[Senate Hearing 117-737]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 117-737


  CHILDCARE AND OTHER POLICY TOOLS TO COMBAT BOTTLENECKS AND INFLATION

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

                                HEARING

                               before the

                            SUBCOMMITTEE ON
                            ECONOMIC POLICY

                                 of the

                              COMMITTEE ON
                   BANKING,HOUSING,AND URBAN AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                                   ON

 EXAMINING AMERICA'S CHILDCARE CRISIS AND HOW WE CAN BRING DOWN COSTS 
                         FOR AMERICAN FAMILIES

                               __________

                             APRIL 26, 2022

                               __________

  Printed for the use of the Committee on Banking, Housing, and Urban 
                                Affairs



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                Available at: https: //www.govinfo.gov /

                               ______
                                 

                 U.S. GOVERNMENT PUBLISHING OFFICE

53-442 PDF                WASHINGTON : 2023











            COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS

                     SHERROD BROWN, Ohio, Chairman

JACK REED, Rhode Island              PATRICK J. TOOMEY, Pennsylvania
ROBERT MENENDEZ, New Jersey          RICHARD C. SHELBY, Alabama
JON TESTER, Montana                  MIKE CRAPO, Idaho
MARK R. WARNER, Virginia             TIM SCOTT, South Carolina
ELIZABETH WARREN, Massachusetts      MIKE ROUNDS, South Dakota
CHRIS VAN HOLLEN, Maryland           THOM TILLIS, North Carolina
CATHERINE CORTEZ MASTO, Nevada       JOHN KENNEDY, Louisiana
TINA SMITH, Minnesota                BILL HAGERTY, Tennessee
KYRSTEN SINEMA, Arizona              CYNTHIA LUMMIS, Wyoming
JON OSSOFF, Georgia                  JERRY MORAN, Kansas
RAPHAEL WARNOCK, Georgia             KEVIN CRAMER, North Dakota
                                     STEVE DAINES, Montana

                     Laura Swanson, Staff Director
                 Brad Grantz, Republican Staff Director

                      Cameron Ricker, Chief Clerk
                      Shelvin Simmons, IT Director
                        Pat Lally, Hearing Clerk

                                 ______

                    Subcommittee on Economic Policy

                 ELIZABETH WARREN, Massachusetts, Chair

           JOHN KENNEDY, Louisiana, Ranking Republican Member

JACK REED, Rhode Island              TIM SCOTT, South Carolina
CHRIS VAN HOLLEN, Maryland           THOM TILLIS, North Carolina
TINA SMITH, Minnesota                KEVIN CRAMER, North Dakota
JON OSSOFF, Georgia                  STEVE DAINES, Montana

              Gabrielle Elul, Subcommittee Staff Director

         Natalia Riggin, Republican Subcommittee Staff Director

                                  (ii)










                            C O N T E N T S

                              ----------                              

                        TUESDAY, APRIL 26, 2022

                                                                   Page

Opening statement of Chair Warren................................     1
    Prepared statement...........................................    31

Opening statements, comments, or prepared statements of:
    Senator Kennedy..............................................     3

                               WITNESSES

William E. Spriggs, Professor of Economics, Howard University, 
  and Chief Economist, AFL-CIO...................................     6
    Prepared statement...........................................    32
Melissa Colagrosso, Owner and Director, A Place To Grow 
  Children's Center..............................................     8
    Prepared statement...........................................    38
Brian Riedl, Senior Fellow, The Manhattan Institute..............    10
    Prepared statement...........................................    39
    Responses to written questions of:
        Senator Kennedy..........................................    44
Walt Rowen, President of Susquehanna Glass Company, and Cochair, 
  Small Business for America's Future............................    11
    Prepared statement...........................................    40
Kathleen Sgamma, President, Western Energy Alliance..............    13
    Prepared statement...........................................    41
    Responses to written questions of:
        Senator Kennedy..........................................    45

                                 (iii)









 
  CHILDCARE AND OTHER POLICY TOOLS TO COMBAT BOTTLENECKS AND INFLATION

                              ----------                              


                        TUESDAY, APRIL 26, 2022

                               U.S. Senate,
  Committee on Banking, Housing, and Urban Affairs,
                   Subcommittee on Economic Policy,
                                                    Washington, DC.
    The Subcommittee met at 2:31 p.m., via Webex and in room 
538, Dirksen Senate Office Building, Hon. Elizabeth Warren, 
Chair of the Subcommittee, presiding.

          OPENING STATEMENT OF CHAIR ELIZABETH WARREN

    Chair Warren. This hearing will come to order.
    Good afternoon and welcome to today's hearing on Childcare 
and Other Policy Tools to Combat Bottlenecks and Inflation.
    Now we have heard a lot about inflation over the past 6 
months and rightfully so. When prices go up, whether it is 
because of corporate price gouging or because of pandemic 
related disruptions in the supply chain, it hurts hardworking 
American families. We need to get inflation under control, and 
we need to do it in the smartest way possible. Too many 
analysts seem to think that there is only one tool in the tool 
box, urging the Fed to drive the economy into a recession by 
increasing interest rates. We need to think smarter, and that 
starts with diagnosing some of what has gone wrong.
    The pandemic wrought havoc on supply chains for food, cars, 
appliances, all kinds of goods, and Russia's invasion of 
Ukraine disrupted oil and gas markets. Meanwhile, giant 
corporations have figured out that they can pad their profit 
margins by using inflation as a cover to raise prices more than 
justified, making the whole economy worse off in the process.
    So what can we do? Well, first, we should do everything we 
can to promote competition, to break up monopolies, and to end 
the opportunities for corporate profiteering to drive up 
prices. The Administration has been acting quickly, and they 
have my full support on this.
    Next, we need to increase supply across the board. We need 
to fix supply chains and bring more production home. We also 
need to invest in green technologies so that Americans are not 
held hostage to the whims of oil-rich dictators.
    All those are good steps, but there is another piece of the 
puzzle that we should focus on. We can bring down inflation if 
we increase our labor supply. More workers earning a fair wage, 
with good benefits, means more productivity, and that means 
more downward pressure on prices.
    As we return to many of the activities we enjoyed before 
the pandemic started, Americans are once again eating out, 
going to the movies, and traveling, and businesses are looking 
to hire. Those businesses need servers and line cooks. They 
need retail clerks, hotel staff, barbers, bus drivers, you name 
it. Factories that are trying to run full shifts or even a 
second shift need workers. The transportation industry, 
including drivers and schedulers and planners, need workers. 
Small businesses, from insurance agencies to lawn care outfits, 
need workers. And across the board, a tight labor market will 
mean prices stay higher longer.
    And that is where childcare comes in. One of the biggest 
barriers that is holding back the economy right now is that 
workers who want to rejoin the workforce, who want to respond 
to a help wanted ad, or want to show up for a second shift 
cannot do so if they do not have childcare. A Census Bureau 
study released last year found that one in five working parents 
left the workforce or reduced their hours solely due to 
childcare and one in four women who became unemployed during 
the pandemic said the reason was a lack of childcare.
    Now some economists are worried that inflation could become 
a longer-term problem and actually increase in parts of the 
economy experiencing these worker shortages, especially if we 
do not get more people into the labor force. But to get people 
into the workforce, working parents need childcare, and we are 
still about 117,000 childcare workers short compared to our 
prepandemic levels.
    Childcare providers want to hire more staff so they could 
offer more slots to families and get things back to normal, but 
they cannot. Most childcare providers could not afford to pay 
as much as the gas station down the street paid before the 
pandemic, and it is even harder now. And when they cannot hire 
enough childcare workers, they cannot add more slots, and that 
means they cannot serve more kids and more families. So that 
means parents cannot go back to work, and that makes it harder 
for businesses like restaurants and cleaning services and car 
repair outfits to find enough workers to meet demand, and that 
contributes to higher prices for consumers.
    Fixing this problem will provide jobs for millions of 
Americans, especially women. It will help small businesses and 
unlock economic growth, and it will cut inflation both in the 
short term and in the long term. It is a win-win-win-win 
situation.
    And that is why I am fighting to pass a legislative package 
that includes the investments that we need to improve and 
expand the availability of childcare. The proposal that the 
congressional Democrats have developed will provide much needed 
help for childcare providers, allowing them to hire more 
workers and to offer higher quality care to more families. It 
will provide direct assistance to families for childcare, 
making one of a family's biggest expenses more affordable. 
Universal childcare is pro-family and pro-business. This 
proposal would help cut inflation by allowing millions of 
Americans to return to work.
    So I very much appreciate our witnesses joining us today to 
discuss America's childcare crisis and how we can bring down 
costs for American families.
    So next, I will turn to Ranking Member Senator Kennedy for 
your opening remarks.

           OPENING STATEMENT OF SENATOR JOHN KENNEDY

    Senator Kennedy. Thank you, Madam Chair. I want to thank 
first our witnesses for being here today.
    I want to make three observations. First, I agree with our 
Chair that one way to reduce inflation is to increase your 
labor force participation rate. The more people looking for 
jobs and attending those jobs the better.
    If you do not have a job, you are not healthy, you are not 
happy, and you are not free. It is that simple because I think 
human experience is such that most people understand that doing 
is more satisfying than having. Government can give you things, 
but you feel better about yourself when you can earn them and 
support your family and be a meaningful part of community.
    I do worry about our labor force participation rate. It has 
not recovered from the pandemic. There are a variety of reasons 
for that. Some of our people decided to retire, but I think 
some of our people have--well, I do not know. I honestly do not 
know the answer to the problem. Some say that it is our 
generous Government benefits, and certainly our benefits were 
increased during COVID, but those are starting to--the 
increases are starting to dissipate. Logically, you should see 
more people going back to work. So I think increasing the labor 
force participate rate for childcare workers and for all 
Americans is a win-win-win.
    Number two, let me say a word about inflation, and then I 
will say something about childcare. There are a number of 
reasons for the inflation that we have now. Certainly, the war 
in Ukraine has contributed to it. We have seen the increases in 
commodity prices. We have seen the increases in agricultural 
exports. I mean, both Ukraine and Russia are big exporters of 
food, sunflower oil, for example, wheat. The lockdowns in China 
have had a huge impact in terms of inflation.
    I confess I do not understand the Communist Party of 
China's approach to trying to get control of COVID. Maybe it 
will work. I do not think it will, ultimately, but it has 
certainly had an impact on supply chains.
    In my opinion, the two biggest causes of inflation that we 
are seeing right now in the United States--and this inflation 
predates the war, certainly--are our loose monetary policy and, 
for lack of a better way of saying it, loose fiscal policy. The 
current inflation that we have now has characteristics of both 
cost-push inflation and demand-pull.
    And I will not go into all of the characteristics of the 
loose monetary policy we have had. We had to loosen our 
monetary policy in order to survive the slowdown from COVID, 
but I think even the Federal Reserve, if it were represented 
here today, would tell you that they did not take inflation 
seriously enough, soon enough, they should have started 
tightening monetary policy, they should have taken their foot 
off the accelerator of quantitative easing, and they should 
have raised interest rates sooner.
    But I think the other part of that equation is the loose 
fiscal policy, if you will. We had to spend a lot of money 
during COVID to keep the economy afloat and to keep our people 
afloat. We spent $7 trillion, probably more, but I think that 
is a pretty accurate figure.
    In my opinion, the last $1.9 trillion was not necessary, 
but the President said it was an emergency COVID bill. I did 
not see the emergency. The spending was going to occur over 10 
years. I did not see much--of the $1.9 trillion, $80 billion 
was spent on public health.
    But the point is--and it was not just that bill; it was the 
accumulation. Seven trillion dollars is a lot of money.
    It is clear to me--I do not think this will happen, but 
what we ought to do in the U.S. Congress right now is freeze 
spending. Freeze all spending. I am not saying do not spend any 
money. We have a budget. Do not increase that budget. That is 
the amount of money we are going to spend. What is in our 
budget, period. Freeze spending except for defense spending and 
give the Federal Reserve the chance to do its job. Now I do not 
live in La La Land. That is not likely to happen.
    Right now, there is a discussion of a China bill. We need 
to spend, I am told by the advocates, $250 billion to $400 
billion to compete with China, which I see the bill primarily 
as a subsidy for big tech, but that is just one person's point 
of view.
    So those are my thoughts on inflation.
    Let me say a word about childcare. Yes, childcare is very 
expensive, and it is a real burden, especially for middle 
income and lower-income Americans, and I am all for putting our 
heads together and trying to figure out how to reduce the cost.
    Here is what I have never seen the wisdom of, though. 
President Biden, in his Build Back Better bill, basically said 
his solution to reducing the cost of childcare is to have the 
Federal Government take it over, have the Federal Government 
make it twice as expensive. If you are going to pay childcare 
workers like you pay school teachers, you are going to spend a 
lot more money. And once the Federal Government takes it over 
and makes it twice, in some cases three times as expensive, we 
are going to send the bill to the American people.
    That does not make any sense to me. That is not a solution. 
That is just prolonging the problem. And that, for what it is 
worth, is my point of view.
    We are in the middle of a vote. If I have to leave, I will 
come back, but we have got another vote at some point.
    And I did not mean to talk that long, but let me thank you 
again for coming today.
    [Pause.]
    Senator Kennedy. Time out.
    [Pause.]
    Senator Kennedy. Do you want me to introduce the witnesses 
or wait for Elizabeth?
    [Discussion off the record.]
    Senator Kennedy [presiding]. Senator Warren had to take an 
emergency phone call, so we are going to wait a few minutes.
    [Pause.]
    Senator Kennedy. Well, shoot, I am just going to keep 
talking then. I would be interested in hearing from you today 
about any thoughts you have specifically on childcare, what we 
can do to try to reduce the cost. I mean, it is very expensive, 
and in a world where both parents either choose or have to work 
in order to support their family, it does become a factor.
    And I think it is something worth pursuing, and I can see 
the wisdom of having the Federal Government asking the American 
taxpayer to do its part if childcare is really a priority for 
the Congress, and I think it ought to be.
    But here is what never happens around here. I do not think 
any fair-minded person believes there is not waste in the 
Federal budget. There clearly is; there clearly is.
    Now the Federal budget is a little bit like a cow. There is 
fat on a cow, but it is not at the very end of the cow or in 
the very middle of the cow. It is marbled throughout.
    And so reducing spending to find money for childcare would 
require us to do a lot of hard work and look at every single 
program and ask if that program has metrics. Most of them do 
not. And if it does have metrics, ask if the program is meeting 
its metrics. That, to me, would be a rational approach.
    That is not what I think is going to happen. I can tell you 
I am not just going to pick on my Democratic friends. There is 
no appetite for that on the Republican side. The folks on my 
side talk a really good game. You know, we need to reduce 
spending and get rid of the waste in spending. And you say, OK, 
let us go. And they say, oh, well, not just yet.
    It is like going to heaven. They all want to go to heaven, 
but they are not ready to make the trip just yet, and that is 
the problem we have.
    And I think if we spent a reasonable amount of time taking 
a look at our Federal spending, including defense--look, I am 
going to say again we need to freeze spending, but we are going 
to have to--in this world, we are going to have to spend more 
on defense. But I do find it somewhat embarrassing that the 
Department of Defense has never been audited, never been 
audited.
    Anyway, I have stalled long enough. The Chair is back, and 
she will introduce our witnesses.
    Chair Warren [presiding]. Good, good, good. Thank you very 
much, Senator Kennedy. I really appreciate your comments.
    So we have got a great set of witnesses here to share their 
views on American competitiveness and appreciate each of you 
being here today.
    So first, joining us virtually, we have the Honorable Dr. 
William Spriggs, who is Professor of Economics at Howard 
University and Chief Economist at the AFL-CIO, as well as 
former Assistant Secretary of Labor for Policy. Dr. Spriggs is 
a leading expert on many critical issues for American workers, 
including monetary policy, inflation, unemployment, and 
inequality.
    Second, we have Melissa Colagrosso, who runs a childcare 
center in Oak Hill, West Virginia. Ms. Colagrosso and her 
husband started this family owned business almost 30 years ago, 
and today she provides family oriented childcare to over 100 
children. And you can tell us if you are providing to the 
children of children that you once provided care for. Is the 
answer yes?
    Ms. Colagrosso. [No audible response.]
    Chair Warren. That is pretty terrific.
    Third, we have Walt Rowen, who is the President of the 
Susquehanna Glass Company and Cochair of Small Business for 
America's Future. Susquehanna Glass is a family owned and 
operated business which was founded in 1910 by Mr. Rowen's 
grandfather and his great uncle.
    Joining us remotely, we also have Kathleen Sgamma, who is 
President of the Western Energy Alliance, which represents 
independent oil and gas producers from the western part of the 
United States.
    And finally, we have Brian Riedl, who is a senior fellow at 
the Manhattan Institute, focusing on budget, tax, and economic 
policy.
    And again, thank you all for being here with us today. I 
look forward to hearing your testimony.
    So, Dr. Spriggs, let us start with you. We can go in the 
order I did the introductions. You are recognized for 5 
minutes, and of course, you can always add more to the written 
record if you wish.
    Dr. Spriggs, take it away.

