A Case of Amnesiaby Senator John Cornyn
Posted on 2013-02-13
CORNYN. Madam President, after listening to President Obama's
State of the Union speech last night, I was left scratching my head.
Essentially, the President wants us to pretend the last 4 years never
happened. He wants us to pretend his economic policies have delivered a
strong recovery from the recession of 2008; he wants us to pretend his
administration has made real progress on reducing the national debt;
and he wants us to pretend that more taxes, more spending, and more
debt are the key to middle-class prosperity. In other words, the
President is hoping we all have a case of amnesia.
He wants us to forget about $5.8 trillion in new debt that was racked up during his first term--$5.8 trillion. He wants us to forget our gross national debt is now larger than our entire economy--100 percent of our gross domestic product. He wants us to forget the debt is projected to grow even further, to $26 trillion, by 2023; and he wants us to forget his health care bill will increase taxes by $1 trillion over the next 10 years. He wants us to forget America's credit rating has been downgraded for the first time in our history.
He also wants us to forget we have been suffering through the weakest economic recovery since the Great Depression, as well as the highest, longest period of high unemployment since the Great Depression.
He wants us to forget that nearly 4 out of every 10 unemployed Americans have been jobless for at least 6 months. He wants us to forget that the average family median income has fallen by nearly $2,500 since the official end of the recession. He wants us to forget that the cost of health insurance for the average American family has increased by more than $2,300. And he wants us to forget that as part of the fiscal cliff negotiation, the payroll tax went back up, taking an additional bite out of the check of middle-class workers.
Last night President Obama said we should ask ourselves three questions every day--those of us with the privilege of serving here in the Nation's Capital in the Congress and in the administration. He said: No. 1, how do we attract more jobs to our shores? No. 2, how do we equip people with the skills they need in order to get those jobs? And No. 3, how do we make sure hard work leads to a decent living? I may have my differences with President Obama on a number of policies, but I actually think those are really good questions.
If the President is truly serious about finding the answers to those questions, this may not surprise my colleagues, but he need look only to the model reflected in my home State of Texas.
I ask unanimous consent to have printed in the Record an article entitled ``The Texas Growth Machine'' at the end of my remarks.
The ACTING PRESIDENT pro tempore. Without objection, it is so ordered.
(See exhibit 1.) Mr. CORNYN. The fact is our State relies on a simple economic model the Federal Government could emulate if it would like to have similar positive results: lower taxes, limited government, sensible regulations, and progrowth energy policies.
I know the occupant of the chair comes from a State that I believe is the second largest producer of oil and gas in the country--second only to Texas--and I know the Presiding Officer has seen the economic engine that is created when we unleash our potential when it comes to our energy resources. These are policies that recently helped Texas turn a $5 billion deficit during the recession into an $8.8 billion surplus. These are the policies that made our State a robust engine of job creation that is attracting Americans from all across the country. The total number of jobs in Texas since 1995 has grown at the rate of 32 percent. When we compare that with the rate of growth of jobs in America nationwide, we see it is 12 percent--32 percent to 12 percent. That is not an accident.
Texas is also a leader in the creation of high-paying jobs. Between 2002 and 2012, our State accounted for close to one-third of all U.S. private sector job growth in industries that pay more than 150 percent of the average wage, even though we have only 8 percent of America's total population.
Last night the President talked about, How do we get middle-class wages up? His prescription was an increase in the minimum wage, but I say why don't we look at ways to achieve a maximum wage by creating private sector, high-paying, good jobs, as we have been successful in doing in Texas and as a few other States have done as well.
After 4 years of trillion-dollar deficits and historically high unemployment--right now our unemployment rate is roughly 7.9 percent, but that doesn't really account for all of the people who have since given up looking for work, and it is estimated that more than 20 million Americans either are out of work or they are working part time when they would like to work full time, but they can't find those kinds of jobs.
I believe it is time for the President and this Congress to try a new approach. The great thing about our system of government--of shared sovereignty between the States and the National Government--is that we have essentially laboratories of democracy all around our country where we can try different things to see what works and what does not work. I only hope the President and Congress will look at those places around the country where the policies actually work in creating jobs and economic growth.
I believe it is time for the President to embrace policies that will encourage private entrepreneurship, private sector job creation, income growth, and greater domestic energy production. In short, it is time for him to embrace the Texas model.
Exhibit 1 The Texas Growth Machine (By Wendell Cox) The American economy has had little to cheer about since the 2008 financial meltdown and the resulting recession. Recovery has been feeble, and many states continue to struggle. One bright spot in the general gloom, however, is Texas, which began shining long before 2008. Not only has Texas created jobs at a stunning rate; it has also--pace critics like the New York Times's Paul Krugman--created lots of good jobs. Indeed, the rest of the nation could turn to the Lone Star State as a model for dynamic growth, as a close look at employment data shows.
