RESTORE Act

Floor Speech

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Mr. President, as chair of the Health, Education, Labor, and Pensions Committee, I have come to the floor on a number of occasions over the last year to express my concern about the distressed state of the American middle class. I do so again today in order to share with my colleagues my ideas for how we can rebuild the middle class in America and make our economy work for those who work for a living.

Over the past year, while Washington has been gripped by a fear of budget deficits, I gave speech after speech here on the Senate floor pointing out an even more serious deficit: the deficit of vision in Washington, our failure to confront the current economic crisis with the boldness earlier generations of Americans summoned in times of national challenge.

By this economic crisis, I do not just mean the current economic downturn. Instead, I am referring to the economic crisis that has taken place over the last 30 to 40 years that has resulted in a shrinking middle class, rising inequality in our country, a weakened economy, and a sense that the American dream is slipping away. This is the fundamental challenge--the fundamental challenge--facing our Nation today: rebuilding the American middle class.

Altogether, I now have chaired five HELP Committee hearings on the crisis of the middle class. Last year my State staff visited all 99 counties in Iowa to gain greater insight into the challenges facing working Americans. During these events, I have heard from a diverse array of Americans, including economists, employers, union members, community college students, and everyday, hard-working, middle-class families. Not surprisingly, we found that more and more people are struggling just to make ends meet. Their jobs are insecure, their savings and pensions have shrunk, and they see an economic system that is rigged in favor of the very rich and the powerful.

At a hearing last June, I invited Amanda Greubel, a social worker in her local Iowa school district, to share her story with the HELP Committee. During her testimony, she defined what it means to be in the middle class in this way:

My husband and I didn't have dreams of great wealth. We never expected to have summer homes or expensive cars or vacations on the Riviera. We chose careers that inspire us, knowing that we would never make six-figure salaries. All we have ever wanted is security and a little comfort ..... to know that our bills are paid, our needs are met, that we can have a getaway every now and then, that our children can pursue higher education without the burden of student-loan debt, and that someday we can retire and enjoy our final years together in the way we choose. ..... When I think back over our adult lives, it strikes me that we did everything we were always told to do in order to have the American dream. ..... We did everything that all the experts said we should do, and yet still we're struggling. When you work as hard as we have and still sometimes scrape for the necessities, it really gets you down.

That was Amanda.

Unfortunately, those of us in Washington have not listened enough to people such as Amanda. People such as Amanda do not feel this way because of factors such as ``globalization'' or ``technology change.'' Indeed, harnessing those developments has helped to make the U.S. economy the envy of the world.

Instead, the crisis of the middle class can be traced largely to unwise policy choices made here in Washington. For starters, for the last three decades, too many here in Washington have bought into the failed economic doctrine that says if we give more and more to the very wealthy and to the largest corporations, then prosperity will somehow trickle down to the rest of us. That idea has utterly failed to work for the American people. It is time we get back to policies that are premised on how our economy really works. A strong, vibrant middle class with money in their pockets to spend drives the economy forward because, very simply, businesses will not make things if they do not have any customers.

As Mr. Nick Hanauer, a very successful private sector investor, put it in a recent Business Week column:

Rich business people like me don't create jobs. Middle-class consumers do, and when they thrive, U.S. businesses grow and profit.

So what is the best way forward? Instead of the slash-and-burn approaches of the past year and the failed economic doctrines of the past few decades, we need a way forward that rebuilds the middle class by reflecting the hopes and the can-do spirit of the American people, people such as Amanda Greubel.

To meet the great challenge of our day, restoring and revitalizing the middle class, after having a number of hearings last year, as I said, and countless visits with people throughout my State, I recently introduced sweeping legislation called the Rebuild America Act. It now has a number, S. 2252. This legislation provides comprehensive solutions to rebuilding the American middle class.

Some will say it is too bold and too ambitious, but I disagree. The sweep of this legislation is commensurate with the extraordinary challenge it addresses. The bill aims to rebuild the middle class in four broad ways: creating jobs, investing in the future, helping families, and bringing balance back into our tax system. Let me touch briefly on those four principles.

One, we need to create jobs for all Americans, including for groups of Americans such as people with disabilities who have been especially hard hit by the recent recession. With the official unemployment rate over 8 percent, and some unofficial measures as high as 17 percent, the middle class will continue to lose ground.

When jobs are scarce, workers do not have the leverage to demand fair treatment, paychecks stop growing, or even fall, and even people who are fortunate enough to have a job become fearful of losing it. People have less discretionary money in their pockets or the confidence to spend it. In the absence of robust consumer demand, businesses choose not to expand or invest.

Secondly, we must invest in our future. Not only will investing in our infrastructure help create badly needed jobs in the short term, these investments will lay the groundwork for sustained economic growth in the long term. So my bill tackles this challenge head on by providing for robust new investments in America's infrastructure, including, of course, time-tested things such as roads and bridges, energy efficiency systems, also rebuilding and modernizing our public schools, rebuilding our manufacturing base in America.

