[Congressional Record (Bound Edition), Volume 161 (2015), Part 1]
[Senate]
[Pages 1468-1471]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           INCOME INEQUALITY

  Mr. SANDERS. Madam President, I am delighted to have heard the speech 
from my good friend Senator Cornyn. As the ranking member of the Budget 
Committee, I think we are going to have some very serious discussions 
about the assertion Senator Cornyn and many other Republicans made.
  Let me begin by saying I am delighted that some of my Republican 
friends have expressed great concern about our deficit and our national 
debt. I ask them where they were several years ago when we went to war 
in Iraq and forgot to pay for that war. I happen to think the war in 
Iraq is not a war we should have ever gotten into, but be that as it 
may, I find it interesting that some of the leading deficit hawks went 
to war--a war which will end up costing us some $3 to $6 trillion. For 
the first time in the modern history of our country, they went to war 
and yet they chose not to pay for it. Then on top of that, in the midst 
of the war, during that period, they gave substantial tax breaks to the 
wealthiest people in this country. In addition to that, they passed a 
Medicare Part D prescription drug program--much more expensive than it 
should be--written by the insurance companies, also not paid for. But 
now these same Republicans who came to the floor having voted to spend 
trillions of dollars on a war we should not have gotten into, having 
voted to give huge tax breaks to billionaires, having voted for a 
Medicare Part D prescription drug program that was not paid for--lo and 
behold, they have discovered we have a deficit problem and a national 
debt problem. This country would be in a lot better shape if they had 
expressed those concerns 7 or 8 years ago.
  In my view, there is a war going on in this country. And I am not 
talking about the war in Afghanistan or Iraq or the instability in the 
Middle East; I am talking about the war being waged in America today 
against the American middle class, against the American standard of 
living, and against the American dream.
  Today in the United States of America we have more income and wealth 
inequality than any other major country on Earth.
  Today in America we have the highest rate of childhood poverty of any 
major country on Earth.
  Today in America we are the only major nation not to guarantee health 
care to all of our people as a right of citizenship.
  The United States of America once led the world 40 years ago in terms 
of the percentage of our people who graduated from college. In short, 
we were the best educated people in the world. Today we are in 12th 
place, and millions of our young people are graduating from college 
deeply in debt, while others are looking at the cost of college and 
saying: I am not going to college. I am not going to get a higher 
education. I can't afford it. I don't want to leave school in debt. Our 
competing nations--whether it is Germany, Scandinavia, whether it is 
many of the European countries--are saying their kids are going to go 
to college regardless of the income of their families.
  In terms of our infrastructure, we were once the envy of the world. 
Today, according to the World Economic Forum, we are in 12th place.
  Today in America real unemployment is not the official unemployment 
rate of 5.8 percent; it is over 11 percent if we count those people who 
have given up looking for work and are working part time.
  Youth unemployment--an issue we do not talk about--is 18 percent. We 
have over 5 million young people in this country who either dropped out 
of high school or graduated from high school. Do you know what they are 
doing? They are doing nothing. They are hanging out on street corners 
in Vermont, Louisiana, and all over this country. There are no jobs for 
them. In terms of African-American youth unemployment, that number, if 
you can believe it, is close to 30 percent.
  What the war against the middle-class and working families is about 
is that millions of our people are working longer hours for lower 
wages. In inflation-adjusted dollars, the median male worker today is 
earning some $700 less than that worker made 40 years ago. The median 
woman worker--that woman right in the middle of the economy--made 
$1,300 less last year than she earned in 2007. Since 1999, the median 
middle-class family has seen their income go down by about $4,000.
  The great recession, which was caused by the greed, recklessness, and 
illegal behavior on Wall Street, cost our country millions of good-
paying jobs. It cost millions of Americans their homes and their life 
savings. It destroyed marriages and left people so destitute that they 
took their own lives. But the fact is, when people are in economic 
despair and economic recession, suicide rates go up. While the worst is 
clearly behind us, millions are still trying to claw their way back to 
where they were before the greed and financial abuses of Wall Street 
ripped the middle class apart.
