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+ - FROM RESCUE TO RECOVERY: BUILDING A THRIVING AND INCLUSIVE POST- PANDEMIC ECONOMY
+
+[House Hearing, 117 Congress]
+[From the U.S. Government Publishing Office]
+
+
+ FROM RESCUE TO RECOVERY: BUILDING
+ A THRIVING AND INCLUSIVE POST
+ PANDEMIC ECONOMY
+
+=======================================================================
+
+ HEARING
+
+ BEFORE THE
+
+ SELECT SUBCOMMITTEE ON THE CORONAVIRUS CRISIS
+
+ OF THE
+
+ COMMITTEE ON OVERSIGHT AND REFORM
+
+ HOUSE OF REPRESENTATIVES
+
+ ONE HUNDRED SEVENTEENTH CONGRESS
+
+ SECOND SESSION
+
+ __________
+
+ MARCH 17, 2021
+
+ __________
+
+ Serial No. 117-9
+
+ __________
+
+ Printed for the use of the Committee on Oversight and Reform
+
+[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
+
+
+ Available on: www.govinfo.gov,
+ oversight.house.gov or
+ docs.house.gov
+
+ __________
+
+
+ U.S. GOVERNMENT PUBLISHING OFFICE
+43-985 PDF WASHINGTON : 2021
+
+--------------------------------------------------------------------------------------
+
+
+
+ COMMITTEE ON OVERSIGHT AND REFORM
+
+ CAROLYN B. MALONEY, New York, Chairwoman
+
+Eleanor Holmes Norton, District of James Comer, Kentucky, Ranking
+ Columbia Minority Member
+Stephen F. Lynch, Massachusetts Jim Jordan, Ohio
+Jim Cooper, Tennessee Paul A. Gosar, Arizona
+Gerald E. Connolly, Virginia Virginia Foxx, North Carolina
+Raja Krishnamoorthi, Illinois Jody B. Hice, Georgia
+Jamie Raskin, Maryland Glenn Grothman, Wisconsin
+Ro Khanna, California Michael Cloud, Texas
+Kweisi Mfume, Maryland Bob Gibbs, Ohio
+Alexandria Ocasio-Cortez, New York Clay Higgins, Louisiana
+Rashida Tlaib, Michigan Ralph Norman, South Carolina
+Katie Porter, California Pete Sessions, Texas
+Cori Bush, Missouri Fred Keller, Pennsylvania
+Danny K. Davis, Illinois Andy Biggs, Arizona
+Debbie Wasserman Schultz, Florida Andrew Clyde, Georgia
+Peter Welch, Vermont Nancy Mace, South Carolina
+Henry C. ``Hank'' Johnson, Jr., Scott Franklin, Florida
+ Georgia Jake LaTurner, Kansas
+John P. Sarbanes, Maryland Pat Fallon, Texas
+Jackie Speier, California Yvette Herrell, New Mexico
+Robin L. Kelly, Illinois Byron Donalds, Florida
+Brenda L. Lawrence, Michigan
+Mark DeSaulnier, California
+Jimmy Gomez, California
+Ayanna Pressley, Massachusetts
+Vacancy
+
+ David Rapallo, Staff Director
+ David Hickton, Select Committee Staff Director
+ Russell Anello, Chief Counsel
+ Senam Okpattah, Clerk
+
+ Contact Number: 202-225-5051
+
+ Mark Marin, Minority Staff Director
+
+ Select Subcommittee On The Coronavirus Crisis
+
+ James E. Clyburn, South Carolina, Chairman
+Maxine Waters, California Steve Scalise, Louisiana, Ranking
+Carolyn B. Maloney, New York Minority Member
+Nydia M. Velazquez, New York Jim Jordan, Ohio
+Bill Foster, Illinois Mark E. Green, Tennessee
+Jamie Raskin, Maryland Nicole Malliotakis, New York
+Raja Krishnamoorthi, Illinois Mariannette Miller-Meeks, Iowa
+
+
+ C O N T E N T S
+
+ ----------
+ Page
+Hearing held on March 17, 2021................................... 1
+
+ Witnesses
+
+Joseph E. Stiglitz, University Professor, Columbia University,
+ Nobel Laureate in Economics
+Oral Statement................................................... 7
+William E. Spriggs, Chief Economist, AFL-CIO, Professor,
+ Department of Economics, Howard University
+Oral Statement................................................... 9
+Larry Kudlow, Former National Economic Council Director (2018-
+ 2021)
+Oral Statement................................................... 11
+
+Written opening statements and the written statements of the
+ witnesses are available on the U.S. House of Representatives
+ Document Repository at: docs.house.gov.
+
+ Index of Documents
+
+ ----------
+
+
+ * Letter Regarding School Funding; submitted by Rep. Raskin.
+
+Documents entered into the record during this hearing and
+ Questions for the Record (QFR's) are available at:
+ docs.house.gov.
+
+
+ FROM RESCUE TO RECOVERY: BUILDING
+ A THRIVING AND INCLUSIVE POST-
+ PANDEMIC ECONOMY
+
+ ----------
+
+
+ Wednesday, March 17, 2021
+
+ House of Representatives
+ Select Subcommittee on the Coronavirus Crisis
+ Committee on Oversight and Reform
+ Washington, D.C.
+
+ The subcommittee met, pursuant to notice, at 11:15 a.m.,
+via WebEx, Hon. James E. Clyburn (chairman of the subcommittee)
+presiding.
+ Present: Representatives Clyburn, Waters, Maloney, Foster,
+Raskin, Krishnamoorthi, Scalise, Jordan, Green, and
+Malliotakis.
+ Chairman Clyburn. Good morning. The committee will come to
+order.
+ Without objection, the House--the chair is authorized to
+declare a recess of the committee at any time.
+ I now recognize myself for an opening statement.
+ Americans have testified--have suffered terribly during the
+Coronavirus pandemic. The virus has killed more than half a
+million of our fellow Americans and resulted in the loss of
+more than 22 million jobs, many of which have yet to come back.
+ These losses of lives and livelihoods have not affected all
+Americans equally. Historic job losses have disproportionately
+impacted populations that were also hit hardest by the virus,
+including low-wage workers, Black Americans, and Latinxes.
+Women have suffered greater economic harm than men.
+ Last summer, former chair--Fed Chair Ben Bernanke and
+current Treasury Secretary Janet Yellen testified before this
+committee that low-paid workers, women, and minorities are
+overly represented in the sectors hit hardest by the economic
+crisis, like restaurants and hotels. They explained that these
+groups--and I'm quoting their joint statement here--have born a
+disproportionate share of the job and income losses, end of
+quote.
+ President Trump's own Treasury Secretary agreed. He
+testified before this committee last year that many industries
+and small businesses were, in his word, ``destroyed'' by the
+pandemic. And the service industries employing low-wage
+workers--and I'm quoting again--have been particularly hard
+hit.
+ Of course, many jobs have returned; 379,000 jobs were
+created in February. And the official unemployment rate has
+dropped to 6.2 percent from a high of 14.8 percent in the early
+months of the pandemic. This is encouraging news. But our
+economy has still not replaced roughly 10 million jobs that
+existed last year.
+ And Fed Chair Jerome Powell has cautioned that the official
+unemployment rate fails to get to account the millions of
+Americans who have left the work force due to Coronavirus
+health or family reasons or because they work in industries
+that haven't come back yet.
+ Even the official numbers show stark disparities. While the
+overall unemployment rate in February was 6.2 percent, the rate
+for White Americans stood at 5.6 percent, while the rate was
+8.5 percent for Latinxes, and nearly 10 percent for Black
+Americans.
+ These job losses can have devastating long-term
+consequences for people's future employment prospects and their
+ability to stay in their home, care for their families, and
+avoid a spiral of unsustainable debt. Even as the stock market
+hits record highs, 42 million Americans, including 1 in 6
+children, do not have enough to eat.
+ The American Rescue Plan will lift these communities with
+urgently needed support. The nonpartisan Urban Institute
+projects that this groundbreaking law will reduce poverty in
+America by one-third and by more than half for children and for
+families facing job loss. Racial economic disparities will be
+reduced, and the overall economy will be given a boost.
+ The Select Subcommittee is committed to working with the
+Biden-Harris administration to ensure the American Rescue Plan
+is implemented effectively, efficiently, and equitably, so that
+it can, to its full benefit, can be realized.
+ But rescue is only the first step toward recovery. Many
+economies are now sounding the alarm that if we fail to build
+on the American Rescue Plan, we could see a fundamental
+inequitable post-pandemic economy where the wealthy
+reconsolidate their pre-pandemic prosperity, while low-income
+families continue to suffer. We must be vigilant to ensure this
+reversion to economic inequity is avoided.
+ That is why this morning, I sent a letter to the Office of
+Management and Budget and the Department of Labor asking that
+they include data on employment disparities in the upcoming
+budget and put those metrics at the forefront of our efforts to
+reduce economic inequities.
