[Senate Hearing 112-809]
[From the U.S. Government Publishing Office]



                                                         S. Hrg.112-809
 
                    STORIES FROM THE KITCHEN TABLE:

                     HOW MIDDLE-CLASS FAMILIES ARE

                      STRUGGLING TO MAKE ENDS MEET
=======================================================================



                                HEARING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,

                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                                   ON

                    EXAMINING MIDDLE CLASS FAMILIES

                               __________

                             JUNE 23, 2011

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions


      Available via the World Wide Web: http://www.gpo.gov/fdsys/




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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                       TOM HARKIN, Iowa, Chairman

BARBARA A. MIKULSKI, Maryland
JEFF BINGAMAN, New Mexico
PATTY MURRAY, Washington
BERNARD SANDERS (I), Vermont
ROBERT P. CASEY, JR., Pennsylvania
KAY R. HAGAN, North Carolina
JEFF MERKLEY, Oregon
AL FRANKEN, Minnesota
MICHAEL F. BENNET, Colorado
SHELDON WHITEHOUSE, Rhode Island
RICHARD BLUMENTHAL, Connecticut

                                     MICHAEL B. ENZI, Wyoming
                                     LAMAR ALEXANDER, Tennessee
                                     RICHARD BURR, North Carolina
                                     JOHNNY ISAKSON, Georgia
                                     RAND PAUL, Kentucky
                                     ORRIN G. HATCH, Utah
                                     JOHN McCAIN, Arizona
                                     PAT ROBERTS, Kansas
                                     LISA MURKOWSKI, Alaska
                                     MARK KIRK, Illinois
                                       

                      Pamela Smith, Staff Director

                 Lauren McFerran, Deputy Staff Director

     Frank Macchiarola, Republican Staff Director and Chief Counsel

                                  (ii)






                            C O N T E N T S

                               __________

                               STATEMENTS

                        THURSDAY, JUNE 23, 2011

                                                                   Page

                           Committee Members

Harkin, Hon. Tom, Chairman, Committee on Health, Education, 
  Labor, and Pensions, opening statement.........................     1
Enzi, Hon. Michael B., a U.S. Senator from the State of Wyoming, 
  opening statement..............................................     2
Franken, Hon. Al, a U.S. Senator from the State of Minnesota.....    39
Whitehouse, Hon. Sheldon, a U.S. Senator from the State of Rhode 
  Island.........................................................    41
Blumenthal, Hon. Richard, a U.S. Senator from the State of 
  Connecticut....................................................    43
Bennet, Hon. Michael F., a U.S. Senator from the State of 
  Colorado.......................................................    44

                               Witnesses

Bernstein, Jared, Senior Fellow, Center on Budget and Policy 
  Priorities, Washington, DC.....................................    10
    Prepared statement...........................................    12
Sipprelle, Susan M., Multimedia Journalist, Englewood, NJ........    19
    Prepared statement...........................................    20
Greubel, Amanda, Director, Family Resource Center, Central 
  Clinton Community Schools, DeWitt, IA..........................    26
    Prepared statement...........................................    30
Clements, Thomas, Founder, Oilfield CNC Machining LLC, Broussard, 
  LA.............................................................    33
    Prepared statement...........................................    34

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    Flight Risk, The Washington Post, article....................     4
    Debbie Stocks, Your Benefits Partner, LLC....................     6
    Dennis Murray................................................     7
    Response to questions of Senator Enzi by Jared Bernstein.....    55

                                 (iii)



                    STORIES FROM THE KITCHEN TABLE:


       HOW MIDDLE-CLASS FAMILIES ARE STRUGGLING TO MAKE ENDS MEET

                              ----------                              


                        THURSDAY, JUNE 23, 2011

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10:06 a.m., in 
Room SD-430, Dirksen Senate Office Building, Hon. Tom Harkin, 
chairman of the committee, presiding.
    Present: Senators Harkin, Franken, Bennet, Whitehouse, 
Blumenthal, and Enzi.

                  Opening Statement of Senator Harkin

    The Chairman. Good morning. The Senate Committee on Health, 
Education, Labor, and Pensions will come to order.
    This is the second in a series of hearings this committee 
will be holding to explore the economic State of America's 
middle class. Last month, we heard testimony from, among 
others, former Labor Secretary Bob Reich, who spoke about the 
long-term economic changes that have left middle-class families 
squeezed and our economy reeling.
    Today, we will expand on that topic with testimony from 
Jared Bernstein, the former chief economist to the Vice 
President, and by hearing from a diverse group of voices who 
will bring that story down to the level of America's kitchen 
tables.
    A strong America is built on a strong middle class, which 
means good jobs, steadily improving wages and benefits, and a 
healthy and happy retirement. But sadly, over the last 30 
years, that strong middle class has been disappearing.
    In the decades after World War II, our economy grew as our 
middle class flourished. In those years, rising worker 
productivity was met with equally rising incomes. We expanded 
access to high-quality, affordable education. Retirement 
security was bolstered by a partnership of individual savings, 
private defined-benefit pension plans, and Social Security. 
Strong unions provided workers with the ability to negotiate 
for basic rights on the job like pay raises, workplace safety 
standards, sick days, overtime pay.
    All of these combined to make our middle class the driving 
force of our economy by giving middle-class families the 
ability to spend their hard-earned rising paychecks without 
taking on huge debt. This, in turn, stimulated the demand 
needed to convince businesses to expand. And I might add, when 
businesses expanded during that period of time, they expanded 
here in America, not overseas.
    But since the 1970s, that social contract has disappeared. 
Real family income has barely budged, despite our workforce 
becoming more productive than ever. Unions have deteriorated, 
and defined-benefit pensions have all but disappeared.
    Our manufacturing base has been shipped overseas. Large 
corporations have put returns for their shareholders and higher 
pay for their executives over their workers' economic security. 
Income and wealth inequality today are at levels not seen since 
immediately before the Great Depression.
    The testimony we will hear today will help shed light on 
how families across America are coping with these changes. One 
of our witnesses, Amanda Greubel, a Family Resource Center 
director from DeWitt, IA, wrote me a very moving letter, 
inviting me to spend a day with her in her job at the Family 
Resource Center at their local school district.
    Well, I wasn't able to make it to DeWitt. So I thought I 
would bring her here to Washington instead. In her letter--and 
I know she will talk about this--she said,

          ``As parents and public servants, hearing that the 
        Government wants to cut funding for education and other 
        important programs while giving tax breaks to people 
        who don't need them sends a strong message that our 
        child does not matter to you.''

    Well, I couldn't agree with her more and look forward to 
hearing more about her experiences.
    But the experiences we will hear about today from all are 
sadly too common across the country. I just want to note for 
the record, to build on this hearing and the stories that we 
will hear, my State staff is embarking this week on a 99-county 
tour of Iowa to collect more testimony from Iowa's middle 
class.
    I am convinced that we need to do more to help reverse 
these long-term trends and rebuild our middle class. There is 
no doubt the economy is in better position than it was before 
President Obama took office. But the trend toward wealth 
concentration continues.
    Simply put, I feel there can be no real economic recovery 
without the recovery of the middle class. Most Americans don't 
expect to be rich or famous, but we do expect a living wage and 
good American benefits for a hard day's work.
    I hope it is time we get back to that basic concept, and I 
look forward to our discussion.
    With that, I will yield to Senator Enzi.

                       Statement of Senator Enzi

    Senator Enzi. Thank you, Mr. Chairman.
    We are holding this hearing on how American families are 
struggling in this very difficult economy. There is no doubt 
that many, many people are suffering. Over 14 million Americans 
are unemployed.
    It is obvious that the economic recovery has stalled. 
Unfortunately, the efforts taken by this Administration to 
stimulate the economy have not created enough jobs and have put 
us further in debt.
    Worse, many of the actions this Administration has taken 
are actually preventing and slowing job creation and making 
things worse. I hope my colleagues will agree that an average 
9.5 percent unemployment rate since May 2009 is unacceptable. 
Solving the job crisis should be the top priority of this 
committee.
    This is the second hearing on the middle class the HELP 
Committee has held, and I understand that a third has been 
scheduled. If the goal is to hear from real middle-class 
Americans working in the private sector about how to get the 
economy going, I would suggest we do a better job with the 
witness invitations.
    At the last hearing, the majority invited an economist, a 
policy advocate, and a legal counsel for organized labor. The 
minority was pleased to invite an actual job creator that is 
still locked in a senseless legal battle with the National 
Labor Relations Board about where jobs can be created and who 
gets them.
    Today, again, I see that the majority has invited a DC 
economist and a policy advocate filmmaker. I am pleased that we 
have two witnesses today who are on the front lines of this 
economy, but I wish there were more. We need to hear from the 
small businesses and industries that are actually creating the 
jobs America so desperately needs.
    It is very important that this committee pay attention to 
the economic problems facing the middle class and all 
Americans. I don't like doing this based on polls. But I do 
think polls give an indication of the mood of our country, 
perhaps even more so than the testimony of policy advocates.
    Recent polls show that the country is very worried. 
Seventy-eight percent of Americans feel the country is on the 
wrong track. Seventy-four percent believe the economy is the 
most important problem facing the country.
    Fifty-one percent think their situation is worse than it 
was 2 years ago after President Obama took office. Only 6 
percent of Americans believe the stimulus package created jobs, 
and 57 percent believe that it had no impact or is making 
things worse.
    These statistics are startling. I hope this hearing will be 
a wakeup call to the Administration. The failure of the 
stimulus is not a laughing matter to most Americans, and they 
are not looking for excuses. The time to take action is now, 
before things get worse.
    There are a number of steps the Administration could take 
to create jobs and boost this economy. Most of them involve 
Washington just getting out of the way. They can push the free 
trade agreements with South Korea, Colombia, and Panama, which 
have been negotiated for years and will open markets to our 
producers, creating more jobs.
    They can reduce the regulatory burden the Federal 
Government places on employers, especially small employers. We 
have heard a great deal of rhetoric about the regulatory 
burdens, but the only action we have seen is the creation of 
more regulations.
    White House Chief of Staff Bill Daley recently said with 
regard to the onslaught of new regulations, ``Sometimes you 
can't defend the indefensible.'' That is true. But it is an 
unacceptable excuse from a representative of the chief 
executive.
    Mr. Daley may have also been referring to the 
Administration's so-called ``independent boards and agencies.'' 
Two in particular have stretched their authority to tilt the 
scales in favor of union organizing bosses and against the 
rights of individual employees and employers.
    Yesterday, the National Labor Relations Board announced 
another new rulemaking. This time, it is an expedited 
rulemaking to accomplish the card-check objective of 
eliminating an employer's opportunity to make his case during a 
union organizing drive.
    The board is trying to rush this expedited rulemaking into 
place before it loses members due to Senate opposition to its 
actions. This amounts to nothing more than an outrageous 
assault on America's job creators and workers, and the 
opposition that it has already drawn will only get stronger as 
the public has a chance to read through the 145-page proposal.
    Attempts to distance the Administration from the actions of 
these boards are misleading. President Obama nominated and 
appointed the Board's officers that are carrying these actions 
out. In some cases, he appointed them against the will of the 
Senate.
    The acting general counsel of the National Labor Relations 
Board, who is pursuing the complaint against Boeing and also 
suing States over voter referendums protecting the secret 
ballot, is an administration appointee and nominee. Since his 
nomination is pending before this committee, we do know that 
very well. If the President did not agree with this assault on 
a U.S. company creating thousands of U.S. jobs in the middle of 
a recession, he could withdraw the nomination.
    I will note that the acting general counsel's complaint 
against Boeing has come under strong criticism from many 
quarters, including an editorial in the Washington Post this 
weekend. With consent, I will put that editorial in the record.
    The Chairman. Yes.
    [The information referred to follows:]

                  [The Washington Post, June 19, 2011]

                         Flight Risk for Boeing

                             (By Editorial)

    The Opening  of a manufacturing plant with nearly 1,000 jobs should 
be cause for celebration. But Boeing Co.'s $1 billion facility in South 
Carolina has met a different, less welcome response.
    The National Labor Relations Board, spurred by the International 
Association of Machinists and Aerospace Workers, hit Boeing with a 
complaint of unfair labor practices. The board charges that Boeing 
illegally shipped jobs to South Carolina from the company's Washington 
State facility in retaliation for past strikes by unionized workers in 
Puget Sound. Both facilities will have a hand in building the company's 
new and mammoth 787 Dreamliner.
    The NLRB pegged its case to ``coercive'' threats by Boeing 
executives who told the media that disruptions caused by the strikes 
played a role in deciding to build in South Carolina. They also spoke 
of the need to ``geographically diversify'' to avoid shutdowns caused 
by natural or man-made disasters and to control costs, which would be 
easier to do in a ``right-to-work'' State through lower labor costs.
    As punishment, the NLRB is seeking to compel Boeing to move the 
Dreamliner jobs in South Carolina to Washington State--which the 
company says would essentially force it to shut the plant. Boeing calls 
the proposed punishment ``indisputably the most consequential and 
destructive remedy ever sought by an officer of the NLRB.''
    The law forbids employers from discriminating or retaliating 
against employees for lawful union activity. To prevail, an aggrieved 
party typically must show that the retaliation resulted in demotions, 
dismissals, wage reductions or other punitive measures. In Boeing's 
case, these reprisals are absent; the company also claims its 
collective bargaining agreement gives it the explicit and exclusive 
right to locate work where it wishes.
    The allegation that the company ``transferred'' jobs out of State 
is unconvincing because the jobs in South Carolina are new. The company 
has not cut jobs in Washington, nor has it demoted or slashed the wages 
of union workers. Boeing has added about 3,000--albeit temporary--jobs 
in Washington since it announced its South Carolina plans and says it 
is likely to add more to keep up with demand for its commercial 
airliners.
    Employers who engage in unfair labor practices should be penalized. 
But the NLRB's move goes too far and would undermine a company's 
ability to consider all legitimate factors--including potential work 
disruptions--when making plans. It also substitutes the government's 
judgment for that of the company. This is neither good law nor good 
business.

    Senator Enzi. This Administration's energy policy is 
actively slowing and preventing job creation. Our domestic 
energy production industries can offer good jobs with good pay 
when they are allowed to operate and expand.
    Mining has been one of the few bright spots in creating 
private sector jobs during this recession. But we know that it 
could create far more jobs if the permitting process were not 
being slow walked. The result of this Administration's 
misguided energy policy is lost jobs and bankrupted American 
companies.
    On the Gulf Coast, many of the thousands of jobs that were 
supported by the offshore drilling industry are simply gone due 
to the moratorium, and the bureaucratic permit delays on 
offshore drilling in the Gulf. Two victims of these policies 
are here with us today.
    Thomas and Melissa Clements are small businesspeople who 
poured everything into building their American dream. Thomas 
acquired the specialized skills necessary to assist offshore 
oil exploration operations. He and Melissa worked, saved, and 
built relationships with customers until they got to the point 
where they could start their own shop. Then they hired 
employees, created jobs, and were on the way.
    Unfortunately, the Deepwater Horizon accident occurred in 
April 2010, resulting in the tragic loss of 11 workers. As a 
result the Administration placed a moratorium on all offshore 
drilling permits. In October 2010, the Administration lifted 
the moratorium, but did not issue a permit until March 2011.
    Since the accident, the Federal Government has issued 16 
deepwater permits. Of those, approximately 14 were in the 
process before the accident happened. As Mr. Clements will 
point out, the moratorium and refusal to grant permits is not 
necessary and is ruining a profitable industry on which the 
Nation relies. He says it best in his testimony, ``You don't 
ground all planes when there is a plane crash.''
    Since the start of the moratorium, eight deepwater rigs 
have left the Gulf of Mexico. Another six are being marketed 
for international locations. Because of the huge cost 
associated with the rigs, once they leave, they are not likely 
to return, and neither are the skilled workers who operate 
them.
    Some production has moved to Brazil and other countries 
that are not impeding their domestic energy production, and we 
are their customers. We are buying from them instead of 
producing ourselves.
    Ironically, one of the largest oil discoveries--reserves in 
the Gulf of Mexico was just announced last week. This discovery 
proves that there is still massive amounts of domestic energy 
available to help alleviate higher prices if the Government 
would simply get out of the way.
    Unfortunately, the slowdown in exploratory drilling as a 
result of last year's moratorium is expected to lead to a 20 
percent production decline in the next year. Again, the 
Administration's policies are making things worse. Thank you 
for being here today to explain the cost of these misguided 
policies, Mr. Clements.
    I also want the committee to hear from the other Americans 
that are suffering as a direct result of administration 
policies. I have a statement from Debbie Stocks, an insurance 
broker from Glen Allen, VA, who runs a small business with two 
employees.
    Mrs. Stocks' business is selling health and welfare 
insurance policies to small businesses. Agents and brokers 
across the country have seen their commissions slashed as a 
result of the new healthcare law, and this is putting thousands 
of people out of work.
    I also have a statement from a worker who signed up to work 
for Boeing at its new facility in South Carolina. This employee 
is frustrated that a Federal agency is attempting to move his 
and thousands of other jobs to Washington State so it can be 
performed by unionized employees.
    With consent, I will place those two statements in the 
record.
    The Chairman. Without objection.
    [The information referred to follows:]
Prepared Statement of Debbie Stocks, Owner, Your Benefits Partner, LLC, 
                              Richmond, VA
    I'm a small business with two other employees, located in Glen 
Allen (Richmond), VA. I've been in business for myself for 6 years. I 
started my agency in 2005, after the insurance company I worked for 
restructured. I really wanted to work for myself and knew the value of 
creating a book of business that I could sell someday. I've worked hard 
these past 6 years to grow my clientele and increase revenue.
    About 1\1/2\ years ago, I decided to add property and casualty 
insurance to my practice as I was mainly offering health and welfare 
(life, disability, dental, vision, etc.) benefits. We were licensed 
last year and began offering the beginning of this year. Thank 
goodness! In January, we received letters for most of the carriers 
announcing commission cuts for small group and individual sales (my 
niche). Anthem gave us a 33 percent cut! I don't know too many 
businesses that can withstand a 33 percent cut in revenue and stay 
afloat.
    Why the cuts in commission? When I look at the healthcare 
legislation (PPACA), I ask myself how could the carriers NOT cut 
commission? Given the required medical loss ratio of 85 percent, only 
15 percent remains for administrative costs. When we consider 
application processing, billing, claims processing, and State taxes 
(though these may have been moved outside the equation--you'll have to 
fact check me on that), what could be left? In addition, adding 
dependent coverage to age 26, no annual lifetime and annual maximums, 
and enhanced preventive benefits, will also increase costs to the 
carriers (in both claims and administrative expenses). With PPACA, 
we've added these additional expenses to the carriers but they cannot 
charge more. It can't work.
    The property and casualty portion has certainly carried us this 
year. We continue to work with our health clients to service their 
policies, help with claims and billing questions, etc.
    The shame of this is that individuals and small businesses are the 
VERY people who need help from a broker. They have no HR dept. to 
research and shop the market. Going to the carrier will only give that 
carrier's plans (not competing plans). And yet, brokers in my position 
(servicing these smaller clients) are the ones hurt the most.
    I will continue to work in the insurance business because I love 
it. My customers are very appreciative of the help I give and that 
makes me feel good. It isn't just about the commission (I don't make 
that much money, in fact). I believe I provide a valuable service to my 
clients.

