[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]


     THE BENEFITS OF TAX REFORM ON THE ENERGY SECTOR AND CONSUMERS

=======================================================================

                                HEARING

                               BEFORE THE

                         SUBCOMMITTEE ON ENERGY

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 20, 2018

                               __________

                           Serial No. 115-141
                           
                           
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      Printed for the use of the Committee on Energy and Commerce

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                    COMMITTEE ON ENERGY AND COMMERCE

                          GREG WALDEN, Oregon
                                 Chairman

JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Vice Chairman                        Ranking Member
FRED UPTON, Michigan                 BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
MICHAEL C. BURGESS, Texas            ELIOT L. ENGEL, New York
MARSHA BLACKBURN, Tennessee          GENE GREEN, Texas
STEVE SCALISE, Louisiana             DIANA DeGETTE, Colorado
ROBERT E. LATTA, Ohio                MICHAEL F. DOYLE, Pennsylvania
CATHY McMORRIS RODGERS, Washington   JANICE D. SCHAKOWSKY, Illinois
GREGG HARPER, Mississippi            G.K. BUTTERFIELD, North Carolina
LEONARD LANCE, New Jersey            DORIS O. MATSUI, California
BRETT GUTHRIE, Kentucky              KATHY CASTOR, Florida
PETE OLSON, Texas                    JOHN P. SARBANES, Maryland
DAVID B. McKINLEY, West Virginia     JERRY McNERNEY, California
ADAM KINZINGER, Illinois             PETER WELCH, Vermont
H. MORGAN GRIFFITH, Virginia         BEN RAY LUJAN, New Mexico
GUS M. BILIRAKIS, Florida            PAUL TONKO, New York
BILL JOHNSON, Ohio                   YVETTE D. CLARKE, New York
BILLY LONG, Missouri                 DAVID LOEBSACK, Iowa
LARRY BUCSHON, Indiana               KURT SCHRADER, Oregon
BILL FLORES, Texas                   JOSEPH P. KENNEDY, III, 
SUSAN W. BROOKS, Indiana             Massachusetts
MARKWAYNE MULLIN, Oklahoma           TONY CARDENAS, California
RICHARD HUDSON, North Carolina       RAUL RUIZ, California
CHRIS COLLINS, New York              SCOTT H. PETERS, California
KEVIN CRAMER, North Dakota           DEBBIE DINGELL, Michigan
TIM WALBERG, Michigan
MIMI WALTERS, California
RYAN A. COSTELLO, Pennsylvania
EARL L. ``BUDDY'' CARTER, Georgia
JEFF DUNCAN, South Carolina

                         Subcommittee on Energy

                          FRED UPTON, Michigan
                                 Chairman
PETE OLSON, Texas                    BOBBY L. RUSH, Illinois
  Vice Chairman                        Ranking Member
JOE BARTON, Texas                    JERRY McNERNEY, California
JOHN SHIMKUS, Illinois               SCOTT H. PETERS, California
ROBERT E. LATTA, Ohio                GENE GREEN, Texas
GREGG HARPER, Mississippi            MICHAEL F. DOYLE, Pennsylvania
DAVID B. McKINLEY, West Virginia     KATHY CASTOR, Florida
ADAM KINZINGER, Illinois             JOHN P. SARBANES, Maryland
H. MORGAN GRIFFITH, Virginia         PETER WELCH, Vermont
BILL JOHNSON, Ohio                   PAUL TONKO, New York
BILLY LONG, Missouri                 DAVID LOEBSACK, Iowa
LARRY BUCSHON, Indiana               KURT SCHRADER, Oregon
BILL FLORES, Texas                   JOSEPH P. KENNEDY, III, 
MARKWAYNE MULLIN, Oklahoma               Massachusetts
RICHARD HUDSON, North Carolina       G.K. BUTTERFIELD, North Carolina
KEVIN CRAMER, North Dakota           FRANK PALLONE, Jr., New Jersey (ex 
TIM WALBERG, Michigan                    officio)
JEFF DUNCAN, South Carolina
GREG WALDEN, Oregon (ex officio)

                                  (ii)
                                  
                                  
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, opening statement....................................     2
    Prepared statement...........................................     3
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     4
    Prepared statement...........................................     6
Hon. Greg Walden, a Representative in Congress from the State of 
  Oregon, opening statement......................................     6
    Prepared statement...........................................     8
Hon. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................     9
    Prepared statement...........................................    10

                               Witnesses

Holly Wade, Director, Research and Policy Analysis, National 
  Federation of Independent Business Research Center.............    12
    Prepared statement...........................................    14
    Answers to submitted questions...............................    94
Sam McCammon, President, Anamet Electrical, Inc..................    39
    Prepared statement...........................................    41
Seth Hanlon, Senior Fellow, Center for American Progress.........    49
    Prepared statement...........................................    51
Tom Ferguson, President and Chief Executive Officer, AZZ, Inc....    63
    Prepared statement...........................................    65

                           Submitted Material

Letter of June 18, 2018, from Linda Church, Chief Executive 
  Officer, National Hydropower Association, et al., to Mr. Upton 
  and Mr. Rush, submitted by Mr. Griffith........................    92

 
     THE BENEFITS OF TAX REFORM ON THE ENERGY SECTOR AND CONSUMERS

                              ----------                              


                        WEDNESDAY, JUNE 20, 2018

                  House of Representatives,
                            Subcommittee on Energy,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:03 a.m., in 
room 2123, Rayburn House Office Building, Hon. Fred Upton 
(chairman of the subcommittee) presiding.
    Members present: Representatives Upton, Olson, Barton, 
Shimkus, Latta, Harper, McKinley, Griffith, Johnson, Long, 
Bucshon, Flores, Mullin, Hudson, Walberg, Duncan, Walden (ex 
officio), Rush, McNerney, Green, Doyle, Castor, Sarbanes, 
Tonko, Loebsack, Kennedy, and Pallone (ex officio).
    Staff present: Jennifer Barblan, Chief Counsel, Oversight 
and Investigations; Mike Bloomquist, Staff Director; Samantha 
Bopp, Staff Assistant; Kelly Collins, Legislative Clerk, 
Energy/Environment; Wyatt Ellertson, Professional Staff Member, 
Energy/Environment; Margaret Tucker Fogarty, Staff Assistant; 
Ali Fulling, Legislative Clerk, Oversight and Investigations, 
Digital Commerce and Consumer Protection; Jordan Haverly, 
Policy Coordinator, Environment; Zach Hunter, Director of 
Communications; Milly Lothian, Press Assistant and Digital 
Coordinator; Mary Martin, Chief Counsel, Energy/Environment; 
Sarah Matthews, Press Secretary; Drew McDowell, Executive 
Assistant; Brandon Mooney, Deputy Chief Counsel, Energy; Mark 
Ratner, Policy Coordinator; Annelise Rickert, Counsel, Energy; 
Austin Stonebraker, Press Assistant; Madeline Vey, Policy 
Coordinator, Digital Commerce and Consumer Protection; Hamlin 
Wade, Special Advisor, External Affairs; Andy Zach, Senior 
Professional Staff Member, Environment; Jeff Carroll, Minority 
Staff Director; Rick Kessler, Minority Senior Advisor and Staff 
Director, Energy and Environment; John Marshall, Minority 
Policy Coordinator; Alexander Ratner, Minority Policy Analyst; 
Andrew Souvall, Minority Director of Communications, Member 
Services, and Outreach; and Tuley Wright, Minority Energy and 
Environment Policy Advisor.
    Mr. Upton. Good morning, everybody. The Chair would 
recognize myself for an opening statement.

   OPENING STATEMENT OF HON. FRED UPTON, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF MICHIGAN

    So welcome to today's hearing where we are going to be 
focusing on the benefits of the tax reform on the energy sector 
and consumers.
    As we all know, last December Congress passed the Tax Cuts 
and Jobs Act of 2017. This new law is the most comprehensive 
rewrite of the Tax Code in more than 30 years. Across the 
country, its impact on our economy is already evident in the 
form of reduced tax burdens and more money in the pockets of 
middle-class Americans.
    Today we are going to focus on the effects of tax reform on 
the energy sector. I would like to welcome our witnesses who 
will share their perspectives on how that reform is impacting 
their businesses.
    Across the country, the Tax Cuts and Jobs Act is resulting 
in widespread economic benefits, providing tangible relief for 
American workers and their families. The savings resulting from 
tax reform is now beginning to reinvigorate our national 
economy and a renewed confidence and the lower cost of doing 
business is resulting in bigger paychecks, more jobs, and, yes, 
more benefits.
    It is not just political rhetoric. We actually are seeing 
the benefits of tax reform across the U.S. economy.
    Since the beginning of 2018, the country's GDP has risen by 
2.2 percent. Small business owners are experiencing the 
benefits of tax reform, with over three-quarters indicating 
that they believe the current business climate is heading in a 
positive direction and 87 percent expecting that it will have a 
positive impact on the economy.
    The savings from tax reform are allowing these companies to 
reinvest in their employees through wage increases, in bonuses, 
and more benefits.
    These perceptions are also supported by the hard numbers. 
According to CBO, the Tax Cuts and Jobs Act is estimated to 
grow wages by $1.2 trillion over the next decade.
    In Michigan, Penske Automotive recently announced that, as 
a result of tax reform, they would increase company matching 
401(k) contributions for employees from 1.5 to 2.5 percent.
    The benefits of tax reform can be measured by employment 
numbers as well. Businesses are increasing hiring new 
employees. Last month, 223,000 new jobs were created. In 
addition, there are 6.7 million job openings with only 6.4 
million available workers to fill them--obviously, more jobs 
than people out of work, something the American economy has 
never before experienced.
    Energy companies have experienced firsthand the benefits of 
the recent tax reform. Since the passage of the Tax Cuts and 
Jobs Act, utility companies in 49 out of 50 States and DC have 
taken action to pass their tax savings on to their customers. 
In Michigan, several utilities, such as Consumers and DTE 
Energy, have publicly announced their plans to pass on those 
savings to Michigan families and businesses.
    Utility savings are happening all over the country. 
Currently, at least 102 utilities across the U.S. have lowered 
rates for consumers, and they are now seeing lower utility 
bills for their electricity, gas, and water. In Michigan, my 
State, it will result in DTE Energy passing along a savings of 
more than $190 million to their 3.5 million customers.
    Notably, FERC is also acting to ensure that reduction in 
the corporate income tax rate is reflected in the rates charged 
by the electric transmission, natural gas, and oil pipeline 
companies that it regulates.
    Tax reform also has helped spur economic growth and 
investment for our Nation's infrastructure sector and enabled 
the build-out of more energy infrastructure.
    Recently, again in Michigan, our own ITC Holdings, an 
independent transmission company, announced that it would 
reduce its customer rates as a result of the lower tax rate. 
For capital intensive infrastructure tax reform is allowing 
greater long-term stability for large projects with longer 
construction timelines, and that translates into more American 
jobs and, indeed, helps strengthen our Nation's economy.
    So today's witnesses represent businesses that are on the 
front line and have already experienced some of the effects of 
tax reform.
    Thank you for being with us today. We look forward to your 
testimony on how the bill has impacted your businesses, 
employees, and customers.
    [The prepared statement of Mr. Upton follows:]

                 Prepared statement of Hon. Fred Upton

    Good morning and welcome to today's hearing where we will 
be focusing on the Benefits of Tax Reform on the Energy Sector 
and Consumers. As you know, last December Congress passed the 
Tax Cuts and Jobs Act of 2017. This new law is the most 
comprehensive rewrite to the tax code in more than three 
decades. Across the country, its impacts on our economy are 
already evident, in the form of reduced tax burdens and more 
money in the pockets of middle-class Americans. Today, we'll be 
focusing on the effects of tax reform on the energy sector and 
I'd like to welcome our witnesses who will share their 
perspectives on how tax reform is impacting their businesses.
    Across the Nation, the Tax Cuts and Jobs Act is resulting 
in widespread economic benefits, providing tangible relief for 
American workers and their families. The savings resulting from 
tax reform is now beginning to reinvigorate our national 
economy and a renewed confidence and lower cost of doing 
business is resulting in bigger paychecks, more jobs, and more 
benefits. This is not just political rhetoric--we are actually 
seeing the benefits of tax reform across the United States 
economy. Since the beginning of 2018, the country's GDP has 
risen by 2.2 percent.
    Small business owners are experiencing the benefits of tax 
reform, with over threequarters indicating they believe the 
current business climate is heading in a positive direction, 
and 87 percent expecting that it will have a positive impact on 
the economy. The savings from tax reform are allowing these 
companies to reinvest in their employees through wage increases 
and bonuses. These perceptions are also supported by hard 
numbers. According to the nonpartisan Congressional Budget 
Office, the Tax Cuts and Jobs Act is estimated to grow wages by 
$1.2 trillion over the next decade. In my home State of 
Michigan, Penske Automotive recently announced that as a result 
of tax reform, they would increase company matching 401(k) 
contributions for employees from 1.5 percent to 2.5 percent.
    The benefits of tax reform can be measured by employment 
numbers, too. Businesses are increasingly hiring new employees. 
In fact, just last month, 223,000 new jobs were created. In 
addition, there are 6.7 million job openings and just 6.4 
million available workers to fill them, meaning there are more 
jobs than people out of work--something the American economy 
has never experienced before.
    Energy companies have experienced first-hand the benefits 
of the recent tax reform. Since the passage of the Tax Cuts and 
Jobs Act, utility companies in 49 out of 50 States, and DC, 
have taken action to pass their tax savings on to their 
customers. In my home State, several utilities, such as 
Consumers and DTE Energy, have publicly announced their plans 
to pass on their savings to Michigan families.
    Utility savings are happening all over the country. 
Currently, at least 102 utilities across the United States have 
lowered rates for customers and American consumers are now 
seeing lower utility bills for their electricity, gas, and 
water services. In Michigan, this will result in DTE Energy 
passing along a savings of more than $190 million to their 3.5 
million customers. Notably, the Federal Energy Regulatory 
Commission is also acting to ensure that the reduction in the 
corporate income tax rate is reflected in the rates charged by 
the electric transmission, natural gas and oil pipeline 
companies that it regulates.
    Tax reform also has helped spur economic growth and 
investment for our Nation's manufacturing sector and enabled 
the build-out of more energy infrastructure. Just recently 
Michigan's own ITC Holdings, an independent transmission 
company, announced it would reduce its customer rates as a 
result of the lower tax rate. For capital-intensive 
infrastructure, tax reform is allowing greater long-term 
stability for large projects with longer construction 
timelines. This translates into more American jobs and helps 
strengthen our Nation's economy.
    Today's witnesses represent business that are on the front 
line and have already experienced some of the effects of tax 
reform. Thank you again for being here today, and I look 
forward to hearing your firsthand accounts of how the tax bill 
has impacted your businesses, employees, and customers.

