[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
FIELD HEARING ON THE STATE OF THE
AMERICAN ECONOMY: APPALACHIA
=======================================================================
HEARING
before the
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 6, 2023
__________
Serial No. 118-1
__________
Printed for the use of the Committee on Ways and Means
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
______
U.S. GOVERNMENT PUBLISHING OFFICE
53-014 WASHINGTON : 2024
COMMITTEE ON WAYS AND MEANS
JASON SMITH, Missouri, Chairman
VERN BUCHANAN, Florida RICHARD E. NEAL, Massachusetts
ADRIAN SMITH, Nebraska LLOYD DOGGETT, Texas
MIKE KELLY, Pennsylvania MIKE THOMPSON, California
DAVID SCHWEIKERT, Arizona JOHN B. LARSON, Connecticut
DARIN LaHOOD, Illinois EARL BLUMENAUER, Oregon
BRAD WENSTRUP, Ohio BILL PASCRELL, Jr., New Jersey
JODEY ARRINGTON, Texas DANNY DAVIS, Illinois
DREW FERGUSON, Georgia LINDA SANCHEZ, California
RON ESTES, Kansas BRIAN HIGGINS, New York
LLOYD SMUCKER, Pennsylvania TERRI SEWELL, Alabama
KEVIN HERN, Oklahoma SUZAN DelBENE, Washington
CAROL MILLER, West Virginia JUDY CHU, California
GREG MURPHY, North Carolina GWEN MOORE, Wisconsin
DAVID KUSTOFF, Tennessee DAN KILDEE, Michigan
BRIAN FITZPATRICK, Pennsylvania DON BEYER, Virginia
GREG STEUBE, Florida DWIGHT EVANS, Pennsylvania
CLAUDIA TENNEY, New York BRAD SCHNEIDER, Illinois
MICHELLE FISCHBACH, Minnesota JIMMY PANETTA, California
BLAKE MOORE, Utah
MICHELLE STEEL, California
BETH VAN DUYNE, Texas
RANDY FEENSTRA, Iowa
NICOLE MALLIOTAKIS, New York
MIKE CAREY, Ohio
Mark Roman, Staff Director
Brandon Casey, Minority Chief Counsel
----------
C O N T E N T S
----------
Page
OPENING STATEMENTS
Hon. Jason Smith, Missouri, Chairman............................. 1
Hon. Don Beyer, Virginia, Ranking Member......................... 12
Advisory of February 6, 2023 announcing the hearing.............. V
WITNESSES
Tom Plaugher, Vice President of Operations, Allegheny Wood
Products (Truth in Testimony).................................. 17
Ashley Bachman, Owner/Operator, Cheetah B's Restaurant (Truth in
Testimony)..................................................... 22
Wylie McDade, Co-Owner, Devil's Due Distiller (Truth in
Testimony)..................................................... 28
Jamie Ward, Itmann Prep Plant Manager, CONSOL Energy Inc. (Truth
in Testimony).................................................. 36
LOCAL SUBMISSIONS
Local Submissions................................................ 4
PUBLIC SUBMISSIONS
Public Submissions............................................... 89
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
THE STATE OF THE AMERICAN ECONOMY: APPALACHIA
----------
MONDAY, FEBRUARY 6, 2023
House of Representatives,
Committee on Ways and Means,
Washington, D.C.
The committee met, pursuant to call, at 11:00 a.m., at
Allegheny Wood Products, Inc., 1454 Johnson Run Road,
Petersburg, West Virginia, Hon. Jason Smith [chairman of the
committee] presiding.
Chairman SMITH. The committee will come to order.
Without objection, the gentleman from West Virginia, Mr.
Mooney, is authorized to participate in today's hearing and ask
questions of the witnesses.
So passed.
Welcome to the first hearing of the Ways and Means
Committee in the new Republican majority. Thank you to
Allegheny Wood Products for hosting us. As you all may have
noticed, the first full hearing of the Ways and Means Committee
is not being held in the marbled Halls of Congress. Instead, we
are in Petersburg, West Virginia, for the first of many such
field hearings.
The Ways and Means Committee has a connection to the
American public that dates back to the founding of our country.
Every family, business, farmer, senior citizen and, frankly,
foreign nation, is impacted by our work. More importantly, our
values are reflected in that work.
But, over the last few years, this committee's work--and
that of Congress--has drifted from the needs of these good
people. We must course correct. We must prioritize the voices
in rooms like this one and not those of the Washington
political class.
We will hear today about the state of the American economy,
and it is in danger: historic inflation, high energy bills,
declining real wages, labor shortages, spikes in interest
rates, the supply chain crisis, China's unfair trade practices
and so much more. These are some of the challenges confronting
working families that Republicans will work to solve.
If we want to put our Nation on sounder footing, we need to
prioritize our most valuable resource: the American worker. And
the first step is listening to Americans on the front lines of
our economy, hearing their stories and their ideas for
improving life for their families, their neighbors, and our
country.
The people of West Virginia are resilient, but life is
undeniably harder than it was just 2 years ago. Communities
like Petersburg have seen their voices drowned out by special
interests in Washington calling for more spending and more
regulation that has fueled the fire of inflation. For many
Americans, it feels like Washington has forgotten all about
them.
In West Virginia, the cost of living has increased 15.1
percent since President Biden took the oath of office, costing
families a total of $7,000 and counting. For parents, it means
choosing between new shoes for school or filling up your tank
to get to work. For seniors, it means figuring out each month
whether to pay for groceries or the heating bill. Gas prices
have risen 42 percent in this State since Biden became
President. Up and down the supply chain, farmers, businesses,
and workers are being crushed.
In West Virginia, there are two job openings for every
unemployed person. Across this country, too many Americans have
been incentivized by misguided Washington policies to sit on
the sidelines of our economy and miss out on the dignity and
the paycheck that came from a steady job. For small towns, it
can mean treasured local establishments shutting their doors
from lack of workers.
Today, we will hear from Tom Plaugher, a 25-year employee
of Allegheny Wood Products, our host today; Ashley Bachman, a
mom of three and local restaurant owner; Wylie McDade, a
veteran and co-owner of a local distillery; and Jamie Ward,
West Virginia native and a 30-year veteran of the coal
industry.
The stories of our witnesses, Americans trying to make ends
meet and provide for their families, tell the real state of the
union. When President Biden gives that speech tomorrow, he will
claim the Nation is finally turning a corner on inflation, the
same inflation he spent a full year denying and which his chief
of staff called a high-class problem.
The truth is, is that inflation has risen 13.9 percent
across the country since Joe Biden took the oath of office.
Skyrocketing costs are even worse in rural communities, where
inflation is 130 percent higher than urban areas, and real wage
growth is 25 percent lower. And, after increasing government
spending by $10 trillion with a T, he will ask the taxpayers,
through this committee, to approve a clean increase of his
ability to borrow more.
President Biden will take credit for falling gas prices.
Few things could be more insulting to the coal miners of West
Virginia and energy producers across the country than to hear
the President take credit for their hard work. In fact, this
administration is shutting down fossil fuel production while
throwing billions at green energy projects run by the
Democratic donor class.
Who knows if President Biden will bother to mention the
supply chains. Small businesses waiting for parts and equipment
on back order know that our supply chain issues haven't been
solved. The struggle means lost revenue for businesses, smaller
paychecks for workers, and higher prices for families.
Instead of negotiating trade agreements to bring supply
chains home and sell more American goods abroad, the Biden
administration has been out to lunch. His speech will likely
not mention the worker shortage, even though his party's war on
work helped create the problem. The result has been ``help
wanted'' signs everywhere and the lowest labor force
participation rate since Jimmy Carter.
We need to connect more Americans to work. That is how you
help lift families out of poverty. Where I come from in
Missouri, people work hard and play by the rules. They buy
Always Save mac and cheese and they shop at Walmart to stay in
their budgets. They get excited if a restaurant lets kids eat
for free because it means they can afford to spend a family
night out.
They deserve the same opportunities as the people who walk
the Halls of Congress. That is why we are here in Petersburg to
partner with the American people to find the solutions. It is
their voice that matters most in writing the next chapter of
American history, not K Street lobbyists.
To that end, for those from the community in attendance
here that are not testifying and the employees of Allegheny, we
want to hear from you too. We will be providing a notebook for
you to share your thoughts with this committee and which we
will insert into the official record of the hearing.
So throughout the hearing those notebooks will be passed
out, and I want more than just the four witnesses here to tell
us about the issues you are concerned with in this country and
your ideas for solutions, so that we can enter those into the
official record and bring them back to Washington to help
deliver results for each and every one of you.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman SMITH. I want to thank our witnesses for taking
time away from their families and work to be with us today and
share their stories.
I am pleased to recognize the gentleman from Virginia, Mr.
Beyer, who will serve as acting ranking member today, for his
opening statement.
Mr. Beyer.
Mr. BEYER. Chairman Smith, thank you very much. And thank
you for scheduling this hearing. Thank you for bringing us to
West Virginia. I am so glad you chose an Appalachian and West
Virginia specifically to host this first Ways and Means
Committee hearing of this Congress.
This may be the only time I ever get to be the acting
ranking member on Ways and Means, so thank you. And I may be
one of the very few Democrats around, but I want you to know
how much I care about your children, your health, your family
finances and especially your future.
Communities throughout this region and my own State of
Virginia have been the first to experience the direct effects
of massive economic forces that have come to dominate policy
discussions in Washington and in capitals around the world. The
consequences of the energy transition and globalization have
been felt first and often hardest in communities like this one.
So, I am so grateful to have the opportunity to hear how local
businesses have adjusted to these and the other trends
affecting the U.S. economy.
This is a particularly great time and place to host a
hearing since businesses, workers, and families in West
Virginia are beginning to take advantage of the numerous
programs recently passed by Congress and signed by President
Biden.
Despite the expectations of many in Congress, last Congress
was historically productive, at least from my perspective, and
delivered a series of massive investments for Appalachia and
West Virginia, in infrastructure, clean manufacturing, energy
security, as well as R&D, that will make the region well
positioned to compete in the 21st century.
Companies in Appalachia are already capitalizing on the
variety of tax credits and direct investments we made in those
new bills. Multiple new large battery manufacturing plants have
been announced in West Virginia in the last year, along with an
electric school bus factory and a host of others throughout the
region, bringing in thousands of high-quality manufacturing
jobs.
Furthermore, with Federal funding provided by the
Infrastructure and Jobs Act and the tax credits in the
Inflation Reduction Act, West Virginia is leading the way in
diversifying and growing its energy portfolio. You are taking
advantage of your high school workforce and existing energy
infrastructure to establish a clean hydrogen hub that will
supply the energy needs for the region as we move towards a
wider variety of cleaner fuels.
And individual taxpayers stand to benefit directly as well.
The Inflation Reduction Act included a series of tax credits
and rebates, which will provide much-needed relief to families
dealing with inflation by dramatically lowering energy costs.
Hundreds of thousands of low- and middle-income households
in the State will soon be able to replace older, less efficient
appliances with electric heat pumps, clothes dryers, water
heaters at steep discounts that will save them hundreds of
dollars per year on their utility bills.
And other provisions in the IRA will make it significantly
cheaper for taxpayers to make repairs and improvements to their
homes that increase energy efficiency and reduce the cost for
installing solar panels and battery storage systems.
There is one final item in the IRA I would like to mention.
I was extremely pleased to see a permanent extension of the
black lung excise tax included in the bill, which support the
Black Lung Disability Fund. This trust fund provides healthcare
and a small stipend for miners disabled with black lung if
their employers have gone bankrupt and no single company can be
identified as responsible for a miner's disease. I know this
was a tremendous relief to miners and their advocates, who are
now able to turn their full focus to other important issues
facing the mining community.
There is a great deal of work that still needs to be done.
Abandoned coal mines remain a serious problem for local
communities in West Virginia and southwest Virginia, as they
create polluted watersheds, hazardous erosion and land
subsidence, underground mine fires and piles of coal waste.
One measure that can help is the bipartisan RECLAIM Act,
which Hal Rogers and I have worked on for a number of years,
which would provide $1 billion in funding for Appalachian
communities to restore polluted land and water resources, seal
and fill abandoned deep mine entries and voids, and prevent
erosion and sedimentation.
This measure was advanced in previous years, and I hope to
work with my friends and colleagues across the aisle to see it
through this Congress.
Again, Mr. Chairman, thank you so much for welcoming me
here. It is wonderful to be back in West Virginia, and I look
forward to hearing from the witnesses.
Chairman SMITH. Thank you, Mr. Beyer. We greatly appreciate
you being here.
I will now recognize our two colleagues of West Virginia,
welcoming us to their beautiful State, Mrs. Miller and Mr.
Mooney, for some brief remarks.
Mrs. Miller, you are free to go first.
Mrs. MILLER. Thank you so much, Chairman Smith.
And I would also like to thank our host, Allegheny Wood
Products. And I want to welcome all of my colleagues to my home
State of West Virginia. I truly believe there is no better
place to live, work, and raise a family. As Dorothy would say,
there is no place like home.
I am really excited for the opportunity today to be able to
highlight some of the stories of hardworking West Virginians
and the unnecessary struggles that they face because of an
overreaching Federal Government.
I would like to especially thank our guest speakers, Mr.
Plaugher, Ms. Bachman, Mr. McDade, and Mr. Ward, for taking
time out today to join us. Your voices are essential for the
Representatives who are here today to help fight for the
policies that will empower our constituents.
West Virginia faces so many challenges, and this is due to
the constant attacks on our energy industry from unelected
bureaucrats and uninformed lawmakers, which have caused untold
damage to all of our communities in southern West Virginia in
particular.
The effects of bad policies have been devastating.
Recently, high gas prices and soaring inflation have left the
effect on our families as they are struggling to make their
ends meet. An overzealous IRS has targeted working-class
Americans. President Biden immediately broke his promise to not
tax anyone making less than $400,000, and this administration
has surrendered to foreign countries on international tax
negotiations.
The President has also failed to devise any coherent trade
policy, leaving our exports uncompetitive. It is almost as if
President Biden is more interested in shipping our jobs
overseas than our products.
According to the Economic Innovation Group, 48 million
Americans reside in distressed communities, where nearly a
quarter of the population are below the poverty line and more
than a third of them are out of work.
While the national economy has shown signs of recovery, it
is slow to reach our communities, the ones like mine that have
been hit the hardest by the Great Recession. Over a decade
later, they are still far behind the rest of the country and
are now reeling from the new economic crisis in front of us. We
cannot let this happen again.
Today's hearing provides the perfect opportunity to lay out
our case for brighter days ahead under Republican leadership.
The 2017 Tax Cuts and Jobs Act was essential for the booming
economy that we had under President Trump. Unemployment reached
50-year lows, 50-year lows. Ordinary workers had the strongest
wage growth of any group, and the businesses stopped leaving
the United States for low-tax countries and, thus, keeping our
jobs right here in the United States.
The Tax Cuts and Jobs Act also included important
provisions, like creating Opportunity Zones, which have
promoted businesses to settle right here in West Virginia.
According to a recently released report, close to half of all
Opportunity Zone tracts have received investment between 2017
and 2020, and even more since then. In fact, West Virginia saw
4,000 last year compared to 2019. Modernizing and improving the
successful Opportunity Zone policy will be essential to
continue driving investments to the communities that need it
the most.
I want to thank you again for the opportunity to highlight
my beautiful State, Mr. Chairman, and I hope you return soon.
I yield back my time.
Chairman SMITH. Thank you, Mrs. Miller. There is definitely
no place like home.
I would like to recognize Mooney.
Mr. MOONEY. Thank you. Thank you, Chairman Smith, and all
my colleagues. As I look around, you may not realize, we got so
many States represented here: California, I mean, the South.
Our schedule in Congress is generally we work/vote 4 days out
of 5, 3 weeks out of 4. And today is the first day we would
vote on a Monday at 6:30 p.m. We have votes tonight. So what
everybody here has done is come in a day early to hop the bus
at 7 a.m. to come from D.C. to here to have this hearing with
us, and then they are going to take the bus right back to D.C.
and vote tonight.
So I really appreciate the effort this committee made. It
is quite unique. I don't know that I have come to a field
hearing before, so it is really an honor to be with you.
I live in Jefferson County with my wife and three kids,
Charles Town. For my colleagues, it is a little less than 2
hours north of here. And I can actually get to D.C., it is 70
miles from my home in Charles Town to Congress.
But welcome to the Ways and Means Committee, the powerful
Ways and Means Committee here in Grant County, West Virginia. I
thank you for the opportunity to join today's hearing and allow
me to contribute to this important conversation.
I am grateful that the hearing is in my district, and I
hope today's discussion focuses on issues in rural America that
Washington often overlooks. West Virginia families are being
forced to make tough economic decisions.
According to the Congressional Budget Office, which is the
standard we all use to look at the numbers in D.C. and the
spending, inflation, the price of consumer goods has risen,
inflation, 13.9 percent in just the last 2 years since
President Biden took office. The price of gas, groceries, and
utilities remain high, and the value of hardworking West
Virginian paychecks are decreasing due to inflation. The cost
of living is skyrocketing, turning on the lights, heating your
home, buying groceries for the week are now difficult choices
that my constituents have to make.
So helping small businesses get off the ground and expand
is another challenge I hear when I travel the 27 beautiful
counties in the congressional district I represent, the
northern half of the State. You have your entire State
delegation here, Carol Miller and I, the two Congressman from
West Virginia.
I listen to the feedback. It is so important to hear your
feedback when we go to Washington, so that we know exactly what
to focus on. I actually went and toured Grant County Hospital
this morning before I came here. And transportation is an issue
there because, unlike big cities, to get to and from a hospital
or to another hospital, it is often 2 hours whereas in a big
city it might be 2 miles. Those are different challenges that
we have in rural America.
I normally serve on the Financial Services Committee, and
we just passed my bill last week, a bipartisan bill, called
Expanding Access to Capital for Rural Job Creators Act. And
that simply would survey the problems and challenges--the
unique challenges, frankly--that small businesses have in rural
areas when they are attempting to get capital to expand their
business. I am glad the House passed it unanimously, and it
will make it easier to navigate the needs and the bureaucracies
that small businesses have to deal with.