STATEMENT OF WILLIAM E. SPRIGGS, PROFESSOR OF ECONOMICS, HOWARD 
            UNIVERSITY, AND CHIEF ECONOMIST, AFL-CIO

    Mr. Spriggs. Thank you very much, Chairwoman Warren. I 
deeply apologize, but I have had a horrible cold over this 
weekend. So I apologize that my testimony was late and that I 
am not there in person, but no one wants my cold.
    I want to thank you for the invitation to give testimony to 
your Committee today on the issue of improving resiliency of 
the American economy. 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 at Howard University's Department of 
Economics.
    The size of a labor force is the key determinant of 
economic growth. Even in a world where machines and computers 
can do so much, in the final analysis, the determinant of the 
size of the economy is the number of workers behind the 
computers and machines and in front of customers to deliver 
services. The size of our labor force, however, has some 
variance. When wages rise or there is greater certainty of 
landing a job, the labor force participation rate grows in 
response.
    The growth in opportunities for women for the latter half 
of the 20th century fueled a rapid growth of women's labor 
force participation. That dramatically increased the labor 
force and potential size of our economy, and that allowed for 
continued stable growth with moderate inflation. But women's 
labor force participation peaked in 2000 and has stumbled 
since.
    The collapse in economic activity in the first quarter of 
2020 in response to the COVID crisis unleashed a chain of 
events that disrupted normal economic activity. The global 
pandemic, unlike other shocks, had a simultaneous effect on the 
world economies. Necessary precautions that delayed the spread 
of the disease and successfully mitigated worse loss of life 
significantly altered consumption. So while the initial impact 
was a drop in all consumption, the gradual reopening of some 
activity led to different patterns of consumption than before 
the pandemic.
    In the quick response by Congress, we were able to 
stabilize the economy, and the American Rescue Plan extended 
support to ensure the effects of COVID would not scar the 
American economy into 2021, with the fastest growth in decades 
and the strongest recovery of the labor market on record.
    But we still struggle from the disruptions, and those 
disruptions had disparate impacts on women. In particular, 
those areas of the economy that needed to shut down were 
services that involved a large share of the women's labor 
force. Women were half the labor force prior to the COVID 
shutdowns, and they are important, therefore, because they are 
half the labor force.
    The U.S. labor force participation rate for women, however, 
is woefully below standard for the OECD. When we compare 
women's labor force participation in the United States to our 
partners, we are number six out of the top seven Nations. Only 
Italy has a labor force participation rate that is lower. That 
is because the other countries have the infrastructure to 
increase and give a pathway for women to work.
    Most notably and woefully, the United States almost does 
not appear on any chart when it comes to public investment in 
early childhood education. We are so far to the right in the 
chart. We are so low in those investments that you almost need 
a telescope to see that, oh, Cypress and Turkey are, too. The 
rest of us, every other industrialized, advanced country spends 
a greater share of GDP investing in their children.
    And if we look at the record across a wide range of 
economic research and economists of all stripes, we know that 
that investment in the case of the United States our own record 
on our own programs have huge returns because they lower crime, 
they make healthier citizens, they make higher-earning 
children, they do everything good when they return money to the 
economy. So it is inexcusable.
    But we rely on the market instead, and the problem is since 
2000 the real wages at the middle for women has simply not kept 
up with inflation of childcare costs. And that is why we need 
to change our reliance only on the market because the market is 
pricing women out of childcare availability.
    We need to also look at issues that can rebound the 
industry right now, which is still hundreds of thousands of 
workers short, about 10 percent short, of where it had been. 
Many still have not been able to reopen. We can change that 
labor supply. We can get back to historic levels of women's 
labor force participation for the United States by making the 
right investments and by being wise in those investments 
because they pay off.
    Chair Warren. Thank you very much, Dr. Spriggs. We really 
appreciate your testimony here today.
    Now, Ms. Colagrosso, you are recognized for 5 minutes.

STATEMENT OF MELISSA COLAGROSSO, OWNER AND DIRECTOR, A PLACE TO 
                     GROW CHILDREN'S CENTER

    Ms. Colagrosso. Good afternoon. Thank you, Senator Warren 
and Senator Kennedy and the Senate Banking Committee, for 
inviting me to tell my story today.
    My husband and I opened A Place To Grow in 1995. We had a 
toddler and an infant, and we knew that we needed to work. I 
had worked in my college years, throughout several childcare 
centers, and I knew the difference that a quality early 
childhood experience could make in my children's lives. There 
was not one in our rural community, so our adventure began.
    The challenges of opening a childcare business still are 
the same today. They begin with the reality that the math does 
not add up. The projections of income for a childcare business 
are not enough to convince a loan officer or a potential 
investor to invest in beginning a business like that. So my 
husband and I, we took out a second loan on our home and 
continued to pursue the goal of providing a safe place for our 
children to grow while I could also earn a paycheck.
    Projections fall short. The reality is the provider 
payments and subsidies payments that the Childcare Development 
Block Grant provides for low-income working families are not 
enough to cover the cost. They do not cover the full cost of 
care at all but certainly not high quality care. So if the 
prices charged to families outside of that subsidy system are 
meant to make up for it, but yet they outprice what workers in 
the community can afford, then revenue falls short.
    Let me give you an example. Sometimes you can see this 
easier if you see some numbers. The subsidy rate for care for 
an infant is $36 per day. The ratio for safe infant care is one 
teacher per every four infants, but really best is--three is 
considered best practice, but we will go with four. That means 
if have four infants that are on the subsidy program the max we 
would receive would be $144 for that day of care.
    So now we need a teacher, and if we pay that teacher just 
$10 a day, which is clearly far below a fair wage for a teacher 
taking care of infants, we are facing a personnel cost of $120 
a day with taxes.
    But wait, we still might need to cover rent, insurance, 
utilities. Maybe we need a second teacher for breaks.
    So clearly, the math just does not add up.
    Our business did indeed show a loss 23 out of the 25 years 
of business, but our business also continued to grow to meet 
the needs of the community. We increased our original capacity 
from 30 to 100 children. We achieved national accreditation 
from the National Association for the Education of Young 
Children, and we built a strong staff with a commitment to 
serve families.
    Yet, we struggled to make the payroll. Often, we had to 
borrow. We took out personal loans for things like building 
repairs or equipment, but yet we keep going. We keep going 
because working families in our community depend on our center, 
and as you mentioned, Senator Warren, our children are bringing 
their children back to us. We are part of the community.
    When the pandemic hit, we immediately felt panic as 
everyone did. I was met with parents in tears, who pleased with 
us, please stay open. They needed to work, and our community 
needed them to work. They needed paramedics and respiratory 
therapists and doctors. They had to go to work. So our staff 
made a commitment to take all precautions but continue to care 
for the children.
    Fortunately, some serious help came in quickly from the 
Small Business Administration. We used the SBA Economic Injury 
Disaster Loans to pay off our high interest debt, cover the 
utilities, and make our building mortgage. That got us through 
the beginning. Then the Payroll Protection Program came, and we 
were able to stay open so those essential workers could rely on 
us and our staff could rely on their paychecks.
    Then businesses stepped in, and we had four businesses in 
our little community that contacted us and asked if they could 
pay us directly for the childcare of their employees because 
they needed them to work and with schools closed suddenly 
people had a need for childcare that may not have before.
    So they made it that--finally, the long-term help came, and 
that made it possible for us to reassure families that we would 
not be closing. Working together, we made the math add up.
    The American Rescue Plan Act, or ARP Act funds, that were 
passed directly to childcare have enabled me to stay open long 
term, since the beginning of the pandemic. I have been able to 
maintain my commitment to high quality by supporting our 
educators, maintaining our facilities, and meeting the social 
and emotional needs of our children. I am currently able to 
fund continuing education for our teachers--that was a 
wonderful benefit--retention bonuses for all of my staff, as 
well as paid sick leave, which is only smart during a pandemic 
to include. I have been able to reduce caseloads for teachers 
and add additional assistant teachers to provide a higher level 
of care. We have an abundance of children who have suffered 
trauma due to the opioid crisis, due to the COVID-19 pandemic, 
as well as a vast array of special education needs in our 
community.
    In addition, the ARP Act funds that the State has used to 
subsidize families' childcare have allowed more parents to 
access childcare and go back to work. This is how the childcare 
system should work.
    As our parents have learned of my travels here today, 
several asked that I share stories. They are desperate to tell 
how much they appreciate the assistance. I have time for just 
one real quick.
    One grateful mom expressed, ``Having the subsidy help is a 
major blessing. Without it, I am not sure I could send both of 
my kids full-time. Childcare is expensive and necessary. We 
would sometimes have to choose between paying our childcare 
bill or our utilities or our groceries. Parents must work.'' 
Most families in our area ``need both parents working to make 
ends meet. We have wonderful jobs,'' and yet ``we still 
struggle. The kids love their teachers, and they are constantly 
learning and growing from their relationships with their 
teachers and friends.''
    As you can hear, childcare is keeping our economy moving.
    A Place To Grow's current enrollment consists of children 
being cared for by grandparents, foster children, children with 
special needs, low-income families, working-class families, as 
well as upper-income professionals. We have quite a village, 
and this village works together to help each other when there 
is a need. Right now, they need our elected officials to 
recognize the value of childcare. It gives them the ability to 
go to work.
    The business of childcare is necessary for all other 
businesses. The shortage of workers being experienced by 
businesses nationwide is connected to the shortage of childcare 
programs.
    In addition, this is an urgent need. We cannot wait to 
invest in childcare because the relief funding is here right 
now, but there is this looming cliff that we are about to all 
fall off when they funding is gone. Without collaborative work 
and Federal investments now, our village may collapse. I beg 
you, please, please help us make the math add up.
    Thank you for your time and consideration, and I look 
forward to your questions.
    Chair Warren. Thank you very much, Ms. Colagrosso. I really 
appreciate it.
    Mr. Riedl, you are recognized for 5 minutes.

    STATEMENT OF BRIAN RIEDL, SENIOR FELLOW, THE MANHATTAN 
                           INSTITUTE

    Mr. Riedl. Thank you. Good afternoon, Chairwoman Warren, 
Ranking Member Kennedy. Thank you for inviting me to 
participate in today's hearing.
    Inflation is currently creating significant economic pain 
for American families and businesses. With the inflation rate 
soaring to 8.5 percent, the highest rate in 41 years, real 
wages have fallen 2.7 percent. Moody's Analytics and Penn-
Wharton both estimate that inflation is causing the average 
American $300 per month. A Harris poll reveals 84 percent of 
Americans are cutting back on key purchases. And the problem is 
deepening every month.
    Inflation has been driven by numerous factors, but fiscal 
and monetary policy are the lead causes. Since the beginning of 
the pandemic, the Federal Reserve has poured $4.8 trillion into 
the economy, more than doubling its balance sheet. Now a lot of 
this was necessary to keep the economy afloat during the 
pandemic, but it was also excessive as the Fed was still buying 
mortgage-backed securities as recently as last month.
    The Fed's actions have worked in tandem with overly 
aggressive fiscal policy, providing more than $2 trillion in 
new personal benefits, an average of $16,000 per household. 
Again, a healthy portion of this spending was needed and 
justified by the pandemic and the economy. But policies such as 
$11,400 in relief checks for the typical family of four, a 
child credit expansion of $1,600 per child, a $600 enhancement 
of weekly unemployment benefits, and a continued student loan 
payment pause were often excessive and poorly targeted.
    The Federal Reserve notes that consumer spending on an 
annualized basis has leaped by $2 trillion since the pandemic 
and $1 trillion since last summer. No wonder supply chains are 
overwhelmed. Families have $2.7 trillion in additional savings 
right now than they would have with the pandemic, which on one 
level is great news, but there is not enough production in the 
economy to handle the new spending, and so we are getting 
inflation. And as these savings are spent down, there is going 
more inflation in the pipeline.
    A major culprit is last year's $1.9 trillion American 
Rescue Plan. At the time of enactment, CBO estimated that the 
baseline economy would operate $420 billion below capacity last 
year and then gradually close the output gap by 2025. While 
some stimulus was justified, lawmakers shot a $1.9 trillion 
bazooka into a $420 billion output gap, and this was just weeks 
after a $900 billion stimulus bill had been passed at the end 
of the summer. Economics on the left and right, including 
Lawrence Summers and Mark Zandi and Jason Furman, warned that 
excessive stimulus would bring inflation. I think they have 
been proven right.
    Yet, other actions have worsened inflation. The Biden 
administration has hiked tariffs on Canadian lumber and added 
tariffs on building materials. It renewed President Trump's 
tariffs on solar panels, extended the tariffs on Chinese 
imports, and imposed tariff quotas on steel. It imposed Buy 
America provisions, raising the cost of infrastructure and is 
working to expand Davis-Bacon policies that raise the cost of 
Government contracts. The White House is defending the Jones 
Act that raises shipping costs and also allowing a higher 
ethanol blend in gasoline that will raise food prices. We also 
had student loan payments deferred well past the cost that 
could be justified simply by the low unemployment rate.
    Many of these policies can be defended and justified as 
achieving other very important policy goals, but cumulatively, 
they do significantly worsen inflation as well that is already 
sinking under the weight of fiscal policy, monetary policy, 
supply chain disruptions, and the war in Ukraine.
    The Peterson Institute for International Economics 
calculates that even a 2 percentage point reduction in tariffs 
would lower the inflation rate by 1.3 percent and save $800 per 
household annually.
    Current economic factors show that inflation will not 
likely recede soon by itself and may even accelerate in the 
near term. There is no easy path to bringing down inflation, 
but the first rule should be do no harm. That means resisting 
calls for more aggressive Federal spending as well as ensuring 
that businesses can operate efficiently without expensive 
tariffs and overregulation because if inflation does persist 
and real wages continue to fall and really harm families it is 
going to soon cost jobs and create economic chaos that endanger 
all the good things you want Government to do.
    Thank you.
    Chair Warren. Thank you, Mr. Riedl.
    Mr. Rowen.

