Jim Saxton

Mr. SAXTON

Mr. SAXTON. Mr. Speaker, I yield such time as he may consume to the gentleman from Connecticut [Mr. Gejdenson]. amendment offered by mr. gejdenson

Mr. SAXTON. Mr. Speaker, it is the gentleman's State. I will not ask unanimous consent.

Mr. SAXTON. Mr. Speaker, I would ask the gentleman does he have any further speakers?

Mr. SAXTON. Mr. Speaker, I yield 3 minutes to the gentlewoman from Connecticut [Mrs. Johnson].

Mr. SAXTON. Mr. Speaker, I yield such time as he may consume to the gentleman from New Hampshire [Mr. Bass].

Mr. SAXTON. Mr. Speaker, continuing my reservation of objection, I would just conclude by saying that inasmuch as the gentleman from Connecticut and the gentleman from Massachusetts apparently do not wish to afford their constituents the same protections that Mr. Bass does, I will not object. Mr. Speaker, I withdraw my reservation of objection.

Mr. SAXTON. Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.

Mr. SAXTON. Mr. Speaker, with that understanding I yield such time as he may consume to the gentleman from New Hampshire [Mr. Bass] for his closing statement.

Mr. SAXTON

Mr. SAXTON. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days to revise and extend their remarks and include extraneous material on H.R. 2909, the bill just passed.

Mr. SAXTON

Mr. SAXTON. Mr. Speaker, earlier today I said that I had supported the increase in the minimum wage in 1991. I did so primarily because the people who earn the minimum wage in my part of the country are, by and large, people who are age 20 and younger. They do that because in the summertime, our tourism industry has a fair demand for young people to come to the New Jersey shore in the summer to take jobs that customarily pay the minimum wage. I thought I was doing the right thing for them, so I voted to increase the minimum wage. I found, however, that in talking to employers, those employers, during those summers in the intervening time, hired less teenagers than they had previously because we increased the cost of that labor. This chart on my left demonstrates, I think, conclusively, just as 12 studies that I pointed to earlier, that increasing the minimum wage hurts teenagers more than it does any other segment of our society. This chart shows, on the red line, what the pattern of the minimum wage has been. In the middle 1980s it was quite high. It eroded because of inflation during the late 1980's. Then we increased the minimum wage, as the line shows, in 1991. Then it began to erode again because of inflation. The blue line shows the unemployment rate of teenagers. Just as the minimum wage requirements decreased, the number of young people who are unemployed also decreases; or, said the other way around, the number of young people who are employed increases. There is a parallel track that goes along. When we raised the minimum wage in 1991, the rate of unemployment for teenagers shot up and spiked as well. Of course, the same is true, the same downward trend is then true later. I say to my colleagues on both sides of the aisle, these are facts. This is not a feel-good vote, this is a factual vote that we need to take very seriously.

