Middle Class Economics

Floor Speech

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Mr. GARAMENDI. Madam Speaker, and Members, wow. There are actually people here in the audience and Members.

We have talked a lot about middle class economics, but why? Why is it important? Why did the President raise this issue in his State of the Union? What is this all about?

We are going to spend some time here today working our way through middle class economics, and some of my colleagues may join me, and I asked the Republicans, if they want to join, they could too.

It is okay, Madam Speaker, that they are not listening. But this is really an important issue.

So why is middle class economics important?

What is it all about?

It is really about driving the economy. If you want to create jobs in America, if you want to have economic growth in America, the middle class of America, the great middle class, the millions upon millions of men and women that are working families, they need to grow. And so middle class economics is all about growing the American economy, because that is where demand is created.

We often talk about the job creators, and businesses really create product and they create profit. But it is the middle class that actually creates the growth in the economy by creating the demand. So if we are able to grow the middle class, grow the paychecks, increase the vast number of Americans who are in the middle class, we will create the jobs. So that is why middle class economics is on our agenda.

There are other pieces of this. It leads to higher wages. So when you increase the middle class, you increase the higher wages, creating the demand.

So that is what this is all about. It is about opportunity. It is about growing the ability of the working families in America to make it, to have a shot at education, to have a shot at a home. So that is what we are going to talk about today in the next 46 minutes, about middle class economics. The President brought this issue to us. We are going to spend some time discussing this.

I notice that our fearless whip, Steny Hoyer of Maryland, has joined us.

Mr. Hoyer, please, let's get into this conversation.

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Mr. GARAMENDI. I thank you, Mr. Hoyer. Nobody has been at this longer than you. You have been working in the Halls of Congress and across this Nation advocating for the middle class.

Both Democrats and Republicans now agree that the middle class in America has stalled out. They have not seen the increase in their paychecks. In fact, in the last couple of years, there has actually been a decrease on the average middle-American paycheck.

So what we are all about and what the President proposed to us in his State of the Union was middle class economics. And it is critically important, if we want to grow the jobs in this Nation, that we have got to pay attention to the middle class and how they can improve themselves, how they can have a higher standard of living, have greater paychecks. In doing so, we will grow this economy. We will be able to deal with the deficit. There are numerous ways in which this can be done.

We need to look for higher wages. Infrastructure is critically important. In the budget that the President just put forth yesterday, there is a major advancement that he is proposing for infrastructure, a 6-year program, over $600 billion in that 6-year period--$673 billion building our roads, rebuilding our bridges, our ports, our communication systems. When you do that, you actually are going to grow the economy, and it is the middle class that will have those jobs.

So this is all about growing the middle class, otherwise known as middle class economics. That is what we are going to debate this year.

We are going to spend the next several months as we put together the budget first and then the appropriations and the various pieces of legislation--for example, reauthorizing the surface transportation program. We want to structure that. We, the Democrats, want to structure that in such a way that the principal benefits flow to the working families of America so that they can see greater wages, so that they can see greater opportunities. And there are many, many pieces to this puzzle that we need to pay attention to. So we want to grow American jobs.

The gentleman from Maryland (Mr. Hoyer) was here just a moment ago. And he has been talking about this theme of making it in America, which builds on the Buy America laws which have been in effect for more than 40 years. Our taxpayer money must be spent, should be spent on American-made equipment. We will come to this in a little more detail, but these are the fundamental parts of growing American jobs. You make things in America, whether that happens to be a movie or a new app for your iPhone or a train or a plane, whatever it happens to be. Make it in America; and use our taxpayer money to buy American-made equipment.

This one here: a well-educated workforce is fundamental to growing any economy, whether it be in Bangladesh or in the United States, the education of the workforce. If you have a well-educated workforce, your economy will grow.

America used to have the best education system in the world. We are not there anymore. We have fallen way off that power curve. We have got to establish America's position as having the best educated workforce in the entire world.

