[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
FROM RESCUE TO RECOVERY: BUILDING
A THRIVING AND INCLUSIVE POST
PANDEMIC ECONOMY
=======================================================================
HEARING
BEFORE THE
SELECT SUBCOMMITTEE ON THE CORONAVIRUS CRISIS
OF THE
COMMITTEE ON OVERSIGHT AND REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION
__________
MARCH 17, 2021
__________
Serial No. 117-9
__________
Printed for the use of the Committee on Oversight and Reform
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available on: www.govinfo.gov,
oversight.house.gov or
docs.house.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
43-985 PDF WASHINGTON : 2021
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COMMITTEE ON OVERSIGHT AND REFORM
CAROLYN B. MALONEY, New York, Chairwoman
Eleanor Holmes Norton, District of James Comer, Kentucky, Ranking
Columbia Minority Member
Stephen F. Lynch, Massachusetts Jim Jordan, Ohio
Jim Cooper, Tennessee Paul A. Gosar, Arizona
Gerald E. Connolly, Virginia Virginia Foxx, North Carolina
Raja Krishnamoorthi, Illinois Jody B. Hice, Georgia
Jamie Raskin, Maryland Glenn Grothman, Wisconsin
Ro Khanna, California Michael Cloud, Texas
Kweisi Mfume, Maryland Bob Gibbs, Ohio
Alexandria Ocasio-Cortez, New York Clay Higgins, Louisiana
Rashida Tlaib, Michigan Ralph Norman, South Carolina
Katie Porter, California Pete Sessions, Texas
Cori Bush, Missouri Fred Keller, Pennsylvania
Danny K. Davis, Illinois Andy Biggs, Arizona
Debbie Wasserman Schultz, Florida Andrew Clyde, Georgia
Peter Welch, Vermont Nancy Mace, South Carolina
Henry C. ``Hank'' Johnson, Jr., Scott Franklin, Florida
Georgia Jake LaTurner, Kansas
John P. Sarbanes, Maryland Pat Fallon, Texas
Jackie Speier, California Yvette Herrell, New Mexico
Robin L. Kelly, Illinois Byron Donalds, Florida
Brenda L. Lawrence, Michigan
Mark DeSaulnier, California
Jimmy Gomez, California
Ayanna Pressley, Massachusetts
Vacancy
David Rapallo, Staff Director
David Hickton, Select Committee Staff Director
Russell Anello, Chief Counsel
Senam Okpattah, Clerk
Contact Number: 202-225-5051
Mark Marin, Minority Staff Director
Select Subcommittee On The Coronavirus Crisis
James E. Clyburn, South Carolina, Chairman
Maxine Waters, California Steve Scalise, Louisiana, Ranking
Carolyn B. Maloney, New York Minority Member
Nydia M. Velazquez, New York Jim Jordan, Ohio
Bill Foster, Illinois Mark E. Green, Tennessee
Jamie Raskin, Maryland Nicole Malliotakis, New York
Raja Krishnamoorthi, Illinois Mariannette Miller-Meeks, Iowa
C O N T E N T S
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Page
Hearing held on March 17, 2021................................... 1
Witnesses
Joseph E. Stiglitz, University Professor, Columbia University,
Nobel Laureate in Economics
Oral Statement................................................... 7
William E. Spriggs, Chief Economist, AFL-CIO, Professor,
Department of Economics, Howard University
Oral Statement................................................... 9
Larry Kudlow, Former National Economic Council Director (2018-
2021)
Oral Statement................................................... 11
Written opening statements and the written statements of the
witnesses are available on the U.S. House of Representatives
Document Repository at: docs.house.gov.
Index of Documents
----------
* Letter Regarding School Funding; submitted by Rep. Raskin.
Documents entered into the record during this hearing and
Questions for the Record (QFR's) are available at:
docs.house.gov.
FROM RESCUE TO RECOVERY: BUILDING
A THRIVING AND INCLUSIVE POST-
PANDEMIC ECONOMY
----------
Wednesday, March 17, 2021
House of Representatives
Select Subcommittee on the Coronavirus Crisis
Committee on Oversight and Reform
Washington, D.C.
The subcommittee met, pursuant to notice, at 11:15 a.m.,
via WebEx, Hon. James E. Clyburn (chairman of the subcommittee)
presiding.
Present: Representatives Clyburn, Waters, Maloney, Foster,
Raskin, Krishnamoorthi, Scalise, Jordan, Green, and
Malliotakis.
Chairman Clyburn. Good morning. The committee will come to
order.
Without objection, the House--the chair is authorized to
declare a recess of the committee at any time.
I now recognize myself for an opening statement.
Americans have testified--have suffered terribly during the
Coronavirus pandemic. The virus has killed more than half a
million of our fellow Americans and resulted in the loss of
more than 22 million jobs, many of which have yet to come back.
These losses of lives and livelihoods have not affected all
Americans equally. Historic job losses have disproportionately
impacted populations that were also hit hardest by the virus,
including low-wage workers, Black Americans, and Latinxes.
Women have suffered greater economic harm than men.
Last summer, former chair--Fed Chair Ben Bernanke and
current Treasury Secretary Janet Yellen testified before this
committee that low-paid workers, women, and minorities are
overly represented in the sectors hit hardest by the economic
crisis, like restaurants and hotels. They explained that these
groups--and I'm quoting their joint statement here--have born a
disproportionate share of the job and income losses, end of
quote.
President Trump's own Treasury Secretary agreed. He
testified before this committee last year that many industries
and small businesses were, in his word, ``destroyed'' by the
pandemic. And the service industries employing low-wage
workers--and I'm quoting again--have been particularly hard
hit.
Of course, many jobs have returned; 379,000 jobs were
created in February. And the official unemployment rate has
dropped to 6.2 percent from a high of 14.8 percent in the early
months of the pandemic. This is encouraging news. But our
economy has still not replaced roughly 10 million jobs that
existed last year.
And Fed Chair Jerome Powell has cautioned that the official
unemployment rate fails to get to account the millions of
Americans who have left the work force due to Coronavirus
health or family reasons or because they work in industries
that haven't come back yet.
Even the official numbers show stark disparities. While the
overall unemployment rate in February was 6.2 percent, the rate
for White Americans stood at 5.6 percent, while the rate was
8.5 percent for Latinxes, and nearly 10 percent for Black
Americans.
These job losses can have devastating long-term
consequences for people's future employment prospects and their
ability to stay in their home, care for their families, and
avoid a spiral of unsustainable debt. Even as the stock market
hits record highs, 42 million Americans, including 1 in 6
children, do not have enough to eat.
The American Rescue Plan will lift these communities with
urgently needed support. The nonpartisan Urban Institute
projects that this groundbreaking law will reduce poverty in
America by one-third and by more than half for children and for
families facing job loss. Racial economic disparities will be
reduced, and the overall economy will be given a boost.
The Select Subcommittee is committed to working with the
Biden-Harris administration to ensure the American Rescue Plan
is implemented effectively, efficiently, and equitably, so that
it can, to its full benefit, can be realized.
But rescue is only the first step toward recovery. Many
economies are now sounding the alarm that if we fail to build
on the American Rescue Plan, we could see a fundamental
inequitable post-pandemic economy where the wealthy
reconsolidate their pre-pandemic prosperity, while low-income
families continue to suffer. We must be vigilant to ensure this
reversion to economic inequity is avoided.
That is why this morning, I sent a letter to the Office of
Management and Budget and the Department of Labor asking that
they include data on employment disparities in the upcoming
budget and put those metrics at the forefront of our efforts to
reduce economic inequities.
To succeed in building a strong and inclusive post-pandemic
economy, we must, first and foremost, invest in our Nation's
infrastructure, as many economists are urging. We must put
Americans to work at good wages, repairing our country's
crumbling roads and bridges, enhancing rail and transit,
expanding a fuller access to broadband internet, upgrading
water systems, building houses and schools, constructing state-
of-the-art healthcare facilities, and transitioning to clean
energy.
As we make these investments, we must create opportunities
for small businesses and ensure equity in Federal procurement
and lending. Taking these steps now will pay dividends for
generations to come.
Just like the American Rescue Plan, bold infrastructure
investment has broad support across the country from Democrats,
Republicans, and Independents. Every member of this committee
represent Americans in need of economic opportunity and
communities in need of economic development.
According to the Census Bureau, there are approximately 500
counties in the United States that are classified as persistent
poverty counties. These are counties where 20 percent or more
of their citizens have lived below the poverty level for the
last 30 years.
I have long advocated that resources be targeted into these
communities. This is not a partisan issue. Two-thirds of the
people in these communities are represented in this body by
Republicans. I invite my colleagues on the other side of the
aisle to work with my colleagues on my side of the aisle on an
ambitious plan to get all Americans back to work building a
strong equitable and sustainable economy.
I now yield to the ranking member for his opening
statement.
Mr. Scalise. Well, thank you, Mr. Chairman. And I want to
thank our witnesses as well as the new members who have joined
our committee in this new Congress. I look forward to all of
your participation.
The subcommittee has not held a hearing since October 2 of
last year, which strikes us as pretty extraordinary. Speaker
Pelosi stood up this committee to deal with the pandemic, yet
we've gone five months without a single hearing during some of
the most impactful months of the pandemic; five months, that
is, without having investigations on school reopenings,
fundamental health and drug addiction crisis we're seeing; to
deal with China and the World Health Organization in the role
they played; to look at vaccine rollout; the nursing home death
scandal; as well as COVID that's now spreading in some of our
communities at America's open southern border.
Instead, the Select Subcommittee went silent during this
period. Today, it does reopen but for the sole purpose of
serving as Speaker Pelosi's PR machine to tout the Payoff to
Progressives boondoggle bill that passed on a strictly partisan
vote last week.
When this subcommittee was created, the majority made a
point of emphasizing the desire to model it after the Truman
committee, which we had during World War II, a committee that
strove to make sure the Federal Government spent taxpayer money
wisely and effectively. But instead, what we've seen is just
attempts to cheer spending nearly $2 trillion, over 90 percent
of which, by the way, had nothing to do with the health needs
or reopening schools, and then argue that, we're hearing this
week, more taxes need to be raised, more spending, maybe
trillions more in spending need to be made. Where does this
end?