Mr. SAXTON. Mr. Speaker, I would like to just say to my colleagues that the last time we had a vote on the minimum wage, which was 5 years ago, I voted to increase the minimum wage. I thought I was doing the right thing, and it sure made me feel good. In the intervening years, as I became vice chairman of the Joint Economic Committee and began to pursue a variety of subjects that had to do with our economy and the welfare of our workers, I have came across information which I would like to share with my colleagues today because today I am not going to vote in support of the minimum wage as I did 5 years ago; I think for good reason. For example, early in my tenure as vice chair, I came across a study that was done in 1983 by the Joint Economic Committee. There as referenced in this Wall Street Journal article which was published in April of this year, an article written by Bruce Bartlett, a renowned economist, and let me quote one line from this article. It says: ``A survey of earlier studies by the General Accounting Office in 1983, for example, found virtually total agreement that employment is lower than it would have been if no minimum wage existed.'' Mr. Speaker, this is important. It was important to me as I began to look at why we should or should not support a mandated increase in the minimum wage. In the meantime, our committee put this study together. It finds no, zero, zilch, no credible evidence, not one credible piece of evidence that increasing the minimum wage is a benefit to the working people of this country. Not one single study. The Card-Krueger study has been referenced here on a number of occasions. Let me share with my colleagues that after having hearings on the Card-Krueger study, after consideration of their results and after looking at studies that were done pursuant to it, it was a telephone survey, folks. They called on the telephone to fast food restaurants, and they said to whoever answered the telephone: How many part-time and full-time workers do you have? And the responses were quite astonishing. As a matter of fact, on one occasion the results point out that the answer was, we have 35 employees. On a followup telephone call, which they also recorded, the response from the same restaurant was, just a few months later: We have 35 full-time employees and 30 part-time employees. Their employment had doubled. Everyone knows that that did not happen. So as we looked at the Card-Krueger study, we became convinced, particularly pursuant to a followup study that was done by economists Neumark and Wascher from Michigan State University, hat this study simply is not credible. And as I point to these issues, I would like to quote the President from his 1995 State of the Union Address. He said: I believe the weight of the evidence, the weight of the evidence, he said, is that a modest increase does not cost jobs. We have proven that is not true. Over the years, over the last 50 years there have been more than 100 studies that have concluded unanimously, unanimously that mandating an increase in the minimum wage puts people out of work. Let me tell my colleagues about these studies. Beginning in 1957 and ending in 1993, there were five studies; all concluded that the minimum wage reduces employment. Beginning in 1973 and ending in 1992, there were 14 studies that concluded the minimum wage reduces employment among teenagers more than it reduces employment among adults. Beginning in 1971 and ending in 1980, there were seven studies that were done that concluded that the minimum wage reduces employment among black teenage males. There were two studies that were done in the meantime that concluded that the minimum wage hurts blacks generally. There were three studies that concluded that the minimum wage hurts low-wage earners. There were five studies that were done that concluded that the minimum wage reduces employment in low-wage industries such as retailing. There were three studies that were done that concluded that the minimum wage hurts low-wage regions such as the South and in rural areas. There were six studies that were done that concluded that the minimum wage does little to reduce poverty. There were five studies, four studies that were done that concluded that the minimum wage has reduced employment in foreign countries as well as here. We found not one credible piece of evidence, we found not one credible piece of evidence anywhere, from academia, from the world of economics that concludes that increasing the minimum wage helps anyone. That is why the gentleman from North Carolina is correct on each occasion that he has stood up and said, in your State, this bill will cost x number of jobs. He is absolutely correct. The empirical evidence is unanimous, not questionable, unanimous in support of the gentleman's position.

Mr. SAXTON

Mr. SAXTON. Mr. Speaker, I rise today to recognize the hard work and dedication of Scott Jacobs, who has been a member of my staff for the last year and a half. Scott is leaving us on May 24, 1996, to start a new job with the Naval Criminal Investigative Service. Scott came to my personal office here in Washington, DC, on a legislative fellowship. He was on loan from the Navy. With his background in the investigation of environmental crimes, he was a natural fit in my office to work on environmental and resource issues. While many Hill staffers share the qualities of hard work and dedication that Scott possesses, Scott Jacobs has special qualities that deserve special recognition. Often, here on the Hill, people will tell you that something is impossible rather than actually figuring out how to get it done. Scott refuses to believe ``impossible'' exists. He is willing to take the time and exercise the creativity needed to get the job done where other people would have given up long ago. In the face of continual opposition, Scott undertakes a process of communication and compromise that has served New Jersey, this Congress, and America very well. Due to his refusal to believe the nay-sayers, Scott serves as an example and inspiration to Members and staff alike. I commend Scott's many accomplishments while here and fully expect that his exemplary work will continue at his new position with the Naval Criminal Investigative Service. As I stand here today to recognize Scott's determination, courage, and creativity, I am sorry to lose Scott as a member of my staff. But, I wish him fair winds and following seas on his return to the Navy. Mr. Speaker, on behalf of myself, my staff, and all the friends Scott has made while here with us, I would like to say, Thank You, Scott, for all of your hard work.

