Economic Miracle in 2018 and 2019

Floor Speech

BREAK IN TRANSCRIPT

Mr. SCHWEIKERT. Mr. Lipinski, being someone from the other side, you really are one of the good guys. I have had a handful of great conversations with you over the years. Even though I am a conservative from the desert, you have always been very kind to me, and your concern and love for your community have always shone through, so it is appreciated.

Mr. Speaker, this is one of those opportunities where you have the feeling you are going to be doing this a lot over this next year.

Mr. Speaker, I want to make an argument that growth is moral, and I want to go a bit further than that. One of the things that spurred me to come here is I listened to Janet Yellen just a couple of days ago, who may be becoming Secretary of the Treasury, give a speech. In that speech, there were wonderful words about caring about working men and women, helping the working poor, but there was a complete failure in that discussion to talk about where we have had success.

Look, so many people in this body run around saying, well, you are conservative, you are liberal, but we care about the hardworking taxpayers of America. We want to see our brothers and sisters in the country, particularly those who--and I hate this term, and it is one of the hazards as a Republican. We often sound like accountants on steroids. You know, we will go and say, well, our brothers and sisters who are in the lower income quartiles--and no one knows what a quartile is.

But the point, we claim we care. We claim we want to do things. I want to claim we have the proof that, in 2018 and 2019, there was a miracle happening in this country.

For the first time in modern economic history of the United States, the thing particularly the left used to scream at Republicans, because they cared so much about income inequality, I am going to make the argument we delivered policy, that, for the first time, income inequality began to shrink, 2 years where it worked.

As the demagoguery, which is the modern political scene, as we hear people like the Janet Yellens of the world, who I have had a great working relationship with over the years, read their script and don't take a moment to say what worked in just the last couple of years, what worked to help so many of our American citizens have opportunity, to see a light at the end of the tunnel, to stop seeing the purchasing power of their lives, their ability to plan for retirement, the ability to take care of their families and their kids.

Even outside the political rage that drives this body so often, could we take a moment and understand America was doing something it had not been able to do for decades and decades and decades, where the income inequality, the movement of wages, the value of someone's labor, had been being crushed decade after decade? In 2018 and 2019, the data is absolutely solid and clear: There was an economic miracle happening in this country.

If you care about the working poor, take a look at what happened, and let's do more of it. Those things that weren't working in the previous years, let's do less of it. The problem is, in this environment, that becomes partisan.

Let's walk through some of the facts. This is my moment to get a little snarky at my colleagues from the other side and some of their comments they have made. Those of us on our side are looking for our apology because they didn't tell the truth. They projected the future.

This is when Speaker Pelosi then was the minority leader. She, basically, when we did the tax reform, after calling it a scam and then, in her quote, saying making the rich richer, except that is not what happened. The math is the math is the math. I know it doesn't fit the political rhetoric of this place, but the math is the math.

If you take a look at the highest income quartiles, their percentage of the income, the wealth actually went down in 2018 and 2019, something that had not happened in modern economic history.

You would have thought the Democrats would say, hey, we got it wrong, but we really care a lot about this, because they claim they care a lot about it. So why don't we look at some of the other reality.

My colleagues on the Ways and Means Committee on the other side, the House Democrats, kept doing speeches. I just snipped one of the quotes: You know, the one-time bonuses are nice, but what American workers really deserve are permanent wage increases. The true beneficiaries of the Republican tax bills are shareholders and top corporate executives, not the middle class.

It turns out they were absolutely wrong. And the math is the math is the math. The facts are the facts. If you look at the population--and we even broke this down--you could see wage increases for African Americans were the fastest movement growth in modern times. When I say modern times, I mean like the last 50 years. Hispanics outpaced Anglo workers rather dramatically.

Do you think those of us on the Republican side are ever going to get an apology for them making up things?

Why don't we go on and just make it for gender? It turns out that 2018 and 2019, movement in wage growth was miraculous. There should have been joy in this body if you care about the working poor. It turns out that wage growth for females, particularly females who didn't have a high school education, was remarkable.