+ To succeed in building a strong and inclusive post-pandemic
+economy, we must, first and foremost, invest in our Nation's
+infrastructure, as many economists are urging. We must put
+Americans to work at good wages, repairing our country's
+crumbling roads and bridges, enhancing rail and transit,
+expanding a fuller access to broadband internet, upgrading
+water systems, building houses and schools, constructing state-
+of-the-art healthcare facilities, and transitioning to clean
+energy.
+ As we make these investments, we must create opportunities
+for small businesses and ensure equity in Federal procurement
+and lending. Taking these steps now will pay dividends for
+generations to come.
+ Just like the American Rescue Plan, bold infrastructure
+investment has broad support across the country from Democrats,
+Republicans, and Independents. Every member of this committee
+represent Americans in need of economic opportunity and
+communities in need of economic development.
+ According to the Census Bureau, there are approximately 500
+counties in the United States that are classified as persistent
+poverty counties. These are counties where 20 percent or more
+of their citizens have lived below the poverty level for the
+last 30 years.
+ I have long advocated that resources be targeted into these
+communities. This is not a partisan issue. Two-thirds of the
+people in these communities are represented in this body by
+Republicans. I invite my colleagues on the other side of the
+aisle to work with my colleagues on my side of the aisle on an
+ambitious plan to get all Americans back to work building a
+strong equitable and sustainable economy.
+ I now yield to the ranking member for his opening
+statement.
+ Mr. Scalise. Well, thank you, Mr. Chairman. And I want to
+thank our witnesses as well as the new members who have joined
+our committee in this new Congress. I look forward to all of
+your participation.
+ The subcommittee has not held a hearing since October 2 of
+last year, which strikes us as pretty extraordinary. Speaker
+Pelosi stood up this committee to deal with the pandemic, yet
+we've gone five months without a single hearing during some of
+the most impactful months of the pandemic; five months, that
+is, without having investigations on school reopenings,
+fundamental health and drug addiction crisis we're seeing; to
+deal with China and the World Health Organization in the role
+they played; to look at vaccine rollout; the nursing home death
+scandal; as well as COVID that's now spreading in some of our
+communities at America's open southern border.
+ Instead, the Select Subcommittee went silent during this
+period. Today, it does reopen but for the sole purpose of
+serving as Speaker Pelosi's PR machine to tout the Payoff to
+Progressives boondoggle bill that passed on a strictly partisan
+vote last week.
+ When this subcommittee was created, the majority made a
+point of emphasizing the desire to model it after the Truman
+committee, which we had during World War II, a committee that
+strove to make sure the Federal Government spent taxpayer money
+wisely and effectively. But instead, what we've seen is just
+attempts to cheer spending nearly $2 trillion, over 90 percent
+of which, by the way, had nothing to do with the health needs
+or reopening schools, and then argue that, we're hearing this
+week, more taxes need to be raised, more spending, maybe
+trillions more in spending need to be made. Where does this
+end?
+ A year into the pandemic, shouldn't the Select Subcommittee
+be focusing on lessons learned? There are many, good and bad,
+by the way. We do know that inflation adjusted dollars, all of
+World War II cost $4 trillion. We've now spent over $5.5
+trillion. And much of that money, by the way, still remains
+unspent. Look, hundreds of billions of dollars from previous
+COVID relief bills are still unspent.
+ If this subcommittee was truly modeled after the Truman
+committee, this Select Subcommittee should be leading--the
+leading voice in Congress educating the American people that
+some Governors managed their states dramatically better than
+other Governors. And we could be sharing those best practices,
+which, by the way, those best practices in the states, these
+incubators of democracy could be shared to save us trillions of
+dollars, seeing how some did it well, some did it poorly,
+surely not replicating what was done in the states that didn't
+do it well, and trying to amplify the voices of the states who
+did it well so others can do it.
+ The minority asked all year to hold hearings on China and
+the role that the World Health Organization played at being
+China's mouthpiece in those early days when they instead could
+have been helping us confront the crisis that no one knew about
+that was coming out of Wuhan. The majority refused that
+request.
+ Now even The Washington Post Editorial Board has written,
+quote, ``We're still missing the origin story of this pandemic.
+China is sitting on the answers,'' close quote. We should be
+trying to get those answers. The Post Editorial Board is also
+asking the same question that we've asked the majority on the
+subcommittee from the beginning, quote, ``What is China trying
+to hide about the origins of the pandemic and why,'' close
+quote. Other voices from both the left and the right have
+raised the same concerns. But the silence from the majority
+rings loudly.
+ Mr. Chairman, China's lies in the World Health
+Organization's coverup cost us half a million lives, not just
+here in America, but all around the world; could have saved
+millions of lives. Where is that bipartisan outrage?
+ On June 14, the minority wrote the Governors of five states
+a letter asking for information about deadly nursing home
+policies that forced COVID-positive patients back into nursing
+homes against the CMS guidance that was out there. The majority
+ignored us. If they would have joined us, we could have gotten
+those answers. History now shows that we were right in asking
+those questions.
+ And now it has come out that Governor Cuomo of New York
+initiated a potentially criminal coverup, specifically designed
+to hide those facts, not just from us in Congress, but from the
+people of New York, the families of those thousands of people
+who never should have died, who are still, by the way,
+demanding answers. Those families deserve answers. We're going
+to keep fighting until we get those answers. Whether Governor
+Cuomo wants to comply or not, the answers are going to come
+out. And you are seeing people even within his own
+administration, that don't want to go down with a sinking ship,
+that are finally starting to speak out.
+ I would encourage any official in the state of New York who
+has that information to get it to us. Don't be complicit in
+Governor Cuomo's coverup. Enough reports are out there that he
+tried to hide this data. They were on a call with state
+senators in New York bragging about the fact that they hid the
+data. Don't be involved in a coverup. Thousands of families in
+New York want and deserve answers. The rest of the country can
+learn from those deadly mistakes. I would encourage everyone in
+New York, from Governor Cuomo on down, to share that
+information.
+ Right now, you're seeing Democratic colleagues even calling
+for Governor Cuomo's resignation, in part citing the nursing
+home scandal, in addition to his sexual harassment scandals.
+But the silence from Democrats here in Congress rings volumes.
+Just last week, we again asked for a hearing on this scandal. I
+would urge the committee to bring this up.
+ A year into this pandemic, we know many cities made
+devastating mistakes on school closures. Back in March and
+April of last year, maybe the mistakes then would have been
+understandable, but now we have the data, we have the science,
+we know what is happening to our young children all across the
+country. And by the way, the science is loudly saying the kids
+need to be back in the classroom. It can be done safely.
+There's a roadmap out there for doing it. The American Academy
+of Pediatrics has laid that out. We have also seen it from CMS.
+Even the CMS Director under President Biden acknowledged that
+kids could be back in school.
+ We put hundreds of billions of dollars out there for this,
+by the way, in previous relief packages. Some school systems
+chose to actually spend this money and get kids back in the
+classroom. Unfortunately, it's only about 40 percent of
+America's students who are back in the classroom. The damage
+that's being done to millions of kids, not because of the
+science, but because of the unions who don't want to go back to
+school. In fact, they were just urging teachers they can go to
+spring break while they're not in the classroom, just don't
+post pictures of you being on spring break. That tells you
+what's going on. There is a tremendous disservice. And so many
+teachers want to be back in the classroom, and yet their unions
+are fighting to hold them out.
+ These kids are suffering. We're seeing mental illness off
+the charts. We're seeing opioid abuse, including deaths and
+suicide, off the charts, not to mention, Mr. Chairman, the
+long-term damage that's being done to these kids that are being
+held back and left behind. None of us should stand for that. We
+should all be having hearings and calling for hearings on this
+scandal. And let's fight to get our schools reopen and follow
+the science.
+ We hear we can't open schools until this money is spent.
+Schools need to upgrade. Of course, we already spent hundreds
+of billions in relief that was targeted to getting schools
+open. So that money is available for anyone who wanted it. But
+some schools that chose to serve the children opened, some
+bowed to the unions.
+ We need to look at the science and follow it and open our
+schools. This may be one of the biggest public policy mistakes
+that America has seen by these systems that are still refusing
+to open up their schools to in-classroom learning.
+ The per cap--capita death rate from COVID in California and
+Florida are about the same. New York is much higher than both.
+California and New York, of course, locked down, crushed
+businesses so many that will never reopen. Schools and churches
+that are closed. Their unemployment rates are nine and 8.8
+percent in New York and California. Florida, while facing very
+misguided criticism, opened up their schools and businesses and
+followed the science and did it safely. Their unemployment rate
+is about 4.5 to five percent, less than five percent.
+ So after five months with no hearings, Mr. Chairman, it
+seems like today's hearing should be about the different
+experiences we have seen in states, some that stayed locked
+down and some states that safely opened, and how to share those
+best practices. Because if the Select Subcommittee modeled this
+after Harry Truman in what he did with the Truman Commission,
+the conclusion would be that we couldn't have saved trillions
+of dollars by focusing on the most vulnerable in our society,
+by redirecting ourselves to ending inequality in our education
+system, by simply following the science, by analyzing the data
+that's out there now after a year of shutdowns, and
+acknowledging that American ingenuity and things like President
+Trump's Operation Warp Speed are the path to getting out of
+this pandemic.