  The good news is that in the past 6 years our economy has made 
significant progress. We have created millions of jobs, and that is a 
good thing. Our unemployment rate is down, and we have seen a whole lot 
of people return to work. But when we talk about the economy, we also 
have to understand that the recovery we are seeing is extremely uneven. 
Some people--the people on top--have done remarkably, unbelievably 
well. A tiny slice of the population has gobbled up all of the economic 
gains since 2009.
  Let me repeat that because it is almost impossible to believe, but it 
is true. All of the new income gains after 2009--not 50 percent, not 80 
percent, not 90 percent--100 percent of all of the income gains after 
2009 have landed in the pockets of the top 1 percent.
  Today the top one-tenth of 1 percent owns more wealth than the bottom 
90 percent. Today the Walton family--six people--owns more wealth than 
the bottom 41 percent. Here is the Walton family, six people who are 
worth $144.7 billion, and here is the bottom 41.5 percent of our 
population--131 million people who are worth about $123.4 billion. I 
ask the American people, is this what our country is supposed to be 
about--one family owning more wealth than the bottom 41 percent, the 
bottom 131 million Americans? Our economy and our distribution of 
wealth and income is completely out of balance, and this imbalance is 
not only fundamentally immoral, it is wrong that so few have so much 
and so many have so little. But it is also detrimental to economic

[[Page 1469]]

growth, it is dangerous for our financial stability, and in fact it 
threatens our democracy. Our task is to rebalance this economy; to 
create an economy that works well for all of our people and not just 
wealthy campaign contributors--not just the Koch brothers but the 
working class of this country.
  There was a time after the Great Depression when we built an economy 
that allowed workers to share in our Nation's prosperity. There was a 
time when the economy grew to help all people--the rich got richer, the 
middle class expanded, and poverty went down. That economy brought 
unparalleled prosperity and financial stability to our country and is 
affectionately remembered as the golden age of American capitalism. For 
decades wages increased alongside rising productivity, and each 
generation could reasonably expect to do better than the last.
  My parents worked very hard so their sons could do better than they 
did. That was the American dream--a dream, by the way, which no longer 
exists.
  After rising to more than $56,000 at the start of the 21st century, 
real median household incomes today have fallen back to where they were 
in 1996, a decline in living standards of more than $4,000 a year. 
Something is not right in our economy.
  The good news is the economy is growing. It is much better than it 
was 6 years ago, and we should be delighted by that. GDP is up. We just 
had a very strong quarter--5-percent growth. Productivity is up, 
employment is up, home prices are up, and the stock market is way up.
  On the other hand, average hourly earnings have barely budged, 
leading economists to resurrect a Depression-era term--a Depression-era 
term--called secular stagnation. For the first time since the Great 
Depression, our economy is growing in a way that is leaving most of our 
citizens no better off. In other words, the economy is doing well, but 
the people are not doing well.
  In fact the distribution of wealth today is worse than at any time 
since 1917--1917. The share of wealth owned by the top one-tenth of 1 
percent is almost the same as the bottom 90 percent.
  When we talk about the budget--and I will talk about the budget as 
the ranking member of the Budget Committee--the budget has to be placed 
in a broader context of what is happening in America. What is happening 
in America is the people at the top are doing phenomenally well, the 
stock market is going off the wall, corporate profits are at an alltime 
high, while the middle class shrinks and we have almost more people 
living in poverty than at any time in our history. That is the context 
in which in my view the Budget Committee has to accept its challenge.
  Today half of all Americans are making less than $20 an hour, half 
the kids in our public schools are living in poverty, and 62 percent of 
Americans do not have the money to cover an unexpected emergency room 
visit or a $500 car repair. In other words, all over this country 
people are stressed. They are worried about what would happen if their 
car were to break down. They are worried what would happen if they were 
to get sick because they have no money in the bank. They have nothing 
to rely upon. They are working longer hours and in many cases they have 
nothing in the bank.
