PREPARED REMARKS: Chairman Sanders at Senate Budget Committee Hearing on Wall Street Greed and Growing Oligarchy in America

WASHINGTON, Feb. 17 – Sen. Bernie Sanders (I-Vt.), Chairman of the Senate Budget Committee, today delivered remarks at the committee hearing, “Warrior Met and Wall Street Greed: What Corporate Raiders are Doing to Workers and Consumers” to examine growing oligarchy on Wall Street through the case study of Warrior Met Coal in Alabama where workers have spent the last 11 months on strike.

Sanders’ remarks, as prepared for delivery, are below:

Let me thank Senator Braun for serving as Ranking Member today, filling in for Ranking Member Graham.

Let me also thank our colleagues on this committee and our witnesses for being with us this morning.

Today, we are going to discuss an issue that is almost never talked about in Congress and the corporate media.

And that is the incredible concentration of ownership and power that a handful of Wall Street investment firms have over our entire economy, and the enormous impact they have on workers, consumers, and virtually every person in our country.

Today, in America, just three Wall Street firms – BlackRock, Vanguard and State Street – manage $22 trillion in assets. What does that mean?

Well, for starters it means that the amount of money these three firms control is nearly equal to the entire Gross Domestic Product (GDP) of the United States and more than five times the GDP of Germany.

These three firms—BlackRock, Vanguard, and State Street—are major shareholders in more than 96 percent of S&P 500 companies. In other words, they have significant influence over many hundreds of companies that employ millions of American workers and, in fact, the entire economy.

Let’s talk about banking. After the Wall Street crash of 2008 there was a lot of discussion about the wealth and power of the major banks and that they were too big to fail.

Well, these three Wall Street investment firms are the largest shareholders of some of the biggest banks in America – JP Morgan Chase, Wells Fargo, and Citibank.

Let’s talk about transportation. They are among the top owners of all four major airlines – American, Southwest, Delta and United.

And what about healthcare? Together, they own an average of 20 percent of the major drug companies.

Wall Street firms, in general, have bought up thousands of nursing homes where profits and mortality rates have soared.

They are also responsible for the astronomical prices at emergency rooms, increasing prices by over 60 percent and driving over half a million Americans into bankruptcy each year.

These firms will tell you that they are “passive” investors – that they are not involved in the day-to-day or decisions of the companies they own.

But let’s be clear.

These three companies control nearly one-fourth of votes at shareholder meetings, leveraging their power to influence CEO compensation, stock buybacks, environmental commitments, mergers, and pension benefits.

In addition to the Big Three, a small handful of Wall Street vulture funds – so-called “private equity” firms – also have an enormous control over industry after industry after industry.

Over the past two decades, private equity takeovers have slashed nearly 1.3 million jobs and shut down nearly 20,000 stores in the retail industry – including Toys R Us, Payless, and Dollar General.

Let’s talk about housing. Last year, a small number of Wall Street firms and other extremely wealthy investors bought about one out of every 7 homes in some of the largest cities in America and now own over a million apartments, hiking rents by as much as 30 percent and neglecting needed repairs and the safety of tenants.

And if you haven’t heard much about this you should know that a small number of Wall Street firms control half of the newspapers in America.

We’re talking about a handful of Wall Street firms that buy up companies, load them up with debt and make a huge amount of money by laying off workers, slashing wages, shipping jobs overseas and eliminating healthcare and pension benefits.

According to recent studies, after these Wall Street firms takeover companies as a result of a “leveraged buyout,” jobs are slashed by 13 percent, wages fall by 6 percent and the companies that Wall Street firms takeover are 10 times more likely to declare bankruptcy.

When we talk about power in America many people think that the President of the United States is the most powerful person in our country. I’m not so sure, given the enormous power that the CEOs of these extremely large Wall Street financial firms have over our economy.

That brings us to Warrior Met Coal in Brookwood, Alabama where workers have been engaged in a strike for 11 months fighting for economic justice and dignity on the job.

In 2016, a group of private equity funds led by Apollo and Blackstone acquired Walter Energy and formed Warrior Met Coal.

As part of the restructuring, workers were forced to take a $6 per hour wage cut—over 20 percent—and massive cuts to their health and retirement benefits.

The concessions the miners made 5 years ago saved Warrior Met $1.1 billion.

Let’s be clear. The workers agreed to these cuts with the understanding that they would be restored when the company returned to profitability.

That is not what happened. While Warrior Met has returned to profitability and could afford to pay its CEO (Walter J. Scheller III) $4 million in compensation each year, it has reneged on that deal and is offering workers an insulting $1.50 raise spread out over 5 years while refusing to restore the healthcare and pension benefits that were taken away from them in 2016.

Now, I invited Mr. Scheller, the CEO of Warrior Met to testify at this hearing. I wanted to ask him how, over the last 5 years, Warrior Met could afford to provide $1.5 billion in stock buybacks and dividends to its wealthy shareholders and huge bonuses to its executives, but cannot afford to treat his workers with dignity and respect.

Once again: Concessions made by the workers totaled $1.1 billion over 5 years. Stock buybacks and dividends over this same time period totaled $1.5 billion.

I invited Larry Fink, the CEO of BlackRock and the largest shareholder of Warrior Met to testify at this hearing. My hope was and remains that Mr. Fink will do the right thing and demand that Warrior Met’s management sit down with their workers and negotiate a contract in good faith. Unfortunately, Mr. Fink has declined to testify.

Further, I invited Stephen Schwarzman and Marc Rowan, the CEOs of Blackstone and Apollo, to testify at this hearing.

Unfortunately all of them declined to participate at this hearing.

The good news, however, is that we have a number of excellent witnesses who are not afraid to answer questions. They include Braxton Wright – a worker at Warrior Met, Cecil Roberts – the president of the United Mine Workers of America. Our last panel will include several economists who have studied and written extensively on this issue.

Let’s be clear—what is happening at Warrior Met is not an aberration. At a moment of unprecedented corporate greed in this country, attacks against working people are taking place in company after company, in industry after industry. Here is a dangerous reality. Never before in American history have so few owned so much and had so much power over our entire economy.

The extraordinary concentration of ownership held by Wall Street over the economy is an issue that Congress and the American pe
ople have to deal with it.

With that, Senator Braun is recognized for his opening statement.