+ I look forward to hearing from our witnesses, and I yield
+back.
+ Chairman Clyburn. I thank the ranking member for his
+statement. And I would like to remind you, my dear friend, that
+we wanted very much to have those hearings that you talked
+about, but for some strange reason, the minority leader refused
+to appoint committee members, which prevented us from having
+those hearings.
+ Now, as for the schools, I think you know that in this
+bill, the Rescue Plan, $128 million to make our schools safe so
+people can return. Being a former public schoolteacher myself,
+I know how important it is. But for some reason, my Republican
+colleagues refused to support that $128 million.
+ Mr. Scalise. Will the gentlemen yield on that?
+ Chairman Clyburn. Yes, I'm pleased to yield.
+ Mr. Scalise. Clearly, and we pointed this out during the
+hearing, we actually tried to correct it when we were seeing
+this still move through, over 95 percent of that money for
+schools can't even be spent this year. And not a single dollar
+was dedicated to safely reopen schools. In fact, we had
+amendments to require that the money be used to reopen schools,
+and we were shut out. That amendment was blocked on a partisan
+basis.
+ So, I'd look forward to working with the gentleman to
+target money on the things that need to be addressed.
+Unfortunately, the bill that passed last week didn't do that.
+And I'd yield.
+ Chairman Clyburn. Well, I thank you for your statement,
+except that I totally disagree with it. But we've got some
+other people here to hear from today, so I'm not going to get
+into a back and forth with you on that. But I thank you for
+your statement.
+ And I welcome today, two new members. It looks like both
+the Speaker and the minority leader have been testing my
+southern education with these appointees here. But I'm going to
+welcome on the Democratic side, Mr. Krishnamoorthi. I hope I
+didn't do too much damage to that. And on the minority side,
+Ms. Malliotakis.
+ Mr. Scalise. You got it. Good job.
+ Chairman Clyburn. Very good. Well, my Southernese ain't as
+bad as I thought. So, I welcome them.
+ I now am pleased to welcome our distinguished witnesses:
+Joseph Stiglitz, a Nobel Laureate in economics and professor at
+Columbia University; William E. Spriggs, the chief economist at
+AFL-CIO, a professor at Howard University; and former director
+of the National Economic Council, Counselor Larry Kudlow. Thank
+you all for being here today and for your testimony.
+ The witnesses will now be unmuted so we can swear them in.
+ Assuming that you all have been unmuted, please raise your
+right hands.
+ Do you swear or affirm that the testimony you're about to
+give is the truth, the whole truth, and nothing but the truth,
+so help you God?
+ Let the record show that the witnesses answered in the
+affirmative.
+ Thank you.
+ And without objection, your written statements will be made
+a part of the record.
+ With that, Professor Stiglitz, you are now recognized to
+provide your testimony.
+
+STATEMENT OF JOSEPH E. STIGLITZ, UNIVERSITY PROFESSOR, COLUMBIA
+ UNIVERSITY, NOBEL LAUREATE IN ECONOMICS
+
+ Mr. Stiglitz. [Inaudible] I would like to begin by
+congratulating Congress and the administration on what they
+have already accomplished.
+ Before discussing the next steps--and let me emphasize, I
+think your time is rightly spent thinking about the steps going
+forward, not thinking back of what should have been done. But
+before discussing these next steps, let me highlight some of
+the achievements of this act.
+ A large child allowance that will cut child poverty in
+half. This is a huge step forward to giving the government an
+affirmative role in directly supporting people, especially
+children, who cannot fend for themselves. And, second, sector-
+specific relief. The huge increase in spending for higher
+education, the health industry, and especially aid to states
+and localities, which will stem the tide of austerity policies
+and contraction that would otherwise have resulted.
+ Most importantly, the dramatic difference between this bill
+and the action taken a year ago is that this bill has a vision
+of what kind of society and economy we want. With the Federal
+Government spending so much money, the expenditures should
+reflect a collective vision. It is a start to building back
+better.
+ In this testimony, I focus on one dimension of building
+back better: creating a more widely shared prosperity. The
+pandemic has further exposed and aggravated the divides in our
+society. The irony is the frontline workers who put themselves
+most often in harm's way, who contribute so much to our
+society, are among the lowest paid. If we value those who
+educate our children, nurse our sick, care for our elderly, it
+is unconscionable that we pay them so little. Their wages are
+largely determined, not by abstract market forces, but by
+decisions we make as a society. Some of this low pay is a
+legacy of discrimination, many aspects of which we have been
+reminded of during the past 12 months.
+ Now I am worried that the K-shaped recovery that is
+underway will further aggravate the high levels of inequality
+in the United States. It may even speed up changes associated
+with robotization and AI that are already happening, and they
+risk widening the gap even more. So, it's imperative that we
+focus our policy on dealing with the grave inequities in our
+society.
+ The tasks before us are many and our resources are limited.
+Thus, we'll have to make our dollars do double and triple
+duty--rescue, revive our economy; promote economic and social
+justice; push the structural transformation of our economy and
+retrofit it to face the existential crisis of climate change.
+ The good news is that research shows that there is an ample
+supply of investments that can do all of these simultaneously.
+There are strong complementarities. A green infrastructure
+program can be timely, have large multipliers, with a big bang
+for the buck; be labor-intensive; and better connect workers
+with jobs through public transportation. The effects of adverse
+environmental conditions are felt most strongly by the poor,
+and that's another reason that better environmental regulations
+and more investments to protect the environment are such an
+important part of an equitable recovery.
+ I would like to note two aspects of the bill that ought to
+be addressed in future legislation. First, I would have been
+happier if some of the key provisions, such as extended
+unemployment insurance, had been linked to some measure of a
+weakness in the labor market or the economy. As I've argued in
+another recent paper with Secretary--former Secretary of
+Treasury Robert Rubin and former OMB Director Peter Orszag, we
+should have more automatic stabilizers.
+ Second, many of the actions need to be made permanent. For
+instance, those related to reducing child poverty.
+ There's so much to do for a truly strong resilient, just,
+and sustainable economy. And let me just list a few of those
+issues very briefly.
+ A fair and better designed tax system could close
+loopholes, enhance economic efficiency, promote growth, and
+reduce the administrative burden and inequities that plague the
+current system.
+ We need to ensure that everyone can receive the education
+that enables them to reach their full potential, regardless of
+their parents' income. A GI Bill for all Americans. We can
+afford it. This is an investment in our country's future. So,
+in a way, we cannot afford not to do it. But with politics in
+America being what they are, if we cannot reach this goal, it
+is time to recognize the historical legacy of discrimination
+and deprivation against African Americans and Native Americans
+and at least create a GI Bill for these groups.
+ We need to deal with the legacy of education debt that has
+been built up in this country, which imposes an unacceptable
+burden on too many young Americans.
+ We need affordable healthcare for all, and the gaps in the
+ACA need to be quickly remedied. A public option is a
+reasonable way forward. The pandemic demonstrated the poor
+health of so many Americans and laid bare the fact that the
+U.S. has the lowest life expectancy of any major advanced
+country and the largest health disparities.
+ And we need to explore public options to make decent
+housing and a secure retirement more affordable for all.
+ The rampant and growing inequalities in our society are to
+a large measure a result of power imbalances in the
+marketplace. And if we are to ensure that we don't have a K-
+shaped recovery, these have to be corrected.
+ Before concluding, I would like to say a word about the
+macroeconomics underlying what has been done. It would, in
+fact, be a good thing if we faced greatly tightened labor
+markets. It is only during those times that we bring
+marginalized groups into the labor force and reduce the
+longstanding inequities.
+ Let me conclude, the American dream has always been about
+ensuring that everyone has a chance to have a decent middle-
+class life. It has always been about opportunity for all,
+regardless of race, gender, ethnicity, or the income and
+education of one's parents. We have to recognize that, today,
+the American dream is largely a myth.
+ The pandemic has provided us a moment to reflect on where
+we are and where we should go, to redesign our economy and
+society to provide that dream once more, this time for all
+Americans. I hope we seize the opportunity.
+ Chairman Clyburn. Thank you very much, Professor Stiglitz.
+ Now we will turn to Professor Spriggs.
+ Professor Spriggs, you're now recognized.
+
+ STATEMENT OF WILLIAM E. SPRIGGS, CHIEF ECONOMIST, AFL CIO,
+ PROFESSOR, DEPARTMENT OF ECONOMICS, HOWARD UNIVERSITY
+
+ Mr. Spriggs. Thank you, Chairman Clyburn and Ranking Member
+Scalise, for this invitation to give testimony before your
+subcommittee today on the issue of rebuilding America's economy
+in the wake of the novel Coronavirus. I am happy to offer this
+testimony on behalf of the AFL-CIO, America's house of labor,
+representing the working people of the United States, and based
+on my expertise as a professor in Howard University's
+Department of Economics.