You see, here in West Virginia, we don't have any big
cities. For 8 years, I represented Kanawha County, Charleston,
and I now represent Morgantown. We don't even have a city with
more than 50,000 people in West Virginia. Okay. This is a rural
State.
We have challenges. Internet access is a big challenge
everywhere I go, with the exception of Hardy County, where
Hardy does a great job with internet. But, you know, internet
access is a challenge. Transportation. The weather is often a
challenge.
What we do have is hardworking taxpayers here in West
Virginia, and we have great natural resources: Coal. And this
beautiful wood you see around here, we have plenty of that. You
can cut it down, plant it, cut it down again, plant it, cut it
down again. We have great forests.
We need, for our State to be successful, to harness our
natural resources and not allow the Federal Government to get
in the way of that, as they often do. West Virginia's small
business owners create jobs. Okay. That is what businesses do.
These are be job-creating businesses. You have hundreds of
employees here that create good-paying jobs for West
Virginians. Rural job creators face these difficulties
obtaining loans, you know, workforce issues, inflation and
regulatory challenges.
There is much more that can be done, and I think that this
committee will come away with valuable information from our
witnesses here today. We can take that back to Washington,
D.C., work together to chart the best path forward for a more
prosperous America.
Thank you and I yield back, Mr. Chairman.
Chairman SMITH. Thank you, Mr. Mooney. It is a pleasure to
be in your congressional district, and thank you for allowing
us to come visit.
I will now introduce our witnesses. Tom Plaugher is vice
president of operations here at Allegheny Wood Products, our
gracious host today. Mr. Plaugher is a native West Virginian
and has 25 years of service with AWP. He currently oversees all
operations for AWP's sawmills, dry kilns, IT, transportation,
and exports.
Thank you for sharing your time and this great facility
with us today.
Ashley Bachman is the owner of Cheetah B's Restaurant, a
highly rated steakhouse right here in Petersburg, currently
employing a staff of 35, a mother of three. Ms. Bachman is a
West Virginia native and a veteran of the hospitality and
special events industries. Her passion is entrepreneurship,
with a goal of bringing more opportunity and growth to this
community.
Ms. Bachman, thank you for joining us.
Wylie McDade is co-owner of Devil's Due Distillery, a craft
distillery located in West Virginia's Eastern Panhandle. Mr.
McDade works with local farmers, sourcing as much as possible
from the surrounding land. Mr. McDade is also a veteran of the
U.S. Navy.
Thank you for being here, for your service to our country,
and for sharing your experience and the story of Devil's Due.
Jamie Ward is the preparation plant manager at CONSOL
Energy, Incorporated. A father of three, Mr. Ward was born and
raised in southern West Virginia and has a 30-year tenure in
the coal industry.
Mr. Ward, thank you, for taking time for us today, as a
representative of an industry that is so critical to
communities and families in this State.
The committee has received your written statements, and
they will all be made part of the formal hearing record. You
each have 5 minutes to deliver your oral arguments, oral
remarks.
Mr. Plaugher, you may begin when you are ready.
STATEMENT OF TOM PLAUGHER, VICE PRESIDENT OF OPERATIONS,
ALLEGHENY WOOD PRODUCTS, INC.
Mr. PLAUGHER. Thank you. Mr. Chairman, distinguished
committee members and guests, allow me to welcome you all to
Allegheny Wood Products and welcome to West Virginia.
My name is Tom Plaugher, and I am the vice president of
operations for Allegheny Wood. AWP is one of the largest
producers of Eastern U.S. hardwoods. We operate sawmills and
dry kiln facilities throughout the State of West Virginia. We
don't make two-by-fours or two-by-sixes for framing.
We manufacture hardwood lumber. Species like red oak, white
oak, cherry, hard and soft maple, poplar and walnut, the lumber
that goes into fine furniture, cabinetry, mouldings, millwork
and flooring. We also manufacture hardwood pellet fuel from the
byproducts of the sawmilling process. Our intent is to utilize
every portion of the trees that we harvest.
AWP is a family-owned company founded by John and Patricia
Crites back in 1973. We will celebrate a milestone of 50 years
in business this year. We started out with a small sawmill and
13 employees, selling products within a 300-mile radius. Today,
we have a dozen locations, 800 employees, and we sell our
products all over the world. We have exported our products to
over 30 different countries, and we loaded over 5,000 export
containers last year alone.
The forest products industry contributes $3.2 billion in
economic impact to the State of West Virginia on an annual
basis. There are over 30,000 people in this State that work in
our industry. And it is the only industry that is found in all
55 counties. AWP employs over 75 independent logging
contractors and nearly 100 independent trucking contractors to
support our operations on a regular basis.
With that much economic impact, we are often asked, are we
running out of trees? The answer is a resounding no. Recent
U.S. Forest Service studies have shown that we are reliably
growing two and a half times the volume that is being removed
in the Appalachian region.
There are a couple of key factors about our industry that I
need for you to keep in mind. The first is that we are directly
tied to housing. We need single-family housing starts and
remodeling expenditures to be high, because those are the homes
where people install high-quality hardwood products.
The second is that we must have access to trade. Much of
the secondary manufacturing in the hardwood industry left the
U.S. in the early 2000s. For industries like ours to be
successful, we must have access to markets and the ability to
export our goods. The past 5 years have been extremely
challenging for the hardwood industry, with a trade war
beginning in 2017 and the COVID pandemic in 2020.
American hardwood producers suffered because of retaliatory
tariffs imposed on our products during the trade war, and AWP
was forced to close two of our mills and lay off employees that
had been with us for decades because business was so bad. The
pandemic brought a new challenge nearly every day for months,
as lockdowns were imposed, rules and regulations were made and
changed repeatedly. Some businesses were shut down while others
were allowed to operate, and some businesses and industries
received government assistance while others did not. Our
industry was hit hard during that period and not all companies
survived.
There are five critical problems that have materialized
over the past 2 years that are poised to impact our industry
once again in 2023: The first is dramatically increasing fuel
costs. The war on fossil fuels has played havoc with the cost
and supply of diesel fuel and all oil products. That hampers
our industry at every link in the chain.
The second is the supply chain crisis. Getting parts and
supplies needed to operate has been very difficult and
sometimes impossible. We sell our products internationally, and
getting product to our customers timely, with the shortages of
shipping containers and available vessel space, has been a
major hurdle.
Third is the inability to find qualified labor. Much of the
workforce does not appear to have returned to work following
COVID, and that is impacting the productivity of every
industry.
Fourth is rising interest rates. This is slowing down the
housing market. It makes capital more expensive, and it will
put the brakes on our entire industry.
And last but certainly not least is increasing regulations
and bureaucracy. Regulatory agencies have ramped up their
efforts to come out with new initiatives and requirements that
hamper permitting and place more burdens on businesses at every
turn.
A trip to the grocery store will convince you that
inflation has gotten out of hand. And you might think that
would be the case for all goods and services, but the fact is
that the pricing for our products has fallen 40 percent, on
average, over the past 6 months, due to the decline in the
housing market and the lack of demand.
I want to finish by saying that we here in West Virginia
are blessed with an abundant natural resource. And our industry
is made up of some of the finest, hardest working people you
will meet, both at AWP and the forest products industry as a
whole.
Thank you again for this opportunity, and I am happy to
answer any questions.
[The statement of Mr. Plaugher follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman SMITH. Thank you, Mr. Plaugher, and thank you for
hosting us once again at AWP.
Ms. BACHMAN, you are recognized.
STATEMENT OF ASHLEY BACHMAN, OWNER/OPERATOR, CHEETAH B'S
RESTAURANT
Ms. BACHMAN. Hello, ladies and gentlemen of the committee.
My name is Ashley Bachman, and I am a mother of three children
and currently own a local restaurant called Cheetah B's. I have
been a resident of Grant County for 11 years now. When I first
moved to Grant County, I was working in Lanham, Maryland, for a
trade show and special event company as a freight coordinator
for a company called Hargroe Incorporated. The pay was far
higher than any job I can do in our community, but after
becoming pregnant with my third child, it became impossible for
me to travel that way for this shop.
I saw an opportunity to open my own business with a local
restaurant when a local restaurant decided to close their
doors. We opened Cheetah B's on June 15th of 2015. I didn't
have any culinary training but always had a passion for
cooking.
It took us a couple years, but we built a highly successful
restaurant. Right at the peak of our success, COVID shut our
business down. My husband and I were employed through the
restaurant, so this was terrifying to us. We had three
children. How were we going to make it? How were we going to
pay our bills, let alone feed our children?
We couldn't accept the fact that we were forced to shut
down due to COVID-19 regulations, so my husband and I put our
thinking caps on. We have a window in our restaurant that faces
the road. We decided we would try to operate a restaurant
through what we called our drive-through. Luckily, we were able
to keep our doors open during this trying time by pivoting our
business model by finding different ways to serve our
customers.
Unfortunately, after COVID, we have been hit with another
crisis, the crisis of rising cost of everything. This has
proven to be a much tougher task than what we dealt with during
the COVID regulations.
The cost of goods has been steadily rising throughout the
past couple years. It has been tough to stay ahead. We have had
to change our menu prices countless times just to make sure
that we don't go out of business.
We are still not charging enough for our menu items,
because we are afraid we will price ourselves out of business.
We have and continue to struggle with the ever-increasing cost
of goods. Of course, our customers suffer with us as well as
they pay more for menu items that have gone up in price, the
customers that still come out to eat, that is. We have taken a
hit in business so far these past two quarters, having less
customers come in.
Just as the increasing cost of goods has required us to
change menu prices and menus altogether, the failures in supply
chain have caused the same. I can't tell you how many times our
food reps have came into our establishment to warn us of which
products were going to be out of stock for an unknown amount of
time or which products were going to be increasing in cost to
the point that we may not even want to order them. Just one
example would be bone-in chicken wings. We used to sell one to
two 40-pound cases a week. They used to be $40 a case before
they skyrocketed to up over $150 for the same amount.
Just as the cost of goods have gone up, so has the cost of
our energy to cook those items. Our kitchen cooking equipment
runs off of propane. This is the only utility that we pay in
our establishment, as our leaser pays the others. During some
months, the cost of propane has more than doubled the price
that it was in the corresponding months of 2020. The rise in
price in all other energy costs has caused our lease payment to
increase from $2,000 to $4,500 a month in only 5 years' time.
Our little restaurant has been bleeding money due to all
the increased costs, and I don't know how much longer we will
be able to continue with the prices the way they are. It is
very worrisome.
Our business has been very fortunate with workers during
the past few years. We also pay a higher wage to keep these
employees. We have, however, seen it has affected other
businesses. We have heard through our food reps and other
restaurants that have had to close or completely change their
business hours because of lack of workers. Just last week, I
saw at my doctor's office that CVS Pharmacy is no longer open
on the weekends because of staff shortages.
I believe that the amount of money that has been handed out
throughout the years has definitely contributed to this. Around
the same time stimulus checks were going out and added
unemployment benefit money is when the worker shortage started
to happen.
Higher fuel costs affect our community probably more than
most. It takes more fuel to get our groceries and other
essential items across the mountains that we live in between.
Our local grocery stores charge sometimes double to even triple
on goods than other grocery stores in more populated areas. Our
local gas stations charge 30 cents per gallon more than gas
stations just 30 miles away.
Some of the biggest financial worries I hear from my
community is the cost of goods, price of gas, price of
utilities and just life in general. The cost of everything has
gone up. I see lots of my old customers at the grocery store,
and they tell me they are sorry they haven't eaten at my
restaurant lately because they are just struggling to live.
My community is having a hard time right now. I have
colleagues and powerful community members asking me for a
second job, and, unfortunately, with the rise of inflation
costs, I cannot run with any more staff members at the moment.
Lots of my current staff members are using their employment at
my restaurant as a second source of income and still find
themselves struggling. My husband and I have even found
ourselves struggling to keep up and are also taking on other
business opportunities besides our restaurant.
We have such a wonderful community that is trying their
best to bring new business, to provide more job opportunities
and fun things to do for our youth in the area, but
entrepreneurs like myself are scared to make any financial
decisions during this recession.
We personally bought a 5,000-square-foot building to be the
future site of Cheetah B's and Potomac Valley Brewery, but have
put a hold on our project seeing other peers go through
devastating financial hardships working on similar projects. We
can only hope that things will normalize again and give our
businesses and children hope for the future.
It was a pleasure speaking with you today and thank you for
having me.
[The statement of Ms. Bachman follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman SMITH. Thank you. Thank you, Ms. Bachman.
Mr. McDade, you are new recognized.
STATEMENT OF WILEY McDADE, CO-OWNER, DEVIL'S DUE DISTILLERY
Mr. McDADE. First, I would like to thank you all for
inviting me here today to speak. I am here with my wife,
Cynthia, and lead distiller, Ken Walker.
And I will tell you a little story. So I come to Petersburg
today to tell you a story about our small business located in
our small little town in America. The town is called
Kearneysville. It is located in Jefferson County, West
Virginia.
This county is of incredible historic importance to the
United States. George Washington didn't just sleep there; he
lived there. His brother Charles, who in 1868 founded Charles
Town at the heart of the county, lived there as well. The
American Civil War started there at Harpers Ferry. West
Virginia seceded from Virginia shortly thereafter in support of
the Union. And I can tell you that the people of West Virginia
are fiercely proud of their State.
The people here come from all walks of life. Farmland
abounds. So do small shops and boutiques and restaurants. The
county is ringed by national parks: Harpers Ferry, Antietam,
C&O Canal. The two great rivers, the Shenandoah and the
Potomac, converge there and form the northern end of the
Chesapeake Bay watershed, which flows under the Nation's
Capital just about 40 miles away, as the crow flies.
I think you guys probably thought, as the crow flies, this
place was pretty close to you until you got on the back roads,
and you found out that it is always twice as far to get
anywhere in West Virginia, but it is also twice as beautiful.
When you cross the border, it just feels different here. John
Denver captured that perfectly. And I think that is why people
come here.
Nationally, a small distillery feels right at home here. It
is true that, prior to the Whiskey Rebellion in the late 1700s,
many, if not most, farms had a working still. It was
logistically far easier and economically more profitable to
bring grain to market by the barrel than by the bushel.
Appalachia to the south and west of where we are, it wasn't
always accessible as it is now today.
Today, West Virginia's rich culture and tradition is
showcased at our distillery. We aim to take local grains, the
same ones that have been produced there for hundreds of years,
and use that same tradition to produce a product that you just
can't get anywhere else. We don't look to make products better
there; we just look to make them different. Jefferson County
proved to be the place that has everything we need to succeed.
Geographically, our distillery is strategically placed in a
small business park called James Burr near the I-81 corridor, a
major north-south interstate and commerce artery. That highway
bisects the Eastern Panhandle of West Virginia and is in
relatively close proximity to us, which we chose to help keep
freight costs low.
We are also a completely electrified distillery, due to the
current unavailability of natural gas in our area. You know,
natural gas boilers in the distillery industry are almost 100
percent more efficient than electricity.
At least 75 percent of our agriculture inputs are supplied
by the local farms in the county. However, grain is only one
part of a much bigger production process that we have there,
and our inputs are freighted in from across the United States
and sometimes around the world.
Our whiskey is mashed and distilled on equipment produced
in Missouri. Our whiskey, by Federal law, must be aged in
American White Oak. The oak for these barrels is sourced from
all over the United States: The Ozarks, which are known for
their tight grain white oak; the Tennessee Valley, which that
white oak is known around the world, a lot of Kentucky whiskeys
are aged down there; and, of course, lots and lots of oak from
right here in Appalachia is used in the production of our
whiskeys.
Our bottles are produced throughout the United States and
abroad. Our label production occurs in Maryland and New York,
and our merchandising is a mix of locally produced craft, which
we love, but also national commercial products from around the
United States. Nearly all of these products rely on freight and
working supply chains.
We started our business in 2021, and when we started diesel
prices were in the mid-$2 range. Factories were producing at or
near capacity. Warehouses were full. Choice in products--I will
say that again--choice in products was plentiful.
Much has changed in the past 2 years. Fuel prices and their
fluctuations have made planning difficult, especially on
already small margins. Due to factory closures, glass shortages
have been and continue to be a scourge on our industry. Input
costs on grains have risen sharply, something we are really
actually pretty well-positioned to endure because we deal a lot
with local farmers, but ever present on the commercial market.
Lead times are up by at least a factor of 2 and sometimes
up to a factor of 10. And, in particular, order minimums have
gone up significantly. I have to buy more. And a guy like me
who, you know, relies on just-in-time delivery yet can't afford
an entire truck, now has to buy more product at one time or put
in longer and longer contracts, contract out for the whole year
instead of maybe for just the quarter.
The enormous glass warehouses that feed our industry remain
at minimum capacity with only minor gains in stocks, and supply
chain logistics remain painful, to say the least.
Despite input cost increases, we are reluctant to raise
prices, and we haven't done so. And I believe that this is one
of the main drivers keeping our clientele coming back. However,
it comes at a great cost, growth. Our workforce should consist
of 7 to 10 in order to work the distillery, the tasting room,
and the distribution aspect of the business, yet we do so with
five. Everyone works long hours. They wear many hats.
My business colleagues in the area tell me that they have
similar experiences and that hiring remains a challenge, a
perceived shortage of available workers. That shortage is
compounded by rising home prices, soaring rents, and
inaccessible credit.
In the face of all these problems, our outlook looks
strong. And I believe our community outlook is also very
positive, but this is West Virginia, and mountaineers
inherently know how to do more with less.
So we endure and hope that Washington can work to provide
stability in our markets. We need lower and more consistent
fuel prices to allow for planning on thin margins. We need
choice in energy to achieve efficiencies in our industry. We
need to strengthen national manufacturing and refill our
national commercial warehouses.
We need to pull back from intensive interest rate hikes and
stabilize local housing availability. We are just one small,
proud West Virginia business out of many thousands all looking
for the same thing, an opportunity to succeed. Thank you.
[The statement of Mr. McDade follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman SMITH. Thank you.
Mr. Ward, you are recognized.
STATEMENT OF JAMIE WARD, ITMANN PREP PLANT MANAGER, CONSOL
ENERGY INC
Mr. WARD. Chairman Smith, Ranking Members Neal, and members
of the Ways and Means Committee, I would like to thank you for
the opportunity to speak today.