Now, the President, in his State of the Union and as part of the middle class economics, spoke to this issue when he talked about community colleges, all Americans being able to get 2 years of education at a community college, perhaps to pick up an AA degree or some skill set, and that it be free. What an important, important element that is in having a well-educated workforce.

There are many, many other pieces to this educated workforce, and we will, over the next several weeks and months, be talking about this as we go forward.

Research and development. Well, I am from California, and I represent a major research university, the University of California, Davis. You can just see spreading out from that university new businesses in biotechnology, biomedical, biopharmaceutical. We are seeing energy programs and new companies being created from the research at the universities. This is not just at Davis, California, but certainly Silicon Valley is a prime example of the skill being used all across this Nation, and other research institutions around the Nation. These are the ways in which you grow American jobs.

We talked earlier about infrastructure. We will come back to that.

Trade policies are also critically important. We will be debating the Trans-Pacific Partnership here and the TTIP, the European trade agreement. In those trade agreements, it is vitally important that we don't give away the American jobs. It will be a great debate. Very important. We have seen what happened with NAFTA and other trade agreements when we have simply allowed the offshoring of American jobs.

So these are six pieces of how you grow American jobs.

I notice my colleague from Vermont is here.

If you would care to join us in this conversation, I would be delighted.

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Mr. GARAMENDI. Mr. Welch, your representation of the State of Vermont is unparalleled. You have been at this for some time, and you have so correctly pointed out all of the various policies that are in law today that hold back the middle class.

You have talked about the tax policy that basically supports those at the very, very top--the one-percenters, the 10 percent--and forces, therefore, the tax burden onto the middle class and the poor. The President is suggesting a shift in that, and we are going to debate that here--and we should. But again, that is one more piece of this middle class economics to grow American jobs. These are all public policy issues, the Make It In America, the Buy America provisions, the education.

You raised something that has been very, very much on my mind. I have kids that have school debt from going to medical school or nursing school or even just to the 4 years, and I often wonder, the great majority of the student debt is actually owned by the Federal Government. I think about 60 percent of the $1 trillion-plus in student debt is owned by the American public.

We refinance everything. We refinance our credit cards, and we refinance our home, seeking a lower interest rate. I just wonder: Why don't we refinance the student debt?

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Mr. GARAMENDI. We could borrow money at less than 2 percent now for 10 years, probably 3 or 4 percent for 20 years. Why don't we go out and borrow at 2 percent, refinance that debt, and let them pay 2 1/2 rather than 6, 7, 8, and 9 percent?

Mr. WELCH. If I may, Mr. Garamendi, you are so right. One of the upsides of this really tough economy is that interest rates have gone down, and a lot of folks have been given a little breathing room by being able to reduce their interest rates on their mortgage from 7 or 8 percent down to 3 1/2 percent. That is real money in their pocket.

Mr. GARAMENDI. You bet.

Mr. WELCH. Why not allow students and parents who have cosigned on students loans that same opportunity to save a few bucks? They will pay those loans back.

So I salute you.

Mr. GARAMENDI. Refinance your home; refinance your student debt. It is a bookkeeping procedure at the Federal level. Right now, those students are paying a very, very high interest rate to the U.S. Government, and they are held back. This is a major part of the middle class.

Mr. WELCH. Well, I thank you for your leadership.

Mr. GARAMENDI. Mr. Welch, thank you for joining us.

Madam Speaker, I am going to carry on here for a few more moments. We are going to talk about a few other things that go into this. That previous placard had Make It In America as one of the principal ways of growing American jobs, and it is really true.

Madam Speaker, I want to give you just two examples of how Make It In America and Buy America creates American jobs--or not. Two bridges, one on the west coast, the San Francisco-Oakland Bay Bridge, and one on the east coast--New York, actually--the Tappan Zee Bridge in New York.

This bridge in the San Francisco Bay was supposed to be about a $3 billion project. It turned out to be over $6 billion. Instead of buying American steel, they went out and bought Chinese steel. It was supposed to be 10 percent cheaper. It turned out to be far, far more expensive. It became over budget.

