A very interesting development occurred on October 15 of last year. On October 15--as I mentioned earlier, Alan Greenspan, who was the chairman of the Fed before Mr. Bernanke, and I have had our run-ins. Mr. Greenspan, along with Mr. Rubin and others, were the chief proponents--Larry Summers in there--were the chief proponents of deregulation of financial institutions, and Mr. Greenspan and I had more than a few arguments. But on October 15 of last year, Alan Greenspan, who admitted his views on deregulation were wrong--and I give the man courage for at least admitting he was wrong. He did a heck-of-a-lot of damage, but at least he had the courage to admit he was wrong. He was quoted in Bloomberg News as saying:
If they are too big to fail, they are too big. In 1911, we broke up Standard Oil. So what happened? The individual parts became more valuable than the whole.
Maybe that's what we need to do.
Alan Greenspan, the architect of deregulation, citing the fact that in 1911 we broke up Standard Oil. So here we have Greenspan, who helped cause this crisis, at least having the courage to understand that now is the time to begin breaking up these big financial institutions. They have enormous power over our economy. They have enormous power over our political life. Their lobbyists are all over this place. You can't walk down the hall without bumping into some of their lobbyists. So we have to start breaking them up and the American people have to be prepared for a major fight to take on these huge financial institutions.
Former Fed Chairman Paul Volcker, who has advised the Obama administration, supports breaking up big banks so they no longer pose systemic risk to the entire economy.
According to a recent article in the New York Times, Volcker said:
People say I'm old-fashioned and banks can no longer be separated from nonbank activity. That argument brought us to where we are today.
Paul Volcker. I couldn't agree more. That is what I am talking about. We have to start breaking up four financial institutions which led us into the economic disaster we are in right now that remain much too big to fail, that we are going to have to bail out again and again and again, and that today have a stranglehold on our economy.
The New York Times says under Volcker's plan:
JPMorganChase would have to give up their trading operations acquired from Bear Stearns. Bank of America and Merrill Lynch would go back to being separate companies. Goldman Sachs could no longer be a bank holding company.
That is exactly what needs to be happening.
I come from a small State. We have community banks. Here is the irony: The banks in Vermont, in the midst of all of this financial disaster, did just fine. They are small, locally owned banks. They know the people they lend money to. The CEOs are not making hundreds of millions of dollars in profit. They know their community. They know what loans made sense. Now, I may be old-fashioned like Mr. Volcker, but I think that is what banking is about: to lend out money to people in the productive economy, to the business community, who can use the money to expand and create jobs; to homeowners who need that money to buy a home, not to be living in your own world engaged in a huge gambling casino producing and selling worthless products nobody understands.
The function of a bank is to be a middleman between people who need money and are producing real products and helping them get that money and people who are investing in the banks. It is not supposed to be an island to itself. But in recent years what we have seen, incredibly, is that 40 percent of all profit in America went to the financial institutions with a small number of people working there, relatively small. They got 40 percent of the profits because they live in a world that is a huge gambling casino.
We need financial institutions to go back to the way banking used to be, where the job of banks was to provide affordable loans to the productive economy so we can produce real products, real goods, and we can create real jobs when we do that.
Robert Reich, President Clinton's former Labor Secretary, said:
No important public interest is served by allowing giant banks to grow too big to fail. Wall Street banks should be split up, and soon.
We have a lot of people, some conservatives, some progressives, who are saying the same thing. If we are going to rebuild the middle class, the way to do that is, among other things, to change our disastrous trade policies, to make it clear to corporate America that they cannot continue to sell out the workers of this country by moving to China and other low-wage countries. We also have to have a much more competitive economy, one in which all large financial institutions do not own assets of more than half of the GDP of this country.
On that point, I find it very interesting that it is not just progressives such as myself or Robert Reich, but we have some conservative bankers--people who are heading Fed banks around this country--who are saying pretty much the same thing.
Also, when we talk about banks, I wish to get back to a point I raised earlier. This is an issue I have been working on for years and years, and this is the issue of usury. I mentioned earlier, if you read the religious tenents of the major religions throughout history, whether it is Christianity, Judaism, Islam, and others, what you find is almost universal objection and disgust and a feeling of immorality in terms of usury. When we talked about usury in the United States, what we usually talked about were thugs, gangsters working on street corners who lent out money at outrageously high interest rates to workers, and when that money was not repaid back at the interest rates asked for, the thugs would beat up the workers.
In fact, I am thinking now about the first movie of Rocky. I don't know if the Presiding Officer saw the first movie of Rocky with Sylvester Stallone, but before he became a successful fighter and the heavyweight champion of the world, that is what he was: a big tough guy who beat up people who did not pay back the gangsters the high interest rates they were asking for.
Well, the world has changed. Now the people who are committing usury are not the gangsters on street corners all over America. Their place has been taken by the CEOs of Wall Street financial institutions who are lending out money to desperate Americans at 25 or 30 percent interest rates. That, my friends, is called usury, and according to every religion on Earth, that is immoral. What you are doing is going up to people who are desperate, people who are hurting, and you are saying: You desperately need money, we are going to give you money, but there is a string attached. You are going to be charged an outrageous amount of interest on that money.
So here is the irony: The people who are hurting the most pay the highest interest rates. The people who need the money the least are paying the lowest interest rates.
So the Fed lent out billions and billions of dollars to the largest financial institutions and offered it at less than 1 percent. That is American taxpayer money--large corporations, less than 1 percent.