    Mr. Shimkus. In your last 42 seconds, can I have your time?
    Mr. Upton. Yes. I yield to the gentleman from Illinois.
    Mr. Shimkus. Thank you.
    We always want to welcome our visitors. I want to make a 
special shoutout to Mr. Sam McCammon, who is president of 
Anamet Electrical, Incorporated, which operates out of Mattoon, 
Illinois, which is in the 15th District of Illinois.
    We are happy to have you and look forward to hearing your 
testimony.
    With that, Mr. Chairman, thank you for the time. I yield 
back.
    Mr. Upton. Thank you.
    The Chair would recognize the ranking member of the full 
committee for an opening statement, Mr. Pallone.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you, Mr. Chairman.
    This hearing is nothing more than a blatant attempt by the 
Republican majority to tout its unpopular tax scam in the hopes 
that middle-class Americans, who are not seeing any substantial 
benefits from the new law, might just reconsider their 
opposition. And I wouldn't bet on it.
    The GOP tax scam remains enormously unpopular with the 
American people. They understand that the new law 
overwhelmingly benefits the wealthy and corporate interests 
while saddling them with rising healthcare costs, higher taxes 
on middle-class homeowners, and drowning their children in new 
debt.
    In fact, a poll released by Monmouth University on Monday 
shows that the majority of Americans are not fooled by this 
scam. Only 34 percent of the public approves of the Republican 
tax law, and the poll found that it is actually becoming less 
popular with time, dropping 6 points in approval since late 
April.
    Republicans are obviously focusing this hearing around 
businesses, because it is the corporate sector and the wealthy 
owners who reap the main benefits of the GOP tax scam, not 
middle-class wage earners or their families. Since passage of 
the bill in December, real average hourly earnings have not 
budged.
    In fact, a recent Washington Post analysis of the data 
released by the Trump administration's Bureau of Labor 
Statistics showed that real average hourly earnings year over 
year have actually gone down slightly.
    So it is easy to see why Republicans don't want to focus on 
the bill's impact on real wages for working Americans.
    Now, even if you are a middle-class family who thought you 
might benefit from the GOP tax scam, chances are the policies 
pushed by President Trump and congressional Republicans have 
more than wiped out that benefit.
    For instance, healthcare premiums are on the rise thanks to 
the tax bill eliminating the Affordable Care Act's individual 
mandate. The Congressional Budget Office recently stated that 
the average premium for a benchmark health plan is about 34 
percent higher than it was in 2017. And CBO and the Joint 
Committee on Taxation actually expect premiums for these plans 
to increase by an additional 15 percent from 2018 to 2019 as a 
result of the GOP tax bill's provisions.
    From an energy perspective, gas prices at the pump are also 
going up, thanks in large part to President Trump's reckless 
Middle East policy and his rollback of fuel economy standards. 
In the last 3 months, those actions have helped feed a 40-cent 
spike in the price of gas.
    In fact, the price at the pump has risen nearly 25 percent 
since President Trump took office. Analysts at Morgan Stanley 
have estimated that the increase this year alone will probably 
devour a full third of any savings people might have seen from 
the GOP tax plan.
    For those in my home State of New Jersey, the GOP tax scam 
has been particularly painful. Elimination of a huge portion of 
the State and local tax deduction is increasing taxes on people 
who already pay huge amounts of Federal tax.
    And it is not just New Jersey. The same is true for middle-
income homeowners in New York, California, Illinois, 
Connecticut, Oregon, Massachusetts, Minnesota, and Rhode 
Island. Taxpayers in Pennsylvania, Wisconsin, and Virginia will 
also feel the pinch.
    So Americans understand that the GOP tax scam bill is only 
rewarding the wealthiest among us while drowning our children's 
future in a sea of debt. It has already increased the debt to 
$20 trillion, and CBO has predicted that the annual budget 
deficits will start to hit the $1 trillion mark by 2020.
    And what do Republicans do when they create deficits by 
cutting taxes without paying for it? They then propose cuts to 
Social Security, Medicare, and Medicaid. Speaker Ryan has 
already talked about so-called reform of these popular 
programs, and now the Republican budget proposal unveiled just 
yesterday includes drastic cuts to all three programs.
    So, Mr. Chairman, the Republican tax law is a scam that 
benefits the wealthy and the corporate interests. The American 
people are not fooled, and no rhetoric thrown out today is 
going to change that fact.
    I don't know if anybody wants my extra minute. If not, I 
will yield back.
    [The prepared statement of Mr. Pallone follows:]

             Prepared statement of Hon. Frank Pallone, Jr.

    This hearing is nothing more than a blatant attempt by the 
Republican majority to tout its unpopular Tax Scam in the hopes 
that middle-class Americans--who are not seeing any substantial 
benefits from the new law--might just reconsider their 
opposition.
    I wouldn't bet on it. The GOP tax scam remains enormously 
unpopular with the American people. They understand that the 
new law overwhelmingly benefits the wealthy and corporate 
interests, while saddling them with rising health care costs, 
higher taxes on middle-class homeowners, and drowning their 
children in new debt.
    In fact, a poll released by Monmouth University on Monday 
shows that the majority of Americans are not fooled by this 
scam--only 34 percent of the public approves of the Republican 
tax law. And, the poll found that it is actually becoming less 
popular with time--dropping six points in approval since late 
April.
    Republicans are obviously focusing this hearing around 
businesses because it is businesses and their wealthy owners 
who reap the main benefits of the GOP tax scam, not middle-
class wage earners or their families.
    Since passage of the tax bill in December, real average 
hourly earnings have not budged. In fact, a recent Washington 
Post analysis of the data released by the Trump 
administration's Bureau of Labor Statistics showed that real 
average hourly earnings year over year have actually gone down 
slightly. So, it's easy to see why Republicans don't want to 
focus on their bill's impact on real wages for working 
Americans.
    Even if you are a middle-class family who thought you might 
benefit from the GOP tax scam, chances are the policies pushed 
by President Trump and Congressional Republicans have more than 
wiped out that benefit. For instance, health care premiums are 
on the rise thanks to the tax bill eliminating the Affordable 
Care Act's individual mandate. The Congressional Budget Office 
recently stated that the average premium for a benchmark plan 
is about 34 percent higher than it was in 2017. And CBO and the 
Joint Committee on Taxation actually expect premiums for these 
plans to increase by an additional 15 percent from 2018 to 2019 
as a result of the GOP tax bill's provisions.
    From an energy perspective gas prices at the pump are also 
going up thanks in large part to President Trump's reckless 
Middle East policy and his rollback of fuel economy standards. 
In the last three months, those actions have helped feed a 40-
cent spike in the price of gas. In fact, the price at the pump 
has risen nearly 25 percent since President Trump took office. 
Analysts at Morgan Stanley have estimated that the increase 
this year alone will probably devour a full third of any 
savings people might have seen from the GOP tax plan.
    For those in my home State of New Jersey, the GOP tax scam 
has been particularly painful. The elimination of a huge 
portion of the State and local tax deduction is increasing 
taxes on people who already pay huge amounts of Federal tax. 
It's not just New Jersey--the same is true for middle-income 
homeowners in New York, California, Illinois, Connecticut, 
Oregon, Massachusetts, Minnesota, and Rhode Island. Taxpayers 
in Pennsylvania, Wisconsin, and Virginia will also feel the 
pinch.
    Americans understand that the GOP tax scam bill is only 
rewarding the wealthiest among us, while drowning our 
children's future in a sea of debt. It has already increased 
the debt to $20 trillion, and CBO has predicted that annual 
budget deficits will start to hit the $1 trillion mark by 2020.
    And what do Republicans do when they create deficits by 
cutting taxes without paying for it--propose cuts to Social 
Security, Medicare and Medicaid. Speaker Ryan's already talked 
about so-called reform of these popular programs. And now, the 
Republican budget proposal, unveiled just yesterday, includes 
drastic cuts to all three programs.
    The Republican tax law is a scam that benefits the wealthy 
and the corporate interests. The American people are not 
fooled, and no rhetoric thrown out today is going to change 
that fact.

    Mr. Upton. The gentleman yields back.
    The Chair recognizes the chair of the full committee, Mr. 
Walden, for an opening statement.

  OPENING STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN 
               CONGRESS FROM THE STATE OF OREGON

    Mr. Walden. Well, Mr. Chairman, thank you for having this 
hearing.
    I want to thank our panel of witnesses for being here. You 
might imagine we have a different point of view on this side of 
the aisle. It is actually your money to start with, and 
Government has a lot of waste, fraud, and abuse that needs to 
be dealt with.
    And we are actually growing the economy and growing jobs. 
The lowest unemployment rates in decades.
    And the American people are responding. When you look at 
right track, wrong track, where the country is headed, it is 
moving in the right direction. When you look at their 
confidence in the economy, headed in the right direction.
    Then, if you actually get home and talk to people that are 
affected, like I do every week, I was out in Bend, Oregon, this 
weekend, and I met with the folks at GoodLife Brewing. That is 
a little startup, mom-and-pop, family-owned brewery and 
distillery, started, I don't know, 6, 8--oh, they started in 
2010. It has been 8 years. And they proudly said just the 
change in the excise tax on beer will save them $75,000.
    They said, ``We are not putting that in our pocket. We are 
hiring two more people part-time and investing in new 
equipment.''
    And I said, ``And don't forget, the tax also said you get 
to write off that equipment right away.''
    I was a small business owner for 21 years with my wife. 
When you have signed the front of a payroll check, it makes a 
difference and you understand the importance of the changes we 
made in the Tax Code to grow the economy.
    Now, I only visit them because these microbreweries, we 
have got 243 of them in Oregon, do value-added agriculture. And 
I want to make sure that those value-added agricultural 
products are meeting quality assurance. So you have got to do 
product testing from time to time in this job.
    Mr. Shimkus. That is a joke, people.
    Mr. Walden. Yes. I know. Couldn't hear. The door is open.
    So I went to the Walmart distribution facility, 816 
employees in my district working at Walmart. They all got 
bonuses. They got their incentive comp, which they earned. And 
then they are going to get the tax cut.
    These are real working people who felt left behind in the 
past. Between the bonuses and the tax cuts, it could be a 
couple thousand bucks.
    Now, I know Nancy Pelosi and the Democrats think that is 
crumbs. They said that. They would repeal all this stuff. They 
never did support it. Not a single Democrat voted to cut taxes 
in America. And so we did.
    And the result was we don't have to live with a 1.5 percent 
GDP growth, which is what the Democrats told us America was 
only capable of.
    Instead, we have lifted the dead hand of over-Government 
regulation and incented the private sector to create new jobs, 
and they are doing it in record numbers--a million new jobs 
since the tax cuts were passed just 6 months ago. And as my 
chairman pointed out, there are now more job openings than 
there are people to fill them.
    Now, that is a heck of a lot better than what we did during 
the Obama years when we argued about how much longer we needed 
to extend unemployment benefits and how we better just settle 
in at 1.5, 2 percent economic growth. That was their vision for 
America: regulate, tax, and restrict.
    Ours is about freeing up energy, creating new jobs all 
across America. And I think you are seeing that happen.
    Now, those weren't my prepared remarks, so let me move on 
to these. When you just live it every day, you kind of see it 
firsthand.
    Because I want to talk about energy, because in my State we 
are seeing the energy companies say, ``We are going to pass on 
all these savings back to ratepayers and customers.''
    And it is across every one of these. So you are going to 
see not only wage increases that have been announced, tax 
savings that have been announced, but on your energy bill, 
reductions. Because under our law, they have got to pass that 
back.
    Now, some of them are still figuring out their rates and 
everything for next year. But those savings are going to go 
back in lower heating bills, lower electricity bills, lower 
energy bills. That is real money for people. They will save.
    And so I just, I am glad. We want to hear your stories. I 
have read your testimony. Look, this is really important.
    We are going to see economic growth of 3, some say as much 
as 4 percent, maybe even higher than that. And you think what 
that will do. And I just think we should be optimistic about 
this.
    We lived 8 years under their plan. How did that work out 
for you? Now the kids can move out of their parents' basement. 
They don't have to stare up at the old Obama campaign sign 
anymore. And they can actually go to work. It is a hell of a 
deal.
    And so we are seeing an economy that is growing. We are 
seeing a country that is thriving. And we have got new 
innovation and new opportunity.
    And that is what this committee is all about. It is putting 
the consumer first. It is freeing access to our resources. It 
is building our broadband. It is cutting through the 
bureaucratic nightmare that restricts permits and new 
development. We are moving forward, and it is showing in the 
numbers.
    And with that, Mr. Chairman, I am happy to yield back.
    [The prepared statement of Mr. Walden follows:]

                 Prepared statement of Hon. Greg Walden

    Good morning and welcome to today's hearing on the benefits 
of tax reform on the energy sector and consumers. It's been six 
months since Congress passed the most sweeping tax reform in a 
generation, and now we're beginning to see the real, positive 
effects of pro-growth reform.
    Before passage of the Tax Cuts and Jobs Act, our economy 
was underperforming. Following one of the worst economic 
recessions of our lifetime, recovery was flat, hardworking 
Americans weren't getting wage increases, and living standards 
were stagnant. Many Americans were justifiably anxious about 
the lack of opportunity and economic uncertainty.
    Fast forward to today. With the passage of Tax Cuts and 
Jobs Act, we're beginning to see tremendous economic growth. 
Americans are more optimistic and feeling better about the 
future. Unemployment is at a record low, paychecks are getting 
bigger, and U.S. businesses are more competitive and increasing 
investment. These benefits are flowing back to employees and 
consumers.
    Since the Tax Cuts and Jobs Act was signed into law in 
December the unemployment rate has fallen to a historic low of 
three-point-eight percent. There are now more job openings than 
workers--a historic ``first'' since the Bureau of Labor 
Statistics started tracking job openings and labor turnover 
numbers in 2000. According to the Treasury Department, ninety 
percent of Americans are seeing bigger pay checks. And 
according to the Council of Economic Advisors, five and a half 
million American workers have received bonuses, raises, and 
other benefits thanks to tax reform.
    In eastern Oregon, the part of the State that I represent, 
a family earning the median income of approximately $50,000 per 
year will pay about $1,300 less under tax reform. Over the next 
8 years, that's more than $10,000 in savings for that family.
    Over the last several months, I've toured several 
businesses in eastern Oregon that are investing back into their 
businesses and their employees thanks to tax reform. These 
businesses are giving bonuses or raises, hiring more workers, 
and expanding their operations. Just last weekend I visited 
Good Life Brewing in Bend. Due to the reduced excise tax on 
craft brewers, they are reinvesting in their workforce and 
adding to their team.
    Consumers are also benefiting from lower monthly bills, as 
utility companies are reducing electric, gas, and water rates 
because of the Tax Cuts and Jobs Act. More than one hundred 
utilities across the country have announced plans to lower 
their rates. I am pleased to hear that at least three of our 
Oregon utilities--Avista Corporation, Pacific Power, and Rocky 
Mountain Power--have all announced that they plan to pass the 
benefits of tax cuts on to their customers.
    Thanks to tax reform, our economy is coming back to life. I 
look forward to hearing from our witnesses about how tax reform 
has positively impacted their businesses and communities.
    Thank you, I yield back.