It did create 3,000 jobs in China and serious problems with the quality of the steel, the welds, and other problems. Anyway, it wound up almost $4 billion over budget, more than 100 percent more expensive. That was San Francisco. This is my State. This is a major controversy and, if you will, a major scandal in California.

In New York, the Tappan Zee Bridge is now under construction. It is 100 percent U.S.-made steel. It is coming in at about $3.9 billion total, under budget, and there were 7,728 American jobs as a direct result of the decision made by New York to buy American, to make it in America.

This is the most clear example that I have been able to find--west coast, east coast--and the east coast is making the right decision of buying American, using the American taxpayer dollars in the case of both the commuters in New York or the commuters in San Francisco Bay, paying their money to China in the case of San Francisco Bay Bridge, or to American workers and American steel companies, a prime example of why Make It In America is so critically important because it is all about those middle class jobs.

It is about the steelworkers, the ironworkers, and the men and women that are doing the welding that are in the shops and in the steel mill harvesting or mining the coal and the iron ore to make the steel.

Keep this in mind, America: when we talk about Make It In America policies and when we talk about middle class economics, we are talking about bringing it home, keeping it home, and building our own economy.

China can do what they want to do, but let them do it with somebody else's money and not with American taxpayer money, so we are going to push this policy hard.

I want to give you another example, Madam Speaker, and that is that at this moment Amtrak--we know what Amtrak is. It is just the American passenger rail system. Amtrak is requesting a waiver from the Department of Transportation on the Buy America requirements for the purchase of 28 new high-speed rail train sets for the east coast corridor.

Amtrak correctly wants to make the trip between Washington, D.C., and Boston a whole lot faster. To do that, they want to transition to a whole new type of train--not the Acela, which was the last version of high speed. They want to go to a real high-speed system here on the east coast.

However, we are talking about tens of millions of dollars to be spent on these high-speed train sets, 28 of them. They want to waive the Buy America requirements--waive the Buy America requirements.

What happened with the Bay Bridge, the San Francisco-Oakland Bay Bridge when they did that? The jobs went overseas. I am saying: No way, no how, are you going to waive the Buy America requirements. They say: Oh, but you don't understand. America doesn't make high-speed trains.

Yes, that is correct because we have never had them in the United States, and we never will if we waive the Buy America requirements both for the high-speed rail on the east coast or the high-speed rail on the west coast.

No way, no how, Madam Speaker, should we allow American taxpayer money to be spent overseas. Build it in America, make it in America, and hold on to those Buy America requirements. They are legal. They have been in law for nearly half a century. Keep them.

Amtrak, I am sorry, but I have talked to the companies that could manufacture these trains. They say: Of course we can make them in America. It is going to take a little while. We have got to build the factory. We can do it. If it is required, we will do it.

I will give you an example of how it actually happened. In the stimulus bill, the American Recovery Act, there was a provision, some $700 million for Amtrak to purchase 100 percent American-made locomotives--these are the electric locomotives that will be operating on the east coast corridor, 100 percent American made, $700 million, about 80 different trains, 80 different locomotives.

Siemens looked at that and said: Hmm, 700 million, that is a lot of money, 80, 90 trains or locomotives, we can do that.

They took their light-rail factory in Sacramento, California, about a mile from my district, a few miles from my home, expanded it, and began the process of making it in America. Those new locomotives are 100 percent American made by a German company operating in the United States.

Don't tell me you can't do it. Don't tell me that you cannot make aluminum frames for these trains, that you can't make wheels and brake systems in the United States. This is the United States. We used to be--and we must be--at the top of the pack. We can be if we bring it home, if we keep it home, and if we make it in America.

Remember. Remember this fiasco in California. Remember what happens when you went to China to buy steel, 100 percent over budget, and a lot of ongoing problems as to the safety of this bridge going forward.