+ My testimony will focus on some immediate needs to be
+addressed following the enactment of the American Rescue Plan,
+but it would also address some of the issues that the current
+crisis has made clear. The scope and size of the American
+Rescue Plan clearly show the cumulative cost of our economy of
+high levels of inequality and our lack of attention to
+addressing both inequality within the market economy, and our
+tools to addressing equality through our fiscal policies.
+ As a Nation, our economy cannot afford workers earning less
+than $15 an hour, nor can we afford making our work force
+subject to casualization, dodging our wage and hour laws
+through misclassifying workers as independent contractors. We
+have gone too long with a falling share of national income
+going to workers, disconnecting national prosperity from wage
+incomes. It is time we balanced the bargaining power of workers
+in management and ensure our households can be more resilient
+to economic downturns.
+ The huge imbalance in racial wealth is a large contributor
+to overall inequality, and it is a particular problem because
+of the low absolute level of liquidity held by Black and Latino
+households, in particular. We must recommit ourselves to
+address a legacy of a host of discriminatory policies that
+leave too many households lacking resilience during economic
+downturns. Addressing those disparities is very expensive.
+ As a result of these deficiencies, the size of the American
+Rescue Plan has given us a larger national debt. To resolve
+that issue, we must learn from our past. We faced a large
+threat to our Nation during World War II. This is our biggest
+test since then. We resolved the debt of that conflict having
+higher marginal tax rates on high incomes, pursuing full
+employment policies to keep the economy from falling into
+needing fiscal stabilization, and by investing our way out of
+debt through a massive infrastructure package that created our
+modern interstate highway system.
+ Further, we made a massive investment in the education of
+Americans, granting free college to returning World War II
+vets, and then repeating that by bringing the next wave of
+young people affordable student loans to pursue degrees in
+vital strategic areas in engineering, science, math, modern
+languages, and public education.
+ We did not respond with austerity. We responded by doubling
+down our bets on the American people and made a down payment
+America's future, launching the greatest increase in
+productivity, wages and technological innovation among
+developed economies up through 1980.
+ Our infrastructure weakness is a national security risk.
+Our clear inability to respond to the water crisis in Jackson,
+Mississippi, is another embarrassment that shows us to be weak
+and unable to quickly respond to our major disruptions.
+ We must fix our unemployment insurance system. This is one
+of the things that the Rescue Plan sought to correct. We cannot
+go into the next downturn with this weakened condition. Relying
+on a state-based system that clearly showed discrimination in
+who had access to unemployment benefits that forced Congress to
+have to come up with a patch is not going to be acceptable.
+Congress must immediately go to resolve the remaining
+disparities in the system.
+ In 2018, fewer than eight percent of those who were
+unemployed in leisure and hospitality received unemployment
+benefits under the normal system. That's why this patch had to
+be done, but going forward, we cannot rely on this state-based
+system.
+ In rebuilding, we must face that our labor force is not
+growing fast enough. We must find ways that infrastructure
+should be the means of getting people to work, and that means
+increasing female labor force participation. That means an
+infrastructure that includes expanding childcare, addressing
+elder care, addressing the disparities in access to elder care
+that we know will result from the racial wealth gap where this
+is most acute in retirement. We must have paid family leave so
+that we can get women's labor force participation up.
+ We must find a way to revamp and revise the way that we
+have been conducting higher education in the last 10 years that
+allowed this and only this generation to be faced with college
+debt at this exorbitant level. We cannot rely on higher
+education being a private-funded matter. It has a
+disproportionate impact on Black families who are more likely
+to have college debt, and when they are the ones with college
+debt, have the most college debt.
+ We have to find a way to provide reliable public
+transportation. This is the way to provide mobility and
+resilience to workers, and that includes workers in rural areas
+who must have access to adequate transportation.
+ Going forward, we cannot afford to have inequality at this
+level. The IMF, the OECD have clearly documented that
+inequality slows growth. This will be the biggest impediment
+for a thriving economy going forward. Everything that Congress
+can do to address inequality at all levels, at issues of race
+and gender, must be put in place so that we can have a full
+recovery for everyone.
+ Thank you.
+ Chairman Clyburn. Thank you very much, Professor Spriggs.
+ We will now hear from Mr. Kudlow.
+ Mr. Kudlow, you are now recognized.
+
+ STATEMENT OF LARRY KUDLOW, FORMER NATIONAL ECONOMIC COUNCIL
+ DIRECTOR (2018 2021)
+
+ Mr. Kudlow. I raised a couple of key [inaudible] looking at
+maybe the past's prologue to the future. I'm not going to
+comment on the act that was just--the so-called stimulus act
+that was just put through. My criticisms have been made
+elsewhere. There was some good but a lot of not so good.
+ I do want to say this: I agree with Mr. Clyburn and Mr.
+Scalise and some of the others that we need a balanced and
+equitable and inclusive economic recovery. I fully agree with
+that goal. What I want to note here, though, is that looking at
+the policies of the last administration, the Trump
+administration, of lower tax rates, significant rollback of
+regulations, energy independence, and also tough and fair trade
+policies, particularly with China, that pre-pandemic, in the
+first three years before we got hit by this awful catastrophe,
+we had a broad-based inclusive economic growth rate, a
+resurgence and renaissance of the economy, which middle and
+lower-middle income folks did better than upper-income folks by
+a significant degree. And minority groups, be they African
+Americans, Hispanic Americans, Asian Americans, women, people
+with only high school degrees, did significantly better. It was
+the middle-and lower-income brackets that far outpaced the
+upper brackets. The tax cuts, lower tax rates, particularly for
+corporations and smaller businesses, as well as the regulatory
+rollback and the energy storybook.
+ After many years of stagnant wages going back to the year
+2000, median household incomes rose by $6,500 for a typical
+family of four. Real wages increased 10 percent for blue-collar
+and middle-class workers. I called it a blue-collar boom pre-
+pandemic. 6.6 million Americans were lifted out of poverty.
+Household wealth, that's stocks and homes and cash, household
+wealth for the bottom 20 percent of income earners increased 34
+percent, while household wealth of middle-income Americans
+increased 20 percent. Wages, incomes, and household wealth for
+the top one percent and the top five percent grew but far less,
+substantially far less, than what we saw in the lower income
+groups.
+ The bottom 50 percent of households saw an astonishing 40
+percent raise in net wealth. Poverty rates for African
+Americans, Hispanic Americans, Asians, women reached their
+record low numbers. Inequality declined dramatically. All this
+was a complete reversal, not only of the prior eight years,
+but, frankly, of the prior 16 years going back to the year
+2000.
+ Unemployment hit 50-year lows. Employment participation
+rates hit almost 50-year highs. And, again, it benefited, you
+got low unemployment at 3.5 percent overall. But, again, the
+key minority groups, Black Americans, Hispanic Americans, Asian
+Americans, women, less well-educated blue collars and middle-
+income people, they have rock bottom 50-year low unemployment
+rates. So, I just put that on the table.
+ My biggest concern here is that we're going to turn back
+the clock and reverse these policies. And my thought here is
+that if we do, if we reverse the Trump tax cuts, if we move
+into a huge overregulated economy, if we end fossil fuels and
+end energy independence, we will do great damage, specifically
+to those groups that have been discussed this morning, the
+minority groups and so forth, women, people in poverty,
+underserved community.
+ I want to also tout the opportunity zone program. Roughly,
+1,000 opportunity zones have been set up across the country to
+provide incentives for investments to underserved communities.
+These must be allowed to stay.
+ I think at the end of the day, the best policies we can do
+is not to overspend, not to try to penalize success, not to try
+to raise taxes and regulations in ways that we haven't seen in
+30 or 40 years. The best thing we can do is provide an
+incentive-oriented supply side driven growth model that has
+worked in the past to deliver the goods and the incomes to the
+very people that we are talking about, the so-called inclusive
+recovery.
+ These policies, I might add, have worked under Democrat and
+Republican administrations. I wrote a book on this subject.
+John F. Kennedy was the biggest tax cutter since World War II.
+He was really the first supply sider. Ronald Reagan followed.
+Bill Clinton may have raised taxes in his first year, but he
+wound up cutting the capital gains tax and the biggest welfare
+reforms, a bipartisanship with Newt Gingrich, that this country
+has ever seen.
+ And I want to make a note on welfare reforms. I guess it
+will be my final point. I don't want to go on forever. But this
+recent stimulus bill has expanded the welfare state, probably
+by the largest amount since the LBJ Great Society. And, in
+particular, I want to express my worry and my concern that this
+expansion which has left work requirements out, whether it's
+the child credit or anything else, work requirements have been
+decimated in this bill, and people want to make that permanent.
+That goes against what Clinton and Gingrich did. And I fear
+that it will create more poverty and more unemployment as we go
+forward.
+ So, I would like to see less spending. I would like to see
+more supply side economics. I say this in a bipartisan sense,
+we can work together to achieve these goals. At the end of the
+day, gentlemen, I think the private enterprise economy is going
+to deliver the goods for all Americans far better than a top-
+down, heavy government, central planning economy.
+ Thank you for listening.
+ Chairman Clyburn. Thank you very much, Mr. Kudlow.
+ Each member now will have five minutes for questions.
