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19) Rural Development and Telecommunications (Testimony of Phillip Mink, Citizens for a Sound Economy, before the JEC on May 22, 1991).

Mr. Mink states that improving telecommunications networks in rural areas will benefit all of America by fostering economic growth. Citizens for a Sound Economy advocates certain policy changes that are not in line with those advocated in the Office of Technology Assessment's report "Rural America at the Crossroads: Networking for the Future." CSE notes that due to anticompetitive policies in a highly regulated communications industry, mutual development in the computer and communications industries is not occurring. CSE advocates the following policy changes: lift the ban placed on the seven regional Bell companies that prohibits them from manufacturing telecommunications equipment; change the 1984 Cable Act which prevents telephone companies from providing service to their telephone service areas; and allow accelerated depreciation schedules for all telephone companies. In conclusion, by making the policy changes suggested, competition will flourish and the private sector will be able to determine how to meet rural America's telecommunication needs.

20) Presidents and Economic Performance: An Analysis by Fiscal Years (Released by Rep. Dick Armey and Sen. Connie Mack, November 1991).

This study debunks the emerging myth that the late 1970s were better in terms of economic growth and job creation than were the mid to late 1980s. The author emphasizes that one should not measure a president's economic performance by calendar year but should focus on the fiscal year. This evidence clearly shows that the Reagan years yielded lower inflation, lower unemployment, and higher real economic growth than the years under Jimmy Carter.

21) A Marshall Plan for America (Testimony of James C. Miller, III, Citizens for a Sound Economy, before the JEC on January 13, 1992).

Mr. Miller, the former director of the Office of Management and the Budget under President Reagan, answers calls for "governmental intervention" in the economy by setting up parameters where the economy can flourish on its own. He cautions that the government should not try to "fine tune" the economy, but that it should take action to eliminate economic dead weight. He calls for cutting the capital gains tax to zero, reducing tax rates to where they were before last year's budget accord, freezing government spending in nominal terms, and establishing a moratorium on new regulation. Mr. Miller concludes by urging Congress to adopt the economic parameters he has suggested and warns that more short-term fiscal maneuvering, as stressed in the "Marshall Plan for America," could well make economic matters worse.


22) Rethinking Welfare Policy (Testimony of Stuart M. Butler at The Heritage Foundation before the JEC on November 19, 1991).

Mr. Butler begins by noting that heavy government spending has appeared to reinforce or actually cause trends that have led to a "culture of poverty." Mr. Butler continues by urging state and Federal governments to think more clearly about work requirements and training, urges lawmakers to gain an understanding of the incentive system, emphasizes that the Federal government must recognize the importance of empowerment, and asks the Federal government to expand the waiver process to allow states to try new approaches to the welfare problem. Mr. Butler concludes by stating there must be vigorous scientific evaluation and controlled experiments. Congress should design detailed strategies that relate to real conditions, and new Federal rules should give states the widest possible latitude to embark on radical reform.

23) The War on Poverty: What Worked? (Testimony of Walter E. Williams of George Mason University before the JEC on September 25, 1991).

Professor Walter Williams charges that any sensible discussion of poverty should include alternative definitions of poverty. Only then does he say that society can work to eliminate poverty. He also criticizes the Census Bureau for the way the agency measures poverty. He says that Americans have eliminated most aspects of material poverty as traditionally defined, yet are left with those that are "permanently dependent" and who have "poverty of the spirit." While the Federal government has played a large role, it has been anything but good. He cites numerous examples including the public housing situation, the socialized agriculture market, and the minimum wage laws. He says that those who want to help wrongly want to redistribute income. In his estimation, income is earned, not distributed, and Congress hinders greater efforts to earn.

24) Poverty in the United States (Testimony of Lawrence M. Mead of New York University before the JEC on July 25, 1991).

In his statement, Dr. Mead says that poor adults working at much lower levels than the nonpoor explains poverty among most families and children. He argues that barriers such as low wages, lack of jobs, and racial bias explain this inequality among workers better than a failure to work. Moreover, he says that nonwork is due mostly to demoralization. In his estimation, requirements that welfare recipients work as a condition of support have proven more effective than policies that promote work by raising skills or wages.


