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Floor Speech

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Mr. JOHNSON. First of all, I want to say to my colleague from Missouri that I certainly share and I think every Senator in this Chamber shares his concern for people who are hurting because of this COVID pandemic. Businesses have closed. People are on unemployment. People are in need through no fault of their own.

This is an act of God, and that is one of the reasons why I certainly supported the CARES Act. That was over $2 trillion. In total, this body has passed well over $3 trillion, 15 percent to 16 percent of last year's GDP in terms of financial relief.

My comments here are really not directed specifically at the proposal of the Senator from Missouri because he makes many good points. We do have working men and women, we have households that--again, through no fault of their own--are struggling, and we need to provide financial support. I think my comments are, in some respect, more general from the standpoint of how we have done that.

As I have explained to my colleagues in conference, by and large, the initial need packages here were a shotgun approach. We had to move fast. We had to do something big. We had to make sure that markets wouldn't seize, that financial relief could be sent to people very quickly, and so we passed over $3 trillion in financial relief. I knew it would be far from perfect. It was far from perfect.

But now we have had a lot more time, and anything we consider for this additional package that we are considering now that is being debated, that is being discussed, that is being negotiated, ought to be far more targeted.

One of the reasons we are currently $27.4 trillion in debt, which is about 128 percent of last year's GDP--if we do this bipartisan deal, another trillion dollars, we will be $28.4 trillion in debt in the next 3 or 4 months. That is 132 percent of GDP.

When I came to the Senate, we were a little over $14 trillion and our GDP was over $15 trillion, and we were actually below 100 percent of GDP.

I know I am using a lot of numbers right now, and I am going to use more because that is part of the problem.

One of the reasons we are $27.4 trillion in debt is, we only speak about need; we only talk in terms of compassion. We all have compassion. We all want to fulfill those needs. We just don't talk in numbers very often. We don't analyze the data. We don't take a look at what we did in the past and see, did it work or didn't it work? What was spent well? What was wasted?

So I didn't have enough time to do charts. It would be a little bit easier. But let me go through numbers, and I will go through slowly so that people can understand at least my perspective of why I am so concerned about our Nation's debt and the fact that we are mortgaging our children's future. I think we need to be very careful about mortgaging it further when we aren't doing it in a targeted fashion

So, again, before the COVID recession hit, in December 2019, we hit a record number of people employed in this country. There were 158.8 million people employed. That was a record. Our economy was humming. Because of President Trump's administration, they put forward a reasonable level of regulation and competitive taxes. That brought back the entrepreneurial spirit that supercharged the economy. We were at 3.5 percent unemployment. When I took econ, 5 percent was considered full employment. We were at 3.5 percent unemployment.

Then, COVID hit and, by April, we had gone from almost 159 million people employed in this country to just a little over 133 million people, so that was a reduction in employment of a little more than 25 million people--again, from 159 million to 133 million, 25 million fewer people employed in this Nation.

Now, the good news: Even though the pandemic is still not over and the vaccine is being delivered, and it is being administrated--I think the end is in sight--we have already gained 16 million people employed, so now employment stands at 149.7 million people; 150 million people are employed--down about 9 million jobs--9 million.

I want you to keep those numbers in mind because they are important. Our unemployment rate stands at 6.7 percent. By the way, the number of people unemployed, according to the Bureau of Labor Statistics, which has a little bit different calculation, is about 10.7. So, in this, somewhere between 9 million and 11 million people are currently unemployed.

Now, in the CARES Act--again, which I supported because we had to provide relief--we did provide economic impact payments, which Senator Hawley wants to just duplicate--no changes, no modifications, no further targeting. Those economic impact payments were about $275 billion to 166 million people. Remember, 25 million people lost their jobs, but we sent our checks to 166 million people, averaging about $1,673 per person. What may be a more relevant figure is how many households we sent those checks to. We sent them out to about 115 million households at about $2,400 per household.

So, again, $275 billion to 115 million households--that was about 4.5 more households than the number of jobs lost. Today, with only 9 million jobs lost, not only--I mean, that is a big number, a big number. I am not minimizing that. With 9 million jobs lost, if we just repeat it--send out to another 115 million households--that is 12.6 times the number of jobs lost. And if we double it, it goes from $275 billion to $550 billion. That is half a trillion dollars.

I know a trillion doesn't sound like much anymore. It seems like hundreds of billions seem more, but now that we are dealing in $1 trillion or $2 trillion, it is pocket change apparently.

I think it is important to ask: Well, how was that money spent? Did it really--was it really spent on essentials? Was this money really needed? Was there any hope, actually, of that money being stimulative to our economy?

