[Congressional Record Volume 166, Number 19 (Wednesday, January 29, 2020)]
[House]
[Pages H637-H640]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE OBAMA ECONOMY
The SPEAKER pro tempore. The Chair recognizes the gentlewoman from
Texas (Ms. Jackson Lee) for 5 minutes.
Ms. JACKSON LEE. Mr. Speaker, in 2016, I wrote this op-ed, ``Seven
Years of Change You Can See and Feel.'' I wrote it in the backdrop of
the election of President Barack Obama and his opening remarks and his
inauguration that said: ``Today I say to you that the challenges we
face are real. They are serious and they are many. They will not be met
easily or in a short span of time. But know this America: They will be
met.''
Mr. Speaker, I include in the Record the op-ed I authored.
[From the Washington Examiner, Feb. 17, 2016]
Seven Years of Change You Can See and Feel
(By Sheila Jackson Lee)
The morning of January 20, 2009 was one of the coldest days
on record in Washington, DC. But this was nothing compared to
the chill wind blowing through the American economy and body
politic. The nation was facing economic challenges unseen
since the Great Depression: Americans were losing their jobs
at a frightening rate of 800,000 per month; the national
unemployment rate had risen to 7.8 percent and would continue
to climb until reaching its peak of 10.0 percent in October
2009.
For African Americans, the numbers were much grimmer: A
jobless rate of 13.5 percent in January 2009 which would grow
to 16.5 percent by the end of the year. And on top of this,
tens of thousands of American families each month were losing
their health insurance and their homes to foreclosure. The
United States was still bogged down in the quagmire that was
the Iraq War and young people by the thousands were being
forced to defer or drop out of college because of lack of
financial aid. And the average price of gas exceeded $4 per
gallon.
It was against this backdrop that I watched from the
inaugural platform as Barack Obama, surrounded by his radiant
and beautiful wife, Michelle, and their two adorable
daughters, rose to take the oath of office. After being sworn
in as the nation's
[[Page H638]]
44th president of the United States, Obama reassured an
anxious but hopeful nation, saying:
``Today I say to you that the challenges we face are real.
They are serious and they are many. They will not be met
easily or in a short span of time. But know this America:
They will be met.''
Watching Barack Obama address the nation that day,
spectators in attendance and viewers across the country and
around the world understood they were witnessing a historic
president, the first African American ever to hold the
nation's highest office.
But more than being a historic president, Barack Obama's
actions and leadership over the ensuing seven years would
demonstrate that his would be a consequential presidency that
changed America for the better.
His first and most pressing task was to rescue an economy
on the brink of collapse. Working with the Democratic-
controlled Congress, the American Recovery and Reinvestment
Act was passed, which created 3.7 million jobs and saved the
jobs of millions of teachers, firefighters, police officers
and social service providers. The Recovery Act also cut taxes
for working families, extended unemployment insurance, and
expanded the Earned Income and Child Tax Credits, which
disproportionately benefit African American families.
Seven years later the verdict is in on the economic plan
put in place by President Obama and the Democratic Congress.
The Recovery Act ended the Great Recession, transformed the
economy from one hemorrhaging jobs to one that has created
more than 16 million new jobs over a record 71 consecutive
months. The national unemployment rate has dipped under 5
percent for the first time since President Clinton left
office, the deficit has been cut by 71 percent and the Dow
Jones stock market index topped 18,000 in 2015, an increase
of 177 percent over where it stood the day President Obama
took office.
As an added benefit, the average price of gasoline has been
reduced from more than $4.11 per gallon to $1.80, the lowest
price since before the tragedy of September 11. The seven
years of Obama also effected policy change in the areas of
criminal justice reform, health and education, national
security and foreign affairs.
President Obama also made history by appointing two women
to the U.S. Supreme Court, including the first Hispanic
American to serve on the Court. He appointed the first
African American man and woman to serve as attorney general
and the first woman to chair the Federal Reserve Board.
In the area of foreign affairs and national security,
President Obama ended the Iraq War, assembled and led an
international coalition to impose sanctions on Iran that were
so crippling that it was forced to the negotiating table.
That yielded the Iran Nuclear Agreement that prevents Iran
from ever attaining a nuclear weapon. And of course, as the
world knows, because of President Obama's leadership, General
Motors is alive and Osama Bin Laden is dead.