    STATEMENT OF WALT ROWEN, PRESIDENT OF SUSQUEHANNA GLASS 
   COMPANY, AND COCHAIR, SMALL BUSINESS FOR AMERICA'S FUTURE

    Mr. Rowen. Good afternoon, Chairwoman Warren, Ranking 
Member Kennedy. My name is Walt Rowen, and I am the owner of 
Susquehanna Glass Company in Columbia, Pennsylvania. And, I am 
the Cochair of the Small Business for America's Future, a 
national coalition of small business owners and leaders working 
to give the small business community a voice at every level of 
Government. We are committed to ensuring policymakers, like you 
prioritize Main Street by advancing and just and equitable 
economic framework that works for us, our employees, and our 
communities.
    Susquehanna Glass is a family owned business. We are in the 
glass decorating business, and we have been in operation for 
110 years. I look pretty good for 110, don't you think? We 
employ around 60 people; 50 percent of them are women, 
normally.
    COVID affected most small business owners, I included. The 
pandemic highlighted how reliant small businesses are on their 
employees having predictable schedules and how dire the need is 
for affordable and accessible childcare. I know from firsthand 
experience that until there is access to adequate childcare for 
workers small businesses and the country as a whole will 
struggle to recover from the economic challenges presented by 
the pandemic.
    Many of my workers have to stay home with their kids on 
snow days and school holidays because they do not have 
childcare options. The pandemic, however, put a spotlight on 
how dependent our employees are on care providers and schools 
to earn a living. For example, one of my key employees, Alexis, 
lost 2 weeks without pay during our peak season, Christmas time 
last year, when her primary care provider, her father in law 
was exposed to COVID and had to quarantine for 2 weeks. So 
Alexis stayed home for 2 weeks because she did not have any 
childcare options in my hometown. This happened multiple times 
for many of my key employees over the last 2 or 3 years.
    This is a reality that plays out in Main Street small 
businesses across the country every day. It hurts employee 
financially and hampers small business success. The impact of 
childcare issues on Main Street is real. In a national survey 
of more than 1,000 business owners from our network, 56 percent 
of small business owners said they lost business income as a 
result of childcare issues. It is no wonder 66 percent of the 
small business community says they believe the Federal 
Government has a role in supporting universal access to 
affordable, high quality childcare.
    At the beginning of the pandemic, my business shut down 
from the middle of March until June of 2020, when we gradually 
began to bring folks back. I am a manufacturer. I cannot work 
from home. My people have to be in the factory, making the 
products that we produce. While were able to make due with a 
smaller workforce for a short period of time, as our backlog of 
orders grew, we needed to hire more people, which just became 
more and more difficult.
    During the holiday season, which is my peak season, for 
instance, I could have used between 10 and 15 people more to 
meet my demand. It was impossible to get that type of short 
term, seasonal wage mostly because of the family issues related 
to the pandemic. The stress COVID put on the system clearly 
demonstrated how interconnected the success of business is with 
their employees' access to reliable childcare.
    Because of COVID, we had to increase prices for the first 
time in 5 years primarily due to supply chain interruptions but 
also reduced production capacity, which connects back into the 
childcare issue.
    Part of the reason for this is because we simply cannot 
find people at an entry-level job situation because many, many 
times entry-level people are young people, often women, and 
they are the people that have the children, the young children. 
So as long as childcare is unaffordable, they cannot work.
    When I was young, my mother stopped working to take care of 
my three siblings and me until we were all in school. She 
ultimately spent about 10 years out of the workforce. This 
experience made her passionate as an advocate for providing 
families with affordable childcare. She banded together with a 
community of leaders in Columbia and formed the Columbia Day 
Care Center, a nonprofit organization that offered subsidized 
childcare based on a family's income. Many of our employees 
took advantage of the program, but after decades of providing 
great day care for our community, the organization lost its 
funding and had to close in 2005, a demonstration that we need 
ongoing investment to ensure communities have affordable and 
professional day care options.
    And the testimony we just heard from Melissa will show very 
glaringly the inadequacy of the economic model in a strictly 
private venture. It just does not work.
    The bottom line is that employees, Main Street businesses, 
and communities would all benefit from good childcare options. 
Small business owners like me recognize this and support the 
Federal Government's taking a role in helping to provide it. We 
know that this would be a smart investment in our Nation's 
economic success because we are investing in our communities 
and we are investing in our people.
    Small businesses create two-thirds of all the new jobs and 
employ half of all workers. Advancing legislation to create 
affordable childcare would bolster America's Main Street 
businesses and their workers and enable them to lead all of us 
to prosperity.
    I would like to thank you very much for the opportunity to 
testify here today on an unbelievably critical issue to all of 
us. Thank you.
    Chair Warren. Thank you very much, Mr. Rowen. I really 
appreciate your testimony and your being with us today.
    And finally, our fifth witness, Ms. Sgamma, you are 
recognized for 5 minutes.