A year into the pandemic, shouldn't the Select Subcommittee
be focusing on lessons learned? There are many, good and bad,
by the way. We do know that inflation adjusted dollars, all of
World War II cost $4 trillion. We've now spent over $5.5
trillion. And much of that money, by the way, still remains
unspent. Look, hundreds of billions of dollars from previous
COVID relief bills are still unspent.
If this subcommittee was truly modeled after the Truman
committee, this Select Subcommittee should be leading--the
leading voice in Congress educating the American people that
some Governors managed their states dramatically better than
other Governors. And we could be sharing those best practices,
which, by the way, those best practices in the states, these
incubators of democracy could be shared to save us trillions of
dollars, seeing how some did it well, some did it poorly,
surely not replicating what was done in the states that didn't
do it well, and trying to amplify the voices of the states who
did it well so others can do it.
The minority asked all year to hold hearings on China and
the role that the World Health Organization played at being
China's mouthpiece in those early days when they instead could
have been helping us confront the crisis that no one knew about
that was coming out of Wuhan. The majority refused that
request.
Now even The Washington Post Editorial Board has written,
quote, ``We're still missing the origin story of this pandemic.
China is sitting on the answers,'' close quote. We should be
trying to get those answers. The Post Editorial Board is also
asking the same question that we've asked the majority on the
subcommittee from the beginning, quote, ``What is China trying
to hide about the origins of the pandemic and why,'' close
quote. Other voices from both the left and the right have
raised the same concerns. But the silence from the majority
rings loudly.
Mr. Chairman, China's lies in the World Health
Organization's coverup cost us half a million lives, not just
here in America, but all around the world; could have saved
millions of lives. Where is that bipartisan outrage?
On June 14, the minority wrote the Governors of five states
a letter asking for information about deadly nursing home
policies that forced COVID-positive patients back into nursing
homes against the CMS guidance that was out there. The majority
ignored us. If they would have joined us, we could have gotten
those answers. History now shows that we were right in asking
those questions.
And now it has come out that Governor Cuomo of New York
initiated a potentially criminal coverup, specifically designed
to hide those facts, not just from us in Congress, but from the
people of New York, the families of those thousands of people
who never should have died, who are still, by the way,
demanding answers. Those families deserve answers. We're going
to keep fighting until we get those answers. Whether Governor
Cuomo wants to comply or not, the answers are going to come
out. And you are seeing people even within his own
administration, that don't want to go down with a sinking ship,
that are finally starting to speak out.
I would encourage any official in the state of New York who
has that information to get it to us. Don't be complicit in
Governor Cuomo's coverup. Enough reports are out there that he
tried to hide this data. They were on a call with state
senators in New York bragging about the fact that they hid the
data. Don't be involved in a coverup. Thousands of families in
New York want and deserve answers. The rest of the country can
learn from those deadly mistakes. I would encourage everyone in
New York, from Governor Cuomo on down, to share that
information.
Right now, you're seeing Democratic colleagues even calling
for Governor Cuomo's resignation, in part citing the nursing
home scandal, in addition to his sexual harassment scandals.
But the silence from Democrats here in Congress rings volumes.
Just last week, we again asked for a hearing on this scandal. I
would urge the committee to bring this up.
A year into this pandemic, we know many cities made
devastating mistakes on school closures. Back in March and
April of last year, maybe the mistakes then would have been
understandable, but now we have the data, we have the science,
we know what is happening to our young children all across the
country. And by the way, the science is loudly saying the kids
need to be back in the classroom. It can be done safely.
There's a roadmap out there for doing it. The American Academy
of Pediatrics has laid that out. We have also seen it from CMS.
Even the CMS Director under President Biden acknowledged that
kids could be back in school.
We put hundreds of billions of dollars out there for this,
by the way, in previous relief packages. Some school systems
chose to actually spend this money and get kids back in the
classroom. Unfortunately, it's only about 40 percent of
America's students who are back in the classroom. The damage
that's being done to millions of kids, not because of the
science, but because of the unions who don't want to go back to
school. In fact, they were just urging teachers they can go to
spring break while they're not in the classroom, just don't
post pictures of you being on spring break. That tells you
what's going on. There is a tremendous disservice. And so many
teachers want to be back in the classroom, and yet their unions
are fighting to hold them out.
These kids are suffering. We're seeing mental illness off
the charts. We're seeing opioid abuse, including deaths and
suicide, off the charts, not to mention, Mr. Chairman, the
long-term damage that's being done to these kids that are being
held back and left behind. None of us should stand for that. We
should all be having hearings and calling for hearings on this
scandal. And let's fight to get our schools reopen and follow
the science.
We hear we can't open schools until this money is spent.
Schools need to upgrade. Of course, we already spent hundreds
of billions in relief that was targeted to getting schools
open. So that money is available for anyone who wanted it. But
some schools that chose to serve the children opened, some
bowed to the unions.
We need to look at the science and follow it and open our
schools. This may be one of the biggest public policy mistakes
that America has seen by these systems that are still refusing
to open up their schools to in-classroom learning.
The per cap--capita death rate from COVID in California and
Florida are about the same. New York is much higher than both.
California and New York, of course, locked down, crushed
businesses so many that will never reopen. Schools and churches
that are closed. Their unemployment rates are nine and 8.8
percent in New York and California. Florida, while facing very
misguided criticism, opened up their schools and businesses and
followed the science and did it safely. Their unemployment rate
is about 4.5 to five percent, less than five percent.
So after five months with no hearings, Mr. Chairman, it
seems like today's hearing should be about the different
experiences we have seen in states, some that stayed locked
down and some states that safely opened, and how to share those
best practices. Because if the Select Subcommittee modeled this
after Harry Truman in what he did with the Truman Commission,
the conclusion would be that we couldn't have saved trillions
of dollars by focusing on the most vulnerable in our society,
by redirecting ourselves to ending inequality in our education
system, by simply following the science, by analyzing the data
that's out there now after a year of shutdowns, and
acknowledging that American ingenuity and things like President
Trump's Operation Warp Speed are the path to getting out of
this pandemic.
I look forward to hearing from our witnesses, and I yield
back.
Chairman Clyburn. I thank the ranking member for his
statement. And I would like to remind you, my dear friend, that
we wanted very much to have those hearings that you talked
about, but for some strange reason, the minority leader refused
to appoint committee members, which prevented us from having
those hearings.
Now, as for the schools, I think you know that in this
bill, the Rescue Plan, $128 million to make our schools safe so
people can return. Being a former public schoolteacher myself,
I know how important it is. But for some reason, my Republican
colleagues refused to support that $128 million.
Mr. Scalise. Will the gentlemen yield on that?
Chairman Clyburn. Yes, I'm pleased to yield.
Mr. Scalise. Clearly, and we pointed this out during the
hearing, we actually tried to correct it when we were seeing
this still move through, over 95 percent of that money for
schools can't even be spent this year. And not a single dollar
was dedicated to safely reopen schools. In fact, we had
amendments to require that the money be used to reopen schools,
and we were shut out. That amendment was blocked on a partisan
basis.
So, I'd look forward to working with the gentleman to
target money on the things that need to be addressed.
Unfortunately, the bill that passed last week didn't do that.
And I'd yield.
Chairman Clyburn. Well, I thank you for your statement,
except that I totally disagree with it. But we've got some
other people here to hear from today, so I'm not going to get
into a back and forth with you on that. But I thank you for
your statement.
And I welcome today, two new members. It looks like both
the Speaker and the minority leader have been testing my
southern education with these appointees here. But I'm going to
welcome on the Democratic side, Mr. Krishnamoorthi. I hope I
didn't do too much damage to that. And on the minority side,
Ms. Malliotakis.
Mr. Scalise. You got it. Good job.
Chairman Clyburn. Very good. Well, my Southernese ain't as
bad as I thought. So, I welcome them.
I now am pleased to welcome our distinguished witnesses:
Joseph Stiglitz, a Nobel Laureate in economics and professor at
Columbia University; William E. Spriggs, the chief economist at
AFL-CIO, a professor at Howard University; and former director
of the National Economic Council, Counselor Larry Kudlow. Thank
you all for being here today and for your testimony.
The witnesses will now be unmuted so we can swear them in.
Assuming that you all have been unmuted, please raise your
right hands.
Do you swear or affirm that the testimony you're about to
give is the truth, the whole truth, and nothing but the truth,
so help you God?
Let the record show that the witnesses answered in the
affirmative.
Thank you.
And without objection, your written statements will be made
a part of the record.
With that, Professor Stiglitz, you are now recognized to
provide your testimony.
STATEMENT OF JOSEPH E. STIGLITZ, UNIVERSITY PROFESSOR, COLUMBIA
UNIVERSITY, NOBEL LAUREATE IN ECONOMICS
Mr. Stiglitz. [Inaudible] I would like to begin by
congratulating Congress and the administration on what they
have already accomplished.
Before discussing the next steps--and let me emphasize, I
think your time is rightly spent thinking about the steps going
forward, not thinking back of what should have been done. But
before discussing these next steps, let me highlight some of
the achievements of this act.
A large child allowance that will cut child poverty in
half. This is a huge step forward to giving the government an
affirmative role in directly supporting people, especially
children, who cannot fend for themselves. And, second, sector-
specific relief. The huge increase in spending for higher
education, the health industry, and especially aid to states
and localities, which will stem the tide of austerity policies
and contraction that would otherwise have resulted.
Most importantly, the dramatic difference between this bill
and the action taken a year ago is that this bill has a vision
of what kind of society and economy we want. With the Federal
Government spending so much money, the expenditures should
reflect a collective vision. It is a start to building back
better.
In this testimony, I focus on one dimension of building
back better: creating a more widely shared prosperity. The
pandemic has further exposed and aggravated the divides in our
society. The irony is the frontline workers who put themselves
most often in harm's way, who contribute so much to our
society, are among the lowest paid. If we value those who
educate our children, nurse our sick, care for our elderly, it
is unconscionable that we pay them so little. Their wages are
largely determined, not by abstract market forces, but by
decisions we make as a society. Some of this low pay is a
legacy of discrimination, many aspects of which we have been
reminded of during the past 12 months.
Now I am worried that the K-shaped recovery that is
underway will further aggravate the high levels of inequality
in the United States. It may even speed up changes associated
with robotization and AI that are already happening, and they
risk widening the gap even more. So, it's imperative that we
focus our policy on dealing with the grave inequities in our
society.
The tasks before us are many and our resources are limited.
