State of the Economy

Floor Speech

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Mr. BISHOP of Georgia. Madam Speaker, in 2009, President Obama came into office during the Great Recession. He inherited a dreadful economy but worked hard for policies that would stimulate growth and help the average American. Thankfully, his policies worked and America is on the upswing.

However, we now have a President who wants to take credit where credit is not due. President Trump is reaping the benefits of Obama's economic policies, while harming the people who were still left behind. Recovering from a recession and lifting up all Americans takes more than eight years, and this President has not taken the torch.

Instead of building on Obama's success, Trump has kicked the Americans who are still down.

When farmers in the 2nd Congressional District of Georgia and all across the nation were suffering from major crop losses from natural disasters, President Trump decided to start a trade war with China. Trade wars do not often have victors, but they always have losers.

American farmers, workers, and consumers were the losers.

Our farmers lost business, our workers lost wages, and our consumers paid higher prices--all to cover the costs of the tariffs--not China and not President Trump, the architect of this bad plan.

When running for office, then-candidate Trump said he would use his knowledge of tax cuts for the rich to help the people who this economy still isn't working for. When he was elected, one of the first things he did was give a $1 trillion tax cut to the super rich--also known as himself and his friends.

Trickle down economics did not work then and they do not work now. Giving money to the wealthy does not translate to higher wages for workers. It means more money for the already super wealthy.

The Trump tax cut has also ballooned an already too high national deficit. When you take a pay cut, you cannot pay your bills, so your debt grows. But it's not the wealthy who will feel the pain from an exploding deficit that will slow our economic growth. It is everyday Americans who will feel the effects--lower wages lead to a lower standard of living. The Peterson Foundation estimates that if the national debt continues rising as is, the average income for a family of four will drop by $16,000 over the next three decades.

$16,000 is not much for those at the top. But it is devastating for those in the middle and working class. Food stamps, unemployment benefits, Medicare, and Social Security could all face cuts because of tax cuts for the wealthy.

We should be trying to make the nation a better place for our children and grandchildren. Instead we have a leader who wants to leave them with our debt. Instead we have a leader who wants to ride on President Obama's coattails and lure us into a false sense of security, so he and his rich friends can have even more--when so many in America have less!

America is supposed to be a land of opportunity, where anyone can succeed with enough hard work. Trade wars, tax cuts for the rich while cutting food stamps for the poor are not the way to make America great. Instead of building on our success and lending a helping hand to those in need, this President has only sought to help himself.

Ms. Jackson Lee. Madam Speaker, I thank Majority Leader Hoyer Chairmen Neal of Ways and Means and Chairman Yarmuth of the Budget Committee and Vice-Chairman Beyer of the Joint Economic Committee for holding this very important and timely Special Order to review and assess the state of the national economy two years after the Republican-controlled Congress enacted the Trump-GOP TaxScam.

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.

Madam 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.

Madam 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.

Madam 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.

Madam Speaker, I will 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 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, Madam Speaker, President Obama bequeathed a booming and vibrant economy to his successor, who promptly took actions to undermine it and explode the national debt.

Madam Speaker, the GOP TaxScam was the wrong policy at the wrong time because it showered benefits on the top 1 percent and 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 taxscam 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 Boosts 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. GOP TaxScam Not 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 227,000 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 50-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.

Madam Speaker, we 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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