For seven years, President Barack Obama has represented our
country with grace, integrity, honor, and distinction. He has
provided consolation, hope, and healing in the face of
unspeakable tragedies such as the massacre of innocent
children at Sandy Hook, worshippers at Mother Emanuel AME
Church in Charleston, spectators at the Boston Marathon, and
mass shootings in Aurora, Colorado and Tucson, Arizona. He
expressed and symbolized our joy and pride in the progress
made over the last half century--and the distance we still
have to travel--when he marched across the Edmund Pettus
Bridge and addressed the multitude from the spot on the steps
where the Rev. Martin Luther King, Jr. shared his dream for
America's future.
So as President Obama serves the final year of his
presidency, it is clear beyond doubt that he kept the promise
he made to the nation seven years ago on that cold day in
January when he said:
``Today I say to you that the challenges we face are real.
But know this America: They will be met.''
They were more than just met; they were overcome under his
leadership. And because of President Obama, today the United
States is stronger, more prosperous and better positioned
than ever to win the future.
And that is what makes his one of the most consequential
presidencies in American history.
Ms. JACKSON LEE. In the years of Obama's service, we did, together,
meet those challenges.
His first and most pressing task was to rescue an economy on the
brink of collapse. Working with the Democratic-controlled Congress, the
American Recovery and Reinvestment Act, the stimulus, was passed and
created 3.7 million jobs and saved the jobs of millions of teachers,
firefighters, police officers, and social service providers.
The Recovery Act also cut taxes for working families, extended
unemployment insurance, and expanded the earned income and child tax
credit, which disproportionately benefits African Americans. The
challenge was met.
So any discussion of any excitement about the work of this
administration creating an economy, it is an economy that was literally
given to them because of the work of President Obama and the Democratic
Caucus.
We have, now, $2 trillion extra in debt. We have the pending
possibility of wars. We have the continuing downward spiral of issues
that will impact this economy.
So, with this terrible tax cut, we were not given a strong economy.
We paid an extremely high price: $1.9 trillion for tax cuts has done
little for the economy. There is no such thing as a bump by this
administration. Key indicators are saying that things, in actuality,
are worse.
The Joint Economic Committee says unemployment was cut by more than
half during the Obama administration, from a peak of 10 percent to 4
percent. The economy had experienced 76 consecutive months of job
growth. The GDP growth was strong, an average of 2.6 percent in 11
quarters of the Obama administration. Growth in annual median household
income was strong and trending upward, increasing $4,800 during those
last 2 years. And the Chairman of the Council of Economic Advisors
under George W. Bush states that the economy was in fine shape at the
end of the Obama administration, despite what President Trump now
asserts.
Mr. Speaker, I include in the Record the Joint Economic Committee
article.
President Trump did not create the strong economy; he inherited it
President Trump regularly claims the economy he inherited
was a ``mess,'' but fact checkers have found this to false.
Before Trump took office in January 2017, the economy had
largely recovered from the Great Recession. Overall economic
indicators were already strong and were trending stronger.
Unemployment had been cut by more than half during the
Obama administration, from a peak of 10 percent to 4.7
percent.
The economy had experienced 76 consecutive months of job
growth.
GDP growth was strong--an average of 2.6 percent growth in
the last 11 quarters of the Obama administration.
Growth in annual median household income was strong and
trending upward, increasing $4,800 during the last two years
of the Obama administration.
Greg Mankiw, chairman of the Council of Economic Advisers
under President George W. Bush, states that ``the economy was
in fine shape at the end of the Obama administration, despite
what President Trump sometimes asserts.''
There is no such thing as a ``Trump bump''--key economic indicators are
the same or worse
Last week, the president said ``we have the greatest
economy we've ever had in the history of our country.'' This
claim did not make it by the fact checkers at The Associated
Press. A few facts to keep in mind:
Monthly non-farm job growth has slowed in the first 35
months of the Trump administration compared to the last 35
months of the Obama administration--36,000 fewer jobs per
month under Trump.
Average real GDP growth has been roughly the same for the
first 11 quarters under Trump and the last 11 quarters of the
Obama administration.