                  Prepared Statement of Dennis Murray
    I am one of the South Carolina-based Boeing employees seeking to 
intervene in the National Labor Relations Board prosecution of the 
Boeing Company, regarding Boeing's South Carolina operations.
    I reside in Summerville, SC. I am currently employed by Boeing in 
North Charleston, SC.
    Along with my family, I have lived in South Carolina since 1981. I 
moved to South Carolina in 1981 when it was made my Air Force permanent 
duty station. I served in the Air Force for a total of 8 years, and was 
honorably discharged in 1984.
    I went to work for Lockheed in 1984 in Charleston, SC. I was 
employed within a bargaining unit represented by the International 
Association of Machinists & Aerospace Workers (``IAM''). I was a 
voluntary member of the IAM for most of the time I worked there.
    Eventually Lockheed ran out of contracts and I was laid off. Later, 
Lockheed merged with Martin-Marietta, and the jobs in Charleston were 
moved to the Baltimore, MD area. I remained in Charleston and did not 
relocate to Baltimore.
    I then worked for Bayer for about 9 years, in the greater 
Charleston area. There was no union in that facility. I got laid off by 
Bayer when they downsized and sold off the facility, and I moved on to 
other jobs.
    In 2008, I became employed by Vought, a manufacturer with a 
Charleston facility that assembled two aft sections of large Boeing 
aircraft. In approximately July 2009, Boeing bought the Vought facility 
where I worked, and I have been a Boeing employee since that time.
    When I went to work at Vought in 2008, the IAM had been voted in as 
the employees' exclusive bargaining representative, but they were just 
negotiating a first contract. In November 2008, an IAM representative 
called an emergency meeting but only told 12 of the 200 union members 
in the unit about the meeting. A total of 13 employees attended the 
meeting and those few in attendance ratified the IAM's contract by vote 
of 12-1. Many of the provisions of the new IAM contract were worse than 
what Vought employees already had without a contract. For example, 
employees lost medical, dental, and short-term disability. The Vought 
employees were then extremely unhappy with the IAM's actions. This 
unhappiness was exacerbated by subsequent layoffs that lasted from 3 
weeks to 5 months. Employees contacted IAM leaders to seek redress for 
the way that the contract had been ratified, but the IAM leadership 
turned down our requests to intervene and refused to assist us. I also 
contacted the NLRB and was told that this was not an unfair labor 
practice because the NLRB does not police internal union ratification 
votes.
    Employees then collected more than 30 percent of signatures to 
decertify the IAM, but were told by the NLRB that we could not 
decertify until the contract expired, and we would have to wait until a 
60-90 day period prior to the expiration of the contract.
    In May 2009, we heard rumors that Boeing was going to buy out the 
facility from Vought, and we started collecting new decertification 
signatures. On July 30, 2009 when it was formally announced that we 
were no longer employees of Vought but were now employed by Boeing, we 
filed a decertification petition with the NLRB. The case was docketed 
as The Boeing Company/IAM, NLRB Case No. 11-RD-723. I was the named 
decertification petitioner in that case. After Boeing bought Vought's 
facility, it continued to recognize the union as our representative, 
but employees wanted to get out of the union nevertheless. Boeing was 
not hostile to the IAM in any way and did not encourage us to 
decertify. We filed the decertification petition entirely on our own.
    Besides our lack of support for the IAM, it soon became clear to 
many employees that there was another good reason to decertify the 
union. In 2009, during all of this maelstrom and the decertification 
campaign, the media was reporting that Boeing was in the middle of a 
site election process to decide where it should create a new final 
assembly and delivery line for the production of large aircraft. It was 
reported that Boeing was looking at several sites all over the country, 
including Charleston. Many employees knew about Boeing's site selection 
process, and discussed the fact that a decertification of the IAM would 
make our facility in Charleston all the more attractive to Boeing, 
since it was common knowledge that the IAM had caused major labor 
problems for the company in Seattle.
    Thus, many employees who wanted to decertify the IAM because of the 
contract ratification fiasco also realized that our facility in 
Charleston would be in a much better competitive position to attract 
the Boeing final assembly and delivery work if we were operating non-
union, without the IAM's rules and labor strife. The decertification 
election was held on September 10, 2009, and the IAM was voted out by a 
tally of 199-69. Boeing announced that Charleston was selected as the 
site for the new final assembly and delivery site about 2 months later.
    Now that we are working in a nonunion setting, I feel that Boeing 
is treating employees well. Within a few weeks after the 
decertification was final, Boeing gave us 3 percent across-the-board 
raises. Overall, the wages, wage structure and benefits are better 
under the current non-union Boeing than under the prior unionized 
Vought. Most employees in my building are happy.
    The Boeing Campus in north Charleston, SC is divided into three 
production buildings. The former Vought facility is now identified as 
Building 88-19. It is the Aft-Body Manufacturing building where 
sections 47 and 48 are made. Here the two sections are made from 
scratch, and then completed by the addition of all structural members 
and systems components. The sections are then joined together, making 
the rear third of the aircraft. Next is the former Global Facility, now 
known as Building 88-20. This is Mid-Body Assembly Facility where the 
mid-body sections are flown in from Italy and mated with the center 
wing section brought in from Japan. Once all the sections are joined 
and mated with the center wing section, the remainder of the systems 
components and wiring are installed completing the center third of the 
aircraft.
    Last, there is the Final Assembly and Delivery Building, also known 
as FA&D. This is where the forward third of the aircraft is brought in 
from Spirit Aircraft in Kansas, the Mid-Body brought in from Building 
88-20, the Aft-Body section from Building 88-19 as well as the wings 
from Japan and Horizontal stabilizer from Italy. All the sections are 
then combined to create a complete 787 Dreamliner aircraft. The 
interiors will come from the IRC facility being completed a few miles 
away, and also be installed at FA&D. After a quick flight for a high 
quality customer paint job, the aircraft return to the Charleston 
delivery center where the customers will take possession of their new 
airliner.
    Building 88-19 is currently staffed by about 1,200 employees. 
Building 88-20 is currently staffed by about the same amount. FA&D 
currently has somewhere in the range of 800 to 1,000 employees with 10 
classes going around the clock with several hundred more employees 
preparing to work in the FA&D building. When it is fully staffed, FA&D 
will employ some 3,800 employees.
    Although I still work in the ``old'' section of the building 
working on the aft sections of the aircraft, it is possible that I 
could transfer over to the new facility.
    I understand that the NLRB General Counsel seeks a remedy in this 
case that would force Boeing to discontinue the final assembly and 
delivery work in Charleston, and transfer it to Seattle. This remedy is 
grossly unfair and would devastate our community and my family. As 
noted above, I have been laid off several times in my career due to 
corporate re-structuring or lack of work, and it is a devastating 
experience.
    It seems clear that many Charleston-based employees and I would 
lose our jobs with Boeing in South Carolina if the General Counsel's 
proposed remedy is adopted. The current unemployment rate here is high 
and jobs are scarce. If I lose my job, my family will be devastated, as 
my son and daughter are both looking for work but are currently 
unemployed due to the high unemployment rate in this geographic area. I 
have two grand kids from my 22-year-old daughter who are also living 
with us. Thanks to Boeing I am able to keep food on the table and a 
roof over my head for all of my family, including my grandchildren. 
Many other families around here are in a similar boat.
    Moreover, even if Boeing gave me the opportunity to move to 
Washington to perform the work that the General Counsel seeks to 
transfer to that State, I would oppose and decline such a move because 
I have already gone head-to-head with the IAM union and do not want to 
work in a unionized IAM environment in Washington, especially in light 
of what they have done to us here in Charleston.
    In January 2009 Vought sent me to Boeing's Everett, WA facility for 
training purposes. When I told those rank and file IAM members how we 
had been mistreated by the IAM, the rank and file workers voiced 
support for us. But of course the union officials were against our 
efforts to re-do the contract ratification and our efforts to decertify 
the IAM. One union official went on public record and said that he 
would try to keep work from coming to our plant in Charleston because 
of the decertification. I would not want to work in such a hostile 
unionized environment, nor do I believe that I should have to in order 
to earn a living and feed my family. The union bosses are trying to 
spank us like unruly children, by having all our jobs taken away. And 
we're fighting back.
    I have chosen to exercise my rights as a citizen of the United 
States to live and work in South Carolina. I have chosen to exercise 
the rights provided to me under the State and Federal laws that 
prohibit compulsory unionism, and allow employees to refrain from 
joining or supporting any labor union. I served in the military to 
uphold every citizen's basic constitutional rights, which includes the 
right not to be compelled to join or support any private organization. 
Moreover, along with a large majority of my coworkers, I have already 
chosen to exercise my rights under the NLRA to decertify the IAM when 
it was our representative at the same facility. I have nothing against 
unions, but I do not think they should be compulsory. I do not think 
employers should be told by the Federal Government where they can 
establish their operations.

    Senator Enzi. Too many Americans are suffering in this 
economy, and far too many are suffering because of some policy 
being carried out by the Administration. I look forward to 
hearing everyone's testimony.
    The Chairman. Thank you very much, Senator Enzi.
    And now, we will turn to our panel. I will introduce them 
all, and then we will hear from them as we go from left to 
right.
    First, we have Jared Bernstein, who recently left his 
position as the chief economist to the Vice President, and is 
currently a senior fellow at the Center on Budget and Policy 
Priorities. During his time in the White House, he served as 
the executive director of the White House Middle Class Task 
Force. He was previously a senior economist at the Economic 
Policy Institute and chief economist at the Department of 
Labor.
    Next, we have Susan Sipprelle, a multimedia journalist who 
is currently working on a documentary entitled, ``Over 50 and 
Out of Work,'' which is an ongoing project that details the 
impacts of the great recession on Americans that are 50 and 
older. She is a graduate of the Columbia University Graduate 
School of Journalism and New York University's Stern School of 
Business.
    Her work has been published widely, including in the New 
York Times. Ms. Sipprelle is joined by her husband, Dwight, and 
three of their children whom I just met--Clare, Troy, and 
Lynne--along with her film colleague Sam Newman.
    Next, we have Amanda Greubel from DeWitt, IA, about whom I 
spoke. She is the Family Resource Center director in the 
Central Clinton Community Schools. She wrote a very moving 
letter to my office earlier this year, and I am pleased that 
she is able to join us to share her story with the committee.
    Ms. Greubel has a bachelor's degree in social work from 
Wartburg College and a master's degree in social work from St. 
Ambrose. Her husband, Josh, is the band director in the local 
schools, and they have a 5-year-old son, Benen.
    And Thomas Clements, about whom Senator Enzi just spoke, is 
the co-owner of Oilfield CNC Machining LLC, a small business in 
Broussard, LA, which he owns with his wife, Melissa. Their 
business specializes in machining metal parts for oilfield 
equipment used on offshore drilling rigs.
    To each of you, thank you for being here, and your 
statements will all be made a part of the record in their 
entirety. I will ask if you could sum up--the clock says 5 
minutes, but let us say 7 minutes. And if you go 1 minute over, 
I won't get too excited. But once it starts going over that, I 
might get a little nervous, OK?
    So, Mr. Bernstein, welcome, and please proceed.

 STATEMENT OF JARED BERNSTEIN, SENIOR FELLOW, CENTER ON BUDGET 
             AND POLICY PRIORITIES, WASHINGTON, DC

    Mr. Bernstein. Thank you, Chairman Harkin, Ranking Member 
Enzi. I thank you for this opportunity to testify before the 
committee, and I applaud the committee for once again bringing 
these critical issues to the forefront of your work.
    As you mentioned, Senator, I am currently a senior fellow 
at the Center on Budget and Policy Priorities, and before that, 
along with my chief economist post to the Vice President, I was 
executive director of the White House Task Force on the Middle 
Class.
    More often than not, the stories we heard on that task 
force were of middle-class families having a much harder time 
than they expected not just making ends meet, but in meeting 
their aspirations. Such aspirations typically included a decent 
house in a good neighborhood with quality schools for their 
kids; the ability to save enough for their kids' college 
education, as well as parents' belief that their children 
should do better or at least as well as they did; the ability 
to afford decent health coverage; working hard but also finding 
enough time to enjoy your families; saving for retirement.
    Some families went further, talking to us about an implicit 
social contract between their families, their government, and 
their employers. The terms of this contract were that if they 
worked hard and played by the rules, they would have a good 
chance of realizing those aspirations I just elaborated.
    Need I tell you, many folks now believe that contract is 
broken. While many of us are currently focused on the cyclical 
problems remaining from the great recession that began in late 
2007, it is important to stress that the so-called middle-class 
squeeze did not begin with the great recession, and it won't 
end when that downturn is finally behind us.
    No question the great recession put even more downward 
pressure on the living standards of the middle class. But for 
many in the middle class, the downturn presented a new problem 
on top of an old one. Historical context is helpful here.
    Over the three decades from 1947 to 1979, the real income 
of the median family grew almost in lockstep with productivity 
as both more than doubled. But over the next 30 years, median 
income growth was about one-eighth that of productivity growth. 
That divergence between middle-class incomes and the economy's 
productivity is clearly a structural long-term development, not 
a cyclical short-term one.
    Understanding why economic growth has increasingly eluded 
the middle class is essential. Globalization and technological 
change favoring more highly skilled workers plays an ongoing 
role for sure. But other contributors have more to do with the 
reduced ability of middle-class workers to bargain for their 
fair share of economic growth.
    High unemployment is a major culprit here. And as I have 
shown in recent research, the economy operated with much less 
slack over the period when productivity and middle-class 
incomes grew in sync. I would say in today's American economy 
with extensive globalization and diminished union power, 
middle-class workers have no better friend than full 
employment. And of course, we remain very far from such 
conditions today.
    Another factor worth noting is the ``financialization of 
growth,'' strong profit growth in sectors where middle-class 
workers are less likely to be employed. In this regard, I 
wanted to be sure to point out that the recent data show that 
while corporate profit rates are returning to their pre-
recession peaks, the paychecks of average workers are now 
lagging behind inflation.
    The recession hit middle-class families hard. Between 2007 
and 2009, middle-class families lost over $2,000 in real terms, 
about 4 percent of their incomes. For African-Americans, the 
loss was much greater, 7 percent.
    Finally, I want to say a few words about policies currently 
under discussion that could help or exacerbate the challenges 
faced by middle-class families today. When families talked with 
our task force about the economic squeeze they were facing, it 
was often in the context of how their family budgets didn't 
seem to go as far as they used to, particularly in the areas of 
healthcare coverage and college tuition.
    In fact, while overall inflation has grown by a factor of 3 
since the late 1970s, college tuition and fees, according to 
the price index, has grown by a factor of 10. It is true that 
student aid has grown over this period as well, and that has 
been extremely important to these families in offsetting the 
climb in the sticker price of inflation.
    Retirement is also less secure for many older persons. One 
important factor here is the shift away, as you mentioned, sir, 
from defined-benefit pensions to defined contributions--a 
change that shifts the risk of income inadequacy in retirement 
from employers to workers and their families. As I show in my 
written testimony, there has been a complete reversal in the 
share of coverage between a guaranteed and variable pension 
benefits.
    In this regard, it bears repeating that Social Security, a 
guaranteed pension for retirees, is the first line of defense 
in retirement security. Though it is often mistakenly thought 
to be unimportant to seniors, in fact, for recipients age 65 
and up, Social Security is about two-thirds of their income, 
and that share grows with age.
    Last, on our task force, we heard from families that health 
coverage is another source of the squeeze and as the cost of 
family health insurance premiums have gone up many times faster 
than their earnings. The Affordable Care Act is targeted at 
this problem and is expected to lower the growth of healthcare 
spending and premium costs relative to their expected trend.
    But in the near-term debate, it is important to the middle 
class to protect the Medicaid program against deep spending 
cuts. Though Medicaid coverage is generally thought of as 
serving the low-income population, the program is the primary 
payer for 64 percent of nursing home residents.
    With savings and other insurance, middle-class seniors may 
be able to initially pay for home healthcare or nursing home 
services. But over time, many spend their savings and 
eventually need Medicaid to step in as Medicare provides 
limited coverage for these services.
    Thank you very much.
    [The prepared statement of Mr. Bernstein follows:]
                 Prepared Statement of Jared Bernstein
    Chairman Harkin and Ranking Member Enzi, I thank you for this 
opportunity to testify before this committee. There are few topics as 
important to America's economic success as the well-being of the broad 
middle class and I applaud this committee for once again bringing these 
issues to the forefront of your work.
    I am currently a senior fellow at the Center on Budget and Policy 
Priorities.\1\ Prior to my current position, I was chief economist to 
Vice President Biden, as well as the executive director of the White 
House task force on the Middle Class. Some of what I reference below 
derives from the activities of that task force.
---------------------------------------------------------------------------
    \1\ I thank Arloc Sherman for the data work on the middle-class 
hours and earnings data. Hannah Shaw and Kelsey Merrick provided 
valuable research assistance. Any mistakes are my own.
---------------------------------------------------------------------------
            the middle-class squeeze and the social contract
    It is commonly thought that the economic life of the American 
middle class has grown increasingly difficult over the past few 
decades. This sentiment has given rise to the notion of the ``middle-
class squeeze,'' which is generally understood to imply that middle-
class families are having a harder time achieving a set of economic 
aspirations that we often associate with the American middle class.
    These economic aspirations typically include a decent house in a 
good neighborhood with quality schools for their kids; the ability to 
save enough for their children's college education, as well as parents' 
belief that their kids should do as well or better than they did; the 
ability to afford decent health care coverage; working hard, but also 
finding enough time to actually enjoy their families; saving for their 
retirement.
    It is also argued that for many years, there was an implicit social 
contract between government, private firms, and the middle-class. If 
folks ``worked hard and played by the rules,'' they would have a good 
chance of realizing those aspirations. But in recent decades, both 
policy and structural economic changes, it is argued, have broken that 
contract with the middle class.
    Some of these concepts are handily measurable. It is clearly the 
case, for example, that the cost of health care premiums has risen much 
faster than middle-class incomes and that the locus of risk of saving 
for retirement has shifted from employers and firms to workers and 
their families. It is also true that real median family income grew 
more slowly in recent decades than in earlier periods, and that this 
slowdown is particularly sharp relative to productivity growth.
    But other aspects of this story are less amenable to empirical 
economic analysis. Economists have neither a widely accepted definition 
of ``middle-class'' nor a construct of a ``middle-class squeeze.'' 
Certainly, there is no obvious metric for measuring the breaking of an 
implicit social contract, one that clearly didn't cover everyone 
(women, minorities) anyway.
    Given those limits, this testimony evaluates the economic evidence 
for the middle-class squeeze where hard evidence exists. On other 
matters, like the broken social contract, I will, as best I can, 
extrapolate from the data and my experiences in this field of study to 
judge the claims being made.
         the empirical evidence behind the middle-class squeeze
Median Family Income Growth
    I begin this section with an analysis of median family incomes, but 
before presenting these data, it is important to stress that the so-
called ``middle-class squeeze'' did not begin with the Great Recession 
and it will not end when that downturn is fully behind us. As shown 
below, it is demonstrably the case that the Great Recession put even 
more downward pressure on the living standards of the middle class. But 
policymakers can neither understand nor address the problems documented 
herein if their analysis begins only a few years ago.
    Note, for example, Figure 1. Over the three decades from 1947-79, 
real median family income grew almost in lock step with productivity 
growth. But over the next 30 years, middle-income growth was about one-
eighth that of productivity. That divergence between middle-class 
incomes and the economy's productivity is clearly a structural 
development, not a cyclical one.\2\
---------------------------------------------------------------------------
    \2\ A technical issue raised here involves the different price 
deflators for family income, which uses a consumer price deflator, and 
for productivity, which uses a product-side deflator. Using a product 
deflator on family income closes 40 percent of the productivity/median-
income gap, but when considering family well-being, it is not the right 
approach, since families face consumer, not producer, prices. For 
example, it's true that machine tool prices are rising more slowly than 
health care prices, but it is that latter that matters to consumers.


    What explains these very different outcomes? First, they reflect 
the sharp increase in economic inequality since the 1970s. Yes, the 
productivity of the American economy downshifted over the past 30 years 
(though it accelerated post-1995) compared to prior decades, but it 
slowed much less than the growth of median family income. Clearly, a 
larger share of growth over this period flowed to those at the top of 
the income scale.
    This fact is corroborated by a broad set of inequality statistics, 
including the much referenced work of economists Piketty and Saez (P/
S). Figure 2 plots the time series of real median family income against 
the P/S data for the income share of the top 1 percent. The two trends 
broadly show that while real middle-income growth is not wholly ``zero-
sum''--i.e., a gain at the top does not necessarily come at the expense 
of the loss in the middle--median incomes grew much more strongly 
during the period when income inequality was flat or falling.


    Referencing once again the percent changes shown in Figure 1, 
median incomes more than doubled while the top 1 percent share fell by 
a couple of percentage points, 1947-79. Since then, when median family 
income grew by only 10 percent, the top 1 percent share grew by a 
striking 13.6 percentage points.
    Correlation is not causation, and it would be wrong to argue that 
rising inequality caused the flatter middle-class income growth, post-
1979. The literature has identified many factors that at least 
partially explain both of these developments, including globalization, 
technological change favoring more skilled workers, much diminished 
union power, the declining minimum wage, ``financialization'' of growth 
(strong profit growth in sectors where middle-class workers were less 
likely to be employed), along with a set of policies that journalist 
Harold Myerson labels shareholder vs. stakeholder capitalism, implying 
policies (like financial market deregulation) that favor holders of 
financial instruments over wage earners.
    But the main point of this part of the analysis is that the post-
1970s slowdown of real median family income growth is (a) a key factor 
behind the middle class squeeze, and (b) related to the increased 
inequality of income as the benefits of productivity growth eluded many 
in the middle class over the past few decades.
Work in the Paid Labor Market (Labor Supply)
    The fact that family income growth slowed for many in the middle-
class is not because they worked less. As is well-known, women's labor 
force participation grew significantly, almost doubling, over the 
period shown in the above figure, from about 32 percent in the late 
1940s to almost 60 percent in recent years.
    To get a closer look at what these changes mean to middle-class 
families, and how they might relate to the middle-class squeeze, we 
examined the annual hours worked in the paid labor market by middle 
income,\3\ ``prime-age'' (25-54), husbands and wives with children, 
1975-2009, along with low-income single mothers.
---------------------------------------------------------------------------
    \3\ ``Middle income'' refers to household in the middle 20 percent 
of the distribution when households are ranked nationally by cash 
income.
---------------------------------------------------------------------------
    Figure 3 shows annual hours of work by middle-income husbands and 
wives, 1975-2009. While middle income husbands in this age range 
generally worked full-time, full-year over this period, hours worked in 
the paid labor market by middle-income wives grew steeply, by over 400 
hours, as shown in table 1.