In addition, there is also the investment in the human infrastructure: helping prepare great teachers, providing better pathways to good jobs for workers, job retraining so that the old jobs that are now gone, we can now take those workers and retrain them for the future jobs, to ensure that current and future workers will have the education and skills they need to be successful and to be in the middle class.

Three, we need to do more to help middle-class families succeed. It is time for us in Washington to wake up to the harsh reality that middle-class families have been living in for the last few decades. Unfortunately, the programs and policies that helped create the middle class have been either intentionally discarded or have fallen victim to neglect.

For example, the real value of the minimum wage has declined for the last four decades, dragging down all workers' paychecks. In 1968, that was the height. That was when someone making the minimum wage had the highest purchasing power ever since we had a minimum wage--1968. Since that time, it has fallen in real terms. If, in fact, the minimum wage had kept pace just with inflation from 1968 to today, the minimum wage would be slightly over $10.30 an hour. Right now the Federal minimum wage is $7.25 an hour. So think of it this way: The same class of people that was making the minimum wage in 1968 is basically the same class of people making the minimum wage today: young people, minorities, people in businesses that are just starting, people who are not highly educated, new immigrants to this country, for example. So the same people who are making the minimum wage then are the same kind of class of people making the minimum wage today.

But think about it this way. That same class of people today--today--has 30 percent less buying power than that same class had in 1968--30 percent less. Think about that. That same person making the minimum wage today is making 30 percent less than his or her counterpart in 1968.

So what my bill does is basically over a stage raise that minimum wage and then peg it to inflation in the future so we do not have that erosion again in the future. Also families and workers have seen basic rights, such as the right to organize and to bargain collectively, eroded. It is harder and harder and harder all the time for people to organize and join a union in this country.

The right to overtime pay has been eroded under the Fair Labor Standards Act. So a lot of these things have been eroded by misguided regulations, bad court decisions, and years of lax enforcement.

The fourth part of the bill. It is essential that we put balance back in the economy through a balanced tax system that will help reduce our deficit, get our fiscal house in order over the longer term. To do so, among other provisions, my bill includes a tax on Wall Street trades, often called a financial transaction tax. At just 3 cents per $100 dollars in trade value, that would raise $350 billion over 10 years.

Again, you might say, well, is this something now? No. We had a transaction tax, a financial transaction tax, in this country until 1966. Then it was done away with. Well, that is again one of the reasons why we have seen this terrible inequality grow in our society where more and more of our wealth goes to fewer and fewer people.

A small transaction tax would do two things. It would raise money. It would also discourage a lot of the spinning and the churning of transactions on Wall Street whereby some of these traders make hundreds of thousands of dollars a day, megamillions of dollars a year, but not adding much to our economy at all. So it's a small transaction tax.

In addition, the bill requires high-income taxpayers to pay their fair share. Well, sort of like the Buffett rule that the present occupant of the chair, the distinguished Senator from Rhode Island, championed the other day that we voted on here. It got voted down on party lines. I do not understand this, that we cannot even ask those who have the most in our society to pay their fair share.

Well, just because we lost the vote on the Senate floor the other day does not mean we have to give up on it. I am sure the Senator from Rhode Island, Mr. Whitehouse, is going to continue his efforts, as he always has, to make sure that we have more fairness in our tax system. So that is in our bill also.

Restoring balance and fairness to the Tax Code is critical to the success of our economy and is critical to the rebuilding of the middle class in America. So in sort of broad strokes, that is my Rebuild America Act, S. 2522.

Over the last few years, the American people have heard from too many of us politicians and talking heads that our country is broke, that we can no longer afford the investments that make for a strong middle class. You know, that is sort of the premise of the Ryan budget in the House, cut and slash. The premise is one that has been in favor around this town for far too long. Here is the premise. The premise is that we are broke, the United States of America is broke and we cannot afford to do these things.

This is false. The United States of America remains a wealthy Nation. We are the wealthiest Nation in the history of the world. We have the highest per capita income of any major country. So one might reasonably ask: If we are so rich, how come we are so broke? Think about that. If we are the richest Nation in the history of the world, if we have the highest per capita income of any major country, then why can we not afford to invest in our infrastructure, invest in better teachers, make sure our kids get a good education without a mountain of debt on their heads? Why cannot we invest in making new energy systems that are cleaner and more productive for the future?

We can. We can do these things. The problem is not that we are broke, the problem is that because of actions or inactions by this government over the last 30 years, America's wealth has not been spread among our people in a reasonable way. The wealth has been concentrated in fewer and fewer and fewer hands. And the middle class in the meantime has been decimated.

I submit that there can be no sustainable economic recovery to America, no sustained return to fiscal balance, without the recovery of the middle class. That is exactly the aim of the Rebuild America Act. It is comprehensive. Yes. Ambitious. Of course. But it rises to the challenge of our time.

I urge my colleagues to join me in advancing this legislation and doing all we can to restore the American middle class. It is the fundamental challenge of our time.

I yield the floor and I suggest the absence of a quorum.

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