BUDGET HEARING: Opportunity, Mobility, and Inequality in Today’s Economy
Washington, D.C—Today, Chairman Patty Murray (D-WA) and the Senate Budget Committee held a hearing on Opportunity, Mobility, and Inequality in Today’s Economy with majority witnesses Joseph Stiglitz, University Professor of Economics at Columbia University, and Raj Chetty, William Henry Bloomberg Professor of Economics at Harvard University. At the hearing, Murray addressed the lack of economic mobility and rise of economic inequality, which threatens the middle class -as well as prospects for prosperity and fiscal responsibility. Murray also highlighted ways to expand opportunity to more Americans through supporting workers and struggling families, and addressing deficits in jobs, infrastructure, education, and research, to ensure all Americans have a chance to get ahead.
Key Excerpts From Chairman Murray’s Opening Statement:
“…something happened to our economy over the last three decades or so. Instead of the rewards from hard work and innovation being shared broadly, those rewards began to flow overwhelmingly to those at the very top, while everyone else was left behind. But stagnant economic mobility and soaring inequality are not inevitable. We can expand opportunity to more Americans and ensure people have the tools they need to succeed.”
“We know that our economy thrives when America’s middle class can earn enough to raise a family, save up for their kids’ college, and put some money away for a secure retirement. But in recent decades, the middle class has been squeezed. Wages have stagnated. Workers can’t find jobs. Homeowners worry about making their next mortgage payment. That’s happened even as incomes for the country’s top earners have increased. That trend is simply unsustainable and unhealthy for our economy.”
“…we need to do some foundational things to help today’s workers. That starts with a minimum wage increase. Working full-time shouldn’t leave a family in poverty. Congress can and should act to ensure that hard work pays off by raising the minimum wage for millions of workers.”
“…last week, I introduced the 21st Century Worker Tax Cut Act. That bill would update our tax code to help today’s workers and families keep more of what they earn. It would give working families with children a 20 percent deduction on a second-earner’s income. And, it would expand the Earned Income Tax Credit, or EITC, for workers without dependent children, who are just starting out, or whose children have already left home.”
“Our system is riddled with tax loopholes and special-interest carve-outs that benefit the wealthiest Americans and the biggest corporations. That’s simply unfair. Instead of spending billions on these tax loopholes, we should be investing in national priorities that benefit American families.”
“We shouldn’t re-litigate our bipartisan budget deal or create needless uncertainty in a budget process that should finally be free of crises. And I will certainly fight back against any attempts to move our country backwards with deeper cuts to investments for families and seniors, or unfair and irresponsible budget proposals that protect the wealthiest Americans and biggest corporation from paying a penny more toward their fair share. But we owe it to our constituents to keep working together toward policies that create jobs, increase economic mobility, and give more people more and better opportunities.”
Full Text of Chairman Murray’s Opening Statement:
“This hearing will now come to order.
“I’d like to thank the Ranking Member, Senator Sessions, and my colleagues for joining me here today.
“And I want to especially thank our panel of distinguished witnesses for being here: Nobel Laureate Dr. Joseph Stiglitz, John Bates Clark medal recipient Dr. Raj Chetty, and Senior Research Fellow at the Mercatus Center Dr. Keith Hall.
“Today’s hearing will focus on mobility, inequality, and opportunity.
“But really, at the heart of our discussion is the basic promise of America – the idea that no matter where you come from, no matter your circumstances, if you work hard, and play by the rules, you’ll have the chance to live out the American Dream.
“That basic promise is why I’m able to sit here today.
“When I was 15, my father was diagnosed with Multiple Sclerosis. Within just a few years, he could no longer work.
“Without warning, our family had fallen on hard times. But this country didn’t turn its back on us.
“For several months, we relied on food stamps. With the help of a government program, my mom attended Lake Washington Vocational School, so she could get a better paying job. My siblings and I were able to stay in college because of student loans and support from what we now call Pell Grants.
“We had lost our footing, but because of this great country, we never lost hope that with hard work, we’d have the opportunity to live out the American Dream.
“But something happened to our economy over the last three decades or so.
“Instead of the rewards from hard work and innovation being shared broadly, those rewards began to flow overwhelmingly to those at the very top, while everyone else was left behind.
“But stagnant economic mobility and soaring inequality are not inevitable.
“We can expand opportunity to more Americans and ensure people have the tools they need to succeed.
“And that’s what Congress should be focused on in the coming years.
“We know that our economy thrives when America’s middle class can earn enough to raise a family, save up for their kids’ college, and put some money away for a secure retirement.
“But in recent decades, the middle class has been squeezed. Wages have stagnated. Workers can’t find jobs. Homeowners worry about making their next mortgage payment. That’s happened even as incomes for the country’s top earners have increased.
“That trend is simply unsustainable and unhealthy for our economy.
“A recent study by the International Monetary Fund shows that countries with higher inequality have slower growth and more turbulent business cycles.
“As you’ve written, Dr. Stiglitz, the United States has one of the highest levels of inequality among the advanced industrial countries.
“Making matters worse, as inequality has grown, it hasn’t gotten any easier for people to climb the economic ladder, as you discovered in your research, Dr. Chetty.