+ I now recognize myself for five minutes.
+ Now, I am very concerned that these sectors of the economy
+that have been hit the hardest during this pandemic are those
+intended to employ workers who are already economically
+vulnerable, exacerbating economic inequity. Last year, Federal
+Reserve Chairman Powell testified before our subcommittee, and
+I am quoting him here: The burden of the downturn has not
+fallen equally on all Americans. Those least able to withstand
+the downturn have been affected most. The rise in joblessness
+has been especially severe for lower wage workers, for women,
+and for African Americans and Hispanics, end of quote.
+ Professor Spriggs, you testified that the unemployment rate
+for workers of color in the most affected industries last year
+was more than 38 percent, and the labor market still has not
+recovered all those jobs. What is the long-term impact on
+economically distressed communities if those inequities are not
+addressed.
+ Mr. Spriggs. Thank you, Chairman Clyburn, for that
+question. It is clear from the downturn that we are currently
+at the same place in terms of the gap in payroll employment as
+we were at the depth of the Great Recession. We still have a
+long way to go.
+ The loss of wealth from this large period of unemployment
+is a large contributor to the racial wealth gap. Downturns
+affect Black and Latino communities more severely. Blacks have
+the largest period of long-term unemployment. This is not a
+matter of skills. The unemployment rate for high school
+dropouts in the United States, during most of this period since
+February, for high school dropouts has been lower than the
+Black unemployment rate.
+ Last month, when the Black unemployment rate went up as
+others went down, the unemployment rate for Black men, all
+Black men was lower--was higher, was higher than the
+unemployment rate for high school dropouts. This is not a
+matter of skills. It's a matter of the way discrimination takes
+place within the recovery.
+ Back in April when the economy was shot, the Black
+unemployment rate collapsed. Since then, we have seen the way
+the labor market performs, and the 2 to 1 ratio is on its way
+back. That loss of income, of job experience has ramifications
+going forward. It penalizes the youngest workers the most. They
+will have permanent income loss from this.
+ Chairman Clyburn. Thank you very much for your answer
+there.
+ Professor Stiglitz, you know, if Congress had not enacted
+the American Rescue Plan, could we have counted on the economy
+to recover on its own?
+ Mr. Stiglitz. No. In short, you know, slowly economies do
+recover. The question is how long would it take and how various
+groups would be affected. And, unfortunately, because so little
+was done earlier, both addressing the pandemic and addressing
+some of the statures and groups that most needed it, there's
+already been scarring, and that means that the potential for
+recovery quickly is inhibited. And that was one of the reasons
+why, I think, it was so important to have such a strong bill.
+ In other words, economists talk about hysteresis effects.
+If you don't deal with a problem quickly, you get scarring, and
+that was already happening. That's why it was really important
+to take the strong action now.
+ Chairman Clyburn. Well, thank you very much.
+ I've got 25 seconds. I'm going to yield back to the ranking
+member.
+ Mr. Ranking Member, you're now recognized for five minutes.
+ Mr. Scalise. Thanks a lot, Mr. Chairman. I appreciate that.
+Again, I enjoyed the testimony from all of our witnesses.
+ As we look at this hearing's title talking about focusing
+on rescue to recovery, clearly, in economic recovery, we want
+to get our economy back on track. We have seen some really
+strong indicators already, but we've also seen some fault
+lines.
+ And I know Mr. Kudlow brought up the energy industry
+changes that President Biden's made. There's been a lot of
+concern expressed about that. But one of the people who
+expressed real concern about the very first day of the Biden
+administration canceling the Keystone Pipeline, some estimates
+say about 10,000 good union jobs eviscerated.
+ I know, Mr. Spriggs, I wanted to ask you, because the head
+of your organization, Richard Trumka, had said regarding the
+canceling on the Keystone Pipeline that he said, it, quote, did
+and will cost us jobs.
+ You know, as we focus on economic recovery, Mr. Spriggs, do
+you agree with Mr. Trumka that canceling the Keystone Pipeline
+was not the approach that was the right one for recovery, but
+that, in fact, we should have kept moving forward with those
+good high-paying union jobs that Keystone was producing?
+ Mr. Spriggs. The labor movement has affiliates on both
+sides of the issue on the Keystone Pipeline. Those jobs are----
+ Mr. Scalise. What's your opinion, if you are here as our
+witness regarding--you know, I guess, you're representing the
+AFL-CIO, what's your feeling on that? Do you think it was a
+good or bad thing to cancel Keystone?
+ Mr. Spriggs. Thank you. Thank you, Ranking Member, for the
+question. And in my answer I am pointing out that from the
+union perspective, our affiliates are on both sides of that
+pipeline project, because it affects both those that are
+affected by global warming and those who get those immediate
+jobs. And so----
+ Mr. Scalise. If I could point out----
+ Mr. Spriggs. And so, my answer to you is that I'm concerned
+on both sides of that question. I'm concerned for those
+affiliates that lose jobs because of global warming and its
+effect. And, yes, there's a concern about the loss of those
+jobs, but there are ways to address loss of jobs.
+ Mr. Scalise. All right. Well, if I may----
+ Mr. Spriggs. And there are ways----
+ Mr. Scalise. We're limited on time. I've got to reclaim--
+I've got to reclaim my time.
+ If you're concerned about global warming, first of all,
+let's recognize, by getting rid of the Keystone Pipeline in
+America, doesn't get rid of the oil that's coming from Canada.
+It just means Canada is sending that oil to refineries in
+countries like India, who, by the way, emit more carbon. So, if
+you're concerned about global warming and carbon emissions,
+having the Keystone Pipeline built here by American workers
+getting high-paid union jobs would actually reduce carbon
+emissions globally, because now those emissions are going to be
+admitted. You know, John Kerry is still going to need jet fuel
+to put in his private airplane. It's just going to come from
+Russia and Middle Eastern countries who don't have the
+standards we have.
+ Mr. Kudlow, can you answer that question as well, because I
+know you touched on the energy job losses and what that means?
+ You're on mute right now, Mr. Kudlow.
+ Mr. Kudlow. Yes. Look, efforts to end fossil fuels are
+going to have--take an enormous toll on this economy. We're
+going to wind up losing millions of jobs. We're going to wind
+up losing energy, reducing it. We're going to increase the cost
+of energy, and it's going to affect every household.
+Particularly, middle-and lower-income people are going to
+suffer the most. So, this in my judgment, is a huge mistake.
+ I do not--I'm not a denier. I think global warming needs to
+be discussed at length, but I'm saying, we should be adding to
+the portfolio of energy, not reducing it. I'm an all-of-the-
+above kind of guy. We should look for technology and innovation
+in the private sector, not to shut down important projects that
+will be job killers.
+ Look, I wanted to--Mr. Scalise, I just wanted to raise a
+broader point. This downturn was not a macroeconomic effect. It
+was a natural catastrophe effect. The pandemic is different
+from the Great Recession or the Great Depression. And these
+ideas of wild spending and financed by higher taxes provide the
+wrong macroeconomic solutions. But they missed the point. Here
+is the key.
+ Mr. Scalise. And let me jump in, because we've only got 40
+seconds left. Because I do want to add, CBO had projected we
+were going to get over 4.5 percent growth without----
+ Mr. Kudlow. Right.
+ Mr. Scalise [continuing]. Taking $1.9 trillion----
+ Mr. Kudlow. Right.
+ Mr. Scalise [continuing]. Borrowing it from our grandkids
+for that.
+ Mr. Kudlow. The economy may grow at eight percent this
+year. And, by the way, before the bill was passed, we had $1
+trillion of bipartisan bills that hadn't yet been spent. The
+key is opening the economy. It is----
+ Mr. Scalise. And I know--I got one more quick question.
+Because, you know, when you think about the bill, you know,
+you're going to give taxpayer-funded checks barred from our
+kids to felons in prison in this bill. But when you look at
+things like reopening schools, what damage it's doing,
+shouldn't we be focused on things like that instead, Mr.
+Kudlow?
+ Mr. Kudlow. Absolutely. Reopening schools, reopening
+businesses, ending unnecessary lockdowns. And the whole key,
+the biggest stimulus package that we----
+ Mr. Scalise. Tax hikes, good or bad?
+ Mr. Kudlow. Pardon?
+ Mr. Scalise. Tax hikes are good or bad.
+ Mr. Kudlow. Tax hikes are going to be a disaster. An
+absolute disaster. But the best stimulus, Mr. Scalise, is the
+vaccine, the vaccine, which started with Operation Warp Speed
+under the Trump administration. Now you've got about a hundred
+million. We're very close to herd immunity. That is going to
+open up the entire economy, and that is going to fill in the
+minority jobs in the lower-income areas. I don't disagree about
+that analysis. I do disagree with the solutions for it.
+Vaccines----
+ Mr. Scalise. I know we're out of time, but thank you for
+that. I know we'll get into this more later. I appreciate it.
+Thanks.
+ I yield back, Mr. Chairman.
+ Chairman Clyburn. Thank you very much.
