Helping Working Poor

Floor Speech

Date: Sept. 24, 2021
Location: Washington, DC


Mr. SCHWEIKERT. Mr. Speaker, to my friend Louie, it is always interesting listening to you. People know how freaky smart you are.

Mr. Speaker, we are going to try to do something for the next half an hour, and I don't want to sound like a jerk when I do some of it. Some of it I am sincerely trying to find a way to talk about something that is of intense concern to me. But it is also going to be a pretty direct assault on a lot of the left's policy right now. I am hoping there will be some hearts that will listen to the concern and to the solutions.

Mr. Speaker, if I came to you right now and said: What is the single most economically violent thing you could do to someone that is in the working poor, those brothers and sisters who didn't graduate high school, who basically the economic value they sell is their labor, their work talent? We are talking 25 million to 40 million Americans who functionally are in that category. They are hardworking, lower middle class.

What we have allowed to happen so far this year, the brutality to their family's ability to survive, to economically exist--I want to walk through some of the math, and then I want to talk about why the left believes a series of transfer payments is the way to make their life better, unlike when we actually had the data from 2017, 2018, when we saw the working poor get dramatically less poor because their labor became more valuable.

What is the number one thing you do, the first thing you do, to crush people in that lower end of the scale who are out there busting their backside trying to survive? You open up the border.

We have really good data here, and we are going to talk about a couple of our slides, but there are lots of studies. The amusing thing, some of the older studies were actually promoted by liberal think tanks that actually thought that the exploitation of cheap labor coming across the border was actually a thing to crush the poor in the United States.

We all forget, a decade, decade-and-a-half ago, it was the left who believed in securing the border to protect working men and women, and the right was the one that was accused of saying we want cheap labor for our business colleagues. It is amazing how the ideology has flipped.

But we actually have a couple of studies that basically come back-- and these are tough because we are going to talk some pretty aggressive math. If you take a family that you and I would designate as the working poor today and you flood society with 1 million, 2 million in, functionally, a 12-month, 24-month period of time, you have just lowered their future earning power.

In one of the studies, it is about 6.2 percent, which is a stunning amount to think that, at the end of a decade, their wages are going to be over 6 percent less. They didn't participate in the growth of the value of their labor going up.

I will argue that we are missing one of the most critical parts of discussing what is happening in the southern border of our country. And being from Arizona, we are seeing it.

If we love and care about the people that struggle in our country, then why would we allow a policy--and I hear on occasion, well, we are being compassionate. You damn well are not being compassionate to the people that are already here.

We can demonstrate in study after study--and these aren't conservative studies; they are academic. Some of them when we went back, we went back 10 to 15 years and found some that talked about that they were going after President Bush's policy of immigration reform and what it was going to do to working men and women, particularly on, we will call it, the working poor categories.

It just breaks my heart that, on occasion, we are going to have the immigration conversation of the chaos that is going on at the border. Could we actually demonstrate some love and caring for those working families, for those working individuals on the lower income end?

Mr. Speaker, this isn't comfortable coming from someone that looks like me from Scottsdale. But if you actually see the stratification on the numbers, you take urban African Americans and we are kicking their head in economically, more than just over the next year, but over the next decade.

I have a fixation that economic expansion, you know, economic growth, is moral. Particularly what we saw in 2018 and 2019, before COVID, we saw this amazing thing where income inequality was shrinking at the fastest ever in modern economic history, that the working poor were getting dramatically less poor. The rich were getting richer, but not as fast as the poor were getting less poor. That has to be the goal.

What is the other thing you also do to absolutely crush the working poor? You open up the borders and devalue their labor, and then you allow an inflationary cycle right now.

I have been there. I mean, God knows, I lived in a little, tiny room behind a garage for years just trying to economically survive. I got very lucky.

But to someone that that is their life, when the rent goes up, when fuel goes up, when food goes up, all these things where, for someone that is in the working poor, the percentage of their wages, their income, maybe even their transfer payments gets chewed up by inflation. And at the same time, you are lowering the value of their wages.

Why would we do this? Do my brothers and sisters on the left actually have any labor economists who are willing to tell the truth, that at the end of this year, the very population that both sides here claim we care about will be poorer? Their lives will be more miserable.

We are better than this. I am frustrated because I understand the left's solution is, well, we are going to stack them up with transfer payments. Okay. We are going to talk about how that gives you a nice pop.

By the end of the decade, you could have gone with the conservative model, which is economic vitality, growth, make the wages more valuable, those things, a supply-side model where things get cheaper because you have incentivized productivity and production, those things.