    Mr. Upton. The gentleman yields back.
    The Chair would recognize the ranking member of the 
subcommittee, Mr. Rush, for 5 minutes for an opening statement.

 OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Rush. I want to thank you, Mr. Chairman.
    Mr. Chairman, tax reform is an interesting topic for an 
Energy Subcommittee hearing. Why tax reform when we consider we 
do not have jurisdiction over tax policy?
    Unfortunately, Mr. Chairman, I cannot sit here as if this 
is business as usual when we are currently facing a tragedy 
that is taking place as we speak at our southern border. If we 
are going to deviate in this hearing from the issues that are 
actually related to our jurisdiction, then let's deviate, Mr. 
Chairman.
    I believe that time and our Nation would be better served 
by speaking up and speaking out against the Trump 
administration's mean-spirited, racist, and immoral new policy 
of separating immigrant children from their parents.
    Mr. Chairman, this new policy is a blatant attempt to use 
these innocent young babies as pawns in the President's sick 
and twisted political game for getting what he wants in regards 
to immigration policy.
    The fact of the matter, Mr. Chairman, is that Republicans 
control every branch of the Government and they should be able 
to govern and enact policies that reflects their core values.
    Mr. Chairman, babies unborn and babies born must be our 
Nation's priority. Ripping young children away from their 
parents in order to extort money for a wall is both evil and 
inhumane. And it is about time that members of the Republican 
Party stand up to the entitled blowhard currently occupying the 
White House.
    The silence by so many Republican Members of Congress in 
light of so many misguided, asinine, and un-American decisions 
by this administration is both shameful and telling.
    The fact of the matter, Mr. Chairman, is that either if my 
Republican colleagues endorse and agree with this policy on 
separating families at the border for political gain or they 
are opposed to it and they have decided that their political 
futures are more important than the character and 
representation of our great Nation.
    Mr. Chairman, Ranking Member Pallone and I, along with many 
of our Democratic colleagues, will be sending Chairman Walden 
and Health Subcommittee Chairman Burgess a letter later today 
requesting a hearing as soon as possible to address this issue.
    We need to examine how many of these children have been 
forcibly separated from their parents and forced into custody 
of the Department of Health and Human Services' Office of 
Refugee Settlement.
    We also need, Mr. Chairman, to examine what type of mental 
and psychological damage and severe trauma that these children 
are being subject to stemming from this sinister and cynical 
policy of snatching them from their parents and rounding them 
up to be put in cages at such early and vulnerable stages of 
their lives.
    As the Irish philosopher and father, Mr. Chairman, of 
modern conservatism once stated: ``The only thing necessary for 
the triumph of evil is for good men to do nothing.''
    Mr. Chairman, we are at a pivotal time in our history, and 
we can no longer afford for good men to sit back, shake their 
heads in silence, or whisper about the wrongdoings privately 
being done behind the scenes.
    No, Mr. Chairman, now is the time for Congress to grow a 
spine and reclaim our constitutional duty as an equal and 
separate branch of Government ready and willing and able to 
serve as a check to a President who has seemingly gone mad.
    Mr. Chairman, Proverbs 29:2, to quote the Bible, as the 
Attorney General tried to quote, but let's quote the Bible, 
Proverbs 29:2: ``When the righteous are in authority, the 
people rejoice; But when a wicked man rules, the people 
groan.''
    Mr. Chairman, if not now, when? If not us, then who will 
speak out against this evil?
    I can assure you that this will not be the last time this 
issue comes up during business before this subcommittee. I urge 
all of my Republican colleagues to finally make their voices 
heard so we can surely represent the will and the spirit of the 
American people.
    Lastly, Mr. Chairman, as Alexander de Tocqueville once 
observed: America is great because America is good. If America 
ceases to be good, then America ceases to be great.
    Thank you, and I yield back the balance of my time.
    [The prepared statement of Mr. Rush follows:]

                Prepared statement of Hon. Bobby L. Rush

    Mr. Chairman, tax reform is an interesting topic for an 
Energy Subcommittee hearing, considering we do not have 
jurisdiction over tax policy.
    Unfortunately, Mr. Chairman, I cannot sit here as if this 
is business as usual when we have a tragedy taking place as we 
speak at our southern border.
    If we are going to deviate in this hearing from issues 
actually related to our jurisdiction, then I believe this time 
would be better served speaking up and speaking out against the 
Trump administration's mean-spirited, racist, and immoral new 
policy of separating immigrant children from their parents.
    Mr. Chairman, this new policy is a blatant attempt to use 
these innocent young children as pawns in the President's sick 
and twisted political game for getting what he wants in regards 
to immigration policy.
    The fact of the matter is that Republicans control every 
branch of the Government and they should be able to govern and 
enact policy that reflects their core values.
    Ripping young children away from their parents in order to 
exhort money for a wall is both evil and inhumane and, it is 
about time that Members of the Republican Party stand up to the 
entitled blowhard currently occupying the White House.
    The silence by so many Republican Members of Congress, in 
light of so many misguided, asinine, and un-American decisions 
by this administration is both shameful and telling.
    The fact of the matter is that either my Republican 
colleagues endorse and agree with this policy of separating 
families at the border for political gain.
    Or they have decided that their political futures are more 
important than the character and reputation of our great 
Nation.
    Mr. Chairman, Ranking Member Pallone and I, along with many 
of our Democratic colleagues, will be sending Chairman Walden 
and Health Subcommittee Chairman Burgess, a letter later today 
requesting a hearing as soon as possible to address this issue.
    We need to examine how many of these children have been 
forcibly separated from their parents and forced into custody 
of the Department of Health and Human Services' Office of 
Refugee Settlement.
    We also need to examine what type of damage and severe 
trauma these children are being subjected to, stemming from 
this sinister and cynical policy of snatching them from their 
parents and rounding them up into cages at such an early age.
    As the Irish philosopher and father of modern conservatism 
once stated: ``The only thing necessary for the triumph of evil 
is for good men to do nothing.''
    Mr. Chairman, we are at a pivotal time in our history and 
we can no longer afford for good men to sit back, shake their 
heads, and whisper about wrongdoing privately behind the 
scenes.
    No, now is the time for Congress to grow a spine and 
reclaim our Constitutional duty as an equal and separate branch 
of Government ready and able to serve as a check to a president 
who has seemingly gone mad.
    Proverbs 29:2: ``When the righteous are in authority, the 
people rejoice; But when a wicked man rules, the people 
groan.''
    Mr. Chairman, if not now, when, if not us, then who will be 
speak out against evil?
    I can assure you that this will not be the last time this 
issue comes up during business before this subcommittee and I 
urge all of my Republican colleagues to finally make their 
voices heard so we can truly represent the will and spirit of 
the American people.
    As Alexander de Tocqueville once observed: ``America is 
great because she is good. If America ceases to be good, 
America will cease to be great.''
    Thank you, Mr. Chairman, and with that I yield back the 
balance of my time.

    Mr. Upton. The gentleman yields back. Time has expired.
    At this point we are going to entertain the testimony from 
our witnesses.
    We appreciate you sending your testimony up in advance, and 
we will give each of you 5 minutes to summarize that, at which 
point we will do questions.
    I will say that we are expecting votes around 11:15 or 
11:20.
    So, Ms. Wade, director of research and policy analysis from 
the NFIB, we welcome you and your organization here, and you 
are recognized for 5 minutes.
    Thank you.

    STATEMENTS OF HOLLY WADE, DIRECTOR, RESEARCH AND POLICY 
ANALYSIS, NATIONAL FEDERATION OF INDEPENDENT BUSINESS RESEARCH 
CENTER; SAM MCCAMMON, PRESIDENT, ANAMET ELECTRICAL, INC.; SETH 
 HANLON, SENIOR FELLOW, CENTER FOR AMERICAN PROGRESS; AND TOM 
   FERGUSON, PRESIDENT AND CHIEF EXECUTIVE OFFICER, AZZ, INC.

                    STATEMENT OF HOLLY WADE

    Ms. Wade. Good morning, Chairman Upton, Ranking Member 
Rush, and members of the Subcommittee on Energy. On behalf of 
the NFIB, I appreciate the opportunity to submit for the record 
this testimony for your hearing entitled ``The Benefits of Tax 
Reform on the Energy Sector and Consumers.''
    My name is Holly Wade, and I serve as the director of 
research and policy analysis of the NFIB Research Center. NFIB 
is the leading small business advocacy association, 
representing members in Washington, DC, and all 50 States.
    Founded in 1943, NFIB's mission is to promote and protect 
the rights of its members to own, operate, and grow their 
businesses. NFIB proudly represents hundreds of thousands of 
members nationwide from every industry and sector.
    NFIB recently published a report that captures small 
business owners' initial reaction to the Tax Cuts and Jobs Act. 
The survey was a random sample of NFIB members with responses 
received between mid-February and mid-April. NFIB published 
this report as taxes and tax-related activities play a 
significant role in the general operation of small businesses.
    NFIB's 2016 Small Business Problems and Priorities survey 
found that 5 of the top 10 most severe problems facing small 
business owners are tax related, the most severe of which, 
Federal taxes on business income, ranked third out of 75 
problems, with 29 percent of small business owners finding it a 
critical problem in operating their business, not surprising 
since profits are the major source of capital for firm growth 
and expansion.
    The frustration level associated with tax-related costs and 
compliance is immense. The new tax law will help ease some of 
these problems for most small businesses, for some more 
significantly than other.
    For example, increasing the thresholds of the estate tax 
and alternative minimum tax will result in fewer business 
owners having to spend their valuable time and resources 
complying with these burdensome and costly taxes.
    NFIB's monthly Small Business Economic Trends survey 
highlights small business owners' enthusiasm for the new tax 
law as near-record optimism levels have been achieved in the 
months following the law's enactment.
    Taxes historically received the most votes as the single 
most important problem since 1982, but fell to only 13 percent 
in March, the lowest reading in 35 years.
    Most small business owners are still learning about how the 
law will affect them and their businesses as the impact depends 
on their form of business and detailed IRS interpretations that 
are still being developed. The expiration of small business 
provisions, including Section 199A and the individual tax rate, 
creates looming uncertainties that will affect businesses 
differently.
    Today on Capitol Hill there are more than 600 NFIB members 
advocating for permanency of the small business provisions to 
provide certainty for long-term business planning.
    Incorporated businesses have a clearer path, as the 
corporate tax rates were permanently consolidated to 21 percent 
and the corporate alternative minimum tax was permanently 
repealed.
    Small business owners are now assessing how these changes 
will affect them personally and within their business.
    The new tax law is a significant step forward in easing one 
of the main concerns of small business owners: the impact of 
Federal taxes on business income. However, the complexities of 
the Tax Code remain.
    Owners will continue to seek professional assistance to 
understand and comply with the new Tax Code. But the reduction 
in taxes will free up resources to support the growth of their 
business and ease issues related to intergenerational changes 
in management.
    Thank you for inviting me to testify. I look forward to 
answering any questions you may have.
    [The prepared statement of Ms. Wade follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Upton. Thank you.
    Mr. McCammon, president of Anamet Electrical, Incorporated.
    We welcome you. And you are recognized for 5 minutes.