+ Mr. Ranking Member, we have a little bit of an issue here
+with people with other hearings. Would you agree for us to do--
+if I could do two Democrats now, then go to two Republicans, we
+can allow for people to get to their hearings?
+ Mr. Scalise. Yes. Yes, we can do that, Mr. Chairman.
+ Chairman Clyburn. OK. So, I'm going to recognize two
+Democrats now, Mr. Krishnamoorthi and Bill Foster will be
+recognized. Then I'll go to two Republicans.
+ I'll go to Mr. Krishnamoorthi.
+ I understand, Chairwoman Waters, that you've agreed to
+this. Thank you.
+ Ms. Waters. I did not. Mr. Chairman, it's difficult. Go
+right ahead. No, I did not agree, but I understand what you're
+trying to deal with. Please go right ahead.
+ Chairman Clyburn. Thank you very much.
+ Mr. Krishnamoorthi.
+ Mr. Krishnamoorthi. Thank you, Mr. Chairman; thank you, Mr.
+Ranking Member; and thank you, Chairwoman Waters, for your
+indulgence.
+ Good morning, Mr. Kudlow. I wanted to just touch on your
+reference to the vaccines associated with Operation Warp Speed.
+I assume that you agree that they are safe and effective,
+correct?
+ I think you're on mute, Mr. Kudlow.
+ Chairman Clyburn. Mr. Kudlow.
+ Mr. Kudlow. Yes, I think I'm unmuted. Sorry, sir. Yes, I
+think the vaccines are safe and effective.
+ Mr. Krishnamoorthi. And I assume that you agree all
+Americans should get vaccinated, correct?
+ Mr. Kudlow. Absolutely. Absolutely.
+ Mr. Krishnamoorthi. By the way, have you been vaccinated,
+sir?
+ Mr. Kudlow. I have. Blessedly, I've received two
+vaccinations.
+ Mr. Krishnamoorthi. Excellent. Thank you, sir.
+ Can the staff put up a graph that I wanted to just ask Mr.
+Kudlow a couple of questions about?
+ Great.
+ Mr. Kudlow, I'd like to draw your attention to this graph
+here. It's basically data which shows cumulative COVID-19
+deaths over the course of the pandemic, as well as some
+statements you made during 2020. And on the X axis and the
+source of the CDC for the COVID deaths, on the X axis is the
+passage of time, and on the Y axis is cumulative deaths over
+time.
+ And so, you know, one thing that I wanted to point out is
+on February 25, 2020, you told CNBC in an interview about the
+Coronavirus, quote, ``We have contained this. I won't say
+airtight, but pretty close to airtight.'' Obviously, over time,
+we know that that's not accurate as we've now seen 540,000
+deaths, approximately.
+ On March 24, 2020, in an interview--I'm sorry, in a press
+conference, you said, quote, ``We are heading for a rough
+period, but it's only going to be weeks, we think.'' Of course,
+almost one year later, the pandemic is not over.
+ And then, finally, I just want to bring your attention to
+June 22, 2020, when at that point we had lost 120,000 lives to
+COVID-19, and you told CNBC Squawk Box, quote, ``I really think
+it's a pretty good situation. Fatality rates, incidentally, the
+fatality rates continue to decline. So, all in all, I think
+it's a pretty good situation.''
+ So, here's my question, Mr. Kudlow. At the time that you
+said on June 22, 2020, ``I really think it's a pretty good
+situation,'' look, you, sir, come across as a very intelligent
+guy, savvy, sophisticated, to a lot of people, you didn't
+really believe it was a really good situation on June 22, 2020,
+did you?
+ Mr. Kudlow. Well, look, I will tell you, the case rate was
+way down at that point, and it proved to be temporary, but all
+I could do is deal with the actual facts at the time. And the
+economy was beginning to show a V-shaped recovery. And if I
+may, sir, back in February 2020, when I made the statement that
+I made about containing it, it was not a forecast; it was a
+statement of fact. There were, at that time, 14 cases, only 14
+cases. Now, later on----
+ Mr. Krishnamoorthi. I'm just going to reclaim my time for a
+second. On June 22, I'm not asking about prognostications or
+case rates, but after 120,000 deaths, sir, to call it a, quote/
+unquote, ``pretty good situation'' is, unfortunately, not the
+case, when we actually had a very horrible situation. And that
+lack of candor really matters, because it shows a lack of
+leadership by the Trump administration.
+ I'd like to turn your attention to another issue, which is
+the economy. Mr. Kudlow, in April 2008 in the National Review
+Magazine during the Great Recession, you said, quote,
+``recessions are therapeutic. They cleanse excess from the
+economy,'' close quote.
+ Mr. Kudlow, you don't dispute that you wrote those words in
+the National Review Magazine, correct?
+ Mr. Kudlow. I'm sure that's correct. I have no reason to
+doubt it.
+ Mr. Krishnamoorthi. According to the Department of Labor,
+Mr. Kudlow, 18 million people are currently collecting
+unemployment benefits during the recession. You don't dispute
+that statistic, correct?
+ Mr. Kudlow. Wait. Are we talking about now or then?
+ Mr. Krishnamoorthi. Yes. Now, now, now.
+ Mr. Kudlow. Well, what does that have to do with what I
+wrote in 2008?
+ Mr. Krishnamoorthi. Well, what I'm trying to say is this:
+You can't possibly think that people collecting unemployment
+benefits view their plight as therapeutic, do you?
+ Mr. Kudlow. You're going from one context to another, sir.
+Look, I supported two bipartisan bills. I helped negotiate two
+bipartisan bills in 2020, both of which provided unemployment
+assistance, plus-ups, as they were called, and so I'll stand by
+that. We changed--like the rest of the world, incidentally. I
+could pull out quotes from lots of Democrats and leading
+Democrats and high Democratic officials who were in the same
+boat as I was
+ [inaudible] you're in the fog of war, and you're doing the
+best you can with the facts available, and when the facts
+change, of course, we change, but I think it's kind of unfair
+to go after that.
+ I supported the unemployment assistance. That's a matter of
+record.
+ Chairman Clyburn. The gentleman's time is expired. Thank
+you so much.
+ We're now going to adjust, once again. We are now going to
+go to Ms. Waters, because she's informed us since yesterday
+that she has an issue, then we'll go to two Republicans and
+come back to you, Bill Foster.
+ Ms. Waters. Yes. Thank you very much, Mr. Clyburn. I
+appreciate your cooperation and your patience. I am in the
+middle of another hearing on GameStop, and so I do want to get
+back to that, but I just want to talk about the pandemic job
+losses that have harmed already our vulnerable populations. I
+think there's been some discussion on this already, but since
+the pandemic began, more than 525,000 of our fellow Americans
+have died from the Coronavirus. The virus has taken a
+particularly heavy toll on minorities nationwide, Latinx, Black
+Americans are more than twice as likely to have died from
+COVID-19 when age is taken into account. People of color have
+also lost their jobs at higher rates during the pandemic. The
+Black unemployment rate now stands at 9.9 percent; the Latinx
+unemployment rate at 8.5 percent; and the White unemployment
+rate at the 5.6 percent.
+ Professor Spriggs, why is it that workers of color have
+faced steeper job losses than White workers during the
+pandemic?
+ Mr. Spriggs. Well, initially, for the Hispanic community
+they are overworked in the industries that were hit the hardest
+in leisure and hospitality, in particular. For African-
+Americans, it's a different story, because initially, African-
+Americans didn't lose jobs at a disproportionate rate. The
+problem is discrimination in rehiring workers. And as the
+continued depth of the situation unfolded, it means that Black
+workers had a harder time getting back. We have to remember
+that in April, the Black and White unemployment rate virtually
+collapsed. They were as equal as they've almost ever been. So,
+there are two different forces taking place here.
+ We have lost a million and a half public sector jobs. This
+disproportionately affects women and minorities, and those jobs
+have not come back during this period. It's a good thing that
+the rescue plan gave additional funds to state and local
+governments. We hope that Congress will direct states that the
+first thing they need to do with the money that they're being
+given is to rehire those one and a half million workers, and
+that will make a big difference. That's 10 percent of the gap
+in payroll that we currently are suffering from. That needs to
+take place immediately.
+ So that--that's what makes this more complicated, and we'll
+have to find better ways of preventing discrimination in hiring
+to address the gaps.
+ Ms. Waters. Thank you for that. You just alluded to
+discrimination in hiring. And as we know, we have been aware
+of, and lived with ``the last hire, the first fire'' for all of
+our lives. Do you think that this played an important role in
+the tremendous and disproportionate lost number of jobs that
+were lost by Blacks and Latinx?
+ Mr. Spriggs. Yes. Again, the unemployment rate for high
+school dropouts, the least qualified in our country, is lower
+than the Black unemployment rate for most of this recovery last
+month finding the Black unemployment rate was better than the
+high school dropout unemployment rate, but not for Black men
+who have their unemployment rates spiked.
+ So, this is vital to understand that this is not about
+Black skills, it's about the way in which people reenter the
+labor market and the scarring effects from this from this. We
+need a summer youth jobs program because we're not going to
+have recovered the labor market sufficiently to help those
+under 25 get the labor market experience to prevent the
+scarring we know takes place during this period.