    For working-age, middle-class families, opportunities in the job 
market are at the core of their living standards. A detailed analysis 
of these opportunities would look at the types of jobs by industry and 
occupation available to heads of such families. Here, I look more 
closely at outcome measures, including hours worked and hourly 
earnings.
    The data shed light of the squeeze hypothesis in the following 
ways:

     Almost 100 percent of middle-income husbands consistently 
worked full time, yet suffered stagnant hourly wages and thus overall 
earnings;
     Middle-income wives and single mothers significantly 
increased all dimensions of their labor market work, including 
participation, weeks per year, and hours per week; and
     Their earnings also rose, though of course from a 
significantly lower base than men's earnings.
    Certainly, the increased labor market work and better earnings 
opportunities for women represent an important societal advance. But as 
these are families with children, it also represents a stress factor in 
families' lives, contributing to another dimension of the squeeze; the 
challenge of balancing work and family life. Middle-
income wives increased their participation by 11 percent, added 9 
weeks, on average, over these years, amounting to over 400 extra hours 
of working the paid labor market. That's about 2.5 months of full-time 
work, added to the family schedule.
    And while wives' earnings clearly helped to offset husbands losses, 
if we add their earnings together in these two periods, their real 
income rises by about $6,000 over about 30 years, or about 0.5 percent 
per year.
    There is another important point to consider regarding these data. 
As the figure above shows, middle-income wives hours have not grown 
since 2000, and in fact they fell by about 40 hours, 2000-7 (and 
further in the recession). The same is true (not shown) for low-income 
single mothers, though even more so (about 80 hours lost). Research has 
not determined whether this is a ``ceiling effect''--mothers have 
topped out on the amount of hours they can work given current family 
responsibilities and divisions of labor--or a function of weaker demand 
for the jobs and hours they'd like to work. But if more women, working 
more weeks per year and more hours per week at rising wages was a 
primary offset mechanism for stagnating men's wages, that route may not 
be as available to middle- and lower-income families going forward.

                        Table I--Labor Supply and Earnings, Middle-Income Married Couple
                           (Families With Children and Mid/Low-Income Single Mothers)
----------------------------------------------------------------------------------------------------------------
                                                                        Share
                                                 Earnings    Hours     work [in  Weeks per  Hours per    Hourly
                                                                       percent]     year       week       wage
----------------------------------------------------------------------------------------------------------------
Husbands:
    1977-79...................................    $36,150      2,059         95         49       44.3     $17.56
    2005-7....................................     35,343      2,109         96         50       44.0      16.76
    Change....................................       -807         50          1          1       -0.3      -0.80
----------------------------------------------------------------------------------------------------------------
Wives:
    1977-79...................................    $ 6,050        666         56         36       33.1     $ 9.07
    2005-7....................................     12,956      1,084         68         45       35.6      11.95
    Change....................................      6,906        418         12          9        2.5        2.9
----------------------------------------------------------------------------------------------------------------
Single Mothers, Average of Bottom 60 Percent:
    1977-79...................................    $14,017      1,115         70         40       37.3     $12.58
    2005-7....................................     18,594      1,386         78         45         38      13.42
    Change....................................      4,577        271          8          5        0.7       0.85
----------------------------------------------------------------------------------------------------------------
Notes: Data are from March CPS Surveys. Three-year averages were taken to smooth out volatility. Sample for
  husbands and wives, 25-54, parents of children under 18, middle-income fifth. Sample for single mothers same
  as above but data are for bottom 60 percent of families. Quintiles use cash income and have equal numbers of
  households.

                the middle class in the great recession
    As noted, for many in the middle class struggling with the 
challenges raised thus far in this testimony, the recession that began 
officially in late 2007 represented a new problem on top of an old one. 
Income that was stagnant during the 2000s fell steeply when the economy 
turned down. As Table 2 reveals, households lost between $2,000 and 
$3,000 in real 2009 dollars in just 2 years (data for 2010 is not yet 
available).

                     Table II--Middle Class Incomes in the Recession: Households Take a Hit
                                     (Median Household Income, 2009 Dollars)
----------------------------------------------------------------------------------------------------------------
                                                                                  African-
                                                              All       White     American   Hispanic    Asian
----------------------------------------------------------------------------------------------------------------
2007.....................................................    $51,965    $53,912    $35,086    $40,013    $68,382
2009.....................................................     49,777     51,861     32,584     38,039     65,469
Real Dollar Change.......................................     -2,188     -2,051     -2,502     -1,974     -2,913
Percentage Change........................................       -4.2       -3.8       -7.1       -4.9       -4.3
----------------------------------------------------------------------------------------------------------------
Source: U.S. Bureau of the Census

    For minority households, especially African-Americans, those losses 
came off of a lower base, so the percent decline--7 percent--was 
historically large (the second largest 2-year loss in a series going 
back to 1967).
    We can also use our data series on middle-income, prime-age 
families in this context. As shown in Table 3, earnings and hours 
worked fell particularly steeply for middle-income husbands, who lost 
an average $3,600 and 184 annual hours of work, the equivalent of over 
1 month of full-time work. Working wives did better than their 
husbands, but low-income single mothers also lost considerable ground, 
with a particularly sharp decline in their employment rates. This 
finding--why low-income single mothers lost more ground in the 
recession compared to middle-income wives--is worthy of further study. 
Putting aside child support, single mothers are by definition the sole 
breadwinners of their families, and these families are economically 
more vulnerable than most two-parent families.\4\
---------------------------------------------------------------------------
    \4\ Low-income, married women (e.g., wives for quintiles one and 
two) had work and earnings patterns over the recession that looked more 
like middle income wives than like single mothers.

 Table III--The Impact of the Great Recession on Middle- and Low-Income
                         Families With Children
------------------------------------------------------------------------
                                                                 Share
                                           Annual     Hours     work [in
                                          earnings              percent]
------------------------------------------------------------------------
Husbands:
    2007...............................    $36,149      2,118       96.2
    2009...............................     32,529      1,934       93.9
    Change.............................     -3,620        184        2.3
------------------------------------------------------------------------
Wives:
    2007...............................    $13,003      1,090       67.1
    2009...............................     12,944      1,066       67.4
    Change.............................        -59        -24        .03
------------------------------------------------------------------------
Single Mothers, (Bottom 60 Percent):
    2007...............................    $18,602      1,379       78.8
    2009...............................     17,157      1,279       74.2
    Change.............................     -1,445       -100       -4.6
------------------------------------------------------------------------
Notes: Data are from March CPS Surveys. Three-year averages were taken
  to smooth out volatility. Sample for husbands and wives, 25-54,
  parents of children under 18, middle-income fifth. Sample for single
  mothers same as above but data are for bottom 60 percent of families.
  Quintiles use cash income and have equal numbers of households.

              other dimensions of the middle class squeeze
    In my work with Vice President Biden on the White House task force 
on the Middle Class, we heard middle-class families discuss the kinds 
of basic income and inequality problems documented thus far. We also 
heard a good deal about working harder yet getting ahead more slowly.
    But more often than that, we heard the squeeze discussed in the 
context of how family budgets didn't seem to go as far as they used to, 
particularly in areas such as health care coverage and college tuition.
    These concerns are supported by the data. For example, according to 
BLS price data, overall inflation has grown by a factor of three since 
the late 1970s; college tuition and fees, according to their price 
index has grown by a factor of 10. It is true that student aid has 
grown over this period as well, a very important development that I'll 
discuss in a policy section below.
    Retirement is also less secure for many older persons. One 
important factor here is the shift away from defined benefit pensions 
to defined contribution, a change that shifts the risk of income 
adequacy in retirement from employers to workers and their families. As 
figure 4 reveals, there has been a complete reversal in share of 
coverage between a guaranteed and variable pension benefits.
    Finally, the cost of health coverage for middle-class families is 
another source of the squeeze. Data from the Kaiser Family Foundation 
(KFF) show that the share of family coverage paid by covered workers 
has been relatively constant at about 27 to 30 percent.\5\ But it is 
also the case that the cost of premiums has gone up much faster than 
middle-class earnings, meaning that families are paying a similar share 
of a larger amount. Census Bureau data show that median family income 
rose about 23 percent, not accounting for inflation, 1999-2009. 
According to KFF, the nominal premium costs of family coverage rose by 
134 percent over this period.\6\
---------------------------------------------------------------------------
    \5\ See http://ehbs.kff.org/pdf/2010/8085.pdf, Exhibit 6.1.
    \6\ See http://ehbs.kff.org/pdf/2010/8085.pdf, Exhibit 1.13.
---------------------------------------------------------------------------
        what are the policies that could help the middle class?
    This committee has long been committed to tackling many of the 
policy challenges implied by the data and discussion above. Here, I 
briefly list a few policy areas that could make a difference. I offer 
few specifics and more generally just point out areas worthy of more 
policy research.

     Retirement Security: Social Security, a guaranteed pension 
for retirees, is often the first line of defense in retirement 
security. Though it is often mistakenly thought to be unimportant to 
most seniors, in fact, for recipients age 65 and up, Social Security is 
about two-thirds of their income and that share grows with age--for the 
old-elderly, it's closer to 70 percent of their income. For a third of 
those over 65, Social Security accounts for at least 90 percent of 
their income.


    So protecting Social Security benefits is a key component of a 
retirement security agenda. Beyond that, increasing access to pension 
savings through work would help future retirees. The Obama 
administration has put forth various proposals to encourage pension 
participation and incentivize employer participation. Also, with 
seniors living longer, presenting retirees with annuity options is also 
worth a close look.
     Health Care: The Affordable Care Act was clearly targeted 
at helping to improve middle-class health care security, by lowering 
the growth of health care spending and premium costs relative to their 
expected trend. Analysis by the President's Council of Economic 
Advisors that by lowering the growth rate of health care costs, the 
real income of middle-class families in 2020 will be $2,600 higher than 
would otherwise be the case.\7\
---------------------------------------------------------------------------
    \7\ See: http://www.whitehouse.gov/assets/documents/
CEA_Health_Care_Report.pdf.
---------------------------------------------------------------------------
    In the near-term debate, however, it is very important to the 
middle class to protect the Medicaid program against deep spending 
cuts. Though Medicaid coverage is generally thought of as serving the 
low-income population, the program is the primary payer for 64 percent 
of nursing home residents. With savings and other insurance, middle-
class seniors may be able to initially pay for home health or nursing 
home services, but over time many spend their savings and eventually 
need Medicaid to step in, as Medicare provides limited coverage for 
these services.
     Support for College Tuition: As noted above, college 
tuition has significantly outpaced inflation and middle-class income 
growth. But the large increase in government tuition assistance in 
recent years has helped offset these costs for both middle-class 
(American Opportunity Tax Credit) and lower-income students (Pell 
grants). These measures can lower the net cost of tuition well below 
the ``sticker price,'' and in doing so, help relieve income-strained 
families.
     Jobs and Incomes: The ability of middle-income families to 
meet the challenges noted thus far, from saving for retirement, 
balancing work and family, paying for college and health care, and 
retirement security, will all depend on quantity and quality of jobs 
available to middle-class families. While it is beyond the scope of 
this testimony to discuss a jobs agenda policy set, the ideas that 
President Obama outlined in his ``winning the future'' agenda, 
including investments in new industries such as clean energy, 
infrastructure, and education should certainly help generate more 
opportunities.

    But there is much more for policymakers to consider in this area, 
including manufacturing policy (including aggressive pushback against 
unfair trade practices), a strong, efficient public sector, a balanced 
playing field for union organizing, appropriate workplace regulation to 
protect workers' safety and basic rights, decent minimum wage levels, 
and consumer protections.
    These types of ideas have the potential to form the basis of a new 
social contract, one that could once again give the American middle 
class a fighting chance to loosen the squeeze and regain their economic 
footing.

    The Chairman. Thank you, Mr. Bernstein.
    Ms. Sipprelle, welcome. Please proceed.

    STATEMENT OF SUSAN M. SIPPRELLE, MULTIMEDIA JOURNALIST, 
                         ENGLEWOOD, NJ

    Ms. Sipprelle. Thank you, Mr. Chairman, Ranking Member, and 
members of the committee, for giving us the opportunity to talk 
about ``Over 50 and Out of Work'' at this morning's hearing.
    For the past 16 months, filmmaker Sam Newman and I have 
traveled across the country using video to chronicle the 
stories of unemployed older Americans, almost all of them 
middle class. Sam is sitting at the press table in the tan 
suit.
    We have conducted 100 interviews with individuals who are 
currently jobless, including steelworkers, bankers, IT project 
managers, auto workers, carpenters, engineers, fishermen, and 
office workers. Their 3- to 7-minute videos can be seen on our 
Web site. But for today's hearing, we prepared a short video 
that includes 21 of our interviewees and highlights many of the 
issues revealed by our multimedia documentary project.
    Maybe we could show it now? It is 3 minutes long.
    [Video presentation.]
    Before I continue my oral testimony, which is an 
abbreviated version of our submitted written testimony, I want 
to clarify that our interviewees were not prescreened or 
preselected. Their powerful and moving eloquence about their 
lives and experiences is unrehearsed and unscripted.
    We focused the video you just watched on many of the issues 
that emerged out of our ``Over 50 and Out of Work'' multimedia 
documentary project--job loss and the erosion of job security, 
financial hardship, strained marriages and family 
relationships, foreclosure, lack of health insurance, 
dependence on children or on parents to help defray mortgage 
and living expenses, and the inability to pay for children's 
college education.
    The job search success rate of our 100 interviewees mirrors 
the results of an ongoing national unemployment survey that is 
being conducted by the Center for Workforce Development at 
Rutgers University. Only 7 out of our 100 interviewees have 
found full-time jobs with salaries comparable to what they 
earned previously. Most of our interviewees are severely 
underemployed, struggling to make ends meet, and approximately 
one-third are still without any job at all.
    Overall, our project dispels the myth that unemployed older 
workers are not trying to find jobs and prefer relying on 
unemployment insurance to survive. They prove to be persistent 
and resilient, but thwarted by the current dearth of available 
jobs.
    But the most powerful theme that emerges from our 
documentary project is the shock that older middle-class 
Americans experience when they realize that they are no longer 
set for life. The collapse of the housing and financial markets 
often eroded the values of their homes and savings even before 
they faced the dislocation and pain of losing their jobs.
    Now they are struggling to get back to work, trying to 
reinvent themselves and compete for job openings in a depressed 
labor market, while facing the double hurdles of age 
discrimination and a bias against the long-term unemployed. 
They are recalibrating their expectations downward, both for 
their own futures and for the future of their children and 
their grandchildren.
    They are fearful that they will not be able to hang on to 
their middle-class status, despite their desire and 
determination to work, and afraid that the American dream, 
which they worked very hard to achieve, is slipping away, both 
for themselves and for their families.
    [The prepared statement of Ms. Sipprelle follows:]
                Prepared Statement of Susan M. Sipprelle
    Mr. Chairman and members of the committee, since February 2010, 
filmmaker Samuel D. Newman and I have been traveling across the country 
using video to chronicle the stories of older unemployed Americans, 
almost all of them middle class. We conducted 100 interviews with 
individuals who are currently jobless, covering as broad an array of 
professions and occupations as possible, and we concentrated our 
interviews in States with the highest rates of unemployment.
    Out of these video interviews, we created Over 50 and Out of Work, 
a multimedia documentary project.
    All 100 3- to 7-minute interviews can be viewed on our Web site at 
www.overfifty
andoutofwork.com. A list of our interviewees' names and occupations, as 
well as their cities and States of residence, is attached (Appendix A).
    For today's committee hearing, we prepared a short video 
testimonial that includes 21 of our interviewees and highlights many of 
the issues revealed by our multimedia documentary project. Subsequent 
to today's hearing, we will add the testimonial to the Videos section 
of our Web site on the Documentary page. The names, occupations and 
cities and States of residence of our interviewees included in the 
testimonial are also attached (Appendix A).
                                context
    I never in my wildest dreams thought that at age 50 I'd be out of 
work for an extended period of time.--Tom Bertin, 50, industrial fluid 
power salesman, Rochester Hills, MI.

    Although the Great Recession was declared over in June 2009, the 
outlook for unemployed older middle-class Americans has evolved and 
become more complex, but it has not brightened. The collapse of the 
housing and financial markets often eroded the value of their homes and 
savings even before they faced the pain and dislocation of unemployment 
due to the economic downturn.
    When older workers lose their jobs, their homes and their financial 
security, they confront a vulnerable reality--they have less time than 
younger workers to recoup and regain their financial footing. Moreover, 
as their needs escalate and globali-
zation races ahead, government at all levels is cutting back on 
programs and services that could help them regroup and re-enter the 
labor force, which would not only help them personally, but would 
reduce fiscal pressures on the U.S. budget.
    The unemployment rate of 6.4 percent for workers 50 and over 
compares favorably to the national unemployment rate of 9.1 percent, 
but once older workers lose their jobs, they find it increasingly 
difficult to get rehired. The average length of time that older workers 
are jobless has been climbing since 2008 and now exceeds 12 months, 3 
months longer than the average time for all unemployed workers 
(Appendix B). Decades of structural changes in the U.S. economy, 
accelerated by the Great Recession, have resulted in the highest rate 
of unemployment among older middle-class workers ever recorded.
    The number of Americans who are 50-plus and jobless remains around 
3 million, but this figure does not take into account: workers who have 
dropped out of the labor market due to discouragement, individuals 
forced to claim disability payments or Social Security at the earliest 
possible date because they cannot find jobs to support themselves, and, 
last, the growing numbers of boomers who are seriously underemployed.
    Seven of our one-hundred interviewees have returned to work in jobs 
that provide salaries and benefits comparable to the compensation they 
received previously. Nine have gotten back to work in full-time 
positions where they are now paid one-half or less of their prior 
salaries.

    I'm making one-third, compared to what I used to make before.--
Joseph Wong, 60, IT specialist, Castro Valley, CA.

    Most of our interviewees, however, are now eking out a living by 
taking on one or two part-time jobs or by trying to redefine and market 
themselves as independent consultants.

    I'm currently part-time employed, still looking for other [work]; I 
need two jobs.--Mark Miller, 63, computer consultant, New Orleans, LA.

    Over one-third of our interviewees remain jobless.
    In sum, although most of our unemployed older workers have proven 
themselves resilient and adaptable to changing workforce conditions by 
learning new job hunting techniques, upgrading their skills, networking 
and volunteering (both to do good and build job connections), the 
outcome of their lengthy job search has not been rosy. Even if they 
found work, they have not been able to recoup the financial setbacks 
they suffered when they drew down their savings to tide them over while 
unemployed, and they can no longer count on retiring.

    The next 5, 10, 15 years of my life will be working my tail off. I 
don't anticipate retiring ever. I don't anticipate I'll be able to.--
Rick Peterson, 61, IT project management, Piscataway, NJ.

    We interviewed Carl Van Horn, professor of public policy and 
director of the John J. Heldrich Center for Workforce Development at 
Rutgers University, as an expert for our documentary project. Van Horn 
has been studying labor markets for 30 years and jointly authored The 
``New Unemployables'': Older Job Seekers Struggle to Find Work during 
the Great Recession.
    In May 2009, the Heldrich center surveyed unemployed workers of all 
ages and repeated the survey in August 2010. By 2010, one-third of the 
younger workers had been re-employed, a historically low success rate, 
Van Horn said. Of the older workers, only one-sixth had found new jobs, 
an even poorer outcome. Older workers who had gotten back to work had 
accepted lower pay. Half of the survey respondents were no longer able 
to afford health insurance. Overall, the job search outcomes for our 
Over 50 and Out of Work interviewees are slightly bleaker than the 
dismal results for the survey's participants.
                                 themes
    The most powerful theme that emerges from our documentary project 
is the shock and pain that older middle-class Americans experience when 
they realize that they can no longer depend on a comfortable future 
with a dependable job.

    That's basically what was instilled upon us--that you worked 30 
years in this mill--you're set for life.--Joe Magnone, 50, third 
generation steelworker, Weirton, WV.
    My journey is one that I didn't expect. I thought I would be able 
to retire from Panasonic.--Dan Sato, 53, consumer electronics 
marketing, Denville, NJ.
    I had 12 years of a job that I really, really liked every step of 
the way, and it hurt, it hurt a lot, to get that call to say--we're 
going to be letting you go.--Donna Jadis, 60, technical writer, 
Antioch, CA.

    They are frightened and often overwhelmed by the financial setbacks 
and consequences they encounter as a result of job loss.