25) Fast Track Reauthorization, the World Economy and International Trade (Released by Rep. Dick Armey, May 1991).

This briefing paper looks at the long-term impact of a free-trade agreement with Mexico and our ability to compete with the rapidly forming trading blocks in Europe and the Pacific Rim. It addresses concerns about Mexican labor and environmental standards, job gains from increased trade with Mexico, and the outlook for U.S. exports. It concludes that the best choice for the United States is to lead the world toward open markets for goods and investment and warns that Congress must not allow special interests to strangle the world trading system.

26) Foreign Direct Investment in the United States (Testimony of Michael R Darby Under Secretary for Economic Affairs, Department of Commerce, before the JEC on September 20, 1991).

Michael Darby discusses the nature and extent of foreign direct investment (FDI) in the United States in his testimony. Though measuring costs and benefits is difficult, current information indicates that, on net, the United States has benefitted from the large inflow of capital from abroad during the 1980s. A view from the industry and firm level shows FDI to be advantageous as well, and he highlights a number of foreign-owned firms' contributions to the U.S. economy. Any potential costs of FDI to the U.S. economy so far appear to be minimal, and further states that the United States is the largest foreign direct investor in the world. His testimony covers five case studies which examine FDI in the electronics, automotive, steel, chemical, and banking sectors. These studies indicate that FDI contributes to the overall health of the economy by providing needed capital to United States manufacturing; contributing to R&D spending; and transferring cutting-edge technologies into the United States.

27) "Monetary Reform in the U.S.S.R." (Testimony by Allan H. Meltzer, American Enterprise Institute before the JEC on July 9, 1991).

Allan Meltzer focuses on three central points. First, there is no single blueprint with which to turn a centrally planned economy into a market system. Second, a significant reform of institutions must be undertaken. Third, a market economy can only be achieved by way of major structural changes. In a detailed discussion, Mr. Meltzer describes how credibility, flexibility, and applicability affect the successful conversion of the Soviet Union to a market economy. Finally, the danger of monetary overhang, which could lead to hyperinflation, can be controlled by proper Soviet action, as detailed by Mr. Meltzer. He concludes that the United States should limit itself to offering technical and humanitarian assistance to Soviet privatization efforts.

(Copies of the material listed in these pages can be obtained from the Republican staff office of the Joint Economic Committee, 805 Hart, Washington, D.C. 20510. Phone: (202)224-7943)

Mr. ARMEY. My bottom line is, though, I frankly would have to oppose this request and recommend that it not be honored. I think we could tighten our belts and get better work out of our staff with a smaller request.

[The information follows:)




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The chairman and vice-chairman of the Joint Economic Committee are requesting a 6.6 percent increase in the JEC's budget for the coming fiscal year, or a baseline increase of $264,000 per year. As the committee's Ranking Republican, I cannot support this request. Senator Roth has authorized me to inform you that he also opposes this funding request. As you know, Senator Roth will again assume the position of JEC Ranking Republican in the next Congress, when the funding level before us takes effect, if he is not serving as a committee chairman in a Republican controlled Senate.

I must admit it's tempting to go along with the increase. I've wondered why more Ranking Republican members don't fight the explosive growth in committee staff size over the years. I've wondered how come some of the fiscal conservatives in my party have been quiet while annual funding for legislative staff grew by about $770 million between 1980 and 1990, a baseline increase of about 60% percent over the course of the decade. Now I know.

If you approve this request for a 6.6% increase, which is about 3% higher than a true cost-of-living adjustment would amount to, the JEC will have seen its budgetary baseline grow by $609,000 per year in a two-year period, or about 17% in one Congress. Under the rules, over $150,000 of that money flows to the minority side, and that's where the temptation comes in.

I'm extremely proud of the minority staff at the JEC. As a professional economist myself, I'm in an interesting position. I have staff under me whose professional economic skills I respect very much, and I'd stack them up against any economic shop in the country. In fact, I'd like to submit now for the record, without objection, a Resource Guide Senator Roth and I are sending out next week, which is a directory of the many economic studies, reports, and legislative analyses the Republican members of the JEC released over the past year. This is some of the best work out there, and I'd love to

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