Growth in median annual household income was three times as
great during the last two years of the Obama administration
as during the first two years of the Trump administration.
President Trump's signature economic policy--the $1.9 trillion tax
cut--has failed to deliver the promised economic boost
Trump promised the tax cuts would be like ``rocket fuel''
to the economy, but the effects have been underwhelming. The
economic boost has been very small and short-lived.
GDP growth: Trump promised GDP growth as high as 6 percent.
However, in the seven quarters before and after passage of
the Republican tax law, GDP growth is exactly the same,
averaging 2.5 percent.
Business investment: The Trump administration predicted a
flood of business investment, which is critical to long-term
economic growth. However, it actually has slowed since the
tax cut, falling from an average annual growth rate of 4.6
percent in the seven quarters before enactment to a 3.5
percent annual rate in the seven quarters following the tax
cut.
Household income: The administration predicted that the tax
cuts would bring an increase of $4,000 to $9,000 or more per
household. However, household income increased only $550 in
the first year after the tax cuts went into effect.
Unemployment: It was at 4.1 percent before the tax cuts
took effect, falling just over one-half of 1 percent since
then.
We paid an extremely high price--$1.9 trillion--for tax cuts that have
done so little for the economy
When it is fully implemented, the Republican tax law will
add $1.9 trillion to the national debt, according to CBO.
In just the past two fiscal years, the annual deficit has
increased from $666 billion in FY 2017 to $984 billion in FY
2019 (a 48 percent increase).
Despite a deficit forecast to exceed $1 trillion for the
rest of the decade and beyond,
[[Page H639]]
Trump administration officials continue to claim the tax cuts
will pay for themselves.
In the long term, the vastly increased deficit likely will
weigh down the economy and Republicans will argue that those
deficits will require cuts to vital services and programs
like Medicare and Social Security. In fact, the President
admitted just last week he will look at cuts to those
programs.
Trump's second major economic policy--the trade war--is a self-
inflicted wound, hurting consumers, businesses and the economy
Trump's claim that China bears the entire cost of the
tariffs is absolutely false--there are casualties on both
sides of the trade war.
One analysis finds that the trade war with China had
already cost 300,000 American jobs as of September 2019 and
the number could rise to 450,000 by the end of 2019.
CBO estimated that the trade war reduced GDP by 0.3 percent
by 2020.
The trade war hits consumers in their wallets and
pocketbooks. The Federal Reserve Bank of New York estimated
that tariffs on imports from China cost each U.S. household
nearly $300 per year in 2018, and over $800 per year since
with the additional 15 percent tariff on $200 billion worth
of goods.
While Trump cuts taxes for the wealthy and applauds the stock market,
millions of Americans are struggling to make ends meet
In a recent analysis, the Brookings Institution found that
53 million workers--44 percent of all workers--earn just
$10.22 per hour or about $18,000 per year. $18,000 is not
enough to raise a family on.
The president has begun talking about a blue-collar boom,
but manufacturing has contracted in three of the last four
quarters. The sector has added just 9,000 jobs in the past
six months.
Most of President Trump's claims about the economy are false or highly
misleading
According to The Washington Post Fact Checker, Trump has
made more than 1,500 false claims about the economy.
This is part of a broader pattern. Fact Checker has found
that altogether Trump has made more than 16,000 false or
misleading claims on all topics in his first three years in
office.
Trump made half of those false or misleading claims in
2019--the pace of these claims is increasing.
Any statement the president makes about the economy has a
good chance of being false or misleading.
Ms. JACKSON LEE. And so we have a challenge to try and recoup and
recover, for hardworking Americans, a real economy, because it is
frightening when we begin to start losing jobs.
Let me show how the trend went.
We were adding 270,000 jobs per month under President Obama. We are
now adding an average of 191,000 jobs under this present
administration. And it can be seen very clearly that the job growth is
challenging.
We can also see that, when we were down in a slump on median
household income, it was surging up because of the values and
principles of the Obama administration working with the Democratic
Congress.
Employment was down when Mr. Obama took office. We can see that it
surged up; and then it began to go down, with respect to this
administration, and turning red again. The economy, as I said, had been
growing very well under President Obama.