“That research finds that the ‘birth lottery’ – or a child’s parents’ socio-economic standing – matters more today than it used to, because economic mobility is stagnant, while inequality is on the rise.
“That’s an alarming trend, because it goes against America’s basic promise.
“Right now, there could be a child with the potential to go on to make new medical breakthroughs, or start a new business, or innovate new technologies.
“But if she didn’t win the birth lottery, our economy and the world might never benefit from her talents and skills.
“But Dr. Chetty, you also found in your research that some areas in the U.S. have greater economic mobility – notably places that have less inequality and good school systems.
“So we can overcome these challenges. Government alone can’t solve the problem of inequality.
“Of course, businesses that create good-paying jobs, help people reach the middle class, and build a stable and secure life.
“But we in Congress can create the conditions so that all Americans –from the top income earners, to those in the middle class, and those struggling to get there – can succeed.
“And to do that, we need to do some foundational things to help today’s workers.
“That starts with a minimum wage increase. Working full-time shouldn’t leave a family in poverty. Congress can and should act to ensure that hard work pays off by raising the minimum wage for millions of workers.
“And, last week, I introduced the 21st Century Worker Tax Cut Act.
“That bill would update our tax code to help today’s workers and families keep more of what they earn.
“It would give working families with children a 20 percent deduction on a second-earner’s income.
“And, it would expand the Earned Income Tax Credit, or EITC, for workers without dependent children, who are just starting out, or whose children have already left home.
“Based on estimates from the Treasury Department and the Joint Committee on Taxation, these simple changes to our tax code would help more than 13 million childless workers, and more than 7 million working families climb the economic ladder.
“And my bill is paid for by closing corporate tax loopholes that both sides have proposed closing.
“I know there are differences when it comes to how our parties would use these savings.
“My bill would close these loopholes to give workers and families some tax relief—while Chairman Camp has proposed closing these loopholes to pay for lower rates for corporations.
“But I’m hopeful that, especially when they consider the kinds of challenges we are discussing today, my Republican colleagues will rethink their approach, and join our effort to give a tax break to struggling workers who really need it.
“We also need to address all of our deficits fairly and responsibly.
“Our country faces serious long-term fiscal challenges.
“So while this year, our deficit is expected to be about a third of what it was just five years ago, I want to continue to build on the $3.3 trillion in deficit reduction we’ve already put in place.
“But at the same time, creating opportunity means we can’t lose sight of other deficits our country faces.
“Too many people still can’t find work. Our economy is still recovering after the worst economic downturn since the Great Depression. So we have to do more for people struggling to find a job.
“We must address our infrastructure deficit. Infrastructure is what makes our economy move. It helps businesses grow, and communities to thrive. We need to make these investments to spark economic growth and to create more jobs for more workers.
“We must give our kids the best education and training they’ll need to compete and to lead the world. That means investing in early learning, all the way up to college and job training programs.
“And, we must maintain a strong safety net. Programs like food assistance and affordable housing help ensure families don’t fall into deep poverty, hunger, and homelessness. Instead, it gives families more opportunity to climb the economic ladder.
“And the last point I’ll mention is the need to reform our tax code. Our system is riddled with tax loopholes and special-interest carve-outs that benefit the wealthiest Americans and the biggest corporations.
“That’s simply unfair.
“Instead of spending billions on these tax loopholes, we should be investing in national priorities that benefit American families.
“We have lots of work to do for families across the country. And in our divided government, getting anything done is going to take bipartisanship and compromise.
“Thankfully, we in Congress proved just a few months ago that this is possible—that Democrats and Republicans can break through the bitterness and rancor, work together, and reach an agreement.
“When Chairman Ryan and I sat down together after the government shutdown ended last year, we faced a lot of skepticism that we would be able to get anything done.
“But we listened to each other, we searched for common ground, and we made some compromises. We knew we were never going to agree on everything, but we didn’t think that should mean we couldn’t agree on anything.
“And when we got a deal just a few months ago, the vast majority of Congress put partisanship aside, to do the right thing for the American people.
“Our two-year budget deal was a strong step in the right direction. It rolled back damaging across-the-board cuts and prevented a government shutdown.
“It restored some certainty by setting budget levels not just for 2014, but also for 2015, so the Appropriations Committees in the House and Senate can do their work on time using bipartisan numbers.
“And now, we need to build on that.
“We shouldn’t re-litigate our bipartisan budget deal or create needless uncertainty in a budget process that should finally be free of crises.
“And I will certainly fight back against any attempts to move our country backwards with deeper cuts to investments for families and seniors, or unfair and irresponsible budget proposals that protect the wealthiest Americans and biggest corporation from paying a penny more toward their fair share.
“But we owe it to our constituents to keep working together toward policies that create jobs, increase economic mobility, and give more people more and better opportunities.
“Every child growing up today deserves the same shot at the American dream that my family had.
“And I am ready to work with anyone, Democrat or Republican—to get that done.
“I am looking forward to hearing from our expert witnesses, but first, I’ll turn to Senator Sessions for his opening remarks.”
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