+ That is vital that we have a summer youth job program,
+because the dispirit impact on young Black workers is even
+greater.
+ Ms. Waters. And just ask, do you believe that it is
+absolutely responsible important for the government to give
+assistance so that these jobs can be, you know, gotten again,
+and that the government should play a real role in doing that?
+ Mr. Spriggs. Yes. And I want to thank Congress for
+including money for the National Endowment for the Arts. Many
+people forget that our actors, the member of SAG-AFTRA have
+been hit the hardest of all groups by not having live
+performances. The companies that would hire them are musicians
+and the American Federation of Musicians and our symphony
+orchestras and our opera orchestras are not being employed
+right now.
+ We need the companies that hire them to be secure enough so
+that when we reopen, they're in place and we can get those
+workers back to work.
+ Ms. Waters. Thank you. My time has been exhausted. Thank
+you very much, Mr. Clyburn.
+ Chairman Clyburn. Thank you very much.
+ The chair now recognizes in succession, Mr. Jordan and Dr.
+Green.
+ Mr. Jordan, you're now recognized.
+ Mr. Jordan. Thank you, Mr. Chairman. Mr. Kudlow, low taxes
+and less regulation works, doesn't it?
+ Mr. Kudlow. Sure does.
+ Mr. Jordan. I mean, it worked under Reagan, it worked under
+Clinton, it worked under President Trump. Is that right?
+ Mr. Kudlow. That's correct.
+ Mr. Jordan. Doesn't matter if Democrats cut taxes,
+Republican cut taxes? It doesn't matter if the Democrats reduce
+regulation, if Republicans reduce--it works for everyone in our
+economy when you do that, right?
+ Mr. Kudlow. Yes. I like to refer to the JFK tax cuts as
+working for the economy, a Democrat.
+ Mr. Jordan. Yes. Tax cuts and less regulation are
+nonpartisan and they help everyone--were wages up during the
+Trump economy prior to COVID?
+ Mr. Kudlow. Wages rose at record pace, especially for
+middle and lower income folks. That's what the numbers show
+from the Census Bureau and the Federal Reserve.
+ Mr. Jordan. Best unemployment numbers in 50 years, best
+economy in 50 years under the Trump administration prior to
+COVID. Is that right?
+ Mr. Kudlow. That is correct.
+ Mr. Jordan. Yes. And this was true for any subgroup in our
+economy--Hispanic Americans, African-Americans, poorer
+Americans whose wages were rising faster than middle class and
+upper-class individuals. It was good for every single person in
+our economy. Is that right?
+ Mr. Kudlow. Yes, indeed. Poverty fell, inequality fell. Mr.
+Jordan, the bottom 20 percent had the single largest gain in
+income and wages and wealth. The bottom 20.
+ Mr. Jordan. Lowest quintile, fastest growth we've ever
+seen, and we need to get back to that. So, what's going to help
+our economy more, Mr. Kudlow, letting Americans go back to work
+or paying Federal workers to stay home?
+ Mr. Kudlow. Well, the key here is just unlocking and
+unleashing the economy, and getting these vaccinations out.
+That's the single best stimulus we can have. We're looking at
+an economic boom if we leave taxes low, and leave regulations
+low, and stop destroying the fossil fuel energy business. We
+are looking at an economic boom right now. You could have 8 to
+10 percent growth in this year.
+ Mr. Jordan. But Democrats are getting ready to do all three
+of those things in the wrong direction. They're getting ready
+to raise taxes, they're making it difficult for us to use
+fossil fuel, and they're going to increase regulation under all
+kinds of climate change rules or whatever. They're going to do
+all three things wrong. They're getting ready to do that, and
+that's going to have harmful effects for our economy and, most
+importantly, for the poorest people in our economy and, in many
+cases, those happen to be African-Americans, Hispanic Americans
+who are trying to climb the economic ladder. Is that true?
+ Mr. Kudlow. Look, I have severe misgivings about these
+policies. They will block, obstruct recovery, and you're right.
+It is the lowest end folks who will be hit the hardest by this.
+Just on one easy point, quickly, energy costs are going to
+skyrocket if we take----
+ Mr. Jordan. They already are. They already are. They
+already are. I mean, I got--someone sent me a picture, they
+said never cost me $48 to fill up my car during the Trump
+administration because gas prices are already climbing, which,
+again, disproportionately hurts middle class, lower class
+Americans today.
+ Mr. Kudlow, do you remember the first Green New Deal? Do
+you remember that plan about--oh, about 12 years ago. This was
+Solyndra, Beacon Power, Abound Solar. You remember that first
+Green New Deal that we had?
+ Mr. Kudlow. Yes, I do.
+ Mr. Jordan. Yes. That didn't work out too well, because
+every one of those companies--I think there were 26 different
+companies who got money from the taxpayers, most of those
+companies had a credit rating of double B-minus, and every
+single one of them went bankrupt. I don't think that really
+helped our economy much, but that was the first Green New Deal,
+and now we're getting ready for a second.
+ Mr. Kudlow. I think it's always unwise to try to pick
+winners and losers. I think the private sector does it best.
+Let markets and competition work. Put these industries on a
+level playing field. Look, I'm not against renewables. You're
+not either.
+ Mr. Jordan. I'm not either. I'm not either, right.
+ Mr. Kudlow. The question is, let's have a level playing
+field and expand our energy portfolio. We need power to drive
+the economy. If you take away 75 percent of our power in the
+next 5 to 10 years, which is what some of these programs--some
+of these policies are suggesting, it's going to be a disaster.
+And not only will it be an economic disaster, it's going to
+strengthen the hands of our enemies overseas, particularly
+Russia, particularly Middle East, particularly China. We will
+be devastating our foreign policy as much as we'll be
+devastating our economy.
+ Mr. Jordan. Is it time to get back to work, get back to
+school, and get back to normal, Mr. Kudlow?
+ Mr. Kudlow. Yes. End the lockdowns. I think we made a big
+mistake. We went way too far, too long on lockdowns, and that's
+why, by the way, the low-income industries have been hit the
+hardest. I don't disagree with the analysis; I'm just
+disagreeing with the cause of it. It's the lockdowns that were
+the problem here.
+ Mr. Jordan. States that let people go back to work, states
+that remained opened, largely opened, have done better than
+states that haven't, both economic--and maybe more importantly,
+or just as importantly, on any health measures as well. That's
+what we need to get back to.
+ Mr. Kudlow. Agreed. Completely agree.
+ Mr. Jordan. Thank you, Mr. Chairman.
+ I yield back.
+ Chairman Clyburn. I thank the gentleman for yielding back.
+ The chair now recognizes Dr. Green.
+ Mr. Green. Thank you, Mr. Chairman, and thanks to our
+witnesses. The quickest way to end the pandemic is to vaccinate
+as many people as possible. There's growing evidence from the
+U.K. and other allied countries that the first dose of a two-
+dose vaccine provides as much protection as other one-shot
+versions, and equally reduces the spread. According to the New
+England Journal of Medicine, the Pfizer vaccine provides 92.6
+percent efficacy, while the second dose only marginally
+increases this.
+ By giving the first dose to as many people as possible and
+slightly delaying the second dose, the scientific research
+shows significantly curves the virus to spread by increasing
+the number of people protected. That's why so many other
+countries are doing one shot for everyone first to cover as
+many people as possible. And I want to thank my colleague
+across the aisle, Congressman, Foster, for spearheading this
+effort, and I'm hopeful that the Biden administration will
+respond soon to our letter.
+ Continuing to give two doses will delay protection for many
+and may cost lives. A year ago, the American people were told
+that we needed two weeks to flatten the curve. The next 12
+months were unlike any other we've ever seen. Broad one-size-
+fits-all lockdowns brought devastating consequences for
+millions of Americans.
+ Screenings for cancer and other serious health conditions
+were and still are down. States imposed restrictive shutdown
+orders, schools were shutdowns and moved to computer screens,
+thousands of businesses permanently closed their doors.
+ Meanwhile, young people face a serious educational and
+mental health crisis as many have not set foot in a classroom
+for months. Millions of children are not getting the mental
+health counseling provided by their school system. Youth mental
+health visits to the emergency department have increased by 30
+percent, 30 plus percent in our country. And the CDC survey in
+August estimated that a quarter of young adults admitted to
+having thoughts of suicide. The death rate from suicide has not
+yet been reported. The lockdowns have continued long past the
+point when they cease to make sense. In fact, less than 300
+children have died to COVID; yet, a 10 percent increase in
+suicide kills far more since the average death to suicide
+fluctuates between 4,000 and 6,000 a year.
+ The science is clear that in-person learning is the best
+option for students and teachers and will save lives. We know
+this. It's long past time to reopen America's schools. The
+failure to do so is a failure to put service to students over
+control by the unions and selfish politicians. Instead, the so-
+called stimulus passed by the Democrats rewards lockdowns that
+states and teachers unions are pressing to keep their schools
+shuttered.