The GOP tax scam led to a record-setting $1 trillion in stock
buybacks, unlike what was represented to us, that that was going to
create investment in this country.
We are now beginning to put forward some major legislation that deals
with investment in our infrastructure, investment in public housing and
affordable housing, because we realize what creates jobs. We create
jobs when we invest back into the Nation. We do not create jobs when we
take tax cuts and give them to the rich while everybody else suffers.
The GOP tax law encourages companies to send factories and jobs
overseas. Under the GOP tax cut, income generated by American companies
abroad face tax rates that are half the new top corporate rate of 21
percent.
By the way, corporations didn't ask for that low corporate tax rate.
Some companies may be able to avoid taxes altogether on tangible
investments made offshore.
The GOP tax law increases deficits, as I said earlier, by $1.9
trillion when we are facing major budgetary challenges driven by our
aging population.
Finally, Mr. Speaker, I would say that there was nothing but a gift
given to this administration by the hard work of the Obama
administration.
Let us get back to investing in the American people. That is how we
build the economy, not by snatching it away from them.
Mr. Speaker, the verdict is now in, and it leads to the inescapable
conclusion that the Trump TaxScam has not accelerated the economy,
rather it is a significant drag on the booming economy President Barack
Obama bequeathed to his successor, the current occupant of the office.
Specifically, two points cannot be stressed enough.
First, President Trump did not create the strong economy; he
inherited it.
Second, we paid an extremely high price--$1.9 trillion--for tax cuts
that have done so little for the economy.
Mr. Speaker, most of President Trump's claims about the economy are
false or highly misleading.
There is no such thing as a ``Trump bump''--key economic indicators
are the same or worse.
The President's signature economic policy--the $1.9 trillion tax
cut--has failed to deliver the promised economic boost and his second
major economic policy--the trade war--is a self-inflicted wound,
hurting farmers, consumers, businesses and the economy.
Mr. Speaker, those of us who were there remember well that the
morning of January 20, 2009, which was one of the coldest days on
record in Washington, DC.
But it was nothing compared to the chill wind blowing through the
American economy and body politic because at that time the nation was
facing economic challenges unseen since the Great Depression: Americans
were losing their jobs at a frightening rate of 800,000 per month; the
national unemployment rate had risen to 7.8 percent and would continue
to climb until reaching its peak of 10.0 percent in October 2009.
For African Americans, the numbers were much grimmer, a jobless rate
of 13.5 percent in January 2009 which would grow to 16.5 percent by the
end of the year.
And on top of this, tens of thousands of American families each month
were losing their health insurance and their homes to foreclosure.
And the average price of gas exceeded $4 per gallon.
It was against this backdrop that the new President of the United
States, Barack Obama, rose to take the oath of office.
After being sworn in as the nation's 44th President, President Obama
reassured an anxious but hopeful nation, saying:
``Today I say to you that the challenges we face are real. They are
serious and they are many. They will not be met easily or in a short
span of time. But know this America: They will be met.''
Because of the actions President Obama took, not to further the
interests of himself but of the American people, these challenges were
more than met and overcome and for that Barack Obama's presidency is
regarded by historians as a consequential presidency that changed
America for the better.
Mr. Speaker, before Trump took office in January 2017, the economy
had recovered from the Great Recession and overall economic indicators
were already strong and were trending stronger.
Unemployment had been cut by more than half during the Obama
administration, from a peak of 10 percent to 4.7 percent.
The economy had experienced 76 consecutive months of job growth, the
longest sustained period of growth in American history.
GDP growth was strong, average of 2.6 percent annually in the last 11
quarters of the Obama Administration and median household income growth
was strong and trending upward, increasing $4,800 during in last two
years of the Obama administration.
Even Greg Mankiw, chairman of the Council of Economic Advisers under
President George W. Bush, had to admit that ``the economy was in fine
shape at the end of the Obama administration, despite what the current
President falsely asserts.
Mr. Speaker, I include in the Record an op-ed published on February
17, 2016 in the Washington Examiner, entitled ``Seven Years of Change
You Can See and Feel.''
President Obama actually had a plan to tackle the economic woes that
were affecting the American people.
Working with the Democratic-controlled Congress, the President signed
into law the American Recovery and Reinvestment Act, which created 3.7
million jobs and saved the jobs of millions of teachers, firefighters,
police officers, and social service providers.
