[Congressional Record Volume 164, Number 35 (Tuesday, February 27, 2018)]
[House]
[Pages H1328-H1330]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ISSUES OF THE DAY
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 3, 2017, the gentleman from California (Mr. Garamendi) is
recognized for 60 minutes as the designee of the minority leader.
Mr. GARAMENDI. Mr. Speaker, I want to thank my colleagues for
reminding us of the enormously important work that was done for
tomorrow's session here on the floor and here in the Capitol, where he
will be lying in state.
I recall very clearly the day that my wife and I met Reverend Graham
in Sacramento when he was having one of his ministries there in the
city. We attended, and it was an incredible experience. We met with him
personally after the event. And like the millions and, indeed, billions
of people that heard him speak, we, too, were moved.
Earlier, when I learned of his passing, I said that, while he is no
longer with us physically, his work remains with us. His speeches, his
recordings, and his videos are all there for future generations and,
indeed, for our generation. So I thank my colleagues for bringing to
our attention what is a profoundly important event here in the Nation's
Capitol when Reverend Billy Graham lies in state.
Mr. Speaker, there are a couple of other things I would like to bring
to the attention of the floor. One, fortunately, is not a death, but
rather a retirement. This one is for Debbie Davis, the editor and
assistant publisher of the Davis Enterprise, for her service to the
Davis community and to congratulate her on her retirement.
For over 38 years, Ms. Davis has helped unite and inform the Davis
community through her work at the Davis Enterprise, the local paper.
Her work expertise earned her a reputation as a respected journalist,
and there is no doubt in my mind that her legacy will have a lasting
impact on the Davis community.
The breadth of Ms. Davis' accomplishment is in itself an achievement.
Some of her most notable milestones include the development of the 2017
centennial magazine that celebrated the businesses and leaders that
built the Davis community, the ``Those Who Make Memories'' book, and
over 10,700 editions have been used at the Davis Enterprise.
I speak on behalf of the entire Davis community when I say ``thank
you'' to Debbie Davis for her generous service to the community of
Davis, California. We all wish her the best as she enjoys her well-
deserved retirement.
If I might, Mr. Speaker, move on to other events, some of them events
here in Washington, D.C., in the days ahead. If I might retrieve my
chart, Mr. Speaker. Normally I would bring this out with me, but I
wanted to cover the Billy Graham event. I think he might have enjoyed
this particular saying from Franklin Delano Roosevelt. I use this
whenever I start my presentations here on the floor because it reminds
me of values, at least a value that I think ought to be basic to our
work here in Congress. So allow me to repeat not for the first, but
maybe for another dozen times:
The test of our progress is not whether we add more to the
abundance of those who have much. It is whether we provide
enough for those who have too little.
The test of our progress. It is interesting that there is so much we
need to do, so much we need to do here in America, particularly for
those who have too little. It is interesting to note what has actually
happened over the last several years.
Are we really making progress?
Well, I think we ought to spend some moments talking about our
infrastructure.
Are we making progress?
Well, no, not really. We once were the most advanced infrastructure--
highways, rail systems, transit systems, airports, maritime ports--in
the world. We had great drinking water systems. You could come to
America and drink water anywhere and not have to worry about the
quality or the contamination of that water.
But here it is from the American Society of Civil Engineers:
aviation, we are ranked a D; bridges, a C; dams, a D; drinking water, a
D; parks and recreation, a D; ports, a C; rail, we are doing okay;
roads, a D--we see that every day when we travel back and forth.
School systems--and we want to talk about safe schools; lots of talk
as a result of the tragic shooting in Florida about making schools
safe. Well, schools really rank in the D category. Whether they are
safe or not, they are ranking as Ds.
Transit is a D. Declining wastewater is a D.
We are familiar with places around the Nation.
{time} 1930
This bridge, about 6 years ago, this was a bridge that connected the
United States to Canada. This was the Interstate 5 bridge, a road,
Interstate highway from Vancouver, British Columbia, to Tijuana,
Mexico. Infrastructure. The bridge collapsed.
On the water side of life, I think most of us would be familiar that,
1 year ago, the spillway at the Oroville Dam, the highest dam in the
United States and quite possibly in the world, gave way during the
heavy rains of the
[[Page H1329]]
2017 year, and we created the biggest waterfall in the world. It went
on for some time.