Remember New York. They said they were going to buy American. It comes in under budget with 7,728 jobs in the United States, built by Americans. I am not proud of California in this situation.

Madam Speaker, there are a couple of other things that are on my mind. As I said, why middle class economics? It is about growing the demands. It is about rebuilding the middle class, giving the purchasing power to the middle class, and growing their wages.

Grow the paycheck. Grow the paycheck. Grow the jobs. Grow the paycheck. These are all ways in which we can raise the wage. There is this little #raisethewage, so when you see that out there on your Twitter account, you know what it is about. Grow the paycheck, buy American, education--job training and education.

This is a big one: more than 50 percent of the women in America are working, and they are working at the same job as a man for about 75 percent of the wage. Do you want to grow the wage? Do you want a bigger paycheck for American families?

Then pay attention to the law that has been in effect in the United States since John F. Kennedy signed it in the sixties, and that is equal pay for equal work.

This one down here at the bottom, the men and women at the bottom at the minimum wage. We have been calling for a raise in the minimum wage for months and years here.

If you want to help out the American economy, you raise the minimum wage--we--excuse me, not you, us--Members of Congress and the Senate--raise the minimum wage, and we will see greater purchasing power and a growing economy as a result of that.

You don't lose jobs. The economic studies are clear. You are not going to lose jobs by raising the minimum wage. It hasn't happened in California. The minimum wage went up in California a year ago. We have seen job growth. We didn't see less jobs.

What we are seeing, Madam Speaker, is greater purchasing power by the families of America, fewer people on food stamps, and fewer people on welfare. As you raise the minimum wage, that is what happens, so this is what we call grow the paycheck, raise the wage.

I am going to let education go. We will pick that up later. I want to pick up one of my current challenges. I think anybody that studies American history will know that America was the greatest maritime nation in the world. We would contend with the United Kingdom--England--as to which was the greatest maritime nation, and we surpassed England.

We have lost that. We have seen our maritime industry--our mariners and our ships--decline. We have very, very few ships flying the American flag anymore. All of the cruise ships that are advertised even on the Super Bowl 2 days ago were flagged overseas. They didn't have American crews on them, although all of their passengers seemed to be American--or at least many of them.

What we need to do is to find ways to rebuild the American maritime industry. These are the sailors, the merchant marines, the American mariners, the captains, the sailors, and the engineers.

It is also the shipbuilding. The great shipyards of America are in need of business. We do a lot of naval ships. Madam Speaker, this is a fundamental national security issue. The shipyards in America, the ability to build ships for the Navy and for our domestic trade is critical as a security issue. Obviously, it is critical as a jobs issue. We can do this.

We are in the process of exporting natural gas with liquefied natural gas. A new terminal by the Cheniere company in Texas will need 100 ships or more just for that one terminal. What I am saying is that if we are going to ship a strategic national asset--natural gas in the form of liquefied natural gas--if we are going to export that, then we ought to use that export to secure a second national security issue, and that is our merchant marines and our shipyards.

When this tanker, which happened to have been built in Japan, finds its way to an American port, will it be American sailors? This is a very dangerous thing. You are talking about millions of gallons of natural gas in liquefied form. Will it be American sailors? Will this ship be an American ship?

India wants to buy natural gas from the United States. They have a tender offer out. That tender offer says: We want to buy X gazillion cubic meters of natural gas--good--and three of the ships that transport that must be built in India.

And I say to India: Great. The other six or seven ships must be built in the United States. You want our gas, terrific. Then we want to have the ships built in the United States with American sailors.

This is a fundamental national security issue.

I just noticed that my good friend, the gentleman from New York (Mr. Tonko), came to join me on the floor, probably because I was praising New York so profusely with the Tappan Zee Bridge. Mr. Tonko, good for New York. Shame on California for building a bridge with Chinese steel.