But if you are a worker today and you are having hard times--maybe you are unemployed--you are going to pay 25 or 30 percent interest rates on your credit card, and sometimes more. You have this Payday Lending where people are paying outrageous sums of money. I think that is immoral. I think we have to stop it, and it disturbs me very much that especially at a time when we bailed out these large financial institutions they are still able to charge our people 25 or 30 percent. People who have bailed them out get hit the second time around by having to pay 25 to 30 percent interest rates.
Right now, it is not even 25 or 30 percent. As a matter of fact, the tenth largest credit card issuer in this country, an entity called Premier Bank, is now offering a credit card with a 79.9-percent interest rate and a $300 credit limit. What do we make of that? The tenth largest credit card issuer in this country is charging 79 percent interest rates, and we allow that to go on. These are crooks. These are no different than the gangsters who beat up people on street corners when they didn't get payment back, except now the gangsters are wearing three-piece suits and sitting in some fancy suite on Wall Street.
Today, over one-quarter of all credit card holders in this country are now paying interest rates above 20 percent and, as I indicated, as high as 79 percent. Let's be clear. When credit card companies charge over 20 percent interest on credit cards, they are not engaged in the business of making credit available. What they are involved in is extortion and loan sharking--nothing essentially different than gangsters, except they dress a lot better. That is all it is. It is thievery and we tolerate it, and we bail them out.
It is interesting in terms of these high interest rates because for many years we have had States, including the State of Vermont, saying: You are not going to charge outrageously high interest rates. For example, establishing a usury law is not a radical concept, which is what we have to move toward. We have to put a cap on interest rates. In fact, between 1978 and today, over 20 States in America had laws capping credit card interest rates.
In Alabama, the legal maximum amount of interest is 8 percent; in Alaska, it is 10.5 percent; in Arizona, it is 10 percent; in Idaho, 12 percent; Kansas, 15 percent; the State of Vermont, my own State, the legal maximum interest rate is 12 percent. But what happened is all of those State interest rate caps disappeared under the 1978 U.S. Supreme Court decision known as the Marquette case, which allowed banks to charge whatever interest rates they wanted if they moved to a State without an interest rate law such as South Dakota or Delaware.
So all of these companies moved to South Dakota. They moved to Delaware. No interest rates. And they charged the people in Vermont or Hawaii or anyplace else 35 percent interest rates.
So getting back to the original agreement--which I strongly disagree with--that the President and the Republican leadership agreed to, I think that agreement significantly helps the upper income people by lowering the tax rates for millionaires and billionaires, by lowering the interest rate on the estate tax, and by providing some business loans which are not the kinds of investments that can best create jobs.
(The PRESIDENT pro tempore assumed the chair.)
One of the things we have to do to protect the middle class today is have a cap on interest rates because otherwise people are getting a paycheck and then going into debt and paying 25, 30 percent on their interest rates, with the money going to a handful of banks on Wall Street.
I have introduced legislation to put a cap on interest rates, and it is not a radical idea. Right now, credit unions in this country, by law, are not allowed to charge more than 15 percent, except under extraordinary circumstances. By and large, that has worked for about 30 years. So if you get a credit card through a credit union, you are going to be paying in almost every case no more than 15 percent. That was developed by Federal law.
Do you know what. I have talked to the credit union people in Vermont and all over the country. Credit unions are doing just fine. They are not the ones that came begging the American taxpayer for a huge bailout. So for 30 years they have survived just fine on a 15-percent cap. But our friends on Wall Street who caused this recession, our friends on Wall Street who needed a welfare check from the American people in order to survive, who today are earning more money than they did before the bailout--we don't have any cap on the interest rates they can charge.
In my view, if the credit unions have survived and survived well with a 15-percent maximum interest rate cap--the most they can charge--and it worked for credit unions, it can work for the private banks as well. That is what we have to do.
According to a recent article--this is a year ago--in the Los Angeles Times:
Chris Collver, legislative and regulatory analyst for the California Credit Union League, said that a rate cap hasn't hurt business for nearly 400 credit unions represented by his organization. ``It hasn't been an issue,'' he said. ``Credit unions are still able to thrive.''
Here is my point. The middle class is hurting. Unemployment is outrageously high, poverty is increasing, there are 50 million people with no health insurance, there is a gap between the rich and everybody else, manufacturing is collapsing, and jobs are going all over the world--China, Mexico, India. We have to start protecting the middle class of this country.
There are a number of things we have to do. I think one simple thing we have to do is tell the crooks on Wall Street--and I use that word advisedly--history will prove that they knew what they were doing. They were dishonest. The business model is fraudulent. There are honest people who occasionally make a mistake, but there are other businesses that are based on fraud and assume they are never going to get caught. When they do get caught, the penalty they have to pay is so little that it is worth it because they end up getting caught 1 out of 10 times, but they make a whole lot of money, and then they pay a fine and somebody goes to jail--very rarely, though--for a year. That is what you are seeing on Wall Street.
I think if it has worked very well for the credit unions, it can work for the private banks as well.
Mr. President, in the financial reform bill, did we address this issue? Yes, we did, and no, we didn't. We said the credit card companies have to be clearer and more honest about their interest rates and how much borrowing money will actually cost because before they would say: You will get a zero interest rate or a 2-percent interest rate, but most people didn't read the small print on page 4 that said they could raise interest rates at any time.
We have made some progress on at least them being honest with the American people about what their credit card costs will be, but that is not enough. What we have to do is put a cap on interest rates. It has worked for the credit unions. I believe it can and should work for the big banks as well.