My name is Jamie Ward, and I am here representing CONSOL
Energy, a 150-year-old thermal and metallurgical coal-producing
company with operations in Pennsylvania and West Virginia,
where I supervise the Itmann No. 5 preparation plant outside of
Mullens, West Virginia.
I have worked in the coal industry for almost 30 years.
Growing up in southern West Virginia, I was surrounded by coal
mines in the coal industry from the time I was young. I
attended Independence High School in Raleigh County. There, I
decided to enter the workforce after graduation, beginning my
career at a local coal company where I conducted coal sampling
and quality analysis. From there, I worked at the coal
companies for several different operators before landing at
CONSOL.
As my career progressed, I watched as coal companies began
to either consolidate, go bankrupt, or be bought out, at one
time causing me to work for 6 different companies in a period
of 13 years.
I saw the coal industry decline further, to the point where
I was forced to leave West Virginia to find work in the
industry in Alabama for a time. I watched small towns in my
home State fall on incredibly hard times, all because of
anticoal policies that were being pushed in Washington, D.C.,
by people who had never even been here where I grew up. The
result of these policies have been economic disaster to the
people of Appalachia.
In 2019, CONSOL Energy decided to reinvest in a thin seam
coalfield in southern West Virginia, providing me the
opportunity to move back to my State. My experience at
preparation plants allowed me to join the CONSOL team in the
position I am in now. I manage the day-to-day operations of a
plant, including 25 employees and contractors. I also interface
with customers and coordinate shipments on a daily basis, both
domestic and international sales.
CONSOL Energy owns and operates the largest underground
high-BTU bituminous coal complex in North America. And now, in
Wyoming County, West Virginia, we operate our new Itmann No. 5
metallurgical coal mine and prep plant, which it produces coal,
coking coal in the steel production.
Itmann prep plant recently shipped its first trainload of
coal to customers in October of last year. It was a truly
exciting step in the right direction toward bringing the mine
and plant up to full production, despite many supply chain
challenges that were being felt nationwide, which was a result
of policy decisions made at the highest level.
Though CONSOL has brought jobs and economic stimulation to
Mullens, Pineville, Itmann, and other little towns, all of
Appalachia still faces staffing shortages. This is due to the
variety of factors, including fuel costs making it hard to
travel to work and Federal policies that attack our coal jobs.
The coal industry is consistently under pressure from
Washington, which makes it harder to do business and provide
the materials needed for steel and other fuel with affordable
electricity. Federal agencies make it difficult for the
operators to even get off the ground, especially when agencies
make the rules that are very hard to follow.
I remember a time when someone could not drive more than 3
or 4 miles without seeing a coal mine where you would be able
to find work. Now I have employees coming from as many miles--
one of them drives over 75 miles from the State of Kentucky.
Imagine driving an hour and a half every day to work with the
gas prices we see as high as they are. You can see how
something like that would prevent someone who wants to succeed
from being able to simply get to the job site.
In addition, the rising cost of groceries do not make
things easier on my staff at the plant. The prices of milk and
eggs, two items that most families need weekly, are through the
roof. We pay our workers great wages, but the rising cost of
basic needs is still deeply felt, no matter how much you get
paid. There is only so much that can be done from the industry
side to help ease the burden of high fuel and grocery bills
that we are forced to pay.
My team at the plant is incredibly hardworking every day,
and we support the local economy through our work there. We
have a local general store in Mullens, where we buy our boots,
supplies, food, and whatever we might need because the nearest
store to get these things is an additional 25 miles away.
We also use a local service garage in Mullens to service
the vehicles of our fleet. These things help keep our small
economy in Mullens up and running, but, sadly, the same cannot
be said about the thousands of other little towns that struggle
because of the rising cost of living.
CONSOL's Itmann operation has the capacity to mine 800,000
to 1 million tons of coal output a year, with over 20 million
in reserve. That amount of output is life-changing for West
Virginians and the other Appalachia who need a stable job.
We do our part. It is time for the Federal Government to do
its part by lowering the costs rural Appalachians are forced to
pay every day just to stay alive.
I look forward to answering any questions that you have.
Thank you again for allowing me to share my perspective of the
state of the American economy in Appalachia.
[The statement of Mr. Ward follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman SMITH. Thank you, Mr. Ward.
And I want to thank all of you for your excellent testimony
and for being here once again. We will now proceed to the
question-and-answer session, and I will begin with the first
question.
My colleagues here today will certainly have a number of
more specific questions as we dive into the impact of Federal
policies and programs on the lives and livelihoods of folks
here in Petersburg and families all across the country, but let
me begin with a more general question for each one of you.
If you were sitting on the side of this--if you were
sitting on the side of this room with the ability that we all
have to write the laws of the land, what is one thing, the
first thing you would do or change to make your lives easier?
I ask that question because this committee is committed to
empowering all of you, to empowering the voices of citizens all
over this country when it comes to creating and changing
policy.
So I ask, if you were sitting in our seats, standing in our
shoes, what would be the first thing that you would want us to
do?
Mr. Plaugher, I will begin with you.
Mr. PLAUGHER. Well, I am not sure if it would qualify as a
law, but I guess the first thing that I would do is ask you to
look at getting the inflation under control. The impact of
inflation on our communities, on my employees is devastating.
And their cost of living has gone through the roof.
And, as Jamie mentioned, you know, we are in rural West
Virginia. A lot of my employees drive a long way to get to
work. So the price of gas, the price of fuel for them is a
major factor in their cost just to get through, make it each
month.
So the inflationary pressures and the cost of fuel I think
is something that you should be looking at immediately.
Chairman SMITH. Thank you.
Ms. Bachman.
Ms. BACHMAN. I have to agree with the cost of fuel. I feel
like we need to be more self-sustaining, have a more self-
sustained energy in here, the United States. This would allow
the cost of logistics to go down and lower the cost of goods.
I also feel like you should look at decreasing the current
unemployment benefits that are being received. Currently, a
Grant County resident averages around $21,000 a year. For an
unemployed couple receiving unemployment benefits and
ObamaCare, a spouse would need to make for a full-time job
paying $73,000 a year to be better off. So those two things I
think.
Chairman SMITH. Ms. Bachman, would you repeat that last
sentence?
Ms. BACHMAN. Yes. A spouse would need to make $73,000 a
year working full-time in order to receive the same amount of
pay as somebody receiving, a couple receiving unemployment
benefits and ObamaCare.
Chairman SMITH. Thank you, Ms. Bachman.
Mr. McDade.
Mr. McDADE. I would agree with her on the problems with
worker shortages in the country, getting people back to work.
What policies can you put in place to get people back into the
factories? Most of the issues I see are unavailability.
When we call and ask for something, you know, for the
inputs for my business, you know, I always seem to be--they
always seem to be scraping the bottom of the barrel to get me
the supplies that I need to make my business function.
Chairman SMITH. Mr. Ward.
Mr. WARD. Yeah, more focus on the inflation, gas prices,
grocery prices. And, really, college isn't for everybody, but
maybe some more focus on the high school education. When they
come out of high school, they are more equipped for real life.
A lot of kids now they come out and, in my opinion, they
just are really not prepared to enter the workforce, but they
so choose not to go to college. So there is an issue, the way I
look at it.
Chairman SMITH. Thank you.
I will now recognize the acting ranking member, Mr. Beyer,
for any questions he might have.
Mr. BEYER. Mr. Chairman, thank you very much.
And I think all of you brought up the issue of labor force
availability, which is not unique to West Virginia, by the way.
In northern Virginia, we have the exact same problem with
virtually every business.
It is fascinating that the labor force participation rate
from 1948 through 2023 averaged 62.8 percent. It is now 62.4.
So it is almost where it has been for all of our lives. In
fact, before the recession--before the pandemic, rather, when
Donald Trump was President in January 2020, 3 years ago, it was
63.5, so up less than 1 percent more.
It is fascinating that the labor force participation rate
has come back for virtually every category of people except
childbearing women, which is largely blamed on the absence of
childcare.
But, Ms. Bachman, I am fascinated by--economic impact
payments stopped 18 months ago. The child tax credit stopped 13
months ago. Unemployment insurance applications are at their
lowest rate in 50 years. But your 21,000 versus 73,000 is
fascinating.
Do you pay healthcare for them, or why is it fair to add
that to the benefit that they get that keeps them out of work?
Ms. BACHMAN. Well, this is the average of--looking up
statistics, that is the average of what the Grant County
resident brings home. That is not necessarily my employees. I
pay my employees a little bit more than that.
But, unfortunately, I am unable to offer healthcare at this
moment. Healthcare is just out of my means. I looked into it. I
am uninsured. My whole family is uninsured at the moment. We
are out-of-pocket pay. We just can't afford that monthly bill
right now. And it is----
Mr. BEYER. Is that an argument for getting rid of ObamaCare
and making that insurance available to those people in your
town?
Ms. BACHMAN. Well, I personally don't have insurance. I
know that, you know--I just--I fall in that middle class where
I don't--I make too much to go and get certain benefits that
the United States offers low-income people, but I just make
enough to where I can't afford insurance for my family right
now.
Mr. BEYER. What you are clearly sort of affirming is the
chairman's thought that we are paying people to stay home.
Ms. BACHMAN. Yes.
Mr. BEYER. Okay, great. Thanks.
Commander McDade, you talked about inflation being very,
very real, which I wholly appreciate. The good news, which is
hard for us to appreciate right now, is that Wall Street
Journal says inflation in the last 6 months has been running at
less than 2 percent. However, still pretty high compared to
what it was before the pandemic.
And, of course, you also said that the interest rate is
killing you, which I appreciate also, especially on housing and
everything else. We have relatively few controls as a Member of
Congress. We can't do price controls. The last person that did
that was Richard Nixon. And the Fed, after the 578,000 jobs
that were just announced for January, is likely to raise them
again in March.
What else should we be doing to hold down inflation that
the Fed is not doing now?
Mr. McDADE. Boy. Well, the first thing we should do is
stabilize the interest rates, I think, in this country. You
know, you have mentioned quite a few things, but I will give
you an example.
Over the last, say, oh, I don't know, 10 or 12 months, we
have seen the housing prices in our neighborhoods go up, and
they went up, they have gone up significantly. I have seen the
neighbors when they sell their house.
And you know who doesn't come house shopping anymore is
families with children. We only see older folks come in and
look at those houses, and I have seen them with my own eyes,
people who have made their money in the world. And the biggest,
I think, complaints I get is that forces a lot of people into
the rental market, and the rents are now skyrocketing.
And so it causes a problem. I mean, I know people who rent,
and they say: Yeah, our rents are up significantly what they
were just 2 or 3 years ago.
And, to your point on inflation, I am more interested in
how we are going to be drawing down prices now, now that--if
inflation has crested, that is fine, but once those prices go
up, how do we bring them back down to a level where we can all,
you know, make a living?
I told you we have a thin, a very thin margin. The liquor
industry is the most regulated industry probably besides
banking. I mean, it has been that way ever since Prohibition.
And there are huge--we pay steep, steep fees in forms of excise
taxes. And so our margins are--I mean, they are pretty small.
And so anything that opens that margin up a little bit is going
to help us out.
Mr. BEYER. Thank you very much, Mr. Chairman.
I yield back.
Chairman SMITH. Thank you.
Mrs. Miller, you are now recognized for 5 minutes.
Mrs. MILLER. Thank you, Chairman Smith.
And it is nice to say ``chairman'' and have the gavel on
our side.
And thank you, Ranking Member Beyer.
And, again, thank you all for being here today.
I am so honored to have the first Ways and Means hearing of
the Republican majority right here in my State, our State of
West Virginia.
You know, southern West Virginia has borne the brunt of
attacks tax by President Biden's disastrous agenda. It is long
overdue for our Nation to hear from real West Virginians on the
impact of Washington's poor decisions on their lives,
businesses, and communities.
I have here an article, a statement from the Coal
Association. Mr. Chairman, I would like to submit for the
record this statement by the West Virginia Coal Association,
explaining how the Biden administration's war on coal has cost
thousands of jobs and devastated the social fabric of
communities in this great state.
Chairman SMITH. Without objection, so ordered.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mrs. MILLER. While I can go on and on about the successes
that we have seen and the challenges we continue to face, the
most important thing for us to do here is to hear your voices.
You can hear ours all the time.
So I just want to thank all of you for representing West
Virginia so well in this hearing.
Mr. Ward, thank you for being here today. I understand that
you have three children and two of them are attending higher
education in our State. One is at WVU, and the other is in my
beloved Marshall. Go Herd.
Our State for way too long has exported our educated
children. What do you see as the greatest challenge into
keeping them here right now?
Mr. WARD. To keep the kids here, I mean, we educate them.
But we do not offer them positions to use their education to
stay in the State. So we have to create jobs that, once they
are educated, higher-paying jobs, competing with other States,
that would be our biggest hurdle to keep them here.
Mrs. MILLER. That is so correct.
I do have to mention basketball. One thing Mullens is
famous for is their basketball.
But your story is the story of way to many West Virginians
whose lives have been impacted by the decisions of both
lawmakers and bureaucrats in Washington. So I am glad that you
had the opportunities to return home. In--the fact that you
have to drive 20 miles to buy shoes or groceries or socks or
underwear, it is amazing. The people that live in Washington,
D.C., who only have to go down, like, half a block the buy
those things, it is unusual.
You know, the coal industry has been under heavy scrutiny
by Washington and usually by people who are really ignorant of
the importance and the history of the product that you produce.
Can you at least tell them the difference between
metallurgical and thermal coal and how important each type of
coal is?
Mr. WARD. Yes. What we do at Itmann or in the southern West
Virginia part is the metallurgical coal. It is--we are after
the coke, the carbon that is in the coal. So that is the
metallurgical coal that is used to make carbon which goes into
steel making. The thermal coal, which is--it is used. Its
primary job is for electricity, to generate electricity.
Mrs. MILLER. Electricity. Oh, my goodness.
Thank you so much.
Mr. Plaugher, thank you for hosting us here at Allegheny
Wood Products. Again, the facility is a testament to all the
hard work that you do. An important role of the Ways and Means
Committee is overseeing our trade agenda, and I very first
sought this seat on this committee after seeing your hardwood
product while I was on a trip overseas in China and
experiencing firsthand the importance of the trade, not just
for our national interest but the impact that it has right here
in West Virginia.
Can you speak briefly to Allegheny's exports and what
challenges the Federal Government has created in getting your
products to market?
Mr. PLAUGHER. Well, the two biggest challenges in recent
years have been the effects of the trade war, when retaliatory
tariffs were levied on our products, basically taking 25
percent off the top of what we could charge for our products to
our customers in Asia.
The supply chain crisis is the second big issue. And over
the last 2 years as the supply chain crisis has tightened, it
has made it extremely difficult to get access to containers, to
vessel space for us to reach our customers on time.
If we have a customer in Asia who is doing--who is looking
for just-in-time delivery, we have to be able to put that on
the ground for them timely. And the supply chain crisis has
made that extremely difficult.
As steamship lines took advantage of the higher rates
coming from Asia, they elected to ship containers back, empty,
rather than load products here in the United States, and took
advantage of those exorbitant rates coming back this direction
and left American exporters high and dry.
Mrs. MILLER. Thank you.
I am so sorry I can't get to the other two. I have run out
of my time.
So I yield back my time, Mr. Chairman.
Chairman Smith. Thank you, Mrs. Miller.
I now recognize the gentleman from West Virginia, Mr.
Mooney, for five minutes.
Mr. MOONEY. Thank you, Mr. Chairman. I am just going ask
two questions. I want my colleagues to have plenty of time.
Actually, Mr. Plaugher, I am going to ask you first. Has
Allegheny Wood Products been affected by any supply chain
failures?
Mr. PLAUGHER. Yes, Allegheny Wood Products has been
effected by many supply chain failures. As one of the other
gentleman mentioned, you know, just the ability to have the
supplies on hand to run our plants has been dramatically
affected by the supply chain crisis.
Parts that we may have been able to get in a couple days,
so we would keep one on the shelf because we knew order and
have one here quickly, suddenly turned into things that we
couldn't get for 3 months.
So you had to increase your inventory of supplies just to
maintain your regular production schedule, to have what you
needed in order to be able to run, which means you had to sink
more money into supplies.
Mr. MOONEY. The next question will be directed to Ms.
Bachman.
And congrats. I read in your bio, your statement you are
opening another business, a bouncy house for kids. As the
father of an 8-year-old, we were looking for things like that
the past few years. And we had one of those in Jefferson
County. And when COVID hit, they shut it down. And the kids
didn't have a place to go. So it was kind of a shame to be
perfectly honest.
So I hope there is a good clientele for that. There must
be. I am sure you have done a market analysis, and hopefully
the children will benefit from that. Particularly the cold
weather, it is hard to go out to the parks.
But so I guess my question to you, you had mentioned the
jobs and how expensive it is for employees and finding
employees. Do you think there is enough work opportunity in
this part of the country?
Ms. BACHMAN. I do think there is enough opportunity, but
what you lack is motivated workers. Again, when you pay them
more to sit at home, you know, there is no motivation to go to
work, especially in a place like my restaurant. It is, you
know, the kitchen is hot. You know, you are on your feet for
hours. It is not a very fun job. So I personally experience
issues getting employees.
But, again, we are in a small town. I think I have a good
reputation of being a good employer. So I have been able to
retain employees. And, again, I have to pay good money to keep
them.
Mr. MOONEY. Yeah. Well, I guess it is better to have more
jobs than people than more people than jobs, if you had to
choose between the two. But it is still a problem, and I do
think a lot of the policies government created has exacerbated
that, made it too easy not to work. We need to get people back
to work. They are able-bodied adults.
Mr. Chairman, I am going to go ahead and yield back the
balance of my time.
Chairman SMITH. Thank you, Mr. Mooney.
I would like to recognize the vice chairman of our
committee, Mr. Buchanan, from Florida for 5 minutes.
Mr. BUCHANAN. Thank you, Mr. Chairman.
I just want to thank all of our witnesses for being here.
There is nothing I am more passionate about than
entrepreneurship and startups. So I am going to have two or
three questions I want to have you weigh in on.
