The United States has embarked upon an era of global economic
competition in which American companies and American workers are going
head_to_head against foreign businesses and workers for market share at
home and abroad. I believe the international economic race is not a sprint
but a marathon; winning requires endurance. Building endurance requires
first and foremost training and investment in our workers. With knowledge
having surpassed capital, labor and raw materials as the key resource in
the new world economy, education in the schools and in the workplace must
provide American workers with the capability to create and apply new technology
and the flexibility to adapt to change.
Critical investments in education and technology must be accompanied by
a concerted effort to achieve high standards of budget discipline and fiscal
responsibility. With our national debt now well over $5 trillion, wasteful
spending must not be tolerated. Paying down the debt creates a ripple effect
throughout the economy - cheaper access to credit for American businesses,
lower mortgage rates for home buyers, reduced auto loan rates, and lower
inflation. During the 1990s, a national commitment to deficit reduction
resulted in the longest peacetime expansion in history. In the 21st century,
I believe that trend should continue. The government must use its resources
wisely to ensure the economy runs efficiently.
My record reflects an unwavering commitment to job creation, economic growth
and deficit reduction. From my assignments on the Senate's Finance, Commerce,
Foreign Relations and Small Business Committees, I have been a strong advocate
for measures to strengthen budget discipline, deliver targeted tax relief to
working American families, sustain investments in research and development, expand
capital formation, facilitate the creation and growth of small businesses, establish
free and fair international trading rules and promote the export of United States
products and services. With new trends and challenges emerging daily, I will
continue working to ensure that American businesses and the American workforce
remain at the forefront of our global economy.
As a United States Senator, John Kerry has advocated market-based solutions
aimed at maintaining a high level of economic growth, job creation, and
technological advancement. In Senator Kerry’s view, keeping America
strong and competitive requires an economic agenda based on education and
training, investments in key priorities such as research and development,
and a commitment to fiscal discipline. Vital economic decisions should
not be governed by special interest reactions to tax cuts or spending increases,
but rather careful consideration of their long-term impact on the national
and global economy.
One of Senator Kerry’s first legislative initiatives as a United
States Senator was his cosponsorship of the Gramm-Rudman-Hollings Deficit
Reduction Act. At the time of its enactment in December of 1985, the
federal deficit was over $200 billion. The bill sought to gradually eliminate
the deficit by requiring adherence to a series of fixed deficit targets.
Sequestration, a process involving automatic spending cuts, was established
as a means to enforce the deficit targets. The Gramm-Rudman-Hollings
legislation is widely recognized as a turning point in federal budgeting–representing
a critical step in curtailing runaway government spending.
Nevertheless, by 1992, the unemployment rate was over 7 percent, the
fiscal deficit was $290 billion and projected by the Congressional Budget
Office to grow to over $500 billion in 2001, and the federal debt had
quadrupled over the preceding 12 years and was projected to double again
by 2001.
Against this unfriendly backdrop, Senator Kerry was a key supporter of
the Deficit Reduction Act of 1993–a bill which passed Congress
without a single Republican vote. With its commitment to fiscal discipline,
the bill’s deficit reduction program set in motion a virtuous cycle
of rising incomes, job creation, the lowest poverty rate since 1979,
low inflation, unemployment as low as 4.2 percent–a level not seen
in 30 years, and large current and projected surpluses. Between the beginning
of 1993 and the beginning of 2000, payroll employment increased by more
than 20 million jobs.
Through a policy strategy of maintaining fiscal discipline, investing
in people and technologies, and opening international markets, the nation
has been able to exploit new opportunities and reap the benefits of major
scientific and technological advances.
Balanced budgets have contributed to lower interest rates, restoration
of consumer and business confidence, increased demand, increased investment–especially
in new technologies, and increased productivity levels.
Recent events, however, threaten to dismantle the framework of budget
discipline which enabled our economy to grow for a record 10 years, the
longest expansion in history. In June of 2001, a Republican-controlled
Congress passed a $1.35 trillion tax cut which relied almost exclusively
on uncertain budget projections. Within eight months, the new tax legislation
and a decline in economic activity had resulted in the loss of nearly
$4 trillion in projected surpluses. Deducting Social Security revenue
from surplus calculations revealed that the federal budget had returned
to an era of deficit spending. At the same time, Republicans were calling
for additional corporate tax cuts while opposing Senator Kerry’s
proposals to assist working families struggling during the recessionary
period.
Senator Kerry’s agenda for economic growth and prosperity involves
continued investment in key priorities to lift and improve worker productivity–education
and training, investments in new health care technology, and support
for both federal and private sector-based research and development. Senator
Kerry supports capital gains relief for investments in small businesses
and critical technologies. He also supports targeted tax relief to encourage
savings, investment, and entrepreneurship. Senator Kerry believes in
harnessing the power of the market economy, not overwhelming it with
excessive government regulation. For the economy to grow, government
and business must work in tandem, not in opposition. The 1990s demonstrated
that a national commitment in favor of fiscal discipline; productive
investments in education, business, and technology; and modest and targeted
tax cuts can serve as an effective engine of economic growth. Senator
Kerry will continue to work in the months and years ahead to ensure that
the American economy remains a beacon of leadership in a competitive
global marketplace.
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