[Congressional Record Volume 159, Number 37 (Thursday, March 14, 2013)]
[House]
[Pages H1418-H1423]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CONGRESSIONAL PROGRESSIVE CAUCUS UNVEILS THE BACK TO WORK BUDGET
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 3, 2013, the gentleman from Wisconsin (Mr. Pocan) is recognized
for 60 minutes as the designee of the minority leader.
Mr. POCAN. Mr. Speaker, I rise today on behalf of the Congressional
Progressive Caucus to repeat and enhance our calls made by our
colleagues today to talk about the budget introduced by the House
Republicans.
We have a number of members of the Progressive Caucus who will be
addressing various components of the budget. I will start out with one
of the freshman Members from the great State of California (Mr.
Takano).
I yield to the gentleman from California.
Mr. TAKANO. I'd like to thank my friend, the gentleman from
Wisconsin, for yielding the time this evening.
Earlier today, I was joined by 22 of my fellow freshman Democrats in
sending a letter to the distinguished gentleman from Wisconsin (Mr.
Ryan) requesting specifics for his 2014 budget.
{time} 1750
As freshman Members, we had hoped Mr. Ryan's budget provided areas
where both parties, Democrats and Republicans, could find common
ground. Instead, what was presented was a document that was vague. How
can we begin to negotiate when we don't even know what we're
negotiating? And where Mr. Ryan is specific, it's in areas that he
knows that Democrats won't agree.
Ezra Klein of The Washington Post described Mr. Ryan's so-called
``Path to Prosperity'' in the following ways:
He cuts deep into spending on health care for the poor and
some combination of education, infrastructure, research,
public safety and low-income families. The Affordable Care
Act's Medicare cuts remain, but the military is spared, as is
Social Security. There's a vague individual tax reform plan
that leaves only two brackets--10 percent and 25 percent--and
will require either huge, deficit busting tax cuts or
increasing taxes on poor and middle class households, as well
as a vague corporate tax reform plan that lowers the rate
from 35 to 25 percent.
After reading Mr. Ryan's budget, I find this document bears a
striking resemblance to the tactics used by the Romney campaign:
Promise massive tax cuts but don't provide any specifics on how to pay
for them. This is surprising since Mr. Ryan is considered a ``serious''
policy maker.
My colleagues who joined me today don't expect to agree with
everything in Mr. Ryan's budget. But as we detailed in our letter
today, we hope to find areas of common ground so that our country can
move forward. Only then can we begin to tackle the fiscal challenges
facing our Nation.
Mr. POCAN. I would like to thank the gentleman from California. As a
member of the Budget Committee that marked up the bill yesterday, we
had spent the entire day considering the budget proposal that was
introduced by our Republican colleagues. From the beginning, it was
clear that the budget represented little more than recycled policies
that have already been rejected by the American people and unrealistic
proposals that will never occur.
We had an opportunity in committee to focus on areas where Democrats
and Republicans could come together to grow our economy and responsibly
reduce our deficit. Instead, we were given a budget that is based on
math gimmicks and absurd assumptions, assumptions like trying to keep
the savings from the Affordable Care Act while repealing its benefits.
Well, that has about as much credibility as if we had said in the
budget we should hire leprechauns to grab pots of gold at the end of
rainbows and count that as revenue. It is simply not realistic.
As a small business owner and as a former cochair of the Wisconsin
joint committee on finance, I've worked on budgets for years and years.
We used to spend 8 hours a day, 3 days a week for 4 months making sure
that each and every detail meant something in a budget because a budget
is a statement of our values, where do we stand as a country, or, in
that case, as the State of Wisconsin.
Unfortunately, we didn't take the time to make those tough choices
with the budget that was presented to us. Instead, we were given a
budget that balances the budget on the backs of seniors and working
class families. It's not a tough choice. It's a reckless and
irresponsible choice.
Our budget should reflect our values, and the GOP budget does not
reflect Wisconsin's values. And I don't believe it reflects the values
of middle class families across the country.
Mr. Speaker, the type of choices that we were given from the
Republicans in presenting their budget included things from keeping the
sequester in place that you heard earlier have had terrible effects
across the country and will continue to in the coming months of this
current budget, like turning Medicare into a voucher system, a system
that breaks the promise to the American people that we've had about
Medicare for so long.
It includes trillions in undisclosed spending cuts with absolutely no
information on where they'll come from other than eventually they're
going to come from the middle class through losing some of the current
proposals that we have in place in the law. Ultimately, all these will
harm our economic growth and stunt the positive gains we've made in the
economy just as recently as last month.
In fact, the Economic Policy Institute has found that the GOP Ryan
budget released yesterday would result in 2 million fewer jobs next
year alone. It would decrease our gross domestic product by 1.7 percent
and stall our Nation's economic recovery.