Mr. President, what I want to do now is just give you some examples about--you know, sometimes here--and I am guilty of it as well--we talk in big numbers--a billion here and a trillion there--and it adds up. But I think it is also important to look at the flesh and blood that is out there, the real suffering people are experiencing.
A while back, what I did was I sent an e-mail out to people in Vermont. It was a very simple e-mail. It said: Tell me in your own words what is going on in your family. What is going on in your lives, in the midst of this terrible recession?
Again, it is important. Yes, we know unemployment is 9.8 percent and the real unemployment is 16 percent, 50 million people don't have any health insurance, median family income has gone down, poverty has gone up, and 25 percent of our kids are on food stamps. It is important to know that stuff. But behind all of those statistics is flesh and blood and good people who are doing everything they can to survive with a shred of dignity in their lives.
I did this last year. I sent that e-mail out to my constituents in Vermont, and I said: Write back to me. Tell me in your own words what is going on in your lives. I cannot remember how many we received, but there were hundreds and hundreds of responses. It quite amazed me. Frankly, it was hard to read these letters from decent, good people about what was happening in their lives.
What I said to them was this: If it is OK with you, we will publish what you have written. We won't use your names, of course. I don't want to embarrass anybody. We will read some of these stories on the floor of the Senate.
That is what I did. I didn't read them all, but I read some of them because it is important for us sitting here inside the beltway not to forget what is going on in the real world, whether it is Hawaii, Vermont, California, or anyplace.
Here are letters from two mothers in Vermont. First is from a woman in a rural area. The second is from a single mother in a small city. In Vermont, frankly, we don't have too many big cities. In my very beautiful State, where I expect the weather is very cold today, our largest city is all of 40,000 people. That is Burlington, VT, and I was honored to have been the mayor of that city for 8 years. Certainly, the vast majority of our people live in towns of less than 1,000, and there are towns of 500. For a while, I lived in a town called Stanton, up in the Northeast Kingdom of Vermont, which has probably 150 people in it, and that is not uncommon in Vermont. There are a lot of small towns.
Here are the two letters.
A woman in the rural area says:
My husband and I have lived in Vermont our whole lives. We have two small children, a baby and a toddler, and have felt fortunate to own our own house and land. But due to the increasing fuel prices, we have at times had to choose between baby food and diapers and heating fuel.
In Vermont, heating fuel gets up there when the weather gets 20 below zero. It is an expensive proposition.
We have run out of heating fuel three times so far, and the baby has ended up in the hospital with pneumonia two of the times. We tried to keep the kids warm with an electric space heater on those nights, but that just doesn't do the trick. My husband does what he can just to scrape enough money for car fuel each week, and we have gone from three vehicles to one just to try to get by without going further into debt. We were going to sell the house and rent, but the rent around here is higher than what we pay for our mortgage and property taxes combined. Please help.
That is what she asked of me and her government--``Please help.'' She didn't ask me to lower taxes for billionaires. She is speaking for tens of millions of people in this country who are in desperate need of help.
Here is another letter that came from a woman who lives in a larger town:
I am a single mother with a 9-year-old boy. We lived this past winter without any heat at all.
That is not a good position to be in in Vermont in the winter.
Fortunately, someone gave me an old wood stove. I had to hook it up to an old unused chimney we had in the kitchen. I couldn't even afford a chimney liner. The price of liners went up with the price of fuel. To stay warm at night, my son and I would pull off all the pillows from the couch and pile them on the kitchen floor. I would hang a blanket from the kitchen doorway, and we would sleep right there on the floor. By February, we ran out of wood, and I burned my mother's dining room furniture. I have no oil for hot water. We boil our water on the stove and pour it into the tub. I would like to order one of your flags and hang it upside down at the Capitol building. We are certainly a country in distress.
Mr. President, what I will without doubt assure you is that those stories, in different forms--and I know it is different in big cities than in a rural State such as Vermont, and I know it is different in Hawaii, where the Chair comes from, than in Boston, MA. But I am absolutely sure that millions of people in one way or another are telling the same story. These are great Americans, people who want to work and do the best they can by their kids. They are simply not making it right now.
This is the United States of America, in 2010, and people are going cold. People don't have enough food. People are homeless. My friends here are talking about huge tax breaks for billionaires. My friends here are talking about lowering rates on the estate tax for the top three-tenths of 1 percent of the American people. What are we talking about? What kinds of priorities are those?
Here is another letter from Vermont. This is not a woman in desperation. Those folks I just read from are. This woman says:
As a couple with one child, earning about $55,000 a year [which is, in Vermont, fairly decent] we have been able to eat out a bit, buy groceries and health insurance, contribute to our retirement funds, and live a relatively comfortable life financially. We have never accumulated a lot of savings, but our bills were always paid on time, and we never had any interest on our credit card. Over the last year, even though we have tightened our belts, not eating out much, watching purchases at the grocery store, not buying extras like a new TV, and repairing the washer instead of buying a new one--doing all those things, we find ourselves with over $7,000 of credit card debt and are trying to figure out how to pay for braces for our son. I work 50 hours per week to help earn extra money to catch up. But that also takes a toll on the family life. Not spending those 10 hours at home with my husband and son makes a big difference for all of us. My husband hasn't had a raise in 3 years and his employer is looking to cut out any extra benefits they can to lower their expenses, which will increase ours.
How many millions of Americans do you think are saying exactly the same thing?
Let me read another story that comes from Vermont.
