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 entitled, “Unleashing America’s Economic Potential,” that focused on the effects of the Republican tax law and critical federal oversight. In his remarks, Senator Heinrich emphasized the damage the tax legislation and the Trump administration’s reversal of key consumer, worker, environmental protections will cause American families.
Below are his remarks as prepared for delivery:
“I’m pleased that we have this opportunity today to dig a little deeper into the Republican tax law.
It was a complex bill, passed without Democratic input, and little debate. The result is a hastily written law that has caused confusion about how families and the broader economy will be impacted.
So let me start with a couple of facts. As a result of the Republican tax law:
Working families will see what little relief they get disappear over time.
Corporations will pocket massive, permanent gains.
The deficit will soar, and Republicans will point to spending as the problem.
And the price tag seems to be growing. From $1.5 trillion in December, this week CBO increased the estimate to $1.9 trillion.
By adding nearly $2 trillion to the national debt, the tax law gives Republicans a fresh rationale to target Social Security, Medicare and Medicaid.
Before the bill was even signed, Speaker Ryan said:
“We're going to have to get back next year at entitlement reform, which is how you tackle the debt and the deficit.”
And other House Republican leaders, including Majority Leader McCarthy and Majority Whip Scalise, have made similar pledges.
I thought a big part of tackling the debt and the deficit was not wasting nearly $2 trillion on tax breaks for large corporations and wealthy individuals.
But that’s not how my Republican colleagues see it.
To pay for some of their tax giveaways, Republicans want to cut health care coverage that families receive through Medicaid and go after Medicare and Social Security that seniors and their families count on.
Democrats will fight these cuts every step of the way.
This week, House Republicans are planning to vote on a balanced budget amendment that would have devastating consequences for seniors, children and middle-class families.
It's all part of the same Republican script. Tax breaks for those who don't need them followed by a belated call to address the national debt they keep adding to.
As this committee has discussed, Republicans also promised that their tax law would result in big yearly wage increases – at least $4,000 per family.
There’s no question that families across the country desperately need a raise.
After adjusting for inflation, the typical worker’s wages have grown by only 6 percent over the past 35 years.
It’s especially tough in places like New Mexico, where there are fewer jobs today than when the recession began more than a decade ago, and the unemployment rate is at 5.8 percent—almost 50 percent higher than the national rate.
But the ones who are getting most of the benefits from the tax law are corporate executives and wealthy shareholders.
Companies are spending about 30 times as much on stock buybacks as worker bonuses or wage increases.
Why are large companies using their tax savings to lift their stock prices?
Well, it’s actually pretty simple.
Executive compensation is tied directly to the price of company stock. One study found that more than 80 percent of compensation of the 500 highest-paid executives in 2015 came from stock.
That’s a pretty big incentive for top executives to try to get their stock price higher.
And there’s another piece that’s just as concerning.
Large buybacks also mean that companies have less left over for investment in factories and research and development that drives productivity, job creation, and wage increases over the longer term.
Now, I want to turn to the other focus of today’s hearing – reversing critical federal oversight.
The administration has rolled back protections for workers, consumers, and the environment.
Reducing costs is often the stated motivation behind gutting protections.
But a new OMB report shows that the regulations issued between 2006 and 2016 resulted in annual benefits that far exceeded the costs – benefits of between $287 and $911 billion, with annual costs of between $78 and $115 billion.
There’s no question that many recent actions taken by the administration will harm workers and consumers.
For example, the Trump administration reversed an increase in the overtime threshold, costing 4 million workers a collective $1.2 billion in additional wages per year.
The administration has given payday lenders a green light to engage in predatory lending practices that result in annual interest rates as high as 600 percent.
And Republicans passed a law that reduced the effectiveness of the National Instant Criminal Background System and made it easier for people with serious mental illness to buy a gun.
The administration also has gone after the environment and our public lands.
At the end of last year, President Trump took action to dramatically reduce the size of Bears Ears and Grand Staircase-Escalante national monuments, pushing aside concerns voiced by native communities that these sacred places should be protected and opening up pristine lands to commercial development.
The Organ Mountains-Desert Peaks and Rio Grande del Norte national monuments in New Mexico have also been under threat.
Rather than working off of special interest wish lists, the administration should work with Democrats to foster inclusive economic growth that helps families pay their bills, afford college, and save for retirement.Thank you each for your testimony today.”