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Mr. GARAMENDI. Mr. Tonko, you have been here on the floor with me many times over the last few years, and we keep beating this drum about American jobs. We now have a policy from the President, middle class economics, that has all of the elements, many of which we have talked about on the floor--the research issue, the education issue, the job training issue, the infrastructure, all of those things--and it is all pulled together in middle class economics.

Another piece of that puzzle is trade policy. If we are going to grow American jobs, as I put this up before--Make It In America, Buy American, education workforce, research, infrastructure, and then this one down here, trade policy.

The gentlewoman from Ohio (Ms. Kaptur) has spoken to us on the floor about this issue many times. She is passionate about it. I think she is right about it. We have to be really, really careful as to how we do our international trade programs so that we don't hollow out the great American manufacturing sector, American jobs, whether they are in agriculture or manufacturing, or in other parts of our economy.

Ms. Kaptur, we would love to hear from you on this issue. I know that you are passionate about it and very well informed.

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Mr. GARAMENDI. Ms. Kaptur, you are very, very correct about the role of trade policy and hollowing out the American jobs in almost every sector--you mentioned several sectors--and in every one of those, we have seen this happen.

We are going to be engaging in a debate this year about whether we are going to extend trade policies to what is called the Trans-Pacific Partnership and, also, very, very soon, whether we will give away our constitutional obligation to write trade policy, whether we are going to give that away to the administration.

For me, this is extremely important. We have seen this year after year, we have seen this problem, and I do not want to see a repeat of it in the new legislation.

I would like to just move to a couple of other issues. We have got about 7 minutes left. Perhaps, Mr. Tonko, if you would take a few of those minutes and wrap up, keeping in mind that this is all in the context of middle class economics, how the American family that is struggling to make it in America, how they can do better with a set of policies that we are proposing to the American public--tax policy, infrastructure, educational policy, research--all of these things that are part and parcel of middle class economics.

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Mr. GARAMENDI. Mr. Tonko, I thank you so very, very much.

Ms. Kaptur, we are in what we call the rapid fire. You have about 2 minutes, then I will wrap it up with another minute, and we are out of time. If you would, please

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Mr. GARAMENDI. I want to thank you and Mr. Tonko for joining us, so I have got Ohio and New York. Mr. Hoyer was here earlier from Maryland and Mr. Welch from Vermont. We covered a large part of the United States.

We are all talking about what the President has put forth as a national policy of middle class economics: how we can grow the American economy, why it is so important for the middle class to really succeed, because that creates demand that then America businesses can fulfill in their many, many ways.

I notice that the esteemed chairman of the Rules Committee is here, and I suspect he wants to present us with some information. Mr. Sessions, if you are ready--and I will continue on until you are ready.

In the meantime, the elements of the middle class economics, we know why it is important. It builds the demand that the businesses can then fulfill--American business--and so you really create the jobs with that demand.

It also gives us higher wages. You are strengthening the middle class with higher wages.

We talk about infrastructure. We will spend a lot of time talking about infrastructure as we come up to the May deadline where we must renew the infrastructure law, the surface highway transportation.

All of these are pieces of the puzzle.

We are nearly out of time, but I see the esteemed chairman of the Rules Committee.

Mr. Chairman, I yield.

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Mr. GARAMENDI. If I may interrupt here for a second?

Thank you for the courtesy that you provided to me in the Rules Committee when the liquefied natural gas--the LNG bill came up and when we talked about how we could use that strategic asset to enhance another strategic asset, the American shipbuilding industry. You were kind.

We had a wonderful discussion in the committee and then again on the floor. It is another way in which we can grow the American economy, by using public policy in this way, and there are many, many other pieces to it.

I think your staff has just arrived with the papers that you need, so I will yield to you, Mr. Chairman.

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Mr. GARAMENDI. Mr. Chairman, I have always looked forward to a dialogue, a bipartisan dialogue, on important issues, and I didn't quite know that we would come to that at this moment while we await your staff bringing down their papers.

In the meantime, I thank my colleagues very much, and I yield back the balance of my time.

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