I also want to mention AWP is celebrated, if the math is
right, their 50th anniversary today. That is a great American
story. Let's give them a round of applause.
And I think they have close to 800 employees. So that is
just an incredible story. Our goal as an organization is to do
everything we can to get to you another level and help our
startups as well.
On the startup thing, I have got a bill that basically
would quadruple startup expenses that you can deduct. Would
that help you in terms of attracting capital or setting up your
business? And part of the reason I say that, I read a statistic
many years ago. It always sat here in my heart. Ninety-two
percent of startups aren't in business 5 years later.
You have talked about the struggles both of you are looking
at, and that is why we need to do everything we can to help
especially the two of you get to another level.
But let me ask you, Mrs. Bachman. What do you think? Would
additional write-offs up front in terms of attracting capital,
if you could write that off and tell the investor you can write
it off, would that make a difference?
Ms. BACHMAN. Oh, that would make a huge difference. I mean,
we have more power of buying supplies. I mean, we can employee
more people, providing more income. I mean, I--that would
definitely benefit my business.
Mr. BUCHANAN. Mr. McDade, do you want to comment on that
real quick?
Mr. McDADE. Well, coming from an industry that gets taxed
pretty heavily, I mean, absolutely, any sort of relief on that
front, especially for us from being the startup perspective,
would be outstanding.
Mr. BUCHANAN. Yeah. The other thing is the Tax Cuts and
Jobs Act. I don't know if you are that familiar with it.
Mr. Plaugher, I am going to ask you. A couple of things
that we did on especially on past years' subchapter S company,
we, you know, decreased that 199 20 percent. But also in terms
of we went to this idea of full expense. Instead of writing
something off over 5 years, you can write it off now. Now some
20 percent of--well, it is supposed to sunset. We are going to
hopefully try to change.
But can you address those two things, the tax cuts in
general?
And by the way, I will say with my Democratic friend here
that the bill they passed or are trying to pass out of our
committee, when you added it all up, it looked pretty good on
math. It was 46.4 percent. It was gigantic. We can talk about
that later, but that is reality of it.
But what is the, in terms of adding taxes or full
expensing, what is your thoughts on that?
Mr. PLAUGHER. Congressman, I am a forester and a lumberman
and probably pretty poor accountant. But just in general, the
tax cut would be very beneficial to us, especially the bonus
depreciation, the upfront depreciation. The line that is behind
you is actually a test line for an automated lumber grading
system. We will put the scanning equipment in place here in
about 2 weeks. And at the end of the day when we finish this
line completely, it will be about a $5 million investment.
Mr. BUCHANAN. So you are able to write that off first year,
it would probably be part of the reasons why you did it.
Let me just jump over. I have got one big question I want
to answer because I think we are not focused on it enough at a
committee or just in general. I mentioned this to the chairman.
But healthcare costs for small businesses, I know you are a
bigger can. You guys absorb more. But a lot of small businesses
can't, you know, can't do it.
So let me just ask you in terms of your cost, because you
touched on it a little bit, we talked about it a little bit
earlier, in fact, Mrs. Bachman. What is--what is your sense
of--why don't you tell your story? You wanted to get--look for
insurance for your new company. You have got three children, a
husband, and you wanted to be able to get healthcare. To me,
this is unacceptable. If we do nothing else, we need deal with
this.
Why don't you mention what they quoted you on the
government website?
Ms. BACHMAN. For a family of four, it was $750 a month.
Mr. BUCHANAN. Seven-fifty a month times twelve is almost
$10,000 a year.
What did you?
Ms. BACHMAN. I didn't get insurance, and I am just out-of-
pocket pay. I pay myself $39,000 a year. So that would take a
huge chunk of my wage.
Mr. BUCHANAN. Yeah, it is all wages. I can tell you in our
area, as someone mentioned to me, I heard your story, they are
paying--a couple, they got an Italian restaurant, 20 years.
They came up to me and said they are paying $3,000 a month for
the two of them. They are in their early sixties. They don't
get Medicare, but they thought it was outrageous. I thought it
was outrageous until I heard your story.
We got your back. Thank you.
I yield back.
Chairman SMITH. Thank you.
I would like to recognize the chairman of the Trade
Subcommittee, the gentleman from Nebraska, Mr. Smith.
Mr. SMITH of Nebraska. Thank you.
I appreciate all of our witnesses here today, the
perspectives that you bring, that you share, that you
experience.
I think it is especially instructive, Mr. Plaugher. Thank
you for touching on the trade issue. I think it is important to
note that things can get really complicated really quickly as
various policies might be pursued. We always, I think, need to
keep that in mind, ultimately keeping the consumer in mind. It
is the consumers that I think are touched by all of you.
And so I think, as we look at inflation and as important as
I think trade policy is, I also believe that the workforce
shortages and the supply chain shortages, and the two being
obviously related, are a significant driver for inflation.
And it concerns me greatly. You know, it is tempting. Let's
see. It is tempting to celebrate unemployment rates. I think
West Virginia's is 4.1 percent. Grant County is 3.4 percent.
That sounds great. But it is only part of the story.
Our national workforce participation rate is only 62.4
percent and Virginia's is 54--West Virginia--I am sorry--is
54.8 percent. These are significant numbers that I don't think
get enough attention.
And we have realities that exist across our big country
where there are different needs in different communities,
different factors impacting various communities, small and
large, rural and urban. And so we always need to keep that in
mind.
But if there is one thing that I think we can do is engage
folks who might be receiving some benefits, and I think we
always need to ask ourselves a question. Are we engaging the
American people like we could in perhaps bringing them,
encouraging them off of the sidelines?
I have worked on--with many of my colleagues here what we
call the JOBS For Success Act to engage States who administer
these programs, to have to tell us more if they are making any
progress, if they are actually bringing people off the
sidelines, so we could improve that workforce participation
rate.
It should concern all of us that, for example, 45 percent
of West Virginians are not in the workforce. And those numbers
obviously can vary across the country.
But when you look at where reality sets in, I would be
curious, Ms. Bachman, you order supplies all the time for your
operation.
Ms. BACHMAN. Yes. We get food trucks at least twice a week,
two separate trucks. So----
Mr. SMITH of Nebraska. Right. I kind of think I know the
answer on the cost eggs lately but that is a--involves a lot of
things as well. But I would be curious to know, and from all of
you, too, that, you know, there are high prices and then there
is lack of availability across the board in some cases or at
least temporarily.
And I am just wondering how you, each of you, might
experience that, what you do to deal with that, because it is a
reality that can be pretty painful.
Ms. Bachman, if you want to lead that off.
Ms. BACHMAN. Unfortunately, things happen so quickly in my
industry. So, you know, for instance, a case of lettuce, it was
after average last year about $32 a case. That is for 24 heads
of lettuce. It went from $32 to the very next week $100 for the
same exact case.
And, you know, we have up to our prices and then you have
angry customers and it is hard to convey that, you know, I
mean, we can't give--we have to charge these prices, you know.
I am sure that everybody sees the same thing when they go to
the grocery store.
But, yeah, I mean, and it is constantly we are--we will
order something or and our supply won't come in. So we will
have to go locally and order items that are two, three times as
much as they would have been through Cisco or US Foods, causing
us even more costs that we should not have to endure.
Mr. SMITH of Nebraska. Right.
Mr. Plaugher.
Mr. PLAUGHER. I guess early on in this supply chain crisis
the real issue is being able to get things at all. So that
caused the problem of just having what you needed in order to
operate.
But as the supply chain has come back together and things
have come back in line, the prices have settled now on a lot of
these items that have more than doubled where they were when
it--when things start.
So for us, for example, for parts and supplies in 2022, to
run our operations, we more than doubled the cost from 2020 to
buy the same things and produce the same amount of goods that
the price has not gone up on.
Mr. SMITH of Nebraska. Thank you.
My time has expired. I yield back.
Thank you.
Chairman SMITH. Thank you.
I would like to recognize the gentlelady from Minnesota.
Mrs. Fischbach.
Mrs. FISCHBACH. Thank you very much, Mr. Chairman.
And I would like to thank you all for being here today.
And I think Mr. Mooney at the beginning of the meeting said
there is lots of States represented, and I will just tell you a
little bit. In--in--I am from Minnesota. I am from rural
Minnesota, from--yeah, you can tell by the accent. But you
know, from Canada, almost all the way to Iowa, so we are very
rural. We are very heavy ag. We are very heavy manufacturing.
And so the workforce shortages are huge, and I can't
remember. Who was it said they had to go 20 miles to get there?
Mr. Ward at the end? I go about 30 miles. I have got a grocery
store and a Dollar General. But other than, that you have to go
about 30 miles to get in my area.
But I just I wanted to ask a little bit about, I know that
there was talk about the housing issues. And that is one of the
things that I have been looking at in my district, you know,
and we look at those workforce issues, because we are low on
housing. We just can't get it. We can--we--sometimes we can
attract people. We can't find the housing for them because it
is too expensive. And in Minnesota I will tell you there is
huge overregulation from the metro area on how to build a house
in Minnesota. So that doesn't help us.
But, you know, is it price? Is it availability? I mean,
what are the issues with housing? And I will throw it out to
everybody.
Mr. McDADE. You know, about--I have had a couple of friends
try to move into the area and it has kind of changed. When the
market was hot, you--there wasn't anything in the Eastern
Panhandle you could find in the $200,000 range. They were, at
soon as they came on the market, they were gone. And so it was
availability for a while. And then as the ramp-up increased,
then it became price. And I feel like a lot of people felt like
they got--they got locked out of the market.
When you add the interest rates on top of that, if you want
to move and you can find someone to buy your house for 20 or 30
percent more than it was a year ago, well, then you have to
move into another house that is equally expensive. And so it is
just--yeah, it is a struggle and it doesn't look like it has
any end to anyone. I think that is the feel I get when I speak
to people.
Mrs. FISCHBACH. Is there any issue with low-income housing?
I mean, or it is not that. It is market rate housing that you
are looking for.
Mr. McDADE. Well, no, I mean, on the--I touched on it
earlier. The rental market is also--you know, I have got--my
sister rents and she has moved from one rental house to
another. And those prices per square foot went up. And it is
built in to--the people I talked to. When the lease is up,
those prices will go up. And they will go up the maximum
allowable by law right now is what--is the things I am seeing
and so big step increases in rents and anytime they can be had.
Mrs. FISCHBACH. And just--if anybody has anything else to
add about the workforce shortage, if there is issues that, I
mean, that we didn't touch on yet, I mean, because, obviously,
you know, we talked a little bit about education and that is
it.
Generally, I talk about strong rural communities. And so it
is not just--you know, it is not just the housing issue, not
just the education, but there is a lot going on of those, they
interplay. And they are all involved in making sure that we
have the workforce we need and we have the folks we need here.
So----
Mr. PLAUGHER. Congresswoman, I guess I would say I
appreciate Mr. Beyer's comments about workforce participation
not having not changed.
But in our communities, you know, we--I know that there are
a lot of young people who are not working. We drug test for our
facilities. We have a terrible problem in our communities with
drugs. We have been doing that for over 20 years. It used to be
we would find marijuana, softer drugs like that. Today we find
fentanyl, heroin, cocaine in the most rural parts of West
Virginia.
And I know that is hampering a lot of our young people from
and holding them back, ending their lives. So I know that is a
huge part of our issue here in West Virginia.
Mrs. FISCHBACH. Well, thank you.
And I have a couple of seconds left, if anybody wants to
jump in there. Otherwise, I will go ahead and yield my time.
Thank you, Mr. Chair.
Chairman SMITH. I thank the gentlelady.
I would like to recognize the gentleman from Oklahoma, Mr.
Hern, for 5 minutes.
Mr. HERN. Thank you, Mr. Chairman, for moving this meeting
out of the ivory tower that knows no recession known as
Washington, D.C., and get out among the real people.
Having spent 35 years in business before coming here in the
restaurant business, I was talking to Mrs. Bachman about how
difficult it is. For anybody that is listening, I would
recommend nobody getting in the restaurant business. It is very
difficult.
Mr. Plaugher, thank you so much for AWP hosting us here.
You know, one of the biggest issues that we have right now is,
you know, not talking about things that really matter to the
American people. And that is why we are here.
In 2025, we have the expiration of section 199A which gives
back some cash or cash flow to the businesses in American,
small businesses in America, to be able to invest more, to do
more for their people, to stay more competitive, to innovate. I
know the chairman has carried the bill forward about making
that a permanent fixture, as we go forward, to give security to
our businesses as we go forward in America.
The National Federal of Independent Businesses have talked
about how important that is to the small businesses in America
to be able to stay competitive as the economy around the world
changes.
Mr. McDade, I would like to say, first and foremost, to you
thank you for your 24 years' service in the Navy, protecting
the freedom so we can have these kinds of meetings. So we
really appreciate you so much for doing that.
I would like to talk to you about, you know, your testimony
that you put forth. And if we remove this where you now would
have 20 percent more income to be taxed on, what would that do
to your business, removing that ability to produce that cash
flow?
Mr. McDADE. Well, let me give you an example of why we are
even here in the first place. The excise, the Federal excise
tax traditionally has been based on the proof gallon. That is
100 proof gallon of liquid, 50 percent alcohol, 50 percent
water. It is taxed by the Federal got at a rate of $13.70 a
proof gallon.
Now the Craft Beverage Act that was passed said that, well,
the first 100,000 gallons of your production will be exempted
and will be charged a rate of $2.70 per gallon. That is the
reason there is a craft distillery industry in the United
States. Jim Beam makes that on Thursday and so it is not a big
deal to them, but it is everything to us.
And that whole thing kind of underpins the growth of our
entire industry, and that is why you see more and more of them
popping up.
And I would say there is--there are answers like that in
lots and lots of industries. It is not necessarily that we want
to cut that--you know, we want to cut taxes. But if you want to
encourage growth from the bottom, it is excellent example that
is now--that is--that is now being played across the entire
United States.
We went from, oh, in the eighties less than 200
distilleries probably to an industry that was just still
recovering from, you know, 80 years since prohibition to now
over 6,000 and growing, back to something--it used to be
something like before prohibition where nearly every town in
the United States had a distillery making, you know, making
something from the local grains.
Mr. HERN. I appreciate. Your response is very similar to
some other small business of all types across America, and we
really appreciate. We will do everything we can as we move
forward to get a bipartisan solution to this so that we can fix
this for all the small businesses in America.
Mr. Ward, I come from Oklahoma, an energy State where 40
percent of our energy are fossil fuels. In fact, I always love
to challenge my Democratic friends who talk about Google.
Google's largest data server farm in America and around the
world is 25 miles east of Tulsa, and it sits about a thousand
yards from a coal-fired/natural gas-fired energy plant. And the
reason it sits there, by their own admission, is because they
need reliable energy.
And then have you President Biden saying that the country's
coal plants should be closed because they are too costly to
operate and cannot be relied upon as a dependable energy source
for future generations.
Mr. Ward, what would that do to America and to your
businesses to see that fulfilled, based on your mentioning that
Consol Energy announced in October 2022 the commission of the
Itmann Preparation Plant? Could you expound on how important
coal has been and is today and will be in the future for
American energy supplies?
Mr. WARD. Yes. Coal is very important to southern West
Virginia, really, in my opinion, the world. You talk about
reliable. Ask Texans when they relied on solar source for
energy and the ice storm came. They didn't have no electricity,
and they needed heat. Coal-fired electricity just kept going.
It was very reliable, and it is been reliable since it was
invented. And it is cleaner now than it is ever been, and it is
more reliable now than it is ever been.
As far as the metallurgical coal, it makes strong carbon
steel. So it is very important to us. It is very important to
our economy.
Mr. HERN. Mr. Chairman, I would like to thank the witnesses
for all being here today and sharing their testimony.
Mr. Chairman, I yield back.
Chairman SMITH. Thank you.
I would like to recognize the chair of our Subcommittee on
Tax, Mr. Kelly, from Pennsylvania.
Mr. KELLY. Thank you, Chairman.
And thank you all for being here, and I know we have a lot
of people who came today to hear what was going on.
And I think that one of the common fixes today, because no
matter where I go, whether I am going in church or coming out
of church or going shopping, people stop me and say you know
what, you guys in Congress got to do something to fix this. I
say, you know what, until a month or 2 months ago we were in
the minority. And when you are in the minority, you can't fix
anything. And I--our inability to work with each other is
probably the biggest problem we have.
The other problem we have--and I don't mean to slight
anybody or to make anybody feel, hey, wait, this guy is not
talking the right way. I sat on the school board for 4 years.
My personal opinion is that there is nothing more private than
public education.
The things that are being fed to our children today are so
radical and so far away from the world that I grew up in and
the culture that I grew up in. When I am the youngest guy in
church, there is a problem. When our kids get fed things that
are so unreal, there is a problem.
I just want to let you know that every single person
serving in any, any political position in your town, in your
country, in your State is elected. They just didn't go in and
sit down. And this is the thing that is driving me crazy.
I talk to people every day, and I say I understand your
frustration. I understand where, except you need, you need, you
need to be careful who it is that you elect.
And too many people tell me, I don't even bother voting
anymore.
And I say, Really? Why is that?
They say, My vote doesn't count.
I said, That is a correct statement. If you don't vote,
your vote doesn't count.
We are in the situation we are in today because of
elections, not just the recent election but going back probably
50 years. You have seen what has happened to our country since
the end of World War II. And, again, thank you for your
service. And there is a lot of people sitting out in the
audience that have served.
Ladies and gentlemen, I keep hearing this term about being
woke. My answer to that is forget being woke. Wake the hell up.
Your country is being stolen from you. Your country is being
destroyed, not by an outside entity but by an internal rot.
The most important elected position in any community is
school board. I am tired of hearing that people can pick
whatever--whatever book they want, whatever textbook, whatever
curriculum they want and if you are parent questioning that,
you are bad.
Look, we are sitting here today because our chairman said
we need to get out and get into the country and the country
needs to get into us. Every single problem you are talking
about goes back to what President Reagan said in his
inauguration speech in 1981. It went something like this: The
government is not the solution to our problem. Government is
the problem.
Ladies and gentlemen, to you and us, if we don't start
standing up for what we know to be true, for what we know to be
the way it must be, to what we know is wrong, please do not
take another day off. Do not take a play-off and think that
somehow this is going to get corrected.