Mr. SAXTON

Mr. SAXTON. Mr. Speaker, for a better understanding of why I believe a higher minimum wage is the wrong course to take, I am putting into the Record today the Joint Economic Committee's latest report entitled ``The Case Against a Higher Minimum Wage'' (May 1996). Also, available from the Government Printing Office are the transcripts of two Joint Economic Committee hearings held last year on the minimum wage. When contacting the GPO, request the following two documents: Senate Hearing 104-377 Part I: JEC Hearing on Evidence Against a Higher Minimum Wage: February 22, 1995, part I. Senate Hearing 104-377 Part II: JEC Hearing on Evidence Against a Higher Minimum Wage: April 5, 1995, part II. For any additional information on this or any other economic issue, please contact my JEC office located at 1537 Longworth HOB, Washington, DC 20515. Joint Economic Committee Report the case against a higher minimum wage The voices clamoring for a minimum wage hike are getting ever louder. Proponents argue that the current wage level does not provide an adequate incentive for work. Also, they argue that an increase in the minimum wage will have only a very minor impact on jobs. These arguments are not grounded in fact. The impact of raising the minimum wage has been studied since its inception. All credible research has come to the same conclusion: raising the minimum wage hurts the poor. It takes away jobs, keeps people on welfare, and encourages high school students to drop out. Policy makers should be clear on the consequence of higher minimum wages. jobs and the minimum wage Economists have studied the job-destroying features of a higher minimum wage. Estimates of the job losses of raising the minimum wage from $4.25 to $5.15 have ranged from 625,000 to 100,000 lost jobs. It is important to recognize that the jobs lost are mainly entry-level jobs. By destroying entry- level jobs, a higher minimum wage harms the lifetime earnings prospects of low-skilled workers. Proponents have been able to muddle the debate by pointing to a study done by two Princeton economists, David Card and Alan Krueger. These economists claimed to find that raising the minimum wage does not lower employment.\1\ In one paper, they succeeded in casting doubt on 200 years of economic research and theory. Economists took their challenge seriously and attempted to recreate their results. It could not be done. Economists who attempted to replicate their work demonstrated conclusively that raising the minimum wage destroys jobs.\2\ --------------------------------------------------------------------------- Footnotes at end of article. --------------------------------------------------------------------------- Even after the Card and Krueger study was fully discredited by economic science, it is still being used by proponents of higher minimum wages to support an increase. Why must they rely on discredited research to support their call for raising the minimum wage? Because they recognize that Americans do not support proposals that destroy jobs. Proponents often like to show survey results that say more than eighty percent of Americans support a higher minimum wage. Yet, the same survey shows less than half surveyed, 46 percent, support raising the minimum wage if it ``might reduce the number of jobs available for workers with limited skills.3 '' Clearly, if Americans were informed of the true effects of raising the minimum wage, support would rapidly erode. Minimum Wage Workers Supporters claim that raising the minimum wage is important for working families. Secretary of Labor Robert Reich often repeats the fact that forty percent of minimum wage workers are the sole source of income for their families. This is misleading because it relies on lumping single, non-family individuals with families. Only 2.8 percent of workers earning less than $5.15 are single parents.4 Only 1.2 percent of all minimum wage workers were adult heads of households with incomes less than $10,000.5 Fifty-seven percent of minimum wage workers are single individuals, many of them living with their parents. Minimum wage workers are not parents struggling to feed their children. Rather, they are high school or college students living at home. The level of the minimum wage is irrelevant for most people in poverty. Only 9.2 percent of poor people of working age have full-time jobs.6 Side Effects of Raising the Minimum Wage It has been well documented that the minimum wage destroys