I believe in the ending part of 2018, when they did the calculation here, it was over 7 percent wage growth because their labor had value. We lived in a society that actually had more jobs than people.

I will argue that has to be all of our goal. People's work, their labor, became valuable. I desperately hope we start to focus on how we get back to that.

I know some of these charts are hard to read. We will put them up on our website. And I want to compliment the team over at the Joint Economic Committee for helping me do this. But this one and the next one are important because it is a simple fact that the rhetoric after tax reform from the left, they made things up. By doing that, they hurt so many Americans.

If we had been honest about the facts--it would be intellectually honest if my colleagues on the other side would step up and say, okay, yeah, it is really, really helping the working poor. It is really helping the working Americans. But we think we can do it better.

That would be honest. God bless them, that would be honest. But to say it was hurting them was a lie.

Here is a simple example. 2017, before tax reform, if we--we always compare and talk about the top quartile, the top 1 percent of income earners. They were controlling, I think, slightly over 20 percent, 21 percent, of all the income in the country, and they were paying about 38.5 percent of all the Federal income taxes.

What happened after tax reform? How many times did we hear from the left, from the leftwing echo chamber, from the media, that, well, this was tax cuts for the rich? Well, a year later, when there was tax reform, 2018, the top 1 percent were no longer paying 38.5 percent of the Federal income taxes. Now, they are paying over 40 percent of the Federal income taxes, but yet their control of the wage, of the wealth, income wealth, actually went down.

But what was more important--and this is my failing--we don't talk enough about it. We will call it the bottom 50 percent of our brothers and sisters that we claim we represent, that we claim, when we get behind these microphones, we care about. There, the bottom 50 percent, their tax burden actually decreased, but the percentage of the wages went up.

This is only 2018. The 2019 numbers haven't been vetted because they are still not all in yet. Our understanding is, preliminarily, the curve even steepens. The fact of the matter is, there was an economic miracle happening in 2018 and 2019. If you care about people, we need to figure out what we were doing right and go back and do more of it.

Another way to basically say the same thing, this is--and forgive me if I mispronounce the name. Is it Ms. Tanden who may become the OMB Director? She is the potential OMB nominee. She said some incredibly partisan things that were wrong. The lift-out quote here is: Because they practice class warfare against us.

Well, actually, no. It is just the opposite. If you look at the math, the top 10 percent under the old tax system were paying less of the Federal tax burden than they did after tax reform. Our brothers and sisters, the other 90 percent of the income-earners in this country, were paying less of the Federal tax burden after tax reform. The math is the math. But the rhetoric is toxic and didn't tell the truth. Once again, then-Minority Leader Nancy Pelosi: Widening the income inequality gap.

Except the fact is, the Republican tax reform along with some of the other policies that came about in 2018 and 2019 were the first time in modern economic history where income inequality actually shrank.

I always thought that was the holy grail here, that the rich keep getting richer and the poor keep getting poorer--except after tax reform, except after some of the regulatory reform.

If you care about working men and women in this country, if you care about the working poor, you have a template that is only a year in the past where it was working.

Let's figure out what we were doing right, and, Mr. Speaker, let's go back and do more of it. The one thing I will beg of this body, as the Democrats look like they will continue to be in the majority, and they have spent a couple of years demagoguing our previous work as Republicans when we did the tax reform, when we did, the economic opportunity that it brought: Stop making up the numbers. Tell the truth.

Let's hold hands--well, in the COVID world, we will talk at an appropriate 6-foot distance. If our rhetoric is we care, we have delivered tax reform in a fashion where it worked.

It created an economic, in many ways, to quote Chairman Powell of the Federal Reserve, a Goldilocks economy.

I hope it is every Member of Congress' goal here. Let's get back to that Goldilocks economy that was helping so many of our poor, so many of our working poor, so many of our working class, and actually, as you can see in the data, was closing income inequality.

BREAK IN TRANSCRIPT

Source