Well, we have one study from the Federal Reserve Bank of New York. They issued it on October 13 of 2020. What they did is, since 2013, they have been sending out in the internet a national survey to 1,300 households called the Survey of Consumer Expectations, and with COVID, they decided to send out two special surveys--one in June and one in August.

Here is what those survey results said. Of the $2,400 per household in the June survey, 18 percent of that $275 billion was spent on essential items; 8 percent was spent on nonessential; 3 percent, on donations, for a total of 29 percent spent. This is what they call the marginal propensity to consume, 29 percent. Of the other 71 percent, equally divided, 36 percent of that was saved, so our Nation's savings rate increased, and 35 percent went to pay off debt--credit card debt.

They also asked the same question about what happened to the unemployment payments. Very similar results: 24 percent of those unemployment payments--the plus-up to $600 per week to stay on unemployment benefits--24 percent was spent on essential consumption, 4 percent on nonessential, 1 percent on donations for, again, the same percent: 29 percent was the marginal propensity to consume from the unemployment payments; 71 percent, for savings and for debt repayment.

They also looked ahead, assuming that we are going to do another round of stimulus checks. This time they asked their respondents: How would you spend $1,500 if you got a check? This time respondents said that they would spend about 14 percent on essential consumption, 7 percent on nonessential, 3 percent on donations, for a total of 24 percent that would be the marginal propensity to consume--24 percent--and 76 percent, again, on savings and debt repayment.

So I don't think you can take a look at these direct payments to individuals as stimulative. Obviously, 18 to 24 percent was spent on essential items. We ought to figure out how to provide that money so that people can spend it on essentials. Again, that is only 18 to 24 percent maximum.

I do want to talk a little bit about past stimuli. I personally don't believe they do much to stimulate the economy. I think the best way to stimulate the economy is, again, what this administration has done: Lower regulation to a reasonable level--nobody argues for no regulation; we need a reasonable level--and have a competitive tax system.

I fear, in the next administration, we may just repeat the mistakes of the Obama-Biden administration, and here is the proof of their mistakes. Again, remember those employment numbers: a record of about 159 million, currently 150 million people, being employed. Well, back during the great recession, prior to that, we did have employment of about 146 million people in January 2008. By December 2009, that had dropped to 138 million people employed. But when President Obama took office, he had total control of Congress--a filibuster-proof majority here in the Senate--and, within a month, they enacted the American Recovery and Reinvestment Act--$787 billion of proposed spending. In February of 2009, there were 141.6 million Americans working--141.6-- and the unemployment rate was 8.3 percent. Again, it continued to dip to December 2009 when it got down to 138 million. It took us 3 years from February 2009 to get back to 141.6 million Americans working, and that is with an $800 billion--roughly, $800 billion--stimulus package that did not work, but it further mortgaged our children's future by another $800 billion.

I wish these things worked. A quick aside: Part of that American Recovery and Reinvestment Act--again, Democrats had total control, with a filibuster-proof majority in the Senate. Do you know how much they plussed-up State unemployment benefits to help the unemployed, those 8.3 percent of Americans? They plussed it up by a whopping $25 per week, and now they are arguing that $300 per week, which I believe is the current proposal, isn't enough. It kind of makes you wonder, doesn't it?

So, in summary, kind of reviewing these numbers, we currently are at 6.7 percent unemployment. I don't recall ever, in U.S. history, when we have even begun to think that we should even spend $100 billion to stimulate an economy at 6.7 percent unemployment.

But this is different. We have underemployed; we have families in need. There is no doubt about it. I completely support some kind of program targeted for small businesses so they can reemploy and so they can reopen to restore capital. Their life savings have been wiped out. I have proposals. They have been ignored.

So what I fear we are going to do with this bipartisan package and what the Senator from Missouri is talking about is the same thing--a shotgun approach. We will not have learned the lessons from our very hurried, very rushed, very massive earlier relief packages. We will just do more of the same--another trillion dollars. It takes our debt from $27.4 trillion to $28.4 trillion in a couple of months with doing virtually no revisions, no improvements and, similar to what the Senator from Missouri is talking about in terms of these economic impact payments, no revisions at all--just spend another $275 billion and send it out to 115 million households when we are currently at about 9 million fewer jobs than we were in a record economy before the COVID recession.

So, for all those reasons, I not only object to what Senator Hawley is proposing here, but I am certainly lodging my objection to what is barreling through--the train has left the station--on the package being negotiated right now that is way too big, that authorizes more money, even though we have $600 billion there just for repurposing, no new authorization required. There are 52 Republicans who supported it, but that is not good enough. We have to throw another $300 to $400 billion on top, which is $300 to $400 billion more that we are mortgaging our children's future without reforms and without targeting.

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