    STATEMENT OF KATHLEEN SGAMMA, PRESIDENT, WESTERN ENERGY 
                            ALLIANCE

    Ms. Sgamma. Thank you, Madam Chair, Ranking Member Kennedy.
    Since day one, President Biden has pursued a climate change 
agenda meant to constrain American oil and natural gas 
production and consumption. Starting with the cancellation of 
the Keystone Pipeline, followed by the leasing ban on Federal 
lands, the President was intent on restricting American oil and 
natural gas, particularly on Federal lands and waters, where he 
has the most control.
    But a funny thing happened. Climate change policies meant 
to make energy prices necessarily skyrocket achieved their 
intentions. Energy prices started to rise last year, and the 
Administration started to feel the heat last summer. The first 
reaction was to ask Russia and OPEC to increase their 
production, and the policies meant to overregulate American oil 
and natural gas production continued.
    When Russia and OPEC failed to heed that request, we in the 
American oil and natural gas industry made the case that we 
would be happy to increase production but for policies 
specifically designed to prevent us from doing so. Still, the 
policies continued.
    Fast-forward to February with the Russian invasion, and 
prices jumped even higher. The fallacy of an agenda meant to 
constrain American energy production was exposed. The President 
could help ease inflation by backing off these policies and 
even encouraging American oil and gas production.
    Energy prices are fundamental to all facets of the economy, 
including to childcare as we heard earlier because childcare 
workers need to drive to work like the rest of us. Very few 
goods and services, if any, are made and produced in the United 
States without the use of oil and natural gas. So because oil 
and natural gas are so fundamental to the economy, when prices 
for them are high, it creates inflationary pressures throughout 
the economy.
    One of the most basic ways the President could curb 
inflation is to encourage American oil and natural gas. 
Currently, production is down. Production of oil is down about 
800,000 barrels of oil a day from the high point of 12.3 
million in 2019. My industry is doing its part to bring down 
gasoline prices by increasing production, and the Energy 
Information Administration forecasts American producers will 
increase production by up to nearly 12.5 million barrels of oil 
per day by the end of the year.
    We could reach that goal and even replace the 670,000 
barrels of oil from Russia, that we used to get from Russia, if 
the Administration would reverse course on policies such as 
stopping the constraints on Federal lands and waters. There was 
a lease just announced, but it was the most begrudging 
announcement yet. Acreage was down 80 percent, and costs were 
up 50 percent. And of course, if you increase costs for 
something, you get less of it. So that clearly is intended to 
get less Federal oil production.
    We could reverse policies and actually approve pipelines 
and other rights of way so that we can put in place the 
infrastructure that enables us to capture natural gas and 
reduce methane emissions.
    I would suggest one of the most fundamental things is to 
call off efforts to deny access to capital and lending to the 
oil and natural gas industry, and one of the best ways to do 
that is call off the SEC's Climate Change Disclosure Rule, 
which is specifically meant to discourage American oil and gas 
production.
    He should back off on the regulatory overreach agenda, 
which again is meant to constrain American oil and gas 
production, and desist with things like the Social Cost of 
Carbon, which is meant to necessarily increase energy prices.
    I would suggest Congress should do its part, too, by not 
advancing legislation that has been kicked around for quite 
some time about taxing methane emissions. Methane is controlled 
by EPA regulation. It should not also be taxed and become a new 
revenue stream, to capture it and remove those emission 
sources, not try to create a revenue stream.
    So, appreciate the opportunity to testify today. We can 
help bring down inflationary pressures throughout the economy 
if we reverse course as a society and encourage American oil 
and gas production. Thank you.
    Chair Warren. Thank you very much. Appreciate your being 
here.
    So I am going to start with round one on our questions. The 
American economy depends on working parents. Working parents 
depend on childcare. But our childcare system is in crisis, and 
that is keeping parents out of the workforce, which, in turn, 
limits our productive capacity and contributes to inflation.
    Even before the pandemic, over half the families with young 
kids lived in childcare deserts, areas where there just simply 
are not enough childcare slots. Then COVID hit, forcing 
thousands of childcare providers to close their doors, many of 
them for good.
    Today, when families can find a childcare option, it is 
often too far away, has a years' long waiting list, and costs 
more than mom earns anyway. And that is a big part of why in 
America women's labor force participation is so low compared 
with other developed countries, and it is getting worse. Today, 
women's labor force participation is lower than it was two 
decades ago.
    Ms. Colagrosso, you run a childcare center in West 
Virginia, so let us start with a really basic question, and 
then we will build on this. Why do people need childcare? What 
are the main reasons that parents bring children to you?
    Ms. Colagrosso. Mostly parents bring their children to 
childcare because they need, or they want, to work. They want 
to provide a better life for their families, so they may take 
on a second job. But they want to work or pursue a career or 
maybe open a small business.
    Chair Warren. Yeah.
    Ms. Colagrosso. For employment reasons.
    Chair Warren. So these are people that are doing all the 
things we want them to do.
    Ms. Colagrosso. Yes.
    Chair Warren. For both themselves, as Senator Kennedy says, 
to have the opportunity to work and contribute to our economy, 
but parents need childcare because they want to work. If 
parents can and want to stay home to care for their children, 
that is great, but many folks want and need to work to make 
ends meet, to save for a rainy day, to set aside money for 
their own kids to be able to go to college. But without 
affordable childcare, parents, especially moms, have to make 
excruciating decisions.
    Mr. Rowen, you described your glass decorating small 
business that you run. I want to see some samples before we get 
out of here. I hope you have pictures.
    But you were describing it--but I would just like ask it as 
part of the--make sure we get all of this on the record. What 
happens when your workers are not able to find a childcare 
provider with an opening or at a price that they can afford?
    Mr. Rowen. Well, it is an instant response. So the story I 
gave you of Alexis, she is one of my production supervisors, 
and her father-in-law, who was the childcare provider for her. 
Lexi is one of my best employees, dependable, loyal. She has 
worked for me forever. But the minute something happens with 
her childcare--and we run a family business, and we say it is a 
family business in lots of ways. And one of the ways that we 
say is that if you are a parent and your child is sick your 
place is not here at work, it is at home, so you go home and 
take care of your child.
    Now that does not apply to everybody, and it cannot be a 
business model for everybody, but that is what happens when 
parents--if a parent does not have a childcare alternative or 
an option. They cannot work.
    Chair Warren. Yeah. So they are just gone.
    Mr. Rowen. Everything stops for them. Financially, it is a 
catastrophe for them and for the business because we have 
people that come in and need--fit different models that have to 
be produced.
    Chair Warren. Right, right. You have deadlines to meet?
    Mr. Rowen. Absolutely.
    Chair Warren. All right. And, Dr. Spriggs, you are an 
economist who studies the labor market. When workers have to 
cut hours, work part-time instead of full-time or leave the 
workforce entirely because of childcare, does that mean the 
lack of affordable childcare is reducing labor force 
participation? I just want to build all the blocks here.
    Mr. Spriggs. It absolutely does, and because women are half 
the labor force, even if we have an effect on only 4 percentage 
points of women's labor force participation, that is 2 
percentage points more of a total labor force. That is a lot of 
workers. That is a lot of output. And that changes the equation 
even for the Federal Reserve in considering: Are we in a tight 
labor market? Should we start slowing the economy?
    Chair Warren. So let me ask you on this because I want to 
draw this point out. About what is the broader impact on our 
economy, on our productive capacity, when there is reduced 
labor force participation caused by a lack of affordable 
childcare?
    Mr. Spriggs. So there are a couple of layers. One we 
instantly, of course, have a smaller economy because we have 
fewer workers. That means we have fewer people to put behind 
machines, provide services. Second, once you have shrunk the 
economy, now it is going to grow from a smaller base. And then 
third, you have what the Fed has to consider.
    If Congress does not build the infrastructure to get 
everybody to work, then the Fed's hands are kind of tied. They 
have to slow the economy before we would want them to slow the 
economy. So the length of our expansions become shorter, so we 
get a smaller economy, slower future growth, and a slower--a 
smaller future economy, and we slow the length of our 
expansions. That is lose, lose, and lose.
    Chair Warren. And, Dr. Spriggs, just so I am sure, we are 
having just a little bit of trouble understanding you, and I 
just want to make sure I have got this. How many workers are we 
leaving on the sideline compared to our peer countries, the 
ones that actually invest in childcare, and what is the impact 
of leaving those workers on the sideline on our GDP? Do you 
have some numbers around that?
    Mr. Spriggs. There are a couple of estimates from anywhere 
from 1 percent of GDP to 1.5 percent of GDP.
    Chair Warren. Wow.
    Mr. Spriggs. If you think about Canada, to our north, where 
they do make the investments in their children that we do not, 
this means a much higher labor force participation rate for 
their women. Anywhere from 10 percent would be a good estimate. 
And so we are talking about hundreds of millions of dollars 
that we are leaving on the table because we are not utilizing 
our workers to their maximum.
    Chair Warren. So is the estimate I--like I said, we are 
having a little trouble hearing you on our end. Is the estimate 
that about 5.2 million missing workers in America compared with 
other countries that provide childcare assistance? Is that 
about the right number?
    And I think I heard you say 1 percentage point to a 
percent-and-a-half in terms of the impact on the GDP. Do I have 
those numbers right?
    Mr. Spriggs. Yes. And the 500,000, the number of workers 
that are missing, that is kind of conservative because we are 
only looking at prime-age workers and, of course, a lot of 
women who need childcare are below the age of 25, and so we are 
missing some workers who are in the age group that actually 
need childcare because their children are the youngest. So that 
is a conservative estimate of how many workers we are missing 
compared to Canada.
    And I am using Canada because it is right next door. We 
share the same sort of history, timeline, and we have many of 
the same companies, many of the same industries.
    Chair Warren. Right.
    Mr. Spriggs. It just shows the difference we could have if 
we had the right policies.
    Chair Warren. Wow. So think about that. That is really 
powerful, Dr. Spriggs; 5.2 million missing workers--and we have 
actually graphed that here--and nearly a percentage point off 
the GDP. And that percentage point really matters. You know, 
over the last decade, average annual GDP growth has been about 
2 percentage points. One point higher compounds over time, and 
it would mean both a stronger economy and more opportunities 
for millions of people.
    Right now, Americans are getting hit by record shortages 
and price increases. It is clear that we need to increase the 
supply of everything, from food to cars to health care 
supplies. So, Dr. Spriggs, let me ask you one more question 
about this. If we invested in childcare and unlocked all of 
this labor supply and productive capacity, would that help 
prevent further inflation?
    Mr. Spriggs. It will reduce the pressure for inflation in 
the future, and that is just being the cold-hearted view of the 
labor force. Economists know that investing in American 
children--all of the programs that we have had have a high rate 
of return because in the future they reduce costs for the 
Government on the order of eight to nine times because the 
investment in the children also pays off. Those children are 
heathier. Crime goes down. They own homes. They are less likely 
to be poor and need Government transfers. Those children are 
also part of the benefit in the equation.
    Chair Warren. Oh, thank you very much, Dr. Spriggs. You 
know, we are talking about how without childcare millions of 
parents cannot work. I know this all too well. I nearly quit 
school, and later I nearly quit my first big full-time job all 
because I could not find childcare. I would not have made it 
without help from my Aunt Bea [phonetic], and thank you, Aunt 
Bea.
    But not everybody has an Aunt Bea to make this work or a 
grandparent who is able to make all of it work, and that is why 
it is so critical that we invest in high quality, affordable 
childcare for every American family. It is going to lower the 
cost for those families and help make our economy more 
productive, and with childcare to unlock productive capacity, 
it is going to help prevent shortages and cut back on price 
increases across the economy.
    Thank you.
    I apologize to my fellow Members here for going long, but I 
am so glad to have these experts with us.
    Senator Kennedy.
    Senator Kennedy. Mr. Rowen, what do you propose--is it 
Rowen? I cannot see.
    Mr. Rowen. Yes, Rowen.
    Senator Kennedy. I am sorry.
    Mr. Rowen. Yes, it is Rowen.
    Senator Kennedy. What do you--your employees have trouble 
finding affordable childcare?
    Mr. Rowen. That is correct.
    Senator Kennedy. What do you think we ought to do about the 
problem?
    Mr. Rowen. Well, as I said in my introductory opening, 
there have been solutions over the years. My mother was 
involved in an organization that created a nonprofit childcare 
operation. It worked on pay-by-need. It did have a--it used 
funds from the United Way, which were charitable funds.
    But I also believe that it needs more Government funding to 
keep the economic model for as Melissa was explaining.
    Senator Kennedy. Do you think the American taxpayer needs 
to subsidize childcare?
    Mr. Rowen. I believe, if correctly explained, the American 
taxpayer would understand that an investment by the Government 
in good childcare would dramatically improve the economic 
condition of all of our small businesses and corporate 
businesses to the point where we would have a bigger, larger 
workforce which would be more productive, more stable, and 
everybody would benefit. So the value of the investment--as a 
business owner, I understand investment. The value of that 
investment would be far greater than the cost of it today, and 
if explained properly to the American public----
    Senator Kennedy. I get it. How many employees do you have?
    Mr. Rowen. I run between 50 and 75 to 85.
    Senator Kennedy. OK. What does a starting employee make in 
your company?
    Mr. Rowen. Two years ago, $9 an hour.
    Senator Kennedy. How about----
    Mr. Rowen. Today, about $12 an hour. Minimum wage in 
Pennsylvania is $7.25.
    Senator Kennedy. So the starting pay for a person in your 
company----
    Mr. Rowen. Today, when they walk in.
    Senator Kennedy. ----is $12 an hour.
    Mr. Rowen. That is what I have to be paying to get somebody 
to come in.
    Senator Kennedy. Well, of course, they cannot afford health 
care. I mean, childcare.
    Mr. Rowen. Are you insinuating I pay too little?
    Senator Kennedy. How much money did you take out of your 
company last year? What was your salary?
    Mr. Rowen. My personal salary was $100,000.
    Senator Kennedy. OK. Did you take out any money--are you an 
LLC?
    Mr. Rowen. I am a Subchapter S Corporate.
    Senator Kennedy. OK. You are a Sub S. So you took out 
some--in addition to your salary, you had to pay taxes. So 
presumably, you took out profits. How much did you take out 
there?
    Mr. Rowen. My company lost over $300,000 last year.
    Senator Kennedy. OK. So your total take from your company 
was $100,000.
    Mr. Rowen. Actually, my total take--because as a Subchapter 
S my business income is my income.
    Senator Kennedy. Right.
    Mr. Rowen. Was negative $200,000.
    Senator Kennedy. OK. So you had a--is that aberrational, or 
is that----
    Mr. Rowen. I hope so. Yes, it is.
    Senator Kennedy. Well, prepandemic, how much did you take 
out?
    Mr. Rowen. My average over, say, a 25-year period of time 
for my company has been somewhere between--the profit for the 
company that is then to be paid taxes on has been somewhere 
$45,000 and maybe 150 to $200,000.
    Senator Kennedy. OK. Well, look, I am not trying to pick on 
you, and congratulations on having a family business.
    Let me just give you this point of view. Of course, 
childcare is too expensive. Everybody up here wants less 
expensive childcare. Everybody up here supports children and 
prosperity, too.
    Here is a rational way to go about it, probably not the way 
Congress would go about it, but it is a rational way. There are 
some things you cannot quantify. You cannot quantify the self 
well-being of having a job. I do not care how much money 
Government gives you. You cannot quantify the feeling of self 
worth that a person receives from being gainfully employed and 
supporting his or her family and being a meaningful part of his 
community. Follow me here.
    Mr. Rowen. Senator, I would like to add one thing.
    Senator Kennedy. Sure.
    Mr. Rowen. I have been in my business for over 45 years. I 
am in a small business community. I know every one of my 
employees, and I can quantify with them when I look them in the 
eye what a good job means.
    Senator Kennedy. Right.
    Mr. Rowen. And I watch them cry when they cannot come to 
work because they do not have childcare.
    Senator Kennedy. I understand. So there is a part of this 
you cannot quantify, in my opinion. I meant what I said 
earlier; a person without a job is not healthy, that person is 
not happy, and that person is not free. And, yeah, Government 
can give you a cell phone, but you are going to feel much 
better about yourself if you earn the money to buy a cell 
phone. OK?
    There is a part of this you can quantify. A rational 
approach, therefore, would be to say, OK, if Government 
subsidized the cost of childcare in America, what would that 
mean in terms of GDP? How many additional people would go to 
work? How many fewer lost ``my child is sick'' days would we 
have in America? What would be the impact on productivity? All 
that can be quantified.
    And you take that number, the cost, or the benefit rather, 
and you compare it to the cost, and if the benefit 
substantially outweighs the cost you would go forward.
    The question would then become: How do you pay for it? 
Well, if we say this is a priority, a meaningful place to start 
if you respect taxpayer dollars--and we all do--is to say, OK, 
we are going to comb through our budget. We are going to 
basically scrub our budget before we just go borrow more money 
and try to find out what in our current budget is a lower 
priority than affordable childcare. We never do that. We never 
do that. I mean, we just do not do that. Neither side does 
that.
    When we put together a budget, Mr. Rowen, we do not do it 
like you do at your business. Our fight over budget is how much 
extra money we are going to give to the bureaucracy every year. 
We do not have any metrics.
    In the real world, if you are doing a lousy job, you get 
fired. In Government, if you are doing a lousy job, it must 
mean that you do not have enough money, so we give you more 
money. That is the way it works.
    Let me just finish my thought. So that would be a rational 
play.
    And then once we really try to scrub the budget and find 
the money, then if it is not enough, given our other competing 
priorities, we could talk about, well, is it something that we 
ought to add on an operating--as an operating expense and 
borrow money. That would be a rational way, but that is not 
what is before us.
    What is before us--let me just take the President's Build 
Back Better plan. You know what the childcare provisions in 
that would cost? Seventy-five billion dollars a year. What do 
you think that is going to do to inflation?
    And that is not $75 billion that we could find by scrubbing 
the budget. That is not touching the budget. Nobody wants to 
touch the budget. We just want to add to it.
    We do not even have 5 percent of $75 billion. We have got 
to go borrow that. Do you see the problem?
    I do not think anybody has--at least I do not have--a 
problem with the end result, with the objective here, but the 
answer is not just to say, oh, OK, we will just add $75 billion 
a year extra to our operating account based on the assumption 
that all the money we are spending right now is well spent and, 
yeah, we will just borrow more. That is not the answer. It was 
not the answer before inflation.
    But let me tell you what will happen right now if we go 
pass Build Back Better. And there are some good things in Build 
Back Better. You know the impact of that on inflation? You 
think 85 percent inflation is high? Get ready for 15 percent 
inflation. And the problem.
    Anyway, that is the end of my speech.
    Mr. Rowen. You mentioned that in small business we do not 
do things like Government, and that is very true. I might have 
lost money last year, but then make a decision this year to 
spend $50,000 on a piece of equipment that I cannot afford. So 
I have to borrow for it, but I know that $50,000 worth of 
equipment will make $300,000 worth of equipment--or, products, 
that I will make $50,000 in profit. So I will pay for that 
piece of equipment in 1 year and then own that equipment for 10 
years and make $50,000 every year after that. So I make 
$500,000 because I made an investment that is the correct one 
at the right time.
    It is not----
    Senator Kennedy. I will bet you one of the first things you 
do, though, is you do not just assume that you need to go 
borrow the money to buy that equipment. The first thing you do 
is sit down with your operating budget and see if you cannot 
find a place to cut. That is the first thing you do.
    Mr. Rowen. We do that all the time, absolutely. And I agree 
with you.
    Senator Kennedy. We do not. We do not, and that is the 
problem.
    Chair Warren. Thank you.
    Senator Reed. Well, thank you very much, Madam Chair.
    Ms. Colagrosso, we are looking at a situation where 
childcare is extraordinarily expensive for everybody. And the 
irony is that the childcare workers were only making minimum 
wage or sometimes slightly above that and we would insist, and 
we do by regulation, that they be well trained, that they be 
well screened, et cetera. So how do you manage to support your 
staff while you are providing affordable care like that to 
children?
    Ms. Colagrosso. Prior to the pandemic, it was definitely 
difficult. People that work in childcare have another incentive 
most of the time in reality, just like I did. I went into the 
business a little bit on the selfish side. I needed a place for 
my own children. And also, we just enjoy the work.
    So there is an expectation that we are not there for the 
paycheck. I often say to people when I am interviewing, if you 
are here for the paycheck, you can go down the road to the 
convenience store and make a better paycheck, and not to say 
that that is OK, but that is the reality.
    What we have been amazed about is that when we got the 
pandemic relief funds and I could pass those bonuses on and 
help with education and help with sick time, that how 
stabilized the staff came and more professional. It becomes a 
career, and that is what we really want to fund.
    I understand that that is an issue of expense, in some 
communities much higher expense than other communities, but 
ultimately, we want the quality to be there and support those 
staff that do stay in the industry.
    Senator Reed. What strikes me is in Rhode Island if you 
have, for example, two teachers in the public school systems 
and they have three children they really cannot afford 
childcare because it is, up there, probably that is about 
$50,000 a year, and I am not exaggerating.
    Ms. Colagrosso. Yeah.
    Senator Reed. Mr. Spriggs, thank you. You bring a--excuse 
me, I am going to get my glasses on, sir.
    Mr. Rowen, thank you. You bring a very practical, very 
pragmatic view to this issue, and from listening to you I think 
you have made the point quite clearly that this really is an 
investment. It is an investment that will pay back over the 
life of the child, which is probably 75 years, and in fact if 
we do not make that investment, there is real potential that 
that child could end up being unemployable because they do not 
have the proper social development and educational development. 
And I think you are absolutely right. So I do not know if you 
want to further comment.
    Mr. Rowen. Well, thank you. Yes, I do believe it is an 
investment. It is not just an investment in a child. It is an 
investment in a family. It is an investment in America's 
business community, and it is an investment to all of us for 
our future.
    Senator Kennedy has said many times--and I 100 percent 
agree with him--that the value of work exceeds the value of 
being given something that you did not earn.
    What I think about--the way I think about childcare is I--
and as I said earlier, we employ young people because they are 
entry-level people. That means they are either the first time 
they are working or they are coming back into the workforce, 
especially for women. Women are having children when they 
young. They are out of the workforce for a certain period of 
time, and then they want to come back into the workforce.
    One of the first things we want to do is help that woman, 
that new reentered worker, learn how to be a great worker. If 
we can build a good workforce, we will do extremely well. We 
will do well as businesses, and we will do well as an economy.
    But the most important aspect of a good worker is 
dependability. They come to work on time. They come day after 
day, month after month, and if they like what they do, they 
will stay forever. You cannot have a dependable worker if they 
have to go home every time their child is sick or they can 
never come in because they do not have an affordable childcare 
alternative. It is very simple.
    Senator Reed [presiding]. Well, thank you very much. We all 
believe in the value of work. And it is those people who do not 
earn a living and do not work that is interesting, but I just 
wonder if in that case why some of my Republican colleagues 
want to repeal the estate tax because that simply is giving a 
lot of people who never earned the money the money. I cannot 
understand it, but that is an aside.
    Let me, on behalf of the Chairwoman, recognize Senator 
Smith.
    Senator Smith. Well, thank you very much--I was going to 
call you Chair Reed--Senator Reed, and thank you so much to our 
panelists for being here today. And, I want to thank Chair 
Warren for holding this important hearing.
    You know, I just got back from 2 weeks in Minnesota, and I 
can tell you every place I went in the State and every sector 
of the economy and every region of the State people were 
talking about--and especially businesses, Mr. Rowen, were 
talking about the linked challenges of workforce and childcare, 
and they totally see that link. And what they are telling me 
is, Tina, we have a supply problem. We do not have enough 
spots. We do not have enough places for the children and the 
families that need them. This is especially a challenge in 
rural communities, both the childcare shortage as well as the 
workforce shortage, again, connected.
    And we also know--and I am looking at you, Ms. Colagrosso--
that the costs are extremely high, but at the same time 
childcare centers and their workers are literally struggling to 
survive, struggling to support their families. As you said, 
this is a labor of love. This is not a get rich quick or slow 
scheme, to run a childcare center.
    Ms. Colagrosso. Right.
    Senator Smith. It is a labor of love, but it needs to work 
financially in order for us to have any kind of a supply of 
childcare in this country.
    And of course, we have not been talking about this 
specifically, but we know what the data tells us about the 
connection between brain development and opportunities for kids 
to have exposure to early learning, and we know that those 
opportunities are much less likely to be there for poor kids 
and kids of color. So this is a moral and ethical issue as well 
as an economic issue which we have been talking about today.
    So I mean, I know from what I have heard from my 
constituents in Minnesota that our childcare system is 
fundamentally broken for parents, for children, and for 
businesses that are looking to recruit and retain talent as 
well as for providers.
    So I want to just say, though, Senator Kennedy is not here, 
and I appreciated, Mr. Rowen, him directing his questions to 
you as a businessperson. I started out my career in business as 
well.
    And I am going to come to you in just a minute, Dr. 
Spriggs, but I do just want to point out and correct for the 
record that the childcare provisions, like the other provisions 
in the bill formally known as Build Back Better, were paid for. 
They were not paid for by borrowing, which is actually how we 
paid for the Infrastructure and Jobs Act that was much more 
based on borrowing. It was paid for, and I think that that is 
important to put out there, if you believe that that borrowing 
is somehow fueling inflation. I believe that the thing that is 
fueling inflation is much more to do with the shortage of 
supply of so many things, as Senator Warren said.
    But, Dr. Spriggs, let me just come to you if I could. The 
U.S. Chamber of Commerce has noted that--and you noted this as 
well--that women are participating in the labor force at the 
lowest rate since the 1970s. In the spring of 2020, 3.5 million 
mothers left their job, driving the labor force participation 
rate for working moms from around 70 percent to about 55 
percent. Now in Minnesota, we have one of the highest 
participation rates for women in the country, and we saw our 
numbers go down as well. The number is improving, but it has 
not completely rebounded.
    So, Dr. Spriggs, could you just talk to us a little bit 
about this? Women are half the workforce, half the labor force. 
What impact on economic productivity does the lack of childcare 
have on women in the workforce? And maybe--because Senator 
Warren addressed this a bit, maybe you could focus specifically 
on the challenges particularly for low-wage workers in 
particular.
    Mr. Spriggs. Thank you, Senator, for the question. And just 
like Mr. Rowen was saying, this is an investment and it is an 
infrastructure investment. We would not turn to a business and 
say, ``The bridge fell off. It fell apart. Our roads have been 
destroyed by a flood. We want small businesses to pick up the 
bill.'' We expect that Government will provide the roads so 
that workers have a way to get to the job.
    Now we have the same problem. Women need labor force 
infrastructure. They need the Government to have the 
infrastructure that allows them to participate on a regular 
basis.
    So when workers are absent, when workers just simply cannot 
apply for a job, this shrinks our labor force. It means that 
businesses cannot get the people they want or they cannot get 
reliable work, and that hurts their productivity. They either 
do not have workers who have the skill or the teamwork ability 
because they have not been there every day or they are not 
dependable. That hurts as much as if we had unreliable 
transportation. It is the way for someone to get to work.
    And that is how we have to look at this investment, and it 
pays off. It meets the barrier of: Is this Government 
spending--and economists have studied this to death----
    Senator Smith. Right.
    Mr. Spriggs. ----does this Government spending pay for 
itself? Does it get us more workers, and does it improve the 
productivity of our children, who are our future workforce?
    Senator Smith. Exactly. This is----
    Mr. Spriggs. And this does both.
    Senator Smith. This is the business concept of return on 
investment, and you are articulating it just exactly right.
    Let me ask you this, though, some people say, ``Well, if 
childcare is important--and I get that we need to have 
childcare, but I question whether we have to subsidize it.'' I 
mean, Dr. Spriggs, do we subsidize kindergarten? Do we 
subsidize third grade?
    Mr. Spriggs. Yes. This is all in how one wants to wrap our 
heads around it. When you look at it from the perspective of an 
investment in our children, this is not really subsidizing. We 
know--we have way too much literature that proves--early 
childhood education helps children when they reach 
kindergarten. It makes a difference in their performance, and 
it is long-lasting. It is not just a one-off. It is long 
lasting, which is why we know from our studies of a long term 
impact we get workers who are more reliable when they are 
adults, they are healthier when they are adults, they are less 
likely to commit crime when they are adults.
    All of this pays off, and so it is worth it to invest in 
our children like the rest of the world does. Our Nation, as I 
pointed out in my testimony, is not on the chart. We are not 
even on the chart. We only have Cypress and Turkey that invest 
less in their children.
    Senator Smith. Yeah.
    Mr. Spriggs. Everybody else gets it. Everybody else gets 
that you have to invest in your own children to get them to be 
productive, ready for school, ready to start. And we know that 
there is a difference in the children who get that preparation, 
and in the context of this hearing, we know there is a 
difference in those companies that can get workers and can get 
workers who are reliable.
    Senator Smith. I think you are making a point that I want 
to just put a fine point on, which is that in addition to all 
of the issues we have talked about, you know, family stability, 
family income, you know, development of our children, that this 
is really a global economic competitiveness issue and that we 
are at a disadvantage if we are not making these investments in 
our children and in the capacity of people to work in this 
country as other countries are.
    I want to just--since Chair Warren has not returned and I 
have a little time, I am going to--actually, I want to talk a 
little bit with Ms. Colagrosso.
    In my home State of Minnesota, people are returning to 
work, wages are going up, and that is a good thing. And we are 
doing everything we can to focus--Democrats are doing 
everything we can to focus on lowering costs for families.
    We have discussed how the lack of affordable childcare--
this is something that the Minneapolis Federal Reserve has 
written extensively about--has forced many parents to drop out 
of the workforce. In fact in Minnesota, people say that 
childcare is seen as a bigger challenge even than housing, 
where the cost is also going up really substantially.
    So, Ms. Colagrosso, you talked in your testimony about the 
challenges of hiring and retaining staff. And I know that we 
should just point out that there are existing Federal----
    Ms. Colagrosso. Oh, yeah.
    Senator Smith. ----and State programs to help families 
support childcare, you know, pay for childcare. Can you just we 
have got the Child Care Development Block Grant program. We had 
the American Rescue Plan dollars to help stabilize childcare 
centers during the crisis. There is State level programs.
    Could you just tell us a little bit about what it is like 
to deal with those different Federal programs? Do they meet the 
need? What level of complexity do they provide--do they create 
for you and for the families that you are working with?
    Ms. Colagrosso. It absolutely takes a lot of work to 
understand the programs and to pull them together. I know there 
are a lot of providers and certainly home-based providers and 
community providers in small, rural areas that do not--are not 
able to access those funds. They do not have the ability to 
research the programs and pull them together in the way that I 
did. In a lot of ways, that was why a lot of them have closed 
down when the pandemic happened.
    No one was reaching out and saying, here is the resources 
for you. It is going to be OK. We are going to get through it.
    But--and I know the families--I hear a lot of families that 
do not even realize the subsidies are out there, and I have had 
families who have lost their subsidy payment because of the 
complexity of paperwork, not turning something in they did not 
realize they needed to turn in, improperly filling out a piece 
of paper, and then they lose their subsidy. So we do what we 
can to help, and our State has done what they can to help 
providers, but it is a complex system of pulling funds 
together.
    Senator Smith. And what impact would it have on the 
families that you provide if there was a more sort of cohesive, 
robust, you know, well-funded system to help them afford 
childcare?
    Ms. Colagrosso. Yeah, I think any money we can put into it 
robust is very exciting, but obviously, it would be a large 
change for small businesses in our area, for families. This is 
an investment, as we have all said. And making it a simple 
system and a robust system will answer a lot of problems, I am 
sure.
    Senator Smith. Thank you. Thank you. And I am going to 
pause the hearing. I am going to recess the hearing until Chair 
Warren returns, and so with that, this Committee will be in 
recess.
    [Recess.]
    Chair Warren [presiding]. Sorry. We are all trying to do 
votes, and that gets us coming and going. I apologize for 
taking people's time. I still have a couple of series of 
questions I would like to ask about if we can do that.
    One of the focuses on the provider perspective. So we have 
talked about how childcare is a critical pillar of our economy. 
It lets parents go to work, knowing that their babies will be 
cared for. For decades though, the United States has just 
underinvested in childcare, essentially, crossing our fingers 
and hoping that families will find a way to figure this out, 
but families cannot do it because, as you have explained, Ms. 
Colagrosso, the numbers just do not add up.
    In many States, the cost of childcare outstrips the cost of 
college. Many parents are already priced out of childcare, 
which makes it cheaper for them to stay at home, and those 
parents who were scraping together enough money to pay for 
childcare simply cannot afford to pay another dollar more.
    Meanwhile, childcare providers are clearly not getting 
rich. The fees may choke parents, but they are barely enough 
for childcare providers to make it from 1 month to the next. 
And one way that childcare providers have kept this going is by 
paying childcare workers the absolute minimum that they can, 
not because they are trying to be mean to childcare workers but 
because it is the only way they can try to hold this together. 
And the consequence is childcare workers leave every year. Even 
before COVID, about 30 percent of childcare workers were 
leaving the field every year.
    Add this up, and we just have a massive shortage of 
childcare that is getting worse and getting worse and getting 
worse.
    So, Ms. Colagrosso, you have run a childcare center in West 
Virginia for almost 30 years. I know that you know this issue. 
Are you able to serve all of the families who come to you 
looking for care?
    Ms. Colagrosso. No. We have waiting lists for every age 
group, all the way from infants up through school age. Some of 
those are months long. On a regular basis, I have somebody call 
who has a job, new job to start, and we cannot help them, so 
they have to turn down the job.
    Chair Warren. So the need is vastly outstripping the supply 
in your area, and we know the numbers show that is true all 
around the country. So let me ask the question. Could you just 
raise wages so that you could provide more childcare slots?
    Ms. Colagrosso. Yeah, I would love to raise wages because 
ultimately that is--you know, the people that work for me 
deserve that, but I could not raise the wage of the subsidy. 
That takes somebody at a higher pay grade than me.
    Chair Warren. OK. So let me just stop and make sure 
everybody understands what you are talking about. If the family 
is of low or moderate income, and the pay--the Government, 
either State or Federal Government, is helping subsidize, that 
amount is already fixed.
    Ms. Colagrosso. Yeah. We do not get to decide that amount. 
That is a daily rate.
    Chair Warren. That is for us to do.
    Ms. Colagrosso. For contract, right?
    Chair Warren. OK.
    Ms. Colagrosso. And so then if I had to raise the families 
that are outside of subsidy that much, I could not raise it 
enough to influence my employees' wages and still have people 
be able to afford it.
    Chair Warren. Right.
    Ms. Colagrosso. People in our community would not even be 
able to afford the childcare at all, which is some of what you 
are seeing across the country.
    Chair Warren. Right.
    Ms. Colagrosso. People just say, I cannot afford it, so I 
will just stay home.
    Chair Warren. Yep. And let me ask you just one more just to 
give us a little more flavor around this. How do the wages you 
pay compare with other entry-level jobs in your region?
    Ms. Colagrosso. They are much lower, unfortunately. I 
cannot pay as much as Sheetz. That is the convenience store 
down the road. They are paying $18 an hour for entry level.
    Before the pandemic, I hired in entry-level employees at 
minimum wage, which is $8.75 an hour in West Virginia. Now, 
just as Mr. Rowen mentioned, we have to offer a little bit 
more, so I am offering $12 an hour, but I am really not able to 
afford that. So when the relief money is gone, that will not 
happen. That is just because I have some relief money to get 
people in the door.
    Chair Warren. So working at a local convenience store pays 
more than you can afford to pay the people who are taking care 
of our children.
    Ms. Colagrosso. Correct.
    Chair Warren. You know, I think it is clear that childcare 
workers across this country are shamefully underpaid, and the 
providers are barely staying afloat. This is a broken system, 
and the only way it is going to get better is if the Government 
steps up.
    So let me ask about one more piece in this. West Virginia 
has a preschool funding program. So, Ms. Colagrosso, that means 
you get significant Government funding for one part of your 
business. So does that mean that you can afford to pay those 
teachers more and that you are able to retain them?
    Ms. Colagrosso. Absolutely. In West Virginia, we do a 
contracted collaborative program, so childcare and public 
school work together. And so I do get that public education 
dollar, and that goes directly into the staff, the employees. 
So I pay that teacher and that aide equivalent to the 
kindergarten teachers in our country.
    Chair Warren. And does that mean you have more teachers and 
less turnover?
    Ms. Colagrosso. Just for that classroom.
    Chair Warren. Just for that.
    Ms. Colagrosso. Right. Unfortunately, the others, infants 
and toddlers and 2-year-olds and 3-year-olds, they do not see 
that additional funding, but my Pre-K----
    Chair Warren. So then let me ask about that. What would it 
mean if you have Federal assistance to be able to pay your 
staff equivalently for taking care of 3-months-olds or 2-year-
olds?
    Ms. Colagrosso. It would be an incredible improvement in 
the childcare program and the quality. The number one 
determiner for infants and toddlers of quality is the same 
person, consistency, low turnover. They need to make those 
bonds with the people that are caring for them and the families 
need those bonds, but infants especially and toddlers.
    Chair Warren. Yeah. Thank you very much. Thank you very 
much for the work you do. It is critically important work, and 
I just want to see us support it as we go forward.
    I would also like a follow-up, if I can, Mr. Rowen. You 
were having a conversation with Senator Kennedy about--who 
seemed to agree that childcare is very important, but the 
question is how do we pay for it. So I just want to ask you a 
little bit more about that.
    Mr. Rowen, in 2020, Google paid an effective tax rate of 
13.5 percent, and in that same year 55 other highly profitable, 
giant corporations paid zero in Federal corporate income taxes. 
So let me just ask, do you pay more than that?
    Mr. Rowen. Pretty consistently, yes. And all small 
businesspeople that are running a successful business and 
making profit will be paying a higher rate than the 13 percent 
that Google was paying.
    Chair Warren. Or the zero percent that the 55 are paying.
    Mr. Rowen. Or the zero percent, right.
    Chair Warren. Yes.
    Mr. Rowen. And the only way that makes any sense if those 
corporations are virtually on the verge of going out of 
business and not making any money. But how are they doing that 
year after year after year?
    Chair Warren. Yeah.
    Mr. Rowen. I think there was a study by the SBA that pegs 
the average small business rate of taxation at somewhere around 
19, almost 20, percent. So right there, with Google and average 
small businesspeople, you have got what? A 7-percent 
difference. That just does not sound equitable or fair to me, 
and I do not think--if most Americans would know those numbers, 
they would agree.
    Chair Warren. Yeah, it does not sound fair----
    Mr. Rowen. It is not.
    Chair Warren. ----because it is not fair. Exactly right.
    So one of the proposals that Democrats have put on the 
table is a 15 percent minimum tax just for corporations that 
make more than a billion dollars in profits, and that is in 
their book reporting, right, not in how many loopholes they 
work through on this. It turns out that that would raise about 
$320 billion. So let us just hold that number. If I had Katie 
Porter's whiteboard, I would put that right up here.
    And then I would add under it how much we could save if we 
actually invested in the IRS. And the IRS could go after the 
wealthy tax cheats, not just poor people whose numbers do not 
match up between their W-2 forms and what they were able to 
report, where someone has made a mistake, but if they actually 
spent their time on the folks who are engaged in the most 
sophisticated of the tax dodges and simply enforced current 
law, not just fancy changes in law. The best estimate on that 
from the Treasury Department is that would raise another $400 
billion. This is over 10 years.
    So $320 billion plus $400 billion gives us about $720 
billion. I think that estimate that Senator Kennedy was using 
for the full-scale, all the way, permanent version of childcare 
was about $75 billion a year. So it looks like to me we are not 
quite there on those numbers, but very, very close just on two 
things. Enforce the current tax laws and put a 15 percent 
minimum tax for the billionaire corporations, and we could pay 
for childcare.
    And that is without having to talk about how you pay for 
childcare by increasing GDP by a percentage point, how we pay 
for childcare by bringing, as Dr. Spriggs suggested, about 5.2 
million new workers back into our economy.
    Mr. Rowen.
    Mr. Rowen. One of the things I always say is different 
between the small businessman, businessperson, and a corporate 
businessperson is I live and work and am in visual contact with 
my employees all the time. I just know them. They know me. So I 
am much more invested in their personal lives and understand 
the consequences of the decisions that I make or that the 
business makes as we go forward.
    Corporate people are not quite like that. Now I am not 
taking that completely away from them. But what you just talked 
about, if you had a minimum 15 percent to the corporations as--
--
    Chair Warren. More than a billion dollars.
    Mr. Rowen. More than a billion.
    Chair Warren. This is not for small business, yeah.
    Mr. Rowen. You probably will get pushback from the 
corporate people that run the business, but I will also tell 
you that the corporate--the people that work in those 
corporations would go, thank you----
    Chair Warren. Yeah.
    Mr. Rowen. ----because they will finally get the same 
benefits that we are talking about that filter down all of our 
young families that effectively would be benefiting from this 
change.
    Chair Warren. Well, Mr. Rowen, you give us the perfect way 
to wrap this up. This is about the role of Government in 
helping make this economy work for everyone. Right now, it 
works great if you are a corporation that is making more than a 
billion dollars in profits and paying nothing in taxes, but it 
is not working so great if you are running a small business and 
your employees cannot find childcare. It is not working so 
great if you are trying to run a childcare business. And, it is 
not working so great if you are one of the parents who cannot 
get into the workforce or cannot take a full-time job or cannot 
take an extra job because you cannot find the childcare to put 
you in a position to do that.
    And that is our job here in Congress. We could do a lot 
better in making this economy work, not just for a handful at 
the top but for everyone.
    I want to thank you all for being here today. I want to 
thank those who joined us online for being with us.
    And with that, Senators who may wish to submit questions 
for the record, questions are due 1 week from today, Tuesday, 
May 3rd. For our witnesses, you will have 45 days to respond to 
any questions. Thank you all again.
    This hearing is adjourned.
    [Whereupon, at 4:23 p.m., the hearing was adjourned.]
    [Prepared statements and responses to written questions 
supplied for the record follow:]