  As the recent elections in Greece demonstrate, ordinary people will 
not stand by and watch as their economies unravel and as their 
democracies unravel. Left unchecked, widening disparities in wealth and 
opportunity here at home can give rise to dangerous levels of social 
unrest. We must rebalance the economy so prosperity is enjoyed by the 
many--by the middle class, by working families--and not just a handful 
of people on top.
  We must ensure that our economy continues to grow and that the 
benefits of a growing economy are widely enjoyed. It is not growth 
versus fairness but growth and fairness. In other words, we can have 
all the growth we want and it doesn't mean anything to the middle 
class. In fact, the converse is true: We can have all the fairness we 
want, but if there is not growth, people are not going to gain 
prosperity. In fact, no society has ever flourished without a large, 
prosperous middle class, and that is what we must fight to bring about.
  My Republican friends believe the economy will grow if we just give 
more tax breaks to millionaires, to billionaires, and to the largest 
corporations in America. They refer to this top 1 percent as the job 
makers or the job creators. They insist if we rub their bellies just 
right--deregulating markets and slashing taxes and all of these nice 
things for the wealthy and the powerful--we can coax them into building 
an economy that will work for everyone. That is called trickle-down 
economics: bend over backward for the rich and the powerful, and when 
we give them their tax breaks, we deregulate and let them destroy the 
environment, my God, they are going to create all these jobs for 
working families.
  That is what the first George Bush referred to as ``voodoo 
economics.'' He was right then and that expression is right today.
  I am sure the Presiding Officer has seen the Kevin Costner movie 
``Field of Dreams.'' These supply-side arguments, these trickle-down 
theories are the economic equivalent of the field of dreams. The 
Republicans tell us all we have to do is to build a friendly tax and 
regulatory environment and the ``job creators'' will come. They tell us 
we just have to get the ``incentives'' right and the wealthy will 
create all the good jobs we need. They tell us that if we build the 
rich a better playing field, the jobs will come.
  That is the mantra of supply-side economics, of the trickle-down 
theory: If you build it, they will come. The only problem with that 
theory is it has been tried and the evidence is overwhelming that it 
has failed.
  Since 1980 we have seen the marginal income tax rate--the top 
marginal income tax rate--plunge from 70 to 35 percent. The wealthiest 
people wanted a reduction in their marginal tax rate, and they got it. 
The corporate income tax rate dropped from 46 to 35 percent--although, 
by the way, very few corporations pay 35 percent, but they did get a 
reduction in the corporate tax rate. Taxes on capital gains fell from 
28 to 15 percent. We have deregulated the airlines, deregulated 
telecommunications, deregulated energy, and maybe, most significantly 
and most disastrously, we deregulated Wall Street.
  We did all of the things the wealthy and the powerful wanted us to 
do, but instead of unleashing the job creators and ushering in a new 
golden age that benefits all people, these supply-side gimmicks brought 
us widening inequality and greater financial instability. In other 
words, these experiments failed. They failed. Our economy has become 
more unstable. The distribution of wealth and income has become more 
unequal, and it takes the system longer and longer to call back the 
jobs that are lost each time we suffer a recession.
  I am encouraged by some of the comments I have recently heard from my 
Republican colleagues who recognize that income and wealth inequality 
in America is real. This is a step forward. However, the policies they 
are advocating to address income and wealth inequality will in fact 
make a bad situation even worse.
  As the ranking member of the Budget Committee, let me tell you what 
the Republicans have in mind. They don't say this straightforward, so I 
will help them and say it straightforward. What they intend to do is to 
cut Social Security, and they are going to tell us all the reasons we 
have to cut Social Security. That is what they are going to do. That is 
what they are going to try to do. We are going to stop them, but that 
is what they are going to try to do. They are going to try to end 
Medicare as we know it and convert it into a voucher program. That is 
what the House Republicans voted to do last year. The result will be 
that there will be more and more out-of-pocket medical expenses for 
older Americans. They are going to make devastating cuts in Medicaid 
and throw some of the most vulnerable people in this country off of 
health insurance and onto the

[[Page 1470]]

rolls of the uninsured. They are going to try to cut taxes for 
millionaires, billionaires and large corporations and they are going to 
try to increase military spending.