    This is what we're looking at in 2009, when we got laid off: Our 
retirement is worth half of what it was last year; we have no equity, 
and we're upside down in our home, and we have all of these 
obligations, including, we have a daughter, who is going to be a junior 
in college.--Pam Buckley, 58, former restaurant manager, Berkley, MI.
    When I add all of those things [the consequences of unemployment] 
up in my personal situation, the damage to my wife and I is going to 
approach half a million dollars.--Stan Bednarczyk, 60+, engineer, 
Rockwood, MI.

    Fundamentally, our interviewees, who are all 50-plus, are 
struggling to understand and adjust to today's depressed labor market.

    It seems like you need to be very rich or very poor and not in the 
middle.--Deborah Denenfeld, 58, teaching artist, Louisville, KY.

    They are trying to cope with job loss, lack of job security, new 
methods of seeking and applying for jobs, living on reduced incomes and 
savings, cutting expenses and the potential need to upgrade their 
skills or educational levels. They are trying to figure out where job 
openings exist, both by location and industry. Their ability to 
relocate is sometimes constrained by their inability to sell their 
homes or because they are caring for elderly parents. They face 
daunting hurdles of age discrimination and a bias against the long-term 
unemployed. They are persistent and resilient, but troubled and worried 
about the future both for themselves and for their children and 
grandchildren.

    Essentially, whether you're an employee or a consultant, you're 
just a hired gun. It's just the way it is. And it's business. I 
understand that, but having grown up with a different thinking, where 
you keep your nose clean, you do your job, that's what it took, back 
then. Now, they'll just work you until they can't work you anymore, or 
they don't need you.--Bob and Maura Delpizzo, 56, Flanders, NJ.
    My oldest kids. . . . they even tell me that the end of the world's 
coming, even though I tell them no. It's just that there's no jobs out 
there, and they don't know what to do. They're grown kids and they're 
still living with me, and I have to provide for them.--Rudy Limas, 61, 
commercial truck driver, Woodburn, OR.
                   unemployment insurance and savings
    Our interviewees accept unemployment insurance to help pay their 
living expenses because they cannot find jobs. They deplete their 
savings and, sometimes, are forced to tap or use up their retirement 
funds to survive.

    The 17 months was long. A lot of our savings went. We had enough to 
keep us going, but, then, 17 months is a long time, and, if you're just 
getting unemployment--I only work part-time--that took all our 
savings.--Maurizio and Debbie Adami, 58, tool and die maker, Dearborn, 
MI.
    In that 17-month period, we had to live off of money that we had 
set aside that was supposed to be for retirement . . . For a while 
there, we were burning through our savings something fierce.--George 
Ross, 48, IT project manager, Livermore, CA.
    There's just not enough money anymore. As I said, my savings is 
pretty much gone. And it's becoming more stressful because I never 
thought I'd be out of work as long as I have.--George Dys, 60, product 
design engineer, Forestdale, RI.
    I do a part-time job, working 20 hours a week, doesn't even pay the 
mortgage payment. That's coming from a 401K, retirement money.--Albert 
Yasbick, 59, electrical engineering technician, Las Vegas, NV.
                             discouragement
    Almost all of our interviewees have been working since they were 
teenagers, and they are proud of their work history and 
accomplishments. They are stunned when they cannot find work, given 
their level of experience and their determination to get back to work.

    I've never not been able to find a job. I've always found one. I've 
never had a problem. . . . I've worked hard and long all my life, and 
not to be able to find a job now. It's hard.--Joan McCleskey, 58, 
former bank manager, Fort Myers Beach, FL.
    Many times, even if you are fortunate enough to get an interview, 
you just do not get any follow-up.--Marie Spalding, 62, school 
counselor, Louisville, KY.
    I'm in the same boat as everybody else here. Nobody calls you back. 
There's just so many people that's out of work.--Julie Taylor-Cooper, 
62, accounting manager, Conway, SC.
                          family relationships
    Our interviewees have suffered from the strains on family 
relationships that job loss and deteriorating financial stability can 
produce.

    I've been out of work for a little over two years now. My wife 
doesn't love me anymore; my kids don't love me.--Mike Risinger, 58, 
draftsman, Portland, OR.
    When I lost my job, it became very difficult to keep my house, and 
I eventually lost it. So, I'm renting a home, and I've separated from 
my family, and it's been a real struggle.--Anthony Lalos, sales 
representative, Las Vegas, NV.
                              foreclosure
    Eight of our interviewees have already lost their homes due to 
foreclosure or face the imminent threat of losing their homes. Many 
more now find that their homes are ``underwater''--the amount they owe 
on their mortgages exceeds the values of their houses.

    The condo I'm living in will be auctioned off tomorrow.--Rich 
Galipeau, 58, small business owner, Fort Myers, FL.
    I was unable to make my mortgage payments, so one way of keeping 
from going completely into foreclosure, I put it on a short sale, so 
they had to put it on the market to sell it. Not what I really wanted 
to do, but that was the only other option that I had, if I didn't have 
the money to catch up and continue.--Deborah Salim, 60, part-time grant 
writer, Conway, SC.
    The house across the street from this house just sold for less than 
what I paid for this house in 1989. . . . Yes, I own this house, but 
the bank owns it, but it's in my name. I'm still making mortgage 
payments on it. I have two roommates that help me out.--Mary Sironen, 
55, bartender, Las Vegas, NV.
                        lack of health insurance
    Lacking health insurance coverage is one of the most frightening 
consequences of job loss for our interviewees. More than one-third of 
our project interviewees cannot afford health insurance any longer. 
They defer routine healthcare and are left hoping that they do not 
become seriously ill.

    Health insurance is an issue. When I was laid off, naturally, I 
lost it and with the unemployment benefits that I am getting right now, 
health care is not affordable.--Stan Bednarczyk, 60+, engineer, 
Rockwood, MI.
    I do not have health benefits at this point in time. When I got 
laid off, I had to get a car, so most of my savings went to get a 
dependable car. When I allow myself, I am in fear.--Barbara Such, 55, 
call center engineer, Randolph, NJ.
    I'm upset about it because I feel I worked all these years and, 
now, I don't have no medical insurance. I can't afford it.--Julie 
Taylor-Cooper, 62, accounting manager, Conway, SC.
           dependence on children to help pay living expenses
    Several of our interviewees have to turn to their children to help 
pay their expenses, which is difficult for them to accept, although 
they are grateful for the assistance.

    My kids help. I'm not used to that. That's really difficult. I 
think that's probably the hardest part of the whole thing. I've always 
been the helper of the kids; they would always come to me, and so, now, 
it's hard.--Luanne Jones, 61, office worker, Glendora, CA.
    Our one daughter is still living in the house with us, which is a 
blessing for us, because instead of her paying money on an apartment 
and living by herself, she helps us keep the mortgage payments and food 
and bills taken care of.--Rick Peterson, 61, IT project management, 
Piscataway, NJ.
           dependence on parents to help pay living expenses
    Two of our interviewees have been forced to move back home with 
their parents, a difficult adjustment for adults who are 50-plus.

    I'm living with my father. I'm glad to be here. I'm glad we had a 
place to land.--Brian King and Jessica Goldstein, 53, retail banking, 
Pomona, NY.
    This is the house that I grew up in. My mother and I live together. 
She's 78 years old. She's going to be 79 this month, and she works 
full-time.--Lorraine de Masi, 52, 3D packaging artist, Floral Park, NY.
           inability to provide for their children's futures
    The impact of unemployment among older workers extends to their 
children because our interviewees can no longer provide for their 
futures in the way they had anticipated.

    The tough part right now is I got two daughters who are--well, I 
got one who wants to go to college next year. I don't know how she's 
gonna pay for it.--Mike Risinger, 58, draftsman, Portland, OR.
    Where we had before planned on him going to college, now he's 
thinking more and more seriously about going into the military, which 
is not a bad thing, but it's a recalculation from what he had 
originally thought his life would be like.--Bill Davis, executive 
recruiter, Myrtle Beach, SC.
                              conclusions
    Economic data alone cannot convey the multigenerational pain that 
unemployment and its repercussions have created among older middle-
class Americans. Some will never recover. Many of our interviewees talk 
about hunkering down and getting by, rather than about anticipating 
better times ahead. The traditional American expectation of a better 
future for themselves and their families has been upended, if not 
reversed.

    Since our opportunities came upon us after World War II, what are 
we leaving to our children? And the answer is--not very much and it's 
very concerning.--David Bowes, 64, IT senior executive, Wayne, NJ.
    We didn't grow up with scarcity, like my parents' generation, and I 
think that's major. And I think that's what this next generation is 
going to be dealing with.--Joel Nitzberg, 57, community educator, 
Somerville, MA.

    Surprisingly, despite the ongoing hardships that they encounter as 
a result of unemployment, our interviewees speak eloquently about their 
belief that we can solve the economic problems of the United States and 
restore the American dream for the middle class. They are determined to 
get back to work.

    It's about being able to compassionately understand the fact that, 
hey, we're all in this together. This is America.--Joe Magnone, 50, 
steelworker, Weirton, WV.
                           project background
What inspired Over 50 and Out of Work?
    In 2010, I formed Tree of Life Productions to create independent 
multimedia journalism and documentary filmmaking. The country had been 
plunged into the Great Recession, and I could see the long-lasting 
impact that the economic downturn was having on my peers, the boomers. 
Filmmaker Samuel D. Newman joined the project in February 2010, and 
Nikolia Apostolou took charge of the project's social media in late 
2010.
How did we find our Over 50 and Out of Work interviewees?
    We have collaborated with State and local employment agencies, 
unions, technical and community colleges and job support groups. We 
have also received many volunteers through our Web site.
    We did not pre-screen or pre-select our interviewees and their 
stories were not rehearsed or scripted.

                              Appendix A.--Over 50 and Out of Work Interviewees \1\
----------------------------------------------------------------------------------------------------------------
                Name                  Age         City, State                Job              Unemployed since
----------------------------------------------------------------------------------------------------------------
Dan Sato...........................     53  Denville, NJ..........  Marketing & E-         March, 2009
                                                                     Commerce.
Bob Delpizzo.......................     56  Flanders, NJ..........  IT Project Manager...  March, 2009
Patrick O'Donnell..................     57  Massapequa, NY........  Operations Manager,    May, 2009
                                                                     Trainer, Auditor.
Barbara Such.......................     54  Randolph, NJ..........  Call Center Engineer/  March, 2010
                                                                     Tech Trainer.
Rob Lotstein.......................     65  Montville, NJ.........  Sales & Leasing......  September, 2009
David Bowes........................     64  Wayne, NJ.............  Information            January, 2009
                                                                     Technology Executive.
Kathy Opthof.......................     62  Clifton, NJ...........  County Employee......  June, 2009
Dorothy Carlos.....................     68  Engelwood, NJ.........  Physician's Assistant  November, 2007
Brian King & Jessica Goldstein.....     53  Pomona, NY............  Retail Banker &        2009
                                                                     Teacher, English/
                                                                     Theater.
Stephen Murphy.....................     57  Massapequa, NY........  Sales, Printing        Unemployed 27 months
                                                                     Industry.
Valentina Janek....................     57  West Hempstead, NY....  Founder, Career        February, 2009
                                                                     Support Group.
Bob King...........................     55  Wantagh, NY...........  Controller             March, 2009
                                                                     (Securities), Price
                                                                     Verification.
Susan Kaye.........................     55  Valley Stream, NY.....  Pre-K Teaching         January, 2008
                                                                     Assistant.
Regis Thompson-Lawrence............     65  Hempstead, NY.........  Child Care Counselor,  June, 2006
                                                                     Non-Profit.
Lorraine de Masi...................     52  Floral Park, NY.......  3D Packagaing Artist.  October, 2008
Bill Fleming.......................     55  Little Chute, WI......  Floorer..............  February, 2008
Steve Ludes........................     53  Little Chute, WI......  Paper Mill Worker....  September, 2008
Alice Seifert......................     53  De Pere, WI...........  Paper Mill Worker....  January, 2007
Gary Willcox.......................     57  Green Bay, WI.........  Welder...............  February, 2009
Kevin Lincoln......................     58  Green Bay, WI.........  Paper Mill Worker....  Unemployed 27 months
David Garcia.......................     59  Sheboygan, WI.........  Factory Worker.......  February, 2009
Alan Balkema.......................     62  Washington, DC........  Co-Owner, Market       September, 2006
                                                                     Research Company.
Carol Morgan.......................     68  Washington, DC........  Artist...............  August, 2007
Rick Peterson......................     61  Piscataway, NJ........  IT Project Manager...  April, 2007
Steve Borton.......................     63  Valley Cottage, NY....  Sales, Data Storage..  January, 2009
Frank Pope.........................     57  Weirton, WV...........  Steelworker..........  Unemployed 9 months
Joe Price..........................     51  Weirton, WV...........  Steelworker..........  January, 2010
Joe Magnone........................     50  Weirton, WV...........  Steelworker..........  January, 2010
David Board........................     50  Weirton, WV...........  Steelworker..........  January, 2010
Gary Vinson........................     56  Pine Island, FL.......  Barge Captain........  December, 2008
Deborah Shane......................     60  Fort Myers, FL........  Entrepreneur.........  Unemployed 4 months
Rich Galipeau......................     58  Fort Myers, FL........  Small Business Owner.  .....................
Joan McCleskey.....................     58  Fort Myers Beach, FL..  Bank Manager.........  August, 2009
Gail Stangeland....................     56  Lehigh Acres, FL......  Event Planning &       November, 2007
                                                                     Floral Design.
Mary Eilola........................     60  New Hudson, MI........  Banking..............  January, 2010
Stan Bednarczyk....................    50+  Rockwood, MI..........  Engineer.............  January, 2009
Cynthia Maschat....................     57  Ypsilanti, MI.........  Government Worker....  July, 2009
Michael McClatchey.................     63  Plymouth, MI..........  Information            April, 2010
                                                                     Technology.
Maurizio & Debbie Adami............     58  Dearborn, MI..........  Tool & Die Maker.....  Unemployed 18 months
Wade & Mary Gingell................     50  Otter Lake, MI........  Skilled Tradesperson   October, 2008
                                                                     & Machine Operator.
Tom Bertin.........................     50  Rochester Hills, MI...  Sales, Industrial      June, 2009
                                                                     Fluid Power.
Pam Buckley........................     58  Berkley, Ml...........  Restaurant Manager...  January, 2009
Mirko Vitanoski....................     60  Sterling Heights, MI..  Machine Operator.....  March, 2007
Jerome Williams....................     67  Farmington Hills, MI..  IT Project Manager...  August, 2009
Ken Wadland........................     60  Albion, RI............  Software Development   Unemployed 19 months
                                                                     Expert.
Sheila Bliven......................     55  Woonsocket, RI........  Human Resources......  Unemployed 16 months
George Dys.........................     60  Forestdale, RI........  Design Engineer......  February, 2008
Rich Fuka..........................     50  Port of Galilee, RI...  President, RI          March, 2007
                                                                     Fisherman's Alliance.
Kelley Briggs......................     50  Cumberland, RI........  Banking..............  Unemployed 19 months
Anthony Lalos......................     53  Las Vegas, NV.........  Sales................  May, 2008
Edward Walker......................     56  Las Vegas, NV.........  Cook.................  June, 2010
Kimberly Gilek.....................     50  Las Vegas, NV.........  Lab Technician &       2008
                                                                     Phlebotomist.
Luis Martinez......................     66  Las Vegas, NV.........  Carpenter............  2005
Kathleen Smith.....................     52  Las Vegas, NV.........  Airline Customer       2008
                                                                     Service.
Linda Hebert.......................     61  Las Vegas, NV.........  Real Estate Marketing  January, 2008
Albert Yasbick.....................     59  Las Vegas, NV.........  Electrical             January, 2010
                                                                     Engineering
                                                                     Technician.
Mary Sironen.......................     55  Las Vegas, NV.........  Bartender............  .....................
Joel Nitzberg......................     57  Somerville, MA........  Community Educator...  October, 2008
Diane Young........................     51  Fairlawn, NJ..........  Empowerment Coach....  March, 2009
Jose Ambriz........................     57  La Puente, CA.........  Archiver & Data Entry  May, 2009
                                                                     Operator.
Lorraine Contreras.................     60  Pico Rivera, CA.......  Bookkeeper...........  November, 2009
Ramiro Flores......................     76  Whittier, CA..........  Sales Representative,  April, 2010
                                                                     Graphic Arts.
Luanne Jones.......................     61  Glendora, CA..........  Office Worker........  July, 2008
Darlene Palacios...................     54  Bellflower, CA........  Administrative         February, 2008
                                                                     Assistant.
Jose Valdez........................     64  Pico Rivera, CA.......  Printer..............  February, 2009
Mercedes Paez......................     69  Santa Fe Springs, CA..  Garment Worker.......  August, 2008
Virginia Montelongo................     55  Whittier, CA..........  Apartment Manager....  2008
Maria, Maria, Valentin.............    50+  Bakersfield, CA.......  Fieldworkers.........  .....................
Kathryn Balles.....................     57  Newport Beach, CA.....  Manager, Commercial    April, 2008
                                                                     Mortgages.
Joseph Wong........................     60  Castro Valley, CA.....  Information            Unemployed 9 months
                                                                     Technology
                                                                     Specialist.
Mike Boyd..........................     57  Tracy, CA.............  Teacher..............  2005
Sheila Cooper......................     53  Fremont, CA...........  Dental Lab Technician  June, 2010
Elizabeth Zima.....................     57  Calistoga, CA.........  Healthcare Writer....  2008
George Ross........................     58  Livermore, CA.........  Information            December, 2010
                                                                     Technology
                                                                     Specialist.
Donna Jadis........................     60  Antioch, CA...........  Technical Writer.....  2010
Janet Falk.........................     58  New York, NY..........  Public Relations.....  December, 2008
Bill Davis.........................     59  Myrtle Beach, SC......  Executive Recruiter..  .....................
Florentine Hunter-DeMontaignac.....     68  Myrtle Beach, SC......  Real Estate Marketing  2007
Deborah Salim......................     60  Conway, SC............  Part-time Grant        February, 2009
                                                                     Writer.
Willa Dean Weaver..................     68  Myrtle Beach, SC......  Office Worker........  2006
Craig Beaumont.....................     59  Conway, SC............  Music Industry         2009
                                                                     Consultant.
Julie Taylor-Cooper................     61  Conway, SC............  Accounting Manager...  January, 2009
Lou Angaran........................     68  Conway, SC............  Customer Service.....  January, 2009
Barbara Dixon......................     68  Hammond, LA...........  Receptionist.........  Looking for work,
                                                                                           retired
Jesus Anglero......................     72  Loranger, LA..........  Geophysicist.........  2009
Rick Barrett.......................     59  Hammond, LA...........  Veteran & Handyman...  .....................
Stanley Ferrand....................     59  New Orleans, LA.......  Painter..............  Underemployed since
                                                                                            Katrina
Mark Moore.........................     63  New Orleans, LA.......  Computer Consultant..  Underemployed since
                                                                                            Katrina
Kay Kusy-Eliassen..................     54  Portland, OR..........  Wine and Spirits       .....................
                                                                     Professional.
Peter Hansen.......................     51  Portland, OR..........  Food Industry Worker.  .....................
Mike Risinger......................     58  Portland, OR..........  Draftsman............  2009
Rudy Limas.........................     61  Woodburn, OR..........  Truck Driver.........  .....................
LeRoy Ellis........................     59  Woodburn, OR..........  Sea Captain..........  2008
Alfred Hummer......................     54  Portland, OR..........  Carpenter............  2007
Cheryl Cheney......................     60  Vancouver, WA.........  Social Worker........  April, 2011
Gary Sirianni......................     64  Portland, OR..........  Product Management,    2009
                                                                     Marketing.
Mark Chase.........................     58  Louisville, KY........  Sales................  January, 2010
Deborah Denenfeld..................     58  Louisville, KY........  Teaching Artist......  2009
Marie Spalding.....................     62  Louisville, KY........  School Counselor.....  .....................
Frank Kasdan.......................     57  Louisville, KY........  Small Business Owner.  .....................
----------------------------------------------------------------------------------------------------------------
\1\ Note: Interviewees whose names are in bold are included in the video testimonial.

 


    The Chairman. Thank you very much, Ms. Sipprelle, and for 
sharing the film with us.
    Now we will turn to Amanda Greubel from DeWitt, IA. Welcome 
to the committee, please proceed.