jobs, particularly the jobs of low-skilled, young workers. However, there are other equally pernicious side effects of higher minimum wages. Higher minimum wages make it more difficult for people to leave welfare and induce high-school students to drop out. Dr. Peter Brandon of the Institute for Research on Poverty studied how raising the minimum wage affects the transition from welfare to work.7 He found that raising it keeps welfare mothers on welfare longer. Mothers on welfare in states that raised their minimum wage remained on welfare 44 percent longer than mothers on welfare in states where it was not raised.8 The reason for this result is that raising the minimum wage induces some people to enter the labor market who would not apply if not for the higher level. With a larger labor market, employers choose higher-skilled applicants. Thus, raising the minimum wage hurts low-skilled workers in two ways. First, there are fewer jobs available. Second, with a larger pool of applicants, competition is stiffer. Low- skilled workers have a more difficult time getting those job skills that are crucial to economic well-being. Another side effect of raising the minimum wage is that it increased the number of high-school students who drop out.\9\ Some of these students do not find employment. Another group of students are part of those applicants that compete jobs away from welfare recipients. Dropping out of school is very destructive. High school drop-outs have a very difficult time improving their well-being. The Elusive Benefits of a Higher Minimum Wage The proponents of a higher minimum wage argue that it is vitally important to raise it in order to improve the lives of poor workers. However, the raise will have only a limited impact on poor working families. \10\ A single parent with two children living in California would gain only 26 cents from a 90 cent increase in the minimum wage. To put this gain in perspective, each minimum wage worker who earns $4.25 an hour brings home $3.92 for each hour worked once payroll taxes are deducted. The employer costs of a minimum wage worker is $4.58 an hour when the employers share of the payroll tax is included. \11\ If workers could take home the amount of money it costs the employer to hire workers, they could have 62 cents more per hour. Clearly, the California parent would be better off if the tax wedge were reduced, rather than increasing the minimum wage. Conclusion The campaign to raise the minimum wage will have little positive impact on the lives of poor people. Rather, it is a political measure that plays to a misunderstanding of the impact of higher minimum wages. The future of the American economy depends on a correct understanding of the causes of prosperity. For too long, attempts to relieve poverty have been misguided. To lift people out of poverty, we need a system that maximizes opportunities for economic well-being of low-skilled workers. Raising the minimum wage is a wrong- headed solution that will deprive young, poor Americans of an opportunity to improve their economic situation. Endnotes \1\ Card, David and Alan B. Krueger, ``Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania.'' American Economic Review, September 1994: pp. 772-793. \2\ Neumark, David and William Wascher, The Effect of New Jersey's Minimum Wage Increase on Fast-Food Employment: A Re- evaluation using Payroll Records. National Bureau of Economic Research: Cambridge, MA. 1995. \3\ Washington Post, April 26, 1996, p. F1. \4\ EPI Edge. Employment Policies Institute. April 1996. \5\ Vedder, Richard and Lowell Gallaway, Should the Federal Minimum Wage Be Increased? National Center for Policy Analysis: Dallas, TX. 1995. \6\ Ibid. \7\ Brandon, Peter. Jobs Taken by Mothers Moving from Welfare to Work and the Effects of Minimum Wages on this Transition. Employment Policies Institute: Washington, DC. 1995. \8\ Ibid. \9\ Neumark, David and William Wascher, The Effects of Minimum Wages of Teenage Employment and Enrollment: Evidence from Matched CPS Surveys. National Bureau of Economic Research: Cambridge, MA, 1995. \10\ The reason for the minimum impact is that raising higher incomes causes a loss of benefits in Aid to Families with Dependent Children (AFDC), Food Stamps, and the Earned Income Tax Credit (EITC). \11\ This discussion only focuses on the payroll taxes. Many other taxes such as workers compensation and employment insurance also raise the costs of hiring workers for employers.

