WASHINGTON, D.C. – U.S. Senator Martin Heinrich (D-N.M.), Ranking Member of the Joint Economic Committee, delivered the following statement at today’s hearing on the impact of the Republican tax plan on the economy. In his remarks, Senator Heinrich highlighted that the Republican tax cuts are mostly benefiting the wealthy and doing little for working Americans.
Below are his remarks as prepared for delivery:
“Thank you Chairman Paulsen. I agree with you that it’s useful to look at the Republican tax law’s impacts on the economy, working families, and our nation’s future economic position.
I suspect we will come to very different conclusions.
At best, the Republican tax bill was a massive missed opportunity, squandering $1.9 trillion on tax breaks for those who don’t need them at a time our nation can least afford it.
The bill does little to help working families. Instead, it worsens inequality and burdens the next generation with trillions in additional debt, which could jeopardize vital programs and services families count on.
At a basic level, the law hasn’t lived up to Republican promises. The White House and my Republican colleagues promised families a $4,000 a year increase in income.
But that hasn’t happened.
In fact, wages adjusted for inflation are actually going down, not up.
As you can see in this chart on wage growth, the average hourly wage for production and nonsupervisory workers – our best measure of the typical worker’s take home pay – was lower in July 2018 than July 2017, after adjusting for inflation.
In other words, wages aren’t keeping pace with the cost of living.
That means it’s harder for the typical family to buy groceries, pay rent and put gas in the tank.
After decades of wage stagnation – where the median worker’s wages have grown by 6.1 percent over the last 38 years – people need a real raise, not empty promises.
The reality is that Republican tax bill is doing exactly what virtually all mainstream economists and Democrats said it would do. It is delivering the vast majority of its benefits to large corporations and wealthy individuals, while leaving working Americans behind.
Stock buybacks are now at record highs, with Goldman Sachs projecting they will reach $1 trillion by the end of the year.
While buybacks benefit company executives and other wealthy shareholders and investors, they do nothing for half of all Americans who own no stock. And, since foreign investors own 35 percent of U.S. stocks, much of the benefits of the buybacks are flowing overseas.
It’s important to remember that each dollar spent on buybacks is a dollar not spent on investing in factories or plants, training, or boosting workers’ wages.
We could have gone a different direction.
My Republican colleagues could have joined with Democrats to craft deficit-neutral, pro-growth tax reform.
But, by adding $1.9 trillion to the national debt, the tax law gives Republicans their latest justification to target Social Security, Medicare, and Medicaid.
Just last month, Republican Representative Steve Stivers, the chair of the NRCC, expressed support for turning Medicare into a voucher program.
Republicans are again pushing to cut health care coverage that families receive through Medicaid and go after Medicare and Social Security, which seniors and their families count on.
In my state, more than half of New Mexicans depend on these three programs and the Affordable Care Act to help with health care and living expenses.
Cuts to these programs would have devastating consequences for families who have seen little to no benefit from the tax cuts.
Recent economic projections remind us that any growth bump from the Republican tax cut will be short lived.
So, Republicans will try to take your eyes elsewhere.
Republicans will point to second quarter GDP growth, but will neglect to mention that we have hit higher levels multiple times in this recovery, or that long-term projections are unchanged.
In fact, economists at the San Francisco Fed recently projected that the tax cuts could have zero impact to growth, due to the poor timing of the law.
They’ll talk about this years’ job growth, but fail to acknowledge that 2018 and 2017 look basically the same as 2016 and 2015. In fact, as this chart on job growth shows, the economy is adding fewer jobs per month since President Trump took over.
Now, Republicans want to make permanent the temporary provisions of the bill – to dole out a second helping of tax breaks.
But doing so would deliver two-thirds of the benefits to the wealthiest 20 percent and add nearly $800 billion more to the debt by 2028.
The Republican tax law was the wrong medicine at the wrong time. The solution is not to take more of it.
I want to thank each of the witnesses for your testimony today and I look forward to a spirited discussion.”