                   STATEMENT OF SAM MCCAMMON

    Mr. McCammon. Thank you. Chairman Upton, Ranking Member 
Rush, and members of the subcommittee, thank you for the 
opportunity to testify in front of you today on such an 
important topic, the impact the Tax Cuts and Jobs Act has had 
on businesses in the energy sector.
    My name is Sam McCammon, and I am president of Anamet 
Electrical, Incorporated. Anamet is the global leader in 
offering the highest quality products, superior service, and 
pioneering innovations for flexible liquid-tight electrical 
wiring conduit and industrial stainless steel hose.
    Our products are used in buildings, power plants, including 
the only flexible conduit rated for use in nuclear power plants 
in containment areas, and military installations, industrial 
facilities, and mass transit systems around the world. Based in 
Mattoon, Illinois, Anamet has been serving the global 
electrical industry for more than 100 years.
    According to a recent survey of electrical manufacturers, 
53 percent said that tax reform has already had a net positive 
impact on their business, while an additional 34 percent are 
waiting for full implementation before they can assess the 
benefits of tax reform. Nearly one in three electrical 
manufacturers surveyed said they had already made investments 
in employee salaries and benefits, domestic employment, 
equipment, or research and development. The survey also found 
that more than half of those surveyed are planning to take 
actions because of the Tax Cuts and Jobs Act.
    At Anamet Electrical, Incorporated, we have benefited from 
the lower corporate tax rate, and we made investments in our 
employees and equipment as a result. After foregoing pay raises 
for consecutive years, we were able to finally give our 
employees a much deserved wage increase.
    Furthermore, because of the increase in the Section 179 
deduction limit, Anamet is planning to increase our capital 
expenditures in 2019 by over 100 percent from normal investment 
levels.
    These investments in manufacturing equipment will reduce 
our costs enough to better position us to be competitive with 
our competition, both foreign and domestic, and will open up 
new markets in bulk transfer hose and exhaust hose, including 
the European market. We also plan a significant investment in 
testing a new compound for our nuclear power generation 
Sealtite product to comply with required radiation testing 
procedures.
    Despite all of its benefits, there are a few issues with 
the Tax Cuts and Jobs Act that need to be resolved before we 
can realize the full benefits of the legislation.
    The Tax Cuts and Jobs Act aimed to spur investments in 
upgrades and improvements to commercial properties by making 
qualified improvement property, or QIP, eligible for 
accelerated bonus depreciation and subject to a 15-year 
depreciation recovery period.
    Unfortunately, the text of the final bill mistakenly 
defaults to a depreciation recovery period of 39 years rather 
than 15 years. The chart in my testimony clearly shows you the 
impact of it there. We ask that Congress include a fix to this 
issue in an upcoming legislation that can be signed into law.
    Also of concern to electrical manufacturers are the Base 
Erosion Anti-Abuse Tax and Global Intangible Low-Taxed Income, 
GILTI, provisions. These are detailed in my written testimony, 
but we believe they can be clarified with guidance from 
Treasury.
    Anamet Electrical, Incorporated, and many other electrical 
manufacturers support the Tax Cuts and Jobs Act, and businesses 
like mine are already reaping the benefits. However, the 
changes I just spoke about are needed for the full potential of 
the legislation to be realized.
    I thank the committee for hosting this hearing and for 
inviting Anamet Electrical, Incorporated, to testify. We look 
forward to working with and being a resource for the committee 
as you continue to work to make U.S. manufacturers like Anamet 
more competitive.
    Thank you for your attention, and I look forward to 
answering any questions you might have concerning my testimony.
    [The prepared statement of Mr. McCammon follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Upton. Thank you very much.
    We are joined by Mr. Seth Hanlon, senior fellow for the 
Center for American Progress.
    Welcome to you. Again, thanks for your testimony. You, too, 
are recognized for 5 minutes.

                    STATEMENT OF SETH HANLON

    Mr. Hanlon. Thank you, Mr. Chairman, Mr. Rush, Mr. Pallone, 
members of the committee opportunity. Thank you for the 
opportunity to discuss the effects of the 2017 tax law.
    My testimony will focus on the law as a whole and the ways 
it is failing to fulfill the promises that were made about it.
    Now, we should be clear that the full effects of the tax 
bill will take years and even decades to materialize. But the 
early indications are that it is functioning as its critics 
predicted: conferring windfall tax cuts on wealthy Americans 
and large corporations which are using the tax cuts, first and 
foremost, to reward shareholders through stock buybacks, that 
it is having little or no effect on wages, that it is 
ballooning the Federal budget deficit and raising healthcare 
costs for working Americans. And I will discuss each of these 
points in turn.
    First, this was supposed to be a tax bill focused on the 
middle class and small businesses. In reality, the tax cuts are 
badly skewed to large corporations and wealthy Americans who 
were already receiving an outsized share of the economy's 
gains. The highest income 1 percent of the Americans are 
receiving an average tax cut more than 50 times bigger than the 
average middle-income household.
    And even the provision of the bill that is supposed to be 
for small businesses is going to very wealthy business owners 
and investors. More than 60 percent of the benefit of the new 
pass-through deduction is going to people with incomes in the 
top 1 percent of all Americans, according to the Joint Tax 
Committee.
    And at the same time, 8.5 million households will see a tax 
increase this year, nearly 8 million of which have incomes of 
$200,000 or less. And even those households that receive modest 
tax cuts in the near term may well be worse off when the tax 
cuts are ultimately paid for.
    The tax bill is projected to add 1.9 trillion to deficits 
over the next 10 years, increasing pressure on Social Security, 
Medicare, Medicaid, and education. And we can't know at this 
point how that cost will be offset. But under the most likely 
scenarios for financing the tax cut, most low- and middle-
income Americans are made worse off in the end.
    Second, 6 months after the tax bill passed, workers' wages 
have not increased at all in real terms; in other words, when 
taking into account the rise of prices. The latest report from 
the Bureau of Labor Statistics found that average hourly 
earnings for production and nonsupervisory workers, which is 80 
percent of American workers, were a tiny bit less than they 
were at this point last year. Average hourly earnings for all 
workers were similarly unchanged.
    And remember, the reason for the bill's massive tax cuts 
for corporations was supposed to be that they would trickle 
down to workers in the form of higher pay. The White House even 
predicted that the average household income will be $4,000 more 
than it would otherwise be because of the tax bill.
    Now, this ignored both evidence and recent history where 
record levels of after-tax corporate profits failed to 
translate into real wage gains for workers. And, again, it will 
take years for a complete assessment of the tax bill's effects, 
but we should be clear that 6 months after its passage American 
workers haven't gotten the real raise that they were promised.
    Third, tax bill proponents repeatedly claimed that it would 
pay for itself, which is something that no credible economist 
believed. The Congressional Budget Office now projects 1.9 
trillion in additional debt over the next decade. The tax law 
is already worsening Federal deficits by draining revenue.
    In large part as a result of the tax law, the budget 
deficit for the first 5 months of this year has topped $300 
billion, and that is up 38 percent compared to the same period 
last year. The monthly budget deficit for this past month 
increased 66 percent over last May. Revenue from corporate 
taxes is on pace to decline by about $110 billion this year.
    The House majority is now reportedly considering making the 
temporary provisions of the tax bill permanent which would 
compound the damage to the Federal budget and lock in flawed 
and unfair changes to the Tax Code.
    And why does this matter? Because the proponents of the tax 
bill promised that the tax cut wouldn't need to be paid for 
with cuts to Social Security, Medicare, Medicaid, or other 
essential services because the tax bill would pay for itself, 
and that is just not happening.
    Fourth, while there is the clear surge in companies using 
their tax cut to distribute cash to shareholders through 
buybacks, there is no economywide evidence of any surge in 
business investment, and certainly not the kind of enormous 
surge that would be necessary to fulfill the promises about the 
bill.
    Instead, corporations have announced nearly half a trillion 
dollars of stock buybacks, which is a record level, and that is 
money being paid out of corporations, some of it to corporate 
insiders, that is not being invested in equipment, R&D, or 
workers.
    And fifth and finally, the tax bill is undermining 
Americans' access to healthcare. The individual mandate 
repeal--it helped keep premiums affordable by encouraging 
healthier people to obtain health insurance coverage--and over 
time 9 million fewer people will have health insurance coverage 
as a result. Marketplace health insurance premiums will be 10 
percent higher than they would otherwise be, which translates 
into almost a $2,000 increase for the average benchmark plan 
for a family of four.
    And, finally, the Medicare trustees reported this month 
that the tax bill is one of the reasons that Medicare's 
projected finances are worse this year compared to last year, 
with exhaustion of the trust fund now projected to arrive 3 
years earlier.
    Thank you very much.
    [The prepared statement of Mr. Hanlon follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Upton. Thank you.
    Mr. Tom Ferguson, CEO of AZZ, Incorporated, welcome to you.