              PREPARED STATEMENT OF CHAIR ELIZABETH WARREN
    This hearing will come to order.
    Good afternoon, and welcome to today's hearing on ``Childcare and 
Other Policy Tools to Combat Bottlenecks and Inflation''.
    Now, we've heard a lot about inflation over the last 6 months, and 
rightfully so. When prices go up--whether it is because of corporate 
price gouging, or because of pandemic-related disruptions in the supply 
chain, it hurts hard-working American families.
    We need to get inflation under control--and we need to do it in the 
smartest way possible. Too many analysts seem to think there's only one 
tool in the toolbox: urging the Fed to drive the economy into a 
recession by increasing interest rates.
    We need to think smarter, and that starts with diagnosing some of 
what's gone wrong. The pandemic wrought havoc on supply chains for 
food, cars, appliances--all kinds of goods. And Russia's invasion of 
Ukraine disrupted oil and gas markets. Meanwhile, giant companies have 
figured out that they can pad their profit margins by using inflation 
as a cover to raise prices more than justified--making the whole 
economy worse off in the process.
    So, what can we do?
    Well first, we should do everything we can to promote competition, 
to break up monopolies, and to end the opportunities for corporate 
profiteering to drive up prices. The Administration has been acting 
quickly, and they have my full support on this.
    Next, we need to increase supply--across the board. We need to fix 
supply chains and bring more production home. We also need to invest in 
green technologies so that Americans are not held hostage to the whims 
of oil-rich dictators.
    All those are good steps, but there's another piece of the puzzle 
that we should focus on. We can bring down inflation if we increase our 
labor supply. More workers, earning a fair wage with good benefits, 
means more productivity and that means more downward pressure on 
prices.
    As we return to many of the activities we enjoyed before the 
pandemic started, Americans are once again eating out, going to the 
movies, and traveling--and businesses are looking to hire. Those 
businesses need servers and line cooks, they need retail clerks, hotel 
staff, barbers, bus drivers, you name it. Factories that are trying to 
run full shifts--or even a second shift--need workers. The 
transportation industry, including drivers, schedulers, and planners, 
needs workers. Small businesses--from insurance agencies to lawn care 
outfits--need workers. And across the board, a tight labor market will 
mean prices stay higher longer.
    And that's where childcare comes in. One of the biggest barriers 
that is holding back the economy right now is that workers who want to 
rejoin the workforce--who want to respond to a help-wanted ad or want 
to show up for a shift--can't do so if they don't have childcare. A 
Census Bureau study released last year found that one in five working 
parents left the workforce or reduced their hours solely due to 
childcare. And one in four women who became unemployed during the 
pandemic said the reason was a lack of childcare.
    Now some economists are worried that inflation could become a 
longer-term problem and actually increase in parts of the economy 
experiencing these worker shortages, especially if we don't get more 
people into the labor force. But to get people into the workforce, 
working parents need childcare, and we're still about 117,000 childcare 
workers short compared to our prepandemic levels.
    Childcare providers want to hire more staff so they can offer more 
slots to families, and get things back to normal--but they can't. Most 
childcare providers couldn't afford to pay as much as the gas station 
down the street paid before the pandemic, and it's even harder now. And 
when they can't hire enough childcare workers, they can't add more 
slots, and that means they can't serve more kids and families.
    So that means that parents can't go back to work. And that makes it 
harder for businesses like restaurants, and cleaning services, and car 
repair outfits to find enough workers to meet demand. And that 
contributes to higher prices for consumers.
    Fixing this problem will provide jobs for millions of Americans, 
especially women. It will help small businesses and unlock economic 
growth. And it will cut inflation, both short term and the long term. 
It is a win-win-win-win situation.
    That's why I'm fighting to pass a legislative package that includes 
the investments that we need to improve and expand the availability of 
childcare. The proposal that the Congressional Democrats have developed 
will provide much-needed help for childcare providers, allowing them to 
hire more workers and to offer high quality care to more families. It 
will provide direct assistance to families for childcare, making one 
families' biggest expenses more affordable.
    Universal childcare is pro-family and pro-business. This proposal 
would help cut inflation by allowing millions of Americans to return to 
work.
    So, I very much appreciate our witnesses joining us today to 
discuss America's childcare crisis, and how we can bring down costs for 
American families.
                                 ______
                                 