             STATEMENT OF AMANDA GREUBEL, DIRECTOR,

                FAMILY RESOURCE CENTER, CENTRAL

             CLINTON COMMUNITY SCHOOLS, DEWITT, IA

    Ms. Greubel. Good morning, Chairman Harkin, Ranking Member 
Enzi, and members of the committee.
    Thank you for inviting me to speak to you today.
    My name is Amanda Greubel. I am 32 years old, born and 
raised in Iowa. I have been married for 10 years today to my 
high school sweetheart, Josh. He is the high school band 
director in the same district where I am the Family Resource 
Center director. We have a 5-year-old son, Benen, and our 
second child on the way in December.
    Like a lot of American families, we have a lot of debt--
mortgage, two vehicles, and because we both have master's 
degrees, a lot of student loan debt. I have been invited here 
to speak to you today about my family and the families that I 
work with in my job.
    Until spring of 2010, Josh and I were both accustomed to 
working full-time jobs. During the 2009-10 school year, the 
State of Iowa cut education funding mid-year, which forced our 
district to make some difficult choices. In the end, my 
contract was partially cut to three-quarters time.
    As a result, our family lost $10,000 per year in income, 
and we considered ourselves lucky because we knew it could have 
been much worse. Ten thousand dollars might not seem like a lot 
to some people, but that loss of income required a complete 
financial, emotional, and spiritual overhaul in our family.
    Before the reduction, we followed a loose budget to make 
sure that our bills were paid and our needs were met, and then 
we spent what was left over as we pleased. We had just started 
a college account for our son and were looking at retirement 
options beyond our public employer retirement accounts.
    After my job was reduced, we cut back our cable, Internet, 
phone service. We cut back spending on restaurants, 
entertainment, groceries, gas, and clothing. In our new budget, 
every penny we make and every penny we spend is accounted for 
on paper.
    We realized quickly that living with so much debt is a 
liability in an unstable world, and so we set up a goal to pay 
off both vehicles and all of our student loans within 5 years, 
or at least as soon as possible. Every bit of income we have 
that isn't needed for bills goes toward that debt reduction 
effort.
    Let me give you examples of what all this means in real 
life, rather than in general terms, on a day-to-day basis. It 
means that even though I don't like Wal-Mart and I would rather 
shop at local grocers, I shop at Wal-Mart for groceries because 
that is where the lowest prices are.
    Sometimes the grocery money runs out before the end of the 
month, and then we have to be creative with what is in the 
cupboard. And that was a fun challenge at first, but the 
novelty wears off after a while.
    Anyone who has been pregnant or spent time around pregnant 
women knows that our appetites are random and changeable and 
that we get nauseated very easily. I don't feel like cooking a 
whole lot these days. The smell of raw meat is unbearable.
    But if my husband is working late, which he often does, and 
our restaurant money is gone, we are out of luck. My son ends 
up eating more cold cereal at dinner time than I care to admit. 
And he thinks it is wonderful fun, but I know that I am not 
doing the best I can for him.
    It means that most of our clothing comes from Goodwill, 
garage sales, and the clearance racks because we try not to 
spend full price on anything anymore. It means that when my son 
brought me the snack calendar for his classroom and I saw that 
that month was his week to provide snack for 15 classmates, I 
was scared because I knew it would stretch the grocery budget 
even further. And we didn't have roast beef or pork chops in 
our house that month.
    It means the only way we are able to have much of a 
vacation this year is through the generosity of a friend 
allowing us 4 days at his lake house for free.
    This past spring, our son was hospitalized for 3 days, 
resulting in $1,000 in out-of-pocket medical expenses beyond 
what our insurance covered. Then a problem with our roof 
required $1,500 in repairs. Even though we have been setting 
aside money every month for emergencies like that, we still 
didn't have enough. And so, we have spent the last few months 
catching up.
    And finally, this change in our finances meant giving very 
serious consideration to whether it was even a good idea for 
our family to have another child. Thankfully, life has a way of 
reminding us, through our son's brief illness and 
hospitalization, that some things are more important than money 
and that we will figure it out.
    Honestly, it is exhausting to live this way, making every 
decision based on how it will affect your finances, and every 
little bit of money spent has to be carefully considered. All 
we ever wanted was a little bit of security. We never had 
dreams of great wealth. We chose careers that inspire us, 
knowing that we weren't going to make a lot of money at those 
careers.
    We want security. We want a little bit of comfort. We want 
to know that our bills are paid, that our needs are met, that 
we can have a real vacation every once in a while, that our 
kids can pursue higher education without the burden of student 
loan debt that we have, and that we can choose to retire when 
we are ready and spend our final years together as we choose.
    When I think back to our adult lives, the gentleman 
mentioned the social contract, and it strikes me that we did 
everything we were always told to do to have the American 
dream. We finished high school. We went to college. We got 
married. We work hard. We pay our bills. We have no credit card 
debt. We waited to have children until we believed we were 
ready.
    We both got graduate degrees to be better at our jobs, make 
ourselves more marketable, and increase our worth as employees. 
We volunteer. We donate to help those in need, and we vote.
    We did everything that all the experts said we should do, 
and yet still we are struggling. And when you work that hard 
and you still sometimes feel like you are scraping, it gets you 
really down really quick.
    I have given you a picture of how my own family has been 
affected. However, my family is not the primary reason I have 
been here today. My family has been pretty fortunate overall. 
We have money to meet our needs and a few extras along the way. 
We don't have to choose between food and medicine or whether to 
pay the electric bill or put gas in the car.
    I am here today on behalf of the families I work with, the 
ones who have lost their jobs, their health insurance, their 
homes, and their hope for things to get better. If my family 
with two master's degrees is struggling, you can imagine how 
bad it is for other people.
    The past few years, our school district has seen our 
percentage of students on free and reduced lunch increase 
steadily. In a community that has a reputation of being very 
well off, over 30 percent of our elementary-level students 
qualified for that program this year.
    I have sat with parents as they completed that eligibility 
application, and they cry tears of shame. And they say things 
like, ``I never thought I would have to do this,'' and ``I have 
never needed this help before.''
    They worry that their neighbors will find out and that 
their kids will be embarrassed. And it is my job to reassure 
them that reaching out for help when you need it is no problem. 
It is not a shame. It is not anything to be embarrassed about. 
But it is a mindset that they have, that they are responsible 
for supporting their families.
    I help parents apply for the State Children's Health 
Insurance Program, and it kills me to tell them that there is 
no comparable program for them because they are equally in need 
of coverage. I have held women's hands through pregnancy 
terminations because they knew they couldn't afford to have 
another baby right now. I bought a week's worth of medication 
for a child when a gap in medical insurance came at a bad time, 
and parents didn't have the money to continue his medication.
    I have listened to a coworker tell about how her spouse 
lost his job several months ago and was slipping into a deep 
depression. He had finally stopped looking for work. He quit 
helping around the house, and he stopped parenting their child. 
So not only had she become the sole breadwinner, she had become 
a single parent as well.
    And I have worked with parents who lay awake at night, 
trying to figure out how to tell their children that Santa 
wasn't coming this Christmas because mommy lost her job.
    Even though economic experts use their nebulous measures to 
say that the current recession is over, there is an entire 
class of people who were lost before it even started and are 
still lost today. And when families are under financial strain, 
we see kids struggle in school. They have trouble focusing, and 
sometimes they develop behavior concerns that are really just 
an outward manifestation of their fear.
    Kids don't necessarily tell their parents when they are 
afraid because they see that their parents are stressed out 
enough already, and they don't want to make it worse. Sometimes 
their clothing becomes more tattered, and we see parents cut 
the toes off of tennis shoes to accommodate a few more months' 
worth of growth and let those shoes last just a little bit 
longer.
    When kids don't have enough to eat or they worry about 
losing their homes, they cannot concentrate on learning their 
math facts or their reading strategies. And in some cases, 
financial concerns lead to or exacerbate issues such as 
domestic violence, child abuse, substance abuse, and physical 
or mental health conditions. All of the things that are ailing 
our families right now are so interconnected.
    When we turn on our TVs, our radios, or pick up our 
newspapers, we read about what is going on in our Federal and 
State Governments, and we start to believe that you don't care 
about us. We hear that corporate welfare continues and that 
CEOs get six-figure bonuses at taxpayer expense, and we wonder 
who you are working for. And we look across the kitchen table 
at our families eating ramen noodles for the third time this 
week and wonder how that is fair.
    We read that the wealthy get bigger tax breaks in hopes 
that their money will trickle down to us, and then we turn the 
page and read about how our school districts are forced to cut 
staff again. We know that money talks around here, and that 
means you don't hear us.
    I hold out great hope that today's hearing is not the end 
of this conversation, that you will return to your States and 
you will ask other everyday Americans like me what they really 
need. I may have been called on to be the voice of struggling 
families today, but there are millions more out there who want 
and need to be heard by you.
    And I would ask that you not only listen, but that you then 
come back here and do something. Because it was your commitment 
and your passion for public service that brought you here in 
the first place. Please listen to them and listen to us.
    Thank you for the opportunity to be here today, and I look 
forward to any questions you have.
    [The prepared statement of Ms. Greubel follows:]
                  Prepared Statement of Amanda Greubel
    Good morning Chairman Harkin, Ranking Member Enzi, and members of 
the committee. Thank you for inviting me to speak with you today. My 
name is Amanda Greubel. I am 32 years old, born and raised in Iowa. I 
received my Bachelor's degree in Social Work from Wartburg College in 
2001, and my Master's degree in Social Work from St. Ambrose University 
in 2007. I have been a social worker for 10 years and have had the 
privilege of working with people of all ages, races, and socioeconomic 
circumstances.
    I am currently employed as the Family Resource Center Director for 
Central Community Schools in DeWitt, IA. The purpose of the Family 
Resource position is to work with families to meet students' needs 
outside of the classroom so that they can enjoy more success in the 
classroom. I coordinate an elementary mentoring program, summer 
enrichment programming, a grant program for children with disabilities, 
a Thanksgiving Food Basket program, and an ``Adopt A Family'' program 
at Christmas. I make referrals for health care, mental health care, 
utility assistance, housing, domestic violence services, clothing, 
health insurance, food assistance, and childcare assistance. And thanks 
to the generosity of my community, I have a donations account to help 
families in need with some concrete assistance such as school supplies, 
winter coats, gas vouchers, medication co-pays, electric bills, and 
emergency food baskets. I love my job; it's an honor to be able to 
assist so many of our local families in so many different ways.
    I have been married for 10 years to my high school sweetheart, Josh 
Greubel. Josh and I have known each other for most of our lives. We 
began dating in high school, continued through college, and got married 
a month after I graduated in 2001. Josh has both Bachelor's and 
Master's degrees in Music Education and is the High School Band 
Instructor in the same school district where I work. We have a 5-year-
old son Benen and our second child is due in December. Like many 
American families we have a mortgage, two cars, and (with two Master's 
degrees in the household) a lot of student loan debt.
    I have been invited here today to speak to you about my family and 
the families I work with every day who have been profoundly affected by 
the long-term changes in our economy. Until spring of 2010, Josh and I 
were both accustomed to working full-time jobs. As the economy began to 
slide, we knew that our jobs could be in danger as States brought in 
less revenue and cut spending on education to balance the budget. 
During the 2009-10 school year, the State of Iowa cut education funding 
mid-year, which forced our district to make some difficult decisions. 
We collectively held our breath as the administration met behind closed 
doors. In the first round of proposed cuts, my position would have been 
reduced to half-time. My husband would have lost portions of his 
contract as well. Combined, this meant a loss of almost $30,000 
annually in our household. We were distraught, and in those few weeks a 
lot of tears were shed in our home. In the end when the district 
finally figured out where they stood financially, my husband's entire 
contract was restored, and mine was partially restored to \3/4\ time. 
As a result our family lost $10,000 per year in income; we considered 
ourselves lucky.
    Though $10,000 might not seem like much to some people, the loss of 
that income required a complete financial, emotional and spiritual 
overhaul in our family. Everything about how we managed our money 
changed. Before the reduction, we followed a loose budget to ensure 
that all our bills were paid, and spent what was leftover as we 
pleased. We had just started a college account for our son and were 
looking at options for retirement savings in addition to our public 
employee retirement accounts. After my job was reduced, we examined our 
budget and reduced or cut all unnecessary spending. We cut back our 
cable, Internet, and phone service. We cut back on spending for 
restaurants, entertainment, clothing, gas, and groceries. We set up a 
new budget and new financial goals. In the new budget, every penny we 
make and spend is accounted for on paper. We realized that living with 
so much debt is a liability in an unstable world so we set a goal to 
pay off both vehicles and all student loans in 5 years, or at least as 
soon as possible. Every bit of income we have that is not needed for 
bills or necessities is used as extra payment on those debts.
    These are pretty general descriptions, so let me give you some 
examples of what all of this means in real life, on a day-to-day basis. 
It means that even though I don't like WalMart and would rather support 
local grocers, I buy groceries at WalMart because the prices are lower 
there. Sometimes the grocery money runs out before payday, and then we 
have to be creative with what we have in the cupboards until we get 
paid again. At first this was sort of a fun challenge, but the novelty 
wears off after a while. Anyone who has been pregnant or spent time 
around pregnant women knows that our appetites are random and 
changeable, and that the nausea can strike at any moment. I don't feel 
like cooking much these days and the smell of raw meat is unbearable, 
but if my husband is working late and the restaurant money is gone we 
are out of luck. My son ends up eating more cold cereal at dinnertime 
than I care to admit. He thinks it's wonderful fun, but I know I'm not 
doing my best for him.
    It means that most of our clothing now comes from Goodwill, garage 
sales, or clearance racks. We try not to pay full-price for much of 
anything anymore. It means that when my son brought me the snack 
calendar for his classroom last year, I cringed when I saw that it was 
his turn to bring snacks for a week for his 15 classmates. I knew that 
it would further stretch the grocery budget. There were no roast beef 
or pork chops at our house that month. It means that the only way we 
were able to have much of a vacation this year is through the 
generosity of a friend allowing us 4 days at his lake house for free.
    This past spring our son was hospitalized for 3 days, resulting in 
$1,000 in out-of-pocket medical expenses. This month a problem with our 
roof required $1,500 in repairs. Even though we'd been setting aside a 
little money each month for medical expenses and home repairs, we 
weren't prepared enough and have spent the last few months catching up. 
And finally, this change in our finances meant giving very serious 
consideration to whether having another child was really the best 
choice for our family. Can we afford daycare, diapers, medical 
expenses, and all the other costs of an infant now? Thankfully our 
son's brief illness and hospitalization reminded us that some things 
are more important than money and that we would find a way to make it 
work.
    It means that every penny spent requires thought and planning and 
every decision made must be carefully considered in terms of its 
financial implications. Do we have money set aside for this? If we 
spend it now, will we have what we need for later? Could we get it for 
less somewhere else or at a later time? Is this really something we 
need? And if we have an unexpected expense, where can we pull that 
money from? College and retirement savings aren't even on the radar at 
this point, though hopefully that will change for us someday. Quite 
honestly, it's exhausting physically and emotionally to live this way. 
My husband and I didn't have dreams of great wealth. We never expected 
to have summer homes or expensive cars or vacations on the Riviera. We 
chose careers that inspire us, knowing that we would never make six 
figure salaries. All we have ever wanted is security and a little 
comfort: to know that our bills are paid, our needs are met, that we 
can have a real getaway every now and then, that our children can 
pursue higher education without the burden of student loan debt, and 
that someday we can retire and enjoy our final years together in the 
way we choose.
    When I think back over our adult lives, it strikes me that we did 
everything we were always told to do in order to have the American 
dream. We finished high school, went to college, and got married after 
graduation. We work hard, pay our bills, and have no credit card debt. 
We waited to have children until we believed that we were emotionally 
and financially able to do so. We both got graduate degrees to be 
better at our jobs, make ourselves more marketable, and increase our 
worth as employees. We volunteer, donate to help those in need, and 
vote. We did everything that all the experts said we should do, and yet 
still we're struggling. When you work as hard as we have and still 
sometimes scrape for the necessities, it really gets you down.
    I've given you a picture of how my own family has been affected by 
the economic downturn and explained some of the difficulties we have 
had. However, MY family is not the reason I am here today. 
Circumstances beyond our control led to some tough times, but from this 
situation we were able to make some positive changes--better money 
management, clear financial goals, and a shift in priorities that put 
our family back at the top of the list. We have health insurance 
coverage and paid sick time through work. My family has been 
fortunate--we are still able to meet our needs and have a few extras 
from time to time along the way. We don't have to choose between food 
and medicine or whether to pay the electric bill or put gas in the car.
    I am here today on behalf of the families who truly need your help, 
the families who have lost their jobs, their health insurance, their 
homes, and their hope for things to get better. If my family with two 
Master's degrees is struggling, you can imagine how difficult things 
are for many others. The past few years our school district has seen 
the percentage of students on free or reduced lunch increase steadily. 
Over 30 percent of our elementary-level students qualified for the 
program this year. This is in a community with a reputation of being 
well-off. I've sat with parents as they completed the eligibility 
application, held their hands as they've shed tears of shame. They say 
things like, ``I've never needed any help like this before'' and ``I 
never thought I'd have to do this.'' They worry that their neighbors 
will find out and that their kids will be embarrassed. I reassure them 
that there is no shame in asking for help when you need it. I help 
parents apply for the State Children's Health Insurance program for 
their kids and cringe when I have to explain that there is no 
comparable program for them, the parents who are equally in need of 
coverage. I've held women's hands through pregnancy terminations 
because they can't afford another child right now. I've bought a week's 
worth of medication for a child when a gap in insurance came at a bad 
time and his parents didn't have the $172 to pay for his medicine. I've 
listened to a coworker tell how her spouse who lost his job several 
months before was slipping into a deep depression and had finally 
stopped looking for work, helping around the house, or parenting their 
child. Not only had my coworker become the sole breadwinner, but she 
had essentially become a single parent as well. I've felt lucky to 
offer a temporary solution for parents who, following a job loss, 
stayed up at night worrying about how to explain to their kids that 
Santa wasn't coming this year because Mommy lost her job.
    Even though economic experts use their nebulous measures to say 
that the current recession is over, there is an entire class of people 
who were lost before it officially started and are still lost today. 
They're used to working for everything they have and being self-
sufficient. For their entire adult lives they've taken care of their 
families themselves, and we all know that there is pride in being able 
to do that. These people continue to be proud even as their 
circumstances change, which makes asking for help difficult or even 
impossible. And based on my experience, the children are generally a 
reflection of what is happening in the family despite parents' best 
efforts to hide their worry. When the stability of the family is 
compromised due to financial strain, we see kids struggle in school, 
have trouble focusing, and develop ``behavior concerns'' that are 
really an outward manifestation of their fear. Kids don't necessarily 
tell their parents that they're afraid, because they know their parents 
are stressed out already and they don't want to add to the strain. 
Clothing becomes more tattered and sometimes parents cut off the toes 
of a child's tennis shoes to accommodate a few more months of growing 
feet. When kids don't have enough to eat or worry about losing their 
homes they can't be expected to concentrate on learning math facts. In 
some cases financial concerns lead to or exacerbate issues such as 
domestic violence, substance abuse, and physical or mental health 
conditions. So many of the things ailing our families are 
interconnected.
    In addition to job loss there are many factors that are further 
squeezing families. Health care costs are high for those who have 
insurance coverage and impossible for those who don't. Gas prices eat 
up a large percentage of income for people who have to drive several 
miles to work in rural areas like mine. Grocery prices mean that 
families choose between eating what's healthy and eating what's 
affordable. And to add insult to injury, families who are scraping by 
every day see no real relief in sight. When we turn on our TV's, our 
radios, or pick up our newspapers and read about what is going on in 
our State and Federal Governments, we start to believe that you don't 
care about us. We ask ourselves who our government is truly serving? We 
hear that corporate welfare continues and CEO's get six-figure bonuses 
at taxpayer expense, and we look across the kitchen table at our 
families eating Ramen noodles for the third time this week. We read 
that the wealthy get bigger tax breaks in hopes that their money will 
``trickle down'' to us, then turn the page and read about how our 
school districts are forced to cut staff--again. We hear about the 
scandals and the arguing and the backroom deals. We know that money 
talks around here, and that means you don't hear us.
    I appreciate this committee's interest in these issues and 
willingness to listen to me today. I hold out great hope that this is 
not the end of this discussion, that you will return to your offices 
and your States and you will continue to ask everyday Americans like me 
what they really need. And then I hope you will act on what you hear 
and remember your passion for service that brought you to our Nation's 
Capitol in the first place. I may have been called on to be the voice 
of struggling families today, but there are millions more out there who 
want and need to be heard by you. Please listen.
    Thank you for the opportunity to be here today and I look forward 
to any questions you may have.

    The Chairman. Thank you very much for a most moving and 
eloquent statement.
    Ms. Greubel. Thank you.
    The Chairman. Very, very eloquent.
    Now we turn to Mr. Clements. Mr. Clements, welcome to the 
committee, please proceed.