What the budget does, and we can tell this in my State of Wisconsin
and across the country, is, one, it keeps the sequester in place. And
we've already been told that could cost 750,000 jobs nationwide,
including 36,000 in my State of Wisconsin. The budget would turn the
Medicare program into a voucher program, forcing 873,753 Wisconsin
seniors out of the traditional Medicare plan when the conversion
happens and breaking the promise that kept the link to increasing costs
and having increasing funds that go with it. Finally, it would increase
tax breaks for the very wealthy and big businesses but cost middle
class families $2,000 annually in new taxes.
We must remember the biggest threat to our long-term economic
security at this time is not the deficit; it's our economy. It's about
jobs. It's the 12 million people that are unemployed in this country.
We need to be making investments in American workers, in American
ingenuity, in education, research and development, and infrastructure,
and that's what will get the people of America back to work.
We have a budget that does just that, and I'm proud to support the
Congressional Progressive Caucus' Back to Work Budget. The Back to Work
Budget invests in America's future because the best way to reduce our
long-term deficit is to put America back to work, get people back
working and get people into jobs.
[[Page H1419]]
Just last week, the Congressional Budget Office released a report
finding that half of the deficit in 2013 and three-quarters of the
deficit in 2014 will be due to economic weakness. That means people
being unemployed or underemployed and paying less in revenue rather
than structural budget policies like defense spending, entitlement
spending, or overall tax policy.
So the very problem we're facing is that people aren't working and
aren't able to pay taxes and guide the economy like we need to. If
they're doing that, we would make up three-quarters of the deficit in
the next budget year alone.
Plain and simple, we need to get the American people back to work,
and the Back to Work Budget does that by targeting a goal of 5 percent
unemployment through investments in infrastructure, education, hiring
back laid-off teachers, aid to States, rehiring police, firefighters,
and other public employees, investing in a public works jobs program,
and giving tax credits to companies that create jobs in America instead
of the tax breaks that are still under the Republican budget that help
companies that send jobs overseas.
So I'm hopeful that as this budget process moves forward, we can turn
our attention back to job growth as our budget does and not backwards
to the rejected policies of the past.
I would like to share a few stories that I've collected from my
district from constituents who have written us about the budget, about
the sequester that continues in the Republican budget, as well as the
budget proposals in front of us. Let me read one from a reverend in
Beloit, Wisconsin. Beloit, Wisconsin, is in Rock County, and the
chairman of the Budget Committee, Representative Ryan, and I split Rock
County right down the middle. So these are people that we both talk to
on a regular basis.
This is a reverend in Beloit who had been diagnosed with lung cancer.
This is what he writes:
This morning, I was reading more about the cuts coming on
March 1. One of the areas that could be cut is cancer
research, to the tune of $250 million. This is frightening to
me. I'm married with two girls, ages 8 and 4. Three years
ago, I was diagnosed with a rare form of nonsmoker's lung
cancer. I went through chemo and radiation, and we thought we
got it all. Last year, we discovered the cancer was back and
in my bones. So I started a new pill. Within 2 months, all of
the spots are gone, and I'm in remission. It is because of
the funding for cancer research that I am alive today and my
girls have their father. I have been told that the cancer
will eventually build an immunity to my pill, so there are a
number of other medications in trial now. If the funding is
cut, my next miracle pill may not be there. I heard that
these cuts could set back cancer research 5 years. Please, do
what you can to make sure these cuts don't happen and people
like me can beat back this nasty disease.
That's just from one constituent in my district from a county that
just happens to be shared by the person who authored the budget that
keeps these sequester cuts and these cuts to research in place.
{time} 1800
Let me read one more, and then I'm going to introduce one of my
colleagues, the cochair of the Progressive Caucus.
This is from a mother in Evansville, Wisconsin, also in Rock County,
the county that I share with the chairman of the Budget Committee, Mr.
Ryan. This was received back at the end of February:
My son-in-law will be laid off next week due to the
sequester. This is extremely difficult for his family.
My daughter works for the State and has not had a raise in
years, and pays more for her health insurance and retirement
since all the State's woes are blamed on State employees and
teachers. Her cut in pay is deep.
Our family will not be buying a house or a car, going out
to dinner or purchasing anything from any local entrepreneur
due to these issues. Does this help the economy? Nope. It's
time to fix this so that the little people are not being
harmed the most.
Now I'd like to yield some time to my colleague from Minneapolis, the
cochair of the Progressive Caucus and one of the authors of our budget
plan for the Progressive Caucus, Representative Keith Ellison.
Mr. ELLISON. Let me thank you, Congressman Pocan.