Remember the rule of thumb. What are the two ways you pay someone more? Inflation, which means you raise their wages, but they didn't get anything more for it because it is just chasing the costs, or productivity where you are able to pay people more because we built a tax and regulatory code that encouraged investment in pieces of equipment, in training that made that worker more valuable, and, therefore, they get paid more without setting off inflation. We were living that just about a year and a half ago. That is what we were seeing in 2018 to 2019.

Look, there is another study out there that just talks about the decrease in wages that is now happening. When you start to increase the labor supply--and believe it or not, this one shows 10 percent. But remember, it is 10 percent within that subcategory.

If the border crossing numbers stay where they are, that is what we are going to hit for the next decade. That study says over 6 percent, and this one says almost immediately we are going to take the working poor and not see their wages go up. This study says they are going to go down 3 percent almost immediately because that is what happens when you raise the labor pool of people with similar skill sets. It is a type of cruelty.

If I came to you and said that we both care about the working middle class, the hardworking middle class, and we both particularly care about the working poor in the country because we believe that by making their lives more economically viable and prosperous, our society, our country, gets better, healthier, and we don't tear at each other.

The left talks a lot about income inequality, and I actually agree with that. I believe the stratification. But you don't do it by kicking one quartile in the head. You do it by lifting up the mass and making their labor much more valuable.

But what happens when we start to actually say the way the left is going to do it is, we are going to do trillions of dollars of transfer payments. We will see childhood poverty. Families with children who are in poverty is unacceptable where it is at. There is a handful of things that we would all agree to do to help that population.

But are you really going to do transfer payments for folks with kids up into the $400,000-a-year income? Because that is what the legislation says. Is that really helping children that are growing up in poverty households?

I think one of the numbers is it caps out, for a couple with kids, mid-$400s. That is really the left's definition of struggling families? Or is it actually a level of, sort of, dark political gamesmanship, saying: We are not only going to take care of the population that we agree we must find a way to make them more prosperous, but we are going to take the rest, the most of our society, and we are going to make sure they are addicted to a monthly transfer payment because they will be beholden to one political party.

If that is so, be honest about it. It is brilliant politics. It is devastatingly horrible economics.

As you can start to see with this chart I am holding, by the end of the decade, we are going to be much poorer as a country, much poorer as a society. The size of our economy will actually be smaller because of the way we are doing this.

I am going to have to do this on the floor next week because I wanted to make sure I got my math absolutely correct because it is a hard dataset. By the end of the decade, you can do the Democrat's transfer payment model or our model to help those who are most in need, and then an aggressive economic growth model. You would have a dramatically bigger, healthier economy in the Republican model. Wages would be at a point where you would actually have almost the same poverty statistic.

The difference is the left's version of a transfer payment model to help the poor, and now the craziness of taking it up to people making $400,000-some on that child credit. You create a world, at the end of the decade, where these populations, their wages are worth less, their work opportunities are worth less, their ability to save for retirement is worth less. Their future prospects are basically beholden to the Democrats sending more money.

With the Republican model, you don't get the same political credit, and you don't get the same political loyalty to your party, but they have an economic future. Their savings, their future wages, their ability to save for retirement are dramatically different.

Yes, those people are free to actually go wherever they want, ideologically. But it is a better economic model for our society. We are seeing datasets after datasets. What the Democrats are about to do in their $3.5 trillion--no matter where it ultimately goes, they are going to make our society poorer. They are going to make those working people poorer.

The Tax Foundation just published, and I have only done the first skim of it, but they are looking at a horizon. They are saying, look, revenues are only coming in at a fraction of what the Democrats are scoring over time because of the shrinkage of the size of the economy.

They may get a trillion dollars of new revenues, but long-run GDP, wages, jobs are all smaller, and fairly dramatically smaller over time. There will be 300,000 of our brothers and sisters who no longer have job prospects. The size of the economy will be smaller.

It is sort of a dark way for those who care a lot about prosperity in our society. How can you engage in a political plan, saying, well, we are going to do these types of redesigning the economy, redesigning our society, basically becoming a European transfer income socialist society, which that is the model, without admitting, oh, by the way, at the end of the decade, if you were to take away the transfer payments, the society is much poorer. With the transfer payments, the future of our society, the future of these workers, the future of the working poor, their prospects are much, much less.