It also threatened the lives of over 200,000 people downstream that
had less than 3 hours to evacuate; because had this spillway further
eroded, a 30-foot wall of water would have descended upon those
communities and the water would have been more than 50 feet deep within
1 hour. Fortunately, the rain stopped; otherwise, who knows.
So we have a need for infrastructure. Just 2 weeks ago, the President
announced his great big infrastructure plan. Two hundred billion new
dollars, $1.5 trillion of public and private investment beyond the
Federal participation. Sounds good until you read the big print; not
even the small print, but the big print.
So what does the Trump infrastructure plan bring to us? Well, the
$200 billion of Federal money, it is not new money; it is existing
money, it is the reprogramming of existing money. In fact, it takes
$168 billion from existing transportation programs, highways and
transit, and repurposes it over to some new programs that are supposed
to do the same thing. No new money; just money taken from an existing
program that is working, underfunded to be sure, but working, and
transferred over to a new program that the President can then put his
gold letters, T-R-U-M-P, on it, and, wow, what a wonderful thing that
has been done. Oh, yeah. Well, confusion and the like.
It also paves the way; it doesn't pave the highways, but it does pave
the way for Wall Street and foreign investors to set up toll roads on
our interstate freeways. Well, there is a great idea. It slashes
Federal investments and passes the buck to cash-starved States and
local governments.
You see, right now the Federal Government for highways and transit,
about 80 percent of that money comes from the Federal Government, 20
percent from the locals.
In levies--I represent one of the most flood prone areas. I can put
that picture of Oroville Dam back up. Seventy-five percent Federal, 25
percent local. So what does the great Trump infrastructure plan do? It
flips that over, and guess what? The Federal Government will pay 25
percent for levies and the locals will pay 75 percent. Wow. That is
helpful. Where are they going to get the money?
For transit, 80 percent Federal, 20 percent--no, not in the Trump
plan. It flips it over: 20 percent Federal, 80 percent local. Where are
they to get the money? Big question.
So where did the money go? Why is it that the President's big, new,
fabulous, wonderful transportation/infrastructure program has no money,
just existing money taken from existing programs and put into new
labeled programs that are to accomplish the same thing but with less
Federal support?
So one might wonder, what happened here? Why is there no new Federal
money? Why aren't all of those Ds supported by new Federal programs so
that we have a robust infrastructure program for the United States, one
in which men and women would be employed building the foundation for
tomorrow's economy? Tens of thousands, indeed hundreds of thousands,
millions of people, could be employed if the $1 trillion, $1.5 trillion
that he talks about, were real money. It is not.
Where did the money go? Well, I suppose some of you may have been
listening when the President signed the legislation and then took his
Air Force One jet to Florida, entered his resort at Mar-a-Lago, and
announced to his guests: I just made you a whole lot richer.
Well, indeed he did. One person that he made richer was this
gentleman, who has said repeatedly over the last 2 years: I don't need
more money; I am quite wealthy, thank you; don't do a tax cut that
makes me even more wealthy. Warren Buffett.
What did the tax cut do for Warren Buffett and Berkshire Hathaway?
Well, it was a $29 billion Christmas gift.
Mr. Speaker, the President was quite correct. He did make the rich
even richer.
I thank Mr. Buffett for being brutally honest and saying he doesn't
need more money. He would undoubtedly look at what FDR said: ``The test
of our progress is not whether we add more to the abundance of those
who have much.''
Warren Buffett said this last line: ``It is whether we provide enough
for those who have too little.''
I thank Mr. Buffett. I don't know what he is going to do with the $29
billion, but I know what we could have done with $29 billion. We could
have repaired the bridges of America. We could have repaired the tens
of thousands of dams across America that are at risk. That is what
could have been done with the $29 billion that went to Mr. Buffett.
And he wasn't the only one who benefited from those tax cuts. One of
the Wall Street companies, Morgan Stanley, did an analysis of the
corporate tax cuts, that about $1 trillion of the $1.5 trillion tax cut
went to corporations.
So what did the American corporations do with that $1 trillion
windfall? Morgan Stanley, just this last week, reported that their
analysis is that 62 percent of that $1 trillion windfall will be used
by the corporations to buy other companies; mergers and acquisitions,
about 19 percent; and 43 percent will go for buybacks of stock and
dividends.