                   STATEMENT OF TOM FERGUSON

    Mr. Ferguson. Good morning, Chairman Upton, Ranking Member 
Rush, and distinguished members of the committee. My name is 
Tom Ferguson, and I am president and CEO of AZZ, Incorporated. 
I have spent more than 40 years working in various leadership 
roles in the manufacturing and energy sectors, much of it 
working and living overseas.
    So I am proud to be home in Texas and now leading AZZ, a 
company founded in Fort Worth, Texas, in 1956, the same year I 
was born. AZZ has now grown into a global provider of welding 
solutions, specialty electrical equipment, and highly 
engineered services. And we are the acknowledged leader in hot 
dip galvanizing in North America, which is all about make 
infrastructure last longer.
    We primarily serve the energy and infrastructure sectors, 
including everything from nuclear power plants to solar to 
refineries and everything beyond. AZZ is still based in Fort 
Worth. We have over 60 locations worldwide, including 55 
located in the United States.
    AZZ, like most manufacturers, was truly excited to see 
Congress pass the Tax Cuts and Jobs Act last December. Quite 
frankly, in terms of taxation, it leveled the playing field 
with our global competitors that it enjoyed the ability to 
invest more heavily due to their lower tax rates. What tax 
reform really did to AZZ was it gave us the opportunity to 
rethink afresh.
    At AZZ, we have budgeted a 33 percent blended global tax 
rate coming into this new fiscal year, but tax reform has 
brought our global blended rate down to about 22 to 23 percent. 
Between the cash savings from this and the accelerated 
depreciation at 100 percent of our capital investments, AZZ has 
over 10 million of incremental cash that we can now apply to 
new investments and employee benefits.
    According to a recent National Association of Manufacturers 
survey on the impact of tax reform, 86 percent said they plan 
to increase investments, 77 percent said they plan to increase 
hiring, and 72 percent said they plan to increase employee 
benefits.
    AZZ is behaving very much in line with these results. We 
are increasing investments. For instance, we added a second 
continuous galvanized rebar plant, which is a new technology in 
the industry, planned for down the road. But because of tax 
reform, we are now planning to move that forward to 2018. That 
is a $10 million to $15 million investment and represents a 
significant increase over our normal $20 million to 25 million 
in capital outlays.
    AZZ is creating more jobs to staff the new facility, 
probably in the Carolinas or Georgia. We plan to hire 25 to 50 
new workers. We also plan to add 150 to 250 new workers to our 
existing galvanizing facilities to support the growth we see.
    At AZZ we are not just investing in capital, we are also 
taking big steps to ensure that our employees share in the 
benefits of tax reform. We have already invested $1.75 million 
in financial rewards and special bonuses, including $750,000 
into a new rewards and recognition program. AZZ has also 
already given special bonuses of about $1 million to our 
employees. This was in addition to our normal short-term 
incentive programs that paid out last month.
    We recently decided to increase the wages of about 1,000 of 
our lowest wage earners by $1 to $4 per hour, which is an 
additional $3 million to $4 million benefit to our employees. 
And we have doubled our training budgets.
    Finally, tax reform is allowing AZZ to give back to our 
employees and their communities in a unique way by creating a 
charitable foundation called AZZ Cares that helps our employees 
cover critical expenses in a time of crisis and also supports 
local charities.
    The idea started with a companywide GoFundMe drive last 
year after Hurricane Harvey impacted many of our employees. AZZ 
raised $210,000, including the company match, to help them get 
back on their feet. We were so impressed by how the AZZ family 
stepped up that we decided to form our own AZZ Cares 
Foundation.
    As the chief executive of AZZ, I see the benefits of tax 
reform firsthand. Optimism and demand are rising. I am 
investing in my business, my employees, and my community. And I 
also know that many others are as well.
    But naturally there is more that manufacturers would like 
to have seen in tax reform, such as repealing several changes 
set to take effect in coming years. These serve as 
disincentives to investment and innovation, like a planned 
phaseout of full expensing and modifications to the treatment 
of currently deductible R&D expenses that would make it more 
expensive to perform research, as well as imposing further 
limitations on the ability of businesses to deduct interest 
expense.
    Finally, as a general principle, manufacturers also urge 
you to regularly reevaluate the international competitiveness 
of our tax system. Please stay vigilant to ensure the U.S. is 
an attractive place to start and grow a business and remains 
globally competitive in tax rates and structure. We have 
productive, motivated workers in the U.S., but need to ensure 
they have a level playing field in the global manufacturing 
sector.
    So again, thank you for your hard work to get this done. 
Thank you for inviting me to testify today. I am happy to 
answer your questions.
    [The prepared statement of Mr. Ferguson follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Mr. Upton. Well, thank you very much for your testimony.
    At this point we will move to Members to ask questions.
    Just a couple things from my perspective. About a year ago 
I sat down with a--Western Michigan University has an 
outstanding small business forum, a seminar that meets 
regularly. And a year ago, many of those small business men and 
women talked about their biggest obstacles to expanding and 
really creating the growth that they wanted were two prime 
things. One was the cost of capital and the second being the 
regulatory burden that they had.
    About a month or two, I spent some time with them again, 
and they were pretty excited. For Michigan, we have come out of 
the depths of despair. A few years ago we had unemployment 
rates in the double budgets, 12, 13 percent. We now have some 
counties in Michigan under 2 percent. And it is reflective, I 
think, of the national unemployment average, which is, I think, 
3.8 percent.
    Virtually every employer that I know is looking for talent. 
I stopped at a small business on Saturday morning for a toasted 
bagel with cream cheese and a coffee to go and there was a sign 
on the door looking for employees. And by the time you get to 
the cash register, there is yet another sign looking for 
employees.
    I was at a 50th anniversary of a company in Holland, 
Michigan, on Monday. Their CEO told me that they could use 
probably 40 or 50 employees if they could find them.
    Pfizer, which is my largest employer in southwest Michigan, 
told me a year ago that if we passed the tax bill they were 
going to reinvest in the United States. And in fact they came 
out with a wonderful announcement earlier this year, a $450 
million new expansion, 93 employees they were going to 
average--no, 120 employees going to average $93,000 a year in 
salary.
    A small business fellow that met, scrap metal, that I met 
with on Saturday last weekend said, ``Fred, I kept my promise. 
We gave a bonus to every one of our employees.'' I think they 
have 600 employees over a number of different States.
    So it seems like it is working. And for us, too, in my 
district, we lost our largest employer in one of my counties 
about 6 or 7 years ago to Ireland because of the tax rate. Now, 
I hope that they can come home, but I know Ireland is to trying 
to compete with that lower rate.
    But I guess I would ask, my first question, Mr. Ferguson, 
you talked about what you did. Would you have done that had the 
tax bill not passed?
    Mr. Ferguson. We have had opportunities in past years to do 
it. But with the additional--because we had already gotten into 
our budget year, so normally we would not have done it. But 
because of the savings from taxes and the actual cash it 
generated, it absolutely made a huge difference.
    Mr. Upton. And, Mr. McCammon, what is your perspective? You 
know, had we not done so, had it failed, had we not moved 
forward, where would you be today?
    Mr. McCammon. Well, in our planning going into 2018 we were 
trying to decide whether to go ahead with a wage increase or 
not.
    We are under a lot of price pressure, and margins have been 
slipping for the past 3 years in a row. And just being able to 
turn a profit in that economy was pretty tough.
    So we are trying to make a decision. And when that 
announcement came out, that made it much easier to go forward 
with this. So, yes, I think that is why we went forward.
    Mr. Upton. Ms. Wade, my district is filled with those 
little NFIB membership plaques in the windows.
    Have you done a survey as it relates to maybe ask the 
question, ``Had it not passed, where would you be?'' You have 
got some pretty goods statistics, 75 percent indicate that the 
current business climate is heading in a positive direction, 87 
percent expect that the tax reform would have a positive 
impact.
    Have you asked the question, ``What would you have done if 
the tax bill had not passed?'' knowing that the engine of our 
economy really is small businesses and the ones that are 
certainly members in your organization.
    Ms. Wade. Sure. We did ask the question in this survey 
regarding, of those business owners that anticipate lower tax 
liability, what they plan on using the savings for. And it 
spans most general business operations. So increasing 
compensation, hiring employees, capital expenditures.
    And a large portion of them is still undetermined what they 
will do. That will come with talking to their tax professional 
over the next year. But reinvesting in their business is 
certainly their biggest use of tax savings through the tax law.
    Mr. Upton. Thank you.
    My time has expired.
    Mr. Rush.
    Mr. Rush. I want to thank you, Mr. Chairman.
    Mr. Hanlon, I want to be crystal clear from the outset. Who 
is the Republican trickle-down tax bill designed to benefit 
mostly? While my colleagues on the majority have been trying to 
sell this boondoggle to the wealthiest as a bill that will help 
all Americans, who are the real intended beneficiaries of this 
trickle-down tax bill, and how was that structured into the 
provisions of the legislation?
    Mr. Hanlon. So the largest tax cuts from the bill, both in 
absolute dollar terms and also as a percentage of income, go to 
the highest income Americans. So I had mentioned earlier that 
the top 1 percent, on average, and so these are people with 
average incomes of about $2 million, receive a tax cut that is 
50 times larger than people in the middle, and certainly much, 
much larger than people in the low-income working class.
    And then even as a percentage of income. So even as a 
percentage of their much higher income, millionaires get a much 
bigger benefit, three times as much, as people in the middle.
    So that is the bottom line overall. And of course a lot of 
that is due to the fact that a large share of the bill--the 
bill is really centered around not just a reduction in the 
corporate tax rate, but an absolute tax cut for corporations 
overall.
    Corporations are owned mostly by wealthy Americans. The top 
10 percent of Americans own 84 percent of corporate stock. And 
fewer than half of Americans own any corporate stock, even in 
their 401(k) plans.
    So you have a massive corporate tax cut. You have a cut in 
the top individual tax rate. You have a tax cut for pass-
through businesses, 60 percent of which goes to the top 1 
percent. And then you have a cut in the estate tax that 
benefits the heirs to estates of more than $11 million, which 
is less than 1 out of every 500 people in the country.
    So all told, this tax bill is badly skewed to wealthy 
Americans.
    Mr. Rush. How have the policy stockholders, people who own 
shares of stock, can you be explicit in terms of how do they 
benefit from the tax bill?
    Mr. Hanlon. So much of the tax bill, the corporate tax 
cut--so corporations are just going to be paying less taxes. As 
I mentioned, corporate tax revenue is $100 billion less. So in 
the near term we can expect that is going to be a pure windfall 
for the shareholders of corporations.
    And they are paying it out. And we can see this manifest 
itself through the incredible surge in stock buybacks. So that 
is where corporations are paying out cash to their shareholders 
and it is at record levels at this point in the year. It is 
about almost half a trillion dollars have been announced, the 
stock buybacks, to shareholders.
    And so that is money going out of corporations that is not 
being invested in equipment or R&D or workers. And some of it, 
of course, is going to the executives that own the stock as 
well.
    So I think that is the primary way that the corporate tax 
cut is going through to wealthy shareholders instead of being 
invested.
    Mr. Rush. With the ballooning healthcare costs, 
skyrocketing prescription drug prices, rising gas prices, and 
other increases in the cost of living for working-class 
Americans, does the Republican tax bill provide real meaningful 
assistance to working-class families, such as the ones that are 
my neighbors and that I represent in my district on the South 
Side of Chicago?
    Mr. Hanlon. There are very modest tax cuts for middle class 
and little or no tax cuts for the working poor. To give an 
example, a minimum wage worker who is a single parent raising 
two children would get $75 from this tax cut, right? So that is 
$1.50 a week. And some will get more than that, but it is 
stilla modest tax cut.
    And I think it is also important to note that that tax cut 
is in the short run, and it gradually diminishes over time. And 
of course the things that are going to have to be put under 
pressure to pay for that tax cut could easily more than 
overwhelm any savings directly from the tax cut in the short 
term.
    Mr. Rush. Mr. Chairman, I yield back.
    Mr. Upton. The Chair would recognize Mr. Barton from Texas.
    Mr. Barton. Mr. Chairman, I have no questions. I yield my 
time.
    Mr. Upton. Mr. Olson from Texas.
    Mr. Olson. I thank the chairman.
    And welcome to our four witnesses. A special Texas proud 
Aggie ``welcome'' to our Texan on the committee, Mr. Ferguson.
    Sir, I hope I say this right: ``Howdy'' and ``gig 'em.''
    Mr. Ferguson. Gig 'em and howdy. That works.
    Mr. Olson. And speaking of proud Texas Aggies, I worked for 
a guy named Phil Gramm. A quick observation about these 
comments from the other side of the aisle, what Phil Gramm 
would say about these comments. And when I talk about Phil 
Gramm, I have to imitate his Georgia/Texas accent, so bear with 
me. ``If people ain't saying bad things about you, you are 
doing something wrong.''
    Based on the comments before from my colleagues on the 
Democrat side, we are doing something right. We are doing 
something right. Back home, these tax cuts have been a huge hit 
with every business I have talked to.
    One example, not energy, but a guy who shines my cowboy 
boots every week, Houston Shoe Hospital. He is married to a 
lady from Mexico. They have two kids born in America. They were 
married at her home church in Mexico. Their dream was to go 
back to that exact church, have their kids baptized in that 
church where their relationship started.
    They didn't have the money to do that until we passed this 
tax cuts bill. Right now they have $2,000. He has bought those 
tickets. He is going down there this summer.
    Another company back home, a company called FairfieldNodal 
run by Charles Davison. They do seismic work in the energy 
sector. They expect their tax bill to drop $40 million in 2019. 
Forty million dollars. Where does that money go? Hire new 
people. Invest in new technology. More jobs, more growth back 
home.
    Let's talk about the power sector. In Texas, our Public 
Utility Commission has already seen requests for rate 
reductions--rate reductions--from El Paso Electric, Oncor, and 
Southwest Electric Power, all because of tax reforms.
    In my hometown, Houston area, CenterPoint says they are 
bending the curve lower on future rate increases they thought 
they needed because they will pass on $39 million to their 
customers--$39 million because of the tax cuts. We have heard 
comments that these tax cuts only help the wealthy and the 
rich.
    Ms. Wade, first question for you. Is it fair to say that 
most small businesses, your members in NFIB, expect to see an 
improvement in their bottom line and that they will hire new 
employees, get new equipment, or upgrade old equipment? Is this 
good for American businesses?
    Ms. Wade. Absolutely. NFIB members are overwhelmingly 
enthusiastic about the benefits of the tax law. In our 2016 
survey, Federal taxes on business income ranks as the third 
most severe issue facing their business, with 29 percent of 
owners saying that it is critical.
    So the new tax law has gone a long way to help benefit 
small business owners and dealing with their tax liability and 
all the time and paperwork related to it.
    Mr. Olson. Thank you.
    Mr. Ferguson, I reckon you want to make some comments about 
the tax bill.
    Mr. Ferguson. We were really happy with it. I think the 
only thing we wished was it had been announced earlier, because 
we had already completed our budgets. And so I do think you are 
going to continue to see a ramp-up from corporations as they 
are able now to budget for this going into 2019.
    We were fortunate. We are on a fiscal year, so we started 
March 1. So we actually had a couple of months to change our 
budgets and our plans, which we did. So we were thrilled with 
the act.
    And our employees have benefited. My average employee makes 
about $46,000. I have got a lot of $10-an-hour people. Half my 
workforce is Latino. And everybody I talk to, they are family 
people, and they are thrilled with what it is doing for them 
personally as well as the fact we are able to increase our 
entry-level wages and now train a lot of new workers in the 
workforce.
    Mr. Olson. Sir, back home, my district is the most diverse 
one in Texas. And so Hispanics, Asians, whatever, lowest 
unemployment rate in almost half a century.
    One final comment about what is going on here.
    Mr. McCammon, do you have any questions? Anything you would 
like to add before I yield my time back?
    Mr. McCammon. I would just say that we, too, invested in 
equipment, actually in a roof and LED lighting project. This 