Thus, we'll have to make our dollars do double and triple
duty--rescue, revive our economy; promote economic and social
justice; push the structural transformation of our economy and
retrofit it to face the existential crisis of climate change.
The good news is that research shows that there is an ample
supply of investments that can do all of these simultaneously.
There are strong complementarities. A green infrastructure
program can be timely, have large multipliers, with a big bang
for the buck; be labor-intensive; and better connect workers
with jobs through public transportation. The effects of adverse
environmental conditions are felt most strongly by the poor,
and that's another reason that better environmental regulations
and more investments to protect the environment are such an
important part of an equitable recovery.
I would like to note two aspects of the bill that ought to
be addressed in future legislation. First, I would have been
happier if some of the key provisions, such as extended
unemployment insurance, had been linked to some measure of a
weakness in the labor market or the economy. As I've argued in
another recent paper with Secretary--former Secretary of
Treasury Robert Rubin and former OMB Director Peter Orszag, we
should have more automatic stabilizers.
Second, many of the actions need to be made permanent. For
instance, those related to reducing child poverty.
There's so much to do for a truly strong resilient, just,
and sustainable economy. And let me just list a few of those
issues very briefly.
A fair and better designed tax system could close
loopholes, enhance economic efficiency, promote growth, and
reduce the administrative burden and inequities that plague the
current system.
We need to ensure that everyone can receive the education
that enables them to reach their full potential, regardless of
their parents' income. A GI Bill for all Americans. We can
afford it. This is an investment in our country's future. So,
in a way, we cannot afford not to do it. But with politics in
America being what they are, if we cannot reach this goal, it
is time to recognize the historical legacy of discrimination
and deprivation against African Americans and Native Americans
and at least create a GI Bill for these groups.
We need to deal with the legacy of education debt that has
been built up in this country, which imposes an unacceptable
burden on too many young Americans.
We need affordable healthcare for all, and the gaps in the
ACA need to be quickly remedied. A public option is a
reasonable way forward. The pandemic demonstrated the poor
health of so many Americans and laid bare the fact that the
U.S. has the lowest life expectancy of any major advanced
country and the largest health disparities.
And we need to explore public options to make decent
housing and a secure retirement more affordable for all.
The rampant and growing inequalities in our society are to
a large measure a result of power imbalances in the
marketplace. And if we are to ensure that we don't have a K-
shaped recovery, these have to be corrected.
Before concluding, I would like to say a word about the
macroeconomics underlying what has been done. It would, in
fact, be a good thing if we faced greatly tightened labor
markets. It is only during those times that we bring
marginalized groups into the labor force and reduce the
longstanding inequities.
Let me conclude, the American dream has always been about
ensuring that everyone has a chance to have a decent middle-
class life. It has always been about opportunity for all,
regardless of race, gender, ethnicity, or the income and
education of one's parents. We have to recognize that, today,
the American dream is largely a myth.
The pandemic has provided us a moment to reflect on where
we are and where we should go, to redesign our economy and
society to provide that dream once more, this time for all
Americans. I hope we seize the opportunity.
Chairman Clyburn. Thank you very much, Professor Stiglitz.
Now we will turn to Professor Spriggs.
Professor Spriggs, you're now recognized.
STATEMENT OF WILLIAM E. SPRIGGS, CHIEF ECONOMIST, AFL CIO,
PROFESSOR, DEPARTMENT OF ECONOMICS, HOWARD UNIVERSITY
Mr. Spriggs. Thank you, Chairman Clyburn and Ranking Member
Scalise, for this invitation to give testimony before your
subcommittee today on the issue of rebuilding America's economy
in the wake of the novel Coronavirus. I am happy to offer this
testimony on behalf of the AFL-CIO, America's house of labor,
representing the working people of the United States, and based
on my expertise as a professor in Howard University's
Department of Economics.
My testimony will focus on some immediate needs to be
addressed following the enactment of the American Rescue Plan,
but it would also address some of the issues that the current
crisis has made clear. The scope and size of the American
Rescue Plan clearly show the cumulative cost of our economy of
high levels of inequality and our lack of attention to
addressing both inequality within the market economy, and our
tools to addressing equality through our fiscal policies.
As a Nation, our economy cannot afford workers earning less
than $15 an hour, nor can we afford making our work force
subject to casualization, dodging our wage and hour laws
through misclassifying workers as independent contractors. We
have gone too long with a falling share of national income
going to workers, disconnecting national prosperity from wage
incomes. It is time we balanced the bargaining power of workers
in management and ensure our households can be more resilient
to economic downturns.
The huge imbalance in racial wealth is a large contributor
to overall inequality, and it is a particular problem because
of the low absolute level of liquidity held by Black and Latino
households, in particular. We must recommit ourselves to
address a legacy of a host of discriminatory policies that
leave too many households lacking resilience during economic
downturns. Addressing those disparities is very expensive.
As a result of these deficiencies, the size of the American
Rescue Plan has given us a larger national debt. To resolve
that issue, we must learn from our past. We faced a large
threat to our Nation during World War II. This is our biggest
test since then. We resolved the debt of that conflict having
higher marginal tax rates on high incomes, pursuing full
employment policies to keep the economy from falling into
needing fiscal stabilization, and by investing our way out of
debt through a massive infrastructure package that created our
modern interstate highway system.
Further, we made a massive investment in the education of
Americans, granting free college to returning World War II
vets, and then repeating that by bringing the next wave of
young people affordable student loans to pursue degrees in
vital strategic areas in engineering, science, math, modern
languages, and public education.
We did not respond with austerity. We responded by doubling
down our bets on the American people and made a down payment
America's future, launching the greatest increase in
productivity, wages and technological innovation among
developed economies up through 1980.
Our infrastructure weakness is a national security risk.
Our clear inability to respond to the water crisis in Jackson,
Mississippi, is another embarrassment that shows us to be weak
and unable to quickly respond to our major disruptions.
We must fix our unemployment insurance system. This is one
of the things that the Rescue Plan sought to correct. We cannot
go into the next downturn with this weakened condition. Relying
on a state-based system that clearly showed discrimination in
who had access to unemployment benefits that forced Congress to
have to come up with a patch is not going to be acceptable.
Congress must immediately go to resolve the remaining
disparities in the system.
In 2018, fewer than eight percent of those who were
unemployed in leisure and hospitality received unemployment
benefits under the normal system. That's why this patch had to
be done, but going forward, we cannot rely on this state-based
system.
In rebuilding, we must face that our labor force is not
growing fast enough. We must find ways that infrastructure
should be the means of getting people to work, and that means
increasing female labor force participation. That means an
infrastructure that includes expanding childcare, addressing
elder care, addressing the disparities in access to elder care
that we know will result from the racial wealth gap where this
is most acute in retirement. We must have paid family leave so
that we can get women's labor force participation up.
We must find a way to revamp and revise the way that we
have been conducting higher education in the last 10 years that
allowed this and only this generation to be faced with college
debt at this exorbitant level. We cannot rely on higher
education being a private-funded matter. It has a
disproportionate impact on Black families who are more likely
to have college debt, and when they are the ones with college
debt, have the most college debt.
We have to find a way to provide reliable public
transportation. This is the way to provide mobility and
resilience to workers, and that includes workers in rural areas
who must have access to adequate transportation.
Going forward, we cannot afford to have inequality at this
level. The IMF, the OECD have clearly documented that
inequality slows growth. This will be the biggest impediment
for a thriving economy going forward. Everything that Congress
can do to address inequality at all levels, at issues of race
and gender, must be put in place so that we can have a full
recovery for everyone.
Thank you.
Chairman Clyburn. Thank you very much, Professor Spriggs.
We will now hear from Mr. Kudlow.
Mr. Kudlow, you are now recognized.
STATEMENT OF LARRY KUDLOW, FORMER NATIONAL ECONOMIC COUNCIL
DIRECTOR (2018 2021)
Mr. Kudlow. I raised a couple of key [inaudible] looking at
maybe the past's prologue to the future. I'm not going to
comment on the act that was just--the so-called stimulus act
that was just put through. My criticisms have been made
elsewhere. There was some good but a lot of not so good.
I do want to say this: I agree with Mr. Clyburn and Mr.
Scalise and some of the others that we need a balanced and
equitable and inclusive economic recovery. I fully agree with
that goal. What I want to note here, though, is that looking at
the policies of the last administration, the Trump
administration, of lower tax rates, significant rollback of
regulations, energy independence, and also tough and fair trade
policies, particularly with China, that pre-pandemic, in the
first three years before we got hit by this awful catastrophe,
we had a broad-based inclusive economic growth rate, a
resurgence and renaissance of the economy, which middle and
lower-middle income folks did better than upper-income folks by
a significant degree. And minority groups, be they African
Americans, Hispanic Americans, Asian Americans, women, people
with only high school degrees, did significantly better. It was
the middle-and lower-income brackets that far outpaced the
upper brackets. The tax cuts, lower tax rates, particularly for
corporations and smaller businesses, as well as the regulatory
rollback and the energy storybook.
After many years of stagnant wages going back to the year
2000, median household incomes rose by $6,500 for a typical
family of four. Real wages increased 10 percent for blue-collar
and middle-class workers. I called it a blue-collar boom pre-
pandemic. 6.6 million Americans were lifted out of poverty.
Household wealth, that's stocks and homes and cash, household
wealth for the bottom 20 percent of income earners increased 34
percent, while household wealth of middle-income Americans
increased 20 percent. Wages, incomes, and household wealth for
the top one percent and the top five percent grew but far less,
substantially far less, than what we saw in the lower income
groups.
The bottom 50 percent of households saw an astonishing 40
percent raise in net wealth. Poverty rates for African
Americans, Hispanic Americans, Asians, women reached their
record low numbers. Inequality declined dramatically. All this
was a complete reversal, not only of the prior eight years,
but, frankly, of the prior 16 years going back to the year
2000.
Unemployment hit 50-year lows. Employment participation
rates hit almost 50-year highs. And, again, it benefited, you
got low unemployment at 3.5 percent overall. But, again, the
key minority groups, Black Americans, Hispanic Americans, Asian
Americans, women, less well-educated blue collars and middle-
income people, they have rock bottom 50-year low unemployment
rates. So, I just put that on the table.
My biggest concern here is that we're going to turn back
the clock and reverse these policies. And my thought here is
that if we do, if we reverse the Trump tax cuts, if we move
into a huge overregulated economy, if we end fossil fuels and
end energy independence, we will do great damage, specifically
to those groups that have been discussed this morning, the
minority groups and so forth, women, people in poverty,
underserved community.
