BREAK IN TRANSCRIPT
Mr. TONKO. Thank you, Representative Yarmuth, and thank you for leading us in this discussion.
It is rather interesting to hear you, with your introductory comments, speak of the approach to one side of the ledger. What has been advertised out there, what has been messaged, is that what we have are these cuts that translate into savings: we're going to save at the expense of the middle class. We're going to cut programs for seniors, for veterans, for children, for working families, for small businesses. That will produce savings--this propensity for tens of billions of
dollars' worth of cuts, for $100 billion worth of cuts, and an insatiable thirst for cutting domestic programs that really provide the dignity factor for many families as well as provide for job creation and retention.
We saw what happened when we invested in job creation, which was to gain over 2 million private sector jobs in just over the last year. So we know that those investments oftentimes will lead to lucrative dividends. They will relate to programs that are required for our working families, for our middle class Americans across this great country. Also, they provide for an opportunity for job creation, which produces the sort of mix--that down payment, the priming of the pump, if you will--that makes it all happen.
So, Representative Yarmuth, you are correct in talking about this as a one-sided approach. Yet what troubles me is that there is this messaging effort under way that would try and convince the American public that it's producing savings. But where do those savings go? There are trillions of dollars of cuts to the middle class in this Republican plan. Those trillions of dollars of cuts that they deem as savings are then that fuel that provides the resources to cut the trillions of dollars' worth of millionaire/billionaire tax cuts to provide for the continuation of services that contractors will provide, which have been deemed wasteful or at times fraudulent, with the Pentagon. They will continue to protect those investments. They will allow for additional relief for corporations.
So it's sliding dollars out of the pockets of the middle class and investing them, the spending that they do, as they accrue those savings. The new spending that they do is tax cut delivery for those in the upper echelon. To me, it sounds very much like the pre-recession situation under the Bush administration which led us to this deep and very painful and long-term recession. Their plan has been dubbed by themselves, by their own Members, as the Path to Prosperity. I would suggest that it's a road to ruin for the middle class and that it's a road to riches that paves the streets with golden opportunities for those who are the most comfortable in society, for those deemed on top of the perch.
This is a very interesting scenario that is being placed before this body, before all of Congress for that matter. We need to put it under the microscope, and we need to message to America what is happening. You take from the poor and the middle class. You slide it over to the most comfortable--to corporations and millionaires, billionaires, oil company handouts, mindless handouts. That's how they pay for those, by sliding that cash down that slippery slope and investing it in tax cuts, spending it on tax cuts for those, as you indicated, who just didn't get quite enough under the Bush tax cuts.
In a while, too, I want to go toward the Medicare situation. They want to end Medicare with this budget. I want to talk about that after we hear from some of our other colleagues.
This is an interesting scenario--a road to ruin, a road to riches. It's a complete separation, a dichotomy, of special needs out there, coming at the expense of middle class America. It's a raid on our middle class. It's paving the road to riches for the very fortunate, and it's creating the road to ruin for America's middle class.
Without a strong middle class, without enhancing the purchasing power of our middle class, we have a weakened America. That is easy enough to prove through history.
So thank you again, Representative Yarmuth, for bringing us together on a very important discussion here in the House of Representatives as we continue to fight for the middle class that has been impacted severely and would take even more hits if this budget were allowed to pass through.
Mr. YARMUTH. I thank the gentleman. He mentioned the ``road to ruin.'' It's also a road we've been down before.
Mr. TONKO. Absolutely.
BREAK IN TRANSCRIPT
Mr. TONKO. Thank you, Representative Yarmuth and Representative Garamendi. Thank you both for your input.
Now, Representative Bass of California talked about the Medicare transformation that would really hurt people across this great country, and it seems as though you would expect everyone that serves here to be an avid fan of history, that we would want to be taught by the history that has built this great Nation.
We heard earlier from Representative Yarmuth about the repeats of the tax cuts that were recent history. We saw it during the second Bush Presidency. We saw it during the Reagan era where we did this trickle-down theory: if we reduce the burden at the top, it will trickle down and everyone will have jobs galore.
Well, you look at the history, and those two scenarios just did not work. They did not work. And as students of history, all of us as Representatives, we should absorb that lesson, and we should know that a repeat of that kind is only going to wreak damage on the American economy and, more importantly, on the American families, the middle class.
What did work, what lesson in history stands very strong and tall is that during the FDR Presidency when this country was hurting from one of the worst economic struggles it had to face, they came up with a program that invested in job creation, invested in the American worker, invested in American families.