My 90-year-old father in Connecticut has recently become ill and asked me to visit him. I want to drop everything I am doing and go visit him. However, I am finding it hard to save enough money to add to the extra gas I will need to get there. I am self-employed with my own commercial cleaning service and money is tight, not only with gas prices but with everything. I make more than I did a year ago, and I don't have enough to pay my property taxes this quarter for the first time in many years. They are due tomorrow.
Here is another letter that I think deserves to be read. Mr. President, I think it would not hurt this body if every Member of the Senate--I know we all get letters like this--came down here and spent a couple of days talking about what is going on with working families in this country. Spouting statistics is good, and dealing with tax deals of $900 billion is fine, but I think we should reacquaint ourselves with the reality of life in America today.
This is what another constituent of mine writes:
My husband and I are retired and 65 years of age. We would have liked to work longer, but because of injuries caused at work and the closing of our factory to go to Canada, we chose to retire early. Now, with oil prices the way they are, we cannot afford to heat our home unless my husband cuts and splits wood, which is a real hardship as he has had his back fused and should not be working most of the day to keep up with the wood. Not only that, he has to get up two or three times each night to keep the fire going.
In other words, what she is talking about, is that in Vermont a lot of people heat with wood--increasingly with pellets, an important source of fuel in the State of Vermont. What she is talking about is her husband, who is 65, with a bad back, has to go out and cut wood, and in their case, his being old, he has to get up two or three times a night to stoke the furnace that is keeping the house warm. Again, I would remind people that in Vermont it occasionally gets 20 or 30 below zero.
We also have a 2003 car that we only get to drive to get groceries or go to the doctor or to visit my mother in the nursing home three miles away. It now costs us $80 a month to go nowhere. We have 42,000 miles on a 5-year-old car.
They can't afford to even use the car. I don't know what the price of gas is in Hawaii, Mr. President, but in Vermont it is now over $3 a gallon. A lot of people in my State have to travel long distances to get to work. Their cars need repairs. Cars break down. Cars require, in Vermont, compulsory insurance. They have to spend a whole lot of money just getting to work. I think we forget about that here. We don't need tax breaks for billionaires, we need to pay attention to these people.
She continues and concludes:
I have Medicare, but I can't afford prescription coverage unless I take my money out of an annuity, which is supposed to cover the house payment when my husband's pension is gone. We only eat two meals a day to conserve.
This is not some Third World country. This is the United States of Vermont--the United States of America, my State of Vermont, and Vermont is better off today than a number of States around this country. You have these stories, and multiply them by 10 in every area of this country.
Here is another story:
Yesterday, I paid for our latest home heating fuel delivery--
Again, I am focusing now on the cost of fuel because in Vermont, where I come from, it is a big deal. So she writes:
Yesterday, I paid for our latest home fuel heating delivery--$1,100. I also paid my $2,000-plus credit card balance, much of which bought gas and groceries for the month.
The point here, and then I will continue her letter, is that a lot of people use their credit cards not just as a nice and convenient way of not having to use cash--when I go shopping, I am going to use my credit card and I will pay it off at the end of the month. What a nice thing. No, people are using their credit cards to buy food, to buy gas, and to buy the basic necessities of life. It is their only line of credit open. And then, as I mentioned earlier, they are charged 25 or 30 percent interest rates on what they owe.
My husband and I are very nervous about what will happen to us when we are old. Although we have three jobs between us and participate in 403(b) retirement plans, we have not saved enough for a realistic post worklife if we survive to our life expectancy. As we approach the traditional retirement age, we are slowly paying off our daughter's college tuition loan and trying to keep our heads above water. We have always lived frugally. We buy used cars and store brand groceries, recycle everything, walk or car pool, when possible, and plastic our windows each fall.
What that means is that, in Vermont, if you don't have good storm windows, you put up plastic. It is a way to keep the wind out and keep the home warm. I know about that because I used to do that.
Even so, if and when our son decides to attend college, we will be in deep debt at age 65. Please--
And here she ends this.
P.S. Please don't use my name. I live in a small town, and this is so embarrassing.
So embarrassing. We should be embarrassed, not her. We should be embarrassed that we are for one second talking about a proposal which gives tax breaks to billionaires while we are ignoring the needs of working families, low-income people, and the middle class. We should be embarrassed that we are not investing in our infrastructure, that we are not breaking up these large financial institutions, that we are not putting a cap on interest rates, that we are the only country in the world that does not have health care for all of our people--of major countries. We should be embarrassed, not this wonderful woman who is trying to maintain her dignity.
Another letter from the State of Vermont.
I too have been struggling to overcome the increasing cost of gas, heating oil, food, taxes, et cetera. I have to say that this is the toughest year financially that I have ever experienced in my 41 years on this Earth. I have what used to be considered a decent job. I work hard, pinch my pennies, but the pennies have all but dried up. I am thankful that my employer understands that many of us cannot afford to drive to work 5 days a week. Instead, I work 3 15-hour days. I have taken odd jobs to try to make ends meet. This winter, after keeping the heat just high enough to keep my pipes from bursting--
One of the problems you have, when you live in a rural State and it gets cold, your pipes can burst, and then you have to spend a fortune getting them repaired.
The bedrooms are not heated and never go above 30 degrees.
What happens in Vermont, if you have a home, in the wintertime, and you don't have a whole lot of money, you kind of close off rooms in the house because you can't afford to heat the whole house. So people live in a smaller area.
I began selling off my woodworking tools, snow blower, pennies on the dollar, and furniture that had been handed down in my family from the early 1800s just to keep the heat on. Today, I am sad, broken and very discouraged. I am thankful the winter cold is behind us for a while but now gas prices are arising yet again. I just can't keep up.