I want to also tout the opportunity zone program. Roughly,
1,000 opportunity zones have been set up across the country to
provide incentives for investments to underserved communities.
These must be allowed to stay.
I think at the end of the day, the best policies we can do
is not to overspend, not to try to penalize success, not to try
to raise taxes and regulations in ways that we haven't seen in
30 or 40 years. The best thing we can do is provide an
incentive-oriented supply side driven growth model that has
worked in the past to deliver the goods and the incomes to the
very people that we are talking about, the so-called inclusive
recovery.
These policies, I might add, have worked under Democrat and
Republican administrations. I wrote a book on this subject.
John F. Kennedy was the biggest tax cutter since World War II.
He was really the first supply sider. Ronald Reagan followed.
Bill Clinton may have raised taxes in his first year, but he
wound up cutting the capital gains tax and the biggest welfare
reforms, a bipartisanship with Newt Gingrich, that this country
has ever seen.
And I want to make a note on welfare reforms. I guess it
will be my final point. I don't want to go on forever. But this
recent stimulus bill has expanded the welfare state, probably
by the largest amount since the LBJ Great Society. And, in
particular, I want to express my worry and my concern that this
expansion which has left work requirements out, whether it's
the child credit or anything else, work requirements have been
decimated in this bill, and people want to make that permanent.
That goes against what Clinton and Gingrich did. And I fear
that it will create more poverty and more unemployment as we go
forward.
So, I would like to see less spending. I would like to see
more supply side economics. I say this in a bipartisan sense,
we can work together to achieve these goals. At the end of the
day, gentlemen, I think the private enterprise economy is going
to deliver the goods for all Americans far better than a top-
down, heavy government, central planning economy.
Thank you for listening.
Chairman Clyburn. Thank you very much, Mr. Kudlow.
Each member now will have five minutes for questions.
I now recognize myself for five minutes.
Now, I am very concerned that these sectors of the economy
that have been hit the hardest during this pandemic are those
intended to employ workers who are already economically
vulnerable, exacerbating economic inequity. Last year, Federal
Reserve Chairman Powell testified before our subcommittee, and
I am quoting him here: The burden of the downturn has not
fallen equally on all Americans. Those least able to withstand
the downturn have been affected most. The rise in joblessness
has been especially severe for lower wage workers, for women,
and for African Americans and Hispanics, end of quote.
Professor Spriggs, you testified that the unemployment rate
for workers of color in the most affected industries last year
was more than 38 percent, and the labor market still has not
recovered all those jobs. What is the long-term impact on
economically distressed communities if those inequities are not
addressed.
Mr. Spriggs. Thank you, Chairman Clyburn, for that
question. It is clear from the downturn that we are currently
at the same place in terms of the gap in payroll employment as
we were at the depth of the Great Recession. We still have a
long way to go.
The loss of wealth from this large period of unemployment
is a large contributor to the racial wealth gap. Downturns
affect Black and Latino communities more severely. Blacks have
the largest period of long-term unemployment. This is not a
matter of skills. The unemployment rate for high school
dropouts in the United States, during most of this period since
February, for high school dropouts has been lower than the
Black unemployment rate.
Last month, when the Black unemployment rate went up as
others went down, the unemployment rate for Black men, all
Black men was lower--was higher, was higher than the
unemployment rate for high school dropouts. This is not a
matter of skills. It's a matter of the way discrimination takes
place within the recovery.
Back in April when the economy was shot, the Black
unemployment rate collapsed. Since then, we have seen the way
the labor market performs, and the 2 to 1 ratio is on its way
back. That loss of income, of job experience has ramifications
going forward. It penalizes the youngest workers the most. They
will have permanent income loss from this.
Chairman Clyburn. Thank you very much for your answer
there.
Professor Stiglitz, you know, if Congress had not enacted
the American Rescue Plan, could we have counted on the economy
to recover on its own?
Mr. Stiglitz. No. In short, you know, slowly economies do
recover. The question is how long would it take and how various
groups would be affected. And, unfortunately, because so little
was done earlier, both addressing the pandemic and addressing
some of the statures and groups that most needed it, there's
already been scarring, and that means that the potential for
recovery quickly is inhibited. And that was one of the reasons
why, I think, it was so important to have such a strong bill.
In other words, economists talk about hysteresis effects.
If you don't deal with a problem quickly, you get scarring, and
that was already happening. That's why it was really important
to take the strong action now.
Chairman Clyburn. Well, thank you very much.
I've got 25 seconds. I'm going to yield back to the ranking
member.
Mr. Ranking Member, you're now recognized for five minutes.
Mr. Scalise. Thanks a lot, Mr. Chairman. I appreciate that.
Again, I enjoyed the testimony from all of our witnesses.
As we look at this hearing's title talking about focusing
on rescue to recovery, clearly, in economic recovery, we want
to get our economy back on track. We have seen some really
strong indicators already, but we've also seen some fault
lines.
And I know Mr. Kudlow brought up the energy industry
changes that President Biden's made. There's been a lot of
concern expressed about that. But one of the people who
expressed real concern about the very first day of the Biden
administration canceling the Keystone Pipeline, some estimates
say about 10,000 good union jobs eviscerated.
I know, Mr. Spriggs, I wanted to ask you, because the head
of your organization, Richard Trumka, had said regarding the
canceling on the Keystone Pipeline that he said, it, quote, did
and will cost us jobs.
You know, as we focus on economic recovery, Mr. Spriggs, do
you agree with Mr. Trumka that canceling the Keystone Pipeline
was not the approach that was the right one for recovery, but
that, in fact, we should have kept moving forward with those
good high-paying union jobs that Keystone was producing?
Mr. Spriggs. The labor movement has affiliates on both
sides of the issue on the Keystone Pipeline. Those jobs are----
Mr. Scalise. What's your opinion, if you are here as our
witness regarding--you know, I guess, you're representing the
AFL-CIO, what's your feeling on that? Do you think it was a
good or bad thing to cancel Keystone?
Mr. Spriggs. Thank you. Thank you, Ranking Member, for the
question. And in my answer I am pointing out that from the
union perspective, our affiliates are on both sides of that
pipeline project, because it affects both those that are
affected by global warming and those who get those immediate
jobs. And so----
Mr. Scalise. If I could point out----
Mr. Spriggs. And so, my answer to you is that I'm concerned
on both sides of that question. I'm concerned for those
affiliates that lose jobs because of global warming and its
effect. And, yes, there's a concern about the loss of those
jobs, but there are ways to address loss of jobs.
Mr. Scalise. All right. Well, if I may----
Mr. Spriggs. And there are ways----
Mr. Scalise. We're limited on time. I've got to reclaim--
I've got to reclaim my time.
If you're concerned about global warming, first of all,
let's recognize, by getting rid of the Keystone Pipeline in
America, doesn't get rid of the oil that's coming from Canada.
It just means Canada is sending that oil to refineries in
countries like India, who, by the way, emit more carbon. So, if
you're concerned about global warming and carbon emissions,
having the Keystone Pipeline built here by American workers
getting high-paid union jobs would actually reduce carbon
emissions globally, because now those emissions are going to be
admitted. You know, John Kerry is still going to need jet fuel
to put in his private airplane. It's just going to come from
Russia and Middle Eastern countries who don't have the
standards we have.
Mr. Kudlow, can you answer that question as well, because I
know you touched on the energy job losses and what that means?
You're on mute right now, Mr. Kudlow.
Mr. Kudlow. Yes. Look, efforts to end fossil fuels are
going to have--take an enormous toll on this economy. We're
going to wind up losing millions of jobs. We're going to wind
up losing energy, reducing it. We're going to increase the cost
of energy, and it's going to affect every household.
Particularly, middle-and lower-income people are going to
suffer the most. So, this in my judgment, is a huge mistake.
I do not--I'm not a denier. I think global warming needs to
be discussed at length, but I'm saying, we should be adding to
the portfolio of energy, not reducing it. I'm an all-of-the-
above kind of guy. We should look for technology and innovation
in the private sector, not to shut down important projects that
will be job killers.
Look, I wanted to--Mr. Scalise, I just wanted to raise a
broader point. This downturn was not a macroeconomic effect. It
was a natural catastrophe effect. The pandemic is different
from the Great Recession or the Great Depression. And these
ideas of wild spending and financed by higher taxes provide the
wrong macroeconomic solutions. But they missed the point. Here
is the key.
Mr. Scalise. And let me jump in, because we've only got 40
seconds left. Because I do want to add, CBO had projected we
were going to get over 4.5 percent growth without----
Mr. Kudlow. Right.
Mr. Scalise [continuing]. Taking $1.9 trillion----
Mr. Kudlow. Right.
Mr. Scalise [continuing]. Borrowing it from our grandkids
for that.
Mr. Kudlow. The economy may grow at eight percent this
year. And, by the way, before the bill was passed, we had $1
trillion of bipartisan bills that hadn't yet been spent. The
key is opening the economy. It is----
Mr. Scalise. And I know--I got one more quick question.
Because, you know, when you think about the bill, you know,
you're going to give taxpayer-funded checks barred from our
kids to felons in prison in this bill. But when you look at
things like reopening schools, what damage it's doing,
shouldn't we be focused on things like that instead, Mr.
Kudlow?
Mr. Kudlow. Absolutely. Reopening schools, reopening
businesses, ending unnecessary lockdowns. And the whole key,
the biggest stimulus package that we----
Mr. Scalise. Tax hikes, good or bad?
Mr. Kudlow. Pardon?
Mr. Scalise. Tax hikes are good or bad.
Mr. Kudlow. Tax hikes are going to be a disaster. An
absolute disaster. But the best stimulus, Mr. Scalise, is the
vaccine, the vaccine, which started with Operation Warp Speed
under the Trump administration. Now you've got about a hundred
million. We're very close to herd immunity. That is going to
open up the entire economy, and that is going to fill in the
minority jobs in the lower-income areas. I don't disagree about
that analysis. I do disagree with the solutions for it.
Vaccines----
Mr. Scalise. I know we're out of time, but thank you for
that. I know we'll get into this more later. I appreciate it.
Thanks.
I yield back, Mr. Chairman.
Chairman Clyburn. Thank you very much.