One of the great things about this 113th Congress is that you and a
number of other awesome new Members have joined us to really lend your
creativity or expertise to advocating for the American people, the
American working man and woman. You hail from the great State of
Wisconsin, which is where I think collective bargaining began.
Am I right about that?
Mr. POCAN. Absolutely, Representative Ellison. We are very proud to
be not only the creator of collective bargaining, but I believe also
unemployment compensation and other great provisions for workers across
America.
Mr. ELLISON. Congressman, you come from a State, ``Fighting Bob'' La
Follette. We all know about his wonderful legacy.
And we all love Tammy Baldwin. When she told us she was running for
the Senate, we didn't know how anybody could fulfill her tremendous
legacy, but you've walked into this building, and you have stepped up
right away. So I just want to the say thank you for the work that
you're doing.
Just if I may take a few moments to talk about the Back to Work
Budget.
There will be all kinds of budgets being discussed. The Republican
budget authored by Congressman Ryan has already been the subject of a
lot of conversation.
I would submit, Mr. Speaker, that the real criteria that we should
use to evaluate a budget is how well it puts people back to work, and
that's why we have the Back to Work Budget. The Back to Work Budget is
about--guess what--putting people back to work.
Our budget is not an austerity budget. In our budget, we don't try to
compete with how many people we can lay off and how many programs we
can shut down. We say to the American people, We don't have a debt
crisis. We have a debt problem in the out-years, but we don't have a
debt crisis. Do you know what kind of crisis we've got? A job crisis.
You know what? We've got to fix it.
In 1976 when we passed the Humphrey-Hawkins Full Employment Act,
Americans regarded it as a national outrage that we had 6.3 percent
unemployment. We have 7.7 percent now. That's way better than at the
height of the recession. I remember in January of 2009, we were losing
700,000 jobs a month, and we're now adding them. But we are not adding
them nearly fast enough.
I think that a lot of credit goes around due to the fact that we've
had 36 months of positive job growth, but we don't have enough yet. So
I think we need a budget that reflects the national priority of putting
people back to work.
Mr. Speaker, as the people will stand back and say, well, is this
budget good or is this budget bad? I'm hearing so much from the talking
heads on television. I think, Mr. Speaker, the people need to ask
themselves a very simple question: Does this budget put people back to
work or not?
Congressman Ryan's budget, the Republican budget, according to the
Congressional Budget Office, is going to lay off a lot of people.
According to the Economic Policy Institute, it would be 2 million
people in 2014. That's a lot of people. We don't need to be laying
people off. We need to be hiring them.
So I want to turn back to you, Mr. Pocan, because I don't want to
just talk the whole time. But I do want to say, the Back to Work Budget
is a budget that puts Americans back to work, and I think that's a good
thing.
In a moment, we can talk about one of my constituents.
Mr. POCAN. Thank you, Representative Ellison.
When you talked about the 2 million jobs that we'll lose in 2014
alone and the loss of the gross domestic product, there is no question
that these are the challenges we're facing with the budget before us.
What we didn't mention is that the only folks who are really going to
benefit are the most wealthy. Under the plan that's been released by
the Republicans, they're changing the tax rates and lowering it for
those who make the most money; and the trillions that it's going to
cost to make up for that is going to have to come from somewhere, but
it's not outlined in the budget.
What does that mean they're going to have to go after? They're going
to have to go after the very tax breaks that the middle class rely on.
That means your mortgage interest tax deduction could be on the
chopping line under the Republican version of the
[[Page H1420]]
budget. The largest investment that the middle class ever make in their
lifetime is their home, and the fact that we help incentivize that
investment so that people live in strong neighborhoods and safe
communities could be on the chopping line. The very fact that you could
take away the employer's ability to deduct some of their health care
costs could be on the chopping line. The child tax credit, for people
who have children who have an opportunity to get back to work but need
to have their children cared for, helps 25 million people across the
country, including military families, that could be on the chopping
line.
What they're silent about in the Republican budget is that they keep
the deduction for corporate jets and they keep the subsidy to oil
companies and they keep a number of deductions that do not benefit the
middle class.
It's not just the jobs, Mr. Speaker, that are costs in the version of
the budget, the 2 million jobs next year alone on top of the jobs we
are losing through the sequester that we are facing right now, but it's
this inequity in the tax system that is once again going to benefit the
most wealthy at the expense of the many.
Another thing that I think is worthwhile mentioning as we are talking
about middle class families is what is going to happen to Medicare.
My mother is 84 years old. In fact, she lives in the district in
Wisconsin of the chairman of the committee. She is one of those
countless seniors that cut pills in half because they couldn't afford
to be able to afford medication at the time when she was trying to get
by at 84 with a limited income.
It's those sorts of things, if we change that into a voucher program
and we don't keep up that Medicare promise that people will have money
to keep up with health care costs, that go away. Seniors will pay
thousands more in the future because of the change by breaking that
Medicare promise. That's not even talking about the Medicaid changes,
Mr. Speaker.
