Make it in America

Floor Speech

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Mr. GARAMENDI. Mr. Speaker, I want to thank the leader for the opportunity to take this hour to discuss some extremely important issues here in the United States. We've just listened to an hour discussion on taxes with actually very, very little specificity as to whose taxes are being cut and exactly what those tax cuts would mean to the American economy and to the people of America.

Normally, when we take the floor, as we do most every week on the issue of the American economy, we talk about making it in America and rebuilding the great manufacturing industry. We've seen over the last 20 years that the American manufacturing industry has declined by some 40, 45 percent, from just under 20 million Americans in manufacturing to just over 11.5 million. In the recent months, we've seen a resurgence of the American manufacturing sector, but nonetheless it is still very, very small compared to what it once was.

If we're going to rebuild the American economy, we do have to rebuild the American manufacturing sector.

I'm going to come back to this tax debate here very, very quickly; but I think we ought to put it in the context of what taxes mean to the American economy, which taxes can be cut and which could be raised.

The key issues in building the American economy are here on this chart, taxes being one of the second pieces. But the rest of them are also important: international trade issues, for example, how do we deal with China and the China currency issue; how do we deal with the importation of extraordinary amounts of material, equipment and goods while at the same time exporting even less and less; how do we deal with that? The energy issues are exceedingly important if we're going to rebuild the American economy. Labor issues, how do we prepare the American labor market? That is the men and women that work in America.

Oh, by the way, I heard something here from my colleagues on the Republican side that just drives me crazy. When they say that half of Americans don't pay taxes, then they say, oh, we mean income taxes. Let's understand that every American worker up to those who earn $106,000, pay 6-plus percent--almost 7 percent--excuse me, 8 percent--of their total income in taxes. That's the withholding tax. By the way, it was the Democrats who actually reduced the Social Security withholding tax to half of what it was in previous years. So let's understand that every American worker pays taxes.

Now, the income tax issue is another matter, and we'll come to that in a few moments. But Americans who work pay taxes. Let's not forget that in this discussion. In any case, labor is a major issue.

This issue of education is now very much being discussed in America, and I want to really focus on that during this 1-hour discussion. Research is critical to the future of America's economy and, finally, the infrastructure upon which all of this is built. These are the issues that the Democrats have taken up in building and restarting, reigniting the American Dream, reigniting the American Dream so that men and women in this country can get a decent job, earn enough to be in the middle class and raise their families, own a home if they want to own a home, take a vacation when they want to have one, and be able to have health care so they needn't worry about bankruptcy which is, in this Nation, caused more than 60 percent of the time by health care and health care problems.

So trade, taxes, energy, labor, education, research and infrastructure are the key issues in reigniting the American Dream and rebuilding the American economy.

Tax is a major portion of this, and I don't want to forget about taxes. We just heard this 1-hour discussion about it. The question is, who is taxed and who gets the tax benefits? Less than a month ago, our Republican colleagues put on the floor of this House their blueprint for the American economy, their blueprint for how we are going to use government or reduce government, their blueprint on how we are going to raise the tax revenue necessary for the operations of the government.

Very, very interesting because, essentially, what they have done is to take money away from education and give money to the wealthiest of Americans. Those who earn more than $1 million a year would, under the Republican blueprint on taxes, pay less and less. Actually, they would see a tax reduction. Remember, those whose adjusted gross income is over $1 million a year would pay less taxes. They would get a tax break of $394,000 a year, minimum.

Now, if you're a billionaire, the tax cut would be

in the millions and millions of dollars. Is that fair? I think not. We just heard Fair Tax on the floor. I must tell you that the Republican proposal, in their blueprint, voted out of the House of Representatives, now the blueprint for the Republican action on this year's and future budgets and appropriations would reduce the taxes for millionaires by $394,000; for billionaires, millions and millions of additional reductions in their taxes. That is not fair.

What we on the Democratic side have proposed is to make certain that the elements that lead to a growing economy and a just society are in place. Let's talk specifically about education. In the previous Congress, the Democrats took up education and said this is a fundamental element in economic growth and social justice. The opportunity to get to the middle class is largely dependent upon the education that a person is able to receive in the K 12 system and in higher education. Specific steps were taken for those in low-income communities whose schools are unacceptable. Specific money was put to those schools through the title I programs so that they could raise up the standards of education and provide those who do not have the family support and those that do not have the economic support to be able to get a decent education in K 12.

Much, much more needs to be done. But that was put in place by the Democrats in the last Congress.

