top get nearly three-quarters of the benefits from the tax cuts in this budget as shown by the red bars.
"With policies that have turned a $5.6 trillion 10-year budget surplus into a deficit over those same 10 years of at least $2.7 trillion, this Administration has turned us into a nation of debtors, relying on the rest of the world to finance our budget deficits and the rest of our excessive spending. Last year we had a current account deficit of $805 billion. That is the amount of money we had to borrow from the rest of the world to finance our trade deficit and international payment imbalance.
"Foreign governments are holding large quantities of our public debt, putting us at risk of a major international financial crisis if they should decide that the benefits of holding dollars are no longer worth the risk.
"Mr. Speaker, our future prosperity depends on increasing our national saving and making wise investments; it depends on being ready for the retirement of the baby boom generation and the pressure we know that will put on the budget. But how is the other side preparing us for that future—with more deficits and more debt. They want to make the tax cuts that have gotten us into this mess permanent, and they have no realistic plan for controlling spending or bringing revenues into line with the amount we need to spend to defend the country and take care of the needs of our citizens We need a better plan."
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