helped make our decision to go forward with that, although, as 
I had stated earlier, we are not going to reap full benefits of 
those types of projects right now.
    Mr. Olson. One final comment, too, from our chairman, Kevin 
Brady: This is just a first start. We have to make this 
permanent ASAP.
    I yield back.
    Mr. Upton. The gentleman's time has expired.
    Mr. McNerney.
    Mr. McNerney. Well, I thank the chairman.
    Mr. Chairman, this is clearly a political hearing. It is 
not a policy hearing at all. Its purpose is to convince 
Americans that the unpopular Republican tax bill that greatly 
reduces corporate taxes and reduces tax rates for the 
wealthiest people is a good deal.
    A Morgan Stanley survey found that the market analysts 
estimate 70 percent of the tax cuts savings will go to 
shareholders while only 13 percent go to pay raises, bonuses, 
and employee benefits.
    It also attacks the Affordable Care Act. The Congressional 
Budget Office estimates that 13 million Americans will lose 
coverage as a result. Moreover, it will raise premiums for the 
healthcare insurance for many, many more Americans.
    Moreover, energy prices are going up, undeniably. So having 
a hearing in the Energy Subcommittee entitled ``The Benefits of 
Tax Reform on the Energy Sector and Consumers'' seems to me to 
be ill-placed.
    So, Mr. Hanlon, how will the increased deficit caused by 
this tax scam harm middle-income Americans?
    Mr. Hanlon. So, as I mentioned, the Congressional Budget 
Office projects that the deficit caused by the tax bill on top 
of existing deficits is $1.9 trillion over the next decade.
    And that does not include the costs of making the temporary 
provisions permanent, which Mr. Olson just mentioned. That 
would add another $600 billion or $700 billion within the 10-
year window, and the costs would just explode over time.
    So these deficits, I think we have seen this before, 
promises that tax cuts will pay for themselves, and when that 
doesn't bear out, the rising deficits are used as a reason and 
justification for cuts to, in particular, health programs. I 
think, first and foremost, Medicare, Medicaid, and education, 
and the large swath of domestic programs.
    So I think, in answer to your question, I think average 
Americans understand that when Congress gives away a large tax 
cut, that the large preponderance is not going to them. They 
are going to pay for it in the long run through cuts to 
services and programs that matter to them.
    Mr. McNerney. Will the tax bill help energy consumers?
    Mr. Hanlon. No. I mean, in general, no. I mean, I do think 
the utility sector, there are some State laws that say that any 
kind of tax change needs to be passed on to consumers, but that 
is sort of the exception that proves the rule.
    No other sector all the tax cuts that went to other 
corporations, none of them are going to be passed on to 
consumers. So I think there is really no reason to think that 
consumers are going to be directly affected one way or another.
    Mr. McNerney. Will the tax bill cause increased healthcare 
premiums?
    Mr. Hanlon. Yes. The Congressional Budget Office has said 
that healthcare premiums in the marketplace are going to be 10 
percent higher in 2019, 10 percent higher than they would 
otherwise be. So that is on top of any other increase caused by 
any other rising healthcare cost in general or other acts of 
sabotage by the Trump administration.
    And so that translates to $2,000 for a family of four with 
a benchmark plan on the exchange.
    Mr. McNerney. Thank you.
    You indicated there is a very small business investment 
compared to the stock buybacks. Could you expand on that a 
little bit?
    Mr. Hanlon. So, I mean, I think to back up, to be clear, it 
is very early. We won't have a full accounting of what the bill 
has done. But I think it is very clear that corporations could 
use the tax cut in different ways. They could make investments 
in workers or R&D or capital investment--or they could just 
take the tax cut and distribute it to shareholders.
    We are not seeing clear evidence of the former. We are 
seeing very clear evidence of the latter.
    And so just to give you an example, of course, obviously, 
in a large economy, there is going to be anecdotal evidence, 
and not to knock that down, but, of course, companies are going 
to say they are making investments.
    But then if you look at the country overall, according to 
the Federal Reserve, new orders of nondefense capital goods--
so, in other words, new business investment--is totally flat, 
and it is below where it was from 2012 to 2014.
    But maybe it will pick up. I hope it picks up. But we are 
not seeing it yet in the data. At the same time, we are seeing 
record levels of share buybacks, which is corporate cash being 
distributed to shareholders.
    Mr. McNerney. Thank you.
    Mr. Chairman, it took me longer to pass a post office being 
named in my district than it took to pass this tax bill, which 
affects every part of our economy.
    So I will yield back and let you guys take a stab at this.
    Mr. Upton. Mr. Shimkus.
    Mr. Shimkus. Thank you, Mr. Chairman.
    I do appreciate you all being here.
    Mr. Hanlon, real quick. So in response to Mr. McNerney, you 
did kind of admit that utilities are lowering rates, and some 
of those based on regulated communities. But I think the 
argument also is for competitive States. Competitive States, 
which I live in, are lowering their utility rates, too. So I 
appreciate that.
    Second thing. You made a comment on education, which then I 
am going to go to my constituent. Like 93 percent of public 
education--primary, secondary--is funded through local and 
State governments. Would you agree to that?
    Mr. Hanlon. Yes. I think so, yes.
    Mr. Shimkus. So the spin that this hurts education when we 
are 7 percent might be a reach.
    And let me now go to my colleague.
    Mr. Hanlon. There is higher education, too. But, yes, I 
take your point, It is definitely mostly at the State and local 
level.
    Mr. Shimkus. Let me go to Mr. McCammon. Let's talk about 
Mattoon, Illinois. Do you know what the population of Mattoon 
is?
    Mr. McCammon. It is somewhere around 20,000 or less.
    Mr. Shimkus. Yes. I looked it up, and it may have grown a 
little bit. I got 18,500.
    Average salary of the people in Mattoon, what might you 
guess?
    Mr. McCammon. I don't have information on that. Sorry.
    Mr. Shimkus. So I was working--good thing--with technology. 
It is about $35,000.
    So sometimes here in Washington, we think everything is big 
city, L.A., Miami, New York City, and kind of we forget that 
smalltown rural America and how important small business is to 
the livelihood of those communities.
    So in the State of Illinois, how are local governments 
funded, like the public school system, the county government, 
the municipality, the townships?
    Mr. McCammon. Through taxes.
    Mr. Shimkus. Yes. Through what type of taxes?
    Mr. McCammon. Income.
    Mr. Shimkus. Well, property taxes.
    Mr. McCammon. Real estate.
    Mr. Shimkus. So it is real estate. So it is a value on your 
piece of property that you have. And if it is operating, that 
value, is it higher or lower? If you are producing something, 
there is people working there, is the value of that property 
higher or lower?
    Mr. McCammon. It is going to be higher.
    Mr. Shimkus. It is going to be higher. So that is probably 
beneficial to who?
    Mr. McCammon. Everybody.
    Mr. Shimkus. Yes, because the public schools are being 
funded, the local municipality, the county government. It is 
good for businesses to be able to operate. It is actually 
better for businesses to grow.
    So I don't want to lose that in this debate about the 
benefit of tax reform. If you are saying your business in Coles 
County, Mattoon, Illinois, is benefiting, that means the public 
school district is benefiting; that means the city is going to 
have revenue to pay the police officers; that means the 
township road commissioner will be able to put another patch of 
asphalt on a township road.
    Let me go into exactly some of your testimony. And I am 
actually happy to have you here, and I don't even know all the 
stuff that goes on in my district. So how exactly is this 
flexible conduit used in nuclear plants, and why is Anamet's 
conduit the only one rated for its use?
    Mr. McCammon. Well, the conduit that we have is tested to a 
loss-of-coolant accident as tested through radiation. So it is 
a very expensive test to go through to approve a covering for 
this.
    It is used in containment areas to protect electrical 
wiring so that if you do have a meltdown, you have got 
radiation coming out, it would protect the wires so that your 
fail-safes can continue to work.
    And if you didn't have anything else, I was going to add 
that we think that investing in technology is the answer to 
competing globally, not putting barriers out there, but trying 
to invest in technology. That improves the workers' skills, 
because we do training for workers, and also increases their 
wage base.
    And we are in the processes of doing that right now, and I 
can talk about that some more. I know I am running out of town 
here.
    Mr. Shimkus. And I am running out of time also. I have one 
more question. But I thank you for you being here and I 
appreciate your testimony.
    I yield back.
    Mr. Upton. Mr. Doyle.
    Mr. Doyle. Thank you, Mr. Chairman.
    I am not sure why we are here today to discuss a bill that 
passed 6 months ago. We didn't have any hearing 6 months ago. 
It might have been helpful to these two gentlemen that talked 
about a couple glitches in the bill that they would like to see 
corrected if we had this discussion before we passed the bill.
    And I appreciate you two gentlemen being here, but this 
committee has no jurisdiction over tax policy. You are sitting 
in front of the wrong committee. You should go sit in front of 
the Ways and Means Committee if you want to plead your case on 
what is not in this bill.
    So this is kind of an odd hearing for the Energy and 
Commerce Committee to be having. It might have been helpful 
before the bill was passed to talk about possible impacts on 
energy consumers if we did it 6 months ago, but, I mean, this 
is just--I mean, it is what it is.
    We all know what this is. This is little dog and pony show 
for a bill that most of the American public doesn't support. 
And so I guess you guys got your marching orders to start 
holding hearings and tout the benefits of this bill.
    This is a deeply flawed bill. It fails families. It fails 
the middle class. It fails just about everyone except for 
businesses and the wealthiest people in this country.
    The lack of transparency that took place before this bill 
was voted on has resulted in numerous glitches and loopholes, 
which people are now asking us to correct. CBO now projects 
that this bill will increase the debt by $1.9 billion, up from 
$1.5 billion.
    And my friends on the other side of the aisle claim that 
the thing they most care about is debt, the national debt, and 
they have done more to raise the national debt in a year than 
anything Democrats have ever done.
    Mr. Hanlon, let me ask you. Did the Center for American 
Progress, were you able to create some sort of a model of what 
the impact of this reform bill would have on workers in the 
middle class, as well as the energy industry, before the 
passage of the bill? Were you able to get any information that 
would allow you to model this before we voted on it?
    Mr. Hanlon. I think no. In a lot of ways the bill was 
rushed in about 50 days, and a lot of the times, at various 
stages, Congress didn't wait for even its own analysts to 
produce dynamic estimates of the macroeconomic effects and 
such.
    We certainly didn't. I mean, I think there was some 
analysis that was put together very well under very tight 
circumstances of the direct effects of the bill, so I think we 
generally knew who it was going to benefit. I think there are 
many unintended consequences that were not fully explored 
during the bill's consideration.
    Mr. Doyle. I notice you did finally put out a study that 
shows State by State. For instance, in my State of Pennsylvania 
the average tax cut to the bottom 80 percent of families--80 
percent we are talking about--is around $645.
    The average tax cut to the top 1 percent of Pennsylvanians 
is around $53,580. But then that is offset by a $2,300 increase 
in marketplace premiums and healthcare due to the repeal of the 
individual mandate.
    And I just want to demystify that a little bit, because a 
lot of people when we talk about the individual mandate, they 
don't understand why that is raising premiums. What we 
basically said now is you don't have to buy health insurance if 
you don't want to. There is no mandate that you have to do it.
    So what that results in is a lot of young, healthy people 
saying: I don't want to pay health insurance premiums, and I 
never get sick, and I don't really need healthcare. So they 
don't come into the risk pool, the young healthy people, that 
help us offset the cost of healthcare for people who are 
chronically sick and have major illnesses who have to buy 
insurance because of their health condition.
    So what happens? The risk pool gets riskier and therefore 
the insurance companies say: Our risk has gone dramatically up 
now that we don't have these young healthy people coming into 
the risk pool, we have to raise premiums as a result of that.
    That is what the impact of getting rid of the individual 
mandate is. This ends up just wiping out any potential increase 
that the middle class or the working class in this country 
would get from this tax bill when they see these increases in 
their healthcare costs. That is why this bill was not being 
supported by the vast majority of Americans, because they know 
what is really happening here.
    And with that, I see my time has expired, and I will yield 
back.
    Mr. Upton. Mr. Latta.
    Mr. Latta. Well, thank you, Mr. Chairman.
    And thanks very much for our panel for being with us today.
    And just a little background. I know the people on this 
committee have heard it before, but my district is kind of 
unique. I have got 60,000 manufacturing jobs, and I have done 
scores of meetings across my district since the passage of this 
tax bill.
    And I keep hearing from folks back home, especially when I 
am going into factories and businesses, that they are doing 
things. A, they are hiring people. They are increasing wages. 
They are giving bonuses. They are buying new equipment. And 
when you buy new equipment, it means you have to expand your 
factory, which means somebody out there has got to build it, 
and somebody out there has got to provide the building 
materials, and somebody has got to provide the transportation 
for it.
    So this is something that just goes across the entire 
economy. So it is very, very good news for folks out there, not 
only in my district, but across the country because of the tax 
bill.
    And, Mr. McCammon, if I could ask, I know, I was listening 
to the conversation between you and Mr. Shimkus, but I was 
wondering if you could kind of continue on about your 
discussion about wages and investments and what is going on 
with you.
    Mr. McCammon. Sure. Like I said, we did a wage increase 
this year, and in our area there were quite a few wage 
increases or bonuses, a lot of talk among all the employees, 
even in competition for jobs. Even my daughter, Jessica, 
received a bonus working at Third Bank, and she is a part-time 
person. So there is a lot of talk about that going through the 
communities there.
    We did not go with a bonus. We gave a wage increase, which 
is permanent and needed, and that is what we did.
    As far as investments, we are planning for a big round of 
investments here. And I can talk about 2 years ago, we went 
into a new technology for one of our product lines. We were on 
negative margins and trying to compete against even overseas 
products. We went into this technology, brought it in, and we 
are able to compete with them. And now we haven't been able to 
keep product on the shelf. We had to bring on another person 
this year.
    The economy has been growing in the industrial sector for 
us. The margins on those products are higher. That allows us to 
make more of a profit to be able to invest in things like this.
    So to be able to compete, we need to invest in technology 
if we are going to compete with people overseas. We have got 
two other product lines that are bigger than that that we are 
looking at applying this technology to now. If we can do that, 
that is going to make us much more competitive, both 
domestically and foreign. And that is where we need to spend 
our investments, is into the technology.
    And like I was saying, that benefits the employees also, 
because our wage base comes up. They need a higher knowledge 
base on some of this technology. We have increased the wage 
base for the operators running that line, and we would be doing 
the same thing for the other operators that we would bring in 
to run these lines.
    Also, we have increased our wage base on our entry-level 
toolmakers. We just made a decision to do that in the last 
couple weeks. We have been discussing that and thinking about 
it for a couple years. And like I said, we have been under such 
high price pressure in this industry. Prices have been going 
down for 3 years steady and margins down with it.
    We are at the point now where we think there is confidence 
in the economy right now, and we have decided to make that 
adjustment. And I see things like that continuing with this.
    Mr. Latta. Thank you very much.
    And, Mr. Ferguson, in my last minute, as we have heard 
today, one of the benefits of the recent tax reform is greater 
availability of capital to invest in the expansion of 
companies.
    As you know, AZZ had planned to build a new manufacturing 
plant at some point in the future. How did the recent tax 
reform impact your company's ability to move forward on that 
project?
    Mr. Ferguson. Because we were already past our budget 
cycle, if we wouldn't have had the incremental cash that was 
going to come from the tax cuts, we would not have been able to 
make that decision because it would have negatively affected 
our cash flow, and we were already into the budget, so we 
already would have been into the budget year.
    So because of the timing and because of the cash savings, 
we were able to pull that forward. One, it helps create jobs; 
two, it is a great technology to extend the life of bridges and 