That is the story from one person in Vermont. But that is the story for millions and millions of Americans.
Another story. And the reason I am reading these stories--and I appreciate my staff bringing this booklet down here--is this puts flesh and blood and real life into the statistics. The statistics are frightening enough, but this tells us what happens when the middle class of this country collapses. It tells us what happens when people lose decent-paying jobs. It tells us what happens when the government does not provide the kind of basic support system that it should for people in need.
Here is another letter:
As a single parent, I am struggling every day to put food on the table.
Mr. President, this is the United States of America and people are talking, in my State of Vermont and all over the country, about struggling to put food on the table. What comes to my mind now--and I don't know if you saw them, Mr. President--are some articles in the paper that talked about because of the bailing out of Wall Street, and the fact that Wall Street is now again profitable, these executives there are now making more money than they made before the bailout, and they go into restaurants and they pay thousands of dollars for a bottle of wine, pay hundreds and hundreds of dollars for some fancy dinner. Yet in my State and all over this country there are people who are wondering where their next meal is coming from.
Our clothing all comes from thrift stores. I have a 5-year-old car that needs work. My son is gifted and talented. I tried to sell my house to enroll him in a school that had curriculum available for his special needs. After 2 years on the market, my house never sold. The property taxes have nearly doubled in 10 years.
Let me pick up on that point. We don't deal with property taxes here--I did when I was a mayor--but if we are not adequately funding education, if we do not adequately help cities and towns all over this country in terms of fire protection and in terms of police protection and housing, a lot of that burden falls on the very regressive property tax, which in my State of Vermont is very high. And you find it referred to time and time again that property taxes are going up. Property taxes are going up.
Property taxes have nearly doubled in 10 years. And the oil to heat is prohibitive. To meet the needs of my son, I have left the house sit and moved into an apartment near his high school. I don't go to church many Sundays because the gasoline is too expensive to drive there.
Imagine: She doesn't go to church on Sundays because the gasoline is too expensive to drive there.
Every thought of an activity is dependent upon the cost. I can only purchase food from dented can stores.
Does anybody in this Congress know what a dented can store is? Do you know that many people buy their groceries and they get them cheaper because the cans are dented? Most Members of the Senate and the House, most Governors do not get their meals from dented cans, but huge numbers of Americans do.
She then concludes:
I am stretched to the breaking point with no help in sight.
By the way, the letters that I received, when I asked for letters, came not just from the State of Vermont--most came from Vermont but some came from other areas. I will read another from Vermont and then one from rural Pennsylvania.
This one from Vermont:
Due to illness, my ability to work has been severely limited. I am making $10 an hour, and if I am lucky, I get 35 hours a week of work.
Let me pull away from the letter. That is not an unusual wage in the State of Vermont. That is not an unusual wage all over America. That is what people earn, $10 an hour, times 40 hours. He doesn't get 40 hours. He makes $350 a week. Ten times 40, 400, times 50, $21,000 a year. Shock of all shocks, that is reality. That is what people are trying to live on. Those are the people that we should be helping, not the CEOs on Wall Street who will get $1 million a year in a tax break if this deal goes through. Not the people who are in the top three-tenths of 1 percent, who our Republican friends want to help by repealing the estate tax, which will cost us $1 trillion in 10 years. Maybe we should concentrate on helping people who are trying to get by eating food from dented cans or people who can't afford to drive to church on Sunday because they can't afford the price of a gallon of gas. Maybe we should remember who sent us here and who made this country.
I am making $10 an hour, and if I am lucky I get 35 hours a week of work. At this time, I am only getting 20 hours, as it is off season in Stowe.
Stowe, VT, is a beautiful town. I hope everybody comes to visit us up there. There is great skiing, but it is a resort town. Big time in the winter. We are doing better in the summer, but it is a resort town. Resorts get more business in the winter than summer and less time elsewhere.
So what she is talking about is that it is off season up there and she is only getting 20 hours a week of work at $10 an hour.
It does not take a mathematician to do the figures.
I am sorry, this is a man, not a woman.
How are my wife and I supposed to live on a monthly take-home income of less than $800 a month? We do it by spending our hard-earned retirement savings. I am 50 and my wife is 49. At the rate we are going, we will be destitute in just a few years. The situation is so dire it is all that I can think about. Soon I will have to start walking to work--an 8-mile round trip--because the price of energy is so high that it is either that or going without heat.
This is a 50-year-old guy, making $10 an hour, 20 or 30 hours a week, and his choice is either walking 8 miles to and from his job in Stowe or else not heating his home. And this happens in Vermont all of the time. It is quite unbelievable.
As bad as our situation is, I know many in worse shape. We try to donate food when we do our weekly shopping, but now we are not able to even afford to help our neighbors eat. What has this country come to?
I don't know about other parts of the country. I am sure it is the same. But if you go to a grocery store, there is often a bin out there in front where people buy food and they drop a can of peas or a can of corn or something into it. Here is a guy who is now faced with the reality of having to walk 8 miles to and from work and he is upset at himself that he does not have the money to buy food for his neighbors who he thinks are even worse off than he is. That is the good people of Vermont and America. They are all over this country, good and decent people who do worry about their neighbors.
Then you have the lobbyists here representing the largest corporations in the world where the CEOs make tens of millions of dollars a year and their job is to squeeze the middle class and these families harder and harder, cut back on their benefits in order to give tax breaks to the richest people in this country. What a difference in attitude: A poor man faced with the choice of either walking 8 miles to and from his job or losing his heat, worried about his neighbors, and you have the lobbyists here worrying about the richest people in the world--and winning. And winning.