 STATEMENT OF THOMAS CLEMENTS, FOUNDER, OILFIELD CNC MACHINING 
                       LLC, BROUSSARD, LA

    Mr. Clements. Thank you, Chairman Harkin, for this hearing.
    And thank you, Senator Enzi, for the invite to share my 
story.
    I would hope my story shows the passion and dedication my 
wife and I have in our pursuit of the American dream and of 
life, liberty, and the pursuit of happiness. These were all at 
our reach before the moratorium.
    We had projected plans and future goals within our reach. 
We were successful business owners. We were living our American 
dream. We enjoyed freedom as a result of the fruits of our hard 
labor. We felt like we could change the history of our family 
lives forever. Those were our hopes and our lives before the 
moratorium.
    Today, after the moratorium, we are only in pursuit of 
survival. There is no future plans whatsoever of any kind. Our 
revenue dropped last year 55 percent from 2009 revenues, just 
like many other companies all across the Gulf States. And this 
year, our revenues are down 85 percent from 2009, 85 percent.
    We lost all the employees we had and are running the 
business ourselves as husband and wife, a two-person shop. We 
have lost 2 years of time and productivity due to the 
moratorium and the continuation of the ``permitorium.'' We ask 
ourselves today are we to trust our Federal Government anymore 
to partner with us in our pursuit of life, liberty, and 
happiness? We ask why has the Government become a player, not a 
partner in our business?
    We don't want or need political answers to these questions. 
We want and need action from the Federal Government to put 
American energy workers like me and thousands of others back to 
work.
    We are running out of hope. You, the members of this 
committee, offer us hope. Maybe one of you can convince the 
Administration to take action. Perhaps it takes the entire 
committee. Or maybe the Senate could take action to put 
American energy workers back to work.
    Immediately putting the American energy workers back to 
work should be one of the easiest tasks before Congress. It is 
one of the most important. But we need action. The words and 
hollow promises will no longer work.
    Frankly, I was appalled with the President's speech in 
Brazil. I don't understand how anyone can consider it good 
policy to borrow money to loan to Brazil so that country can 
drill offshore and provide good-paying jobs for their people. 
Even more disheartening was the part where the President says 
he wants America to be their best customer.
    If the energy industry is good enough for Brazil, why isn't 
it good enough for America and its workers? The President 
disappointed every single energy worker with that comment, and 
I expect many of you were concerned as well.
    I wish he were more positive about our energy industry and 
the great things that are happening in our industry. For 
instance, Exxon just discovered a huge reserve of oil in the 
Gulf of Mexico, just waiting for American energy workers to 
extract. And the industry just produced a state-of-the-art cap 
that would ensure that a spill that happened in the Gulf never 
happens again.
    These are great news stories, but we have heard nothing 
from the President. So today I am asking you, the U.S. Senate, 
to pass the three bills from last month--H.R. 1229, 1230, and 
1231--previously passed by the House, which would ensure the 
American energy workers return to work in the Gulf. Putting the 
Gulf Back to Work Act, which ends the Administration's de facto 
moratorium in the Gulf of Mexico in a responsible, transparent 
manner by reforming current law to improve safety and setting 
firm timelines for considering permits to drill.
    Recently, I heard of a new bill that was just passed, H.R. 
2021, Jobs in Energy Permitting Act. I believe Senator 
Murkowski introduced a similar bill in the Senate. Yes, the 
President may veto these plans, but your override would send a 
strong message. A strong message that Congress supports 
America's energy industry and its workers.
    I am ready to go back to work now, but I need your help.
    Thank you.
    [The prepared statement of Mr. Clements follows:]
                 Prepared Statement of Thomas Clements
    My name is Thomas Clements. I live in Youngsville, LA, with my 
wife, Melissa. We are owners of Oilfield CNC Machining LLC., a machine 
shop in Broussard, LA.
    We have been married for over 6\1/2\ years and have three grown 
children.
    CNC stands for ``Computer Pneumatic Controls.'' I have been a 
skilled CNC machinist for 24 years. And for the past 24 years, I've 
always worked long hours and, for the most part, lived paycheck to 
paycheck.
    My wife, Melissa, has spent the past 23 years working in the 
accounting field. Before we married in 2005, she was a single mother 
who had gone through Chapter 11 bankruptcy. She was working full-time, 
and her income was supplemented by rental properties she retained after 
the bankruptcy. But she worked very hard to keep up with the payment 
schedule from the bankruptcy in order to eventually pay off her debts.
    I am sharing this with you so that you can better understand how it 
is that we became small business owners. Neither of us was born with 
silver spoons in our mouths; both of us worked long hours, and together 
we invested an enormous amount of sweat equity into finally becoming 
small business owners.
    Over a period of 3 years, we carefully planned our finances to the 
dollar. My wife was successfully discharged from Chapter 11 bankruptcy. 
We paid off our cars and we saved everything we could in the hope that 
someday soon we could own our own business.
    One day 4 years ago, a customer at the machine shop where I was 
employed approached me about a need he had for an additional machine 
shop. He was looking for someone with my skill set to take on a 
significant amount of new work.
    My wife and I saw this as an opportunity to build our own business 
and live the American Dream, and we took the chance of a lifetime. We 
only had one customer, but that customer had as much work for us as we 
could handle.
    We put in a bid for a $320,000 job and won, and we immediately went 
out and leased a building and began purchasing the tools and supplies 
that we needed to open our shop. We sold most of our assets, and we re-
financed our house in order to come up with the down payment on a 
critical piece of machinery that we needed to get off the ground.
    We didn't have enough cash to purchase the tools and supplies we 
needed to open, but our customer agreed to give us an advance payment 
of $80,000, and that was enough to get us off the ground.
    We took enormous risks, but we felt confident that as long as 
America had a demand for energy, we could make a living in the 
development of America's energy resources.
    So on December 3, 2008, we opened our doors for business.
    Our first year, 2009, was a very successful year. We put all of our 
profits back into our business and caught up on all of our debts. We 
still couldn't afford to hire any help at that time, so I worked 
approximately 18-20 hours a day. I even slept on the couch in the shop 
in order to keep the machine working around the clock.
    After 6 months, our customer offered to lease a machine to us that 
they owned. It was an opportunity for us to grow and expand, so we 
agreed to take another risk and leased the machine. When we could 
afford it, I hired someone to work on the weekends and someone to work 
with me during the week. Eventually we hired a cleaning lady and a yard 
maintenance worker.
    The following year, 2010, started out the same as 2009 did--we were 
very busy, and we were excited as we planned for another successful 
year. As our business grew, we drew up plans to purchase our own 
building, more machines and hire more workers. We had purchase orders 
for work through the first week of June and verbal commitment for 
orders for the rest of the year.
    But in April 2010, the BP oil spill happened, and 11 oil rig 
workers lost their lives very tragically. We have the deepest 
sympathies for their families and loved ones. We know that they were 
hardworking people just like us, and some bad decisions unnecessarily 
cut their lives short.
    For us, everything changed. That's the first time I heard the 
President utter the word ``moratorium.'' On May 27, the President spoke 
of a moratorium that would last 6 months. That shocked us all. Two days 
later, I received an email stating that ``all of our orders for the 
remainder of the year were cancelled.'' By the first week of June, we 
were out of work, and everyone we knew in the industry was also out of 
work.
    At that time we had approximately $80,000 in the bank and $12,000 
in expenses each month--monthly notes, insurance and utilities. We 
unwillingly had to lay off all of our employees and began making plans 
to stretch our income through the 6-month moratorium. We went 5 months 
without a penny of income and no work orders.
    In October 2010 the President announced that the moratorium was 
lifted. We were relieved, to say the least, and we were eager to go 
back to work.
    But no work orders came in.
    Later we learned that the Interior Department stopped issuing 
drilling permits without any explanation. They claimed that it was 
because of a safety issue. And we couldn't understand why, after 50 
years of safe drilling, an entire industry had to be shut down because 
of the actions of one bad actor. That doesn't happen in the airline 
industry, or the rail industry, or the automotive industry.
    The oil spill was caused by bad decisions made by BP's top 
executives. A Federal court found the Interior Department in contempt 
of court, but still there was no action by the Interior Department. No 
new permits were being issued.
    This country has borrowed money from other countries to loan Brazil 
$2 billion to drill offshore and the President says that ``we will be 
their best customer.''
    Since the 2010 elections, the House of Representatives has at least 
tried to do something to get the oil field industry working. I have 
seen nothing pass the Senate as far as pushing to get permits issued 
and getting the offshore industry back up and working in full speed. 
Congress must act quickly to help our industry get back to work. We are 
tired of watching the work and the skilled workers move overseas, while 
untapped resources are right here in our own waters. We have even 
considered moving our business to Brazil, but we do not want to do 
that.
    In the past 6 months, we've received a few small jobs, which were 
enough to barely keep our business from shutting down. But that status 
quo is unsustainable. We will be forced to shut our doors permanently 
unless American energy production resumes in the Gulf. And there are 
many, many more small businesses in the Gulf that are in the exact same 
situation as us.
    Owning our own business and working to produce American-made energy 
in the oil field industry is our American Dream.
    We believe that the government's role is to protect our country and 
encourage American workers to develop our natural resources. But 
instead, our government seem to be doing more to support foreign 
workers develop energy sources abroad.
    I'm here today because our Nation needs energy, and thousands of 
energy workers like me are willing and able to help produce that energy 
right here at home. Mr. Chairman and members of this committee, please 
let us go back to work.
    Thank you.

    The Chairman. Thank you very much, Mr. Clements.
    And thank you all for your very moving testimonies.
    We will start a round of 5-minute questions.
    First, Ms. Greubel, thank you very much for your very 
moving statement. With no slight to anyone else who is here or 
other previous witnesses we have had, I think that is one of 
the most eloquent statements about the plight of the middle 
class and what really is happening to families out there that I 
have ever heard.
    Ms. Greubel. Thank you.
    The Chairman. I am also told, today is your wedding 
anniversary----
    Ms. Greubel. Yes.
    The Chairman [continuing]. So thank you for being here 
today. I hope you make it home in time tonight. So happy 
anniversary.
    Ms. Greubel. Thank you.
    The Chairman. I understand your 10th?
    Ms. Greubel. Yes.
    The Chairman. Congratulations.
    One of the points you made in your testimony is that you 
did everything you were supposed to do to reach the American 
dream, yet you say--and you said it in your statement and also 
verbally that, ``When you work as hard as we have and still 
sometimes scrape for the necessities, it really gets you 
down.''
    I am also aware of studies that have been done by the 
Centers for Disease Control and Prevention and other entities 
about the rising incidence of depression in the United States 
and how it does in many ways track the recession that we have 
had and people out of work. It is the kind of depression that 
just slows people down because in many ways they have tried to 
find jobs. They can't find them. You mentioned that yourself.
    I just wonder if you could elaborate on that. Now, you deal 
with a Family Resource Center. You deal with people that, as 
you say, a lot of them don't have jobs, or they had them and 
they don't have them now.
    Ms. Greubel. Right.
    The Chairman. And they are really at the end of their rope. 
Do you see much depression, and do you see this kind of working 
on families?
    Ms. Greubel. I think access to mental healthcare is one of 
the biggest barriers that families face. I think depression, a 
lot of times, is triggered by, No. 1, not feeling like you have 
any worth or you have any use to your society. And that happens 
when you don't work. You don't feel like there is anything 
worthwhile that you are able to do to contribute.
    And in addition to that, I think anyone who has kids knows 
that not being able to take care of your children on your own, 
not being able to provide for them, not being able to meet 
their needs is terribly, terribly distressing as a parent. And 
especially as this goes on for long periods of time, parents 
start to lose sight of the reasons that they can't do that, and 
they start to feel like failures.
    And so, I absolutely think that we see a lot of mental 
health concerns--depression, anxiety, all of those things that 
are tied to financial issues.
    The Chairman. How does that affect the children? What 
happens--you mentioned that kids don't study very well. They 
start falling behind. Do you see that happening?
    Ms. Greubel. Yes. Children, like I said, a lot of times, 
they see their parents very worried about what is going on. 
They know that their parents are concerned about keeping the 
house. They know their parents are concerned about putting food 
on the table. And even at a very young age, they know that if 
they are worried that adds stress to their parents. So they 
don't want to tell their parents that they are worried.
    I have kids coming into my office who just break out and 
cry in the middle of class, and the teacher brings them to me 
and says, ``I don't know what is going on, and they won't tell 
me.'' And sometimes I have a little bit different insight into 
what is going on with the family than the teacher does. And so, 
sometimes I can ask some of those questions to bring that out.
    But I ask, ``Have you talked to your parents that you are 
scared?'' ``No, because they are already stressed out, and I 
don't want to make things worse.''
    But we see kids have trouble concentrating. We see kids 
start to act out because they just don't know how to handle 
those very adult issues that are going on. And I certainly 
don't blame the parents for not addressing that with their kids 
because they are trying to handle it on their own, too.
    The Chairman. One of the topics we deal with regularly in 
this committee is pensions. I have been having some hearings. 
We are going to have more on pensions. Unfortunately, what we 
know is that the majority of Americans are woefully unprepared 
for retirement.
    In your testimony, you talk about how difficult it is to 
save for retirement, save for your kids' education, putting 
food on the table, gas in the car. You are a public employee in 
Iowa. So you are in the Iowa Public Employees Retirement 
System, I assume.
    Can you give us a sense of how important earning that 
pension benefit is to you? Where would you be if you did not 
have that kind of a pension program out there for you?
    Ms. Greubel. Kind of a safety net. Well, I can tell you 
that college savings and retirement savings for my family 
aren't even on the radar right now. And knowing that we have 
IPERS, our public employees retirement system, that gives us a 
little bit of sense of hope that we will have something when we 
are ready to retire, but there have also been a lot of talk 
about making changes to that and reducing the percentage of 
income that that will provide to people.
    Even that isn't secure, and we know that. And we know, most 
of the employees know that you have to have something else.
    The Chairman. My time has run out. Thank you very much, Ms. 
Greubel.
    I have more questions for Mr. Bernstein and Ms. Sipprelle 
and Mr. Clements. I will do that on the next round.
    Ms. Greubel. Thank you.
    Senator Enzi. Thank you, Mr. Chairman.
    Mr. Clements, I want to thank you for testifying today. I 
know that you had to close your shop for 2 days to make this 
trip, and I know that that is tough in any business. But I 
really appreciate you going to that effort to do it.
    Your business and your work doesn't involve directly 
drilling for oil, but it has still been decimated by the 
drilling ban and the 
refusal to grant permits. What other types of businesses in 
your area have been negatively affected by this collapse of the 
industry?
    Mr. Clements. Senator Enzi, there has been several. We have 
supply companies that we buy our supplies through. Truck 
drivers that actually bring it to you. You know, you have your 
local restaurants where people are scaling back on their cost-
of-living and stuff. Insurance, people are not buying life 
insurance anymore.
    There has been a number of different businesses all 
throughout the area, and it is just incredible.
    Senator Enzi. How did you obtain the skills and the 
knowledge to become a computer pneumatic controls machinist?
    Mr. Clements. It was something that I started 25 years ago, 
started out with a manual lathe. The passion and the excitement 
that I have for being a machinist is something that you take a 
blueprint, and you make parts. And then there are other 
machinists involved, and it is kind of like putting together an 
engine.
    You machine all these parts, and it had to be perfect. You 
put this engine together, and then you watch it start up and 
run. And for some reason, it is an excitement to see that, and 
it is also a camaraderie because engineers spend so much time 
putting these blueprints together.
    Sometimes they spend a year or two designing and building 
parts, and then you become part of that process. And for me, 
that is where the passion comes from and the excitement. So it 
is a great trade.
    Senator Enzi. From your testimony, I can see that you have 
been involved in the manufacturing world for 24 years now.
    Mr. Clements. Yes.
    Senator Enzi. Would you recommend that field to young 
people that are just starting out?
    Mr. Clements. Absolutely. Absolutely. Especially young guys 
that are in high school that are in wood shop and stuff like 
that, mechanic shop, stuff like this. This would be a field for 
them that they can get into. There is journeyman's program 
where you can actually be certified as a journeyman and go on 
to have a good paying job.
    So, yes, I do recommend it.
    Senator Enzi. What is going to happen to your business and 
to you and your wife if the drilling in the Gulf doesn't return 
to what it was before? I heard you say that you had an 85 
percent loss of revenue--and I know you can't operate on 85 
percent loss in any business. So what is going to happen to 
your business and similar businesses?
    Mr. Clements. Well, what would happen, we would eventually 
have to close our doors. I mean, it is tragic. Maybe we need to 
learn Portuguese or learn Spanish and go to another country. I 
mean, that is where some of the money, our money is going into 
work and stuff.
    That is what would happen. Our American dream would go 
down, and we would have to go back to living paycheck to 
paycheck and try to learn to survive all over again and try to 
find the will and the courage to go after an American dream 
again and with some kind of hope. You can't give up.
    I guess that is why I am here. Because you just can't give 
up. I know there are other small businesses out there that are 
struggling, and you just can't give up. You have got to keep 
after this. Things are going to turn around. And so, we are 
just trying to keep the faith, and we are doing the best we 
can.
    Senator Enzi. Well, I appreciate the courage of anybody 
that goes into small business. My wife and I started a shoe 
store, and there are a lot of decisions that people would see 
as being very normal. But the life of the business depends on 
them, and those decisions have to be made daily.
    Of course, I don't think a person has really been in 
business until they have had that wake up in the middle of the 
night, sit bolt upright, and say, ``How do I pay the bills 
tomorrow?''
    Mr. Clements. Absolutely.
    Senator Enzi. So thank you for taking that risk, and we 
hope that you get back to a point where you can not only have 
the American dream, but have a number of employees.
    I see that my time has run out, too, and I have questions 
for the other three. So I am glad we are going to do another 
round.
    The Chairman. Thank you, Senator Enzi.
    In order of appearance, Senator Franken, Senator 
Whitehouse, Senator Blumenthal, and Senator Bennet.
    Senator Franken.

                      Statement of Senator Franken

    Senator Franken. Yes, thank you, Mr. Chairman, for this 
hearing.
    And thank you all, all of you, for testifying. I have been 
a small businessman myself and have sat bolt upright in the 
middle of the night. Usually, it was to think of a joke or 
something.
    [Laughter.]
    ``Yes, that will work.'' But I hired people, and I like to 
think I was a successful small businessman.
    Unfortunately, a number of us had to go to a Judiciary 
executive meeting. So I missed some of the testimony, and I 
missed the Ranking Member's opening statement. But as I 
understand it, in it, he mentions polling that over one half of 
Americans believe that the stimulus did nothing or hurt the 
economy.
    Mr. Bernstein, if a majority of Americans believe 
something--for example, I know at one point, 75 percent of 
Republican-likely voters believed that the President was not 
born in the United States or may not have been born in the 
United States--does that make it true? Does it make it true 
when the majority of people believe something?
    Mr. Bernstein. No, of course, it doesn't, Senator. And I 
was caught up by that same statistic. I think there are 
certainly ways in which polling data can inform our thinking 
about how impressions are formed. But when it comes down to the 
basic facts of the case, as in the case of the Recovery Act, 
that is probably the least informative statistic I can think 
of.
    Much better would be to look at the evidence, empirical 
evidence, and probably the best way to do that would not be to 
look at the Administration's own evidence because one could 
argue there is a thumb on the scale there and look at, for 
example, the Congressional Budget Office. I think widely 
regarded in these halls as being an arbiter of such things, the 
Congressional Budget Office has found time and again in 
numerous reports that the American Recovery and Reinvestment 
Act created up to about 3.5 million jobs and shaved a couple of 
percent off the unemployment rate and helped essentially move 
forward the economic recovery.
    That is, the great recession would have been longer and 
deeper in the absence of it. None of that is to imply that we 
are back to where we need to be, but the evidence is very 
strong in that regard.
    Senator Franken. Sometimes the American people are subject 
to some misinformation. I have heard colleagues of mine on the 
floor, some of my friends from the other side of the aisle say 
that no jobs were created other than for Federal bureaucrats.
    In my State, a lot of roads were built, water towers, and 
those things. Do Federal bureaucrats come from Washington to 
run heavy machinery in Minnesota?
    Mr. Bernstein. Thankfully, no. I, myself, was struck by 
some of those comments, having traveled with the Vice 
President, the implementer-in-chief of the Recovery Act, to job 
sites across this country, including in States of many of the 
Senators who are represented here today. And saw with my own 
eyes precisely what you are talking about, a great deal of work 
in progress.
    Senator Franken. A large part, actually, of the Recovery 
Act were tax cuts, were they not?
    Mr. Bernstein. About a third.
    Senator Franken. About a third. I hear a lot about tax cuts 
now. I hear a lot of my colleagues on the other side say that 
tax cuts always increase revenues. And I am a little bit 
confused about that.
    I hear that tax cuts always increase revenues, but then I 
hear a complete contradictory thing, which is the reason to 
have tax cuts is to starve the beast. As President Reagan once 
said, ``you can't cut taxes unless you cut spending first.'' If 
you tell a child that buys too much, if you cut off his 
allowance, then he will stop buying stuff.
    And so, this seems to me contradictory that on the one 
hand, tax cuts do two mutually exclusive and contradictory 
things. They always increase revenue, but on the other hand, 
they decrease revenue. Can you tell me which it is?
    Mr. Bernstein. Sure.
    Senator Franken. Because I am confused.
    Mr. Bernstein. Generally, tax cuts are going to decrease 
revenue. There are cases where tax cuts can stimulate economic 
growth that otherwise wouldn't occur, and some of that growth 
spins off revenue. But one has to be careful of overestimating 
that effect and going to the kind of a Laffer curve idea, 
which, by the way, serious supply-side economists don't even 
believe that, that it is a dollar-for-dollar tradeoff.
    I mean, if you look at--and here is the punch line, sir. If 
you look at the factors that are mostly responsible for the 
long-term increase in the budget deficit policy wise--I am not 
talking about healthcare costs, which have been an ongoing 
structural problem. And the Center on Budget and Policy 
Priorities has very good graphics on this that I would be happy 
to share with you. You will find that the largest contributor 
to the growth in the budget deficit are the Bush tax cuts, 
hands down, no competition.
    The Bush tax cuts are way, way, way swamp any effect from, 
say, the Recovery Act. The second-largest factor, by the way, 
in terms of policy changes in recent years in contributing to 
the growth of the deficit would be the wars. But the Bush tax 
cuts are a very large revenue loser in the sense that you were 
asking about.
    Senator Franken. Thank you for clarifying those questions 
that I had.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Franken.
    Senator Whitehouse.

