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[Congressional Record Volume 141, Number 86 (Tuesday, May 23, 1995)]
[Senate]
[Pages S7242-S7243]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

                    INCREASING AMERICAN PRODUCTIVITY

  Mr. FRIST. I rise to commend my distinguished colleague from 
Pennsylvania, the Presiding Officer, and especially the chairman of the 
Budget Committee, Senator Domenici, for the outstanding work that has 
been shown over the last several days as we have presented a budget 
that will be balanced by the year 2002.
  I would like to turn to answer a simple question, and that is who 
will benefit from the balanced budget plan proposed by the Republican 
majority this week. The answer? The American family.
  The debate over the past week has been fascinating. We have heard a 
lot of rhetoric, especially from the other side of the aisle, about how 
cutting spending will hurt our children, affect our seniors, and hurt 
the middle class. My colleagues on the other side of the aisle would 
have us believe that the entire Government is going to shut down and 
that disaster is imminent with our budget.
  But what they will not tell you is that the Republican budget will 
have tangible positive benefits for whom? The American family. Benefits 
that the American family will see in their checkbook, in their family 
budgets, and in their overall standard of living.
  According to economists, one of the most significant benefits of a 
balanced budget is increased productivity. What does that mean? Let us 
talk a little bit about what productivity means to that individual 
family, that typical family in America. Increased productivity, a 
product of this balanced budget, means that Americans will produce more 
in the same amount of hours. There will be more produced for a given 
amount of work. And why do we have increased productivity from 
balancing the budget? Why does increased productivity result from 
spending no more than we take in each year?
  Because, very simply, the Government, we, will borrow less, and that 
leaves more for investment by the private sector, by individuals, by 
individual businesses, and greater investment by those businesses and 
individuals results in better technology and better working conditions. 
It is this investment that allows our workers to produce more in the 
same amount of time. And so what does this concept of increased 
productivity which clearly stems from a balanced budget mean to the 
individual family, to you, to me, to our children, to our 
grandchildren?
  From this first chart, the first thing that increased productivity 
means is greater income for the American family. If we accomplish more 
while we are at work, increased productivity, we will make more money 
to buy homes, to send our children to school, to buy clothes for our 
children, to provide for our own retirement.
  According to the Commerce Department, median family income fell last 
year under President Clinton's watch by 1.9 percent. In contrast, over 
the next 10 years, by balancing the budget, the General Accounting 
Office says that earnings would be increased by approximately an extra 
2.9 percent. That would mean an extra $1,200 per year for each American 
family by passing tomorrow this balanced budget proposal.
  Under a status quo budget right now, income of the average family in 
2025 without a balanced budget, for example, under the President's 
proposal would be $35,900. Under the Republican proposal, that same 
income of the average family in 2025 but with a balanced budget would 
be $48,200, a difference of over $12,000 by having a balanced budget.
  Yes, increased incomes for the American family mean greater economic 
security for us, for this current generation, and for that next 
generation. With $12,000 more a year, our families will be able to save 
more for their own retirement rather than having to rely on the 
Government today, as so many people do today. They will be able to pay 
for their own health care, and they will be able to pay for education 
for their children. The investment of this kind of extra money for the 
American family can only mean great things for our economy and for our 
people.
  Let me turn to the second chart. Are there other benefits of 
increased productivity which will result from the balanced budget? Mr. 
President, if we are accomplishing more during work hours, we will 
actually have to work less to accomplish the same amount. This means 
more time at home, more time with our families, more time with our 
children, our grandchildren to play baseball, to go to a guitar 
recital, to read a book.
  Indeed, a typical family workday is 8\1/2\ hours. Increased 
productivity means that workers can provide the same level of output in 
fewer hours leaving more time for family, more time for leisure. In 
traveling the State of Tennessee, I know that Americans feel they are 
working hard to get ahead, and today they are not making progress. The 
median income is declining today. It is tough on families. It is tough 
on moms and dads who struggle to keep the house clean, food on the 
table, and the family running, and it is tough for those individuals. 
As we balance this budget and make this proposal, they worry: Will 
times be better? The message that we must get out is yes, with a 
balanced budget, there is increased productivity, increased time to be 
with one's family.
  The Republican budget, when you break it down, will actually ease 
that burden through increasing the efficiencies of our businesses and 
our workers.
  Let me turn to the third chart, Mr. President. Probably the most 
tangible benefit that we will see from balancing our budget is lower 
interest rates. The Congressional Budget Office has told us that 
interest rates will be lower by almost 2 percent if we balance the 
budget. Other economists, such as the independent forecasting group 
from DRI McGraw-Hill, predict lower interest rates of up to 2.5 
percent, lower than they would be with a budget which is not balanced. 
That translates very directly into lower costs for typical purchases by 
the American family.
  The examples are depicted. It means when lower interest rates take 
effect, that on the $75,000 30-year mortgage to this family, there will 
be a savings of $1,246 if we have a balanced budget.
  Or that same family will save $1,000 over the life of a loan on a 
$15,000 car if we pass this balanced budget proposal.
  And that same family will save $36 per year on an average balance of 
$1,800 on a credit card if we pass this balanced budget proposal.
  And that same family can save $1,128 over the life of a loan on a 
small business or on farm equipment or on this typical tractor.
  Mr. President, these are the kinds of savings that are very real that 
will affect every household in this country if we are successful in 
passing the balanced budget plan tomorrow. There is absolutely no 
question that the Republican budget, yes, will be tough. It will be 
tough, and everybody is going to have to sacrifice for it to take 
effect. But there is no question that this Republican budget does 
provide real, tangible benefits for all Americans and all American 
families.
  Increased incomes, less work time, lower interest rates--all will 
contribute to a much higher quality of life for the American family.
  I urge all of my colleagues on both sides of the aisle to consider 
these positive beneficial effects to the family as [[Page S7243]] we 
vote on this historic--very historic--budget package tomorrow.
  I yield the floor.
  Mrs. HUTCHISON addressed the Chair.
  The PRESIDING OFFICER. The Senator from Texas.

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