Then I got a letter that comes not from Vermont, it comes from rural Pennsylvania:
I am 55 years old and worse off than my adult children. I have worked since age 16. I don't live from paycheck to paycheck, I live day to day. I can only afford to fill my gas tank on my payday. Thereafter I put $5, $10, whatever that I can. I cannot afford to buy the food items that I would. I am riding around daily, to and from work, with a quarter of a tank of gas. This is very scary. I can see myself working until the day that I die.
Trust me, the gentleman is talking about getting older, worrying about working until the day he dies. We are already seeing this. You go to grocery stores in Vermont and you see old people, who should be sitting home with their grandchildren. Do you know what they are doing? They are packing groceries. Then we have some geniuses on this deficit reduction commission, people who made their money on Wall Street, they have a brilliant idea: Let's raise the Social Security age to 68, 69 years old so that people like this will have to work, in fact, to the day they die.
He continues. This is not from Vermont. This is from Pennsylvania:
I do not have savings, no credit cards and my only resources are through my employment. I have to drive to work as there are no buses from my residence to work. I don't know how much longer I can do this. I am concerned as gas prices climb daily. I am just tired. The harder that I work the harder it gets. I work 12 to 14 hours daily and it just doesn't help.
I am not saying every person in America is experiencing these stories. They are not. A lot of people are doing fine. They have good jobs. Their kids are doing well. They are taking care of their parents. A lot of people are doing just fine. But we would be fools and dishonest not to understand the reality of what is going on in this country. It breaks my heart, and I know it breaks the hearts of millions of people in this country, to see what is going on in this great Nation of ours: that so many people are hurting, that so many parents--I don't know if I have that letter or if it is in another booklet. I will never forget one letter I received, and that is these people--my parents never went to college. My father never graduated high school. They wanted their kids to get an education; that is what they wanted--and we did. It was very important, and how proud my mother was of that.
We get letters from people who say: You know, I dreamed that my kid, my daughter, would go to college, and she is not going to go to college now. She is not going to go to college.
It is just painful to even talk about and think about, the direction in which this country is moving. So I want to now take a break from reading these letters. Actually, the truth is, when these letters came in a year ago I could not read more than a half dozen at a time. They took too much out of me. They take something out of you to hear people you know, good people, honest people--I hear from some of my colleagues here that people are lazy. My God, people work so hard in the State of Vermont. We have I don't know how many thousands of people are not working just two or three jobs, they work four jobs. It is all over this country. Whatever you say about the United States of America, the people of our country are not lazy. That is one thing you can say about them.
In fact, according to all of the bloodless statistics, our people today work longer hours than do the people of any other major country on Earth. Did you know that? I don't know that a lot of Americans know that. It used to be Japan. The Japanese are a very hard-working people. Now it turns out that our people work harder, longer hours than do the people of any other country in the industrialized world.
When you think about that, when I think about the books that I read when I was in elementary school--I remember there were pictures up there. I don't know if you remember these pictures. There were pictures where workers were demonstrating, and they said: We want a 40-hour workweek. Do you remember seeing those pictures? We want a 40-hour workweek. That was back in the early 1900s.
Today, 100 years later, people still want a 40-hour workweek because they are forced to work 50 or 60 hours a week. They are working two jobs. They are working three jobs.
What I want to do now, before I get back to why I am on the Senate floor today, and why I have been here for a few hours--which is to say the agreement negotiated by the President and the Republican leadership is not a good agreement. It is an agreement that we can improve upon. It is an agreement the American people can improve upon. But what I am asking the American people to do is to stand up, let your Senators, let your Congressman know how you feel.
Do you really believe millionaires and billionaires who have done phenomenally well in recent years need an extended tax cut at a time when their taxes have been lowered substantially in recent years? Do we really need to give tax breaks to the rich in order to drive up the national debt so our kids and grandchildren will pay higher taxes in order to pay off that national debt caused by tax breaks for the rich?
If you do not believe that, if you do not think that is right, let the President of the United States know about it. Let your Senator know about it. Let your Congressman know about it. We need a handful, seven or eight Members of the Senate to hear from their people, to say: Wait a minute. Don't hold my kids hostage. Don't force them to pay higher taxes in order to give tax breaks to the very rich.
If the American people stand up and by the millions let their Senators and Congressmen and the President know, we can win this thing. We can win this battle. It is not too late yet. That is what I hope will happen.
When we talk about why things go on the way they are here in Washington, and why so many people back home--whether they are Democrats, Republicans, Independent--whether they are conservatives, progressives, moderates, whatever they are--there is a huge feeling of anger and frustration and, in fact, disgust at what goes on here in Washington.
I have just read some letters from people. You can multiply those letters by 1 million. People are saying: Don't you hear us? Don't you know what is going on in our lives? Don't you know the worries we have for our kids, for our parents? Aren't you listening to us?
In many ways I am afraid the Senate is not listening to them, nor is the House, nor is our Government. What worries me so much about this growing concentration of wealth and income in this country is that when the rich get richer, they don't just simply put their money under the mattress. They don't simply go out and buy yachts and planes and 18 homes and all the things rich people do. They do that, but they do something else.