Take a look at the blueprint that passed this House not more than a month ago, the Republican blueprint for the future--cut title I, pull that money away from those low-income communities where the necessity of education must be available to every one of those students. Higher education, another example, in the previous Congress, controlled by the Democrats in this House, the Senate and the President, there was a significant improvement and expansion of the Pell Grants. This is money given to low-income and middle class families to assist them in going to higher education.

Expansion, yes. Community college and part-time students for the first time were given the opportunity to get a Pell Grant so that they can improve themselves in the community college or in higher education 4-year programs, from a little over $4,000 to $5,500 increase as well as an expansion of those who were eligible. This is very important in providing the educational opportunity that students must have if they're going to succeed in a highly competitive world economy.

Secondly, interest rates on student loans, almost every student now attending school, higher education, takes out a loan. The interest rates on those loans were over 6.5 percent.

Now, we did two things as Democrats. We took away from the banks, who were ripping the students off, the student loan program, and put it back into the government, saving billions upon billions of dollars every year; and then reinvested that money back into lowering the interest rates for the students. Not a bad thing, from a 6.5 or 6.8 percent interest rate down to a 3.4 percent interest rate. All of this is designed to make it easier for students who have to take out loans to be able to pay back those debts over time.

We also did a couple of other things for students who had taken out loans, low-income and middle-income families. We changed the way and the timing in which the loans needed to be repaid. We said, you're going to have to
pay no more than 15 percent of that loan each year of your discretionary income, that is, the income over and above food, shelter and clothing, giving students a longer period of time and having to devote less of their money to pay back the student loans. My colleague who will be joining me in a few moments will discuss this in more detail.

In addition to that, we made it possible for the educational system to receive additional money for this fundamental economic development called research. We increased the research for health care, for mental health, for agriculture, and for energy. All of those things are the essence of today's and tomorrow's economy, research being necessary.

Now, what did the Republicans do? In their blueprint, voted on by 100 percent of the Republicans, this was their budget, sometimes called the Ryan Republican budget, every one of those things that we put in place to assist students in getting an education was dramatically and drastically reduced, while at the same time taking money away from students and handing that money to the oil industry and to the millionaires, the multi-millionaires, the billionaires.

Remember, the minimum tax reduction for millionaires is $392,000 a year, while at the same time taking money out of the pockets of students, increasing--not just increasing--but doubling the interest rate on student loans from 3.4 to 6.8 percent, costing every student more than $1,000 a year in additional interest payments on their loans. That's the average.

Now, those that are above average, that number is going to go much higher.

Pell Grants. Reducing the Pell Grants, eliminating from the opportunity to get a Pell Grant more than 1 million students over the next 10 years. Nearly 400,000 students in the United States would immediately see a reduction in their Pell Grants in the year ahead, and 100,000 not being able to get a Pell Grant at all. This is economic fairness? I don't think so. This is wise economic policy? I don't think so.

Giving to the wealthiest 1 percent in this country an enormous tax break and taking it directly out of the pockets of students is bad economic policy, it's bad policy for education, and it will not reignite the American Dream. In fact, it will stifle that American Dream, and we will not stand for that. We Democrats are rising up and saying, no, no, we're not going to do this. We're not going to give to the superwealthy--the billionaires and millionaires--while taking money away from the students of America.

This is an important issue. This is not only an issue about economic fairness; this is an issue about growing the American economy. We know where we stand. We stand for educating the workforce so that they can compete.

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Mr. GARAMENDI. Well, thank you very much.

Let's stay on this student loan issue for a while here. This is the reality of student loans. The debt levels, according to the Federal Reserve Bank--and some of this has just been recently updated--student loans comprise a larger portion of the personal debt in America than credit cards and auto loans. Actually, the number recently, just in the last couple of days, has risen to about $1 trillion of outstanding student loans in the United States. The auto is about $700 billion, and then the auto and credit cards about $700 billion. So we're talking about a huge amount of outstanding money. When you double that interest rate, you're hitting right at the gut of every student and those who have graduated. When you combine that with the Republican blueprint of immediately requiring a larger payment on graduation, you're really stifling the economy.

I know you've wanted to talk about this, Mr. Clarke, about the way in which the Republican proposal would actually slow down the economy by denying--well, go ahead. You and I were discussing this earlier.

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Mr. GARAMENDI. You're exactly right. I've had my kids graduate from college. Fortunately, they didn't have to take out student loans. We gave them 4 years, and the fifth and sixth year they were on their own.