Mr. Ranking Member, we have a little bit of an issue here
with people with other hearings. Would you agree for us to do--
if I could do two Democrats now, then go to two Republicans, we
can allow for people to get to their hearings?
Mr. Scalise. Yes. Yes, we can do that, Mr. Chairman.
Chairman Clyburn. OK. So, I'm going to recognize two
Democrats now, Mr. Krishnamoorthi and Bill Foster will be
recognized. Then I'll go to two Republicans.
I'll go to Mr. Krishnamoorthi.
I understand, Chairwoman Waters, that you've agreed to
this. Thank you.
Ms. Waters. I did not. Mr. Chairman, it's difficult. Go
right ahead. No, I did not agree, but I understand what you're
trying to deal with. Please go right ahead.
Chairman Clyburn. Thank you very much.
Mr. Krishnamoorthi.
Mr. Krishnamoorthi. Thank you, Mr. Chairman; thank you, Mr.
Ranking Member; and thank you, Chairwoman Waters, for your
indulgence.
Good morning, Mr. Kudlow. I wanted to just touch on your
reference to the vaccines associated with Operation Warp Speed.
I assume that you agree that they are safe and effective,
correct?
I think you're on mute, Mr. Kudlow.
Chairman Clyburn. Mr. Kudlow.
Mr. Kudlow. Yes, I think I'm unmuted. Sorry, sir. Yes, I
think the vaccines are safe and effective.
Mr. Krishnamoorthi. And I assume that you agree all
Americans should get vaccinated, correct?
Mr. Kudlow. Absolutely. Absolutely.
Mr. Krishnamoorthi. By the way, have you been vaccinated,
sir?
Mr. Kudlow. I have. Blessedly, I've received two
vaccinations.
Mr. Krishnamoorthi. Excellent. Thank you, sir.
Can the staff put up a graph that I wanted to just ask Mr.
Kudlow a couple of questions about?
Great.
Mr. Kudlow, I'd like to draw your attention to this graph
here. It's basically data which shows cumulative COVID-19
deaths over the course of the pandemic, as well as some
statements you made during 2020. And on the X axis and the
source of the CDC for the COVID deaths, on the X axis is the
passage of time, and on the Y axis is cumulative deaths over
time.
And so, you know, one thing that I wanted to point out is
on February 25, 2020, you told CNBC in an interview about the
Coronavirus, quote, ``We have contained this. I won't say
airtight, but pretty close to airtight.'' Obviously, over time,
we know that that's not accurate as we've now seen 540,000
deaths, approximately.
On March 24, 2020, in an interview--I'm sorry, in a press
conference, you said, quote, ``We are heading for a rough
period, but it's only going to be weeks, we think.'' Of course,
almost one year later, the pandemic is not over.
And then, finally, I just want to bring your attention to
June 22, 2020, when at that point we had lost 120,000 lives to
COVID-19, and you told CNBC Squawk Box, quote, ``I really think
it's a pretty good situation. Fatality rates, incidentally, the
fatality rates continue to decline. So, all in all, I think
it's a pretty good situation.''
So, here's my question, Mr. Kudlow. At the time that you
said on June 22, 2020, ``I really think it's a pretty good
situation,'' look, you, sir, come across as a very intelligent
guy, savvy, sophisticated, to a lot of people, you didn't
really believe it was a really good situation on June 22, 2020,
did you?
Mr. Kudlow. Well, look, I will tell you, the case rate was
way down at that point, and it proved to be temporary, but all
I could do is deal with the actual facts at the time. And the
economy was beginning to show a V-shaped recovery. And if I
may, sir, back in February 2020, when I made the statement that
I made about containing it, it was not a forecast; it was a
statement of fact. There were, at that time, 14 cases, only 14
cases. Now, later on----
Mr. Krishnamoorthi. I'm just going to reclaim my time for a
second. On June 22, I'm not asking about prognostications or
case rates, but after 120,000 deaths, sir, to call it a, quote/
unquote, ``pretty good situation'' is, unfortunately, not the
case, when we actually had a very horrible situation. And that
lack of candor really matters, because it shows a lack of
leadership by the Trump administration.
I'd like to turn your attention to another issue, which is
the economy. Mr. Kudlow, in April 2008 in the National Review
Magazine during the Great Recession, you said, quote,
``recessions are therapeutic. They cleanse excess from the
economy,'' close quote.
Mr. Kudlow, you don't dispute that you wrote those words in
the National Review Magazine, correct?
Mr. Kudlow. I'm sure that's correct. I have no reason to
doubt it.
Mr. Krishnamoorthi. According to the Department of Labor,
Mr. Kudlow, 18 million people are currently collecting
unemployment benefits during the recession. You don't dispute
that statistic, correct?
Mr. Kudlow. Wait. Are we talking about now or then?
Mr. Krishnamoorthi. Yes. Now, now, now.
Mr. Kudlow. Well, what does that have to do with what I
wrote in 2008?
Mr. Krishnamoorthi. Well, what I'm trying to say is this:
You can't possibly think that people collecting unemployment
benefits view their plight as therapeutic, do you?
Mr. Kudlow. You're going from one context to another, sir.
Look, I supported two bipartisan bills. I helped negotiate two
bipartisan bills in 2020, both of which provided unemployment
assistance, plus-ups, as they were called, and so I'll stand by
that. We changed--like the rest of the world, incidentally. I
could pull out quotes from lots of Democrats and leading
Democrats and high Democratic officials who were in the same
boat as I was
[inaudible] you're in the fog of war, and you're doing the
best you can with the facts available, and when the facts
change, of course, we change, but I think it's kind of unfair
to go after that.
I supported the unemployment assistance. That's a matter of
record.
Chairman Clyburn. The gentleman's time is expired. Thank
you so much.
We're now going to adjust, once again. We are now going to
go to Ms. Waters, because she's informed us since yesterday
that she has an issue, then we'll go to two Republicans and
come back to you, Bill Foster.
Ms. Waters. Yes. Thank you very much, Mr. Clyburn. I
appreciate your cooperation and your patience. I am in the
middle of another hearing on GameStop, and so I do want to get
back to that, but I just want to talk about the pandemic job
losses that have harmed already our vulnerable populations. I
think there's been some discussion on this already, but since
the pandemic began, more than 525,000 of our fellow Americans
have died from the Coronavirus. The virus has taken a
particularly heavy toll on minorities nationwide, Latinx, Black
Americans are more than twice as likely to have died from
COVID-19 when age is taken into account. People of color have
also lost their jobs at higher rates during the pandemic. The
Black unemployment rate now stands at 9.9 percent; the Latinx
unemployment rate at 8.5 percent; and the White unemployment
rate at the 5.6 percent.
Professor Spriggs, why is it that workers of color have
faced steeper job losses than White workers during the
pandemic?
Mr. Spriggs. Well, initially, for the Hispanic community
they are overworked in the industries that were hit the hardest
in leisure and hospitality, in particular. For African-
Americans, it's a different story, because initially, African-
Americans didn't lose jobs at a disproportionate rate. The
problem is discrimination in rehiring workers. And as the
continued depth of the situation unfolded, it means that Black
workers had a harder time getting back. We have to remember
that in April, the Black and White unemployment rate virtually
collapsed. They were as equal as they've almost ever been. So,
there are two different forces taking place here.
We have lost a million and a half public sector jobs. This
disproportionately affects women and minorities, and those jobs
have not come back during this period. It's a good thing that
the rescue plan gave additional funds to state and local
governments. We hope that Congress will direct states that the
first thing they need to do with the money that they're being
given is to rehire those one and a half million workers, and
that will make a big difference. That's 10 percent of the gap
in payroll that we currently are suffering from. That needs to
take place immediately.
So that--that's what makes this more complicated, and we'll
have to find better ways of preventing discrimination in hiring
to address the gaps.
Ms. Waters. Thank you for that. You just alluded to
discrimination in hiring. And as we know, we have been aware
of, and lived with ``the last hire, the first fire'' for all of
our lives. Do you think that this played an important role in
the tremendous and disproportionate lost number of jobs that
were lost by Blacks and Latinx?
Mr. Spriggs. Yes. Again, the unemployment rate for high
school dropouts, the least qualified in our country, is lower
than the Black unemployment rate for most of this recovery last
month finding the Black unemployment rate was better than the
high school dropout unemployment rate, but not for Black men
who have their unemployment rates spiked.
So, this is vital to understand that this is not about
Black skills, it's about the way in which people reenter the
labor market and the scarring effects from this from this. We
need a summer youth jobs program because we're not going to
have recovered the labor market sufficiently to help those
under 25 get the labor market experience to prevent the
scarring we know takes place during this period.
That is vital that we have a summer youth job program,
because the dispirit impact on young Black workers is even
greater.
Ms. Waters. And just ask, do you believe that it is
absolutely responsible important for the government to give
assistance so that these jobs can be, you know, gotten again,
and that the government should play a real role in doing that?
Mr. Spriggs. Yes. And I want to thank Congress for
including money for the National Endowment for the Arts. Many
people forget that our actors, the member of SAG-AFTRA have
been hit the hardest of all groups by not having live
performances. The companies that would hire them are musicians
and the American Federation of Musicians and our symphony
orchestras and our opera orchestras are not being employed
right now.
We need the companies that hire them to be secure enough so
that when we reopen, they're in place and we can get those
workers back to work.
Ms. Waters. Thank you. My time has been exhausted. Thank
you very much, Mr. Clyburn.
Chairman Clyburn. Thank you very much.
The chair now recognizes in succession, Mr. Jordan and Dr.
Green.
Mr. Jordan, you're now recognized.
Mr. Jordan. Thank you, Mr. Chairman. Mr. Kudlow, low taxes
and less regulation works, doesn't it?
Mr. Kudlow. Sure does.
Mr. Jordan. I mean, it worked under Reagan, it worked under
Clinton, it worked under President Trump. Is that right?
Mr. Kudlow. That's correct.
Mr. Jordan. Doesn't matter if Democrats cut taxes,
Republican cut taxes? It doesn't matter if the Democrats reduce
regulation, if Republicans reduce--it works for everyone in our
economy when you do that, right?
Mr. Kudlow. Yes. I like to refer to the JFK tax cuts as
working for the economy, a Democrat.
Mr. Jordan. Yes. Tax cuts and less regulation are
nonpartisan and they help everyone--were wages up during the
Trump economy prior to COVID?