I am on a soapbox right now, preaching. But I don't think I
have to ask any of you.
Mr. Ward, we have talked about this. The Pittsburgh scene,
40 percent of our electricity is through burning coal. Oh, my
God, you can't do that. Look what happened in Europe. Shut it
down. Shut it down. Shut it down. Shut it all down. Then we
wonder about why we have the inflation we that have. Why, we
wonder? We look at what happens to our schools. Where is that
group? Where are those green peas? Where that is upshoot that
is going to take over the rows?
Every single problem we have can be going the person who,
when you look in the mirror, looks back at you and say: What
are you doing today to get this thing back on track?
Our chairman has brought the committee into the countryside
because the countryside needs to know that we are you. We
represent you. That is all we do. We are Representatives.
Please, I know what you are going through right now. I am also
a small business owner. It is horrendous what you have to go
through. We can't get talent. We can't get any relief. The cost
of everything is soaring.
And the answer is we need more government. No, we don't. We
need less government. We need more people, American people,
going back. And we were talking today. By the way, our business
is 70 years old this year. My mother and father started it in
1953 with absolutely nothing and went through a lot of
sleepless nights, a lot of months where it was just hard making
payroll and you paid everybody except you. That is how you kept
your team together.
So I want to thank you all for being here today, and I want
to thank you for what this family has done for this area and
the difference it has made in lives.
And, Mr. Chairman, the more we do this, the more we get the
feeling of who it is that sends us to Congress and why they
send to us Congress, we have got to get the hell out of that
town and get out here in the countryside and talk to people and
make the changes we need to change.
Thank you so much, and I yield back.
Chairman SMITH. Thank you, Representative.
I would like to recognize the subcommittee chair of
Oversight, Mr. Schweikert, from Arizona for 5 minutes.
Mr. SCHWEIKERT. Thank you, Mr. Chairman.
And thank you for doing this.
You know, I am from the Phoenix-Scottsdale area. I passed
more trees here than I think I have in my State. I noticed you
have no sorrels. If you would like one, I will send you one.
But here is the great irony. I am from the desert my whole
life, yet many of the problems you have are very similar to us.
I represent a community with the highest inflation in America.
And yet, Mr. Plaugher, you were talking about the difficulty
that has created in running the business and the production.
So a couple of things I want to understand, because I am
desperate to also figure out what we can do policywise that is
great for West Virginia but also great for Arizona. You know,
it is just good American policy.
In the last--let's do 2 years--you, in your opening
statement you talked about your cost of running the business.
Can you give me, like, 30 seconds on where your cost drivers
were and how much of it was also now your workers just
desperately needing a salary change because they are getting
poorer every day? You know, when your salary doesn't go up as
fast as your inflation, you are poorer the next day. And that
is happening, like, crazy in my district. Matter of fact, my
folks are almost 5 percent poorer today than they were a year
ago. And I am told rural America is every bit as brutal.
First, tell me what is happening in just cost of making the
business work.
Mr. PLAUGHER. Well, costs of making the business work are
rising in every way. Most notably, the biggest driver of that
is the price of oil, whether that be what it does to diesel
fuel and oil products or products that are made or derived from
oil, you know, steel, plastic, anything like that. As the price
of oil comes up----
Mr. SCHWEIKERT. You run kilns.
Mr. PLAUGHER. Yes.
Mr. SCHWEIKERT. What does a big kiln end up consuming
energy-wise?
Mr. PLAUGHER. Well, our kilns are driven by steam. And we
product that steam by running the byproducts of the saw milling
process.
Ms. SCHWEIKERT. Interesting.
Mr. PLAUGHER. We burn sawdust. So we use biomass to fuel
our kilns.
Mr. SCHWEIKERT. Interesting. And your wages, how much wage
pressure? Because, you know, you mentioned it in the
restaurant. I am just curious. In the lumber industry, what are
you seeing in your wage pressures?
Mr. PLAUGHER. We have seen considerable wage pressure. And
I have talked to a lot of other business owners across the
country that, you know, especially depending on your location.
Some of them have seen their wage structure double from what it
was 2 years ago.
And, again, you have to remember the prices of our products
have not doubled. They have not gone up at all. In fact, they
have dropped dramatically here over the last few months.
Mr. SCHWEIKERT. And is that because of housing, or you
think an international slowdown? Is it your products that are
being exported, or is it domestic?
Mr. PLAUGHER. It is both. It is due to lack of demand. You
know, again, you need, for our products to do well, you need
housing, single-family housing, remodeling to be doing well,
because that is where that our types of products are put,
hardwood floors.
Mr. SCHWEIKERT. Okay. There is one off there I really want
to ask you. Much of the hardwood or elegant furniture
manufacturing design production is no longer in the United
States.
Mr. PLAUGHER. That is correct.
Mr. SCHWEIKERT. Any idea what we could do to get that type
of production back in West Virginia again?
Mr. PLAUGHER. That is a very difficult question, sir. And
the reason that most of that manufacturing left here was for
cheap labor.
And we face a situation where up until very recently I
could put lumber in Shanghai cheaper than I could put it in
Chicago with the freights. That is reversed itself somewhat
here with ocean freights, but up until very recently that was
the case. You know, the----
Mr. SCHWEIKERT. And I know I am interrupting but it is--
time is a tyrant here.
Mr. PLAUGHER. Yes.
Mr. SCHWEIKERT. Have you seen some of the new automation
that is starting to happen in furniture manufacturing and some
of the sort of the new computer-driven CNC type equipment?
Mr. PLAUGHER. Absolutely, sir, and it is fantastic
equipment. But you have to remember that you are competing
against a furniture plant in Vietnam where the average wage for
that worker is probably $250 a month American.
Mr. SCHWEIKERT. Can we arbitrage it through doing
equipment?
Mr. PLAUGHER. I don't--in my experience, I would say no,
because we have actually tried that ourselves with our own
furniture dimension plan. And at the end of the day, we could
not compete against that cheap labor, you know, so cheap
compared to our American labor or costs that it is worth that
extra cost to send that material overseas, have it processed,
and send it back here.
Mr. SCHWEIKERT. Okay.
Mr. PLAUGHER. And that is why these American furniture
companies have turned into design and marketing companies
rather than manufacturers. They have contracted that out to
foreign entities.
Mr. SCHWEIKERT. Okay. Tom, thank you.
Mr. Chairman, that actually would be an interesting side
project is if we could get energy, get young men back into the
labor market, and the incentive to buy the equipment, how much
of this could we actually move back domestically again.
Chairman SMITH. Thank you, Representative.
I would like to represent the subcommittee chair of Work
and Welfare, Mr. LaHood, from Illinois.
Mr. LaHOOD. Thank you, Chairman Smith. And I want to thank
you for bringing us here today for this hearing.
The more we can get to real America, which is what today is
all about, the better we are going to be as a committee. And as
we listen and learn and acknowledge the challenges that all of
you have talked about today, it is going to be beneficial to us
as we go back to Washington, D.C., and have to decide many of
these issues. I want to thank each and every one of you for
your valuable testimony today.
Mr. McDade, thanks for your service to our country.
And I want to thank AWP for having us at this wonderful
location. I notice we got a lot of wood products here.
Mr. McDade, I was hoping we could have had some Devil's Due
product here, but maybe that will come later. But, again, this
has been very, very helpful for us to hear this today.
I want to--you know, just thinking about what each one of
you have said in your individual businesses, as we think about
coming through COVID, everybody knows we have lots of
challenges and disruptions with COVID. But I think everybody
thought, boy, once we get through COVID, it is going to be back
to normal. We are going to have all our workers back, we are
not going to have supply chain issues anymore, energy costs
will be back to normal. And it has been just the opposite, and
all those struggles you have had to go through have been
related to that.
And what has been frustrating about this current
administration in the first 2 years is they haven't focused on
any of these issues. Right? COVID was bad enough. And so as we
think about our new Republican majority and this committee, in
looking at all those issues you have articulated--supply chain
issues, energy costs, how do we get back to energy
independence, worker retention--we hear you loud and clear here
today on those things. And that is part of why we are here
today on our first hearing is to take that message back.
Mr. Plaugher, I want to just touch on a comment that you
made in your opening statement as it related to trade, your
statement, American hardwood producers suffered because of
retaliatory tariffs imposed on your products.
I am not a fan of tariffs. To me, tariffs are taxes. They
are taxes on businesses. They are taxes on consumers and,
obviously, the trade war was detrimental to you. Can you talk a
little bit about that period and what it meant for jobs
production and profit to your company?
Mr. PLAUGHER. Well, that period became a pure survival
period for most of us in the hardwood industry because that was
so devastating to our industry. To--it made our products
uncompetitive in those marketplaces.
And we are--we are not a business that can just pass along
whatever additional costs come up to our customers. We are a
supply-and-demand business. If our products get--our prices get
too high on our products, our customers will simply look to a
replacement product. And they will go to something else.
So, you know, for us to operate during that period, most
companies operating during that period, they were operating at
a loss to try to keep their employees, to keep their business
going, and just to survive that period.
I understand the reasons for the tariffs and what was
trying to be accomplished there. But when you are caught in the
middle of that, it is an extremely uncomfortable place to be.
Mr. LaHOOD. And I think you mentioned you had to close down
two mills during that period?
Mr. PLAUGHER. Yes, sir, that is correct.
Mr. LaHOOD. Yeah. Maybe just a follow-up on that. We are
dealing extensively on how we deal with China. If I understand
your export market, about 60 percent of your hardwoods goes to
China.
Mr. PLAUGHER. That is correct.
Mr. LaHOOD. Any--I mean, how do you--so as we look at
policy decisions, we look at the malign activities that China
has engaged in all around the world, any suggestions you have
for us as we look at how you deal with China?
Mr. PLAUGHER. I am afraid that one is probably way above my
pay grade, sir. But again, that is where a lot of these
secondary manufacturing for furniture is. That is where our
furniture comes from in large part is those manufacturing
plants, so--as well just about everything that we buy in the
store.
So I think that is something that America has got to take a
hard look at is where our goods come from and that if you--if
you are in a position of having to deal with a controversial
power, where does that leave all of White House are depending
on those goods and a company like us depending on that trade.
Mr. LaHOOD. Got you.
Maybe, Ms. Bachman, real quick here, we have heard a lot
about reliable broadband and making sure we get that to our
rural areas. It is a huge issue, that digital divide, how we
bridge that, how we bring that connectivity.
Can you talk about broadband as it affects maybe your
children and their school or your business?
Ms. BACHMAN. It affects our business constantly.
So we have Square for a point of sale, and they guarantee
that they can go and accept credit card payments when we are
offline. But a lot of times when it comes back, we just cannot
capture that payment. So we are losing actual, you know, whole
sales because of internet.
And, you know, in a lot of big cities I know that they are
doing, like, the QR code menus in order to keep up with the
inflation rates. And, you know, we can't rely on that because
we don't have a good internet infrastructure in our area.
Mr. LaHOOD. Thank you.
Thank you, Mr. Chairman.
Chairman SMITH. Thank you.
I would like to represent--recognize the gentleman from
Ohio, Mr. Wenstrup.
Mr. WENSTRUP. Thank you, Mr. Chairman.
I want to thank you-all for spending your day with us and
your service to your community, your service to this great
country of ours.
And I am sure that you get up each day, wanting to make
each day productive. And I am hoping that today will lead to
some productive measures going forward, not only for you but
for your workers and for your families.
Ms. Bachman, I worked my way through school in restaurants.
I--from dishes to cooking to waiting tables, it is hard work.
But I did it all through school to reduce my students loans so
that you, the taxpayer, wouldn't have to pay off my student
loans, which you shouldn't have to pay off. They are my
responsibility.
You know, COVID hurt us all. Kids have lost years of
education. We saw mandates coming down for vaccine, removing
doctors completely from the conversation and your personal
healthcare. And a lot of this has led to a decreased workforce
including in our military.
You know, I see--I am glad I live in a country where we
have safety nets to help us out. You bring up a point where you
are in this hole. Right? You know, because you know, we have
Medicaid. I am glad we have a safety net. But you know what?
Honestly, it has the highest mortality and morbidity and the
least access to care of any health program in America.
And we have one party that brags about putting more people
in it and another participate that says we want fewer people to
need it. And you fall into that hole where you make too much to
get--so you don't get Medicaid but you don't make enough to
actually afford $750 a month.
These are the problems that we have to address because in
that situation, unless you go from abject poverty to a number
one draft choice in the NFL, you can't just skip over that gap.
And you get stuck in it.
You know, the Tax Cuts and Jobs Act did a lot for this
country. We had no inversions. We didn't see companies leaving
our country. We actually had more coming back in. We encouraged
domestic production which is vital to our supply chain. But
let's just take energy, which every one of you have talked
about being a cost and a problem and a burden.
You know, we have, again, one party that is advocating that
we go to electric vehicles. But all those take batteries that
we rely on China for. We can't make them ourselves. We rely on
China.
We talk about solar panels. You know, I have got fields
where farmers said, oh, okay, I will lease to solar--to a solar
panel field and everything is built but there is no solar
panels. We rely on China for those. This does not make us
energy independent and it doesn't help us and it doesn't help
your business.
But these policies that we have been putting in place are
rewarding China and punishing the United States and punishing
your businesses.
So, you know, and let's just talk about coal. China is
burning coal. They don't do it cleanly like we do. You know?
And why are we doing this to ourselves? Last time I checked,
the Earth goes around every 24 hours. So what they do matters.
And so this is the situation we are in.
I served in Iraq for years as a surgeon. And I realize now
my supplies, my protective equipment, my pharmaceuticals rely
on China. How did we get here? How are we letting this happen
to us and continue to make it even worse?
What I would like to answer on the supply chain side is,
you know: What is your number one or two supply that really
holds up your business? And do you know where it comes from and
how you are going to overcome this? Because the way to overcome
some of it may be by the actions that we take.
Who would like to answer what your number one supply chain
concern?
Mr. WARD. Ours would be electrical supplies and they--most
of them are manufactured in China.
Mr. WENSTRUP. Thank you.
We can go down the line.
Mr. McDADE. Ours is also a stable supply of electricity. We
are an entirely electrified production facility. From the--from
a farming perspective, though----
Mr. WENSTRUP. Uh-huh.
Mr. McDADE [continuing]. I mean, corn is king in my
business. You can't make bourbon without it.
And so I hear--I hear a lot from local farmers that--same
thing you hear on the news but they see it in action--is
fertilizer prices, fuel prices, seed prices, weed killer
prices, all of those things have--you know, it is--they are
kind of the root, the thing that underpins the entire--you
know, corn underpins our entire economy. Everything is either
fed on it or we eat it or it is produced to make, you know,
used to make fuel.
And so seeing that stabilized as well, I think, is pretty
critical.
Mr. WENSTRUP. Yeah, I am southern Ohio. I get the corn
deal.
Ms. BACHMAN. I would have to agree. Food, inflation costs
are my number one concern. And I think, you know, if you fix
fuel costs and getting energy here, then that would fix it.
Mr. PLAUGHER. On the manufacturing plant side, electronics
are the biggest issue that we run into. But we run sawmills,
and we are entirely dependent upon contract logging companies
to harvest the wood that we purchase and bring it to our mills.
And that is dying breed, as those folks cannot get access to
capital. It is a very capital-intensive business.
So it is kind of the war on small business that is
preventing folks like that from starting new businesses,
growing existing businesses that affects our supply chain for
the raw materials we need.
Mr. WENSTRUP. Thank you.
We need to continue to drill down on why those exist, why
those are problems, and what we can do to encourage solving
those problems.
Thank you.
Chairman SMITH. Thank you, Representative.
Would like to recognize the gentleman from Pennsylvania,
Mr. Fitzpatrick, for 5 minutes.
Mr. FITZPATRICK. Thank you, Mr. Chairman.
Thank you all for having us. You are very blessed to live
in a beautiful part of America, and I know you know that. I
think we all had the same collective reaction when we are
driving out here. It is not that far in terms of miles, but it
is like being in a totally different place, a very real place.
So thanks for having us.
You-all touched upon different economic forces that are
posing challenges.
You know, Mr. Plaugher, you zoomed in on taxes and tariffs.
Ms. Bachman, you focused, at least your personal story, on
healthcare.
And both Mr. McDade and Mr. Ward talked about overly
oppressive regulations affecting your respective industries.
The common thread amongst all of you, which is really the
American story, you have all taken chances and taken risks in
order to do what you are passionate about, what you love, and
what you are good at. And this is a televised hearing. It is
all on the record.
I would just like for you to share with us, if you could,
let us know, when you are going through the rough times--and I
am sure all of you have hit at different points and for
different reasons with different levels of extremity, I should
say, being one paycheck away from falling through the cracks,
one medical incident from falling through the cracks, one lost
customer from falling through the cracks.
I think it would be helpful for us to bring back to our
colleagues: What do those kitchen table conversations sound
like for people like yourselves who have invested your entire
life, all of your passion, all of your energy and, because of
outside forces completely outside of your control, you got to
start planning for alternatives? I think it would help me, it
would help our country to hear that.
We could start with you, Mr. Ward.
Mr. WARD. Yeah, I have lived through some ups and downs.
The coal market historically has highs and lows. My wife and I,
we have faced them, many of them, day to day. You wouldn't know
if, when I returned home, if I would have a job. Then the good
times would hit, a change of administration. The coal company
would see or the coal industry would see a little bit of
relief. And then you would see people like me, you know, buy
houses, buy this, buy that.
And, generally, just one election would change all that.
With policies that would just push down, it would spin out. And
I always made fun of--not really fun but just made a comment
that you could look at the local bank and see what the--what
people are going through because the vehicle that they went and
bought a month ago, they can't afford because of the decline in
the industry and it is sitting there for sale, besides the
ATVs, the houses for sale, the people moving away.
That is--and I know that my wife and I, we have set--I have
sliced bread just to make two pieces and then on the other side
I have bought two loaves of bread at one time. So I have seen
both sides of that. Fortunately, right now it is on the high
side. So but all of the people that work for me, my employees,
they go through the same struggle.