But the student loans across this Nation, right at $1 trillion now, the doubling of the interest rate, which was in the Republican budget blueprint, will stifle the economy. As those kids graduate, they have to pay off that loan immediately, not just, as we propose, 15 percent of their disposable income, but even a higher percentage. That's money that they cannot use to buy a car. They've got to pay the bank. That's money that cannot be used to start a home or buy a refrigerator or any other economic activity. Unnecessary.

Now, we can't allow that to happen. So what we need to do--and here it is, this is a ticking time bomb for the American economy. This is a ticking time bomb for the American economy. After today, there are just 66 days left before the student loan interest rate doubles to 6.8 percent. Is action being taken? Mr. Clarke, you have a bill in. The Democrats have proposed a bill that would keep the student interest rates where they are now, 3.4 percent, and pay for that by reducing the subsidy that every American taxpayer gives to the oil industry. Over $12 billion of our tax money--your tax money, the public tax money--now goes to subsidize the wealthiest, most successful, most profitable industry in the world, the oil and gas industry.

So we would propose that the Big 5 that get more than $5 billion a year in your tax money to subsidize their fat profits, which over the last decade have been more than $1 trillion--yes, that's right, more than $1 trillion of profit, and you're adding $5 billion a year of your tax money to their already-substantial profits. We would take back that $5 billion and use it to reduce the interest rate on student loans.

Now, the Republican proposal: let's understand, this is a big issue across the United States. It's erupted on college campuses. There is outrage. There is concern. The Republican budget that came out of this House less than a month ago has hit the stone wall. The public doesn't like it. And so today, just late this afternoon, a proposal came from the Republican caucus to introduce a bill to not double the interest rate. Good. Well, how are you going to pay for it? Interestingly, you know how they're going to pay for it? They're going to take money away from seniors. In the Affordable Care Act there is a provision that allows seniors to get free check-ups, free preventative check-ups.

So the Republican proposal doesn't go to the millionaires, doesn't go to the billionaires, doesn't ask them for any sacrifice. Instead, it says, oh, yeah, we made a mistake on doubling the interest rates, and we're going to pay for it by taking the money away from seniors and their health care. What in the world are you doing? What are you doing? Why would you do that? Why would you take from the poor and seniors more money and give it--while keeping the millionaires, the billionaires and the oil industry whole? I don't get it, but that's their proposal.

Our proposal is to go to those that have extraordinary success, the oil industry, and say: after a century, after a century of subsidization by the American taxpayer, we're going to reduce that. We're going to take that tax money back and we're going to make sure that the students of America do not see a doubling of their interest payment on their student loans.

I yield to the gentleman from Michigan.

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Mr. GARAMENDI. I thank you, Mr. Clarke. The clock is ticking--not the Clarke clock, but the clock is ticking. Sixty-six days before the student loan interest rates double.

We had a long conversation here about tax policy from our colleagues on the Republican side. They didn't happen to mention the burden that's being placed on students if we fail, and they didn't talk about their proposal to take the money away from seniors and continue to provide support for the superwealthy and the oil companies.

Joining me on this conversation is a gentleman who was the chairman of the Labor Education Committee, now the ranking member, has been an advocate for students and education for more than 30 years here in the Halls of Congress, a gentleman that was largely responsible for those improvements that I talked about early in this discussion. Congressman George Miller and I have the pleasure of representing Contra Costa County. We're neighbors. We've worked together these many, many years. I'm absolutely delighted that you came to join us here tonight. No one knows more about this than you do, Mr. Miller, so let's discuss this with the American people.

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Mr. GARAMENDI. Mr. Miller, thank you for the dedication that you've made over many, many decades to education, to the well-being of children and the labor and workforce here in the United States. There are very few men and women that have spent the number of years and have been so successful as have you in making it possible for kids to get an education and for adults to get an additional education.

We didn't talk about all of the elements of the educational system. We've really focused tonight on the student loan, the Pell Grants, and the reductions that the Republican blueprint would impose upon the United States as well as the tax policy that has come from that blueprint, which essentially is a tax policy of continuing to reward the superwealthy while, at the same time, taking away from the struggling middle class, the men and women that are working every single day to keep their food on the table, their family in the house, and pay the mortgage. Now, it's one of the most unfair tax policies that I've ever seen in the many years that I've been involved in public policy. It goes well beyond that.

I want to also make just a couple of points, and if you would just stick around a second, I want to come back to the education of those men and women that are already in the workforce, but I want to make a point here.

Before we took up this 1-hour, our Republican colleagues spent the hour talking about tax policy. They overlooked their own tax policy, just went with some very easy rhetoric about we've got to cut taxes and we've got to make sure the job creators do not have an additional burden.

