Date: 1981-03-23
Speaker: ROBERT C. BYRD (democrat)
Chamber: S

Mr. President. in recent weeks there has been a great deal of discussion about the importance of a sound. vigorous. and competitive economy. To the extent the debate has resulted in the produotive exchange of Ideas. many of us here In the Senate have welcomed it. However. some have spoken about the economy as though the sky were falling. This. I believe. is counterproductive. Politically generated hysteria cannot form a solid basis for economic policy planning. No single ingredient is more essential to the healthy performance of a freemarket economy than confidence. Confidencefrom both consumers and producersis the grease which turns our economic wheels. It promotes savingsa key to investment. And It stimulates investmentthe key to future growth. Ultimately. to slay the inflation dragon. we must produce more. and Increased savings and investment will help to achieve that goal. I believe that the President and the Congress have a shared responsibility to develop confidence in our economy and in our future. Building trust. however. will mean leaving behind campaign rhetoric that portends economic disaster and military weakness. It will mean recognizing our strengths. which are ample and enduring. It will also mean seeing our problems as challenges. with a sense of perspective and a sense of purpose. Let us realistically take stock of our situation. and decide where we are and where we want to go. Early on in his economic address to the Nation. President Reagan began using the year 1960 as the benchmark after which things began to go wrong for America. By comparing the year 1980 to 1960. the President concluded. "We all know we are very much worse off." The facts clearly establish otherwise. As a whole. Americans are better off today than they were 20 years ago. And. to some degree. people enjoy a higher standard of living because they have benefited from Government programs. This is not to say that all Government programs should be spared the budget ax. We should indeed put our fiscal house in order. But Americans are. in many ways. better off today than they were in 1960. After adjusting for taxes and inflation. average per capita income is up by twothirds. For the population as a whole. average real disposable income has more than doubled. The benefits of economic growth have been reasonably well distributed. The percentage of Americans living in poverty has been cut in half over the last 20 years. Today. some 1 out of 10 people are living below the poverty level. in 1960. twice as many people lived in poverty. The most basic measure of the standard of living is the quality of life itself. Americans are healthier today than they were 20 years ago. in part because of the money that has been pumped into public healthinto hospitals. medical education and research. as well as programs such as sewage treatment. rat control. and community outreach projects designed to educate the public. The average persons life expectancy is now nearly 74 years. almost 4 years longer than in 1960. The Infant mortality rate has declined by 46 percent: From 26 deaths per 1.000 to 14 per 1.000. More women are receiving medical care and proper nourishment while pregnant. And Americans in general are eating better. They eat more meat. fish. poultry. and fresh vegetables per capita than they did In 1960. There are other reliable indicators of our improved standard of living: More Americans own their own homes today. and many more own automobiles. The quality of housing has improved substantially. The number of families living in physically inadequate housing has declined steadily: From more than 20 percent of all households to about 8 percent. Less dramatic. but substantial progress has been made in reducing overcrowded housing units. Today. the United States has the lowest average number of persons per room of housing than any other country in the world. Today. Americans are bettereducated. More people have graduated from high school. more people have gone to college. and more people have pursued graduate studies. In 1959. nearly 16 percent of the labor force had less than an eighth grade education. by 1979. less than 5 percent had not completed at least 8 years of schooling. Americans are better protected against uncertain futures. In 1960. only 48 percent of our workers had regular health insurance. today more than 68 percent are insured. Twenty years ago. less than 58 percent of all workers had life insurance coverage. today almost 80 percent of the work force is insured. There are other less quantifiable gains. Cleaner air. cleaner water. improved safety in the workplace. and improvements in the quality of certain goods and services all contribute to higher living standards. These economic benefits often escape traditional economic analyais. While we all have attacked heavyhanded or unreasonable Government regulation. we must remember that some regulation represents a legitimate response to meeting real needs. let us look at the facts. In his economic address. President Reagan said. "The percentage of your earnings