“Washington and Wall Street are booming. The greatest growth area in the United States is Washington, DC… Lobbyists, consultants, and politicians are doing quite well. But median household incomes have declined by $2,268 since 2009… Tax, spend, borrow, and regulate is not only dangerous, but it won’t create jobs and higher wages. We must act to create more jobs and rising incomes—without adding to the debt. Here’s how…”
WASHINGTON—U.S. Sen. Jeff Sessions (R-AL), Ranking Member of the Senate Budget Committee, delivered the following prepared remarks today at a hearing on tax policy and economic fairness:
“Thank you, Chairman Murray, for holding this hearing today about economic fairness. American workers are right to believe that Washington actions are stacking the deck against them.
Washington and Wall Street are booming. The greatest growth area in the United States is Washington, DC. The highest home values and incomes are in the Beltway area, sucking wealth out from middle America. Over the last five years, Washington has surged our debt from $10 trillion to $17 trillion—promising all the time that this borrowing and spending would create a better economy for the very people we are now lamenting are hurting. These policies aren’t working and will never work. You can’t borrow your way to prosperity. Lobbyists, consultants, and politicians are doing quite well. But median household incomes have declined by $2,268 since 2009.
The Federal Reserve has pursued an aggressive easy-money policy that has been great for the investor class.
But at last week’s hearing, we heard from Dr. Keith Hall, the former the Commissioner of the Bureau of Labor Statistics. He explained that “we have seen an unprecedented disengagement from the labor force since the end of this recession.”
Among workers without a high school diploma, nearly 1 in 4 are unemployed, underemployed, or discouraged from looking.
Meanwhile, the U.S. logged a trade deficit of $42 billion in February (the highest in six months). Overall, there are 1.7 million fewer manufacturing jobs than there were in December of 2007. Yes, robotics play a part in that, but we’re not seeing enough economic growth. Last year, GDP came in at 1.9 percent—well below economists’ projections, and well below what we need to have an economy that’s healthy.
Yet, Washington keeps placing new barriers to work. Now, CBO tells us the President’s health plan will eliminate the equivalent of 2.5 million full-time jobs over the next decade.
The President has also proposed expanding subsidies for adults without children. However, his proposal interacts with the Obamacare subsidies in a way that punishes work. Because the EITC and Affordable Care Act phase-out schedules correspond with one another, an adult without children whose income goes from $14,700 to $17,700 would lose 75 cents in higher taxes and reduced government benefits for every dollar they earn. That creates a disincentive to work.
The federal government spends more than $750 billion each year on more than 80 means-tested income support programs. We need to consolidate and reorganize these programs in a way that affirms work—not punishes it. Work is central to life. It’s central to character, it’s central to self-esteem, it’s central to the ability of a nation to provide a rising quality of life. We need to reaffirm work. We need to insist that able-bodied adults who can work do—it’s good for them and good for the country.
We also need a tax policy that allows American industry to compete on the world stage. We have some of the highest tax rates in the world; how can that be good for the growth of American industry and American jobs? Real tax fairness should remove the global competitive disadvantage placed on American workers and businesses.
But our friends in the Majority believe tax fairness means more money for Washington. They propose to eliminate popular deductions not for the purpose of lowering rates, but for new government spending.
What we can’t do is borrow our way to prosperity. Our excessive borrowing is already inflicting a painful toll right now.
Last year, we paid our creditors $221 billion in interest payments on the debt. That’s five times our entire federal highway budget. CBO estimates annual interest payments will reach $880 billion by 2024. That means one year’s interest payments will be almost 12 times greater than what the federal government spent this year on education.
Tax, spend, borrow, and regulate is not only dangerous, but it won’t create jobs and higher wages. We must act to create more jobs and rising incomes—without adding to the debt. Here’s how:
• Produce more American energy
• Eliminate all costly and wasteful regulations
• Make the tax code more globally competitive
• Ensure fair trade, defending American workers from foreign competitors who cheat
• Adopt an immigration policy that serves American workers
• Turn the welfare office into a job training center
• Streamline the government to make it leaner and more accountable
• Balance the federal budget to restore economic confidence
All of these steps would create more jobs for American workers. All of these steps would empower the individual—not the bureaucracy. And all of these steps would grow the middle class—not the government.”