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 Economic Report of the President (ERP) with Council of Economic Advisers (CEA) Chairman Kevin Hassett. In his remarks, Heinrich debunked the false notion that the Republican tax bill is aimed at helping workers, and emphasized that it will mostly benefit the wealthy and large corporations. He also highlighted the economic challenges that the administration has yet to address.
Below are his remarks as prepared for delivery:
“Before I get started, I wanted to welcome our new chairman. Chairman Paulsen, I’m looking forward to working with you this year.
Chairman Hassett, thank you for being here today to discuss the Economic Report of the President and the state of the economy.
I wish I were more optimistic about the policies put in place since you came before this Committee in October.
I’m going to be direct: the Republican tax bill serves special interests and will cost our children dearly for generations to come.
Rushed through with no bipartisan input, the GOP tax law jeopardizes our fiscal position and further tilts the scales in favor of large corporations and wealthy individuals.
While the law’s impacts on economic growth are debatable, the impact on inequality is clear.
Independent analysis shows that within 10 years, more than half of working families will pay higher taxes than they would have before the new GOP tax law.
Meanwhile, the wealthiest 5 percent walk away with an astonishing 99 percent of the tax benefits.
Chairman Hassett, you and the President have promised again and again – most recently in the Economic Report of the President – that tax reform will increase average family income by at least $4,000. But, that is not what we are seeing.
If we wanted to reform the tax code to help the middle class, we could have simply cut taxes for the middle class.
And it would have directly given working people in New Mexico and around the country much needed resources to pay the bills, put their kids through college, and save a little something for retirement.
Instead, Republicans chose to cut taxes for large corporations and the super wealthy, and left Americans hoping that those cuts would somehow trickle down to workers.
History has proven – again and again – that’s not what happens.
And the early evidence this year confirms who the big winners are.
So far, corporations have announced more than $210 billion in stock buybacks, benefiting executives and wealthy shareholders.
While there have been some bonus and wage announcements, they total just $6 billion – a fraction of the money going to executives and the investor class.
It’s not just the immediate impacts that are concerning; the whole strategy was misguided.
The massive increase in deficits constrains our efforts to tackle the problems we should have been focused on in the first place – like fixing our broken infrastructure and making more accessible and affordable a whole range of post-secondary education options – from apprenticeships and vocational education to community college and 4-year colleges.
Think about how we could have invested the $1.5 trillion spent on the tax bill. We could have erased every student loan in the country.
Every single one.
One recent study shows that cancelling student debt for the 44 million Americans who hold it would boost economic output and create up to 1.5 million new jobs in just one year.
Of course, we could have invested that $1.5 trillion in infrastructure.
The administration’s infrastructure plan commits barely any real money to the cause. They say they want to spend $200 billion in federal dollars, but its budget makes more than $200 billion in cuts to existing infrastructure programs – from transit to highways to water.
In other words, the long-awaited plan invests no new net federal dollars. The $1.5 trillion hole dug because of the tax bill could have actually funded our infrastructure plans.
Instead, the administration is hoping that somehow state and local governments and the private sector will pay for roads, bridges, ports, schools, VA hospitals and on and on.
But the private sector has little interest in investing in sparsely-populated, low-traffic rural areas that desperately need infrastructure investment.
And the tax law further limits already cash-strapped states’ abilities to raise new revenues by capping SALT deductions.
It’s less a plan, and more a hope.
You often hear that budgets are a reflection of values.
That’s true. But the massive tax giveaway – maybe even more than the recent White House budget – reveals Republican priorities.
My Republicans colleagues could have joined with Democrats to invest in children, workers, education and our long-term economic success. Instead, they handed out goodies to large corporations and the uber-wealthy and risked our long-term economic health.Chairman Hassett, my focus is on what we can do now, and in the future. I’m interested to get your insight on how the administration plans to work with us on making the investments that will help families succeed in today’s economy. Thank you for your testimony. I look forward to your perspective.”
For more information, please contact Latoya Veal at Latoya_Veal@jec.senate.gov or 202-224-0379.