All the talk about the employees benefiting. Well, let's see. About
13 percent is headed for bonuses and raises. Just 17 percent of that $1
trillion is expected to be used to increase the size of the business,
not through mergers and acquisitions, which usually result in layoffs,
not in new jobs, but rather in what are called savings, in other words,
known as layoffs--just 17 percent.
So where are the jobs? I will give you an example. Nine of the large
pharmaceutical companies in America have already announced that they
are going to spend $50 billion of that tax cut that they received in
buybacks, not in creating new pharmaceuticals and drugs for such
illnesses as Alzheimer's. In fact, Pfizer, one of the large
pharmaceutical companies, the day that they announced that they were
going to stop their research on Alzheimer's, decided that they would
spend their money instead on buying back their stock.
So thus far--we haven't finished all this; this is where they expect
to go--American corporations have already announced $178 billion,
nearly one-fifth of that $1 trillion tax cut, would be used to buy back
stock. That is the largest amount ever reported in any single quarter
in American history.
Now, many folks here on the floor say: Oh, but look at what Walmart
is doing; they are giving over $400 million of bonuses.
Well, if you average that out among all of their workers, it is $190
per worker. Now, that is not chump change, and that is certainly not
crumbs. That is $190, and that is important, but the total tax cut to
Walmart was $18 billion. The $400 million is 2.2 percent for bonuses.
And so it goes.
There is more. Boeing said it will spend $300 million on employees in
increased wages or bonuses, and, at the same time, they will spend $18
billion to buy back shares.
Did I explain what a buyback of shares really does? Well, it reduces
the number of shares that are in the market, and, therefore,
simultaneously raises the price per share.
And how are executive salaries and bonuses determined? By the share
price. The share price goes up, bingo, more money for the corporate
executives.
So if you were given a huge $1 trillion windfall in reduced taxes,
would you use that for capital investment, where the actual return to
the corporation may take 3, 4, 5 years, or would you use it to buy back
stock, which automatically will, in virtually every case, raise the
share price and immediately reward the executives' bottom line salary?
Not a tough decision. Or would you give it to your employees in bonuses
and raises, when you could use it to buy back stock? Raise the share
price, and, lo and behold, guess what? The corporate executive's pay
increases, because his pay is based on the stock price. Pretty simple
stuff.
Did I mention Comcast laid off over 500 employees after reportedly
saying that they would use their tax cuts to give a $1,000 year-end
bonus? And at the same time, they announced a $5 billion stock buyback
for 2018.
It goes on and on.
Apple, $38 billion reduction in taxes; Microsoft, $6.3 billion;
Citibank, $22 billion reduction; Johnson & Johnson, $13 billion;
Qualcomm, $5.3 billion.
[[Page H1330]]
So if we wanted to repair the dams or the bridges, we would have to
have money.
Where did the money go? Well, it didn't go to the bridges, it didn't
go to the roads. The great infrastructure plan from the President is
simply a shell game, moving money from under this shell to under that
shell, no new money, and making the local governments and State
governments pay even more.
And for those of us who represent California, Pennsylvania, New York,
New Jersey, there is one more, and that is we get to pay taxes on taxes
that we pay to the State and to the local governments.
{time} 1945
Now, that is a change. When the first income tax law was written
nearly a century ago--in fact, more than a century ago--they said that
you would not pay taxes on the taxes that you paid, and so they allowed
for the deduction of State and local taxes. But, hey, that changed. Our
President said it is a wonderful gift. Well, it is not for California,
not for New York, not for New Jersey.
So where are we going to get the money? We are going to have to go
back and look at this. We already know that, for every 1 percent
reduction in the corporate tax rate, there is a $100 billion reduction
in revenue to the Federal Government. We might want to look at that.
I am going to wrap this up in just a few moments.
We have been talking about a better deal for America for a long time.
What we have from the Trump tax cut is a raw deal, a bad deal, a
terrible deal for America. The Federal Treasury was gutted.
Yes, there are benefits for the broad American public, but that is
like 17 percent of the total tax cut goes to the broad American public:
middle class, upper middle, and the bottom quartile of Americans. It is
useful. It is certainly going to be helpful.
But more than 80 percent went to American corporations, which, as I
just showed, are not using it for their employees, not using it to
build their capital infrastructure, their ability to manufacture more,
but, rather, for those who already have a great deal of wealth: the
stockholders of America, who happen not to be the bottom 80 percent.