They say: I am not rich enough. I need to be richer. What motivates some of these people is greed and greed and more greed. There is no end to it. So what they do is they do things like hire lobbyists--who are all over Capitol Hill. These lobbyists, sometimes former leaders of the Republican Party, former leaders of the Democratic Party, former hotshot lawyers, bright people, their job is to make sure the legislation we pass--such as this major tax bill--that this legislation benefits not ordinary Americans, not the people whose letters I have just read, not those people, but the wealthiest people in this country and the largest corporations.
I want to just mention something. A very good friend of mine and I do a radio show every Friday afternoon--I am afraid I missed it today--Tom Hartman. Tom is the author of a number of wonderful books.
In his latest book, which is called ``Rebooting the American Dream, 11 Ways to Rebuild Our Country,'' Tom writes and he talks about lobbying, which is an issue we have to deal with in this country. He says, on page 104:
Given how lucrative lobbying is as an investment, it has become a huge business.
In other words, what he is talking about is, if you have a good lobbyist and the lobbyist changes a few words in a bill, your company or you as an individual can end up with huge amounts of money just by changing a few words. In this case, language that we are working on now is whether we extend the Bush tax breaks for the top 2 percent, for many millionaires and billionaires. Some lobbyists, representing the rich and the powerful, are determined to keep that language in there.
So it is an investment. So you spend a few million dollars, an organization spends a few million dollars on a lobbyist, but if you end up getting back hundreds of millions of dollars in tax breaks and corporate loopholes or other benefits, it is a very good investment. That is what Tom Hartman is writing. He says:
Given how lucrative lobbying is as an investment it has become a huge business. In February, 2010, the Center for Responsive Politics laid out which industries had invested how much in Congress the previous year. Overall, it found that in 2009 the number of registered lobbyists who actively lobby Congress was 13,694 and the total lobbying spending--
Get this. Total lobbying spending in 2009 was $3.47 billion, a 240-percent increase since 1999, 10 years, more than tripling it, I guess. In 2009 companies spent $3.47 billion in lobbying. We have 100 Members of the Senate, 435 Members of the House. Listeners or viewers can get out their calculating machine and divide it up, how much money the big money interests are spending trying to influence Senator Inouye or myself or the other 98 Members of the Senate or 435 Members of the House. They are flooding this institution with money.
Let me give you just a breakdown of where that money is coming from. What they call miscellaneous business, that is retail and manufacturing, et cetera, $558 million in one year, 2009; health care, $543 million.
By the way, that was before health care reform. My strong guess--I will be very surprised if that number did not double. If you were a health care lobbyist this year, trust me, you are doing very well. They were all over this place, making sure we did not pass a strong health care bill, for example, in Medicare for all, a single-payer program, which I support. On top of that, you have the finance, insurance and real estate industries combined that spent $465 million.
And, again, that was before we dealt with financial reform. I suppose the recent legislation we dealt with, health care reform and financial reform, was a real boon to the lobbyists around here, because they can go out and earn their money. But that was before this. Finance, insurance, real estate, only spent $465 million in 1 year to influence 100 Members of the Senate and 435 Members of the House.
Energy and natural resources. Well, as I mentioned earlier today, ExxonMobil last year made $19 billion, paid nothing in taxes, got a $156 million refund. ExxonMobil and other companies are putting all kinds of money into phony organizations telling us that global warming is not real, we do not have to transform our energy system; costs a lot of money to do that. The energy and natural resources companies spent $408 million in 2009 alone. This is 1 year, folks, 1 year.
Communications, electronics. Right now I am working on an issue which deals with the merger of Comcast and NBC. I think it is a bad idea. Comcast is the largest provider of cable services in America, huge role in the Internet, and NBC is one of the largest media conglomerates in America. What they are trying to do right now is to merge, these two huge companies.
I think the problem in America is we have too few companies controlling what goes on. We have too much of a concentration of ownership, and that merger is bad. Well, I can assure you for a fact, they have all of these lobbyists in the media industry, from communications, right here rallying, trying to do their best to make sure this merger and other type mergers take place--$360 million from the communication and electronics industry.
Then we have other types of organizations as well. Bottom line, in the year 2009, they spent $3.47 billion, almost 3 1/2 billion, on lobbying. And you know what, you get what you pay for.
That is just lobbying. We are not talking about campaign contributions. We are not talking about the huge sums of money it now takes to run for office in the United States, and we are not talking about where that money comes from. We are not talking about the Citizens United horrendous decision reached by the Supreme Court which allows billionaires and all of these companies and their executives to put money into campaigns and not even have to be identified. We are not even talking about that. This is just lobbying.
So if you wonder why we are having a serious discussion about whether we should give tax breaks to millionaires and billionaires while the middle class is collapsing, and tens of millions of people have no health insurance, and we have the highest rate of children in poverty, and we have the most unequal distribution of wealth and income of any country, if you wonder how we would consider for 1 minute talking about more tax breaks for the rich, then you do not know much about what goes on here in Washington and you do not know about campaign contributions and the degree to which big money buys and sells politicians.
I want to review again--the reason I am down here today, and I have been here for a few hours--and voice my very strong opposition to the agreement that was reached between the Republican leadership and President Obama. I think the American people do not like this agreement. All I can tell you--I do not know what is going on in your office, coming from Alaska, Mr. President, but I can tell you in the last 3 days, between phone calls and e-mails, I probably have gotten 5,000. We have heard from about 5,000 people, many from Vermont, some from out of State as well.
The opposition to this agreement is probably 99 percent. People cannot understand why in a million years, with a $13.7 trillion national debt, and a $1.4 trillion yearly deficit, we would be thinking for one second, for one second, about giving tax breaks to the richest people in this country who are already doing fabulously well.
