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I want to thank all of you for coming out today and I want to thank our panelists for being here as well. We live in difficult times and I fear vey much that the conventional media does not do a good job about keeping people informed about the major issues facing us or what’s going on in Washington. Since I’ve been in Congress I’ve done hundreds of town meetings, in larger communities and in smaller ones, and I’ll continue doing that. What the democratic process is about is that you have a right to tell me what’s on your mind and ask me questions, while I do my best to answer them and tell you what I’m trying to do as your senator.
Let me begin by giving you a brief overview as to where we were a few years ago, where we are today and, in my view, the direction in which we should be moving in the future.
In January of 2009, when Barack Obama was sworn in as President we were losing an average of over 700,000 private sector jobs a month. Our Gross Domestic Product -- the total sum of all that our economy produces -- had gone down by nearly 7 percent during the fourth quarter of 2008 -- the biggest decline in more than a quarter century. Some five trillion dollars of Americans' household wealth evaporated in a 12 week period -- as people in Vermont and all over this country saw the value of their homes, retirement savings, and stocks plummet. There were more than a few economists who believed that, because of the greed, dishonesty and recklessness of Wall Street, the financial system might collapse completely driving our country and the world into a Second Great Depression. That was where we were in January, 2009.
Over the course of the 8 years of the Bush Administration, this country lost over 600,000 private sector jobs; and only 1 million net new jobs were created -- all of them in the government sector.
Median income dropped by $2,200 under the Bush years. In other words, middle class Americans earned more income in 2000 than they did in 2008.
During those 8 years, over 8 million Americans slipped out of the middle class and into poverty and over 7 million lost their health insurance – bring the number of uninsured to around 46 million. During that same period over 3 million Americans lost their pensions.
Continuing a long-term trend, 4.5 million manufacturing jobs disappeared during the Bush years as companies took advantage of our absurd trade policies and shut down factories in the United States and moved to China, Mexico, Vietnam, Bangladesh and other third world countries. In 2000, we had over 17 million manufacturing jobs in this country. In 2008, we had less than 12.8 million, a loss 24 percent in 8 years and today we have the fewest number of manufacturing jobs since the beginning of World War II. Under Bush, our trade deficit with China more than tripled and our overall trade deficit nearly doubled.
But, and here’s one of the important points I want to make, not everyone did badly in the Bush years. In fact, during the Bush Administration, the wealthiest 400 Americans saw their incomes nearly double and the wealthiest 400 families saw their wealth increase by some $400 billion. Further, while the very rich became much richer, their effective tax rates were cut almost in half over the past 15 years. In 2007, these 400 richest Americans earned an average of $345 million in that year while they paid an effective tax rate of just 16.6 percent -- the lowest on record and lower than many teachers, nurses, firefighters, and police officers.
As a result, the gap between the very rich and everyone else continued to get worse during the Bush years.
We hear a lot today about the federal deficit, so let me say a few words about that. When President Bush took over from President Clinton, he inherited a $236 billion surplus in 2001 and a projected 10-year surplus of $5.6 trillion. But, after waging two wars, $700 billion in tax cuts for the wealthiest one percent of Americans, a $400 billion prescription drug program written by the pharmaceutical industry, and a $700 billion bailout of Wall Street, the Bush Administration turned a $236 billion a year surplus into a $1.3 trillion a year deficit. As a matter of fact, the national debt nearly doubled under the Bush years going from $5.7 trillion in 2001 to $10.6 trillion in 2009.
That's where we were.
Where are we today?
Well, there is no doubt that the economy is still very bad. But, instead of losing over 700,000 private sector jobs a month as we were during the beginning of 2009; we have seen the economy create private sector jobs for six months in a row – totaling nearly 600,000 private sector jobs so far this year.
Instead of experiencing the largest decline in economic growth in more than 25 years, the economy has seen four consecutive quarters of positive growth. Now, obviously we need to create more jobs. The unemployment rate is still way too high. Wages are still too low. And, the economy is not growing as fast as I would like. In other words, the economy today is in bad shape but any fair minded person would acknowledge that progress has been made over the last 18 months. Why? Well, there are a number of reasons but let me give you one.