                PREPARED STATEMENT OF WILLIAM E. SPRIGGS
Professor of Economics, Howard University, and Chief Economist, AFL-CIO
                             April 26, 2022
    Thank you, Chair Warren, for this invitation to give testimony 
before your Committee today on the issue of improving the resiliency of 
the American economy. 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.
    The size of our labor force is the key determinant of economic 
growth. Even a world where machines and computers can do so much, in 
the final analysis, the determinate of the size of the economy is the 
number of workers behind the computers and machines and in front of 
customers to deliver services. The size of our labor force however has 
some variance. When wages rise, or there is greater certainty of 
landing a job, the labor force participation rate grows in response. 
The growth in opportunities for women, from the latter half of the 20th 
Century fueled a rapid growth in women's labor force participation. 
That dramatically increased the labor force and potential size for our 
economy. That allowed for continued stable growth with moderate 
inflation. But women's labor force participation peaked in 2000 and has 
been stumbled since then.
    The collapse in economic activity in the first quarter of 2020 in 
response to the COVID crisis unleashed a chain of events that disrupted 
normal economic activity. The global pandemic, unlike other shocks, had 
a simultaneous affect on the world economies. Necessary precautions 
that delayed the spread of the disease and successfully mitigated worse 
loss of life, significantly altered consumption. So, while the initial 
impact was a drop in all consumption, the gradual reopening of some 
activity led to different patterns of consumption than before the 
pandemic. The greatest loss of jobs was in services that required 
customer interaction and so the brunt of job losses fell on women. Some 
labeled this a ``shecession,'' because women took the deepest hit, 
compared to prior downturns that were cyclically sensitive and 
dominated by the loss of jobs in sectors dominated by men like 
construction and manufacturing. We are in the midst of continuing to 
recover in many of those sectors.
    It took the quick decisive steps of the Families First Act and the 
CARES Act to stabilize the economy. These initial steps addressed the 
obvious shortcomings of an inadequate unemployment insurance system, 
the lingering effects of the Great Recession that left household 
balance sheets woefully weak and revealing the lack of resiliency among 
households to income shocks, the lack of paid sick leave, the 
difficulties of main street businesses in accessing liquidity even in a 
time of low interest rates, and the fragility of State and local 
government infrastructure. These necessary pieces did not anticipate 
the subsequent waves of COVID and how long the support proved to be 
needed. So, fortunately, the American Rescue Plan extended support to 
ensure the effects of COVID would not scar the economy. The American 
economy ended 2021 with its fastest growth in decades and the strongest 
recovery of the labor market on record.
    But we began this year with the world still struggling with COVID 
and all the disruptions that have now revealed the scars and fragility 
of a global system. The continued disruptions to supply chains plague 
all Nations. All advanced economies face higher rates of price changes 
than in the pre-COVID era. This is a natural functioning of markets; 
price pressures appear every time there is a shock to supply and is not 
related to differences in fiscal responses.
    There are specific reasons the U.S. measure of prices has run 
higher than for other countries. The U.S. product markets have been 
criticized for having higher levels of concentration than in Europe 
because of weaker antitrust enforcement. (Covarrubias, Gutierrez, and 
Philippon 2019) (Gutierrez and Philippon 2018) (Baker 2003) (Alemani, 
et al. 2013) (Karabell 2020) Higher levels of concentration make it 
easier for firms to raise prices, but also make an industry more 
vulnerable to supply shocks should one firm's workforce be hit harder 
by COVID.
    Most other Nations' response to COVID was the aggressive use of job 
retention schemes. These programs directly subsidized firms keeping 
their workforces during COVID and lowered the frictions being 
experienced in the United States of trying to recruit workers that were 
sent to their best devices. Among OECD Nations, the U.S. unemployment 
rate spiked significantly higher than for other countries, and while 
U.S. unemployment rates have settled near their pre-COVID level as they 
have on average for the OECD, total labor hours in the U.S. still have 
not recovered as they have on average in the OECD--this reflects lower 
labor force participation rates in the U.S. The U.S. has low female 
labor force participation because it lacks the infrastructure of 
policies to support the care economy present in most OECD Nations. 
Protecting individuals, through beefing up the coverage and generosity 
of unemployment benefits helped to facilitate shifting workers to 
sectors that faced rising demand during the initial stages of the COVID 
crisis but has now slowed the recovery of those sections that had 
initially faced the greatest spikes in unemployment. And the lack of 
protection from the virus, and weak paid sick leave coverage in the 
United States, meant several industries faced greater losses of workers 
than other OECD countries. (Chen, et al. 2021) (Bureau of Labor 
Statistics 2021) Fewer workers died in other OECD countries.
    Policies do matter in getting labor force participation to rebound. 
During COVID, problems in safely educating our children caused 
disruptions to public schools operating. The effect of schooling and 
childcare significantly impacted hours worked by parents, exacerbating 
the gender gap in hours worked. (Garcia and Cowan 2022) (Collins, et 
al. 2021) Many women have recovered from that initial shock. But, the 
more pronounced impacts have been on women holding lower wage jobs, 
both because their jobs involve working in-person, and the struggle to 
balance the need for childcare and that many of their employers are 
still recovering. Because of their disproportionate representation in 
nursing care and other frontline positions, Black women have suffered 
more noticeably because of disparate exposure to COVID-19. (Goldin 
2022)
    Comparing the United States to other countries, clearly policy 
matters. The fragility of our economy, and women's labor force 
participation, was a problem before the COVID crisis. Prior to the 
COVID crisis, women were near half the U.S. payroll. So, their 
importance to the economy is crucial. We must have smart policies to 
have a strong economy that can compete globally. The U.S. is only 
slightly above the OECD average for prime age (25 to 54 years old) 
women's labor force participation, and ranks sixth among the G7 
Nations, only ahead of Italy and very noticeably behind our neighbor 
Canada. Figure 1 shows this for 2015 in the pre-COVID era.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    There are glaring gaps in the labor force infrastructure of the 
United States when it comes to women's participation. These include 
being the only Nation without paid maternity leave among OECD 
countries, a lack of job protections like paid sick leave, and no 
Federal policies to assure access to early childcare. Our overreliance 
on the market is hurting women because the median wages of women are 
not keeping pace with childcare prices. Some have estimated the cost to 
the potential of U.S. economy of inadequate childcare infrastructure on 
lower women's labor force participation or reduced work hours as 
costing $67 billion a year. (Belfield 2018) A report from McKinsey 
estimates just the cost of loss income to workers alone, and thus a 
direct loss of economic capacity, from reduced labor force 
participation as half of that cost. (Dua, et al. 2021)
    Not coincidentally, 2017 OECD comparative data show that public 
investment in childcare and early education, as a percentage of GDP is 
virtually the lowest in the United States among advanced economies. The 
U.S. invests an embarrassing amount compared to the average for the 
OECD. Investments in early childhood education, in the United States 
context, have proven to show a very high rate of return, not just 
because they could increase women's labor force participation, but 
because of the improved productivity and positive outcomes for 
children. The extensive research shows reduced expenditures on crime, 
improved health outcomes, reduced poverty in adulthood that lowers 
Government transfer costs, increased earnings in later life that 
increases tax revenue. In all, a dollar invested in early childhood 
education returns almost ninefold reductions in future costs. (Lynch 
and Vaghul 2015) (Hendren and Sprung-Keyser 2019) (Rolnick and 
Grunewald 2003) (Garcia, et al. 2016) (Cannon, et al. 2017) Figure 2 
shows the U.S. as the outlier. The consensus is that the same is true 
in other countries, and a key reason other countries make these 
investments, though at much higher levels than in the United States. 
(OECD n.d.)

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    Because of very low public investment in our children, the U.S. 
relies heavily on the market to determine our childcare investment. 
Figure 3 shows the relationship between the growth in real (adjusting 
for inflation) median hourly wages of women and the Consumer Price 
Index (CPI) for childcare. Since 2000, the gap between the rising costs 
of childcare and real wages is driving a deep wedge for working women. 
The price of childcare is rising faster than the price of other goods 
and causing stress for the typical working mother to choose decreases 
in other items (clothing, rent, food, etc.) and childcare. For others, 
it means being chased out of the labor market.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    The crisis in affordability of childcare shows in data in every 
State. Child Care Aware of America, a network of childcare resource and 
referral agencies, track the price of childcare to assist families in 
locating family services. Based on a standard set by the U.S. 
Department of Health and Human Services, childcare should not exceed 10 
percent of family's budget to be affordable. According to their 
analysis, in 2020, in only six States was the average price of a year 
of childcare less than 10 percent the median household income. But, 
even for many families in those States, childcare was a burden. For 
instance, they report that in Louisiana, where center based childcare 
costs the equivalent of 9.5 percent of median household income, single 
parents pay 42 percent of their income on center-based childcare, and 
married parents with two children who are at the poverty line pay 65.3 
percent of their income. (Child Care Aware of America 2022)
    The affordability crisis has created a huge challenge in getting 
childcare centers reopened. The price gap still creates stress for 
workers, but also as centers look for workers. This gap in recovery has 
ripple effects throughout the economy because the shortage of center-
based care prevents workers in other sectors from getting work. Figure 
4 shows the slow recovery of employment in childcare centers, as 
reported by the U.S. Bureau of Labor Statistics.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    The coalition Child Care Relief surveyed availability of childcare 
providers in July 2021 and showed high percentage of centers were still 
closed. For instance, in Massachusetts, they reported that 44 percent 
of centers were still closed. In Maryland, 18 percent were still 
closed. (Children Care Relief n.d.)
    The debate now, before the Federal Reserve Open Market Committee is 
determining how big is the U.S. labor force. Their current stated view 
is that we have reached the capacity of the labor market. They may well 
concede that if we had better childcare infrastructure labor force 
participation of women would be bigger, but it is up to Congress to 
address that structural barrier, not them. The intent of their current 
policy is to slow economic growth because they believe continued growth 
at the current pace will exacerbate inflation by pushing demand for 
workers beyond the supply of labor.
    So, actions by Congress to fail to make investments in early 
childhood education goes beyond failing our children. It also goes 
directly to how we set economic policy, the rate of growth we can have 
and the size of our economy. An economy that is larger benefits us all. 
And as future growth paths are exponential, a smaller economy today 
compounds a disadvantage in the future. Which as in the current 
situation ignites a debate to slow growth, perhaps prematurely.
    But there is also the issue of addressing the depths of the issues 
in addressing the continued crisis in childcare that has been 
developing this century. The current crisis has made clear the low pay 
and low working conditions of childcare workers makes it difficult for 
the industry to compete for good workers, or any workers. This must be 
addressed to keep turnover rates low, and the industry's ability to 
recruit and retain the best workers.
    A large share of workers do not work standard 9-to-5 jobs. While 
close to 75 percent of workers start their work between 6 a.m. and 10 
a.m., the rest have hours that make finding childcare difficult. And 
helping working parents on these alternate schedules can add to the 
flexibility of workers.
    In our construction infrastructure, it is key to make jobs 
available for working women, too. Ensuring that large shares of 
positions are open to apprenticeships will help increase the supply of 
construction workers and ease labor bottlenecks now and for the future. 
But that would also mean ensuring designing childcare into construction 
infrastructure projects.
    The United States has a lot of fiscal space to make proper 
investments. The investment in our children is always the best, wisest 
and most long running investment we can make as a Nation. But it is 
also important, that America make the investment in labor force 
infrastructure, create pathways to get to a larger workforce and larger 
economy. As we age as a Nation, the sustainability of Social Security 
and Medicare depend on the worker to dependent ratio. As we age, we 
need to make investments to increase the number of workers. And to 
ensure our economic expansions can last longer we need to maximize our 
labor force. In 2000, we showed we can have a much higher share of 
workers. We should not lose that vision for lack of foresight to make 
the right investments.
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    Isabelle Wanner. 2013. ``New Indicators of Competition Law and 
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    price-of-child-care-2019/
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    Care''. Accessed April 26, 2022. https://childcarerelief.org/by-
    the-numbers-covid-19s-impact-on-child-care/#nationalimpact
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    Jose Prados. 2016. ``The Life-Cycle Benefits of an Influential 
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    Minneapolis, MN: Minneapolis Federal Reserve Bank.
                                 ______
                                 