I am down here today, and have been for a few hours, to urge my colleagues and, more importantly, the American people, to say no to this agreement. If we stand together, if the American people write or e-mail or call their Senators and their Congress people, I think we can turn this thing around. I think we can come up with an agreement that makes us all proud, rather than one that we have to be ashamed for.
I know there was an editorial back in the State of Vermont which I saw. I do not remember the exact title, but something to the effect of: This agreement stinks, it is odious, but it is better than nothing. Well, I do not think that has to be the choice, awful or better than nothing. I think the choice can actually be a good agreement. And I think if the American people stand with those of us who are opposing this agreement, we can pull this off. We can defeat this agreement and come up with a much better one, one that does not cause our kids and grandchildren to pay higher taxes in order to provide huge tax breaks for the richest people in this country.
In talking about the reasons I am opposed to this agreement, one of the other reasons is that while the President and the Republican leadership say, well, you know, this is just a temporary extension, it is going to be for 2 years, just temporary, you know and I know that when you talk about temporary here, it becomes long term and then perhaps becomes permanent.
If we extend these tax breaks for the top 2 percent now, my strong guess--I hope I am wrong. I certainly hope this proposal is defeated, but if we extend them for 2 years, my strong guess is they will be, 2 years from now, extended again. And depending upon the politics of what goes on here, they can be extended permanently.
Our Republican colleagues, as you well know, wanted to extend them for 10 years at a cost of $700 billion. An increase in our national debt. Our Republican friends are fighting hard to completely repeal the estate tax, which would cost us $1 trillion, $1 trillion in 10 years in increased national debt.
So the point I have got to make--I want to emphasize this point, that when people talk about these things being short term, being temporary, take those thoughts with a grain of salt. Maybe that is the case. I do not think it is. I think once you move over the cliff and make that decision to extend these tax breaks, they are going to be extended long term. Here is the reason why. Right now the dynamic here is the President campaigned against these tax breaks. The President does not believe in extending these tax breaks for the rich. But he felt he had to make the compromise. I thought he made a bad compromise.
But our Republican friends are saying over and over that if you rescind, end these tax breaks to the rich, you are raising taxes 2 years from now in the midst of a Presidential campaign, when President Obama, if he is the Democratic candidate, says: Do not worry, I am going to oppose these extensions of tax breaks for the rich, his credibility has been severely damaged, and the American people know it. Can they trust him? That is what he told them then. That is what he will tell them in 2 years. Is he going to be believed? I do not think so. So these tax breaks, while ostensibly for 2 years may, in fact, be for a lot longer than that.
I would also say that while we have talked about--primarily the discussion has centered around extending the tax breaks, personal income tax breaks to the very rich, there are other tax breaks in this proposal which are equally odious.
What this agreement between the President and the Republican leadership does is it extends the Bush era 15-percent tax rates on capital gains and dividends, meaning that those people who make their living off of their investments will continue to pay a substantially lower tax rate than firemen, teachers, and nurses.
Think about that. You are a big-time investor. You make most of your income off of capital gains or dividends, and you are paying a 15-percent tax rate. But if you are a worker doing something with your hands or you are a teacher or a fireman or you are a cop or nurse, a doctor, you are paying tax rates that are higher than that. We are extending those 15-percent tax rates on capital gains and dividends.
Then, on top of that, this agreement includes a horrendous proposal regarding the estate tax. The estate tax was enacted in 1916, and it was a proposal strongly supported by Teddy Roosevelt, who believed very strongly that it was not healthy for America to have an ongoing and evolving concentration of ownership. Here is what Teddy Roosevelt said in 1910:
The absence of effective State, and, especially, national, restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power. The prime need is to change the conditions which enable these men to accumulate power which is not for the general welfare that they should hold or exercise ..... No man should receive a dollar unless that dollar has been fairly earned. Every dollar received should represent a dollar's worth of service rendered--not gambling in stocks, but service rendered. The really big fortune, the swollen fortune, by the mere fact of its size acquires qualities which differentiate it in kind as well as in degree from what is passed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes, and in another tax which is far more easily collected and far more effective--a graduated inheritance tax on big fortunes, properly safeguarded against evasion and increasing rapidly in amount with the size of the estate.
How is that? One hundred years ago. That is what he said. I would say he got it right when he said that. It is even more true today, hence the estate tax.
Unfortunately, under the agreement reached by the President and the Republicans, the estate tax rate, which was 55 percent under President Clinton when the economy, by the way, was a heck of a lot stronger than it is today, will decline to 35 percent with an exemption on the first $5 million of an individual's estate and $10 million for a couple.
I made this point earlier, but I think it has got to be made over and over. Our Republican friends have renamed the estate tax the death tax. The implication of what they are saying, and what many Americans believe, is that if I have $100,000 in the bank or $50,000 in the bank and I die, my kids are going to have to pay a heavy estate tax on what I left them. But that is absolutely and categorically not the case. The estate tax applies only to the top three-tenths of 1 percent. This is not a tax on the rich. This is a tax on the very, very, very rich. And under this proposal, which benefits only the top three-tenths of 1 percent, the President and the Republicans agreed to lower the tax rate on the estate tax to 35 percent, with an exemption on the first $5 million.
That is wrong. Let me give you an example of who the folks are who will benefit from doing this. Many of my Republican colleagues have been pushing very hard, not just to lower the tax rate--by the way, this 35 percent is lower, I think, than they ever dreamed they would get, with a $5 million exemption, but what they wanted ultimately, and I suspect will continue to fight for, is the complete repeal of the estate tax.