Mr. McDADE. Yeah, I have heard it a couple of times. It is
that we are all just trying to survive still right now. It is
still at the same point. There is--you know, we are seeing
things come back online a little bit. But my business, it has
got to make money. And there is less and less money to be made
not only from rising input costs.
But, you know, over--I do a lot of forecasting. And I know
how much my business should have made in December. I am sure of
it because I saw the run up. I have done the numbers. We have
been spot on many times and we were and it was 30 percent less
than we thought we were going to make in December.
And we just saw through this fault a tightening closer from
last year's numbers to this year's numbers until we hit
January, and then our numbers this year slumped under last
year's numbers. And so that gap that we were above just kept
getting smaller and smaller until it went inverse.
Now there is some recovery going on right now, and I see
good signs for a numbers of reasons, mostly because we try
really hard. But growth right now is--you know, we got a lot of
irons in fire and we are trying to figure out which ones we got
to put on the back-burner.
Ms. BACHMAN. We struggled a lot when we first opened our
business. We--I was in the kitchen a lot. So and I didn't hire
an accountant right off. And I lost $17,000 in a month and a
half just with internet or the internet loss of that in the
credit card transactions.
We almost lost our home. My husband was working full time
in D.C. still and we were paying--using all of his money just
to pay for our employees and our cost of goods because we
didn't have the money that we were supposed to make from the
sales. And, again, it was poor internet infrastructure.
But, you know, we just we almost threw in the towel. We
almost gave up. But we just--I don't know what it is. It just--
we gave it everything we had. We started marketing heavy. We
started doing all these share contests and giving away free
dinners, and people would come in. And, you know, somehow it
turned around our business. And I now have a wonderful team
that works for me. But we almost didn't make it, but we are
glad we stuck with it.
Mr. PLAUGHER. You asked what--about the conversations
around the kitchen table or the meeting table. And, with us,
anytime we faced hard times, when we are discussing what we are
going to do and which way do we go next, we are always talking
about our people. I am fortunate. I got the greatest employees
in the world. This room that you guys sit in was a construction
site when I walked your team through here a week and half ago.
And anytime that we have faced hard times, the conversation
all boils down to how do we take care of our folks. We have to
keep things going. So no matter what cards we are dealt, I
guess, or what things are handed down from Washington, we have
got to look at the hand we are dealt and say, okay, where do we
go from here. We are going to win. So we just got to figure out
how to do it.
And like Wylie said, pretty much everybody I have got works
really hard. As the founder of our company has always said, we
are a bunch of C students but, man, we're not afraid to work.
So that is where our conversations kind of boil down to.
Mr. FITZPATRICK. I appreciate that.
I yield back, Mr. Chairman.
Chairman SMITH. Thank you, Representative.
I would like to recognize the subcommittee chair of Social
Security, Mr. Ferguson, from Georgia.
Mr. FERGUSON. Thank you, Mr. Chairman.
And thanks to each of you for being here today. Listening
to your story, it hits really close to home because it sounds
like this area has been through or is going through what my
hometown of West Point, Georgia, went through.
We were once home to the textile industry. The largest
employer in our area was a Fortune 500 company, and we had
about 35,000 people in our area working in the textile
industry. And then, all of a sudden, some folks that were
educated beyond their intelligence that had been elected to
office in Washington came up with policies that destroyed our
way of life there. And they passed NAFTA. And there were a
series of promises about better jobs that would come and
greater economic opportunity, and those promises were just
simply empty promises. Never materialized.
And then Washington's response was to send more checks,
more government assistance, and more ideas from Washington to
try to save our area. And, again, it left a generation in
poverty. It moved people from the middle class into poverty.
And, most importantly, it eroded hope in our area.
And it seems like, listening to you all today, that these
same sort of broken promises are being seen here in this area.
This Green New Deal of energy just seems to be destroying a way
of life here, whether it is in the cost of propane, as you
mentioned, to run your business, the energy needed to harvest
and process and distribute wood, the cost of energy to process
your product, Mr. McDade, and clearly, the impact that these
policies have had on the coal industry.
It just seems like that these, again, are empty promises
that are backed up with more checks that come through that
disincentivize work, that put people on the sideline, and they
just leave a generation behind the rest of the country.
So I am sorry for what Washington has done to you,
Republicans and Democrats. It is shameful, and it shouldn't
happen. And that is why we are here, to understand the impact
of it but also figure our way out of it. And it sounds like one
of the most important things that we can do is to get D.C. out
of these policies and let American small businesses run.
So, with that, Ms. Bachman, first of all, I am sure running
a restaurant, you probably look over to your left and probably
need to buy some of Mr. McDade's product on a regular basis,
because----
Ms. BACHMAN. Yes.
Mr. FERGUSON. Yes, exactly. But talk to me again about the
cost of propane. I want to make sure I heard you right on that.
You said it had doubled?
Ms. BACHMAN. It has doubled since 2020 for us.
Mr. FERGUSON. Okay. And the other energy costs that are
wrapped into your lease have also gone up.
Ms. BACHMAN. Yes. Our lease has gone up. We started our
lease at $2,000, and it is today at $4,500 a month.
Mr. FERGUSON. And a big part of that is the energy cost
that is associated with it.
Do these same costs around propane, do they impact a lot of
your customers in this area that heat their homes with propane?
Ms. BACHMAN. Oh, I am sure it does. I just had an employee
last month borrow money off of me because she was--again, it
was electricity, but she was behind $600 on her utility bill.
Mr. FERGUSON. Wow, $600, that is a impactful.
Ms. BACHMAN. And she is a single mother of two, two
children.
Mr. FERGUSON. Wow.
Mr. Ward, I am sure you have heard an awful lot from the
Biden administration about green energy jobs and how that is
the wave of the future. How have those manifested themselves
here in this area, as coal jobs go away and folks are left
without income and hope? Have those green energy jobs
manifested themselves here in this region?
Mr. WARD. In southern West Virginia, where I am from, I
haven't seen too much green energy jobs take any jobs that we
currently have.
Mr. FERGUSON. I don't believe I would hold my breath
waiting on them. And it is a shame. It really is a shame that
you talk about energy policy and do it in a theoretical way.
And it is probably blissful ignorance, but, at the end of the
day, it has an impact on families, and it is hard.
Mr. Plaugher, again, talk to us about the cost of the
product that I am--the cost of your product that I am paying
for as a consumer, because of the energy cost.
Mr. PLAUGHER. Well, again, our cost of manufacturing the
product, our cost of operating has gone up dramatically because
of the cost of energy, because of the price of oil, really, and
how that translates to all of the other goods and services you
have to buy, along with just the fuel to operate. Again, our
prices on those things have more than doubled since 2020.
Mr. FERGUSON. Thank you. And, listen, it just sounds like
that the promises of the Green New Deal energy policies are
just empty, and they are having a negative impact on folks
here.
With that, Mr. Chairman, I yield back.
Chairman SMITH. Thank you.
I would like to recognize the gentleman from Kansas, Mr.
Estes.
Ms. ESTES. Thank you, Mr. Chairman.
I want to start off by saying how much I appreciate today's
field hearing. You know, too often we are stuck in a bubble in
Washington and away from Americans that really are impacted by
the decisions we make. That is why I travel home every weekend,
go to the grocery store, go to the gas station, fill up my van,
and trying to make sure that I stay involved with the people
that I represent.
We hear stories every day from Kansans and Americans
throughout our districts about the concerns that they face,
similar to what we are talking about today. You know, the Biden
administration and some of my colleagues have tried to paint a
rosy picture about the economy, but that is not what people are
saying in Kansas or you are saying here today in West Virginia.
I had a woman in Wichita call my office a few weeks ago,
was shocked to discover that her gas bill was $100 more than it
was a year ago. And she was not knowing how she was going to
handle it and angry that decisions and policy decisions in
Washington, D.C., and people had openly attacked energy
production in her area.
I grocery stores, people are shocked to see the price and
having to discover how much they have to pay for groceries. We
have heard recently from the Biden administration that
inflation is easing and that they were celebrating 6.5 percent
inflation. Well, 6.5 percent inflation is not something to
celebrate. That means prices were 6.5 percent more than they
were a year ago, and that was on top of being 7 percent higher
than they were the year before that.
And so, in total, inflation is up 14 percent since
President Biden took office. That is kind of a staggering
number to think about, that, in the last 2 years, the same
goods and services cost 14 percent more than they did before.
And that is a permanent loss of American wealth through that
cost. And wages haven't kept up. Real wages have dropped 3.5
percent over the last 2 years. For 21 months in a row,
inflation has outpaced wage growth under President Biden.
The state of our economy is bad and Americans know it. In
our first constituent service survey of the year, 71 percent of
the respondents said inflation and the economy are the priority
for us to address in Congress. It was the third highest issue
for Kansans just behind Federal spending and the southern
border.
Kansans and West Virginians know that 14 percent inflation
over 2 years is crippling for families and small businesses,
and we need to implement commonsense solutions to help
Americans struggling through this Biden economy.
One way we can do that is stop attacking American energy,
as we have talked about today. You know, one day in office
President Biden and his executive order pen started attacking
energy producers. And we have seen gas prices tick up ever
since.
The so-called Inflation Reduction Act allowed the Biden
administration to sidestep rulemaking process, allowing the EPA
to impose a methane fee, despite ongoing marginal well studies.
These fees on small, often family-owned, wells could cost the
economy up to $9 billion and as many as 90,000 jobs.
That is why I have reintroduced a bill, the Marginal Welt
Protection Act. The bill would prohibit the EPA from imposing a
methane fee on marginal oil and gas wells. And to try to cover
up the disastrous energy policies, President Biden has put our
Nation at risk by selling off the Strategic Petroleum Reserve,
including to companies controlled by the Chinese Communist
Party.
The SPR's level is at the lowest level since 1984. And,
unfortunately, the administration has not created a reasonable
plan to replenish the reserves, and they are dragging their
feet to go through that process. We need to be responsible
about refilling that so that we have that strategic safety net
for us and the country.
A couple questions before I run out of time.
Ms. Bachman, have you had to increase your prices to
compensate for some of those phenomenal food price increases
you had?
Ms. BACHMAN. Yes.
Ms. ESTES. And so how have your customers reacted to that?
Ms. BACHMAN. Well, most customers understand, but you have,
you know, still a few that are angry that the prices have
increased. They don't realize that we buy quality ingredients.
So, you know, we are buying steak that has been aged for 21
days. So you are going to pay a higher premium on something
like that. So, I mean, we get good quality ingredients. But,
for the most part, customers have been very understanding. And,
yes, we have increased our menu prices.
Ms. ESTES. Thank you. And, you know, I just want to say
again thank you all for being panelists today, for spending
your time with us and sharing some of the information about the
issues that you are addressing and having to deal with so that
we can make sure that we make good policies to help with that.
So, with that, I yield back, Mr. Chairman.
Chairman SMITH. Thank you, Representative.
I would like to recognize the gentleman from Pennsylvania,
Mr. Smucker, for 5 minutes.
Mr. SMUCKER. Thank you, Mr. Chairman.
And hello, everyone. It is wonderful to be here. In fact, I
feel a lot more at home here than in our Ways and Means
Committee room where we all have to wear ties.
I hung a lot of drywall in my life, and I built a
construction company. So this is where real things happen, and
I really appreciate the opportunity to do this field hearing.
I do think it is worth pointing out who is not here. So
this was intended to be a bipartisan hearing, as all of our
hearings are. And, with the exception of my friend Mr. Don
Beyer, not one Democrat has chosen to show up.
They had access to the same bus we did. They could have
driven their cars. They are coming from around the country to
come to D.C. But I think they are more comfortable--they must
be--in their bubble in Washington, D.C., inside the beltway
than to be out here and really talk to real Americans about how
their policies are impacting all of you.
We heard it from them. We went to all of their hearings
that they held when they were in the majority. And they kept
blaming us, saying we didn't care because we didn't vote for
their massive spending bills. And then they won't even show up
to talk to each one of you and to hear from you. So I think it
is a shame.
Secondly, the other point I want to make--and Mr. Beyer is
a good friend of mine. I know he is very serious when he says
he cares about each one of you and your families, as he did
initially. I have worked with him on a number of issues.
But listen to his opening statement and contrast that with
what we are talking about. They literally believe that
Washington is the answer to your problems. He went down over a
list of items that they spent taxpayer money to give to you. He
talked about making it easier to install solar on your home. He
talked about all the government handouts.
And it is not what I heard you want. What I heard from you
was get inflation under control. Get the cost of fuel under
control. Unleash American energy independence. Find a way to
get people back to work. Get people back into the factories.
Again, more focus on inflation, a good education system. These
are the things that you really want, not government handouts.
And so I just want everyone to think for a moment about the
difference in the approaches here and what the parties feel is
important.
And Mr. Beyer talked about rising interest rates as well.
Well, you know what caused that, right? So, first of all, the
trillions of dollars in additional spending caused the
inflation. Their economists warned that would happen. We knew
it was going to happen. We warned them.
But spending money we don't have, by the way, printing
money, trillions and trillions of dollars, spending about $10
trillion just in the first 2 years of this administration over
the trillions that are spent on an annual basis caused the
inflation.
And then, when they were not willing to cut back on the
spending, the only tool we had was for the Federal Reserve to
raise interest rates because you can't just keep inflation
going up; it can quickly spiral out of control. And they are
trying to tamp down the economy by raising interest rates.
These are failed policies, folks. And we believe in you.
They believe in Washington to solve your problems. We believe
in the workers who are represented here today who are feeding--
who are building America. In my area, there is a lot of snack
food. You know, if you have eaten an Utz pretzel, if you have
had either the Peeps, you--I am from Pennsylvania so I say
feeding the country.
But here you are building America, and you are part of
making this economy and this country what it is, and too often
their policies get in the way.
So I have lots of questions, but I went on a rant, but I
just want you to know how much we appreciate the opportunity to
be with each of you. We appreciate the work that you are doing
every day. We appreciate the witnesses who are taking big risks
to run a business, as I did. And you are the job creators in
the country, and you are helping many people as you are doing
that. So thank you so much for hosting us.
Chairman SMITH. Thank you, Representative.
I would like to recognize the gentleman from North
Carolina, Mr. Murphy, for 5 minutes.
Mr. MURPHY. Thank you, Mr. Chairman.
And I want to thank you guys for coming out and everybody
for participating today. The lunch was pretty doggone good. I
come from northeastern Carolina barbecue-wise, so we will have
a little bit of a contest there, but it was pretty doggone
good.
We are driving up here in this big bus, and there are
police following us, and I can only imagine what people on the
road were thinking. They are thinking either, one, well, it is
a bunch of Members of Congress or it is a bunch of criminals
being escorted by the police. And I am starting to wonder if it
isn't a little bit of each, because I think that is what the
American public feels Congress is like, a bunch of criminals.
And I am here to say, and I think you guys have seen this,
we have some people that really give a damn, and both
Republican and Democrat, I really mean that. Some folks that
really, really care.
Sadly enough, some of the philosophies are absolutely
divergent because individuals don't come out and see how the
rest of their world lives. I come from eastern North Carolina.
It is flat. We don't have these kind of hills, but we have
water. We have pine forests. We were talking about that a
little bit earlier.
And so I understand the pressures you guys are facing now
with interest rates, a declining home industry, and the
pressures you have to get rid of your product.
You know, as my colleague Mr. Smucker said, you know, so
much of the spending has gone into--we are a self-inflicted
crisis one after another. We knew coming out of the pandemic,
there was going to be pent-up demand. There was going to be
decreased supply because people were locked out of their jobs.
But, when you add fuel to the fire, you destroy the fabric of
America.
And that is what you guys are facing. I understand that,
and I am sorry for that. I will tell you the way interest rates
are going now--they just raised it a little bit--they are not
going to change anytime soon, because we haven't gotten the
fire under control.
I look at what happened in our forestry industry, which is
the same here. We are trying to export wood chips, but the
world is going against that and pushed by the climate stuff.
Second is, you know, I look at our fishing industry. That
is a big deal for us in eastern North Carolina. Fuel prices
have gone through the roof. The administration just attacks
with rules and regulations. Now they want to put in a rule that
no ship above 35 feet will be able to go more than 10 miles an
hour. Try going 10 miles an hour on your own, see how long it
takes you to get anywhere. So you won't be able to fish. And we
take the vast majority of our seafood from overseas anyway.
One thing, I am a physician by trade, and I look at the
workforce, and I understand that this is one of the epicenters
of the opioid epidemic. So I wonder if each of you could tell
me a little bit about that, which, by the way, we had, in 2021,
107,000 people died from the opioid epidemic. It is going to be
easily over 120,000 this year. So those are people that could
come and work in your workforce but cannot.
I will also say just one aside before I ask you the
question. One of the reasons you are having problems finding
people to work is President Biden has continued the public
health emergency, which, in my medical opinion, should have
stopped a year ago. What is the result of that? Eighteen
million people nationwide are now receiving Medicaid benefits
who are not eligible.
So those individuals are sitting home cashing a check that
are not eligible under Federal law, and they are keeping out of
your workforce. So think about that, all those individuals. And
then, when I hear the 55 percent participation rate here in
West Virginia, it just kills me. I am surprised you can even
stay afloat.
And so if you can, tell me a little bit of story just
because you can, you got about a minute, if individuals in your
workforce have been affected by the opioid epidemic.
Ms. BACHMAN. I know, with the restaurant industry, I mean
we are constantly dealing with it, especially in the younger
days, because I didn't know what I was looking for. I had no
idea what a drug addict looked like. But they go through
lengths to go and do drugs at work. We found needles and stuff
in our ice machines. It is crazy.
I am pretty blessed now. They know that my stepfather, he
is actually the chief of police here in the city of Petersburg.
So, you know, I have got a no-drug policy. So we have cleaned
it up. But we struggled for the first 3 years. We had tons of
drugs in our restaurant. And, you know, that is just not the
way I was raised, but this is my workforce that I had to choose
from, unfortunately. Again, I have came a long ways since then,
but that was the beginning.
Mr. MURPHY. I will tell you I just hear this story over and
over and over again: We can't get somebody because they can't
pass a drug test.
If you look at what is happening at our southern border,
ladies and gentlemen, we are being invaded by drug cartels. And
we are allowing that ourselves. And it is killing our Nation in
so many different ways; not only people actually dying, but we
are killing our workforce because we are addicting other
individuals.