  That is what they are going to do. They are going to give long 
speeches. They are not going to say these things directly, but if you 
listened closely to the speech my friend and colleague Senator Cornyn 
gave, that is truly what they intend to do.
  Einstein said it was the height of insanity to keep doing the same 
thing over and over again expecting different results. It is time to 
accept the facts. The facts are that trickle-down economics does not 
work. It has failed. It is time to get back to doing what does work--
what works for the middle class and working families. That is what we 
have to get back to.
  So what does work? What is a program we should be advocating that 
makes sense and that will work for ordinary Americans? The plan is 
actually pretty simple. It is the way economics was taught and 
practiced during the golden age of capitalism, and it flips trickle-
down thinking on its head. To put it as simply as possible, our economy 
runs on sales, not a very difficult concept to understand. Sales create 
jobs.
  Businesses don't hire and invest because they want to. They hire 
workers and invest in new machinery because they have to. They do it to 
keep up with consumer demand, which is 70 percent of our economy, not 
very complicated. When people have disposable income in their pockets, 
they buy products, they buy services, and when they buy those services 
and products, companies hire workers to make those products and deliver 
those services.
  We hear a lot of talk about how we need to reduce spending to grow 
the economy, but that doesn't quite make sense. Spending isn't just the 
right way to grow the economy. In fact, it is the only way to grow the 
economy. After all, what is the economy? It is our economic pie, our 
GDP. What is that? It is a measure of how much we are spending as a 
nation to buy the goods and services we are producing. If we spend 
less, we don't grow our economy, we shrink it.
  Contrary to what a lot of people believe, the government is not the 
big spender in the economy, households are. Their spending accounts for 
roughly 70 percent of our total GDP. That means consumers play a 
critical role in creating the demand that drives our economy.
  It also means that when the middle class is in trouble--when people 
have less disposable income--the American economy is in trouble. 
Whether we continue to grow and create jobs depends critically on the 
economic well-being of the vast middle class. If the middle class is 
weighed down with debt and struggling to get by, the long-term health 
of the United States economy is in serious trouble.
  Hardworking Americans with money to spend are the real job creators. 
They are the customers who supply the demand of the vast majority of 
what our businesses are trying to sell.
  This is not just Bernie Sanders speaking. Talk to many of the large 
companies out there and they say they are seeing a drying up of their 
customers because the economy is so bad. That is what the folks in many 
industries will tell us today. Our economy does well when people have 
income to spend. This is not a complicated theory. If people can't buy 
products, companies are not making products. Companies are not 
producing services.
  Since the Wall Street crash, many of the jobs that have been added to 
the economy have been low-wage and part-time jobs. In fact, the jobs 
created during the recovery in the last few years pay 23 percent less 
on average than those that were lost in the recession. In his State of 
the Union Address, the President talked about ``middle class 
economics,'' and that is an excellent way to put it. It is a powerful 
reminder of what drives growth and prosperity. When we understand this, 
we understand why our economy cannot function when those at the very 
top are pocketing 100 percent of the income gains.
  Let me repeat that. The top 1 percent is not getting 50 percent of 
all new income, not getting 80 percent of all new income--they are 
getting 100 percent of all new income. Our most important job creator, 
the vast middle class, is disappearing. Squeezed by decades of rising 
costs and stagnant incomes, they just can't do it. When those at the 
very top take more and more of the gains, our job creators--i.e., the 
middle class--get squeezed. Debt becomes a substitute for income, and 
the economy becomes even more fragile.
  Let me show an incredibly revelatory chart. This chart talks about 
distribution of average income growth during expansions and what the 
bottom 90 percent received versus what the top 10 percent of families 
receive.