                PREPARED STATEMENT OF MELISSA COLAGROSSO
         Owner and Director, A Place To Grow Children's Center
                             April 26, 2022
    Thank you, Senator Warren and the Senate Banking Committee for 
inviting me to share my story today.
    I am the owner and director of A Place To Grow Children's Center in 
Fayette County, WV. My husband and I opened A Place To Grow in 1995. We 
had an infant and a toddler. We both needed to work to provide for our 
children. I had worked during my college years in several childcare 
centers, and I knew the difference a high-quality early education 
program could make in our children's lives. No such programs existed in 
our rural community. So, our adventure began.
    The challenges of opening a childcare business began with the 
reality that the math does not always add up. Projections were not 
always enough to convince loan officers and potential business funders 
to invest. We secured a 2nd mortgage on our home and continued to 
pursue our goal of providing a safe, educational place for our children 
to grow.
    The reality is the provider payments or subsidies funded through 
the Child Care and Development-Block Grant (CCDBG) for low income, 
working families are not sufficient to cover the full cost of high-
quality childcare. And if the prices charged to families outside of 
subsidy are too high and out of reach in our community, our revenue 
falls short.
    Let me give you a basic example of the challenges we face:
    The subsidy rate for the care for infants is $36 per day.
    The ratio for safe infant care is 1 teacher for every 4 infants, 
and 3 is the best practice.
    That means that we receive $144 per day in subsidy payments.
    If we pay the teacher only $10/hour, which is already below a fair 
wage, we are likely facing a personnel cost of $120, with taxes 
included.
    Wait . . . do we need to pay rent? How about utilities? Insurance? 
An additional teacher for breaks or long shifts?
    Quite simply, the math does not add up.
    Our business did indeed show a significant loss 23 out of the first 
25 years in business. But our business also continued to grow to meet 
the needs of the community.

    We increased our original license capacity from 30 to 100 
        children.

    We achieved accreditation from the National Association for 
        the Education of Young Children.

    We built a strong staff with a commitment to serve 
        families.

    Yet, we struggled to make payroll and often had to borrow for 
things like building repairs or equipment. We keep going because 
working families in our community depend on our center.
    When the pandemic hit, we immediately felt panic. I was met with 
parents in tears, pleading with us to stay open. Parents needed to 
work. Our community needed them to work. Our staff made a commitment to 
take all precautions but continue to care for our children.
    Fortunately, some help came quickly from the Small Business 
Administration. We used the SBA Economic Injury Disaster loans to pay 
off our high interest debt and cover utilities and our building 
mortgage. Then, the Payroll Protection Program came. We were able to 
stay open so those essential workers could rely on us, and our staff 
could rely on their paychecks. Then businesses stepped in. We had 4 
businesses contact us to arrange to pay us directly for their 
employee's children to attend. Finally, longer term relief came in the 
form of relief funding to stabilize families and childcare programs. 
This made it possible for us to reassure families that we would not be 
closing.
    Working together made the math add up.
    The American Rescue Plan Act or ARP Act funds passed directly to 
childcare have enabled me to stay open. I've been able to maintain my 
commitment to high-quality childcare by supporting our educators, 
maintaining our facilities, and meeting the social and emotional needs 
of our children. I am currently able to fund continuing education for 
our teachers, retention bonuses for all staff, as well as paid sick 
leave--something that is smart for health reasons during an ongoing 
pandemic. I have been able to reduce caseloads and add additional 
assistant teachers to provide a higher level of care for the abundance 
of children who have suffered trauma due to the Opioid crisis, the 
COVID-19 pandemic, as well as a vast array of special educational 
needs.
    In addition, the ARP Act funds that the State has used to subsidize 
family's childcare have allowed more parents access childcare and then 
go back to work. This is how the childcare system should work.
    As our parents have learned of my travels here today, several asked 
that I share their stories. I have time for one.
    One grateful mom expressed ``Having the subsidy help is a major 
blessing. Without it I am not sure that I could send both of my kids 
full time. Childcare is expensive and necessary. We would sometimes 
have to choose between paying our childcare bill or utilities or 
groceries. Parents must work. Most need both parents working to make 
ends meet. We have wonderful jobs and we still struggle. The kids love 
their teachers, and they are constantly learning and growing from their 
relationships with their teachers and friends.''
    As you can hear, childcare keeps our economy moving.
    A Place To Grow's current enrollment consists of children being 
raised by grandparents, foster children, children with special needs, 
low-income families, working class families, as well as upper income 
professionals. This village works together to help each other when 
there is a need. Right now, they need our elected officials to 
recognize the value of childcare which gives them the ability to work. 
The business of childcare is necessary for all other businesses. The 
shortage of workers being experienced by businesses nationwide is 
connected to the shortage of childcare programs.
    In addition, this is an urgent need. We cannot wait to invest in 
childcare. The relief funding is there today, but with a looming, 
quickly approaching end. Without collaborative work, and Federal 
investment now, our village may collapse.
    Please help us make the math add up.
    Thank you for your time and consideration.
                                 ______
                                 
                   PREPARED STATEMENT OF BRIAN RIEDL
                 Senior Fellow, The Manhattan Institute
                             April 26, 2022
    Good afternoon, Chairwoman Warren, Ranking Member Kennedy, and 
Members of the Subcommittee. Thank you for inviting me to participate 
in today's hearing.
    Inflation is currently creating significant economic pain for 
American families and businesses. With the inflation rate soaring to 
8.5 percent--the highest rate in 41 years--real wages have fallen 2.7 
percent. Moody's Analytics and Penn-Wharton estimate that inflation is 
costing the average household $300 per month. A Harris poll reveals 
that 84 percent of Americans are cutting back on key purchases. And the 
problem is deepening every month.
    Inflation has been driven by numerous factors, but fiscal and 
monetary policy are the lead causes. Since the beginning of the 
pandemic, the Federal Reserve has pumped $4.8 trillion into the 
economy, more than doubling its balance sheet. Some of this was 
necessary to keep the economy afloat, but it was excessive, as the Fed 
was still buying mortgage-backed securities as recently as last month.
    The Fed's actions have worked in tandem with overly aggressive 
fiscal policy providing more than $2 trillion in new benefits--an 
average of $16,000 per household. Again, a healthy portion of this 
spending was justified by the pandemic and the economy. But policies 
such as $11,400 in relief checks for a typical family of four, a child 
credit expansion as high as $1,600 per child, a $600 per week 
enhancement of unemployment benefits, and a continued student loan 
payment pause were often excessive and poorly targeted.
    The Federal Reserve notes that consumer spending (annualized) has 
leaped by $2 trillion since the pandemic began and $1 trillion since 
last summer. No wonder supply chains are overwhelmed. Families also 
have $2.7 trillion in savings exceeding what would have been expected 
without the pandemic, yet the economy has not produced trillions more 
in goods and services for them to purchase. And as families spend those 
savings, consumer spending will surge even higher--and drive even more 
inflation.
    A major culprit is last year's $1.9 trillion American Rescue Plan. 
At the time, the Congressional Budget Office estimated that the 
baseline economy would operate $420 billion below capacity in 2021, and 
then gradually close that output gap by 2025. While some stimulus was 
justified, lawmakers shot a $1.9 trillion bazooka at a $420 billion 
output gap. And this was just weeks after the December 2020 stimulus 
law poured in $900 billion. Economists on the left and right, such as 
Lawrence Summers, warned this excessive stimulus would bring inflation. 
They were right.
    Yet other actions have also worsened inflation. The Biden 
administration has hiked tariffs on Canadian lumber, and added tariffs 
on other building materials. It renewed President Trump's tariffs on 
solar panels, extended the tariffs on Chinese imports, and imposed 
tariff quotas on steel. It imposed Buy America provisions raising the 
cost of infrastructure, and is working to expand Davis-Bacon policies 
that raise the cost of Government contracts. The White House is 
defending the Jones Act that raises shipping costs, and allowing a 
higher ethanol blend in gasoline that will raise food prices. It has 
also deferred student loan payments well past the point justified by 
the unemployment rate.
    Many of these policies can be defended as achieving other important 
policy goals. But cumulatively, they significantly worsen an inflation 
problem that is already sinking under the weight of fiscal policy, 
monetary policy, supply chain disruptions, and the war in Ukraine. The 
Peterson Institute for International Economics calculates that even a 
2-percentage point reduction in tariffs could lower inflation 1.3 
percent and save $800 per household.
    Current economic factors show that inflation will not likely recede 
by itself and may even accelerate in the near-term. There is no easy 
path to bringing down inflation, but the first rule should be to do no 
harm. That means resisting calls for more aggressive Federal spending 
as well as ensuring that businesses can operate efficiently without 
expensive tariffs and overregulation. Because if inflation persists and 
real wages continue to fall, it will soon cost jobs and create economic 
chaos that endanger all the good things you want Government to do.
    Thank you.
                                 ______
                                 
                    PREPARED STATEMENT OF WALT ROWEN
President of Susquehanna Glass Company, and Cochair, Small Business for 
                            America's Future
                             April 26, 2022
    My name is Walt Rowen, owner of Susquehanna Glass in Columbia, PA, 
and Cochair of Small Business for America's Future--a national 
coalition of small business owners and leaders working to provide small 
businesses a voice at every level of Government. We're committed to 
ensuring policymakers prioritize Main Street by advancing a just and 
equitable economic framework that works for small business owners, 
their employees, and their communities.
    Susquehanna Glass is a family owned glass decorating business that 
has been in operation for 111 years. We employ 60 people, 50 percent of 
whom are women. The cascade of problems prompted by COVID-19 affected 
most small business owners, myself included. One pressing issue in 
particular that has been underscored by the pandemic is how reliant 
small businesses are on their employees having predictable schedules--
and how dire the need is for affordable and accessible childcare. 
Women, especially, have been forced out of the labor pool due to the 
lack of access to affordable childcare. I know from firsthand 
experience that until there is access to adequate childcare for 
workers, small businesses, and the country as a whole, will struggle to 
recover from the economic challenges presented by the pandemic.
    I see the impacts of inadequate childcare options at Susquehanna 
Glass all the time. Many of our workers have to stay home with their 
children on every school snow day and school holiday because they can't 
afford daycare, or don't have childcare options. The pandemic, however, 
truly shone a light on just how dependent our employees are on care 
providers and schools to earn a living. For example, one of my key 
employees, Alexis, lost 2 weeks without pay during our peak season last 
year when her primary childcare provider, her father-in-law, was 
exposed to COVID and had to quarantine. Alexis had to stay home because 
there were not affordable or available childcare options. This happened 
multiple times with many of our key employees. This is a reality that 
plays out in Main Street small businesses across the country all the 
time. It hurts employees financially and hampers small business 
success.
    The impact of the lack of affordable childcare on Main Street is 
real. In a national survey of 1,060 small business owners by Small 
Business for America's Future, 55 percent of small business owners said 
the lack of affordable, high-quality childcare for employees has had a 
negative impact on their business. Fifty-two percent said they 
experienced employee turnover as a result of a lack of affordable 
childcare; 56 percent said they've lost business income as a result of 
childcare issues; and 45 percent said they've avoided hiring an 
employee due to scheduling complications. These numbers, combined with 
recent U.S. Bureau of Labor report showing that just 39,000 additional 
women participated in the workforce in January compared to 1 million 
men--highlight the need for a bipartisan solution to help support the 
backbone of our Nation's economy--Main Street entrepreneurs. It's no 
wonder 66 percent of small business owners said they believe the 
Federal Government has a role in supporting universal access to 
affordable, high-quality childcare.
    Indeed, my business continues to see the impact of inadequate 
childcare. At the beginning of the pandemic, we shut down from the 
middle of March until June of 2020, when we gradually began to bring 
folks back. While we were able to make due with a smaller workforce for 
a short period of time, we needed to hire to address our backlog of 
orders. But we couldn't get all of our people back for a number of 
reasons--one of the main ones being childcare. During the holidays, for 
instance, I could have used 10-15 more people to maximize production 
and income, but couldn't find all the people we needed because of 
childcare and other issues. The stress COVID put on the system clearly 
demonstrated how interconnected the success of my business is with my 
employees' access to affordable, reliable childcare.
    One step we've had to take is to increase prices on our products 
for the first time in 5 years because of supply-chain disruptions and 
reduced production capacity. Part of the reason for this is because we 
simply have had a hard time finding people to fill positions due to the 
lack of affordable childcare options.
    As the father of three and a small business owner, I understand the 
challenges that come from running a business and taking care of a 
family. And as one of four children growing up in a small community, I 
personally witnessed the importance of good childcare. When I was 
young, my mother stopped working to take care of my siblings and I 
until we were in school. She ultimately spent 10 years out of the 
workforce. This experience made her a passionate advocate for providing 
families with affordable childcare. She banded together with community 
leaders to open the Columbia Day Care Center--a nonprofit organization 
that offered subsidized childcare based on a family's income. Some 
Susquehanna Glass employees took advantage of the program, but after 
decades of providing affordable and accessible daycare, the 
organization lost its funding and had to close in 2005--a demonstration 
that we need ongoing investment to ensure our communities have well 
resourced and affordable childcare options for families.
    The bottom line is that employees, Main Street businesses, and 
communities all require affordable, accessible, and reliable childcare 
to thrive. Small business owners like me recognize this, and as 
multiple Small Business for America's Future small business surveys 
have shown, they see and support the Federal Government taking a role 
in helping to provide it. We know this would be a smart investment in 
our Nation's economic success. Small businesses create two-thirds of 
all new jobs and employ half of all workers. Advancing legislation to 
create affordable childcare would bolster America's Main Street 
businesses and their workers and enable them to lead us all to 
prosperity.
    I'd like to thank each of you for the opportunity to testify today 
on such a critical issue for hard working small business owners across 
the country.
                                 ______
                                 
