Mike Crapo, November 9, 2003

For most of the year, economists across the political spectrum have been involved in the complicated process of predicting long term effects of the tax reforms that have been enacted this legislative session. While these projections offer various models on which to build policy, the results are indisputable.

Recent economic growth statistics released by the Department of Commerce demonstrate that the economic policies of the Administration and Congress are moving hard-working American families toward financial independence and prosperity. In its quarterly report issued October 30, the Commerce Department stated that the economy grew 7.2 percent in the period from July through September. As many of you have already heard, this represents the fastest growth rate since 1984.

Over the past few years, in order to improve the current economic conditions, the Federal Reserve has taken steps which fall within its regulatory power. In May, Congress and the President did their part through changes in fiscal policy. The economic growth of the past quarter can be directly tied to an increase in consumer spending resulting from mortgage refinancing and the tax cut checks mailed out this summer.

The picture of the economy is increasingly brighter. Incomes rose for the third month in a row, and hourly wages continue to rise faster than inflation--a trend that has continued since 2001. The Labor Department reported 57,000 new jobs in September. The stock market also shows continued signs of improvement. At the end of October, the Standard & Poor’s Index was up 31 percent from its March low. Finally, in mid-October, the Congressional Budget Office reduced its previous 2003 budget deficit projection of $401 billion by almost 10 percent to $374 billion. While the deficit is still too high, this readjustment demonstrates that our efforts to stimulate the economy are succeeding.

The economic forecast is sunny, but now is not the time to let our guard down. We must commit ourselves to continued fiscal restraint. As a member of the Senate Committee on the Budget, I have been intimately involved in the budget process and in setting appropriations limits. Monitoring and working to limit federal expenditures has been a priority of mine as a member of the Budget Committee. Hard-working taxpayers need to know that their money is being spent wisely, and they deserve to decide on their own where their spending priorities lie.

Policies that encourage rather than discourage business and jobs keep our economy strong. Recent manufacturing statistics point to the reality that, while we are on the right road, we still have some potholes ahead. While U.S. manufacturing output in October reached its highest level in nearly four years, problems still exist. According to the National Association of Manufacturers, since 2001, Idaho has lost one out of every eight factory jobs.

Congress must pursue policies that support manufacturing growth and economic renewal. Production costs can be lowered by reducing healthcare costs, enacting legal and regulatory reforms, and maintaining an affordable energy supply. U.S. manufacturers can retain a competitive edge in the global market by having a level international trade playing field. Tax reform measures promote investment, which in turn, encourages vital research and development. Research and development paves the way for a more competitive and profitable outlook for companies. Funding for education, especially in the fields of science and technology, and promoting public-private partnerships is essential to the larger picture of economic growth.

Contrary to the naysayers, the recent jobs and growth policies promoted by the Administration and enacted by Congress are indeed benefiting all Americans immediately and profoundly. The American entrepreneur and the American consumer have clearly done their part in laying a foundation for this recovery. Now it is in the hands of Congress to maintain the necessary discipline to ensure long-term prosperity for the American people.

Mike Crapo, a Republican, represents Idaho in the United States Senate.