It was and is a fact that it is the Democrats in this House who actually put forward a very significant stimulus for business on tax policy. It was the Democrats who took and reduced the taxes on businesses that invested in America by allowing American businesses, big and small, to write off 100 percent of every capital investment that they made. That lasted for a year until our Republican colleagues took power here, when they reduced that writeoff to 50 percent. Still good. Still good. It's a better than the normal depreciation schedule, but that has stimulated enormous investment by businesses in improving their capital so they could be more productive and increase their output.

We also took very specific steps among the Democrats to reduce the burden on both businesses and employees when we reduced the payroll taxes. We were unable to continue the business side of that when the Republicans took power here, but we were able to continue the reduction in the payroll tax for employees. Very important: stimulus for the economy, allowing men and women who are working to have more that they could then spend and make ends meet. Those are all things that we did. We ended one other very onerous tax break. This was done by the Democrats in this House in the 2010 session. What we did was to eliminate a tax break that American corporations had for offshoring jobs.

That brings me back to the Make It in America model here. In making it in America, you cannot give a tax break to American corporations for offshoring jobs. It was more than a $12 billion-a-year tax reduction for American corporations that sent jobs overseas. You go, what in the world was that all about? Well, it was in the Tax Code. We eliminated that. I will say for the American public out there that we got precious little support--in fact, no support--from the Republican caucus on this floor when that bill came up for a vote. Wrong-headed and very, very destructive.

These are the policies that create a strong economy: education. A well-educated workforce is the most important element in any economic strategy. It was the American strategy in the fifties, sixties, seventies, and eighties. It has fallen off, but Members of Congress like Mr. Miller have maintained education, not only in the K 12 and the higher education system but in reinvestment in the workforce: making sure that those men and women who are on the production line and those who have been laid off can go back to school, can get an upgraded education, can learn better skills, perhaps as a welder, or as a computer technician, or for all the other thousands of different types of jobs. It's being able to go back to school in the workforce investment programs, as well as in the Pell Grant programs, that Mr. Miller put forward. It is to allow community college students, part-time community college students, to be able to take out a Pell Grant.

Let's run through them. I've got seven of them up here, but there are five that are critical in any economic development strategy. Mr. Miller has done the education piece and has led that fight. It's education, research, manufacturing, infrastructure, and making sure that you're paying attention to the international world. So those are the five that are there.

Mr. Miller, why don't you help me wrap up here, and then we'll be on our way, and we'll thank the American public for listening to this discourse on how education policy fits in to growing the American economy and building up the American middle class and reigniting that dream.

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Mr. GARAMENDI. Mr. Miller, your passion for education was on display in this last discussion. Thank you for that passion, and thank you for the years of service that you have provided to America in leading the fight for the improvement of our education system.

Just a couple of thoughts--not random but specifically on the subject.

Yesterday, I was in Dixon, California, for the opening of a new manufacturing facility. A company, Altech in Birmingham, Alabama, decided that they were going to stay in America for the production of these bucket trucks, which are the kind of trucks that utility companies use that take the worker up to work on the power line, way up on the top of that pole. They decided to stay there, and they're going to hire an additional 100 people to manufacture these bucket trucks in Dixon, California.

In the discussion I had with the manufacturer and the president of the company, I asked him, How are you going to train these workers? And he said, We're going to do it at the community college.

We're going to do it at the community college. The programs that you have put together over the years, with the workforce investment program, meaning that we're investing in the workers, the retraining of the workers electricians, welders, line jobs, well-paying middle class jobs, that's what it's all about.

The most important investment that any society can make is the investment in the education of its people. We need to do more. That education of the workforce, the children, the seniors, the others that are in the field, that investment also entails the individual's participation. The loans that they take out, the Pell Grants that they receive are essential in giving them access, as you so well know. Then when we find a blueprint that passed this House, the Republican blueprint that basically takes away that opportunity, it stifles the American economy.

I share with you your enthusiasm for the newfound awareness of our Republican colleagues, and it only took a week, and it only took three speeches by the President, and they had the ``oh my'' moment. ``We made a mistake, yes.'' But don't double down on that mistake by paying for the reduction in that interest rate by taking away from the vulnerable people of America.

I think not only of the children and their vaccinations, breast cancer and early detection, but also the seniors in their prevention and detection. That's not how to do it. We know better. Your proposal, the proposal of Mr. Clarke of using the resources that we're now giving to the most wealthy industry in the world, our tax money, literally given to the oil industry, we need to recoup that and use that instead for the very future of this country.

We're finished for this evening. It's been a good night. Thank you so very much for joining us.

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