                 PREPARED STATEMENT OF KATHLEEN SGAMMA
                   President, Western Energy Alliance
                             April 26, 2022
    Since day one, President Biden has pursued a climate change agenda 
meant to constrain American oil and natural gas production and 
consumption. Starting with the cancelation of the KeystoneXL pipeline 
followed a week later by the leasing ban, the President was intent on 
restricting American oil and natural gas. On Federal lands and waters 
where the Federal Government has the most control, he has pledged 
eliminating it altogether.
    But a funny thing happened. Climate change policies meant to make 
energy prices ``necessarily skyrocket'' achieved their intentions. 
Energy prices started to rise last year, and the Administration started 
to really feel the heat last summer. The first reaction was to ask 
Russia and OPEC to increase their production in June. The policies 
meant to overregulate American oil and natural gas production 
continued.
    When Russia and OPEC failed to heed that request, we in the 
American oil and natural gas industry made the case that we would be 
happy to increase production, but for policies specifically designed to 
prevent us from doing so. Still the policies continued.
    Fast forward to February of this year when Russian tanks rolled 
across the border of Ukraine and prices jumped even higher. The reality 
of Europe's and the United States' reliance on the stable sources of 
reliable, 24/7 energy that oil and natural gas provide became crystal 
clear. The fallacy of an agenda meant to constrain American energy was 
exposed. Rather than backing down on policies purposefully meant to 
hinder American oil and natural gas, the White House pivoted to blaming 
my industry for high energy prices.
    The President could help ease inflation by backing off these 
policies and even encouraging American production. However, we have 
seen few meaningful signs, other than rhetorical, that a reversal is in 
the cards. Just last week, lease sales were announced for the first 
time in the 15 months, but it was the most begrudging announcement 
possible. The Interior Department was at pains to emphasize that the 
sales are only happening because of a court order last June. Ten months 
later, the department has whittled the acreage down by 80 percent and 
increased the cost by 50 percent. Limiting access and increasing the 
royalty rate by such a substantial percentage will have the intended 
effect: when you tax something more, you get less of it. The 
Administration continues to show it is not serious about increasing 
production, reducing energy prices, and controlling inflation.
    Energy prices are fundamental to all facets of the economy. Very 
few goods and services, if any, are made and provided to consumers 
without the use of oil and natural gas. Anything manufactured requires 
oil and natural gas for materials and component feedstock, industrial 
energy, electricity, and transportation. Online ordering, processing, 
and delivery of any good or service and the entire supply chain relies 
on a vast information technology network based on the computer chip, 
itself made from petroleum. Nearly every business that claims to use 
100 percent renewable electricity, besides those in places like the 
Pacific Northwest or Western New York were there is sufficient 
hydropower, is engaged in greenwashing and at best pays renewable 
energy credits as dispensation for using reliable energy from oil, 
natural gas, coal, and nuclear to keep operations running.
    Because oil and natural gas are so fundamental to the economy, when 
prices for them are high it creates inflationary pressures throughout 
the economy. One of the most basic ways the President could curb 
inflation is to encourage American oil and natural gas production. Even 
if you ignore a year of steadily rising oil prices and blame Putin for 
today's high prices, what better way to bring them down than by 
increasing American production and displacing lost Russian imports?
    Currently, American oil production is down about 800,000 barrels of 
oil per day (bopd) to 11.5 million from the high point of 12.3 million 
in 2019. \1\ My industry is doing its part to bring down gasoline 
prices by increasing production. The Energy Information Administration 
(EIA) forecasts American producers will increase production by nearly 
12.5 million bopd by the end of 2022. We could reach that goal and even 
help replace the 670,000 bopd we previously imported from Russia if the 
Administration could reverse course, such as:
---------------------------------------------------------------------------
     \1\ ``Short-Term Energy Outlook'', EIA, Table 4a, April 2022. 2019 
data from EIA historical production statistics.

    Move forward with leasing and permitting on Federal lands. 
        There are currently 4,579 permits to drill awaiting approval. 
        While there are also 9,000 outstanding approved permits to 
        drill, there are many factors that cause companies to wait to 
        drill those wells, if at all. The biggest factor is the 
        uncertainty in the permitting process which compels the 
        acquisition of permits often years before they are needed. A 
        stable system that isn't beset by litigation and bureaucratic 
---------------------------------------------------------------------------
        delays would reduce the need to build up large inventories.

    Approve timely Rights of Way (ROW) for natural gas 
        gathering lines. A drilling permit is not the only Government 
        approval required before a well can be drilled. ROWs can take 
        years to acquire before companies can put in natural gas 
        gathering systems. With the pressure not to flare from 
        regulators and investors, most companies cannot drill before 
        gathering lines are in place. Timely approvals of ROWs would 
        enable companies to develop sooner.

    Call off efforts to deny capital and lending to the oil and 
        natural gas industry. Activist investors, encouraged by an 
        Administration intent on expanding its financial regulatory 
        powers, have worked to debank and decapitalize the industry. 
        Many companies, particularly the small independents who drill 
        the majority of wells, are having difficulty acquiring the 
        credit and capital necessary to develop. By rescinding the 
        Security and Exchange Commission's overreaching climate change 
        disclosure rule and calling off other bureaucratic efforts to 
        deny financing to the industry the President could send a 
        strong signal to the market that investments in oil and natural 
        gas are safe and new production would move forward.

    Approve pipelines such as the KeystoneXL and natural gas 
        pipelines that supply Liquefied Natural Gas (LNG) terminals. 
        The Administration has worked with anti-oil-and-gas activists 
        to slow pipeline infrastructure. Without pipelines to move the 
        oil and natural gas produced, wells cannot be developed. Ensure 
        the rescinded Federal Energy Regulatory Commission (FERC) 
        natural gas pipeline certification policy is not resurrected 
        through rulemaking.

    Back off the regulatory overreach agenda which is intended 
        to increase costs and reduce production. For example, the 
        Department of the Interior is planning regulation to increase 
        leasing costs and royalty rates and EPA is undergoing methane 
        regulation that would shut down potentially hundreds of 
        thousands of the low-producing wells that provide 8 percent of 
        American production. \2\ The uncertainty of all the new red 
        tape puts a damper on new investment and development today, 
        especially on Federal lands where the burden is highest.
---------------------------------------------------------------------------
     \2\ ``Percentage Depletion: Economic Impact of Its Elimination'', 
Energy and Industrial Advisory Partners on behalf of the National 
Stripper Well Association, 2021.

    Desist with the Social Cost of Carbon (SCC). There is no 
        legal mandate for it and It is specifically meant to increase 
        the cost of reliable energy. A SCC can be used to make 
        regulation that is otherwise upside down in a cost/benefit 
        analysis and make it seem like it is beneficial, even if it 
        increases the cost of the energy that meets 80 percent of 
---------------------------------------------------------------------------
        Americans' energy needs.

    Congress should do its part too by not advancing 
        legislation to tax methane emissions. The methane fees that 
        have been proposed would amount to a tax on natural gas, as 
        measuring the small leakages targeted by the fee is technically 
        infeasible and hence, the tax would necessarily be levied on 
        production volumes or basin leak-rate averages. Further, the 
        fee would be unprecedented, as emissions are already controlled 
        by EPA regulation designed to identify leaks, fix them, and 
        remove the emissions from the atmosphere, not attempt to 
        measure and create a revenue stream out of them.

    Western Energy Alliance encourages the Administration and Congress 
to work together with my industry to reverse many of these policies. 
Together we can increase American production and help control 
inflation.

       RESPONSES TO WRITTEN QUESTIONS OF SENATOR KENNEDY
                        FROM BRIAN RIEDL

Q.1. The Biden's COVID relief bill, the American Rescue Plan, 
included $2 trillion in Federal stimulus. Economists, left and 
right, agreed that this stimulus would accelerate inflation. As 
you know, the Federal Reserve is doing all that in can to cool 
down this economy by raising interest rates.
    What should Congress and the Administration do to do their 
part to combat inflation?

A.1. The first rule is do no harm. That means avoiding big 
spending bills, such as Build Back Better, that would worsen 
inflation. It is also another reason to stop the student loan 
payment moratorium that is inflationary and no longer justified 
by the unemployment rate. From there, Congress should address 
the Biden (and Trump) administration's price-hiking tariffs, as 
well as the Buy America, Davis-Bacon, and Project Labor 
Agreement regulations that are raising prices in the economy 
and hiking costs for the Federal Government.

Q.2. Would you consider the BBB emergency spending? Will the 
BBB help tamp down the rate of inflation Americans are 
witnessing? Or ease supply chain bottlenecks? Expand 
Government?

A.2. There is nothing in Build Back Better that meets the legal 
standard of emergency spending (which is that it be 
``necessary, sudden, urgent, unforeseen, and temporary''). 
Rather, its proposals are drawn from the longstanding liberal 
wish list. And BBB would of course worsen inflation, as 
evidenced by the $791 billion net cost in the first 5 years as 
scored by CBO. Build Back Better would theoretically be 
modestly disinflationary after the fifth year when the 
legislation runs surpluses, but that unrealistically assumes 
that Congress would just let the benefit provisions expire 
within a few years. In fact, the economists at Penn-Wharton 
calculate that Build Back Better would--if extended--lead to a 
significant (and permanent) increase in the price level. The 
bill expands Government by trillions of dollars when Washington 
already faces $112 trillion in baseline deficits over the next 
three decades, and does nothing to ease supply chain 
bottlenecks.

Q.3. The Democrats have proposed a one-size-fits-all approach 
to childcare. They have overregulated childcare small 
businesses, forcing them to jump through hoops or close their 
doors to meet their standards.
    Do these proposals increase the supply of childcare 
services to working families?

A.3. Advocates claim that this proposal will increase the 
supply of childcare services for families through Government 
subsidies. However, the Democratic plan limits which providers 
will be eligible for subsidies (such as excluding most 
churches), which may drive nonsubsidized providers out of 
business. Furthermore, the expensive compliance and ``living 
wage'' regulations would raise costs for providers and make it 
more difficult to stay afloat.

Q.4. Do these proposals make childcare more affordable?

A.4. They absolutely do not make childcare more affordable. The 
large family subsidies will increase demand, pushing up prices. 
On the supply side, the proposal would limit the type of 
childcare providers who are eligible for subsidies (such as 
preventing church-based providers) which will push up prices. 
The statutes, rules, and certifications will require extra 
compliance staff, and those costs will be passed on to families 
through higher prices. Most importantly, the ``living wage'' 
regulations on staff pay would raise childcare costs by 80 
percent. Overall, economist Casey Mulligan estimates that the 
Democrats' childcare proposal would raise prices by 120 
percent, or $27,000 for a family with an infant and 4-year-old. 
Similarly, the left-wing People's Policy Project estimates that 
prices for the middle class would rise by $13,000 per child. 
And using taxpayer subsidies to cover these rising costs does 
not reduce the inflationary effects, but merely transfers the 
costs to other taxpayers.
    Furthermore, during the hearing the majority repeatedly 
asserted that a key way to reduce inflation would be to 
increase the labor force participation rate (through childcare 
subsidies to help more parents work). Yet standard economics 
teaches no such relationship between the labor force 
participation rate and inflation. Yes, higher workforce 
participation pushes out the economy's supply curve, lowering 
the price level. Yet the income these new workers earn and 
spend pushes out the demand curve and raises prices. These 
simultaneous supply and demand expansions together raise 
output, but the price effects cancel each other out, leaving 
inflation roughly unchanged. For proof, look no further than 
the 1965-1980 period that produced a rapid increase in female 
labor force participation without any disinflationary effects 
(in fact, inflation soared over that period for multiple 
reasons). Increasing workforce participation is economically 
positive and raises output, but almost any economist will 
confirm that it does not necessarily reduce inflation.
                                ------                                


       RESPONSES TO WRITTEN QUESTIONS OF SENATOR KENNEDY
                      FROM KATHLEEN SGAMMA

Q.1. Rising energy prices hurt rural families the most as they 
are the ones who drive farther distances. This Administration 
has been at war with domestic energy production by canceling 
the Keystone XL Pipeline, banning new oil and gas leases on 
Federal lands and waters, and appointing bank regulators who 
try to shame and limit financing to oil and gas companies, all 
while begging OPEC to increase its oil production to lower our 
gas prices.
    Can you elaborate on how these actions are making life, 
especially for rural families, less affordable?

A.1. I agree that high gasoline prices are a real hardship to 
most Americans, but may particularly harm those in rural 
communities who generally travel longer distances. I would add 
that the President's ban on leasing is hurting rural Americans 
in particular, since the vast majority of Federal onshore 
development occurs in rural areas. There are oil and natural 
gas communities like Duchesne and Uintah counties in Utah and 
Rio Blanco County in Colorado where over 80 percent of the land 
is Federal. Federal policies like the leasing ban wreck havoc 
on the economies of these rural counties. The Wyoming Energy 
Authority commissioned a study from a University of Wyoming 
professor who finds that the ban on leasing killed 32,719 jobs 
and just under $5 billion in GDP in eight Western States last 
year.

Q.2. Without a 5-year lease plan, Louisiana is set to lose over 
$1 billion in State revenue, cost 14,000 Louisiana jobs, and 
result in a 20 percent reduction in energy produced, over that 
time period. That doesn't sound like a plan to decrease 
inflation for Louisiaians.
    Simply, can you explain the benefits these lease sales will 
have for all Americans not just the people in my home State?

A.2. According to a study from API and NOIA, continued offshore 
lease sales would support 372,000 jobs, $31.4 billion in GDP, 
and $7.4 billion in Government revenues annually. By producing 
2.62 million barrels of oil a day, that offshore production 
helps bring down prices at the pump for consumers. However, 
since this Administration has not even proposed a new 5-year 
leasing plan, offshore production will decline by an annual 
average of 500,000 barrels per day, decreasing employment by 
115,942 jobs and reducing GDP by $10 billion. Of course, this 
decrease in supply will put upward pressure on energy prices, 
which will drive inflation in the economy overall.

Q.3. As you stated in your opening statement, the Biden 
administration has begged some of America's biggest enemies to 
increase their oil production (OPEC, Iran, Russia, Venezuela). 
Many of whom have significantly less environmental standards 
for energy production. America's oil and gas industry produces 
significantly cleaner energy and has the ability to fill this 
production gap. Yet the Biden administration continues to add 
additional layers of regulation on the American energy 
industry.
    Can you explain how these regulations continue to drive 
energy prices higher and production down?

A.3. The Biden administration has pursued several policies that 
are making it more difficult to develop oil and natural gas in 
this country. One example is overturning the modest reform to 
the National Environmental Policy Act (NEPA) from the Trump 
administration that would have helped to reduce the time to 
complete environmental analysis under NEPA. Long NEPA 
timeframes have for decades made building roads, bridges, 
pipelines, and other infrastructure considerably more 
expensive. NEPA is often used to delay oil and natural gas 
projects for years, making it more difficult to bring new 
production online. NEPA litigation continues to delay projects 
on Federal lands. NEPA regulations that further delay 
infrastructure projects put upward pressure on inflation.
    Another example is the SEC's proposed climate change 
disclosure rule. Although not yet finalized, it creates 
uncertainty among financial institutions as their investments 
in oil and natural gas could be eroded by SEC, which seeks to 
use its regulatory powers to drive down production. Proposed 
EPA methane regulations could result in the premature 
abandonment of many of the 760,000 marginal wells that together 
provide about 8 percent of American oil and natural gas 
production.

Q.4. Increased energy prices are being felt in every corner of 
America and every step of our supply chain. Farmers are paying 
more money to fuel their tractors to harvest the fields, truck 
drivers are paying more money to deliver these good, all the 
way down to fueling your car to go buy groceries. These 
increased gas prices are being passed down to the consumer at 
every turn. The oil and gas industry plays a fundamental role 
in how our economy functions. When those prices increase, our 
economy suffers the consequences.
    How will addressing these record high energy prices help 
drive down inflation and supply chain issues?

A.4. Energy prices are fundamental to all facets of the 
economy. Very few goods and services, if any, are made and 
provided to consumers without the use of oil and natural gas. 
Anything manufactured requires oil and natural gas for 
materials and component feedstock, industrial energy, 
electricity, and transportation. Online ordering, processing, 
and delivery of any good or service and the entire supply chain 
relies on a vast information technology network based on the 
computer chip, itself made from petroleum. Increasing oil and 
natural gas production in the United States would bring down 
energy prices and hence, the energy input costs for just about 
every good and service.