02.05.15

Sanders Says We Can Create Jobs By Making Profitable Corporations Pay Their Fair Share of Taxes

Ranking Member spells out priorities at opening hearing of budget debate

WASHINGTON, DC., Feb. 3 – Sen. Bernie Sanders (I-Vt.), the ranking member of the Senate Budget Committee, today spoke at a hearing on the president’s budget proposal for fiscal year 2016. Below are his remarks as prepared for delivery:

Mr. Chairman, the good news is that our country has made substantial economic progress in the last 6 years since President George W. Bush left office.

Instead of losing 800,000 jobs a month as we were during the final months of the Bush Administration, we are now creating some 250,000 jobs a month, and have seen steady job growth over the past 58 months.

Instead of having a record breaking $1.4 trillion deficit as we did when President Bush left office in January of 2009, the federal deficit has been cut by more than two-thirds. Today, the 10-year deficit projection is now $5.5 trillion lower than what the projections were back in 2010.

Six years ago, the world’s financial system was on the verge of collapse. Today, that is not the case. In fact, some might suggest that Wall Street is doing too well.

While we can be proud of what has been accomplished in the last six years, one would be very naïve not to appreciate that there is also a lot of very bad news in our economy for working families.

Most significantly, the simple truth is that the forty year decline of the American middle class continues. Real unemployment is not 5.6%, it is 11.2%, if one includes people who have given up looking for work and people who are working part-time when they want to work full-time. Youth unemployment is close to 17% and African-American youth unemployment is over 30%. Real median family income has declined by nearly $5,000 since 1999.

Incredibly, despite huge increases in productivity, the median male worker now earns $783 less than he did 42 years ago, after adjusting for inflation. The median female worker now makes $1,337 less than she did in 2007. Shamefully, we continue to have, by far, the highest rate of childhood poverty of any major country and forty million Americans still have no health insurance.

In the midst of this tragic decline of America’s middle-class, there is another reality. And that is that the wealthiest people and largest corporations are doing phenomenally well. The result: the U.S. today has more income and wealth inequality than at any time since the Great Depression.

Today, incredibly, the top one-tenth of one percent own almost as much wealth as the bottom 90%.

Today, one family – the Walton family – owns more wealth than the bottom 40% of the American people – some 120 million Americans.

In terms of income, what we have seen in recent years is that virtually all new income is going to the top one percent. Last year, the top 25 hedge fund managers earned more income than 425,000 public school teachers. And that gap between the very, very rich and everybody else grows wider and wider.

The fact of the matter is that, over the past 40 years, we have witnessed an enormous transfer of wealth from the middle class to the top one percent. In other words, we are witnessing the Robin Hood principle in reverse. We are taking from the poor and working families of America and giving to the very rich.

From 1985 to 2013, the share of the nation’s wealth going to the middle class has gone down from 36 percent to less than 23 percent. If the middle class had simply maintained the same share of our nation’s wealth as it did 30 years ago, it would have $10.7 trillion more in cumulative wealth than it does today.

While the middle class continues to shrink - while millions of Americans are working longer hours for lower wages, while young people cannot afford to go to college, while children in America go hungry - we have seen, since 2009, that the top one percent has experienced an $11.5 trillion increase in its wealth. This $11.5 trillion transfer of wealth, from the middle class to the top one percent, over a five year period, is one of the largest such transfers of wealth in our nation’s history.

Mr. Chairman: This is not just a moral issue, it is an economic issue. Seventy percent of our economy is based on consumer spending, and when working people don’t earn enough income, they are not spending money. They are not buying products or services. The “job creators” in this country are not the heads of corporations. They can’t sell products and services unless people have the income to buy them. The real job creators are those millions of Americans who every day go out and purchase goods and services – and if they don’t have adequate income, the economy suffers.

This simple phenomenon, that an economy cannot do well unless there is low-unemployment and decent wages, impacts not only the lives of ordinary people, but also our deficit and national debt -- and important government programs like Social Security. In other words, if we are going to reduce the deficit, we have got to make sure that every American who is willing to work hard is able to get a decent-paying job.

The debate we are having this morning will have a profound impact on the lives of the American people. The Republican philosophy of cutting Social Security, cutting Medicare, cutting Medicaid, cutting nutrition programs for hungry kids, while providing huge tax breaks for millionaires and billionaires would move this country in exactly the wrong direction.

On the other hand, if we are serious about rebuilding the disappearing middle class, reducing income and wealth inequality, and strengthening Social Security, Medicare, and Medicaid we need a budget that creates millions of jobs, raises wages, makes college more affordable, and demands that the wealthiest people in this country pay their fair share. In all of these matters, the President’s budget moves this country in the right direction.

At a time when almost all of the new income gains in recent years have gone to the top 1 percent and when corporate profits are at an all-time high, the president's effort to end egregious tax loopholes that benefit the wealthy and large corporations, while providing tax breaks for working families moves this country in the right direction.

At a time when real unemployment is 11.2 percent, the President’s budget would put hundreds of thousands of Americans back to work rebuilding our crumbling roads, bridges, and other serious infrastructure needs. That is a positive step in the right direction.

At a time when nearly 20 percent of our kids are living in poverty and millions of families are unable to find affordable, high quality childcare and pre-school, the President’s budget triples the childcare tax credit to $3,000 per child, makes an additional $1 billion investment in Head Start, and invests in universal pre-school. That is a positive step in the right direction.

At a time when more Americans are unable to go to college not because they are unqualified, but because they can’t afford it, the President’s budget would make the first two years of community college free for qualified Americans. That’s a decent start. We can do more.

Now, if my Republican friends are serious about reducing the deficit and the national debt, I hope they will join us in making sure that some of the largest, most profitable corporations pay their fair share in taxes.

Each and every year, we lose $100 billion a year in revenue because large corporations and the wealthy are stashing their profits in the Cayman Islands, Bermuda, and other offshore tax havens. That has got to stop.

Today, some of the most profitable corporations in America are not paying any federal income taxes.

Here are just a few examples:

1. From 2008 through 2013, while General Electric made nearly $34 billion in profits in the United States, not only did it pay nothing in federal income taxes, it received a tax rebate of nearly $3 billion from the Internal Revenue Service.

2. From 2008 through 2013, while Verizon made over $42.5 billion in U.S. profits, not only did it pay nothing in federal income taxes, it received a tax rebate of $732 million from the IRS.

3. In 2013, while Citigroup made $6.4 billion in profits in 2013, not only did it pay nothing in federal income taxes, it received a tax rebate from the IRS of $260 million.

And, on and on it goes. Mr. Chairman instead of cutting programs for some of the most vulnerable people in our society, we have got to make sure that the largest, most profitable corporations pay their fair share in taxes.

The bottom line is that the federal budget is about our national priorities. We need a budget that works for all Americans, not just the CEOs of some of the largest corporations in this country.

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