highways; and three, only about half of the cash impact comes 
in our current fiscal year, but that was something that was 
acceptable to us.
    We were able to ensure that we expanded our capital. And we 
will fund the rest of it for next year. We will probably add 
another one of those plans because we are excited with what the 
tax cuts do for us from a cash flow perspective.
    And then the other thing was we had to increase our 
training budgets because we just can't get access to qualified 
labor. And so we are having to do a lot more training up front. 
So we have a lot more entry-level folks coming into our 
workforce, which means we have got to train them just on basic 
mechanical skills and get them ready, which is why we raised 
our entry-level rates as well as for the folks that have been 
with us a fairly short time.
    Mr. Latta. Thank you.
    Mr. Chairman, my time has expired, and I yield back.
    Mr. Upton. Ms. Castor.
    Ms. Castor. Thank you.
    I want to start by saying I really appreciate Ranking 
Member Rush's comments at the outset of this hearing. The 
Energy and Commerce Committee has oversight of HHS, and I think 
the first priority of the Congress right now should be stopping 
the family separation policy.
    I don't know why we are not having a hearing on that today 
to get answers from the administration on what is happening. I 
mean, it was reported by DHS that from May 5 to June 9, 2,342 
children now have been separated from their parents. I mean, 
think about that, just in that short amount of time.
    And this committee should be examining how many more since 
June 9 have been separated, what are the ages, what is 
happening, how are they being taken care of, and really doing 
everything we can to keep families together.
    So thank you, Mr. Rush, for raising this.
    I think it is incumbent upon every Member of Congress not 
to have these kind of retread type of hearings, but to really 
act on what is critical to the country at the moment.
    That is not to say that family economics are not critical 
right now. When I look at what has happened during the Trump 
administration, I would say to American families: Hold on to 
your wallet, because we have seen gas prices go up, we have 
seen health premiums go up through the sabotage of the health 
administration, drug prices are going up.
    It was not lost on people that, as the administration came 
out and said, ``We are going to tackle the cost of high 
prescription drugs,'' but there was no teeth to it. And then 
the value in the stock market, the value of the pharmaceutical 
companies went through the roof.
    So this all hurts the family pocketbook. And my Republican 
colleagues promised during the tax bill debate that they would 
get a raise. Corporations would pass along savings, they would 
give raises. This is the fallacy of the trickle-down economic 
theory.
    They said average workers will get $4,000 in their 
paychecks. Well, that hasn't happened. Most of what has 
happened are stock buybacks. Good for the companies that have 
givenraises and the ones that have given bonuses. But remember 
giving a bonus is not the same as giving folks a raise. And I 
think of a lot of hardworking families who they will use that 
bonus money, but, boy, why not give them a real salary 
increase?
    Mr. Hanlon, it is interesting, because the Trump 
administration's own Bureau of Labor Statistics has shown that 
the real average hourly earnings has actually dropped slightly.
    Now, we have come out of the recession and unemployment 
over the past 10 years has gone down and down and down. But why 
haven't earnings gone up? Why haven't paychecks gone up?
    Mr. Hanlon. I think it is a really good question. The same 
question was asked of the Federal Reserve Chair the other week 
and he said it is a puzzle. So I don't think anybody has a 
complete answer.
    But it is absolutely correct that real wages have not 
increased, and that is distressing at a time when we have tight 
labor markets, unemployment is very low.
    Ms. Castor. Wait a minute, they promised. They said that 
this tax bill, people are going to get thousands of dollars 
into their paycheck.
    Mr. Hanlon. And I think we haven't seen any of that yet. We 
have seen zero real wage growth since the tax bill passed. And 
I think we don't know the full reason why wages haven't 
increased in such a tight labor market with such low 
unemployment, but I think a lot of actions by the Trump 
administration haven't helped. They have taken us in the wrong 
direction.
    Ms. Castor. You bet they have. I mean, gas prices are up. 
Healthcare premiums are up, because in the tax law part of it 
was eliminating requirements for people to have insurance. So 
CBO says that 13 million Americans will lose coverage. And for 
the rest of us our premiums are going to go up.
    And then last week the administration announced that they 
are not even going to stick with the promise of the preexisting 
condition protection that keeps insurance affordable for many, 
for millions and millions of Americans.
    And then part of that tax bill--this really makes me angry, 
anyone who has kids or grandkids--$2 trillion added to the 
debt. And then the Republican budget comes out yesterday, and 
what do they do? Huge cuts to people that rely on Medicaid for 
healthcare and to Medicare.
    So this is kind of a boondoggle. I think people are really 
seeing through the fallacy of, boy, this is going to help the 
average American. Everything they have done, whether it is 
inaction on drug prices, inaction on holding down the cost of 
fuel, of healthcare and wages, it is just not adding up for 
consumers, and I think that is the bottom line.
    Mr. Hanlon. Yes. And I would add rolling back overtime 
protections for workers to that list.
    Mr. Castor. Absolutely.
    Mr. Hanlon. And the failure to raise the minimum wage at 
the Federal level.
    Ms. Castor. Thank you very much.
    Mr. Upton. The gentlelady's time has expired.
    We will do Mr. Harper. Votes have been called on the House 
floor. We have got three votes. We will do Mr. Harper, and then 
we will recess and we will come back.
    Mr. Harper. Thank you, Mr. Chairman.
    Thanks to each of you for being here.
    Mr. Hanlon, did you get a tax cut?
    Mr. Hanlon. I think I probably will, but I don't know. I 
haven't done the math yet.
    Mr. Harper. You haven't looked at your pay stub to see if 
they are withholding less?
    Mr. Hanlon. I haven't done the math. I am pretty sure that 
withholding would increase, but that doesn't mean that I got a 
tax cut because some people will have their withholding 
decreased but then have to pay it back at the end of the year.
    But I don't know. I think I will probably get a tax cut. I 
didn't want one or ask for one, but I think I probably will.
    Mr. Harper. Well, you are not going to turn the money back 
into the Treasury, are you?
    Mr. Hanlon. I haven't decided. I don't know.
    Mr. Harper. Well, feel free to. That is certainly fine.
    You know, it is amazing as I listen to this and talking 
about how it is hurting families and there is no money, I am 
thinking of over 200,000 AT&T employees, for instance, that got 
$1,000 each. When you are talking about middle America and you 
are talking about middle class, I mean, I just don't see how 
you can say that.
    And I look at in my home State of Mississippi hundreds of 
companies, covering hundreds of thousands of employees, are 
making more, have more money in their pocket, real money to 
spend. And I understand that 69 percent of all statistics are 
made up on the spot, or is it--no, 57--yes, 57 percent.
    So this is, I mean, it is like you have been in a car wreck 
and you are talking to two witnesses that were in the same 
wreck and they have completely different narratives.
    I mean, I think it is clear when you talk to some of the 
employees that have gotten extra money it is real money. It 
helps those families. And to say that it doesn't and it is 
hurting America, I just don't see how you can say that.
    And, Mr. Ferguson, you have talked about your company. And 
certainly we have one of your facilities, one of your 
companies, one in my congressional district, which we are very 
fond of, in Richland, Mississippi, and you have another down on 
the coast in Moss Point. So we appreciate the impact that you 
have had there.
    Talk to me for just a minute about what that means, 
specifically for employees in my State, of what that meant for 
them with the tax cuts.
    Mr. Ferguson. Yes, with several of our workers in both of 
the galvanizing plants, we actually have three plants now in 
your--well, two in your district, one on the coast.
    But we have been hiring, so we have added, I think, 12 
people, which it is a workforce of about 180, I think. And we 
have also increased the wages there. They got bonuses. And they 
were some of the participants. They all got the $250 
contribution to the rewards and recognition program that we 
preloaded their accounts. So every one of them got that.
    And I would say that everybody there probably the average 
raise was about $3, but a lot of those lower wage workers, 
entry level, at $10. And I think that is why overall for us our 
average wages would look like they are down slightly, but they 
are actually up because we added so many entry-level workers 
into our workforce.
    Mr. Harper. And, Mr. Ferguson, those are the employees that 
got the hourly wage increase from anywhere from $1 to $4 an 
hour increase?
    Mr. Ferguson. That is correct. That is 60 percent of the 
folks in those factories were direct labor that got those 
raises.
    Mr. Harper. And did you have anybody complain about those 
raises?
    Mr. Ferguson. No. I got a lot of nice notes. I tend to 
communicate a lot with my employees and they know I have an 
open email. So I even got some nice signed letters. As a matter 
of fact, one of them was from Moss Point.
    Mr. Harper. That is great. And did anybody refuse to accept 
the raise?
    Mr. Ferguson. No, except myself.
    Mr. Harper. OK. Well, and hats off to you, Mr. Ferguson, 
for that.
    Now, you have indicated in your testimony that you are 
anticipating adding over 150 new workers to your existing 
facilities.
    Would you have done that or be doing that without this Tax 
Cuts and Jobs Act of 2017?
    Mr. Ferguson. No, because that is related to--the first 
point is, for the first time in probably three decades, we are 
actually now competitive with our global competitors, which 
tend to be much larger than us, particularly on the business in 
your district, Medium Voltage Bus. So we are now competitive, 
so we are much more confident, so we are growing.
    Mr. Harper. Explain for just a moment, Mr. Ferguson, how 
this makes you more competitive nationally and particularly 
globally. How does it do that?
    Mr. Ferguson. Well, a lot of our European competitors, 
because of their tax rates, they have been able to invest more 
aggressively in advanced machinery. So now we are doing that. 
We are upgrading our technology in plants like in Richland, as 
well as in most of our electrical systems plants.
    Two, we are able to do a lot more training because we have 
got the cash savings. So we quickly invested that into more 
training. So we have doubled the training time and periods for 
our average worker.
    And both of those things made us far more--well, and it 
gave us confidence for the future, which is why we have also 
increased our investments. And assuming the tax reform act 
holds, I think you will see a lot more investment by U.S. 
companies.
    Mr. Harper. Thanks to each of you for being here.
    My time has expired, Mr. Chairman.
    Mr. Upton. I remind my colleagues we are going to come back 
after we take a short recess. There are 6 minutes left on the 
votes on the House floor.
    [Recess.]
    Mr. Griffith [presiding]. We will resume the hearing. I 
appreciate you all's patience while we went off to vote.
    We have Mr. Green of Texas up next, recognized for 5 
minutes.
    Mr. Green. Thank you, Mr. Chairman.
    And I think it is interesting, our Committee on Energy and 
Commerce, we always brag about our jurisdiction. I just didn't 
know we could take it away from the Ways and Means Committee. I 
am glad we are having it on the tax bill, because I would love 
to have more issues.
    But anyway, the truth of the matter is the American energy 
renaissance has been unleashed long before this bill was ever 
considered. Coming from a Texas district, advances in 
technology, American ingenuity, even the policies of the Obama 
administration and this committee in the last decade have 
unleashed this energy dominance.
    If you are going to talk about the GOP tax scam, I would 
like to talk about what it did to the Affordable Care Act and 
how premiums, which is part of our jurisdiction, already 
increasing next year with the repeal of individual mandate.
    The bill also exploded our deficit for $1.9 billion over 
the next decade and actually cut the number of years Medicare 
will be solvent, whether it be Medicare, Medicaid, or even 
Social Security. And how many times have I heard over the years 
my colleagues on the Republican side cutting benefits that 
seniors have earned under the guise of deficit reduction.
    Mr. Hanlon, can you explain how the tax law undermines 
Americans' access to healthcare? What will this bill do to the 
terms of the number of Americans who have health insurance?
    Mr. Hanlon. The Congressional Budget Office has said that 
over time, by repealing the provision that encourages healthier 
people to purchase health insurance for themselves, 9 million 
fewer people will have health insurance
    Mr. Green. What can we expect to see happen in healthcare 
premiums as a result of this law?
    Mr. Hanlon. So, again, CBO has estimated that premiums will 
be 10 percent higher for 2019 than they would otherwise be, 
which translates into about $2,000 for a family of four for an 
average benchmark premium.
    That is, of course, just an estimate or a projection, but 
we are already seeing insurance companies apply for their rate 
schedules, do the submissions for the rate schedules for 2019, 
and we are already seeing increases in various States that are 
attributed directly to the repeal of the individual mandate in 
the tax bill.
    Mr. Green. Does this put more stress on Medicare and 
Medicaid as a result?
    Mr. Hanlon. Yes, absolutely. I mean, I think adding $1.9 
trillion of debt, in addition to whatever the cost would be, we 
mentioned it earlier, of making the temporary provisions 
permanent. That $1.9 trillion does not take into account 
extending the provisions that a lot of the sponsors of the bill 
have said that they want to extend.
    Mr. Green. I come from Houston, Texas. It is an energy 
district. I have folks who work at refineries, work at service 
companies. And over the last couple of years they have been 
doing very well, long before this bill.
    My concern is, will my constituents see a noticeable 
increase in their take-home pay enough to offset these rising 
premiums and pressure on the Federal programs that provide 
support?
    Mr. Hanlon. I think that is very unclear, especially over 
the long run. I mean, I think most families will see a modest 
tax cut in the short run. But those tax cuts are only 
temporary. They are offset by any increase in gas prices, 
obviously, any increase in healthcare premiums that are caused 
by the bill. And then over time those tax cuts gradually 
diminish and then expire after 2025.
    Mr. Green. Mr. Chairman, like I said earlier, our committee 
has a lot of substantial issues that we need to address instead 
of just being part of a political messaging term on something 
we have no jurisdiction.
    If months of messaging hasn't changed the approval numbers 
for the GOP tax scam, I don't think this hearing will move 
that.
    So anyway, I yield back the balance of my time.
    Mr. Griffith. I thank the gentleman.
    I now recognize the gentleman from Michigan, Mr. Walberg, 
for 5 minutes.
    Mr. Walberg. Thank you, Mr. Chairman.
    And thanks to the panel for being here, especially, I say 
with all sincerity, three who understand reality, living in the 
real world, and experiencing really what has taken place. And 
thank you. I mean, it is worthwhile hearing what actually is 
happening and people who understand what produces true American 
progress.
    Mr. Hanlon, I hope someday you will, as well.
    Mr. Hanlon. I appreciate that.
    Mr. Walberg. Thank you. We always try to help.
    Mr. Chairman, it has been nearly 6 months since we passed 
the Tax Cuts and Jobs Act--only 6 months, only 6 months--and we 
have seen the economy produce amazing things. It reminds us 
that the American way does work.
    Since then, we have heard countless stories of businesses 
increasing wages, handing out bonuses, hiring more employees, 
and expanding their U.S. Operations.
    The chairman of the subcommittee made that very clear about 
what we are experiencing in Michigan, the first one out and now 
the first one back in in growth and opportunity.
    Being from Michigan, I am encouraged about the benefits for 
our workers and prospects for our State's manufacturing sector. 
Whether it is building some of the best cars in the world or 
casting some of the strongest steel, these manufacturing 
processes are energy intensive, and electricity costs are often 
leading cost of operation.
    Luckily for Michigan and its businesses and its 
manufacturers and its citizens, the tax cuts are leading to 
lower energy costs. Numerous Michigan utilities announced plans 
to lower electric rates and have undertaken that already. This 
will allow Michigan businesses to invest in their facilities, 
but more importantly, invest in their employees.
    And so, Mr. McCammon, thank you for being here for 
manufacturing companies across the country. The savings from 
the recent tax reform has allowed increased investment in 
manufacturing equipment as well.
    For Anamet Electrical, are you planning to utilize money 
saved from tax reform to purchase new manufacturing equipment?
    Mr. McCammon. Yes. As I was talking earlier with the 
technology investments that we made a couple years ago, we are 
in the planning stages right now to increase our investments 
for 2019 much more than we normally do.
    Section 179 has a lot to do with that, and the accelerated 
depreciation that we can get. But in doing that, when we are 
looking at adding to two more lines like that, we would be 
adding probably about another 4 percent to the labor force.
    Mr. Walberg. So not only investing in the equipment, the 
capital outlay.