                    Statement of Senator Whitehouse

    Senator Whitehouse. Thank you, Chairman.
    Ms. Sipprelle, I understand you grew up in Rhode Island?
    Ms. Sipprelle. Yes, I did.
    Senator Whitehouse. Wonderful. I congratulate you on your 
excellent work on the ``Over 50 and Out of Work'' project. I am 
always glad to see Rhode Islanders doing great things, even if 
they have moved to other places.
    I was happy to see that your project included five of our 
fellow Rhode Islanders, some of whom I have had the pleasure of 
meeting. One of those is George Dys, from Forestdale. He was 
not in your presentation today, but I would like to add his 
story.
    George was laid off from his career as a design engineer 
over 3 years ago and still hasn't been able to fully get back 
into the job market. Not for lack of trying. He has gotten 
training in other industries and is willing to do just about 
anything. But as you know, we are at 10.9 percent unemployment 
in Rhode Island, and that makes the job market very difficult.
    I think it is safe to assume that George and probably most 
of the people that you interviewed never thought they would be 
collecting unemployment benefits. That was not something that 
was on their horizon at all. And yet the recession came. The 
disaster on Wall Street created this cascade of misery across 
the country that knocked down people in Rhode Island and other 
places, and we have had to fight very hard to try to keep 
unemployment benefits going.
    As you will recall, we were only allowed to increase 
unemployment benefits, you know, a month and a quarter at a 
time, and each time there was a price to be paid for it. 
Basically, the people in Mr. Dys's situation were held ransom 
for other political demands that people had here in Washington.
    Just react for me to the people who are the so-called 99ers 
now, for whom 99 weeks have gone by, and even though we extend 
unemployment benefits within that period, once you are at the 
end of the 99 weeks, you are just done. And for a lot of those 
people, they never imagined they would be on unemployment at 
all, let alone on unemployment for 99 weeks.
    So they spent down. They used a lot of their resources 
waiting for the day when they would be back on their feet 
again, and now they find themselves in real trouble. What are 
you seeing for that group of folks?
    Ms. Sipprelle. If I answer specifically about George Dys, 
he is driving a bus or a van part time, and he also got a real 
estate license, and he is trying to sell homes, which is also a 
difficult proposition. But that is all he can find. He is a 
good example of many of our interviewees who have put out 
hundreds of resumes and have been unable to find employment.
    I think what it comes down to, Senator Whitehouse, is a lot 
of people are then forced to take jobs, as maybe we have heard 
a little bit about today, that are severely under their skill 
level, or they accept a rate of pay that is much lower than 
they received previously. Or they take a job without benefits. 
Or they work fewer hours. So even though they get----
    Senator Whitehouse. And in some cases, they can't move to 
find a better job because they are under water in their home 
mortgage.
    Ms. Sipprelle. Exactly. And sometimes, even though this is 
not an economic effect, people in my generation--because I am 
53--are taking care of elderly parents, and they are unable to 
move because they are caring for a father or a mother in their 
hometown. And you would be surprised how often that comes up in 
our interviews.
    But underemployment is just a huge issue, and I can give 
you so many examples of our interviewees because since our 
project has been going on for 16 months, many of our 
interviewees have run out of unemployment benefits over that 
period of time. And they are really----
    Senator Whitehouse. That is pretty harsh.
    Ms. Sipprelle [continuing]. Really struggling, and they are 
accepting jobs that pay 25 percent or 33 percent of what they 
received previously. Or they are forced into becoming 
independent contractors or consultants.
    I am not saying that that is necessarily a bad thing. But 
as Senator Enzi said, becoming a businessperson takes a whole 
basket of skills, and not every person who has worked 30 years 
as an engineer is suddenly equipped to become a marketer for 
his or her own services and to be constantly promoting him or 
herself.
    I am definitely not saying that people can't acquire those 
skills, and many of our interviewees have proven to be 
remarkably resourceful and determined and find ways to get back 
to work. But I can tell you for sure they are not getting back 
to work at salaries comparable to what they received 
previously, nor with benefits.
    Senator Whitehouse. I have just a few seconds left. So I 
will wait for the second round.
    But, I did want to mention to Mr. Clements and Ms. Greubel 
that in my second round, I would like to discuss the IRS 
information that shows the top 400 income earners in the 
country who earned over a quarter of a billion dollars each 
actually paid taxes of 18.2 percent.
    When you have the chance in the next round, I will ask you 
to think about if you put your withholding and your income 
together, whether you pay more than 18.2 percent. So that is a 
preview of coming attractions, but my time has expired.
    The Chairman. Thank you very much, Senator Whitehouse.
    Senator Blumenthal.

                    Statement of Senator Blumenthal

    Senator Blumenthal. Thank you, Mr. Chairman.
    And like others who are here today, I want to thank you for 
having this hearing focusing on such a critically and 
profoundly important issue in American society today and thank 
the witnesses who are here for taking time from your schedules, 
which I know are demanding.
    Since we are on the topic of local connections, I notice, 
Mr. Bernstein, that you went to Ridgefield High School in 
Ridgefield, CT, which no doubt has contributed substantially to 
your success. I want to focus on a really very fundamental 
point in your testimony and I'll begin with you. And if others 
have any comments on it, I would welcome them.
    You note, and it is substantiated by Table 3, the very 
different experience of middle-income married women as opposed 
to single mothers, particularly low-income single mothers, in 
the economic downturn. And note that single-income mothers, and 
I am quoting, ``lost considerable ground'' and say that the 
different experiences are worthy of further study.
    I wonder if you could offer some potential explanations or 
hypotheses that might account for those differences, which I 
think in the bare statistics really reflect a very, very 
significant impact on children as well as those single mothers.
    Mr. Bernstein. Thank you very much for raising that. And 
yes, a former Ridgefield Tiger. But I have to go back a lot of 
years to remember that.
    I appreciate your raising that because too often when we 
are focusing on middle-income families, we can ignore the fact 
that single mom families in particular have one breadwinner, 
one sole breadwinner. So they don't have the ability to fall 
back on another earner kicking up their hours or work in a 
downturn.
    And as you point out, in my Table 3, I show that these moms 
on average earned about $18,500. You have heard from folks on 
the panel today about what life must be like on that kind of an 
income. That was in 2007. By 2009, they were down $1,500, a 
huge loss off that low a base.
    You mentioned their hours of work fell by 100 hours on 
average. That is over 2 weeks of full-time work. My sense is 
that when the economy contracted, places where those women 
found work were subject to large layoffs. One of the things 
that tells you is that probably not enough of them are in 
healthcare because, actually, healthcare is a sector that 
continued adding jobs even throughout the worst jobs recession 
any of us have ever seen every month.
    So I suspect many of these women--this is fodder for 
further research--worked in the public sector in some way. 
Maybe childcare aides, maybe aides in the school. And that is 
where we have seen 350,000 jobs laid off in State and local 
employment over the past year and a half.
    Even as private sector growth begins to come back and 
employment in the private sector is up, 350,000 jobs cut from 
the State and local sector because of those budget constraints. 
And I suspect there is a connection there, Senator.
    Senator Blumenthal. Any of the other witnesses have any 
comments on that? And I might just say also in the spirit of 
coming attractions, I would be interested in what you, as 
members of the panel, would recommend be done with regard to 
that particular segment of the population.
    Ms. Greubel. I would like to say that in addition to women 
working, tending to work more in sectors that get cut and also 
have lower pay, the single moms especially are limited in the 
types of jobs that they can take. If they have school-age 
children, they need to work during the school day because, 
otherwise, No. 1, finding childcare at night is a disaster and 
a nightmare. And No. 2, they don't have someone else at home to 
be there when the kids get home and make them supper.
    If they don't have school-age children, if they are looking 
at childcare, a lot of times childcare takes up a majority of 
the income that they bring home. And so, we see these families 
who have been on public assistance for years. Because if you 
think about it, if you are on public assistance, you can get 
your health insurance. You get a little bit of income, even 
though it is not hardly anything, and you can take care of your 
kids.
    And sometimes you can get childcare assistance if you go 
back to work. But you don't want to work too much because you 
can only work like 28 hours and still get that. So it is sort 
of creating a vicious cycle here with these families that we 
tell you, ``Go to work, go to work, go to work,'' and the only 
jobs that they can find that fit with what their family needs 
are jobs that don't pay enough to provide them those same 
benefits of healthcare and that assistance.
    Senator Blumenthal. Thank you for those comments.
    My time is up. But I might just comment that your 
explanation, at least in part, I think is substantiated by Mr. 
Bernstein's findings, I think in footnote 4, that low-income 
married women had work and earning patterns over the recession 
that looked more like middle-income wives than single mothers. 
So the fact of being married, of having someone at home, in 
effect, a means of childcare, is an important factor here.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Blumenthal.
    Senator Bennet.