We created infrastructure; we built across America the needs of this great Nation. And today, some of those institutional efforts are still serving our needs. They stand as a monument of government responding in a way that embraced compassion, that came forward with an intelligence that enabled us to grow out of those economically difficult times. And we were benefited by that sort of leadership.
What we need today is an investment in job creation. Think of it. As we enter into a global race on clean energy and innovation, other nations are bulking up and we are defunding with this budget. We are defunding R&D, research and development for science and tech jobs. How can we expect to win a race, a global race, when we're tying our hands behind our backs and are not allowing us to go forward?
But to Medicare, the history learned there, and Representative Garamendi pointed it out, pre-1965 people were being cherry-picked, they were being led along without appropriate health care coverage, without insurance because they were perhaps dealing with a preexisting condition, they were a complex case, they were ignored, they were totally just abandoned by an insurance opportunity. Because of that, our Nation, with compassion again, the history it wrote through those LBJ years was to establish a Medicare program.
Look what happens. This chart will tell us when we get rid of Medicare, when this Republican plan, if it had its way, ends Medicare, we are going to see this very impact coming upon our seniors. We will go back to the pre-1965 years. Look at this. This is the current Medicare program, where benefits for our seniors enable them to avoid oftentimes the out-of-pocket expenses.
It is forecasted by independent groups out there, not by partisan thinking here in the House, but independent bodies are suggesting that it will double in the early years in terms of what is expected of our seniors digging deeper into their pockets. And by the year 2030, it's forecasted triple what they are paying today. This is another way to provide savings for the sole purpose of investing those savings in millionaire, billionaire tax cuts, in oil company handouts, in corporation relief. This is the effort here. It is a reverse Robin Hood. It is going after the middle class, which is the strength of America.
Give that middle class its purchasing power. Give our middle class seniors their Medicare program. Let them have dignity. Let there be a quality of life. Let there be the opportunity for work, for employment, and let the masses enjoy the benefits of those sorts of programs. That's what we're talking about here. History repeated. Bad history repeated. Good history ignored. And our seniors will suffer from this Medicare program. This end to the Medicare program will bring about suffering for them because of greed and because of the road to ruin that has been established by this so-called path to prosperity.
Representative Yarmuth, I believe that we need to do better than this. We should not fail our seniors, our disabled, and as Representative Garamendi said, future generations of seniors, an onslaught of baby boomers that will be impacted by all of this activity.
Mr. YARMUTH. Thank you very much, Mr. Tonko. There are so many aspects of this that deserve to be discussed. One of the things that's kind of sad is that the Republicans, in talking about their plan to privatize Medicare, say, oh, this is just like the plan that Members of Congress have. Well, first of all, Members of Congress have the same plan as every other Federal employee, so it's not necessarily anything special that we have.
But the only thing that is somewhat similar about this is that you have some options in the private sector. We buy insurance from private vendors, and we have a certain allowance. And under the Ryan plan, the Republican budget, seniors, all those under 55 now, when they become seniors they would have a certain amount that they could spend--not just could spend, had to spend in the private sector because they won't be allowed to buy into any Medicare program or a public option. The difference is, as you pointed out in your graphic there, that Members of Congress and Federal employees pay about 28 percent of the premium. Under the Republican budget, seniors are going to pay 68 percent of their premium.
This is shifting the burden, the cost, and putting it on seniors who are on fixed incomes, who don't have the ability to pay. And what's going to happen to them? This is so unlike the Federal insurance program. It's frightening in its dishonesty.
But I want to talk about one thing quickly and then yield to Mr. Garamendi again, because we talked about taxes and tax rates. In the Budget Committee last week I offered an amendment to the Ryan budget that would have restored the Clinton era tax cut, highest tax rate of 39.6 percent on Americans making $1 million a year or more. Now, that is a very small percentage of Americans. Very small percentage. Less than 1 percent of the Americans make over a million dollars a year.
I said let's just have them pay what they paid under the Clinton era. Not one Republican voted for that. And their argument was, and I know they believe this because they keep saying it and have always said it, that if you raise the tax rate on the highest-income Americans that
they're going to lose incentive, that they're not going to work as hard, that they're not going to make investments because you are eliminating their incentive.
Well, for those with a long memory, the highest marginal tax rate in this country's history back in the sixties was 91 percent--I am sorry, under the Eisenhower administration--was 91 percent. When my father built his company in the sixties and seventies, the highest marginal tax rate was 70 percent. When Ronald Reagan took office it was 50 percent. Now it's down to 35 percent, and they want to cut it even further.