    Mr. McCammon. Yes.
    Mr. Walberg. That is going to produce investments in more 
employees.
    Mr. McCammon. Yes, sir.
    Mr. Walberg. If we can find them, which is a challenge 
right now, as we have talked about. That is great to hear.
    Any other benefits to the company, including their 
employees, as a result of this tax benefit going toward 
increasing capital outlay?
    Mr. McCammon. Well, just seeing the economy pick up for us. 
I am not looking at the grand scale of things like Mr. Hanlon 
is here, but just in what we see, the industrial sector has 
picked up tremendously. That boosts our margins and provides 
that cash flow for us to invest.
    So I think the confidence that is being built by having the 
tax cuts and being able to support industry in investing in 
technology is what is going to really boost the economy and let 
us grow at a faster rate than we would if you didn't have the 
tax reform.
    Mr. Walberg. Thank you. I wish you well.
    Ms. Wade, according to the testimony of small business 
owners, there is a lot of investment that is going on as a 
result of the tax savings.
    Based on your research, prior to the Tax Cuts and Jobs Act 
of 2017 could small business owners have made these investments 
in their businesses' employees as well as debt obligations?
    Ms. Wade. In our monthly survey, we have seen before the 
law that taxes and regulatory issues were some of their largest 
challenges in operating their business with the time 
responsibility in complying with taxes and regulations, but 
also the cost burden. They are certainly feeling some relief 
from both sides of those areas.
    And then with that they are able to support more growth, 
expansion, and capital spending in their businesses and 
reinvest increased earnings and profits.
    Mr. Walberg. That helps communities as well, doesn't it?
    Ms. Wade. Absolutely.
    Mr. Walberg. Mr. Chairman, I yield back.
    Mr. Griffith. I thank the gentleman for yielding back and 
now recognize the gentleman from Maryland, Mr. Sarbanes, for 5 
minutes.
    Mr. Sarbanes. Thank you, Mr. Chairman.
    Thank you all for being here.
    It is sort of hard to believe that our Republican 
colleagues want to come and celebrate this tax bill when you 
look at the fact that the great majority of the benefits of it 
have flowed to the very wealthy in this country, to corporate 
America. It is the sort of the height of chutzpah, as far as I 
can tell.
    I am particularly concerned about the backroom politics 
around this thing. The Republican donor community basically let 
it be known that this had to be brought across the finish line 
or they were going to hold up their donations.
    Politico talked about how a Texas-based donor fundraiser 
refused to give money to Washington Republicans until the 
gridlock broke in Congress. Pleased with the tax reform 
efforts, he said he has since called off the strike. Within 
days of the tax bill passing the Senate, several other GOP 
donors started cutting checks to the Republican committees 
after having not made large donations to Federal candidates all 
year.
    Paul Ryan cut a ``thank you'' video that he sent out to the 
Republican donors. In 13 days after the House passed its 
version of the tax bill, Charles Koch and his wife, Elizabeth, 
combined to donate nearly half a million dollars to Speaker 
Ryan's joint fundraising committee.
    In my view, that is called ``payment on delivery.'' The tax 
bill was hashed. The money started to flow because it does 
benefit people at the very top of the income and wealth range 
here in America.
    But we are here talking about a tax bill that gives power 
to the powerful when we really should be talking in every 
committee and every Member should be talking about this tragedy 
that is unfolding at our southern border.
    And the fact of the matter is our President, if he wants to 
be a big man, he needs to do something about that. You don't 
create a legacy, Mr. President, by giving power to people who 
already have power. You do it by lifting up people that are 
suffering, by lifting up people that are downtrodden.
    You are the big man. You fancy yourself that. You have the 
power. I don't know how many times I have seen the President 
hold up an executive order like this. He has the authority. He 
could solve this problem in 5 seconds, the time it takes to 
sign an executive order, but he won't do it.
    And I just see this imagery of Donald Trump, 6'2'', 6'3'', 
standing there with a small child in front of him looking up at 
him and pleading and saying: Don't separate me from my mother, 
don't separate me from my father.
    He has the power to fix this, and our Republican colleagues 
should be standing up and making that declaration. They should 
push back. They should show some spine. They should show 
compassion. They need to look into their hearts. They need to 
tell the President that this is an offense to humanity. And 
they need to tutor him on how Government works, that he has 
this power, that he can make a difference, that he can stop 
this.
    We are having a hearing about a tax bill that empowered 
corporate CEOs and Wall Street executives and gave more power 
to people in this country who don't need power. They don't need 
a President for that. They have plenty of power already and 
influence, as they demonstrated by instructing the Republican 
caucus to go pass this tax bill.
    What a President is for, what you need the power of the 
Presidency for is to look out for people who are suffering.
    So I implore my colleagues as Americans--not Republicans, 
Democrats--as Americans we need to stand up and say to the 
President of the United States: Not in a week, not in a day, 
not in an hour, but in the next 10 minutes you could fix this 
with one executive order, with indicating that the policy is 
going to change. Do that for the small child that is standing 
in front of you, Mr. President.
    I yield back.
    Mr. Griffith. I thank the gentleman for yielding back.
    I now recognize the gentleman from New York, Mr. Tonko, for 
5 minutes.
    Mr. Tonko. Thank you, Mr. Chair.
    Mr. Chair, it has been said already, but this hearing is 
outside our jurisdiction. What we can and should be doing, in 
terms of oversight, is focus on the children being forcibly 
separated from their families and placed into the custody of 
the Department of Health and Human Services' Office of Refugee 
Resettlement.
    The President's family separation policy and the related 
pain of separation anxiety just caused in our children are 
inhumane outcomes. It is immoral, and it doesn't speak to our 
values as Americans. We need answers, we need accountability, 
we need action from this President.
    Mr. President, children are crying for your help.
    Instead of wasting time on other issues that this committee 
should be doing, we should be focusing on that HHS need.
    So, by now we have heard this all before, but it needs to 
be said again to the tax policy. The Republican tax bill 
provides massive giveaways to the wealthy, and ultimately it 
will be middle-class families that pay for it--more pain 
inflicted.
    We are already seeing the consequences through rising 
healthcare costs. In my home State of New York, insurers are 
requesting an average premium increase of 24 percent for 2019 
due largely to provisions in this Republican tax cut bill.
    And the bill blows a massive hole in the budget. CBO has 
confirmed that it will increase deficits by nearly $2 trillion 
in the next decade. That is about $12,000 per worker.
    Americans should be worried that this new budget outlook is 
going to give more fuel to Republicans who want to reduce 
benefits or privatize America's most essential social safety 
net programs, like Social Security and Medicare.
    But instead of tax cuts that disproportionately benefit the 
wealthy, I want to turn our attention to investments that would 
help the public at large, including America's businesses.
    Mr. Hanlon, do American businesses need good roads?
    Mr. Hanlon. Yes.
    Mr. Tonko. I would cite the Society of Civil Engineers 
giving us a grade of D.
    What about reliable water systems?
    Mr. Hanlon. Yes, absolutely.
    Mr. Tonko. Another D given on the report card for drinking 
water and a D-plus for wastewater.
    Would it make the United States more competitive if more 
businesses had access to broadband?
    Mr. Hanlon. Yes, it would.
    Mr. Tonko. Many U.S. businesses buy, sell, or operate 
facilities abroad. Do we need modern ports and airports for our 
businesses to succeed?
    Mr. Hanlon. We do.
    Mr. Tonko. I would say we do. We have a grade of D for 
aviation and C-plus for ports.
    Mr. Hanlon, it is no secret that America's public 
infrastructure is in bad shape, and I believe it needs serious 
Federal investments. Do you agree that infrastructure 
investments are critical to long-term sustainable economic 
growth?
    Mr. Hanlon. Yes. And I think the tax bill was a missed 
opportunity to make those investments.
    Mr. Tonko. Right. If we are going to invest in that kind of 
money, it should have been for that urgent need that would have 
put people to work building this Nation's infrastructure. But 
for years we have heard some Members say we cannot afford to 
make these investments.
    And since the passage of the Republican tax bill with the 
realities of our new fiscal outlook and the $2 trillion 
increase in deficits that are going to affect every one of your 
workers and businesses, we will hear even more frequently that 
deficits are far too hard to make major investments.
    Don't think this is true? Look no further than the 
President's so-called trillion-dollar infrastructure plan, 
which is predicated on budget gimmicks and pushing costs 
overwhelmingly onto State and local governments. The irony is 
that the tax bill will make it more difficult for local 
governments to invest in infrastructure.
    I am very concerned about the consequences from changes to 
the State and local tax deduction, SALT, which now limits the 
amount of property taxes that can be deducted against Federal 
income taxes and will really hurt my home State of New York and 
other areas with high property tax bills.
    Mr. Hanlon, how might the SALT changes make it more 
difficult for local governments to raise revenues to fund 
infrastructure investments?
    Mr. Hanlon. So the SALT deduction, which previously had no 
cap on it, was capped at $10,000 per not just individual, but 
per couple, with that not adjusted for inflation. So that cap 
is going to becoming increasingly binding over time, which 
means that it is going to make State and local tax payments 
essentially cost more for families.
    And that is going to make it harder, we don't know how much 
harder, but it is going to make it harder, all else being 
equal, for State and local governments to raise the revenue 
they need for education, roads, and everything, all the other 
kinds of services.
    Mr. Tonko. All while infrastructure remains one of the 
biggest concerns of business. You need good infrastructure to 
make things happen, to ship your product, to conduct business.
    In the short term, shareholders will enjoy the stock 
buybacks. But these businesses' investors need to understand 
that the long-term success of your company and our economy will 
be built by modernizing and sustaining our public 
infrastructure.
    It just says the tax bill will lead to a tax on Social 
Security and Medicare. It will also ensure much-needed Federal 
infrastructure investments are not made while making it harder 
for local governments to fill the gaps.
    With that, Mr. Chair, I yield back.
    Mr. Griffith. I thank the gentleman for yielding back.
    And I now recognize myself for 5 minutes.
    Let's talk about SALT for a minute. Let me tell you what 
SALT did in this country. It took districts like mine in 
southwest Virginia where the people are struggling to make ends 
meet, who are trying to hold on to their house, and it made 
them pay money, additional money, to support folks in rich 
areas of the country--in all fairness, like Mr. Tonko's 
district. And he is a good man. He is looking out for his 
constituents. I am looking out for mine.
    Mr. Tonko. Yield for a question, please, Mr. Chair?
    Mr. Griffith. I will gladly yield.
    Mr. Tonko. Do you know the average income in my district?
    Mr. Griffith. I don't know the average income, but I know 
that if you are having to worry about SALT, if you are in my 
district, that is a million-dollar house in most of my 29 
jurisdictions, a million-dollar house.
    If you can afford a million-dollar house, you can probably 
afford to pay your own taxes instead of asking my coal miners--
I take back my time--instead of asking my coal miners to pay 
the taxes for those folks who have million-dollar houses.
    I mean, that is what I am facing in my district. You don't 
have to worry about it if you don't own at least a million-
dollar house.
    All right. That being said, and while I am on a vent, a lot 
of comments have been made about CBO today and looking at CBO 
scoring of this and that. I would just remind everybody that 
when this committee authorized the sale of spectrum, CBO said 
it would be zero. We got $40 billion. They were way off on the 
last farm bill. They were way off on Obamacare.
    And last year, when I put in a shot-across-bow amendment 
under the rules that said that we were going eliminate $15 
million, and there are 89 employees who do their analysis, they 
came back--and I gave them a second chance to get it right--
they came back and said it would have zero impact on the 
budget. Eliminating their analysis would have zero impact on 
the budget.
    So if they don't think they are worth anything, I don't 
know why I should.
    All right, let's get back to what this hearing is actually 
about.
    Tax reform, tax cuts, it has started to show benefits in my 
district in southwest Virginia. And while Mr. Green's 
jurisdiction had oil and they were doing very well, my coal and 
natural gas folks weren't doing quite as well, because our 
natural gas is not on the surface. It is down deep. It is in 
the methane, in the coal beds.
    And we have seen some revival there. We have seen 
significant revival nationally. I was recently visiting the 
West River Conveyors and Machinery factory. It is a small 
factory in southwest Virginia in a little place called Oakwood. 
And what was telling was not only are they expanding, they are 
working more, and they make equipment for mining all across the 
country.
    But one of their biggest problems that they were facing 
right now is that the economy is going so good they are having 
a hard time finding truckers to take that heavy machinery that 
Mr. Hanlon doesn't believe we are investing in, our companies 
are investing in, they are having a hard time finding the 
truckers to take the machinery that they have built for 
facilities all across the country from point A, from Oakwood, 
Virginia, to wherever it needs to go on point B, because 
everybody else is competing for a limited number of truckers. 
That tells me the economy is percolating and things are good.
    And then you get down to the employees. Not only does that 
mean that they are expanding and building a new building on 
their tract of land, not only does that mean jobs, but then you 
have EnerVest, an oil and natural gas company with about 95 
employees in southwest Virginia, First Sentinel Bank of 
Richlands, First Bank and Trust of Abingdon, the K-VA-T food 
stores, that would be Food City for everybody watching at home, 
Charter Communications, McDonald's, Kroger, et cetera, who are 
all doing things. And then last but not least, we got this 
little facility in Bristol, Virginia.
    Mr. Ferguson, would you like to talk about that little 
facility and how it has helped those folks?
    Mr. Ferguson. That little facility is growing, expanding. 
We have been able to improve its asset base. We have invested 
in it. I think we added 12 jobs just in the last month. And we 
have got ``help wanted'' signs all over the place. So we have 
had to increase our wages to be able to recruit.
    And we look for that facility to do really well this year, 
and we are going to be investing more in it.
    Mr. Griffith. And those 12 folks who were working at your 
facility in Bristol, Virginia, they don't think that this tax 
cuts and jobs bill was just crumbs for them, do they? They are 
able to feed their families now, aren't they?
    Mr. Ferguson. Well, and actually the 60 folks that were 
already at that site all got nice bonuses and nice raises. And 
they still have their $250 rewards and recognition that they 
can buy some TVs and whatever they want to buy with it.
    The 12 people that were added came in at the entry level, 
and we are training them to be mechanics so that they will be 
able to move up and hopefully become supervisors and plant 
managers.
    Mr. Griffith. Well, we appreciate that. And we appreciate 
the hard work that they do. And we appreciate the work that you 
are doing to continue to have jobs in southwest Virginia.
    It is an extremely important in an area that has been 
economically hit hard by the previous administration and by 
policies that have not looked out for folks in more rural, in 
areas that have a coal-based economy, because while they don't 
mine any coal in Washington County at this point in time, there 
are an awful lot of businesses that have connections to the 
coal industry and other industries in the area, and we do 
appreciate it.
    And with that, I yield back.
    Seeing that there are no additional folks here who wish to 
ask questions, I would like to thank all of our witnesses again 
for being here today and for taking the time while we went off 
to vote to stay around.
    Before we conclude, I would like to ask for unanimous 
consent to submit the following documents for the record. That 
is a joint letter from the National Hydropower Association, the 
American Biogas Council, the Biomass Power Association, and the 
Energy Recovery Council.
    [The information appears at the conclusion of the hearing.]
    Mr. Griffith. Pursuant to committee rules, I remind Members 
that they have 10 business days to submit additional questions 
for the record, and I ask that the witnesses submit their 
responses within 10 business days in receipt of the questions.
    Any objection to that, Mr. Rush?
    Mr. Rush. No objections.
    Mr. Griffith. No objection being heard, that is approved, 
and this hearing is concluded.
    Thank you all very much.
    [Whereupon, at 12:36 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]
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