Syriaby Senator Bernard Sanders
Posted on 2013-02-26
SANDERS. I thank my colleague from Arkansas for yielding.
When we talk about sequestration, when we talk about deficit reduction, it is important to put that discussion in a broader context. The broader context needs to be, No. 1, what is the fairest way to move toward deficit reduction and what is the best approach in terms of economic policy making our country strong and creating jobs.
I fear very much the debate we are currently having has very little to do with financial issues. I believe it has a lot to do with ideology. It is all about economic winners and losers in our country. It is all about the power of big money. It is all about the soul of what America is supposed to be.
You may have noticed there was a poll done. I can't remember who did it, but it was consistent with all the other polls I have seen. They asked the American people: Are you concerned about deficit reduction? Do you think we should cut Social Security and Medicare? Overwhelmingly, Democrats said no, Republicans said no.
Yet here in the Congress, surrounded by lobbyists and campaign contributors who are very wealthy, that is where we are heading. We are heading toward a so-called chained CPI, which very few people outside the beltway understand. This will mean cuts, significant cuts in Social Security and in benefits for disabled veterans.
The American people say we think the wealthiest people in this country should help us with deficit reduction, protect the safety net.
In Congress, there is a fierce attack by the Republicans and some Democrats on the safety net. To a large degree, we are allowing large corporations, that are enjoying very low effective tax rates, to get away with what they are doing.
When we talk about who should help us with deficit reduction, we need to look at what is going on economically in the United States of America. We don't discuss this issue enough. We need more people coming down to the floor to talk about it. We have the most unequal distribution of wealth and income of any major country on Earth, and the gap between the very wealthy and everyone else is growing wider.
Today, the wealthiest 400 individuals in this country own more wealth than the bottom half of American people, 150 million people. You have 150 million here, you have 400 over there. Who do you think should pick up the burden of deficit reduction? Should we go after children who are having a hard time getting the nutrition they need or seniors who can't afford prescription drugs? Yes, we could do that.
Is that a moral thing to do? No. Is that good economics? No.
Today, one family, the Walton family of Walmart, is probably the most major welfare beneficiary in America. So many of their low-paid employees are on Medicaid, food stamps or other Federal programs. This one family owns more wealth than the bottom 40 percent of the American people.
Do you know what we did a couple months ago? We gave the Walton family a tax break by expanding the estate tax.
Today, the top 1 percent owns 38 percent of all financial wealth--1 percent owns 38 percent. The bottom 60 percent owns less than 3 percent of all wealth.
What do we think? Do we want to go after the bottom 60 percent, families [[Page S843]] who are making $25,000, $30,000 a year, falling further and further behind? Do we want to take away the educational opportunities and the nutrition their kids can get? Yes, we may do it that way. Maybe it makes more sense to go after the top 1 percent who are doing phenomenally well.
Do you know what. The vast majority of Americans agree with that, but this Congress does not reflect the interests of the vast majority of the American people. It is not the American people who are funding the campaigns for Members of the Senate and the House. It is not the average American who has well-paid lobbyists all over this place.
As Warren Buffett has pointed out, the 400 richest Americans are now worth a record-breaking $1.7 trillion, more than 5 times what they were worth two decades ago.
While the wealthiest people are becoming even richer, the Federal Reserve reported last year that median net worth for middle-class families dropped by nearly 40 percent from 2007 to 2010, dropped by 40 percent. That is the equivalent of wiping out 18 years of savings for the average middle-class family.
Whom do we go after? Do we think it makes any economic or moral sense to go after a middle class which is disappearing or maybe do we ask the wealthiest people in this country--who are doing phenomenally well--to help us with deficit reduction? As bad as wealth inequality is, the distribution of income, what people make every year is even worse. It is an amazing statistic, and I hope everybody pays attention to this.
The last study on the subject of income distribution showed that from 2009 to 2011, the last study we have, 100 percent of all new income went to the top 1 percent, while the bottom 99 percent actually saw a loss in their income. In a sense it doesn't matter, given that incredible imbalance in income, what kind of economic growth we have. All the gains are going to go to the top 1 percent.
I have some friends over in the House, our Republican friends, who are saying: No, no, no. We can't ask these people to help us more with deficit reduction. I think that is very wrong.
When we are talking about how to reduce the deficit--and we all want to do that--we need to understand we can't get blood out of a stone. We can't ask people who are earning less and in many cases working longer hours. We can't ask the 14 percent of Americans who are unemployed. If we add people who have given up looking for work and people who are working part-time, we cannot get blood out of a stone. As Willy Sutton the bank robber reminded us, you go where the money is. In this case, all the money and all the income gains are with the top 1 percent.
The other point that needs to be made is we need to ask the question of how we reached the place we are right now. No. 1, we need to ask who is best able to help us with deficit reduction. It is surely not the struggling middle class. It is surely not the disabled veterans and their families. It is surely not elderly people who can't afford prescription drugs. It is surely not kids who don't have enough to eat.