The Recovery Act also cut taxes for working families, extended
unemployment insurance, and expanded the Earned Income and Child tax
credits, which disproportionately benefit African American families.
The Recovery Act ended the Great Recession, transformed the economy
from one hemorrhaging jobs to one that has created over 16 million new
jobs over a record 71 consecutive months.
The national unemployment rate has dipped under 5 percent, for the
first time since President Clinton left office, the deficit has been
cut
[[Page H640]]
by 71 percent and the Dow Jones stock market index topped 18,000 in
2015, an increase of 177 percent over where it stood the day President
Obama took office.
And, as an added benefit, the average price of gasoline has been
reduced from more than $4.11 per gallon to $1.80, the lowest price
since before the tragedy of September 11.
In short, Mr. Speaker, President Obama bequeathed a booming and
vibrant economy to his successor, who promptly took actions to
undermine it and explode the national debt.
Mr. Speaker, the GOP TaxScam was the wrong policy at the wrong time
because it showered benefits on the top 1 percent large multinational
corporations while doing little for everyday working Americans and Main
Street small business owners.
GOP TaxScam also raises the nation's debt by $1.9 trillion at a time
when the economy was already strong, and when we are facing major long-
term budgetary challenges driven by our aging population.
And rather than devoting resources to wise investments in our workers
and small businesses, the GOP TaxScam further burdens working families,
endangers Americans' retirement security, and worsens our budgetary
outlook.
Our long-term economic growth trajectory is unchanged and there is no
sign of an investment boom.
Real wage growth for workers remains modest and factories and jobs
are more likely to go overseas.
The federal deficit is soaring as corporate tax receipts plummet and
the tax code is riddled with even more special-interest tax breaks and
loopholes.
THE GOP TAXSCAM LED To A RECORD-SETTING $1 TRILLION IN STOCK BUYBACKS
The GOP TaxScam delivered huge benefits to rich investors and CEOs
through record-setting stock buybacks in 2018 while average workers
struggle to pay for rising health care and living costs.
Stock buybacks do nothing to improve business operations or help
workers.
THE GOP TAXSCAM SHOWERS BENEFITS ON THE WEALTHY AND LARGE CORPORATIONS
WHILE DOING LITTLE FOR WORKERS AND MAIN STREET SMALL BUSINESSES
The GOP tax cut is heavily tilted toward the wealthy and corporations
and exacerbates the stagnation of wages for the vast majority of
workers and worsens income and wealth inequality.
The GOP tax law does nothing to help small businesses gain access to
capital and grow their receipts.
Only 5 percent of small businesses pay taxes at the corporate level
and most of the pass-through tax cuts go to the largest 2.6 percent of
businesses.
THE GOP TAX LAW ENCOURAGES COMPANIES TO SEND FACTORIES AND JOBS
OVERSEAS
Under the GOP tax law, income generated by American companies abroad
face tax rates that are half the new top corporate rate of 21 percent.
Some companies may be able to avoid tax altogether on tangible
investments made offshore.
This further incentivizes companies to move tangible assets, such as
factories and machinery, overseas.
Rather than protecting workers and their families, the GOP tax law
tilts the playing field against American workers.
THE GOP TAX LAW INCREASES DEFICITS BY $1.9 TRILLION WHEN WE ARE FACING
MAJOR BUDGETARY CHALLENGES DRIVEN BY OUR AGING POPULATION
Even after accounting for any economic growth effects, the
Congressional Budget Office (CBO) estimates the GOP tax scam increases
deficits by $1.9 trillion over the ten years 2018 to 2028--hardly the
``pay for itself' message we heard from the Administration and
Republicans in Congress.
Our friends across the aisle promised the GOP TaxScam would
significantly boost economic growth, spurred an investment boom, drove
unemployment down to the lowest level since the 1960s, created jobs for
millions of workers, and helped middle-class families keep more of
their paychecks.
All of these claims have collapsed in the crucible of actual
experience.
THE GOP TAXSCAM DID NOT SIGNIFICANTLY BOOST THE ECONOMY
In the seven quarters before and after passage of the Trump TaxScam,
GDP growth is unchanged from the Obama economy, averaging 2.5 percent.