Mr. SAXTON

Mr. SAXTON. Mr. Chairman, the gentleman from New York [Mr. Quinn] wanted to be here to add to what we have said tonight but he lost his voice today, the poor guy. What he wanted to say was that we also did a study which showed that, when the Federal Government consumes more than about 17.4 percent of GDP, every dollar that we spend after that actually has a negative impact in pulling down the productivity and the production that takes place in the American economy. Today, as the gentleman knows, the Federal Government consumes a full 22 percent of GDP. And so the optimum level, at about 17.5 percent, has been far surpassed. We are 4.5 percent above where we should be. This budget takes a small step toward getting us back to where we should be so that the guy who gets up in the morning and packs his own lunch and maybe the lunch for his kids, as the gentleman so eloquently pointed out, does not have to look forward to a future where we see diminishing returns on work, which is what is happening in the American economy.

Mr. SAXTON. Mr. Chairman, I yield myself the balance of my time. Let me just say to the folks here from the other side of the aisle, our goals are twofold. The goals of this budget are twofold. One is to set the right priorities, and the second is to get our economy moving again. I have tried to talk over the last hour about the economic implications of this budget as opposed to yours. I believe all Americans will be better off if we can get the economy going again and get median income on the way up again. Where I take some umbrage with my friends from the other side of the aisle is their incorrect use of the word ``cut.'' Anybody can see, this chart represents what our proposal is with Medicare. Over the last 7 years, we have spent $920 billion on Medicare programs. Over the next 7 years, we propose to spend $1.479 billion. If you call that a cut, you have been in Washington too long. This is an increase, not a decrease. It is a substantial increase, not a decrease. So I say to my friends, let us play fair. Let us tell it like it is. the price of big government

Mr. SAXTON. Mr. Chairman, I yield myself 1 minute. The continued claims from the other side that there are cuts in Medicare and Medicaid are no more true this year than they were last year. My friend from New Jersey, I believe, knows that I spent untold hours in hospitals during the debate on Medicare last year. There was no thought among the hospital administrators at the conclusion of that period of time that any hospitals were going to close anywhere in New Jersey, and seniors would expect the same level of benefits that they had received before. It is true that the rate of growth in the program would have been reduced somewhat, but there was not a single penny of cuts in that budget, nor is there in this.