I am over my time. Again, thank you so much for your
stories. They meant a great deal. And don't give up the fight.
We are the greatest country on Earth, despite our bumps and
bruises. And thank you for your work.
With that, I yield back, Mr. Chairman.
Chairman SMITH. Thank you, Representative.
I now recognize the gentleman from Tennessee, Mr. Kustoff,
for 5 minutes.
Mr. KUSTOFF. Thank you, Mr. Chairman. Thank you for
arranging the hearing today outside of Washington, D.C., and
thanks to everybody at AWP for being great hosts, and also to
the witnesses for appearing today.
If I could, Mr. Plaugher, to you, as I understand, at AWP,
companywide you have 800 employees. You are roughly about 50
short. Am I right that, before the pandemic, for a starting
wage unskilled worker, you were paying about $11.50 per hour,
now you are over $14 starting wage?
Mr. PLAUGHER. Yes, that is correct.
Mr. KUSTOFF. And can you generally talk about, benefitwise,
health insurance--I know there has been talk, Ms. Bachman, with
you with health insurance--what you do for your employees
health insurance-wise?
Mr. PLAUGHER. Yes, thank you. When we hire an employee on
full time for us, they become eligible for our 401
(k) program and also our health insurance. And the founder
of our company has always insisted that we try to keep health
insurance for our employees and keep that as reasonable as we
possibly can.
If we were to look at not carrying that health insurance,
we could certainly raise our minimum wages considerably by
doing that, but my older employees--well, all of my employees
with families, they really depend on that.
It doesn't mean as much to the 18- or 20-something that is
just out of high school. They are bulletproof at that point, so
health insurance isn't something that they really consider too
much when they are going to look for a job. But for my long-
term employees, it is a critically important thing. They have
to have access to good health insurance.
So we have tried to keep our health plan as robust as we
possibly could and as cheap for our employees as we possibly
can. And we are actually a finalist for Health Rosetta's Health
Plan Heroes award and, if chosen, we will be ranked in the top
2 percent of selffunded health plans in the United
States.
Mr. KUSTOFF. You are a good employer. You have a good
starting wage in West Virginia, good benefits. Your opinion--
and you have been here a while--the enhanced unemployment
benefits that were paid out to people during the pandemic and
afterwards, stimulus payments, were they a disincentive for
people to want to come to work?
Mr. PLAUGHER. Yes, absolutely. It put businesses that
continued to operate in the position of competing against the
government for employees. You know, as the pandemic went on, we
had employees that were coming to us for every reason to try to
get out of work, you know, and to be eligible for those
enhanced unemployment benefits when they realized they could
actually make more money staying at home than they could coming
to work.
Now, that was a very small percentage of our employees. We
have a very loyal workforce, and our crew has really stuck with
us, and I can't say enough good about them. But a lot of the
benefits that are still out there--I think Mr. Beyer commented
earlier about a lot of those have ended at this point.
But I can tell you from experience, I have had plant
managers that tried to give a raise to an employee. I had this
just very recently where an employee, he is a very talkative
guy, and every time my plant manager would come near him, he
was like: Hey, I need a raise. You need to give me a couple of
bucks an hour. I really need a raise.
So I happened to be down there the day that the plant
manager came to him and said: Hey, you have done a good job.
You have done everything I have asked you. You learned this new
skill, and I am going to give you a raise. Here is where we are
going to go.
And the employee looked at him, and he said: Well, I am
going to have to quit.
And my plant manager was dumbfounded, and so was I. What do
you mean, you are going to quit? You have been asking me for
this raise every day for months. You have done what I asked;
now you are going to get it.
And the employee said: Well, it is going to jeopardize my
medical card and the other benefits that I get. But don't
worry; I will quit and come back to work for a temp agency. I
will work for you, but I have got to quit.
Well, there is something badly wrong when there is not an
incentive for those employees, you know, to keep growing. You
have done a good thing. You need to keep advancing. You need to
keep learning new skills to try to earn more money.
But there are programs in place, whether they be from the
Federal Government or from our State, that cause us to compete
against that, and they disincentivize those employees to
advance, to get ahead. And that is wrong.
Mr. KUSTOFF. In your opinion, the child tax payments that
went to people over the last year or so, did they
disincentivize people to want to work?
Mr. PLAUGHER. I don't know about that. You know, and I
don't know--I know that a lot of my colleagues that were doing
well in life, their children got some of those payments too.
And they felt like: Well, I really didn't need that, you know;
there were people who needed it more than me.
I don't know if that actually disincentivized people from
working or not.
Mr. KUSTOFF. Real quick, Mr. Ward, you talked earlier about
West Virginia. You talked about the coal mines and how far you
got to drive. Now, you got people all around the country
watching today's hearing. What would you say about West
Virginia and the importance of coal to this State and what it
means to you?
Mr. WARD. What coal means to the State, the taxes that coal
pays. We pay a lot of taxes to the State, to the economy. So
coal is a big provider for the State of West Virginia as far as
keeping stuff going. And coal is important to me because it
puts food on my family's table.
Mr. KUSTOFF. Thank you.
Thank you, Mr. Chairman. I yield back.
Chairman SMITH. Thank you, Representative.
I would like to represent the gentlelady from the State of
New York, Ms. Tenney.
Ms. TENNEY. Thank you, Mr. Chairman. And thank you so much
to you and Representative Miller for hosting us here, along
with Alex Mooney, our colleague. You have great representation.
I hale from the State of New York. I am a business owner.
Our business was founded in 1946. We use paper products that
are derivatives of yours. We do pharmaceuticals and packaging,
and I used to run a newspaper.
But I want to just say, first of all, I was an attorney for
many years, and I have always worked in a business, but I want
to just give a shout-out to Kelly Crites, your general counsel,
because that is my job and my family business. And it is a
tough job. And we know that you are the straw that stirs the
drink when a lot of things come up, and we appreciate it. I had
a great conversation with her earlier.
But I really appreciate what I hear you saying today. I am
from a very similar part of upstate New York. I am not from New
York City. You will hear from our New York City Representative.
But things are very similar in New York as they are here.
We have many of the same problems that you are experiencing,
having a hard time getting people to come to work, competing
against government. As you said, Mr. Plaugher, just to talk
about we have employees that don't want a raise and don't want
to succeed because they are going to lose their benefits.
And I think it is worth talking about, you know, Mr.
Beyer's discussion of the employment participation rate
compared to the seventies, where I believe it was about full
employment, not people taking partial employment, and also so
many people that left during the pandemic and never came back.
So we have the same problem trying to get people to come to
work, getting quality individuals.
And you mentioned something that really struck me, as a
person who does a lot of our human resources, is the drug
testing aspect of it. We cannot get people to work. And I know
this is also a problem with our Armed Services.
So, Mr. McDade, you were there, and thank you for your
service as well. This is a problem. And Mr. Murphy rightly
mentioned the southern border.
I have a question, though, on what happens with your
unemployment insurance. And I want to ask each one of you, were
you assessed in the State of West Virginia after the
unemployment insurance or after you were--were you, number one,
forced to shut down during the pandemic, and did you have to
repay any unemployment insurance? Because I know maybe Ms.
Bachman might have been hit more with the restaurants, but if
each of you could just explain how your unemployment insurance
worked and if you were forced to shut down during the pandemic.
Mr. PLAUGHER. Well, we were not forced to shut down during
the pandemic. We were an essential business, and we were
allowed to run. I am afraid I don't know the answer to the
unemployment insurance question.
Ms. TENNEY. Ms. Bachman.
Ms. BACHMAN. I am in the same boat. My husband helps a lot
with that end of the business. I am kind of more on the
handson side. And the restaurant had to shut down, but
we were innovative, and we ended up opening up a drive-through/
grocery store for our community. And we didn't really charge
anything extra for the groceries because, you know, my friends
were going to Walmart, and we saw the shelves were empty.
So we just used it as a service for our community that, you
know, come and order some food from us, and we have some
grocery supplies at no extra cost than what we got them.
Ms. TENNEY. Did you get reassessed for unemployment
insurance from the State of West Virginia, do you know?
Ms. BACHMAN. I am not sure.
Ms. TENNEY. Okay. Mr. McDade.
Mr. McDADE. We built during the pandemic, and so we didn't
start hiring until the April kind of 2021 timeframe.
Ms. TENNEY. But I believe, rightly so, your industry was
considered an essential business.
Mr. McDADE. It was. And my colleagues in my industry, it
was. It was an essential business. And you probably know that
because you probably smelled whiskey in your hand sanitizer for
a number of months during the pandemic.
Ms. Tenney. If you could get it.
Mr. McDADE. That is what most of the distilleries did.
Ms. TENNEY. Yeah. No, thank you. I don't know if you were
aware of that, if that affected your business, but the
unemployment insurance was an issue.
Mr. WARD. As far as Itmann CONSOL in West Virginia, we were
just getting started during the pandemic, but my prior company
that I worked for, we were deemed essential. And I can't
comment on the unemployment.
Ms. TENNEY. Mr. Ward, while we are with you, I would just
like to ask you, so I just stepped off the plane on Saturday
morning in upstate New York, and it was minus 12 degrees. We
had record cold in upstate New York.
And with the billions in subsidies that have been given to
the Northeast and our region for solar and wind, only 3 percent
of the electric grid had anything to do with sustaining the
people who suffered during this recent cold. And I have to tell
you that my own Buffalo Bills had 7 feet of snow at one point
and had to end up playing in Detroit.
So I really would love to know if you could tell us how
much of West Virginia's energy grid relies on coal.
Mr. WARD. I can't quite quote exact numbers, but I am
assuming it is over 50 percent.
Ms. TENNEY. Okay. Well, thank you so much. I believe my
time is up. But thank you to all of you. Thank you for your
service and for fighting the good fight as businesses. We are
on your side. We want to see you succeed, and we want to help
you. Just be glad you are not in New York. Things are worse
there. Thanks so much.
Chairman SMITH. Thank you, Representative.
I would like to recognize the gentleman from Utah, Mr.
Moore.
Mr. MOORE of Utah. Thank you, Chairman. Thank you, Ranking
Member Beyer.
We are absolutely thrilled to be here. Washington needs to
be constantly in the communities in which they serve and
understanding these issues firsthand. Your testimonies were
great, and I want to recap just a couple of things I learned
from each of your testimonies. But I am going to pose the
question that I am going to ask of you, and then I will briefly
share just my appreciation.
The question that I would love many of you to weigh in on
is, if you could choose, if you could make sure we understood
one to two things to get right and keep consistent for you, as
business owners and crucial people working in our economy, what
are the one to two things that we need to get right and keep
consistent?
As a few of us that are in our second term had the distinct
honor of running for Congress for the first time as COVID was
ramping up and, you know, there was a lot of confusion going on
and a lot of really well-intended policies but ultimately had
long-term effects took place, one thing hit me, because I came
from 8 years--my previous 8 years were in management
consulting, where all I did was try to help small businesses
and businesses grow and navigate sort of tricky waters, right,
and predict the future.
And the thing that just stuck out to me, and it has even
gotten worse over the last 2 years, is the policies we
implement in Washington absolutely affect you all, and it makes
it virtually impossible as things are constantly changing for
you to do your job.
I always joke that us politicians, we live our lives in 2-
year increments where you all, as CEOs and workers, you are
looking 10 years out. And there is a disconnect there. So if
there is one to two things that if you could have us get right
and keep consistent, I would love to hear from you.
Mr. Plaugher, your testimony actually inspired that
question, just talking about the things that have been so
difficult to navigate.
Ms. Bachman, your emotional piece of how difficult it is to
build a business plan, put it in place, and then have
everything disrupted and having to make constant change to all
the world around you when there should be more consistency.
And, Mr. Ward, I constantly talk to people about building
clean energy, and we have to have baseload power to build clean
energy. And I appreciate the work that you and your colleagues
do. I represented in my first term a energy-producing area, and
the environmental issues that you all are leading out on it,
and we need to make sure we support baseload power.
And then, Mr. McDade, I will take it a little bit of a
different direction. You served your country. The second half
of your time in your career is something so productive. And
there are so many veterans that are going through difficult
times right now, and they are not finding that productivity and
what you were able to find in starting your own business and
engaging that way. And you have been a model, and I really
appreciate your work there. And we need to make sure that we do
that for all of our veterans.
One to two things. Let's start here, Mr. Plaugher, and just
quickly go down, and if we could get it right, let's do it.
Mr. PLAUGHER. Number one looks to me like energy policy.
And, you know, we need consistency. We need to know where we
are going with energy policy. I am all for green energy, but it
looks like the way this is being brought forward it is at
everyone's detriment, and it is definitely hurting communities
like ours. And the cheaper energy that we have, the more
opportunities for business, the more opportunities for jobs are
out there available, and that needs straightened out.
Mr. MOORE of Utah. Ms. Bachman.
Ms. BACHMAN. I agree with Tom as well, but I also feel that
you need to decrease unemployment benefits so that you can get
people motivated to come to work.
Mr. McDADE. Leadership and vision at the top are going to
stabilize our markets. If you tell us what you are going to do
and you lay out a plan to bring down inflation, bring down fuel
costs, just putting that plan together and presenting it to the
American people is going to go a long way in stabilizing those
markets. If we talk about it and say that it is going to
happen, quite often if we follow the right steps it happens.
But back to another one. Fentanyl killed my kid brother, a
cheap pill on the street. And, you know, I heard it for a while
that some politicians saying, you know what, we need to make
Fentanyl a worse crime.
And the first thing you can do is make it first degree
murder if you are dealing Fentanyl, period, and that is it and
we will nip this problem in the bud. But it is going to take
something very drastic to keep our children and our brothers
and sisters from dying on the street every single day.
It happened to me. I guarantee it happened to most of you
or someone you know. Everyone seems to have a story about it.
And, like, what are we doing? Like, nip it in the bud. Make it
a capital offense if you have to, but make it stop.
Mr. MOORE of Utah. Thank you for highlighting that.
If you will indulge, Mr. Chairman, for Mr. Ward just to
share his last thought.
Mr. WARD. The only thing I could ask is just every decision
that you all make just always put America first. Make sure
that, before your decision, that once you make it America is
better. Protect the southern borders. And that is my two
things.
Mr. MOORE of Utah. Thank you. Thank you all.
Thank you, Mr. Chairman.
Chairman SMITH. Thank you, Representative.
I would like to recognize the gentlelady from the great
State of California, Ms. Steel.
Ms. STEEL. Thank you very much, Mr. Chairman.
And this is a very important hearing on the state of the
economy. So thank you for our guests for taking time from your
busy jobs to discuss how they have been dealing with the
economic downturn for over the last 2 years.
And, Mr. Plaugher, I came from the lumber business my--
grandfather used to own. I have never seen this clean lumber
yard, you know, in my life. So I used to play with dust, you
know, sawdust and all these woods and stuff. So I thought I was
expecting that kind of lumber yard, but this is very, very
clean. So thank you for opening up this place, and I am so
grateful.
I represent southern California, and our families pay some
of the highest costs in the whole country. A lot of other
States, they complain about, you know, how awful this economy
and everything, but, you know, compared to California, I think
it is much better other States in the Nation.
One outrageous example of progressive policies that hurt my
constituents is the fact that State gas tax is 50 cents per
gallon plus 23 cents for cap-and-trade program to lower
greenhouse gas emissions, and 18 cents for State low-carbon-
fuel programs. So our tax and fees are much higher than any
other State's. It went up last year. Actually, $9 per gallon
people had to pay in California.
Government handouts without any plans makes working family
class and the small business going through the very tough time.
In California only--Ms. Bachman, you are working so hard for
the restaurant. Forty percent of small business never came back
in California. So it is really, really bad.
So, Mr. Plaugher, my constituents were on the front line of
the original supply chain crisis. We are located next to the
ports of Long Beach and L.A. There are the number one and
number two, the biggest size of ports in the Nation. Ships were
backed off the coast and trucks were lined up trying to get
into the ports. This caused all kinds of disorder in our
neighborhood and supply chain.
In California, it is the worst progressive policies. So
independent truckers cannot come in. A lot of truckers,
actually 50 percent of the truckers are independent truckers.
They cannot come into California, and they cannot drive. I
always tell people that you do whatever--you do opposite of
what California government does; then you know that you are
doing the right thing.
So you are trying to lead the company or work for. Can you
share how American businesses have been left on the hook for a
failed supply chain and how that affects not just your
employees that I have been hearing but those associated with
your business and community?
Mr. PLAUGHER. Well, as far as how, American businesses have
been left on the hook for the supply chain. I mean, again, it
looked like there were things that the government probably
could have done to help smooth the supply chain out or to help
things run smoother. And there really wasn't any action taken
on any of that.
And American businesses were left to just pick up the
pieces, to figure out how to navigate that situation as best
they could. And they did things like I mentioned before, that
you doubled up on the supplies that you bought because you
didn't know when you could get them again, and that led to
higher price increases because, you know, everyone was trying
to grab everything that they could get so they had what they
needed to operate.
The same way on the exporting side. There were a lot of
unfair things that happened, whether you were an importer or an
exporter, in dealing with the steamship lines and dealing with
getting vessel space and dealing with demurrage costs and
charges that were levied against you.
And you were stuck with them. I mean, you basically had no
repercussion. You had no way to argue them or to deal with
them. It was just another cost levied against you that you had
to deal with for somebody else's incompetence.
So all of it just led to more costs for American
businesses.
Ms. STEEL. My next question is: Many employers have
expressed concerns with me about the skill shortage in southern
California. I think it is in the Nation too. Can you share how
this could impact your business today but also in the future if
not handled by the government correctly?
Mr. PLAUGHER. As far as the skill shortage, we see a
shortage in the trades, you know, in trying to hire people with
welding skills, with, you know, different trade-related skills.
There is definitely a shortage there. And there are tons of
opportunities out there for young people who would want to go
into the trades and learn things like that.
You know, again, from our standpoint--and one thing that
was mentioned a while ago was our starting wages. At this
plant, we are actually at $13 an hour. Ours run from 13 to 18.
It depends where you are at. But that is for entry-level, zero-
skill labor. If we could get people in, we will train them. We
will teach them. We will give them skills. But getting them to
pass the drug test, to show up on time, to show up 5 days a
week and do that on a regular basis, that is the challenge.