The second question we need to ask is how did we get to where we are today. Did this deficit just arrive yesterday? I think we all remember that in the last year of the Clinton administration this country had a $236 billion surplus, a surplus. The economists were projecting that the surplus would expand, expand, and expand.
What happened from the year 2000 to 2013 so that we went from a very significant surplus to a very serious deficit? That needs to be understood when we talk about sequestration and deficit reduction. The answer is, as everybody knows, we went to war in Iraq and Afghanistan. A strange thing happened. We forgot to pay for those two wars. When we go into two wars and we are taking care of all those veterans who have been hurt, that adds up to something like $3 trillion by the time we take care of the last veteran, as we must.
During the Bush administration, we gave huge tax breaks to the wealthiest people in this country, didn't offset it. That adds up. We passed the Medicare Part D prescription drug program, didn't pay for that. That adds up.
Most important, because of the greed, recklessness, and illegal behavior on Wall Street, we were plunged into a major recession, high unemployment, businesses going under, less tax revenue coming into the Federal coffers.
I know my Republican friends say cut, cut, cut, cut benefits for disabled vets, cut Social Security, cut Medicaid, cut nutrition, cut Head Start. We could do it that way, but we should also understand that at 15.8 percent as compared to GDP, the percentage of GDP, our revenue is almost the lowest it has been in 60 years.
Yes, in the middle of a recession we are spending a lot of money making sure people don't go hungry, making sure people who lost their jobs have unemployment benefits, making sure people have affordable housing. It is true. What is also true is that at 15.8 percent, as a percentage of GDP, our revenue is less, almost less than it has been in 60 years.
Today, not only are we seeing a growing gap between the very wealthy and everybody else, it is important to take a look at large corporations. When we do, we find that corporate profits are at an alltime high, while corporate income tax revenue as a percentage of GDP is near a record low. Profits are soaring, and the effective tax rate is near a record low.
In 2011, corporate revenue as a percentage of GDP was just 1.2 percent lower than any other major country in the OECD, including Great Britain, Germany, France, Japan, Canada, et cetera. Corporate revenue as a percentage of GDP is 1.2 percent lower than any other major country in the OECD. In 2011, corporations paid 12 percent of their profits in taxes, the lowest since 1972.
We have a choice. Do we go after the elderly? Do we go after the sick? Do we go after the children? Do we go after the poor or maybe do we say that when corporate profits are at a record level and their effective tax rate is the lowest since 1972, maybe we say to corporate America, hey, help us with deficit reduction.
The last figures we have seen on this issue is that in 2005, one out of four major corporations paid no income tax at all while they collected over $1 trillion of revenue over that 1-year period.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. SANDERS. Let me conclude by simply saying we are losing $100 billion a year from tax havens in the Cayman Islands and elsewhere. There are ways to do deficit reduction without hurting the most vulnerable people in this society.
I yield the floor.
The PRESIDING OFFICER. The Senator from Michigan.
Mr. LEVIN. Before Senator Sanders leaves, let me commend him. I didn't hear all his remarks, but I know the subject of his address, his remarks, was the fact corporations now contribute about 10 percent of the total revenue which comes into Uncle Sam. Years ago, it was about 50 percent, and then gradually it has come down to about where it is now.
The reason for that, mainly, is that there are a whole bunch of gimmicks and loopholes which have been inserted into our tax laws which need to be closed. If they can be closed, we would be able to avoid sequestration. That is how big the loopholes are.
I am not talking about deductions, which most people would say serve a useful purpose. Whether people agree with that purpose, at least deductions, as we generally understand deductions, serve some kind of a productive purpose. For instance, corporations get accelerated depreciation when they buy equipment. That serves a very important purpose. It gives an incentive to buy equipment.
Even the oil and gas credit, which I don't support, nonetheless, the purpose of it is to give an incentive to explore and drill for oil and gas. Whether one agrees with that purpose, at least it is a purpose. When it comes to these loopholes and gimmicks which are used to shift revenues to tax havens, there is no useful purpose. The only purpose is taxable. Those are the loopholes which we can close, and those are the loopholes which it seems to me there ought to be broad bipartisan support to close. If we can close them, we can avoid sequestration. Again, that is how big these loopholes are.
[[Page S844]] I very much appreciate the reference by the Senator from Vermont to our Permanent Subcommittee on Investigations and the work we have been doing, and I very much appreciate the energy he brings to this effort. It ought to be bipartisan. Again, these kinds of loopholes are not what most people consider to be legitimate deductions but are a kind of tax- avoidance scheme that should not be in the law even if we had no deficit. I guess one of the critical differences between these kinds of tax-avoidance gimmicks and the ordinary deductions corporations take is the fact that the use of these and the abuse of these should be eliminated on a bipartisan basis.
So I would like to thank my friend. I wish I had caught the early part of his remarks, but that was not to be.