Mr. SAXTON. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, I believe that I am at least for now our last speaker, so I just wanted to kind of recap regarding the statements that my colleagues on the Republican side of the Joint Economic Committee have made here this evening and why they are important. Before I do that, Let me just pick upon something that the last speaker mentioned, and that was the performance or relationship between the performance of our taxing and spending during the decade of the 1980's. Yes, it is true that there was a tax rate cut which took place in the early eighties. I believe the gentlewoman said or inferred it was because of that tax rate cut that the deficit occurred. Well, I would just like to remind everyone, or if people do not know this to tell them this for the first time maybe, we started the decade of the eighties, before the tax cuts, with about $500 billion in revenue, half a trillion dollars in revenue, money for us to spend, decide on the priorities, $500 billion. By 1990 that had grown, in spite of the tax cuts, I should not say in spite of, because of the tax cuts. 1990, that money grew and became twice as much, $1 trillion. that is right, from 1980. In the early eighties when we had the tax cuts, the tax cuts provided an economic stimulus, and because we had more people working, more people packing their lunch in the morning, more people going to work and coming home on Friday afternoon with paychecks, larger paychecks, I might add, 1.7 percent each year, because they had more paychecks and higher income, they paid more taxes, and our revenue doubled during the decade of the eighties. It was not, it has been proven not to be, true that someone can point their fingers at the Reagan tax cuts and say that it why we have a deficit. The fact of the matter is that we more than doubled spending. It is Congress' function. We are in the middle of the function right now tonight of determining how much money to spend for fiscal year 1997. We will make that determination just like we did every year during the eighties, and every year during the eighties we increased spending by or 7 or 8 percent. It was not the tax cuts that did that; it was done right here in this very process that we are engaged in tonight. Spending is the problem, folks. Spending is the problem for the folks that the gentleman from Illinois [Mr. Manzullo] talked about also. A man goes to work, comes home, in 1992 making a median income of $31,897. It dropped down to $31,186 in 1993, and all the way down to $30,854 in 1994. Once again, we see the effect of tax policy here, because we had a large tax increases, two large tax increases, bipartisan tax increases, one advocated by President Bush and the Democrats in this House in 1990, and the second by President Clinton and the Democrats in this House in 1993. I just hold this up for emphasis. This is what happens when we increase taxes on the American families. It slows down the economy, less income for workers, or at least stagnant income for workers, and as a result of that, I think we can learn from history. We were not the first people to say this. The first person to say this, and believe in this theory, was a member of your party. That was John Kennedy. He said in the State of the Union Address in 1963, ``We cannot for long expect to lead the cause of peace and freedom around the world if we cease to set the economic pace at home.'' He proposed massive tax cuts. Revenue grew and the economy grew, and it was the same story. So we can go back and make this a bipartisan argument. Let me just conclude with this one chart, to reemphasize the point. Starting back in 1973, we anticipated what the American family, or have anticipated since, what the American family should have earned if we had not increased the size of government and the cost of government beyond the optimum size and the optimum cost. If we had kept the size of government at 17.5 percent of GDP, this red line exemplifies what should have happened in terms of median income. Steady growth. Instead, we increased the cost of government to 18 and then 19 and then 20, and now 22 percent. This dotted line shows what actually happened to median family income, a large deficit of another kind that is even more meaningful to many American families than the deficit we talk about all the time. This gap represents over the last 10 years to the average American family a loss of $106,000 in wages. So we are trying with this budget to correct a situation which we have allowed to develop here over the last several decades, Republicans and Democrats working together on the wrong path, on many occasions, and we are trying to correct that situation by slowing the rate of growth of government, because if we do not slow the rate of government and begin to consume 22.5 percent and 22.6 percent of GDP and 23 percent of GDP, this situation with wages and the long-term growth in our economy can only take one path, a negative one. So, the gentleman from Ohio [Mr. Kasich] and his committee and his staff in my opinion have done a great service to the country in bringing this budget to the floor this evening. So I ask Members on both sides of the aisle to consider not just how much we will spend, but the priorities of what we are going to spend, and please, please, consider the effect on the pocketbook of the average American, middle class, upper class, lower class, all classes of American workers. Mr. Chairman, I reserve the balance of my time.

Mr. SAXTON. Mr. Chairman, I yield 3 minutes to the gentleman from South Carolina [Mr. Inglis].

Mr. SAXTON. Mr. Chairman, I yield 3 minutes to the gentleman from South Carolina [Mr. Sanford] who is going to report on yet another Joint Economic Committee study which shows the negative effects of large Government on the free enterprise system.

Mr. SAXTON. Mr. Chairman, will the gentleman yield?

Mr. SAXTON. Mr. Chairman, I yield 6 minutes to the gentleman from Illinois [Mr. Manzullo], a Member who has been particularly active this year in understanding what it means to the American family to have less income and at the same time pay higher taxes. (Mr. MANZULLO asked and was given permission to revise and extend his remarks.)

Mr. SAXTON. Mr. Chairman, I yield 3 minutes to the gentleman from Clarendon, TX [Mr. Thornberry], another member of the Joint Economic Committee who believes that big government acts as a drag on the economy.