Mr. Kudlow. Wages rose at record pace, especially for
middle and lower income folks. That's what the numbers show
from the Census Bureau and the Federal Reserve.
Mr. Jordan. Best unemployment numbers in 50 years, best
economy in 50 years under the Trump administration prior to
COVID. Is that right?
Mr. Kudlow. That is correct.
Mr. Jordan. Yes. And this was true for any subgroup in our
economy--Hispanic Americans, African-Americans, poorer
Americans whose wages were rising faster than middle class and
upper-class individuals. It was good for every single person in
our economy. Is that right?
Mr. Kudlow. Yes, indeed. Poverty fell, inequality fell. Mr.
Jordan, the bottom 20 percent had the single largest gain in
income and wages and wealth. The bottom 20.
Mr. Jordan. Lowest quintile, fastest growth we've ever
seen, and we need to get back to that. So, what's going to help
our economy more, Mr. Kudlow, letting Americans go back to work
or paying Federal workers to stay home?
Mr. Kudlow. Well, the key here is just unlocking and
unleashing the economy, and getting these vaccinations out.
That's the single best stimulus we can have. We're looking at
an economic boom if we leave taxes low, and leave regulations
low, and stop destroying the fossil fuel energy business. We
are looking at an economic boom right now. You could have 8 to
10 percent growth in this year.
Mr. Jordan. But Democrats are getting ready to do all three
of those things in the wrong direction. They're getting ready
to raise taxes, they're making it difficult for us to use
fossil fuel, and they're going to increase regulation under all
kinds of climate change rules or whatever. They're going to do
all three things wrong. They're getting ready to do that, and
that's going to have harmful effects for our economy and, most
importantly, for the poorest people in our economy and, in many
cases, those happen to be African-Americans, Hispanic Americans
who are trying to climb the economic ladder. Is that true?
Mr. Kudlow. Look, I have severe misgivings about these
policies. They will block, obstruct recovery, and you're right.
It is the lowest end folks who will be hit the hardest by this.
Just on one easy point, quickly, energy costs are going to
skyrocket if we take----
Mr. Jordan. They already are. They already are. They
already are. I mean, I got--someone sent me a picture, they
said never cost me $48 to fill up my car during the Trump
administration because gas prices are already climbing, which,
again, disproportionately hurts middle class, lower class
Americans today.
Mr. Kudlow, do you remember the first Green New Deal? Do
you remember that plan about--oh, about 12 years ago. This was
Solyndra, Beacon Power, Abound Solar. You remember that first
Green New Deal that we had?
Mr. Kudlow. Yes, I do.
Mr. Jordan. Yes. That didn't work out too well, because
every one of those companies--I think there were 26 different
companies who got money from the taxpayers, most of those
companies had a credit rating of double B-minus, and every
single one of them went bankrupt. I don't think that really
helped our economy much, but that was the first Green New Deal,
and now we're getting ready for a second.
Mr. Kudlow. I think it's always unwise to try to pick
winners and losers. I think the private sector does it best.
Let markets and competition work. Put these industries on a
level playing field. Look, I'm not against renewables. You're
not either.
Mr. Jordan. I'm not either. I'm not either, right.
Mr. Kudlow. The question is, let's have a level playing
field and expand our energy portfolio. We need power to drive
the economy. If you take away 75 percent of our power in the
next 5 to 10 years, which is what some of these programs--some
of these policies are suggesting, it's going to be a disaster.
And not only will it be an economic disaster, it's going to
strengthen the hands of our enemies overseas, particularly
Russia, particularly Middle East, particularly China. We will
be devastating our foreign policy as much as we'll be
devastating our economy.
Mr. Jordan. Is it time to get back to work, get back to
school, and get back to normal, Mr. Kudlow?
Mr. Kudlow. Yes. End the lockdowns. I think we made a big
mistake. We went way too far, too long on lockdowns, and that's
why, by the way, the low-income industries have been hit the
hardest. I don't disagree with the analysis; I'm just
disagreeing with the cause of it. It's the lockdowns that were
the problem here.
Mr. Jordan. States that let people go back to work, states
that remained opened, largely opened, have done better than
states that haven't, both economic--and maybe more importantly,
or just as importantly, on any health measures as well. That's
what we need to get back to.
Mr. Kudlow. Agreed. Completely agree.
Mr. Jordan. Thank you, Mr. Chairman.
I yield back.
Chairman Clyburn. I thank the gentleman for yielding back.
The chair now recognizes Dr. Green.
Mr. Green. Thank you, Mr. Chairman, and thanks to our
witnesses. The quickest way to end the pandemic is to vaccinate
as many people as possible. There's growing evidence from the
U.K. and other allied countries that the first dose of a two-
dose vaccine provides as much protection as other one-shot
versions, and equally reduces the spread. According to the New
England Journal of Medicine, the Pfizer vaccine provides 92.6
percent efficacy, while the second dose only marginally
increases this.
By giving the first dose to as many people as possible and
slightly delaying the second dose, the scientific research
shows significantly curves the virus to spread by increasing
the number of people protected. That's why so many other
countries are doing one shot for everyone first to cover as
many people as possible. And I want to thank my colleague
across the aisle, Congressman, Foster, for spearheading this
effort, and I'm hopeful that the Biden administration will
respond soon to our letter.
Continuing to give two doses will delay protection for many
and may cost lives. A year ago, the American people were told
that we needed two weeks to flatten the curve. The next 12
months were unlike any other we've ever seen. Broad one-size-
fits-all lockdowns brought devastating consequences for
millions of Americans.
Screenings for cancer and other serious health conditions
were and still are down. States imposed restrictive shutdown
orders, schools were shutdowns and moved to computer screens,
thousands of businesses permanently closed their doors.
Meanwhile, young people face a serious educational and
mental health crisis as many have not set foot in a classroom
for months. Millions of children are not getting the mental
health counseling provided by their school system. Youth mental
health visits to the emergency department have increased by 30
percent, 30 plus percent in our country. And the CDC survey in
August estimated that a quarter of young adults admitted to
having thoughts of suicide. The death rate from suicide has not
yet been reported. The lockdowns have continued long past the
point when they cease to make sense. In fact, less than 300
children have died to COVID; yet, a 10 percent increase in
suicide kills far more since the average death to suicide
fluctuates between 4,000 and 6,000 a year.
The science is clear that in-person learning is the best
option for students and teachers and will save lives. We know
this. It's long past time to reopen America's schools. The
failure to do so is a failure to put service to students over
control by the unions and selfish politicians. Instead, the so-
called stimulus passed by the Democrats rewards lockdowns that
states and teachers unions are pressing to keep their schools
shuttered.
Congress is sending over $120 billion in additional money
to schools, but most $68 billion allocated for schools over the
past year still hasn't even been spent. In fact, the CDL
estimates that only five percent of this new funding will be
spent this fiscal year. The bill actually postpones the money
into future years to support and incentivize these closures, or
as I've described above, incentivizing harming children.
Hundreds of billions of dollars are going to reward states
for dogmatically imposing lockdowns. This payoff to blue states
and cities is destroying lives, and it's time the truth be
told. You've heard my colleagues across the aisle pat
themselves on the back for this almost $2 trillion more to our
debt, while almost $1 trillion of previously approved COVID
relief hasn't even been spent yet, all so we can reward those
states that closed.
This isn't a relief plan. It's not about COVID. It's a
spending spree with the taxpayer's credit card.
Mr. Kudlow, former Clinton Treasury Secretary and Obama
economic adviser Larry Summers wrote that $1.9 trillion
stimulus will, and I quote, ``set off inflationary pressures of
a kind we have not seen in a generation, with consequences for
the value of the dollar and financial stability.''
Sir, could you explain those consequences to this, what it
will mean to our economy, to our trade, the value of the
dollar, et cetera?
Mr. Kudlow. [Inaudible] with the bill. And I don't know if
I agree 100 percent on the inflation issue, and I don't know if
I agree on the dollar, but he's raising the risk, the threats,
and he's a very smart fellow. He's a friend of mine. We worked
together in the past, and I think people should've listened to
that.
You made some important points about the wastefulness of
the spending. The incentives structures were perverse. States
will get more money if they have a higher unemployment rate,
which means they have an incentive to keep lockdowns. I never
understood how that could possibly be in the bill. And also, we
had so much unspent money--it was $1 trillion--and you're right
about the $130 billion. That, by the way--that money for
schools--goes--not even going to be spent. I think only $4
billion will be spent in 2021. The rest of it will be spent in
the next five or six years, which shows that the aim here was
not to get schools open, but, I think, political interest group
payoffs.
So, Larry Summers should be heeded. I don't want to be a
bear in this hearing. I like what I see in the economy. I think
we are in a boom-like situation as long as we keep opening,
opening, opening and we keep vaccinating, vaccinating,
vaccinating. We don't need tax hikes. We don't need regulatory
increases. We don't need to cripple the private sector. We
don't need to end fossil fuels. Let a thousand flowers bloom.
Let free enterprise handle this, and we are going to come out
of it just fine.
Mr. Green. And send the kids back to school.
I yield, Mr. Chairman.
Chairman Clyburn. Thank you very much.
Now, I understand that Mrs. Maloney has agreed that we can
now go to Mr. Foster.
Mr. Foster. Thank you. And am I honorable and visible here?
Chairman Clyburn. Yes, sir.
Mr. Foster. OK. Well, first off, I'd like to thank Dr.
Green for joining Dr. Ami Bera and myself for urging this
improvement in the vaccination strategy, and I hope that,
frankly, those in the administration and HHS take heed at that
as well as the individual states.
Dr. Stiglitz, just a quick question about some of the
investments made during the Obama era. As I recall, during the
Obama era, we put $500 million into a loan to this green
startup called Tesla, and I was wondering, to enable Elon Musk
to build his first factory.
What is the market capitalization of Tesla today? Oops. I
believe you're muted.
Mr. Stiglitz. I don't know the exact number, but, you know,
Tesla's now, I think, is worth more than General Motors. It has
become the largest valuation of any car company.
Mr. Foster. It's my remembrance, it's in the range of a
fraction of $1 trillion. So, roughly, 1,000-to-1 return on that
Federal investment, and we'll get it back simply in capital
gains taxes when those are realized. We're going to get back
that investment hundreds of times over.
Mr. Stiglitz. Absolutely.
Mr. Foster. You know, venture capital is allowed to make
some bad investments if the home runs hit it out of the park,
as I'm pretty clear that that did.