This is a pretty dark thing I believe the Democrats are doing. I think a lot of them have never had an economist sit down and walk them through the math, saying: You are going to get a nice little sugar high for a while, but by the end of the decade, you are going to have a fairly stagnant and almost no economic growth. And people are going to be getting poorer every single day.

I refuse to be like some of my colleagues out there who believe that is actually a mission of the Democrats, to make more of the society addicted to their largesse. I believe that we both love and care about people, and we want them to prosper. I just need someone to buy my brothers and sisters on the left a calculator so they can see what they are about to do.

This isn't all of them. We can actually keep finding more. This is just the list we have as of right now of all the tax hikes. There seems to be this scam going around here of, well, we are only going to tax the rich.

Now, we all know that is a fraud, and I am going to show you how. If they really wanted to transfer wealth from very wealthy people, it is not about taxing them because when you do that, you distort economic decisions. Stop subsidizing them.

You do understand--I actually came to the Ways and Means Committee and presented it multiple times here on the floor--we can come up with, in 10 years, $1.4 trillion that the Democrats subsidized the rich. So it is this amazing economic fraud.

We are going to tax them this much money, and then they are going to turn around and subsidize those people, which is brilliant politically. You show up and lobby me, maybe write me campaign checks and those things on the tax side so I don't make that too burdensome. Then you come and lobby me and campaign and help me and write me checks, and I hand you subsidies.

But when you start to read through all the tax hikes that are part of the Democrat legislation, it is not just the line saying we are going to raise taxes on really rich people. It is dozens and dozens and dozens and dozens of different tax hikes, which will kick the middle class in the head because you just raised their costs. You have just shot up their inflation, and you have just made it expensive for them to live.

But for a lot of folks here, they don't understand the basics of the number of excise taxes. I know the people who are probably watching this or listening, you are freaky smart. You understand the concept of a value-added tax like it is in Europe and parts of Asia, where, during the production cycle, you keep adding. That is essentially what an excise tax is.

If you think about it, we tax it at the manufacturer; we tax it at the distributor; we tax again at the retailer. But there seems to be a misunderstanding that what you are doing to the base affects many products and commodities, and in that list are a number of excise taxes. The chart here is just trying to understand what you are doing to the prices of products.

Then they have the gall to come behind these microphones and say: We are not going to raise the taxes on poor people. We are not going to raise taxes on the middle class.

Come on. Buy a calculator. At least have some level of intellectual honesty. Say you believe a society that is addicted to transfer payments and entitlements is the Democrat vision and the right's vision is economic growth and prosperity. I am willing to have that debate.

I believe the math on my calculator--for my 5-year-old daughter--that a model with a society from top to bottom is wealthier, more prosperous, is so much more egalitarian and so much more elegant, instead of a command and control where the party in power can dial up and dial down whom they want to punish and whom they want to reward according to how they participated for that party in the last election. That is how cynical this place has now become.

So let's actually walk through a little bit of my argument that if the Democrats really gave a damn about getting revenues, then they would stop subsidizing the rich. Because you understand, Mr. Speaker, when you go and raise the taxes on capital gains and say: Oh, rich people are going to pay those, then you have just distorted their investments in things that make us more productive as a society and as an economy.

Remember that earlier part of the conversation, productivity is what makes it so we can pay people more.

But here is how dark the Democrats' bill is. Let's just use this as an example, Mr. Speaker. You have a family making $800,000 a year.

Are they rich?

I would say so. That is in the very top strata of income across this country. The Democrats' bill, as it was given to the Ways and Means Committee last week, when you add up all the tax credits and subsidies, Mr. Speaker, they intend to give that $800,000-a-year-family over $118,000 in credits. Not taxes--credits. Direct cash.

Then they will come behind the microphone and say: But we are going to tax rich people to make them pay to help out society.

I am willing to have that. I am someone who does believe in a progressive tax system. But it is pretty perverse when you say, I am going to raise the taxes and then not mention that you are turning around, Mr. Speaker, and handing over $100,000 to that very family that you are trying to claim you raised their taxes. Yes, you raised it, and then you gave them back more money after you raised it. This is the perversity that is going on here. It is never getting any press because it would require a calculator, and reporters don't own calculators.

But there are land mines that are getting no press because, Mr. Speaker, you handed us thousands of pages of tax-and-spend policy in the Ways and Means Committee. The day before we were supposed to debate it, we offered 57 amendments--many of them were actually derivatives of Democratic amendments--but not one was accepted because the Ways and Means Committee did not write this legislation. It came from the Speaker's Office.

Now, every single day we are discovering little land mines that are hidden in here.