There are so many changes that will cost middle class families that
we need to make sure we have a more sound version, and that more sound
version that the Progressive Caucus puts forward is the Back to Work
Budget.
The Back to Work Budget will invest right now on getting people back
into the marketplace and able to have a living and able to work and be
able to pay taxes. When you have more people paying taxes, as we have
already shown, three-quarters of the deficit in the next year will be
due to unemployment and underemployment. By getting people back to
work, that is the single best way to address the deficit.
With that, I'd like to yield a little time back to my colleague from
Minneapolis, Mr. Ellison.
Mr. ELLISON. Again, Congressman Pocan, thank you for your truly
spoken words.
I just want to tell a few folks a couple of things. One is there is
an alternative to Congressman Ryan's budget and that of the
Republicans, and it's called the Back to Work Budget. There's going to
be a Democratic Caucus budget, which I'm sure will put Americans back
to work, too. But so far, in terms of the ones that have been released,
the Back to Work Budget is the right budget. Ezra Klein says so. If
folks want to look at Ezra Klein's recent zcolumn today, he says this
is the right budget. Look at Jared Bernstein. He's thumbs-up on the
Back to Work Budget. If you want to see economists and noted
journalists who really scrutinize this stuff, evaluate the budgets,
they'll tell you about the Back to Work Budget.
What I'd like to do for a moment, though, is to tell you about a
constituent, Mr. Mark Krey. Mark Krey asked me to share his story. It
goes like this:
I'm a special education paraprofessional at Heritage Middle
School. I live in St. Paul, Minnesota.
That's Mark right there.
Last year, we had an average of 28 kids per class in middle
school. This year, it's up to 35 kids.
{time} 1810
That is like a big jump.
If a class has special education students, the teacher gets
a special education paraprofessional like me to help, so then
you have 35 students with two adults in the classroom. That's
just not the way to educate our future Americans. Our class
sizes keep going up, and the services are going down. More
budget cuts would be devastating to my school district and to
schools across the country. My coworkers and I would face
furloughs and layoffs, and the kids we serve would lose out
on the quality education they need to be future leaders.
I want to thank Mark Craig for caring about kids with special
education needs and also for caring, not just about the individual kid,
but about the system in which the kid's going to school. We can't just
keep on dis-investing in kids like this, Mr. Speaker. We've got to
throw the shoulder behind these kids, not abandon them.
One of the fundamental differences between Republicans and Democrats
and the Back to Work Budget versus the Ryan budget is that, look, the
Republicans, I don't doubt their compassion. They care about people,
and they donate to charities; but it seems like they don't believe that
government can help anyone. They think, oh, government can't do any
good. Just cut it and cut it because it can't do any good.
That's absolutely wrong. All you've got to do is ask a teacher like
Mark Craig, who every day teaches kids who have learning disabilities
and who could be awesome, but if their budgets are cut and if there are
tons of kids in the classroom, they really can't.
The Back to Work Budget recognizes a central truth, which is that,
yes, it's the private sector that is a very important part of our
American culture and part of our American way of life, but it's also
the public sector and the mixed economy working together that helps
Americans succeed.
The Back to Work Budget says we're going to rebuild infrastructure,
get rid of those crumbling bridges and roads, put in some energy grids,
fix our wastewater treatment, put in some transit, put in some high-
speed rail. We're going to do that. Then we're also going to engage the
private sector with the Make Work Pay credit. Then we're going to do
things like help support local heroes like Mark Craig, who is a
paraprofessional in the education sector, but also cops. In my home
State of Minnesota, we're going to have a cut, because of the
sequester, of $200,000. This is money that we use to train police
officers to be better and more effective and to serve the public
better, and we're not going to have that.
I'm not here to put my friends on the other side of the aisle down.
I'm here to say they've got another vision of America, and that vision
of America is that government can't help people and that government
can't do anything right. They're wrong. The interstate highway system,
hey, that's government. The interstate highway is government. There are
police who walk the beat and make sure that the shopkeeper's stuff is
not ripped off. That's government. So this whole thing about, oh,
government is always wrong is wrong, and it's time for the American
people to say responsive government does great things for the American
people, along with the private sector, and we need to stop this free
market extremism.
With that, I'm going to yield back to the gentleman from Wisconsin.
I'm going to be around a little more. I know we've been joined by the
gentleman from Florida. I am very happy to have him back in Congress
after a 2-year hiatus. He was awesome then and he is awesome now, so
I'll be listening carefully.
Mr. POCAN. I would like to thank the gentleman from Minnesota.