Now, during the first three years--I'm just trying to do
triage on some of the wreckage of disinformation from previous
questioning. During the first three years of the Trump
administration, did the average person in the top one percent
see their wealth in absolute dollars increase more or less than
the average person in the bottom 20 percent?
Mr. Stiglitz. Far more. It was not a balanced recovery. You
have to remember we have so much inequality that a one percent
increase at the top is multitudes greater than a one percent
increase at the bottom. The problem at the bottom is, they have
almost no wealth at all. So, a one percent increase of zero is
still zero.
Mr. Foster. And as I recall, 10 years ago when we were--you
were in front of the Financial Services Committee, there was
this raging debate about whether the stimulus back then was
going to debase our currency and trigger run-away inflation and
so on and so forth. And if I recall properly, Mr. Kudlow was on
the opposite side of that discussion.
So, I was wondering if you can sort of summarize, you know,
did we see runaway inflation, and so on, in the time following
the first stimulus?
Mr. Stiglitz. Absolutely not. In fact, one of the results
that we've seen was the multipliers. The bang for the buck was
very large. We got a lot of stimulus out of what we spent. The
main mistake we made is we didn't spend enough and, therefore,
the recovery was much lower than it otherwise would have been.
Mr. Foster. Right. And if you look laterally at other
economies, countries like China that had a stimulus that was
roughly twice of ours as a fraction of GDP recovered more
quickly. Countries like Europe like the U.K. had this austerity
budget, they saw a recovery that was slower. And, so, I think
we've seen a pretty good set of data that when you try to
stimulate the economy in the presence of a big output gap, you
don't drive inflation, but you speed up recovery.
Is that pretty much----
Mr. Stiglitz. Absolutely. You're seeing the same thing
right now in COVID-19. One of the reasons that we've done
better than Europe is that we had a bigger stimulus. And now,
the forecast is an eight percent growth for the United States
in 2021, and that's because we've now enacted a very strong
stimulus, and the forecast reflect the strength and the well-
designed aspect of what the bill that's just been passed.
Mr. Foster. And I think the point was made very effectively
by my Republican colleagues that the key to getting more
equitable--a more equitable economy is a tight labor market.
Will the labor market tighten up more quickly with or without
the stimulus spending that we've just passed?
Mr. Stiglitz. Oh, absolutely. It's going to be faster with
the stimulus spending, and particularly because of the design
of the spending. It's going be directed at that parts of the
economy where the bang for the buck will be large, and where
the distributive effects will be very beneficial.
Mr. Foster. Thank you. And I'll just close by pointing out
that you gave, to my mind, probably the best summary of the
last financial crisis in your testimony mentioning that of the
three things our financial system had to do, which is to
allocate capital, do it efficiently, and control risk, out of
those three key tasks, we failed at all three. And based on
your guidance, we passed Dodd-Frank, and one of my proudest
accomplishments is in the last crisis, the COVID crisis, we did
not see our financial system fall apart. So, thank you for your
part in that.
And I yield back.
Mr. Stiglitz. Thank you.
Chairman Clyburn. Thank you very much. The chair now
recognizes Congresswoman Malliotakis. Can she hear me? The
chair now recognizes Congresswoman Malliotakis. The chair now
recognizes Congresswoman Maloney.
Mrs. Maloney. Thank you, Mr. Chairman. Thank you for
calling this important hearing, and I want to thank all the
panelists for your testimony today. I especially want to thank
Nobel laureate Professor Stiglitz and Larry Kudlow, who are
both from the great city of New York.
Our goal is to make sure that equity is at the center of
our economic recovery policy. It's important that the
information we use to measure the success of recovery tells a
complete story of who actually is benefiting from overall
economic growth.
To monitor how the economy is recovering from the pandemic,
one of the data points we can look at is the gross domestic
product, but GDP data is incomplete and can obscure the fact
that some groups are being left behind.
Just last week, I reintroduced the Measuring Real Income
Growth Act, which would require the Bureau of Economic
Analysis, or BEA, to report GDP growth broken out by income
deciles, and for the top one percent of earners, so we can see
who is benefiting the most from GDP growth.
Professor Stiglitz, would you agree that GDP growth broken
out by income level would improve the quality of the BEA's
economic data, and do you believe this bill will help ensure a
more equitable recovery?
Mr. Stiglitz. Very much so. And in my written testimony, I
actually mentioned that as an important tool going forward. It
was also mentioned that breaking down the unemployment rate by
various groups would also give a better picture of what is
going on. It's important to recognize that it's not just a
percentage changes of what are going on, but the absolute
changes because of the very dispirit circumstances, the
increased inequality that has been so strong in the last 20
years.
Mrs. Maloney. Thank you. Shifting topics. I want to talk
about how women have fared during the economic downturn. The
numbers show that women have been disproportionately harmed by
job losses during the pandemic from February to May 2020. As
our Nation lock downed, more than 11.5 million women lost their
jobs, compared to 9 million men. Black and Latino women have
suffered the highest rate of job losses. The pandemic has
forced many women out of the labor force entirely.
Over the last year, we've seen a two percent drop in
women's labor force participation, and mothers of children 12
years old and younger were three times as likely to lose work
than fathers of children the same age.
So, Professor Stiglitz, why have women disproportionately
lost their jobs and left the labor market during the pandemic,
and why is it important to get women back into the work force?
Mr. Stiglitz. Well, first, let me--Professor Spriggs
remarked earlier, identified some of the factors that affect
different groups, in particular, there's a differential
representation across the economy. The sectors, the hospitality
sectors have been most adversely affected by the crisis, and
these are sectors where women are a larger fraction of the
labor force, and disproportionately in jobs that are affected,
and other service sector frontline jobs as well.
And that pattern is partly a reflection of discrimination,
a historical discrimination in the labor market. And, so, one
of the very important aspects of the pandemic is it has exposed
historical legacies in our economy, discrimination, access to
healthcare that become much more apparent as result of the
pandemic.
Mrs. Maloney. Thank you for that clarification. The
American Rescue Plan takes critical steps to help women get
back on their feet and back into the labor force. The law will
give working families an increase in the child tax credit, the
earned income tax credit, provides emergency paid leave, and
expands childcare assistance. It also provides more than $180
billion to quickly reopen our schools.
Professor, how will these provisions of the American Rescue
Plan help bring women back into the work force and our overall
economy?
Mr. Stiglitz. Well, this is related to what we've been
talking about before. The ability to get money to children
means that the families can afford childcare, and that enables
them to get back into the labor force. The sector-specific
programs in the bill affect sectors where women are
disproportionately represented, and so--and minorities, and so,
again, will help recovery be a more balanced recovery than the
less comprehensive measures that we took last spring.
One of the important aspects of this bill was that it was
much more comprehensive in dealing with some of the sectors
that had been left out of the earlier measures.
Mrs. Maloney. Thank you so much, Mr. Chairman, and I yield
back, and thank you to all the panelists.
Chairman Clyburn. Thank you, Mrs. Maloney, for yielding
back.
The chair now recognizes Ms. Malliotakis.
Ms. Malliotakis. Thank you, Majority Whip. I wanted to talk
a little bit about Mr. Kudlow, because he's from New York, and
I'm from New York, and, certainly, we're experiencing a lot of
the same things, and a lot of the same frustrations. The
funding that was given to the states, the formula which changed
under President Trump and the last Congress, the funding was
based on population. In this Congress, it was based on
unemployment rate. It seems that it almost incentivized states
and local municipalities to keep the economy shutdown, to
implement arbitrary restrictions. And then on top of it, they
also prevented states from lowering taxes. Those states that
did receive the money could not use it for tax deductions.
I had actually sought to freeze taxes and require those
states that were receiving it to not now have their cake and
eat it too, take the money from the Federal Government and then
increase the property taxes, for example, in the city level, or
the income taxes in the state level. And because of that
provision that was placed, we're now seeing the opposite occur
where the New York state legislature and the Governor are
saying they want to further increase taxes and, you know, we
know that that's already driving people out of the state.
I wanted to know what kind of impact you think that will
have, and do you think that's something that should be
revisited by Congress so that way, the burden is not further
placed on the New Yorkers that live there?
Mr. Kudlow. Absolutely. I never understood the perverse
incentives that money would be generated, cash from Washington
would be generated to states on the basis of their higher
unemployment rates, because that is an incentive to keep the
economies locked down. And the whole point of this, as several
have observed today, we've got to open up the economy and open
up the schools. We've created, you know, very grave
consequences for children, for parents, for the work force, for
women, for minority groups.
We have got to get the lockdown ended. Let's open up
everything. That's why I think the only good
[inaudible]. And the other point I'll make on New York
City, look, I'm reading, I guess, this morning or yesterday,
New York City--it's being proposed that New York City would
have a 15 percent personal income tax. Is that--I mean, this is
coming from Albany or the legislature? To me, that is just
extraordinary, because the city is already lost lots and lots
of people, one of the worst records in the country. Smart folks
are not going to stand around and pay a 15 percent income tax.
They're just not going to do it, and the devastation to the
city's economy would be even worse than it already is, and New
York City is, I regret to say this because I'm a lifelong
resident. Mrs. Maloney is, in fact, my Congresswoman, and has
been for a very long time, but the city has not been in good
shape and a 15 percent tax rate would be awful.
I mean, some of these states have surpluses. Some of these
states have surpluses, and they're still raising taxes. Now
that has no macroeconomic sense in my judgment.
Ms. Malliotakis. And as you drive the wealthier New Yorkers
out, obviously the middle class, working class are left holding
the bag, and the burden gets placed on them. With regards to
the CDC in opening schools, because it was mentioned earlier,
that Republicans voted against the money for the schools.
However, there was--$25 billion was the estimate of the CDC to
reopen America's schools, and in the December package, there
was $64 billion put in, which is more than enough. So only
under a mismanaged government would it cost eight times as much
than the original estimate to do what we're supposed to be
doing here.
So, really, the burden has been--$64 billion was approved.
It's been there since December. It's been sitting there, most
of it unspent. We've given some to New York. New York has not
fully reopened the schools, and so, do you really think this is
an issue of more money needed or is it just an issue of these
local municipalities doing their job and just reopening?