  We go back from the period of 1949 to 1953, 1954 to 1957, 1958 to 
1960, 1961 to 1969, 1970 to 1973, 1975 to 1979, 1982 to 1990, 1991 to 
2000, 2001 to 2007, 2009 to 2012. That is the last we have.
  What this chart shows is that in the first three decades after World 
War II the vast majority of Americans did well when the economy did 
well.
  This is the percentage of new income that went to the bottom 90 
percent, and this is what the top 10 percent got. They did OK. The top 
10 percent did pretty well. They got 20 percent of all new income. But 
the bottom 90 percent got 80 percent of the income. Then 1954 to 1957 
went down a little bit, but the bottom 90 percent did pretty well. 
Again, the bottom 90 percent did pretty well, and here the bottom 90 
percent did pretty well. Then the bottom 90 percent begins to do less 
well, and again less well, but they are still getting a majority of the 
new income.
  Whoa--what happens in 1982? Well, Ronald Reagan is President--and the 
good news is we are into trickle-down economics. Here it is. This chart 
tells it all. This is what the top 10 percent got, and this is what the 
bottom 90 percent got.
  Here we are in the last number here, where we are today, and, lo and 
behold, the top 10 percent gets it all. And, frankly, this is a 
metaphor. This is an example of exactly what trickle-down economics is 
all about.
  So early on, in economics, when we have a recovery, most of the new 
income goes to working families and to the broad middle class. Since 
the 1982 period, almost all of the new income goes to the top 1 
percent. Today, as I mentioned--rather unbelievably--all of the new 
income is going to the top 1 percent.
  Clearly, this is unacceptable. This trend of the rich getting richer 
and everybody else getting poorer is not what America is about, and it 
has got to be changed. We have to rethink the fundamentals of supply-
side, trick-down economic theory.
  The difficulty we have, to be frank, is that, especially since 
Citizens United and especially since the millionaires and billionaires 
can pour huge amounts of money into the political process, for them 
this is great news. This chart is fantastic news. They have won. They 
contribute to candidates, and candidates go out and tell us we need 
more tax breaks for the rich, we need more deregulation. And these are 
the results. So not only do we need to change our economic policies. 
Clearly, we need to change campaign finance so the work being done by 
Congress reflects the needs of working families and not just the 
billionaire class.
  Now, let me say what I think we should do. I do not believe we should 
give more tax breaks to the rich because they are getting richer and 
their tax rates have gone down. I do not believe we should give more 
tax breaks to large corporations, because there are huge loopholes in 
our corporate tax system and we are losing about $100 billion every 
single year because corporations and millionaires are stashing their 
money in the Cayman Islands and other tax havens.
  We have a situation right now in this country in terms of our 
individual tax breaks where hedge fund managers who make millions of 
dollars a year pay an effective tax rate lower than a truckdriver or a 
nurse. That makes no sense to me nor do I believe it makes sense to the 
American people.
  So I will very briefly say what I think makes sense and an agenda 
that

[[Page 1471]]

will put Americans back to work at decent wages.
  No. 1, if we want to create jobs in America, we don't pass the 
Keystone Pipeline bill. That creates 35 permanent jobs. That creates 
several thousand construction jobs. And, by the way, that allows the 
Canadian firm to produce and transport some of the dirtiest fuel in the 
world, which will only exacerbate the problems of climate change--doing 
exactly the opposite of what the scientific community tells us we 
should do.
  So if we want to create more than 35 permanent jobs, maybe we should 
be serious about rebuilding our crumbling infrastructure; that is, our 
roads, our bridges, our water systems, our wastewater plants, our dams, 
our levees, our rail system, our airports. Think of what America would 
look like when, instead of having a sub-par infrastructure--an 
infrastructure now ranked 12th in the world--we lead the world with 
cutting edge technology. A $1 trillion investment could put 13 million 
Americans back to work at good wages. In my view, that is exactly what 
we should be doing.
  Right now in this country we have a significant number of people 
working at the starvation wage--the Federal minimum wage--of $7.25 an 
hour. We must raise the minimum wage to a living wage. When we do that, 
we provide a pay raise for some 25 million Americans who today are 
struggling economically. And when we do that, we not only help them, 
but we also help the economy because, as I mentioned earlier, when 
these folks have money they can then spend some money.