As you said, we've heard from Representative Takano from California,
from yourself and myself from the heartland, and now we have one of the
most solid Progressives in the U.S. House, a Representative from the
Orlando, Florida, area, Representative Alan Grayson, to whom I yield my
time.
Mr. GRAYSON. Thank you very much. I appreciate that. I want to share
something with the Representative from Wisconsin and with the Chair.
We labor here under an awful barrier, and that barrier is this: we
are required to actually be original. I sometimes am unable to carry
that burden, and I found something this Saturday that I think was so
important, so well written, so profound that I am going to yield to an
article that I read on Saturday in the Huffington Post, written by
Jason Linkins and Zach Carter, called ``Dow Jones Hits `Record High'
Thanks to Strong Performances from Smoke,
[[Page H1421]]
Mirrors Sectors.'' I'd like to share that with the gentleman from
Wisconsin, the Chair, and with anyone else who just might happen to be
listening right now.
The article reads as follows:
This week, amid the hullabaloo over President Barack
Obama's Deficit Dinner Diplomacy and Senator Rand Paul's 13-
hour filibuster-cum-dissertation on drone strikes and civil
liberties, financial news-watchers touted a milestone in
their lives of Market Worship. We speak, of course, of the
Dow Jones Industrial Average, which on Tuesday hit an ``all-
time high'' of 14,253. The good times rolled steadily on
through the week, and the Dow closed Friday at 14,397.
Of course, the notion that these were ``record'' highs was
not, strictly speaking, true. As Jeff Cox at CNBC pointed
out, ``In inflation-adjusted dollars, the Dow would need to
hit 15,731 to break the record.'' Nevertheless, the exciting
new ordinal number sitting on the stock market index set off
a chorus of hallelujahs. After all, this was the highest mark
it had hit since October 2007. (Of course, if we recall
correctly, that was right around the time that all of our
more recent tragic economic events began to occur.)
The fluctuations of the Dow are typically pored over by the
media in the same way that ancient oracles pierced through
the entrails of birds, seeking for whatever path might lead
to the most prosperity. And in the world of politics,
partisans on both sides are quick to point to the Dow as
generic confirmation that their policies are working as long
as the story suits their narrative anyway.
And these narratives can get wild and weird and wooly
quickly. Seemingly within moments of the Dow's peak, ``Dow
36,000'' author James Glassman was on the pages of Bloomberg
View, taking credit for this and crowing about how his old,
failed predictions were well on the way to coming true.
Of course, as Jonathan Chait points out, Glassman has to
toss out the entire underlying thesis of ``Dow 36,000.'' (He
and coauthor Kevin Hassett ``theorized that the stock market,
circa 1999, was being so undervalued that it would have been
at 36,000 in the days ahead of the massive tech-bubble burst
as opposed to theorizing that ``someday, maybe the Dow would
hit 36,000. Probably. You know, just watch'') in order to
claim vindication now.
Former Reagan domestic policy adviser Bruce Bartlett just
called Glassman a ``nitwit'' and left it at that.
All of which leads to an obvious point: although we
recognize that the long-term trend of the stock market is
that it has an overall upward trajectory--punctuated in
snapshots by the susurrations of the greed/fear cycle--it is
nevertheless catnip for a lot of wild-eyed prognosticators,
and the over-reliance of using the stock market as evidence
of economic recovery, or the proof of economic fundamentals,
is acute.
So what does it say about the Dow that it could hit this
dizzying new height--impressive by any measure in any era,
post-crash or otherwise--at a time when the overall global
economic outlook is so dismal and the domestic recovery is
barely felt by the citizens who sacrificed their capital to
save the world from calamity?
It says that we should be gravely concerned. It says that
we have a two-tiered economy, one where profits flow and
another where risks lurk. It says that a lot of people are
being left behind, and if October 2007 is any guide, it says
that this display of prosperity may simply be an illusion.
The distribution of the stock market's largesse has been
the most un-egalitarian aspect of American economics for
years. A full 50 percent of all capital gains go not to the
richest 1 percent of Americans, but to the richest 0.1
percent, according to The Washington Post.
But the stock market's persistent upward climb since the
spring of 2009 has revealed another massive disparity: the
multinational corporate machinery that generates stock gains
has become unmoored from the economic reality in which the
majority of Americans live and die.
The Dow hit its peak this week amid a host of gloomy global
economic forecasts. Back in January, the World Bank ``sharply
reduced its estimate of global economic growth in 2013,
projecting that the downturn in Europe and the United States'
fiscal problems will continue to weigh on investment and
spending.'' The World Bank's take on U.S. growth was
similarly dismal--its 1.9 percent forecast for the coming
year was less than the most pessimistic estimates of our own
Federal Reserve.
{time} 1820
There's no end in sight for the austerity orgy that's
exacerbating Eurozone pain, despite the fact that the EU
projects that their economy, ``which generates nearly a fifth
of global output, will shrink 0.3 percent in 2013.''