So think about this: My State does not recognize public employee unions. I am from Arizona. So my school district, my county, my city, and my State offer really good benefits: here is your pension, here is your health, here is your family medical leave. To be able to continue to offer that family medical leave in the State of Arizona, they have to recognize unions now. That is hidden. It was brilliantly written. A nonlawyer found it because the staff was just trying to deal with the perversities of what was going on in the way some of the tax definitions were written and where it seems to help certain groups and crush other groups.

Think about this: If you want your electric vehicle, Mr. Speaker--so you are that $800,000 person and you are getting your electric vehicle--if you want the full tax credit, the car had to be made in a unionized plant.

Mr. Speaker, can you tell me how many minutes are remaining?


Mr. SCHWEIKERT. Forgive me. I have had a lot of coffee today. I am a nondrinking Catholic, but I believe if you are not walking around with expresso, you are just not trying.

Mr. Speaker, I am dead serious about this. It is more than just the debate you and I are willing to have on raising taxes over here and spending it over there, becoming more egalitarian in a society. This bill is truly designed to redesign society.

So, Mr. Speaker, now you have the forced unionization of all government workers up and down the tree for the majority of States that are right-to-work States. Okay. Fine.

Shouldn't you actually have told someone that instead of trying to hide it in the legislation?

We keep coming up with more and more of these little backdoor things.

So, Mr. Speaker, if you have union representation, you are going to get to deduct your union fee. But if I am a nonunion worker, I am in a State that provides either optionality or they don't recognize it in my State, but I do have some group over here who does collective bargaining or negotiations, if I'm a union member I get to deduct my fees. So we are using, once again, spending through the Tax Code to backdoor subsidized unions because unions write huge checks and donate stunning amounts of money to Democrat campaigns. But if, on the other side of the equation, I am not one of those union members, I don't get to deduct.

Come on. Is this really where the left has gone that every policy, every design, and every little land mine that can be hidden in the language of the few thousand-page bill isn't necessarily to make the working poor less poor and isn't necessarily designed to make our society grow and provide opportunity?

It is designed for power.

We saw a number of things in that piece of legislation in the Ways and Means Committee when we started to lay it out. I have to admire the audacity of the left and what they are trying to do right now. I just have to genuflect at one level and say that the gall is so over the top it belongs almost being in a movie if someone actually cared about math.

But the forced unionization, the level of transfer payments, and the level of basically making the majority of society, people up to--what was our math--$440,000 a year getting functionally child support payments and child tax credits--direct payments for them, then out the other side of the mouth saying: We are helping the working poor.

No, you are not, Mr. Speaker.

If you and I were helping the working poor, we would have done something dramatically different on the saver's credit and how we do earned income tax credits, those things, and we would actually have an honest conversation that the miracle of growth we had in 2018 and 2019 was one of the most egalitarian and successful in closing income inequality and in closing nutrition stress.

Mr. Speaker, when you saw that nutrition stress shrank to its lowest level and poverty rates shrank to their lowest level--there is a model out there--put it under a Democrat label. I don't care.

I know it irks people on the left to say: Well, regulatory and tax reform created a vibrant economy at a time when our demographics are moving against us.

What makes some of those numbers so difficult--and everyone here knows it, and no one will talk about it--one of the greatest headwinds we have as a society is, we are getting old very fast. Our demographics are really, really tough.

The only way we are ever going to make our debt obligations in a couple decades and the only way my 5-year-old is going to be able to live as well as I did, is not functionally turning the economy into a European-style transfer entitlement economy which is what the legislation does.

It has got to be an economic velocity of takeoff, of adopting a disruptive technology, and of providing where investments are in productivity, so everyone is able to be paid more, make the wages, and make their labors much more valuable. We actually know how to do it now.

For my last couple of moments here, I can't count the number of times I will see Democrats get up and spout about supply-side economics and then you talk to them, Mr. Speaker, and they have no idea what supply- side economics is. You are living in it, Mr. Speaker.

When you see the shortages, when you see the ability to have supply chains work, and when you see the cost of everything going up around it, Mr. Speaker, then you have just seen the Democrat version of subsidized Keynesian, put money into consumption but don't build and put incentives into the production, because the production creates the wealth, creates the jobs, creates the productivity, and keeps the prices low. So even if you subsidize me, if I had to pay higher prices, then I didn't live any better.

The fact of the matter is, you are living the ultimate experience right now, Mr. Speaker, and I truly wish the 1970s could have their economics back.