the Federal Government took in taxes In 1960 has almost doubled." That Is not what the facts tell us. The total amount of Federal personal income taxes and social security taxes paid in 1960 accounted for 13 percent of total personal income. In 1980. they accounted for 15.9 percent. In 1960. the average worker with three dependents paid 9.6 percent of his or her earnings in Federal taxes. In 1980. that worker paid 12.3 percent. In large part. the tax rise that occurred during this 20year period went to pay for social security. In 1960. Federal personal income taxes were 10.8 percent of total personal income. In 1980. they were 11.9 percent. If we examine national income. and all Federal receipts including corporate tax revenues and various business duties. we discover that in 1960. Federal receipts were 22.8 percent of national income. and 20 years later. they were 24.5 percent If we exan e the relationship of all Federal taxes and fees to the gross nationaleproduct. we see that in 1960. they were 18.7 percent of the GNP. and 20 years later. they were 19.8 percent. While the level of Federal expenditures has grown. we must remember that the size of the Federal work force has fallen in relation to our growing population. In 1960. we had 1.808.334 nonpostal civilian employees. or 1 percent of the population. In 1980. we had some 2.215.852 employees. or 0.97 percent of the population. The publio debt has been falling in terms of our gross national product. In 1960. the public debt stood at 56.9 percent of the GNP. Twenty years later. the debt stands at about 35 percent of the GNP. In other words. in 1960. the entire productive capacity of our economy would have had to work more than 6 months to retire. the national debt. In 1980. it couldtheoreticallybe retired in just over 4 months. Of the leading Industrial nations. the United States has one of the lowest deficits as a percentage of GNPWest Germany. Japan. and other countries all run higher deficits. France is the only industrialized country to run a comparably low budget deficit. In his speech. President Reagan said that U.S. industry is being taxed so hard. it is "being priced out of the world market." Between 1977 and mid1980. U.S. exports grew 35 percent. It is estimated that they were actually 22 percent higher in 1980 than in 1979. The dollar is relatively strong. Our trade balance is Improving. despite massive oil bills. President Reagan began his economic address by telling the American people that "we akre in the worst economic mess since the Great Depression." During the Great Depression. 25 percent of the people were unemployed. the banks were closed. and the country was fighting deflationon abnormal decline in pricesrather than inflation. Today. our banks are secure. In the last decade. employment grew by 25 percent and in the last 4 years. by 11 per-. cent. The massive influx of new workers into the labor force will slow now that the baby boom has come of age. The work force will be more mature. better educated. and better skilled. and more productive. During the last 3 years. investment as a percentage of GNP was higher than in any other similar period in the last 3 decades. The GNP expanded at a 5percent annual rate in the fourth quarter of 1980. a healthy Jump. Assuming investment continues at a healthy rate. the ratio of labor to capital will improve. further spurring worker productivity. In painting a realistic picture of the American economy. we must recognize that inflation is a major problem. It breeds uncertaintypeople feel less able to mark their progress or gage their future needs. We cannot conquer Inflation until we stop sending more than $80 billion annually out of the country for the purchase of foreign oil. I do not believe that the private sector has the capability to shoulder this burden without Incentives and other assistance from the public sector. Federal spending can be pared to the bone and everyone can be given a substantial tax cut. but these actions will not end this countrys dependence upon foreign oil. Some people within the administration have suggested that our society faces an "economic Dunkirk." Some have used the fear of impending doom to urge Americans to sacrifice the economic and social progress which has set this country apart from the other nations of the would. The American economy is strong and still growing. but it needs a program for revitalization which should be developed from clear and rational public debate. Public policy should not spring from a climate of alarmist cries. which may themselves become selffulfilling prophecies. It is my expectation that the Congress will act on the Presidents economic program as promptly as prtident foresight allows. There is broad bipartisan consensus that Congress should complete work on the Presidents program by midsummer. It would be unwise if the Presidents program were to be stampeded through Congress. with warnings of economic calamity. It is my hope that President Reagans proposals can be examined in a realistic environment. with a steady eye on past accomplishments. present strengths. and future goals.