We need a better deal. We really need to invest in America. We need
that infrastructure, not the phony infrastructure program that the
President has proposed, but a real infrastructure with real money. And
we need to make that infrastructure in America.
And so make it in America, invest in America. It adds up for a better
deal for America.
My colleague, Al Green from Texas, has some important things to add
to the discussion tonight on a different subject, but I just want to
remind the public that, when we talk on the floor here, we talk about
infrastructure, we talk about real concrete, steel, programs that
actually build infrastructure. We talk about trying to collect
resources so that we can pay for this. We talk about how we might
engage in various financing programs so that we can, over time, build
the solid foundation for economic growth.
And as we do all of this, we are talking about a better deal for the
American public, not the raw deal that this tax scam gave to Americans,
not the kind of deal that The New York Times says: ``Well-Heeled
Investors Reap the Republican Tax Cut Bonanza.''
Mr. Speaker, I include this New York Times editorial, dated February
25, 2018, in the Congressional Record.
[From The New York Times, Feb. 25, 2018]
Well-Heeled Investors Reap the Republican Tax Cut Bonanza
(By The Editorial Board)
After President Trump signed the Republican tax cut into
law, companies put out cheery announcements that they were
giving workers bonuses because of their expected windfalls
from the tax reductions. The president and Republican
lawmakers quickly held up these news releases as vindication
for their argument that cutting the top federal corporate tax
rate to 21 percent, from 35 percent, would boost workers'
incomes even as it added $1.5 trillion to the debt that
future generations would have to pay off.
Now corporate announcements and analyst reports confirm
what honest observers always said--this claim is pure
fantasy. As executives tell investors what they intend to do
with their tax savings and their spending plans are tabulated
into neat charts and graphs, the reports jibe with what most
experts said would happen: Companies are rewarding their
stockholders.
Businesses are buying back shares, which creates demand for
the stocks, boosts share prices and benefits investors. Some
of the cash is going to increase dividends. And a chunk will
go to acquiring other businesses, creating larger
corporations that face less competition.
In addition to benefiting investors, these maneuvers will
end up boosting the pay of top executives because their
compensation packages are often tied to the price of their
companies' stock. Finally, a small sliver of the money will
find its way into paychecks of rank-and-file employees, but
it won't be a big boost and will probably come in the form of
a temporary bonus, rather than a lasting raise.
Morgan Stanley analysts estimated that 43 percent of
corporate tax savings would go to buybacks and dividends and
nearly 19 percent would help pay for mergers and
acquisitions. Just 17 percent would be used for capital
investment, and even a smaller share, 13 percent, would go
toward bonuses and raises.
Other Wall Street analysts have issued similar reports. If
more evidence was needed, Axios reported that just nine
pharmaceutical companies have announced $50 billion in
buybacks since the tax law was passed.
Mr. Trump might argue that it doesn't much matter that the
tax cuts will be a boon for investors because many Americans
own stocks. The president has recently touted the rising
value of 401(k) accounts as a benefit of the tax law. But
roughly half of all families own no stock, and most people
have holdings that are worth less than $5,000. Most stock
holdings, a whopping 84 percent, are in the hands of people
whose incomes put them in the top 10 percent of households.
Republicans might further argue that none of this matters
because the tax law is becoming more popular as people learn
more about it. Indeed, a recent poll for The Times found that
the law now has more supporters than opponents. But this
swing in public sentiment might be less important than it
appears. Consider the results of a recent Politico/Morning
Consult poll that shows that just 25 percent of registered
voters said they had noticed an increase in their paycheck
because of lower tax withholding while 51 percent had not.
The poll also found that high-income people were more likely
to notice that their take-home pay had gone up. That's
because Republicans designed the law to principally benefit
wealthy families while offering crumbs to low-income and
middle class families.
Those crumbs, by the way, disappear after a few years.
Further, many taxpayers in states like California, New Jersey
and New York will be hit with higher tax bills when they file
their 2018 tax returns and realize that they can now only
deduct up to $10,000 in state and local taxes.
There was a legitimate argument for reforming the tax code
in a way that reduced the corporate tax rate, closed
loopholes and made the economy fairer and more productive.
But Republicans chose a plan that rewards the rich at the
expense of workers. They had to lie to make this scheme seem
legitimate. Now the true effects are coming to fruition.
Mr. GARAMENDI. Mr. Speaker, I yield back the balance of my time.
____________________