By 2023, the tax law's positive effect on economic growth will fade
away entirely.
THE GOP TAXSCAM DOES NOT SPUR BUSINESS INVESTMENT
There is no evidence of an investment boom, which Republicans
promised would be the key to unleashing unprecedented economic growth
and wage gains.
Nonresidential business investment grew by less than 1 percent in the
third quarter of last year, while business' orders for durable goods
(another measure of investment) fell in December for the fourth time in
five months.
Instead of encouraging investment, the tax cut triggered a record
level of stock buybacks.
THE GOP TAXSCAM IS NOT THE CAUSE OF LOWEST UNEMPLOYMENT SINCE 1968
President Trump is coasting on an economic expansion--now the second-
longest on record--that began under President Obama.
The law has not changed the unemployment trend.
The unemployment rate has fallen steadily since the end of the Great
Recession.
THE GOP TAXSCAM HAS NOT CREATED JOBS FOR MILLIONS OF WORKERS
More jobs were created in President Obama's last two years in office
than President Trump's first two years, a monthly average of 227,00 for
Obama contrasted to an average of 191,000 for Trump.
Monthly non-farm job growth has slowed in the first 35 months of the
Trump administration compared to the last 35 months of the Obama
administration--36,000 fewer jobs per month under Trump.
The tax law also encourages companies to send factories and jobs
overseas rather than protecting jobs at home.
THE GOP TAXSCAM IS NOT HELPING MIDDLE-CLASS FAMILIES KEEP MORE OF THEIR
PAYCHECKS
There has been very little increase in private sector compensation or
wages since the tax law passed.
Real wage growth continues to be disappointingly modest, and real
bonuses increased by just 2 cents per hour between December 2017 and
September 2018.
The law ignores the stagnation of working-class wages and worsens
income and wealth inequality.
In fact, only 35 percent of the tax law's benefits in 2018 will go to
the bottom 80 percent of households making less than approximately
$150,000 per year.
EVEN THOUGH FEDERAL REVENUES HAVE RISEN, THE GOP TAXSCAM HAS CREATED A
MAJOR REVENUE DEFICIENCY PROBLEM
Corporate tax receipts dropped an astounding 31 percent drop in 2018,
with total receipts as a share of GDP falling to the lowest levels
since the end of the Great Recession despite healthy economic growth
and a tight labor market.
Revenue last year was 16.4 percent of the economy, almost two
percentage points below the so-year average of 18.3 percent in years in
which unemployment fell below 5 percent.
By contrast, spending as a share of GDP last year fell right at the
historical average.
Predictably, the President and our Republican friends seeks to evade
blame and responsibility for the fiscal mess and exploding debt they
have created.
Instead of redressing the harm caused by the Trump TaxScam,
Republicans resort again to their past practice of blaming the deficit
on the entitlement programs such as Social Security, Medicare, SNAP,
and veterans benefits and seek to slash these programs to the
barebones.
For example the President sought to cut non-defense discretionary
(NDD) programs by $1.4 trillion, including cuts to Medicare and
Medicaid, reduce funding for SNAP by $220 billion or 22 percent, and
deny infrastructure funding for cash-strapped state and local
governments; and pile more hardships on struggling Americans with $327
billion in cuts to direct spending programs that safeguard basic living
standards they need to get by.
The President is obsessed with dismantling and destabilizing health
care for millions of Americans by making yet another attempt to
``repeal and replace'' the Affordable Care Act passed under the
extraordinary leadership of President Barack Obama which provided
health security to more than 20 million Americans.
Mr. Speaker, we are now entering Act III of the immorality play we
predicted the President would write.
Act I was the cutting of taxes for the rich; Act II was the
inevitable exploding of the deficit we predicted would result and our
Republican friends denied would ever happen.
And now we have Act III, in which Republicans claim to have newly
rediscovered their horror over the deficits created by their fiscal
irresponsibility and insist that the mess they created but be cleaned
up by slashing investments in the programs relied upon by the 90-95
percent of Americans who were made worse off by the GOP TaxScam.
The President should be embarrassed and ashamed of his economic
stewardship and thankful every day to President Obama for tackling and
solving the major economic challenges facing Americans.
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