                      Statement of Senator Bennet

    Senator Bennet. Thank you, Mr. Chairman.
    Thank you so much for holding the hearing. I am sorry I 
wasn't here earlier. I was on the floor, imploring people to 
stop screaming at each other over our debt and our deficit.
    While we were screaming at each other over the last couple 
of years, I spent a lot of time in town halls in Colorado. And 
if I had to pick one economic fact out of the mix that worries 
me the most, it is the decline of median family income in this 
country.
    People never thought that they would be displaced in an 
economic downturn or thought that they would be working for 
less at the end of the 10-year period than they were at the 
beginning. And they are coming to my town halls and saying, ``I 
have done everything I was supposed to do. I am making less. I 
sent my first kid to the fancy school, and I am not going to be 
able to send my second kid there,'' or ``I can't send my child 
to the best school they got into.''
    This is an important issue, and I don't believe we really 
have a theory, a working theory about how we are going to 
change the arc of that curve. But I wanted to ask Mr. Bernstein 
a couple of questions.
    First, I have seen some data recently that shows that the 
unemployment rate among people with a college degree is about 
4.5 percent in this country. It is far, far higher if you have 
only a high school degree or no degree at all. I wonder if you 
could talk a little bit about the importance of educational 
attainment for driving the middle class in this country and the 
flip side, the economic disparities that are caused by 
educational disparity in this country?
    Mr. Bernstein. The unemployment rate for college-educated 
workers, as you said, is about 4.5 percent. That is actually a 
couple percent higher than it typically is in an economy that 
is percolating along at its potential. But even so, 4.5 percent 
is about half the overall rate.
    Unquestionably the case that a college education, to some 
extent, insulates working people from many of the difficulties 
that we have heard about in today's panel and that I document 
in my piece. The unemployment rate among high school dropouts 
is almost always in the double digits. And if you look at 
minority high school, even high school completion or 
particularly high school dropouts, you will see a permanent 
recession, if not depression level unemployment rate.
    So there is a very steep gradient to higher education being 
associated with lower unemployment rates. That said, as one of 
my colleagues mentioned, even college-educated workers find 
themselves often underemployed or experiencing declining real 
wages right now, but from a much higher level than folks with 
less education.
    Senator Bennet. People would argue a little with the 
statistics sometimes, but rough justice. If you are born into a 
low-income neighborhood in this country, your chances of 
graduating with a college degree are around 9 in 100, which 
means 91 out of 100 will not have the benefit of a college 
degree.
    How should we think about the chances of people in that 
situation attaining a middle-class dream?
    Mr. Bernstein. That is a great question, and it is 
something that I have tried to focus on in my research. In 
fact, I think one of the themes that comes out of the panel 
today is the importance of economic mobility, which is really 
what you are talking about.
    The idea that embedded in the middle-class dream is the 
idea that if you work hard and you play by the rules, you will 
be able to get ahead. And one of the main ways that parents 
help their children get ahead is through access to higher 
education.
    In that regard, as I pointed out in my testimony, the 
increase in the sticker price of college tuition is one of the 
factors behind the immobility problem that you documented. And 
in that regard, the significant extensions of Pell grants under 
this Congress has been instrumental in helping to offset the 
increase in those sticker prices, and I see attacks on those 
Pell grants coming. And I think they are exactly wrong in the 
sense that we are discussing.
    Senator Bennet. I am glad you raised that. My time is up, 
but I would say on that point that the two groups of people in 
the town halls that are worried the most and that I worry about 
the most are people in their 50's that are finding themselves 
out of work and untrained and our young people, who are 
graduating into an economy that just has no place for them.
    At least we have got a theory of action for them, which is 
take refuge at a college campus, because that investment in the 
long run is going to pay off mightily for them and for our 
country. So I agree completely with you.
    Now we have got to figure out, though, what we do with the 
people in their 50's that find themselves in a place where they 
need to be retrained or need to move someplace to do their 
work.
    So thank you to all of you. I am sorry that I didn't get a 
chance to ask everybody questions.
    But, Mr. Chairman, thank you for holding the hearing.
    The Chairman. Thank you, Senator Bennet.
    And we will start another round, keeping in mind that we 
have two votes starting at noon. So we will try to adhere to 
our 5-minute rounds.
    Mr. Clements, I read your testimony last evening and 
listened to you today. And quite frankly, you and your family 
obviously have our sympathy about what happened. And hopefully, 
things are getting better.
    I understand that permitting is underway. Here is what I 
was told--that shallow water drilling has continued. Deepwater 
permitting seems to be back up to approximately its pre-
moratorium level that we had before.
    So I guess what we are seeing is even though you got hit 
pretty hard, do you see things coming back now?
    Mr. Clements. Quite frankly, no, Senator. I don't see any 
of that. The permits that were issued, these were deepwater 
rigs that were already operating before the oil spill, to my 
understanding. I believe there is only one or two new 
exploration drills, permits for drilling.
    You know, the permits are not being issued like they were 
back before the oil spill, and that is what needs to happen for 
our business to get back accelerating like it was before and to 
create the jobs and keep the revenues coming in here for the 
Federal Government as well.
    The Chairman. I will check this out. But I am told that 56 
new shallow water well permits have been issued since June 
2010. Permits have averaged more than 6 per month over the past 
8 months, compared to an average of 8 permits per month in 
2009.
    And deep water, 88 permits have been approved since last 
October. Eighty-eight permits have been approved. There are 28 
pending. Twenty-four were returned to the operator with 
requests for additional information, particularly information 
regarding containment. And overall, the United States has more 
drilling rigs in operation now than at any time in history.
    Mr. Clements. Right.
    The Chairman. I see this. I hear you. I am thinking, well, 
maybe we had a hit, but maybe we are----
    Mr. Clements. I am sure your resources are better than 
mine. So the only resources I get is from customers that I do 
work for.
    The Chairman. And I understand that.
    Mr. Clements. And they tell me that the work that I am 
doing is for international work, for out of the country. We 
don't even do work for the rigs that are out here in the Gulf 
of Mexico. So, I mean, that is the information that I get 
personally from customers that are dealing with customers 
overseas.
    The Chairman. And the reason I have sympathy with you is I 
have a nephew----
    Mr. Clements. OK.
    The Chairman [continuing]. Who has a machine shop in Rock 
Springs, WY, and has had it for some years. His father had it 
and since passed away. My brother-in-law since passed away. And 
he has operated that. And boy, I have seen his ups and downs.
    Of course, we had the oil patch in Wyoming. It went up, and 
he had a lot of work. Then it went down. Then it went back up.
    But like you, he just toughed it out. There were times when 
he was doing a lot of work, then at times less just because of 
what was happening with oil in that area around Rock Springs. 
But it had to do just basically with the vagaries of what was 
happening with the oil patch at that time.
    And so, I have seen what happened to him, and it sounds a 
little similar to yours.
    Mr. Clements. With all due respect, when the moratorium 
happened, we got our email. We had verbally committed for 6 
months of work, and we got our email, and all our orders are 
canceled because of a moratorium that was put in place by the 
President----
    The Chairman. Yes.
    Mr. Clements [continuing]. Without any kind of economic 
data or any recommendation from anybody, for the way I 
understand it.
    The Chairman. Yes.
    Mr. Clements. And so, we are very shell-shocked over that. 
There was no economic data done in the revenues being lost and 
all this. And then, I honestly believed that after the 
moratorium was done, that permits would start being issued 
again, and we would go back to work. You kind of have that 
belief. And then, suddenly, we find out that they are just not 
giving out permits.
    So this continues on for months later. And then, of course, 
back in February and March, they start handing out a few 
permits before, I guess, the stories start getting hot or 
heated or something. So maybe they are giving out some more 
permits. Maybe that just happened recently, and I haven't found 
any data about any of it, or there is really no press releases 
being issued about it anymore.
    But like I said, your resources are better than mine.
    The Chairman. I hope it is going back up.
    Mr. Clements. I appreciate it.
    The Chairman. One question of Mr. Bernstein, my last 
question. You said in your statement why low-income single 
mothers lost more ground in the recession compared to middle-
income wives is worthy of further study. Putting aside child 
support, single mothers are, by definition, the sole 
breadwinners of their families, and these families are 
economically more vulnerable than most two-parent families.
    Could you elaborate on this finding? Low-income single 
mothers lost more ground in the recession compared to middle-
income wives?
    Mr. Bernstein. Right.
    The Chairman. What is that about?
    Mr. Bernstein. I think that has to do with the sectors that 
they work in and the basic time constraints that a single mom 
faces, particularly regarding childcare. By dint of having a 
two-parent family, as was noted earlier, the ability to have 
more flexibility in the jobs you accept, schedule wise, is 
greatly enhanced.
    And when you are talking about an income, as I show an 
average income in the $18,000 range, I looked at single moms in 
the bottom three-fifths of the income scale. So I looked at the 
majority of single moms, and that average income is as I just 
mentioned. You simply don't have the resources to go out and 
buy ``Cadillac flexible'' childcare. So you are very 
constrained on your schedule.
    I think it probably--and I have to do more research on 
this. As I suggested, this is a finding that came up as I was 
preparing for this testimony. I think it may well have--I 
wonder if it has to do with all of the deep cuts that have been 
occurring lately in State and local jobs.
    Maybe these are home health aides. Maybe they are some 
childcare workers themselves. Maybe they are folks who work for 
the education system. And in that sense, that is where you see 
really very significant layoffs over the past couple of years.
    Even as the private sector employment is growing, the State 
budget cuts are leading to a very solid layoff. And yet we 
sometimes disparage the public sector workers. They are on the 
dole or whatever. These are teachers. These are childcare 
workers. These are firefighters. These are folks like we have 
heard from today.
    The Chairman. Exactly. Thank you very much. I ran over my 
time. I apologize.
    Senator Enzi.
    Senator Enzi. Thank you, Mr. Chairman.
    I would like to comment a little bit on the supply of 
domestic oil. Because if it was back to normal, the President 
would not have had to tap the SPR this morning, and that is the 
first time that has happened since Hurricane Katrina. So we are 
short of oil.
    You mentioned the number of permits that are being given 
out, it doesn't matter how many permits you give out if there 
are no rigs available. Eight rigs have already gone 
international, and six more are being marketed internationally.
    What you lose along with the rig are the employees that are 
skilled and trained in that as well. And so, the number of 
permits, if they come late and all the rigs are gone, which has 
happened two other times in U.S. history that have driven up 
gas prices, we are kind of in that crisis again.
    But to move on before I use up my round on something that I 
am very passionate on, another topic that I am very passionate 
on and have worked on with Senator Akaka is financial literacy. 
There are a lot of people that are going through some real 
crises on it now. Ms. Greubel, I really appreciate your 
comments about the way that you are having to budget and the 
situation that you are in.
    You mentioned that you are accounting for every penny. Did 
you take a course in this, how did you get onto the budgeting 
part? Because that is critical to people in America right now.
    Ms. Greubel. Thankfully, I have several friends who, when I 
put out a call and said I need to figure this out and how to 
cut some money, I have several friends who recommended Dave 
Ramsey's ``Total Money Makeover.'' I checked that book out from 
the library, and it is just very common-sense and really 
resonated, and I thought, ``I can do this.''
    And I am not a real math-minded person. You get past the 
basics, and it is sort of beyond me. So the fact that Mr. 
Ramsey had everything, all these things laid out. This is how 
you do it. That was very easy for me to follow. Not easy to put 
into practice, necessarily. But easy to figure out how to 
follow.
    And one of the things that I am hoping to do this next 
school year is to have a parent get-together, invite any 
parents who want to come in, and sort of talk about, OK, what 
does it mean to have a budget? How are some ways you can save 
money on groceries and some of these basic expenses?
    And have people--because I think, collectively, we have a 
lot of wealth of knowledge about how to do this. It is just 
that we have to talk about it and share our ideas amongst 
people who need that help.
    I feel very fortunate that I discovered that resource, and 
I know a lot of families who financial literacy is the key to 
helping them sort of manage their circumstances.
    Senator Enzi. Thank you. You made some comments that kind 
of tipped me off that maybe author Dave Ramsey had been 
involved.
    Ms. Greubel. Yes.
    Senator Enzi. One of them was that you had your credit 
cards paid off.
    Ms. Greubel. Yes.
    Senator Enzi. I have had some experience with people in 
Wyoming that have gone through that kind of a process, too, and 
are now spreading the word. In fact, I mentioned it at one of 
my staff meetings, and several people on my staff picked up a 
copy of his book and put that into operation and have taken 
courses since. And it has had a very positive effect in their 
life.
    It is about the only way you can get through a crisis that 
you have explained. But it goes beyond that, and once the 
crisis is over, it helps to put a person in a good financial 
position, hopefully, to have that American dream. So I really 
appreciate the fact that you are spreading this message of 
financial literacy.
    Ms. Greubel. Thank you.
    Senator Enzi. We probably ought to come up with a more 
friendly name than that, to get people inspired to get 
themselves out of debt. So I really thank you for your 
testimony today and the opportunity to mention that, too.
    Mr. Bernstein, in your June 12th article, you talked about 
direct job creation and you discount the benefit of private 
sector job creation. You seem to suggest that we need a second 
larger stimulus bill. You acknowledge, however, that the 
problem with large public work projects is the hoops the 
Federal Government makes a contractor take before construction 
begins. I am not so sure that isn't where the President's 
comment came from that the shovel-ready projects weren't as 
shovel-ready as he expected.
    But I would agree that there are too many rules and 
regulations from the Federal Government. Do you have any 
specific rules or regulations you think should be repealed to 
help move projects forward?
    Mr. Bernstein. I don't have any specific rules and 
regulations, and in fact, when I have looked at this, I may 
view this slightly different than you, though I think we 
probably share the basic core of your idea in that it--I don't 
know that the problem is with the rules and regulations. In my 
view, the problem is how long it takes for those rules and 
regulations to get approved.
    What I would like to see happen is the decision from 
contract approval to contract implementation happens much, much 
quicker. And having looked at the regulatory process, I believe 
it could be done.
    I think rather than--and there are rules. And by the way, 
the acronym is OIRA. In the OMB, Cass Sunstein's division over 
there have been looking at clearing out some of the regulations 
that are antiquated, and I fully support that work.
    Senator Enzi. So far, I don't think any of those have 
happened. They should happen.
    Mr. Bernstein. They should happen. I agree with you. They 
should happen and soon.
    Senator Enzi. My time is limited. I am actually out of 
time, and I do need to mention that we have the Workforce 
Investment Act bill coming up for markup. That is a job 
training bill that could help to train 900,000 people a year to 
higher skill jobs that are available in their area. I am hoping 
we can get that through this committee and through the Senate.
    I have been working on it for 5 years. Job training is 
important. We ought to be able to get it done.
    The Chairman. And I want to publicly thank you, Senator 
Enzi and Senator Murray, both, for your diligence in working on 
this, at least since I have been chairman over the last year. 
You have been on it longer than that, and I thank you for all 
your hard work in getting it to the point where I hope we are 
going to get it done.
    Senator Enzi. Thanks for your work and Senator Isakson's, 
too.
    The Chairman. I hope we get it done before we get out of 
here next week.
    Senator Franken.
    Senator Franken. I want to thank the Ranking Member for his 
work on WIA. We also had a nice discussion about the ESEA 
reauthorization and his hard work on that.
    I haven't read Dave Ramsey's book, but I guess I will go 
out and get it.
    [Laughter.]
    Mr. Clements, thank you for your testimony. I share the 
chairman's sympathy, and I think all of us do, with what 
happened to you. I liked what you said about your business. You 
are a manufacturer, and you are machinist.
    Mr. Clements. Yes, sir.
    Senator Franken. I liked what you said about young men and 
women who are in high school and are looking for something. We 
have in Alexandria, MN, one of the best 2-year schools in the 
country that does basically industrial arts education. And the 
community of Alexandria does an incredible amount of machining, 
and actually, they are sort of the Silicon Valley of packaging 
machines.
    I thank you for being a manufacturer and manufacturing in 
the United States. So I want to thank you for that.
    Mr. Clements. Thank you, Senator. I appreciate that.
    Senator Franken. Now, and I understand your gripe here, 
which is that this moratorium was put on. I don't know the 
state of the permits exactly, and I don't think that is maybe 
even exactly the point right now. Because, obviously, you are 
on the ground. You are there. You are experiencing the orders 
you are not getting.
    Mr. Clements. Right, Senator. I hear a lot of numbers about 
how many permits are, you know, shallow water, deep water, and 
stuff like that. But the number I don't hear is how many 
permits are being held. You know, how many permits are being 
held up for whatever obvious reason.
    To me, there is no excuse whatsoever, when they have a 
state-of-the-art cap----
    Senator Franken. Let me ask you about that.
    Mr. Clements [continuing]. And there is even more safety 
involved in the industry that has had a fairly good record.
    Senator Franken. Fairly good record. But I think we all 
know what happened with the Deepwater Horizon, and I don't 
think that anyone anticipated that that would happen.
    I don't think anyone was saying BP is a bad actor, and they 
are bound to have one blow and kill 11 people and cause about--
according to BP, total estimates of their costs in cleanup and 
capping the well, compensating the injured parties, fines, and 
the injured parties included a lot of other people who lost 
their livelihood are going to be $40 billion.
    Mr. Clements. Wow. Yes.
    Senator Franken. OK?
    Mr. Clements. They said they would make it right. I mean, 
they solely took responsibility for their accident that I look 
at as completely their incident. It is not a whole offshore 
industry, as far as I am concerned.
    Senator Franken. Right. But I think you would agree that 
you are a victim of it as well?
    Mr. Clements. Absolutely. But under the Oil Pollution Act, 
we didn't qualify for any kind of claim or anything. And after 
the moratorium was lifted and we thought we would go back to 
work, and then we find out no permits are being issued. So we 
immediately tried to get a BP claim because our funds are 
running down. You know, we have done----
    Senator Franken. Right.
    Mr. Clements [continuing]. Depleted our savings, 
retirement, everything, capital. It is gone. And so, we tried 
to get emergency claim. We were denied. Tried to get a final 
claim. That was denied.
    Senator Franken. So this was through the Gulf Coast claims 
facility?
    Mr. Clements. Yes.
    Senator Franken. OK. Well, I am sorry you didn't qualify 
for that.
    Mr. Clements. Even the rig workers had a fund set up. We 
didn't qualify for that. I mean, we really got left out in the 
cold in all this, and we are just one of many, many businesses. 
There are other machine shops in my area, all across this 
country, everything. There are a lot of people that didn't 
qualify for it.
    Senator Franken. I guess what I am just saying is because 
that was a $40 billion hit to the area, I think that we can all 
agree that someone had to make a call one way or the other on 
the moratorium. And that probably nothing would have been worse 
for the Gulf area and for the economy than another one of these 
oil spills.
    And again, I think no one anticipated what was going to 
happen with the Deepwater Horizon. So I think there had to be a 
period there where--and one can argue, and obviously, you are--
--
    Mr. Clements. Absolutely. I will argue this point because--
--
    Senator Franken. [continuing]. That it was too long.
    Mr. Clements [continuing]. You know, who recommended it? 
The way I understand it, there was nobody that recommended it. 
There was no economic data done, as far as to my knowledge, of 
a moratorium being in place.
    Senator Franken. Well, of course, I----
    Mr. Clements. I mean, did they realize the impact of what a 
moratorium would do? I mean, based on one person's incident, 
and then you take a whole industry and shut it down? I don't 
think that has ever happened in U.S. history of shutting down 
an entire offshore industry?
    I mean----
    Senator Franken. Well, what I am saying this was probably 
the worst environmental disaster in the history of our country 
and cost the Gulf area region at least $40 billion in the 
economy. And all I am saying is, is that a call had to be made 
one way or the other. Do we take the----
    Mr. Clements. There sure have been a lot of calls before, 
especially when the oil spills did happen.
    Senator Franken. I just want to say that I admire what you 
do. I admire your testimony about people going and making 
things in America again. I think manufacturing in America is 
what we need, and I am over my time.
    So thank you for testifying.
    Mr. Clements. Thank you, Senator.
    The Chairman. Thank you, Senator Franken.
    Senator Whitehouse.
    Senator Whitehouse. So, to follow up on my last round, I 
suspect that--I know you have had a horrible period since the 
Deepwater Horizon disaster. I suspect that before then, you 
were making probably more than $40,000 a year. I don't know 
about you, Ms. Greubel.
    But what the information is from the Internal Revenue 
Service is that the top 400 income earners in America for the 
last year that they have actually gone back and looked at the 
filings and added them all up and averaged them all together 
and disclosed factual data, these income earners each made more 
than a quarter of a billion dollars. That is with a ``B.'' And 
the actual taxes they paid amounted to a grand total of 18.2 
percent of their income.
    I am from Rhode Island, and I wanted a comparison in Rhode 
Island. Well, turns out that the average wage, according to the 
Bureau of Labor Statistics, for a Rhode Island truck driver is 
about $40,000.
    And if you do the math and look at what a single payer 
pays. You know, you pay a little bit more as your income goes 
up. And the point whereas your income goes up, you hit paying 
18.2 percent of your income in taxes, both withholding and 
income taxes, is a little over $39,000.
    If you put those two data points side by side, you have the 
Rhode Island truck driver paying actually a little bit more in 
terms of his Federal tax rate than those 400 people who 
averaged a quarter of a billion dollars each.
    So I guess my concern is that as we talk about taxes in the 
discussion that we are having, it is really important that I 
think people should pay their fair share, and it concerns me 
when you have people making--I don't know how you spend a 
quarter of a billion dollars.
    I mean, I know people do it, and good on them. That is the 
American way. But why they should be paying lower taxes than a 
truck driver pulling down $40,000, if they are a single filer, 
doesn't make sense to me. And if I could have your reflection 
on that, I would appreciate it.
    Mr. Clements. Start with me?
    Senator Whitehouse. Sure.
    Mr. Clements. Sure. I don't know much about the IRS tax 
code. My wife does all the accounting now. So I don't know how 
much we actually make each year, but all our money goes back 
into our business. And so, we are trying to create jobs.
    But as far as the tax code goes, I would like lower taxes, 
obviously. I mean, it certainly would help us financially and 
help us business-wise in creating jobs and stuff like that. My 
understanding, maybe just have one flat tax code all the way 
down to the bottom, whether rich, poor, or whatever.
    Senator Whitehouse. At least they wouldn't be paying less 
than you, anyway, at the richest levels.
    Mr. Clements. Well, you know, rich or poor, I mean, they 
got there somehow. But I keep hearing that Congress here has no 
problem, no revenue problem. So maybe that is why there is a 
spending problem. But it would be nice to see that if you have 
so much revenue, why don't you give some back, you know?
    So it would be nice to see every American get a raise and 
put a flat code out there or whatever, and take some of that 
IRS tax code and thousands of pages and get rid of them. That 
is my opinion.
    It seems like there are just too many IRS tax codes going 
on against businesses, too, you know? I haven't even got to 
experience when I get to make more in a business how much my 
taxes are going to be.
    Senator Whitehouse. Let me give Ms. Greubel a chance to 
answer, too. By the way, I think I got the number right. Six 
billion American person-hours of work go into complying with 
our tax code. So if you made it simpler, you set 6 billion 
hours that could go to do a lot of other--America can build a 
lot and design a lot and invent a lot and do a lot of help with 
6 billion hours of people's work.
    Ms. Greubel.
    Ms. Greubel. I would like to say that I don't want lower 
taxes. I don't want my tax money back. I want my tax money to 
be used for what it is intended for, which would be education 
and helping people in need and health insurance and all those 
sorts of programs that support our families and our kids.
    And I agree with you that I think everyone should pay their 
fair share. I don't think it is fair that we have to cut public 
service programs and cut programs that are a part of our 
rights, I guess, living here in the United States just so that 
somebody who has more money than they could ever spend in a 
lifetime doesn't have to pay as much.
    That doesn't seem fair to me at all. I just want tax money 
used to help support our citizens like it is supposed to be.
    Senator Whitehouse. My time has expired.
    The Chairman. Thank you very much, Senator Whitehouse.
    And I thank the panel very much. Our time has run out. We 
have two votes starting at noon.
    Again, I want to thank all of you for being here today. I 
thank you for focusing your attentions on this crucial issue of 
what is happening to the middle class in America, whether it is 
public servants, people who are involved in educating our kids 
or starting small businesses.
    You are a small businessperson, too, Ms. Sipprelle, because 
you have started this. And of course, Mr. Bernstein, I thank 
you for all the work you have done in analyzing and looking at 
this issue.
    This committee will have another hearing on the plight of 
the middle class in July, as we continue to bring out more and 
more information about what is happening here in America.
    So, with that, I thank you all very much. The committee 
will stand adjourned.
    [Additional material follows.]

                          ADDITIONAL MATERIAL

        Response to Questions of Senator Enzi by Jared Bernstein
    Question 1. In your testimony you suggest a number of policies that 
could help the middle class. Do you agree with me that the No. 1 change 
that would help the middle class is an improving job market?
    Answer 1. I do, though obviously this is most relevant for working-
age families. For retirees, protecting retirement security would likely 
be the most important economic policy goal.

    Question 2. As executive director of the White House Task Force on 
the Middle Class, I am sure you looked at many ways to address the 
economic problems that they have faced over the last 3 years of this 
jobless recovery. What ideas do you have that do not cost either 
taxpayers or employers money? Would you support increasing off-shore 
drilling in the Gulf of Mexico?
    Answer 2. One idea that would not invoke budgetary costs would be 
to try to get other countries to cease managing their currency values 
in foreign exchange markets in order to make their exports cheaper and 
ours more expensive.
    This could involve the ``bully-pulpit,'' behind-the-scenes 
negotiations with economic officials, and even legislation, such as 
H.R. 2378 from the last Congress, the Currency Reform for Fair Trade 
Act.
    President Obama has recently mentioned patent reform and the 
passage of trade deals as ways to help small businesses, including 
startups, and to boost exports.
    Given my expertise, I cannot speak to the question of off-shore 
drilling in the Gulf of Mexico specifically, but I do support an 
increase in the domestic supply of oil, as long as exploration and 
extraction are carried out in ways that are safe for both our 
environment and our workers.

    Question 3. Do you agree with the complaint filed by the Acting 
General Counsel at the National Labor Relations Board against Boeing, 
for its new 787 Dreamliner plant in South Carolina?
    Answer 3. My current employer, the Center on Budget and Policy 
Priorities, conducts research and analysis to help shape public debates 
over proposed budget and tax policies and to help ensure that 
policymakers consider the needs of low-income families and individuals 
in these debates. We also develop policy options to alleviate poverty. 
In addition, the Center examines the short- and long-term impacts of 
proposed policies on the health of the economy and the soundness of 
Federal and State budgets. Accordingly, since this is the focus of our 
expertise, we do not work on or address issues such as this one.

    Question 4. In your testimony, you talk about the middle-class 
squeeze. In South Carolina, you have a well-respected, major airplane 
manufacturer helping American workers earn a good living, without 
taking away any jobs in the Puget Sound area. As you may know, the 
remedy proposed by the complaint would move all of the jobs from the 
South Carolina production line to the Puget Sound. What would this do 
to the South Carolina economy and middle class there?
    Answer 4. To answer this question accurately, I would need to know 
more about the supply and demand for labor in this part of South 
Carolina, as well as the dynamics of growth in the relevant community 
(i.e., rates of employer and employee turnover, business ``birth'' and 
``death'' rates).

    Question 5. What happened to the unemployment rate after the 
American Recovery and Reinvestment Act (ARRA, or ``stimulus bill'') 
became law?
    Answer 5. The unemployment rate rose about 3 percentage points in 
the year prior to enactment of the Recovery Act (from 5.0 percent in 
December 2007 to 8.2 percent in February 2009). Job losses began to 
slow significantly following the passage of the act, though the 
unemployment rate reached a peak of 10.1 percent in October 2009. Since 
then the jobless rate has come down 1 percentage point (to 9.1 percent 
in July 2011).
    The Congressional Budget Office estimated that without the Recovery 
Act, the unemployment rate would have been 0.3 to 0.5 percentage points 
higher in 2009 than it was. They estimate even larger effects in 2010 
and 2011: the unemployment rate would have been up to 1.8 percentage 
points higher in 2010, and up to 1.4 percentage points higher in 2011 
without the Recovery Act.
    CBO also estimated the effect of the Recovery Act on payroll 
employment. Without the Recovery Act, there would have been up to 
900,000 fewer jobs in 2009, up to 3.3 million fewer jobs in 2010 and up 
to 2.6 million fewer jobs in 2011.

    Question 6. Do you believe that the stimulus would have worked 
better had it been larger? If so, how much larger should it have been?
    Answer 6. The stimulus worked as expected--CBO estimates that it 
added as much as 4.6 percent to GDP at its peak of effectiveness in 
mid-2010 and held down the increase in the unemployment rate by as much 
as 1.8 percentage points. The problem is that underlying economic 
conditions were deteriorating faster than was understood at the time 
the stimulus was enacted, so even with the positive impact from the 
stimulus the economy experienced a sharp decline in GDP and rise in 
unemployment.
    Given the ultimate depth of the recent recession, a larger stimulus 
package would likely have helped to offset even more of the contraction 
in aggregate demand. However, it is worth recognizing that a larger 
package would have posed a greater challenge to the high accountability 
and transparency standards insisted on by the President.

    Question 7. Until 2 months ago, you worked in the White House for 
Vice President Biden. While you were working as his appointee, did you 
take any actions that he did not agree with? If you had, would you have 
been asked to leave?
    Answer 7. Vice President Biden is open to new ideas and I have no 
personal knowledge of the rationale behind any personnel decisions in 
the office of the Vice President.

    Question 8. Do you believe that the President is responsible for 
the actions taken by those he has appointed to Federal, second-branch 
positions?
    Answer 8. As I am unsure as to what exact actions this question 
reefers to, I do not have an opinion on this matter.

    Question 9. Do [you] agree with the statement made by the President 
at a June 29 press conference: ``Companies need to have the freedom to 
relocate, and if they are choosing to relocate here in the United 
States, that's a good thing.''
    Answer 9. In general, I fully support firm mobility, assuming, of 
course, that firms follow the letter of the law in their location 
choices.

    Question 10. Do you agree with the President's decision to extend 
the Bush tax cuts for 2 additional years in December 2010?
    Answer 10. One guiding principle for the current Administration, of 
which I was until recently a member, is that the burden of bringing our 
budget into long-term balance should be shared--including by those who 
have benefited most from the economic growth of recent years. 
Consistent with this principle is, in my view, the policy of allowing 
the Bush tax cuts--initially enacted when the Federal budget was in 
balance and surpluses were projected over the coming decade--to expire 
as scheduled for families earning above $250,000 a year.
    Last December--in the spirit of compromise, and mindful of the need 
to improve demand in a still-struggling economy--the Administration 
agreed to temporarily extend all of the Bush tax cuts, including for 
high-earners. This was done in exchange for the extension of a range of 
temporary provisions that put more money in the hands of those most 
likely to spend it immediately, providing a very important stimulus and 
reducing economic hardship for millions of American families. Given the 
economic and political circumstances, I believe that this was the 
correct decision for that time.
    Going forward, however, even with unemployment still elevated, I 
believe that fiscal discipline requires policymakers to allow the 
upper-income Bush tax cuts to expire on schedule at the end of 2012.

    [Whereupon, at 11:51 a.m., the hearing was adjourned.]

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