(Analysts are currently divided on whether or not China is
also experiencing a slowdown at the moment as well.)
Closer to home, we received a gentle boost from this
month's employment numbers: 236,000 jobs were created this
past month, pending after-the-fact revisions in the months to
come, which is closer to the ideal in terms of keeping ahead
of labor market growth and finally digging out of the post-
crash hole. The overall unemployment rate has subsequently
dropped to 7.7 percent. But these numbers can mask a bevy of
problems. As Matt Yglesias points out, the situation for the
long-term unemployed is becoming a bona fide crisis that
calls for ``targeted interventions.''
And even if the unemployment number continues to drop,
there's a real concern over what sort of jobs are being added
back to the economy. Will they be the quality jobs that put
those entering those jobs and reentering those jobs into the
labor force on a sustainable path to household prosperity? Or
is everyone heading to a future of toil in Amazon shipping
warehouses? It's worth being fretful, because many of those
who will be entering the job market for the first time will
be carrying student loans out of a period of sky-high college
tuition, which taken as a whole may form the backbone of the
next great financial crisis.
Even as the economy has tipped and trended in the direction
of what we might normally call--nominally call--``recovery,''
the answer to the question ``Who has recovered?'' reveals
some stark contrast.
As the University of California, Berkeley economics
professor Emmanuel Saez calculated, losses in average family
income during the Great Recession were felt across the board.
Average real income per family declined by 17 percent. And
the top income earners took it on the chin a little harder.
As the bottom 99 percent experienced a 12 percent drop in
average income, the uppermost percentile's income fell by 36
percent. As Saez reports, ``The sharp fall in top incomes is
explained primarily by the collapse of realized capital gains
due to the stock market crash.''
Of course, the top 1 percent, nevertheless, were largely
sheltered from the stresses that afflicted the most
vulnerable, as you would expect. What you, perhaps, didn't
expect was how the recovery distributed itself across the
same groups.
From 2009 to 2011, average real income per family grew
modestly by 1.7 percent, but the gains were very uneven. Top
1 percent incomes grew by 11.2 percent while bottom 99
percent incomes shrunk by 0.4 percent. Hence, the top 1
percent captured not 100 percent, but 121 percent of the
income gains in the first 2 years of the recovery. From 2009
to 2010, the top 1 percent grew fast and then stagnated from
2010 to 2011. The bottom 99 percent stagnated both from 2009
to 2010 and from 2010 to 2011. In 2012, the top 1 percent
income will likely surge due to booming stock prices, as well
as the re-timing of income to avoid the higher 2013 top tax
rates. The bottom 99 percent will likely grow much more
modestly than top incomes from 2011 to 2012.
This suggests that the Great Recession has only depressed
top income shares temporarily and will not undo any of the
dramatic increase in top income shares that has taken place
since the 1970s.
Much of the economic recovery is simply an increase in the
value of financial assets--stocks and bonds. And most people
just don't own stocks. In 2011, only 21 percent of American
adults even had a 401(k) retirement account, according to a
HuffPost analysis of data from the Investment Company
Institute. Only 52 percent of all adults older than 65
receive money from financial assets at all, with half of that
set receiving less than $1,260 a year, according to the
Pension Rights Center.
Growth that everyone relies on, like that of home values
and wages, has been sluggish. At the end of 2012, the S&P/
Case-Shiller Home Price Indices were roughly where they were
at the beginning of 2009 (which was roughly where they were
in the fall of 2003).
And even as the stock market hits this celebrated peak, the
wages that average Americans are bringing home to, you know,
``put food on their family,'' as George W. Bush famously
said, those are plunging into a trough, despite measurable
gains in overall productivity.
In fact, as Robert Reich points out, the way those
productivity gains are being achieved leaves out workers
altogether, and they are coming about as a result of actions
taken by policymakers:
``Corporations have been investing in technology rather
than their workers. They get tax credits and deductions for
such investments. They get no such tax benefits for improving
the skills of their employees. As a result, corporations can
now do more with fewer people on their payrolls. That means
higher profits.''
Reich adds:
``Joblessness all but eliminates the bargaining power of
most workers, allowing corporations to keep wages low. Public
policies that might otherwise reduce unemployment, a new WPA
or CCC to hire the long-term unemployed, major investments in
the Nation's crumbling infrastructure, have been rejected in
favor of austerity economics. This also means higher profits,
at least in the short run.''
In other words, the labor force is being squeezed for the
very last drop of productivity, because employers know that
they're holding all the cards. If the economy were
approaching full employment, discontented or overworked
employees would have options and leverage. Right now, they
don't. If you've got a job, you need to hang on to it for
dear life. That's an environment for scraping out survival,
not the economic mobility we rightly celebrate during boom
years.