In my view, without the economic stimulus package signed into law by President Obama in February of 2009, our economy would be in much worse shape. That's not just Bernie Sanders talking. That is what both conservative and progressive economists have said. Let me quote from just one of those conservative economists: Mark Zandi, who was John McCain's top economic advisers during the Presidential campaign. Here is what Mark Zandi said earlier this month: “The effects of the fiscal stimulus alone appear very substantial, raising 2010 real GDP by about 3.4%, holding the unemployment rate about 1½ percentage points lower, and adding almost 2.7 million jobs to U.S. payrolls.”
In other words, what this conservative economist is saying is that without the economic stimulus package, the unemployment rate would be 11% instead of 9.5 percent; and instead of seeing positive economic growth, our economy would still be in decline. As a result of this economic stimulus package, over 2.5 million jobs have been created or saved, including 7,000 in Vermont.
Americans in Vermont and all over this country are being put to work repairing our crumbling roads and bridges; making homes and buildings more energy efficient; expanding access to quality and affordable health care; and improving our education system just to give a few examples. In Vermont we are now putting more money into road and bridge repair than at any time in the history of our state – and you can see the difference.
And, not only did the stimulus bill put people to work, it has also provided tax relief to over 95% of working families in Vermont. More than 300,000 Vermont families received a tax credit of up to $800 last year and will receive the same this year.
Over 120,000 Vermont senior citizens received a $250 economic recovery payment. Over 14,000 Vermont families were able to receive a tax credit of up to $2,500 to send their kids to college. Some 21,000 children in Vermont benefitted from an expanded child tax credit.
More than 2,400 homebuyers in Vermont received a tax credit of up to $8,000 toward the purchase of a first home. And 59,000 small businesses in Vermont received tax cuts.
In one way or another, virtually every citizen in Vermont has benefitted from the economic stimulus package.
In addition, earlier this year the President also signed into law a health reform package. While not nearly as strong as I would have liked, this bill will provide health care coverage to an additional 30 million Americans. It also end “pre-existing conditions” and mandates insurance coverage for young people in their parents’ policy.
What are some of the areas that I have been working on?
- FQHCs – $12 Billion – The Health Care bill includes a major expansion in community health centers that I included in this bill. The result, a doubling of the number of Americans – from 20 million to 40 million – who will have access to primary health care and, in the process, we save money. NHSC – more doctors. My goal is to see a community health center in every region of the state.
- Audit the Fed - Under my amendment, beginning on December 1st, the Federal Reserve will finally be required to tell the American people who got this money and what they are doing with it. This money does not belong to the Federal Reserve; it belongs to the American people and the American people have a right to know what is being done with their money. Believe it or not, during the financial crisis, the Federal Reserve provided over $2 trillion in zero or near zero interest loans to some of the largest financial institutions in this country without telling the American people who received this assistance or what is being done with this money.
- Dairy Farm Emergency Support - $350m. We passed an amendment, against great odds, which helped provide emergency support for dairy farmers in VT and around the country in their darkest days.
- Energy Efficiency Conservation Block Grant - $3.2B and $16 million for Vermont. We have also brought money into the state for solar roofs on schools, and are currently working on legislation for 10 million solar rooftops. We are also working to make the VT National Guard the greenest in America.
- LIHEAP – 2B: Helped double funding for the fuel assistance program.
- Veterans Needs - As a member of the Veterans Committee I helped develop a nationally recognized outreach program for those returning from Iraq and Afghanistan, and helped bring CBOCs to Brattleboro and Newport. We have also made real program in expanding VA health care and a new GI Educational bill.
We are now working on a major transportation bill.
Now, where do we need to go?
In my view, we have got to put millions of Americans back to work rebuilding our crumbling infrastructure. According to the American Society of Civil Engineers, we need to invest $2.2 trillion over the next 5 years to repair and rebuild our infrastructure including our roads, bridges, dams, railways, schools, public parks, sewers, and culverts. We will have to make these repairs sooner or later.
We have got to transform our energy sector, and create millions of new jobs in the process, by reducing our dependence on oil and other fossil fuels, investing in renewable sources of energy such as wind, solar, and geothermal, and making our country more energy efficient.