And, as one of my plant managers commented one time, we
were meeting with an Economic Development Authority person, and
they were asking for job training they could offer, and he made
that comment. And he said: If their mama didn't teach them
that, I don't know what kind of job training you are going to
offer that is going to do that.
And that is just the basics of being ready to go into the
workforce.
Ms. STEEL. Thank you, Mr. Plaugher.
And thank you to all the witnesses.
I yield back.
Chairman SMITH. Thank you, Representative.
I would like to recognize the gentlelady from the great
State of Texas, Ms. Van Duyne.
Ms. VAN DUYNE. I appreciate that, Chairman.
And thank you all for being here. I cannot tell you the
warmth that you have received us. And if your Meadowbrook
Farm's barbecue and brisket is anything reflective of the food
that you have here, we will be back. And you guys have been so
good to be sitting there for hours as we have been getting up
and down taking breaks. So I really hope that part of this
includes getting them fed. And, by the way, me saying that from
Texas is a really big thing. And I don't know that I would ever
admit it in my State, but that is like some of the best I have
ever had.
And I appreciate getting out of D.C. I appreciate,
Chairman, you getting us out of D.C. I feel like we have to get
out of that Godforsaken place to be able to hear what is
actually going on in our country.
Last night, I flew in, and I took my daughter out to
dinner. We all talk about inflation. We went and got pizza. We
split an appetizer, had two drinks, and two personal pizzas.
Over a hundred dollar bill for pizza. It is ridiculous.
This is what normal people are feeling every single day.
And I will tell you, when I ran--I have been a Representative.
I was a city council member. I was mayor. I now work in
Congress.
My job is to represent the people in my district in D.C. My
job is not to represent D.C. in my district. And I think we all
feel like that. So getting out here and actually hearing your
stories firsthand is very, very powerful to me.
And, when I say hearing the truth outside of D.C., when I
am home, I have meetings with my small businesses, when I have
meetings with my teachers, when I have meetings with our
parents, with just normal constituents, I am hearing from them
every day that the problems that they are running into, high,
you know, what, 40-year high inflation. They are dealing with
problems with supply chains. They are dealing with energy
costs. They are dealing with a hard time hiring people.
And yet, just earlier last week, we had a President who
wants to make everybody feel better. And he comes in, and he
tells you: Oh, no, we have beaten inflation. Oh, no, no, we
have no problems. Look at how great the economy is doing.
Now, I don't know about you. I feel like I am in a twilight
zone when I hear that. And so my question to you all is, am I
the only one? Because what I have heard from every single
witness today is you are going through hardships.
So, out of curiosity, do you feel like what you are seeing
is, one, reflective of what people across the country are
seeing? And, two, do you feel like the policies that are coming
out of this administration are solutions to the problems that
you are facing?
And, Mr. Plaugher, I will start with you.
Mr. PLAUGHER. Yes, I believe everyone across the country is
dealing with these issues, and it has got to be hitting us
equally hard every place. I mean, inflation is hard on every
family, on everyone.
And no, I don't see the answers coming from Washington
right now that are going to fix these things. Quite the
contrary. It looks like the direction our energy policy is
going, things are going to continue to cost more. It is going
to get more expensive and a lot more uncertainty there. So, no,
I don't see the answers coming at this time.
Ms. VAN DUYNE. I appreciate you saying that.
Ms. Bachman.
Ms. BACHMAN. I agree. I don't see any hope in the next few
years. My husband and I are returning back to work outside of
the restaurant. I mean, we have to do. We are in struggle mode
right now, in survival mode, shall I say, just trying to make
it through all this. And we are hopeful that, in the next
election period, that the Republicans take over again.
Ms. VAN DUYNE. Mr. McDade.
Mr. McDADE. Which commodity is not more expensive today
than it was 2 years ago? I can't think of one. And they are all
tied to the same thing, energy and energy policy. When one goes
up, the other is going to go up. And that is all we see to move
those products.
But I see it even in my local community. I go by the local
gas station: $17 an hour and a $3,000 sign-on bonus to go be a
cashier at a gas station. Now, what does that do to the other
local business owners when they can make much, much better
money working--and there is nothing wrong with being a cashier
at a gas station, but you get my--I mean, there are technical
jobs out here in my place, in your place, in all of these
places. And so it is pushing everything up, at least that is
our perception from down at the bottom.
Ms. VAN DUYNE. Thank you.
And I am going to quickly ask Mr. Ward a separate question:
You keep hearing all of these things coming out of the
administration about all these great green new plans and how
that is flushing trillions of dollars into your community. You,
in particular, are you seeing it? Are you seeing all these
resources coming into your community?
Mr. WARD. No. No, we don't see any of that coming to where
I am from in southern West Virginia.
Ms. VAN DUYNE. Thank you very much.
Chairman SMITH. I want to thank the Representative.
The gentleman from Iowa, Mr. Feenstra, is recognized for 5
minutes.
Mr. FEENSTRA. Thank you, Chairman Smith.
I want to thank you. It is an incredible honor to be now
part of this committee, and I look forward to working with the
committee to create solutions to all the problems and concerns
that we have talked about.
I come from Iowa. I am a rural Iowa kid, born and raised in
rural Iowa. And I am no different than each one of you, right?
We work hard. We care about our country. We are happy, and we
just want to be successful. That is all we want. And yet, it is
a real struggle right now. It is a real struggle.
Our economy is in a precarious situation. Economics 101
notes that, when there is too much money chasing too few goods,
you are going to have inflation. And that is exactly what has
happened. We put $6 trillion--or this administration put $6
trillion into the economy. We have pinch points in the supply
chain. And we have this incredible inflationary issue happening
amongst us.
One of those inflationary issues is obviously our
workforce. Our unemployment rate is 3.4 percent. That means
there are about 5.7 million unemployed people in our country.
However, there are 11 million job openings currently. That
means there are two jobs for everyone employed. In a perfect
system, you could have two jobs.
However, we know that, because of skills, it doesn't work
that way. 2.9 million fewer workers are not in the workforce
because of the pandemic. Before the pandemic, all right, we had
2.9 million more workers. Why did that happen? Because we had
all these giveaways to keep people out of work.
So my question is this: Mr. Plaugher, I will start with
you. You talked about the different things that are keeping
people from work. You also noted what we need to do to train
people. How do we bring people to Iowa? How do we bring people
to West Virginia to want to work in our areas, in our
occupations?
Mr. PLAUGHER. As far as how to bring people to West
Virginia, West Virginia is a wonderful place, if you have never
spent any time here. And I think the State is doing a lot of
things right now that will attract more people to West
Virginia.
You know, I would like to see the native West Virginians,
though, again, I feel that there are a lot of people out there
who are not working who could be working. And the things that I
see impacting that so much are the drug issues and also some of
the benefit issues where we end up competing against the
government. And, you know, we need to straighten it out so that
people are incentivized to want to work, to want to get ahead.
Mr. FEENSTRA. Another issue that you brought up, Mr.
Plaugher, that you noted that home starts are slowing down, and
you are right. I mean, year over year that has passed, home
sales are down about 20 percent. Home affordability has never
been worse. It is even worse than in the 1980s.
And there are obviously two reasons for that. Obviously,
the big issue is inflation. Inflation is hitting building
starts. It costs 42 to 50 percent more to build a house today
than what it did several years ago. The cost of a mortgage is
double.
What an incredible nexus when you have your cost of
building a new house is doubled and the cost of financing it is
doubled. This is catastrophic.
Mr. Plaugher, when you start looking at forecasting for
your business, does this concern you? Is this something that,
you know goes bump in the night that you are worried about?
Mr. PLAUGHER. Yes, absolutely, it does. Again, our goods
that we manufacture go into hardwood products that are used
generally in single-family housing and home remodeling. So they
are more luxury items.
So, yes, absolutely. The forecast doesn't look good in
terms of that and helping our business.
Mr. FEENSTRA. And this is our concern for every business,
every business in our country right now, is the cost, the cost
of goods, the supply chain, the workforce. And you can see what
is going to happen. We are driving ourselves into a recession
when our interest rates continue to go up. The Fed just
increased another 25 basis points.
These are real serious issues that need to be resolved by
serious people. And I just think our administration is not
serious about what is happening, obviously. They keep saying
that everything is rosy, and that is wrong. So I greatly
appreciate each one of your testimonies, and it is time for us
to get to work and try to create solutions for you.
Thank you so much, and I yield back.
Chairman SMITH. Thank you, Representative.
I would like to yield 5 minutes to the gentlelady from New
York, Ms. Malliotakis.
Ms. MALLIOTAKIS. Thank you. And good afternoon to everyone.
I appreciate the chairman and the committee selecting West
Virginia.
I have never been to West Virginia. It is a beautiful
State. And I really enjoyed hearing from all of you today.
I represent New York City, Staten Island, and southern
Brooklyn. And, to be quite honest, the challenges you are
facing are not different from what we are facing in my city,
although I would say probably it is worse in New York City
because of our local and State government.
But we have the similar challenges when I speak to the
small businesses in my community, the restaurants that are
struggling after the pandemic, being slammed with food
inflation and high energy costs, and, of course, small
businesses that I represent just trying to get by. And,
unfortunately, I feel the policies that have come out of our
government, whether local or Federal, have just made it worse.
They haven't helped. They have actually made it harder for you.
And that is a problem. And I think that is why we are all
here today, to kind of hear--and, quite frankly, you are
validating a lot of what we have been saying, those who are
here. Sadly, the ones that need to hear this aren't here today,
mostly.
But we will continue to take this message and echo it,
because the reality is, is you have had to adapt. You have had
to make tough choices. You are dealing with higher energy costs
due to a bad energy policy, which we are seeking to reverse and
try to restore energy independence. And, like you said, we want
diversification. We are for clean energy, but not to the
exclusion of traditional energy sources that are affordable and
reliable.
In terms of labor, they have incentivized people not to
return to the workplace. We have worked to try to end that. But
it is like an endless cycle, right? They keep spending money
with one hand, and then they are taking it from you with the
other hand because now you are paying more in terms of
inflation and whatnot.
But, with the spending and the debt, as my colleague
mentioned, I mean, this is that endless cycle. They spend
money. They create more debt. It leads to inflation. Now the
interest rates are increasing. Now, as a result, mortgage
rates, loan rates, and that is impacting your businesses as
well.
So I have a very basic question, just a basic question,
because I think sometimes Washington needs to hear fundamentals
here. What would happen if your business spent more than you
took in? What would happen if your debt exceeded the value of
the products that you produce?
Mr. PLAUGHER. Our business wouldn't last very long. And,
you know, there is only so long that you can sustain something
like that.
Ms. BACHMAN. Same here. We would have to close our doors
immediately.
Mr. McDADE. I think you have seen in some cases we are
deficit spending on the ground just to maintain our businesses.
Mr. WARD. It would be the same result. We would have to
shut down.
Ms. MALLIOTAKIS. I think that says it all. And that is what
Washington needs to do as well. We need to adapt. We need to
make those tough choices. And that is what the Republican
Conference is aiming to do to try to manage our debt, to lower
our debt-to-GDP ratio, to be more responsible with your tax
dollars, and to stop trying to fix problems by creating more
problems.
And so I thank you all for being here today. Obviously, I
would have more questions, but my colleagues have already asked
them all. So I am pretty much at the end here.
One last thing, with a minute and 30 seconds left: The
interest rates, any of you are seeking to maybe take a loan to
expand or buy a new facility, you know, create a new mortgage
for that. Any comment you would like to make on how mortgage
and interest rates are affecting you right now?
And I can tell you as somebody, I speak to home builders in
my district slowing down now, 35 percent I think decrease in
home building. They are having difficulties now. Home buyers,
all that is slowing down.
How is that affecting your industry and particularly for
wood products, and then anyone else who would like to talk
about how it is impacting their business, preventing them from
expanding?
Mr. PLAUGHER. I think it affects all industry just as far
as access to capital goes. And I mentioned earlier that our
business, we depend on a lot of other small businesses to
operate, logging contractors, trucking contractors, folks like
that. A lot of those are folks that are just starting with one
truck or two trucks and trying to get their business going. And
so, for them, especially, access to that capital and the cost
of that capital is a huge driver in whether or not they can
actually start that business or grow that business.
So I guess I see that as all holding back some of the
business expansion.
Mr. McDADE. Well, I mean, we are in the middle of an
expansion right now. And the business has to grow. You know, we
are out of space. And so we will take it on the chin. That is
what we are going--that is what we have to do. And, yes, it
will be much more expensive to borrow money this time around
than the last time around.
Chairman SMITH. I also want to remind the folks in the
audience that there are clipboards being passed around. If you
want to submit any comments for the record, for the committee
hearing, be sure to fill that out. And we will submit that to
the official proceedings.
Last but certainly not least, we would like to represent
the great gentleman from the State of Ohio, Mr. Carey.
Mr. CAREY. Thank you, Mr. Chairman.
And as most people in Columbus, Ohio, we can trace our
roots right here to West Virginia. In Mason County, west
Columbia, he wasn't--my great-great-grandfather wasn't a coal
miner but he was a salt miner. And I actually just live about
11 blocks where he moved many, many years ago.
Mr. Chairman, we were talking. I would like to submit for
the record this article showing that West Virginia coal mine
employment is at its lowest level since 1980, at fewer than
12,000 coal jobs, or about half the level of just a decade ago.
And that is less than 10 percent of the all-time high.
So if you don't mind, I would like to submit it for the
record.
Chairman SMITH. Without objection, so ordered.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. CAREY. A couple of other things. I mean, I think I have
been looking at all the towns on this wall. And as somebody--as
Congresswoman Miller knows, I have been in most of those towns
over the years. But there is real people in those towns and a
couple of things.
I mean, a lot of us come here. We are from all over the
country. We don't have a State Senator like Randy Smith who is
a coal miner. Right? Jim Justice, who has been in the energy
industry. We don't have AGs like Patrick Morrisey who is
fighting Federal regulations. You have got Riley Moore doing a
great thing on the lending side of things.
But, Chairman, I am really happy you brought us out here to
West Virginia, because you are hearing from real people about
real things.
A couple of things I want to point out. If you look at coal
production historically, so in 2008, America produced 1.3
billion tons of domestic coal. Now whether that is
metallurgical, whether it is steam coal, 1.3. The only numbers
we have for 2021 is, the latest numbers we have, we are down to
580 million tons. Think about those numbers.
And So when you look at towns like Princeton and you wonder
what has happened to the economy and all the spinoff jobs, that
is the other thing. Mr. Ward, you talk about the miners that
you have in those--that work with you in the new mine. But for
every one of those coal miners, there are four spinoff jobs.
And if you look at some of the counties that--whether it is
Monongalia County, Marshal County, and you look at the average
income for a coal miner, it is anywhere from $75,000 to $90,000
a coal miner. Now, when you look at the average wage or the
average per-household income, it is $25,000.
So what happens when you take those good-paying coal jobs
away and the spinoff jobs away? It truly affects the economy
and definitely affects the economy of West Virginia and all
coal-producing States.
But it is not just coal. It is also natural gas. And I
think if we are looking at what we have seen as my--as my
colleague across the aisle there said, what percentage actually
comes from West Virginia in terms of power production per coal,
it is 88 percent.
And the other part, of course, is natural gas. And as you
were saying, you know, natural gas gets diverted, obviously. We
need to have an energy policy that is based on sound, reliable
science, not political science, one that understands baseload
energy, one that understands that there are only two choices of
energy that you could actually store on sight, nukes and coal.
Those are two baseloads.
Now in this rush that we had done as a country to green
energy, which is fine, I am all of the above, i think we should
have that. But when you look at all the products for these--
that go into a lot of these renewables, they all come from
China which, by the way, doesn't have the same mining
regulations that we have in this country, doesn't have the same
environmental, you know, cautions that we have in this country.
So, Mr. Ward, I probably went on a rant because it is
something I truly believe in. But could you just tell, I think,
this committee from Consol's perspective, which is a very
highly respected company out of Pittsburgh, can you just kind
of give what you guys do for the local community and the amount
of people that you're now employing that are relatively close
by here.
Mr. WARD. Yeah, we started hiring back in June. We took--we
took--took a look around and tried to get the very local that
we could. We started--of course, there is several jobs that I
have, you know, the electricians, there are varied trades I
can't hire out of that trade.
But we opened up to people that haven't even been in the
coal industry before and give them a job. This is the first
step that we took. My general manager, he insists that we get
local stuff as close as we can. We could do the bigger stores,
the bigger supply chains. But we get stuff needed locally. We
have several vehicles, fleet vehicles.
Mr. CAREY. It is safe to say you are definitely benefitting
the local economy.
Mr. WARD. Yes. We are putting back what we can.
Mr. CAREY. Thank you.
Real quick, Wes, who actually is the owner of Meadowbrook
Farm BBQ in the back, I spoke with him just recently. He
actually used to work at the Mount Storm Power Plant which is
serviced by the Mettiki coal mine. But he and he I were
talking. I am a big fan of ribs. But he told me, and I am sure
this goes the heart of the products, but just a year ago
barbecue ribs were double the price than what they were just
one year. Now they are still up 40 percent.
So I just thought I would throw that out there, and Wes was
just telling me about the economics of barbecuing.
So thank you, Mr. Chairman.
And thank you all for inviting us down. Thanks so much.
Chairman SMITH. Thank you, Representative.
I want to thank each and every one of the witnesses for
being here today. You took time out of your busy schedule, away
from your family, away from your employees to share ideas that
we need to hear as members of Congress.
I want to thank Allegheny Wood Products once again for
allowing to us be here in our very first hearing of the House
Ways and Means Committee this Congress.
And I also want to thank every member that took the time to
be here. I want to thank, Acting Member Beyer, for making the
point to be here.
I am extremely proud of you all for listening. This is how
we can move America forward, by listening to real Americans and
delivering on those issues. So thank you.
Please be advised that members have 2 weeks to submit
written questions to be answered later in writing. Those
questions and your answers will be made part of the formal
hearing record.
With that, the committee stands adjourned.
[Whereupon, at 2:07 p.m., the committee was adjourned.]
PUBLIC SUBMISSION FOR THE RECORD
=======================================================================
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
[all]