Another thing to keep in mind is that the Dow is hitting
this peak at a time when everyone in the world knows that the
debate over sequestration--whose cuts have awesome recession-
generating powers--has gone
[[Page H1422]]
into vapor-lock, with the GOP refusing to compromise on
raising revenues, through the very tax reform proposals that
formed the basis of the party's recent Presidential campaign.
Everyone has been warned about the consequences of
sequestration. It's just that corporate America currently has
the fortunate position of being able to greet the news with a
shrug, as The New York Times reported this week:
``With $85 billion in automatic cuts taking effect between
now and September 30 as part of the so-called Federal budget
sequestration, some experts warn that economic growth will be
reduced by at least half a percentage point. But although
experts estimate that sequestration could cost the country
about 700,000 jobs, Wall Street does not expect the cuts to
substantially reduce corporate profits, or seriously threaten
the recent rally in the stock markets.''
``It's minimal,'' said Savita Subramanian, head of United
States equity and quantitative strategy at Bank of America
Merrill Lynch. Overall, the sequester could reduce earnings
at the biggest companies by just over 1 percent, she said,
adding, ``the market wants more austerity.''
Well, if that's true, the market is going to love the dire,
short-term consequences that the sequestration is going to
bring to many Americans closer to the ground level of the
economy. Reich rounds up those who will be hit hardest and
most immediately. One hundred and twenty-five thousand people
are going to lose their rental subsidies. Ten thousand more
will be cut off from similar subsidies intended to assist
Americans living in rural areas. One hundred thousand people
face getting kicked out of emergency homeless shelters, and
cuts are coming to unemployment insurance, title I education
programs, Head Start, and antihunger subsidies.
It's not like those who bid on the stock market can't grasp
the looming disaster. They're just completely unconcerned. As
you may recall, the market didn't exactly take to its
fainting couch as the so-called ``fiscal cliff'' loomed,
either, despite dire warnings of a market spasm.
{time} 1830
That's what carting off 121 percent of an economic recovery
will do for a person safely ensconced atop the income ladder.
Fittingly, even as the sequestration's hammer is poised to
come down, The Wall Street Journal reports that the market
for luxury goods is booming. The newspaper characterizes this
as evidence of economic robustness, connecting ``the economy
has bounced back from recession'' to ``as a result, wealthy
Americans are spending freely on expensive clothing,
accessories, jewelry and beauty products.''
The Wall Street Journal quotes HSBC luxury-goods analyst
Antoine Belge thusly: ``Trends in luxury consumption in the
United States have continued to outperform overall consumer
trends.'' This is actually evidence that you and most people
you know are getting left far behind in the post-crash
economy.
The average participant in the overall American economy
isn't fooled by any of this. They well know what Matt
Phillips pointed out at Quartz, that household incomes
``haven't gone anywhere but down.'' As Phillips relates,
``Real median U.S. household income--that's ``real'' as in
``adjusted for inflation''--was $50,054 in 2011, the most
recent data available from the U.S. Census Bureau. That's 8
percent lower than the 2007 peak of $54,489.''
He goes on to show that consumer expectations strike a
serious contrast from the mood within the Dow Jones revival
tent.
We are led then, inevitably, to a conclusion that we all
feel but no one says aloud.
And, by the way, that's my job, to say all the things that we all
feel but no one says aloud.
The American middle class, in other words, no longer lives
in a financial economy. But the gold-standard economic
metrics that we hold out as the key measurements of
prosperity, the economy of Wall Street, of gross domestic
product figures, of the Dow Jones Industrial Average, is
purely, purely financial.
For the time being, you can assume that you and everyone
you care about is screwed. Congratulations.
Mr. POCAN. Thank you to the gentleman from Florida. Thank you for so
eloquently talking about the problems of austerity and this budget that
is the path to austerity, to continued austerity in this country.
One of the statistics I think that's really worth mentioning, and
this is from the Congressional Budget Office, is that from 1979 to
2007, the top 1 percent of income earners grew 278 percent, or about
$973,000 per household. In contrast, the middle 20 percent grew 25
percent, and the poorest 20 percent grew 16 percent.
So the very things that we just heard the gentleman from Florida
talking about are very real; and that's why the Democrats on the
committee, when we had a chance to try to amend the Republican path to
austerity, instead we put out a budget amendment that said we would cap
no family making $250,000 or less, covering the vast, vast majority of
Americans, would be held harmless under the proposals presented by the
Republican budget.
They would not go along with that amendment because they had to
protect the tax breaks for corporate jets, and they had to protect the
tax breaks for oil companies, and they had to protect the other tax
breaks that they had.