  We have to provide pay equity for women workers. It is not acceptable 
that women today earn 78 percent of what male workers earn who do the 
same job.
  We have to deal with the scandal of overtime right now, where we have 
workers in McDonald's who make $25,000, $28,000 a year and who are 
``supervisors'' and therefore are exempt from overtime regulations. So 
they may be working 50 or 60 hours a week making very little money, yet 
because they are ``supervisors,'' they don't get time and a half. 
Ending that and raising that $23,000 threshold to something like 
$56,000 would provide a huge pay increase for millions and millions of 
workers.
  We live in a very, very competitive global economy, and it makes no 
sense to me that in that economy we have large numbers of young people 
who are giving up on the dream of getting a good education and going to 
college or graduate school. Others are leaving school deeply in debt. 
We should learn from many of our competitors who say to their young 
people: You want to go to college? You can go to college, regardless of 
your income because tuition is free.
  A few months ago, one of the States in Germany was the last State in 
Germany to do away with tuition. What one of their political leaders 
said was: Look. We believe all of our people have the right to go to 
college, and income should not be an impediment. I agree with that.
  We need finally to do what I know is very, very difficult for many of 
the Members of this body, and that is take on Wall Street. We have a 
handful of huge financial institutions that have assets equivalent to 
60 percent of the GDP of the United States of America. They issue half 
of the mortgages in this country and two-thirds of the credit cards in 
this country. I believe that is just too big. I fear very much about 
another too-big-to-fail scenario where we have to bail them out.
  As we know, Republicans recently have pushed through language to take 
away some of the protections that taxpayers had in Dodd-Frank and once 
again leave them exposed to bailing out Wall Street when they engage in 
dangerous derivative speculation.
  Lastly--and this is not just an economic issue, although it is; it is 
a moral issue--we have millions of senior citizens and people with 
disabilities in this country who are struggling with incredible courage 
every single day to buy the food they need and to buy the medicine they 
need, and, in cold States such as mine in Vermont, to heat their homes. 
This is not just rhetoric. This is reality. There are--God knows how 
many--seniors who say: Well, I can't buy my medicine if I am going to 
heat the house. I can't heat the house if I am going to buy my 
nutrition. We know that all over the country the Meals On Wheels 
programs have waiting lines because it is a place for low-income 
seniors to get nutrition. Yet we have an effort right now on the part 
of Republicans to say that, well, yeah, we have millions of seniors 
trying to get by on $12,000, $13,000 a year, but we are going to cut 
their benefits. Well, they may make that effort, but I will do 
everything I can to stop it.
  There are very simple remedies for the problems facing Social 
Security, and we should make a couple of things very clear. Despite a 
lot of the rhetoric that we hear, Social Security is paid for by the 
payroll tax and does not add to the deficit. So take that issue away.
  The second issue is that Social Security is going broke. Well, the 
simple truth is Social Security is not going broke. Social Security has 
about $2.6 trillion in its trust fund and can pay out about all the 
benefits owed to all eligible Americans for the next 19 years. If we 
want to make Social Security solvent--not for 19 years, because I think 
we have to extend that--if we want to make it solvent for 30 years or 
40 years and if we want, as I believe we should, not to cut benefits 
but to expand benefits, and if we want to do the right thing for our 
parents and our grandchildren, then I think we defeat every effort out 
there to cut Social Security. I think we lift the cap on taxable income 
so that millionaires contribute more into the Social Security trust 
fund. I think we have that moral obligation to our parents and our 
grandparents.
  Let me conclude by saying this. I think the evidence is overwhelming 
that trickledown economics is a fraud. It works for the very wealthy; 
it does not work for working families. The job of this Congress is to 
protect the middle class and working class, and not just billionaire 
campaign contributors.
  With that, I thank the Presiding Officer for your indulgence, and I 
yield the floor.

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