[[Page S666]] The first thing to point out is that Texan job creation has far outpaced the national average. The number of jobs in Texas has grown by a truly impressive 31.5 percent since 1995, compared with just 12 percent nationwide, according to Bureau of Labor Statistics data. Texas has also lapped California, an important economic rival and the only state with a larger population. The Texas employment situation after the financial crisis was far less spectacular, of course, with the number of jobs growing just 2.4 percent from 2009 through 2011. But that was still six times the anemic 0.4 percent growth rate of the overall American economy.
The National Establishment Time-Series (NETS) Database, which provides detailed information on job creation and loss for firms headquartered in each state, can tell us more about Texas's employment growth. NETS data are divided into two periods--the first from 1995 to 2002, the second from 2002 to 2009. During the 2002-09 period, small businesses of fewer than ten employees were the Texas employment engine, adding nearly 800,000 new jobs; of those, about three-quarters were in firms with two to nine employees. Larger Texas companies-- those with 500 or more employees--lost a significant number of jobs over this span, and medium-size firms likewise shrank, trends that also showed up on the national level.
Bureau of Labor Statistics data shows that many of the new Texas jobs paid well. Indeed, Texas did comparatively better than the rest of the United States from 2002 through 2011. For industries paying over 150 percent of the average American wage, Texas could claim 216,000 extra jobs; the rest of the country added 495,000. In other words, the Lone Star State, with 8 percent of the U.S. population, created nearly a third of the country's highest-paying positions. Texas also added 49,000 positions paying 125 percent to 150 percent of the U.S. average; the rest of the country lost 174,000 jobs in that category. Two sectors in which Texas employment did particularly well during the same period were natural- resource extraction (in fact, the state gained 80 percent of all new jobs in the country in that field) and professional, scientific, and technical positions. Both job categories boast average wages far higher than the national overall average. As happens whenever an economy grows, Texas also added hundreds of thousands of positions in food services, health care, and other lower-paid fields, in addition to the more lucrative jobs. Texas did lose 10,000 construction jobs, but that was a modest downturn, in light of the massive national slowdown in building caused by the crisis of 2008.
Vital to the economic health of Texas is that people are moving to its cities in droves. In 2011, Houston surpassed Philadelphia in population and became the country's fifth- biggest metropolitan region, with 6.1 million people. Dallas- Fort Worth, with 6.5 million, was already the country's fourth-biggest. The two cities trail only New York City, Los Angeles, and Chicago, marking the first time that a single state has had two metros in the country's top five since the Census Bureau began designating these areas a century ago. Meanwhile, of all metropolitan areas in the country with more than 1 million residents, the fastest-growing from 2010 to 2011 was Austin.
Though the national downturn has slowed job creation in Texas's cities, they're still adding jobs, sometimes briskly, unlike many other American metropolitan regions. Austin's strong information-technology sector and government-related work (the city is Texas's state capital) helped propel 4.3 percent job growth from 2009 through 2011 (and 15.3 percent growth from 2002 through 2009). The number of jobs in McAllen, which benefits from increased trade with Mexico under the North American Free Trade Agreement, grew 3.7 percent. Job growth in economically diverse Houston has matched or exceeded the state rate since 1995.
What accounts for the resilience of the Texas economy, which has outperformed the rest of the country not only over the long term but during the Great Recession as well? A pro- business climate has unquestionably been a substantial advantage. In its annual ranking of business environments, Chief Executive has named Texas the most growth-friendly state for eight years in a row. (California has been last for the same eight years.) The reasons included low taxes and sensible regulations; a high-quality workforce (Texas ranked second only to Utah in that category in 2012); and a pleasant living environment (an eighth-place finish, slightly below sixth-place Florida but, perhaps surprisingly, far better than 28th-place California).
Part of the explanation for the high living-environment score is doubtless Texas's low cost of living. In 2011, the U.S. Bureau of Economic Analysis put Texas's ``regional price parity,'' a measurement of the price level of goods in an area, at 97.1, a bit lower than the national level of 100 and far lower than the California level of 114.8. Adjusted for cost of living, Texas's per-capita income is higher than California's and nearly as high as New York's. Factor in state and local taxes, and Texas pulls ahead of New York.
More than three-quarters of the cost-of-living difference between Texas and California can be explained by housing costs. Texas mostly dodged the real-estate bubble of the 2000s: the affordability of houses in large metro areas spiked in America as a whole but rose only modestly in Texas. A major reason that Texas real estate is so affordable is that the state lacks the draconian land-use restrictions that drive California housing prices into the stratosphere. The affordable housing attracts both people and businesses. Since 2000, 1 million more people have moved to Texas from other states than have left.
All these considerations suggest that Texas is poised for further growth. And a final reason for Texans to be optimistic is that a major expansion of the Panama Canal will be completed in 2014. That could bolster the Lone Star State's success by rerouting Asian commerce from West Coast ports to Texas alternatives, which are closer to the nation's major markets.
Mr. CORNYN. With that, Madam President, I yield the floor.
I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.