Now, we brought up that during the Clinton administration the top tax
rate was at 39 percent, but the economy added 20 million jobs. So at 39
percent top tax rate, we added 20 million jobs.
During the Bush administration, we reduced that top rate down to 35
percent, and yet we lost a half a million jobs. So the argument that
somehow having a lower top tax rate is going to create jobs is simply a
myth. We saw that when the Bush tax cuts for the wealthiest were passed
and we saw no economic recovery. And then when they were reauthorized,
we still saw no economic recovery.
But where we did see an economic recovery was when we had the
stimulus and recovery dollars that came through. And in my State of
Wisconsin, I was on the Committee on Finance during that time. We had
to authorize every single dollar that came through in recovery dollars
in my State. And when we put forward the programs that went and built
the roads and rebuilt the bridges and built schools, did repairs to
schools, we had a report by the road building industry and the vertical
construction industry, not exactly your most progressive organizations,
that said that 54,000 jobs were saved or created in the State of
Wisconsin because of those recovery dollars.
And at the Federal level, in the Budget Committee, the head of the
Congressional Budget Office, Dr. Elmendorf, I asked him point blank,
were there jobs created by the recovery, because the same day the
President gave the State of the Union, the Speaker of this House said
that no jobs were created from the past recovery. And yet we were told
by Dr. Elmendorf, from the nonpartisan Congressional Budget Office,
that up to 3.3 million jobs were saved or created.
So, again, part of what the Democrats talked about is how could we
help provide some additional recovery dollars in the Back to Work
Budget, which would specifically invest in those infrastructure
projects into our schools, into our police and fire services. So that's
a little bit about what we talked about down there.
But one last thing I would like to bring up and talk about that
happens in the Republican version of the budget that does not happen in
our version, the Back to Work Budget, the Progressive Caucus Budget, is
the effect on Medicare.
Right now, half the people who receive Medicare make $22,000 a year,
and yet their health care costs are three times that of the average
person. So some of our folks who are the most low-income seniors,
who've been relying on the promise that they've paid into their entire
lives for Medicare, are now having three times the costs of the average
person, are going to see this new voucher program that, down the road,
will eventually make them pay more and more immediately, but down the
road, not keep up with inflation and cause people to make those tough
choices in a lose-lose proposition, receive less health care or pay
more for it when you can least afford to.
That's not fair. That promise that we've had as a Nation through
Medicare, it's simply not fair to voucherize that program.
And then when you take the $800 billion in cuts to the Medicaid
budget, again, that largely goes to seniors in our States, you are
going to see the access and the ability for senior citizens, especially
people of modest and middle incomes, diminish because of this budget.
Now, we agree that the real culprit out there is rising health care
costs. We have to, in a bipartisan way, address those. But you don't
address them by balancing the budget on the backs of the people who can
least afford it, and that's the middle class and the seniors of
America.
So when you look at this budget from the Republicans in totality, and
you look at the cuts to Medicare and the cuts to Medicaid, the
protection of tax breaks for the most wealthy, for the special
interests, for companies that
[[Page H1423]]
outsource jobs overseas, the lack of any investment in infrastructure
or education, or research and development, when you listen to the
stories that I've talked about from people from my district, from the
very same county that Chairman Ryan and I share, who talk about
devastating impacts of these cuts, we have a budget that is misplaced
and will affect real people in the middle class.
I would just like to talk about one final part of the budget that
really makes it really hard to, on top of all these cuts, think that a
lot of serious thought went into it, and that's the fact that the
Republican version of the budget repeals the Affordable Care Act, all
of the benefits to the public, the millions of people who will gain
access to health care, but it still takes the revenues brought in by
the program. And we were told that when we asked questions in
committee.
So, on one hand, to take away the program and say you're going to get
rid of it, and on the other hand, to still take the revenues that are
brought in by the program makes the budget not a very credible budget.
And as I've said in committee, and I'll say again, if you're going to
take those sort of false assumptions and put a budget together, you
might as well say that we're going to hire leprechauns to take the pots
of gold at the end of rainbows and count that as revenue, because it's
about as realistic.
In the end, the Progressive Caucus is very proud of our Back to Work
Budget. We are going to invest in infrastructure, we're going to invest
in public workers, we're going to make sure that we're getting our fair
share of resources that we need so that government can function to take
care of the middle class and the people who need it the most. It will
create 7 million American jobs, reduce unemployment to 5 percent, and
yet still reduce our deficit by $4.4 trillion.
{time} 1840
It will strengthen Medicare and Medicaid and provide high-quality,
low-cost medical coverage to millions of Americans. That's what the
people of the country voted for in November. That's the budget we
should be putting forward in this country, and that's the budget the
Progressive Caucus puts out today.
With that, Mr. Speaker, I yield back the balance of my time.
____________________