Now, they had this belief, again, that if you raise rates you're going to destroy incentives. I built a company, both my brothers have built very successful companies, my father built a very successful company. Not one of us has ever said, oh, my gosh, because I can only keep 60 cents of that next dollar I make rather than 64 cents or 65 cents, I am just not going to make that dollar. Just doesn't make any sense for me to work harder. Business people don't think that way. That is not human nature.
I have one brother who is very successful. He is in the barbecue restaurant business. You have all heard me tell this story a hundred times. I am going to tell it again. I asked him, ``What about this marginal tax rate thing?'' And he said, ``You know, if people can't afford barbecue it doesn't matter what my tax rate is.'' And that's really where we are as a country. That's where we've come as a country. Because we have let the middle class decline, because their buying power has declined not just in relative terms, in absolute terms over the last decade, while the wealthiest Americans, these people making $1 million, $1 billion and more have done extremely well.
Right now 1 percent of the American people make as much as the bottom 90 percent combined. We have the greatest disparity in income and wealth in this country that we have had in almost 100 years. Yet ask millionaires and billionaires to pay a little bit more--not a lot more. We are not saying go to 70 percent. We are saying go to 39 percent from 35 percent. Not one Republican vote.
We've seen in the past what's happened with tax rates. We have been talking a lot about history tonight. Under the Clinton administration, during the Clinton years, top tax rate of 39.6 percent, 20.8 million jobs created. After the Bush tax cuts, reducing that top rate to 35 percent, 653,000 jobs lost. That is not evidence for cutting the marginal tax rate on the highest-income Americans even further.
We have seen again right now the Bush tax cuts--this is the job loss thing--the economy floundered after the Bush tax cuts went into effect. So again, all we're saying is if we're going to ask people to sacrifice as we try to get our fiscal house in order, we need to ask everybody. In particular, we need to ask the people who have done the best and who have earned the most and who have the most wealth.
Again, the person who has talked more about what it takes to create jobs in this economy is my colleague from California. I yield to him again.
BREAK IN TRANSCRIPT
Mr. TONKO. Thank you, Representative Yarmuth. I believe we don't have much time left in this hour of discussion. But let me just indicate that this entire House experienced an election last November. Everyone was up for election. And I would dare say in talking to many, many colleagues about the message that resonated back at home it was about jobs, jobs, jobs. It was about the economy. That was the driving dynamic I believe at the voting booth.
And look at our track record here for the first 3 1/2 months for the 112th session of Congress. Not one bit of legislation that would produce jobs was brought to the floor. However, that budget, as you just pointed out in your Slash-onomics bar graph, might take as many as 975,000 jobs off the picture for American workers, after we've spent just over a year creating over 2 million private sector jobs. Now that's in contrast with 8.2 million lost under the Bush recession. So we've got a long way to go.
But why would you reverse progress with a budget that, with Slash-onomics, reduces nearly--well, we'll even take some of the lower estimates of 400,000; why would you want to do that at a time when we are recovering from that very difficult economic time?
I think it's so important for us to inform the constituents out there and tell middle class America this is a tipping point in our history. This is whether we fix an economy, create a situation where we come forth and produce products not yet on the commercial scene. A leading nation can do that when it embraces its intellectual capacity. You build products not yet discovered and engineered. That is making it in America. That's what we can do if we invest in our workforce and invest in our education. But we're denying all those investments with this budget, just like this Medicare chart which, as you indicate, will have seniors receiving 32 cents on every health care dollar they require, and they're going to have to fend for the rest.
So we're asking middle class America to pay more, everything but 32 cents on the dollar for their health care as seniors qualifying for Medicare, and then we're going to take and destroy this economy and snuff out the dreams and the opportunities for America's middle class. We were told in November, America start growing the economy, stop draining and reducing the middle class. You are reducing, you're snuffing out that middle class. And that was the message.
And also on taxes I believe America is waking up to what has happened here with some of these scenarios. They understand it is not about who's cutting taxes but whose taxes are you cutting? Whose taxes will you cut? There's a big difference. And when you do this mindless handout to profit-rich oil companies, historically profit rich, sitting on about a trillion dollars worth of profit, and mindlessly for nearly a century we have handed out these benefits to oil companies. It's wrong. We can do better. This plan is the Road to Ruin.
BREAK IN TRANSCRIPT