We need to fundamentally re-write our trade policy to prevent American companies from throwing workers out on the street and building plants in China, Mexico and other third world countries.
We need to provide affordable loans to small businesses so that they can expand and create new jobs.
We have got to do these things and much, much more.
Now, I know, some of you may be saying, "Yeah, Bernie, I agree with you, but how are you going to pay for it? We have a $13 trillion national debt."
Let me tell you, this is not an either or proposition. We have got to put people back to work and we need to pay for these investments by ending tax breaks for millionaires and billionaires; getting rid of waste, fraud and abuse at the Pentagon and spending money on the Cold War; ending the War in Iraq; making sure that large corporations pay their fair share in taxes; and imposing a tax on Wall Street speculation that has caused oil prices to skyrocket and precipitated the worst financial crisis since the Great Depression.
Here are just a few examples of what I believe we need to do:
1) Each and every year, large corporations and the wealthy are avoiding some $100 billion a year in taxes by setting up tax shelters in the Cayman Islands, Bermuda and other low tax countries. This is a sham and it has got to stop.
2) In 2005 alone, one in four large corporations paid no income taxes to the federal government on revenue of more than $1 trillion. Last year, Exxon Mobil, the most profitable corporation in the history of the world, not only paid no federal income taxes but actually received a $156 million refund from the IRS. We have got to make sure that large corporations in America pay their fair share in taxes.
3) An Assistant Secretary of Defense for President Reagan, Lawrence Korb, has identified at least $60 billion in cuts to the Pentagon by getting rid of waste, fraud and abuse. Studies that I requested from the non-partisan Government Accountability Office have concluded that the Pentagon is spending some $20 billion a year in spare parts that it does not need. Today, we spend more money on defense than all of our major adversaries and allies combined. That is unacceptable and that has got to change.
4) We could save some $30 billion a year by requiring Medicare to use its purchasing power to negotiate for lower drug prices with the pharmaceutical companies. It is wrong that Republicans, under the leadership of George Bush, prevented Medicare from doing this.
Those are the things we should do. Let me tell you some of the things that we should not do.
First, the Republican Leader in the House (John Boehner), has said that we need to cut Social Security benefits by increasing the retirement age to 70. No, we don't. We can't let that happen.
Despite what you may be hearing, Social Security is not in crisis, and it is not going broke. Social Security has enough money to pay out 100 percent of promised benefits to everyone who qualifies for this program until at least the year 2037. After that, Social Security will still be able to pay out about 80 percent of promised benefits. And, that's if we did nothing, according to the Social Security Actuaries. Instead of raising the retirement age or imposing other harmful cuts to Social Security, we could make Social Security solvent for the next 75 years by eliminating the cap on earnings subject to Social Security payroll taxes. Right now, someone who earns $106,800 a year pays the same amount in Social Security taxes as a billionaire. That is wrong.
Second, we should not pass any more job-killing free trade agreements. President Obama has indicated that he wants Congress to pass the South Korea Free Trade Agreement in September. Doing this would lead to the loss of 159,000 of jobs and an increase in the trade deficit of another $16.7 billion over a seven year period (according to the Economic Policy Institute). That would be a disaster. We need to develop a trade policy that increases jobs in America and lifts wages up, not down.
Third, we do not need to deregulate Wall Street. Republicans in Congress have said that if they regain control in November they want to repeal the very modest Wall Street Reform bill that we just passed. That would be a disaster and we can't let that happen.
Fourth, we cannot afford to extend the Bush tax cuts for the wealthiest Americans, as the Republicans want us to do. Doing this would increase the deficit by nearly $700 billion over the next decade.
Fifth, every single Republican in the Senate but three voted to completely repeal the inheritance tax -- which would provide a tax break to the top 0.3 percent of Americans and add nearly a trillion to the deficit over the next decade. Millionaires and billionaires don't need a tax break.
We have a lot of work to do. But, working together, we can begin to rebuild the middle class and make sure that children in Vermont and throughout the country have a higher standard of living and more opportunities to succeed.