Mr. Kudlow. Well, I think it's an issue of reopening. I
think it's an issue of ending the lockdown. I mean, look in the
bipartisan packages, last April and last December, put hundreds
of billions of dollars. I helped negotiate these bipartisan
packages. Hundreds of billions of dollars were allocated to
states for schools, for education. And what we're seeing--and
one of the other members raised that--is in a lot of states
around the country, the teachers don't want to teach. A lot of
these urban teachers union, I regret to say--I'm not against
teachers. I think it's the leadership that does the damage.
My wife and our two sisters-in-law were both all teachers,
but the point I'm making is, they don't want to teach in the
urban districts. The mayor of Chicago had to fight her own
teachers union to get them to teach. The CDC has said many
times, it is safe to teach even without the vaccine, but now
the vaccines are proliferating.
So, I don't understand this. I think we have wasted a lot
of money and I think too much spending is, you know, going to
be an excuse to raise taxes and that tax increase is going to
be devastating to this economy.
We could have a great recovery, we could have a great
recovery if we limit spending, keep taxes low, keep regulations
low, and keep energy portfolios large, not small. Then we have
a terrific recovery, by far, the best in the world.
Chairman Clyburn. The gentleman's time has expired. The
chair now recognizes Mr. Raskin for five minutes.
Mr. Raskin. Thank you, Mr. Chairman.
You know, I was amazed to see Mr. Scalise, the ranking
member, reach back to last year's talking points when he tried
to shift the blame for hundreds of thousands of American COVID-
19 deaths from President Trump to President Xi in China, and
the reason that they dropped that embarrassing tactic, you'll
recall, is that Trump praised President Xi's performance and
the Chinese Government's performance on COVID-19 37 different
times, which is why I introduced multiple articles to that
effect, including the many times Trump has praised China's
handling of the Coronavirus pandemic.
The point is that Trump's lethal, recklessness, and
incompetence in the COVID-19 crisis manifested in his promises
that it would magically disappear by Easter or by summer
vacation, and his hawking of quack medical cures like injecting
yourself with bleach and his refusal to develop a nationwide
strategy pitting the states against each other produced the
greatest public health debacle in American history.
Now, when he was President, the Democrats still, despite
all of his recklessness and malice and negligence, despite all
of it, we worked with Republicans to pass four bipartisan
relief bills that help prevent the economic crisis from
plunging into a full-blown economic depression, but we couldn't
even get a single Republican vote for the $1.9 trillion
American recovery plan that is going to finally crush the
disease and spread science and vaccination across the country
and lift millions of people out of poverty and unemployment.
Now, Republican experts acknowledge that this economic help
is badly needed. Just a few weeks ago, Mr. Kudlow interviewed
former Treasury Secretary Steve Mnuchin, who called for more
fiscal stimulus saying, quote: ``My preference would be to see
a fifth bill, and then a sixth bill, if needed.'' Mnuchin
explicitly rejected the argument that we suddenly can't afford
to help impoverished struggling Americans, working class people
who have been hit the hardest during COVID-19. He said, I felt
all along we need to spend what we need to spend.
Professor Spriggs, do you agree with Trump's former
Treasury Secretary Mnuchin that we need to spend what we need
to spend in order to confront and transform this crisis?
Mr. Spriggs. Yes. And what we revealed is, how big the
problem of inequality in this Nation is. We passed two bills in
the spring. By December, that money had dissipated and the
economy had gone back into a stall. That money had been
necessary just to keep the economy afloat. We don't appreciate
how deeply people in the bottom 20 percent have no liquidity
and, therefore, have to have a lot of money pumped into them
during these crises.
When we came out of the 2001 downturn, the biggest thing
that was a drag was our ignoring the people at the bottom. This
rescue plan that just passed, fortunately, pays attention to
people at the bottom, so that we can keep their consumption up.
Mr. Raskin. Professor, the labor movement has always been a
strong ally of small business. We couldn't get any Republicans
to support the amazing small business provisions in the rescue
plan, but now that we passed it, a number of our Republican
colleagues are celebrating the value in it. For example, on
March 10, Senator Roger Wicker tweeted about the strong support
in the bill for independent restaurants, writing: ``This
funding will ensure small businesses can survive the pandemic
by helping to adapt their operations and keep their employees
on the payroll.''
Do you agree that the American Rescue Act will help
restaurants and the people who work in restaurants, Professor
Spriggs?
Mr. Spriggs. Yes. This is one of the areas that had been
slow to be able to get assistance. They had not had access to
the PPP in the same way. And in Europe, they kept everyone on
payroll. This is going to be an interesting experiment when we
come out of this globally to see whether keeping people on
payroll was the better way to do this. We, the United States,
have very high unemployment rate compared to industrial
partners.
Mr. Raskin. Great. We've got a lot more work to do. The Fed
Chairman, Jerome Powell, warned in recent testimony that the
economic recovery remains uneven, and far from complete and the
path ahead is highly uncertainty.
Professor Stiglitz, in light of this uncertainty which
still overhangs the economy, do you believe Congress needs to
take additional steps to ensure a complete, strong, economic
recovery, including investments in the Nation's ailing
infrastructures, the roads, the highways, the rail systems,
cybersecurity, and so on?
Mr. Stiglitz. Obviously, the pandemic has exposed a lot of
the weaknesses in our economy. The extent to which the $1.9
trillion will enable us to get back to near full employment is
still uncertain. There are some who think we'll have an eight
percent growth. But regardless of that, the need to address the
problems that have been with us for so long--our inequality,
the lack of infrastructure, the weaknesses in our healthcare
system, the problems in our environment, all these need to be
addressed, and they need to be addressed quickly.
Mr. Raskin. Mr. Chairman, finally, I think my time's up. I
am just asking unanimous consent to submit a letter that was
sent to Speaker Pelosi and Minority Leader McCarthy from 19
different educational groups in the country requesting support
for the American Rescue Act, so that we could reopen the
schools across America, and it was signed by the school
superintendents, the American Federation of Teachers, the
National Rural Education Association, and so on, 19 groups
representing schools all across America asking for us to reopen
the schools with the American Rescue Plan. And I ask unanimous
consent to enter this letter into the record.
Chairman Clyburn. Without objection, so ordered.
Mr. Raskin. And I yield back. Thank you.
Chairman Clyburn. Thank you very much for yielding back.
All time has expired for questions. I do not see the
ranking member. I see his space--there he is. The chair would
now yield to the ranking member for any closing statement he
would like to make.
Mr. Scalise. Again, I want to thank the chairman for having
the hearing, as well as our witnesses for talking about some of
the challenges we're facing as a Nation. I think Mr. Kudlow's
points were well-heeded that, as we've seen our economy
starting to bounce back, the last thing we need to do are
things like raise taxes, put heavy regulations, go start
punishing industries in America because that is what would slow
down our recovery. We don't need to look very far to see where
some states have done it much better than others.
Again, I would like this committee to put some time into
looking at what states have done well, so that we can try to
replicate it, so that we can try to encourage other states as
they're getting these big windfalls of money, and I think we've
seen states like California will get over $40 billion when they
have a $10 billion surplus. Not sure if that's the best use of
money when we're borrowing this money from our kids to give
checks to states that are already experiencing surpluses, to
give checks to felons in prison. No one's explained why that
has anything to do with COVID relief.
Even giving money to school systems when Ashley Hinson, my
colleague from Iowa, had a bill that would say, if schools get
new money, they have to use it to actually reopen their
schools. I thought that was what we were all about, except that
the majority blocked those kinds of bills from moving forward,
or those kind of amendments from even being offered.
So it's one thing to say you want to reopen schools, but
when you don't even bring an amendment, or allow us to bring an
amendment that would dedicate the money to reopening schools,
are you really for reopening schools? So I would like to see us
continue to focus on being targeted at helping where problems
exist, helping our small businesses, helping families who are
struggling; not sending checks to everybody, but sending checks
to people who are actually in need, especially not sending
checks to felons who are in prison. We're already paying for
their costs, and they're paying their debt to society. They
don't deserve a check from the taxpayers that are borrowed from
our kids.
Again, the states that have done it well, they're examples
all across this country. Where states did things right, let's
let those successes be highlighted. Let's not replicate those
mistakes and states like New York where they still are trying
to cover up the data on deaths, why were there so many deaths?
Because Governor Cuomo violated the guidelines that President
Trump's administration put out there, forced the seniors to go
back into the nursing homes with COVID, and even banned the
nursing homes from testing for COVID, and then, unfortunately,
we saw thousands of deaths. Those families need answers. We
ought to be focused on giving them those answers.
So, hopefully, we focus on helping people in need, not just
borrowing money for our kids, to give money to states who are
experiencing surpluses because they happen to be run by
Governors who shut things down and decimated their economy.
With that, I would yield back.
Chairman Clyburn. Thank you very much. And let me close
this hearing by thanking our witnesses for being here today. We
appreciate the tremendous expertise you have shared as Congress
works to tread a path for a strong and equitable post-pandemic
economy.
Today's hearing made clear that economic hardships caused
by the Coronavirus pandemic have disproportionately impacted
Americans who were already vulnerable. This includes low-wage
workers, women, and Black and Latinx Americans.
Today's hearing also made clear that there are steps our
government must take now to ensure that the economic recovery
does not leave the most vulnerable behind, so that Americans
can obtain the assistance they need, while we work to vaccinate
Americans and contain the virus. Imagine the success of the
American Rescue Plan, I am hopeful that the administration will
follow the recommendations in today's letter that I've made
reference to earlier, so that we can chart our progress toward
a more inclusive economy with hard metrics.
The Select Subcommittee must conduct appropriate oversight
so that Congress can move from rescue to recovery efficiently,
effectively, and equitably. This starts with bold action to
invest in our country's infrastructure through these
investments we can create good-paying jobs in all communities,
building the infrastructure we need for a more prosperous and
equitable future.
In the years following the financial crisis in 2008, we
witnessed how an economic recovery can leave communities behind
and exacerbate inequities, not to mention how uneven and
inequitable, the country's response was after the Great
Depression and World War II. As we climb out of another
economic crisis, we must have both an opportunity and an
obligation to ensure that we have the country's response to
this post-pandemic economy working for all Americans.
We must heed the lessons of the past and the valuable
insight from our witnesses here today to ensure that we build
back better.
With that, without objection, all members will have five
legislative days within which to submit additional written
questions for the witnesses to the chair, which will be
forwarded to the witnesses for their response.
This hearing is now adjourned.
[Whereupon, at 1:14 p.m., the committee was adjourned.]
[all]