Mr. SAXTON. Mr. Chairman, I yield myself 4 minutes. Mr. Chairman, first let me commend the chairman of the Committee on the Budget and his colleagues and the staff of the Committee on the Budget for providing us with the opportunity to consider what I consider a very, very find budget. This next hour will be controlled by the members of the Joint Economic Committee, and it is our function, along with deciding on what our priorities should be, to try to shed some light on the fiscal implications of our Federal budget, of our proposed Federal budget, and our past actions on the economic performance of the private sector in our country. Mr. Chairman, I find it quite interesting to do that because over the years that I have served on the Joint Economic Committee we have found that there are certain things that happen here in Washington that have a profound effect on the American economy. Today many middle-class Americans are deeply concerned about their lack of economic progress, and I would like to speak for just a few minutes about that because that is one of the issues that we are trying to address with this budget. Ordinary Americans in many walks of life feel that they are on a treadmill where they have to run faster and faster to stay in the same place, if not fall behind. Unfortunately, they have every reason to be concerned because not only is income growth nonexistent but taxes have gone up. I would like to just point out that over the last 10 months we have released a number of Joint Economic Committee studies and reports documenting the middle-class income meltdown. The sad truth is that a variety of statistics show that economic well-being of the American middle class has declined or stagnated under the policies of this administration, and we are going to try to fix it. For example, take one standard measure, median family income: This statistic charts changes in the level of middle-income families over time and can be adjusted for inflation as well. The Joint Economic Committee found that during the Clinton administration there has been no progress in inflation-adjusted median income. In other words, families that earned $40,000 3 years ago on average continue to earn $40,000 this year. This chart exemplifies that. During the last decade, during the 8 years of the Reagan administration, each year American families could anticipate a 1.7 percent increase on average in their income. Now, if we extrapolate that out during that period of time, that means that income went up during that 8 years almost 14 percent. Now, just to take an example of what that meant to the average American family over that 8 years, it meant that a family that started the decade of the 1980's making $50,000, by 1988 was making $57,281, and so that kind of growth took place because we had in place growth policies here in Washington. Now, by contrast, since the present administration took office, we have had goose eggs, no growth in median family income. And so one of the things that this budget tries to address is that problem by bringing into control Government spending and lowering the thresholds that we anticipate for future Government spending as well. Unfortunately, we know that median income did not treat all Americans the same. For example, male earnings from 1992 to 1994 actually fell. In 1992 the median male income for males in this country was $31,897. It decreased by 2.2 percent by 1993 and fell to just over $31,000; and decreased another 1.1 percent in 1994 and fell to $30,854. So because of, we think, bad things that Congress did and the President did during those years, it crested a disincentive for the economy to grow. Secretary Reich has tried to explain this away by saying that corporate profits are up; therefore, median income must be down. Not true. Not true. This chart shows what happened with corporate profits and total compensation. The red line shows what happened with corporate profits. During the years of John Kennedy back in 1963 and 1964, corporate profits consumed or took up about 14 percent of total compensation. Today you can see over in the other end of the chart, it is only 10 percent. It has actually fallen. The black line does represent total compensation for American workers, 55 percent in 1959 and just about 55 or 56 percent today. Mr. Chairman, I commend the gentleman from Ohio [Mr. Kasich], the chairman, for the great effort he has put into this budget to treat all Americans fairly, and yet recognize the economic implications of what it is that we have created. Naturally, I am going to urge everyone to support this budget. Mr. Chairman, I reserve the balance of my time.

Mr. SAXTON

Mr. SAXTON. Mr. Speaker, I yield myself such time as I may consume. (Mr. SAXTON asked and was given permission to revise and extend his remarks.)

Mr. SAXTON

Mr. SAXTON. Mr. Chairman, I thank the gentleman for providing the Members with that insight. I share the gentleman's views on the issue. In fact, it was in response to those concerns that I proposed my amendment to keep the situation the way it is. In addition to the points which the gentleman has raised, I would like to add two other points. First, as the gentleman knows, within the Pentagon the budget battles are ultimately decided by four-star generals. Left unchanged, H.R. 3230 would set up a command structure which puts the commander of the Army Reserve, a two-star general, in competition with generals that wear four stars. I am concerned that in that arrangement, the U.S. Army Reserve will inevitably end up with the short end of the stick. In addition, I know of no other command within the military which has been the subject of such congressional oversight and attention as the Army Reserve has. The Army Reserve Command is a relatively new command established in 1991. In 1994 Congress mandated a significant change in the command structure. Both actions require time to fully implement and to determine whether further changes are necessary. Mr. Chairman, I believe that, at this time, mandating a change in the U.S. Army Reserve Command structure is premature. My amendment was intended to keep all options open to retain the current command structure, yet permit the change to take place should it be necessary. I have elected to withdraw my amendment, understanding that this issue will be taken up in conference.