+ Congress is sending over $120 billion in additional money
+to schools, but most $68 billion allocated for schools over the
+past year still hasn't even been spent. In fact, the CDL
+estimates that only five percent of this new funding will be
+spent this fiscal year. The bill actually postpones the money
+into future years to support and incentivize these closures, or
+as I've described above, incentivizing harming children.
+ Hundreds of billions of dollars are going to reward states
+for dogmatically imposing lockdowns. This payoff to blue states
+and cities is destroying lives, and it's time the truth be
+told. You've heard my colleagues across the aisle pat
+themselves on the back for this almost $2 trillion more to our
+debt, while almost $1 trillion of previously approved COVID
+relief hasn't even been spent yet, all so we can reward those
+states that closed.
+ This isn't a relief plan. It's not about COVID. It's a
+spending spree with the taxpayer's credit card.
+ Mr. Kudlow, former Clinton Treasury Secretary and Obama
+economic adviser Larry Summers wrote that $1.9 trillion
+stimulus will, and I quote, ``set off inflationary pressures of
+a kind we have not seen in a generation, with consequences for
+the value of the dollar and financial stability.''
+ Sir, could you explain those consequences to this, what it
+will mean to our economy, to our trade, the value of the
+dollar, et cetera?
+ Mr. Kudlow. [Inaudible] with the bill. And I don't know if
+I agree 100 percent on the inflation issue, and I don't know if
+I agree on the dollar, but he's raising the risk, the threats,
+and he's a very smart fellow. He's a friend of mine. We worked
+together in the past, and I think people should've listened to
+that.
+ You made some important points about the wastefulness of
+the spending. The incentives structures were perverse. States
+will get more money if they have a higher unemployment rate,
+which means they have an incentive to keep lockdowns. I never
+understood how that could possibly be in the bill. And also, we
+had so much unspent money--it was $1 trillion--and you're right
+about the $130 billion. That, by the way--that money for
+schools--goes--not even going to be spent. I think only $4
+billion will be spent in 2021. The rest of it will be spent in
+the next five or six years, which shows that the aim here was
+not to get schools open, but, I think, political interest group
+payoffs.
+ So, Larry Summers should be heeded. I don't want to be a
+bear in this hearing. I like what I see in the economy. I think
+we are in a boom-like situation as long as we keep opening,
+opening, opening and we keep vaccinating, vaccinating,
+vaccinating. We don't need tax hikes. We don't need regulatory
+increases. We don't need to cripple the private sector. We
+don't need to end fossil fuels. Let a thousand flowers bloom.
+Let free enterprise handle this, and we are going to come out
+of it just fine.
+ Mr. Green. And send the kids back to school.
+ I yield, Mr. Chairman.
+ Chairman Clyburn. Thank you very much.
+ Now, I understand that Mrs. Maloney has agreed that we can
+now go to Mr. Foster.
+ Mr. Foster. Thank you. And am I honorable and visible here?
+ Chairman Clyburn. Yes, sir.
+ Mr. Foster. OK. Well, first off, I'd like to thank Dr.
+Green for joining Dr. Ami Bera and myself for urging this
+improvement in the vaccination strategy, and I hope that,
+frankly, those in the administration and HHS take heed at that
+as well as the individual states.
+ Dr. Stiglitz, just a quick question about some of the
+investments made during the Obama era. As I recall, during the
+Obama era, we put $500 million into a loan to this green
+startup called Tesla, and I was wondering, to enable Elon Musk
+to build his first factory.
+ What is the market capitalization of Tesla today? Oops. I
+believe you're muted.
+ Mr. Stiglitz. I don't know the exact number, but, you know,
+Tesla's now, I think, is worth more than General Motors. It has
+become the largest valuation of any car company.
+ Mr. Foster. It's my remembrance, it's in the range of a
+fraction of $1 trillion. So, roughly, 1,000-to-1 return on that
+Federal investment, and we'll get it back simply in capital
+gains taxes when those are realized. We're going to get back
+that investment hundreds of times over.
+ Mr. Stiglitz. Absolutely.
+ Mr. Foster. You know, venture capital is allowed to make
+some bad investments if the home runs hit it out of the park,
+as I'm pretty clear that that did.
+ Now, during the first three years--I'm just trying to do
+triage on some of the wreckage of disinformation from previous
+questioning. During the first three years of the Trump
+administration, did the average person in the top one percent
+see their wealth in absolute dollars increase more or less than
+the average person in the bottom 20 percent?
+ Mr. Stiglitz. Far more. It was not a balanced recovery. You
+have to remember we have so much inequality that a one percent
+increase at the top is multitudes greater than a one percent
+increase at the bottom. The problem at the bottom is, they have
+almost no wealth at all. So, a one percent increase of zero is
+still zero.
+ Mr. Foster. And as I recall, 10 years ago when we were--you
+were in front of the Financial Services Committee, there was
+this raging debate about whether the stimulus back then was
+going to debase our currency and trigger run-away inflation and
+so on and so forth. And if I recall properly, Mr. Kudlow was on
+the opposite side of that discussion.
+ So, I was wondering if you can sort of summarize, you know,
+did we see runaway inflation, and so on, in the time following
+the first stimulus?
+ Mr. Stiglitz. Absolutely not. In fact, one of the results
+that we've seen was the multipliers. The bang for the buck was
+very large. We got a lot of stimulus out of what we spent. The
+main mistake we made is we didn't spend enough and, therefore,
+the recovery was much lower than it otherwise would have been.
+ Mr. Foster. Right. And if you look laterally at other
+economies, countries like China that had a stimulus that was
+roughly twice of ours as a fraction of GDP recovered more
+quickly. Countries like Europe like the U.K. had this austerity
+budget, they saw a recovery that was slower. And, so, I think
+we've seen a pretty good set of data that when you try to
+stimulate the economy in the presence of a big output gap, you
+don't drive inflation, but you speed up recovery.
+ Is that pretty much----
+ Mr. Stiglitz. Absolutely. You're seeing the same thing
+right now in COVID-19. One of the reasons that we've done
+better than Europe is that we had a bigger stimulus. And now,
+the forecast is an eight percent growth for the United States
+in 2021, and that's because we've now enacted a very strong
+stimulus, and the forecast reflect the strength and the well-
+designed aspect of what the bill that's just been passed.
+ Mr. Foster. And I think the point was made very effectively
+by my Republican colleagues that the key to getting more
+equitable--a more equitable economy is a tight labor market.
+Will the labor market tighten up more quickly with or without
+the stimulus spending that we've just passed?
+ Mr. Stiglitz. Oh, absolutely. It's going to be faster with
+the stimulus spending, and particularly because of the design
+of the spending. It's going be directed at that parts of the
+economy where the bang for the buck will be large, and where
+the distributive effects will be very beneficial.
+ Mr. Foster. Thank you. And I'll just close by pointing out
+that you gave, to my mind, probably the best summary of the
+last financial crisis in your testimony mentioning that of the
+three things our financial system had to do, which is to
+allocate capital, do it efficiently, and control risk, out of
+those three key tasks, we failed at all three. And based on
+your guidance, we passed Dodd-Frank, and one of my proudest
+accomplishments is in the last crisis, the COVID crisis, we did
+not see our financial system fall apart. So, thank you for your
+part in that.
+ And I yield back.
+ Mr. Stiglitz. Thank you.
+ Chairman Clyburn. Thank you very much. The chair now
+recognizes Congresswoman Malliotakis. Can she hear me? The
+chair now recognizes Congresswoman Malliotakis. The chair now
+recognizes Congresswoman Maloney.
+ Mrs. Maloney. Thank you, Mr. Chairman. Thank you for
+calling this important hearing, and I want to thank all the
+panelists for your testimony today. I especially want to thank
+Nobel laureate Professor Stiglitz and Larry Kudlow, who are
+both from the great city of New York.
+ Our goal is to make sure that equity is at the center of
+our economic recovery policy. It's important that the
+information we use to measure the success of recovery tells a
+complete story of who actually is benefiting from overall
+economic growth.
+ To monitor how the economy is recovering from the pandemic,
+one of the data points we can look at is the gross domestic
+product, but GDP data is incomplete and can obscure the fact
+that some groups are being left behind.
+ Just last week, I reintroduced the Measuring Real Income
+Growth Act, which would require the Bureau of Economic
+Analysis, or BEA, to report GDP growth broken out by income
+deciles, and for the top one percent of earners, so we can see
+who is benefiting the most from GDP growth.
+ Professor Stiglitz, would you agree that GDP growth broken
+out by income level would improve the quality of the BEA's
+economic data, and do you believe this bill will help ensure a
+more equitable recovery?
+ Mr. Stiglitz. Very much so. And in my written testimony, I
+actually mentioned that as an important tool going forward. It
+was also mentioned that breaking down the unemployment rate by
+various groups would also give a better picture of what is
+going on. It's important to recognize that it's not just a
+percentage changes of what are going on, but the absolute
+changes because of the very dispirit circumstances, the
+increased inequality that has been so strong in the last 20
+years.
+ Mrs. Maloney. Thank you. Shifting topics. I want to talk
+about how women have fared during the economic downturn. The
+numbers show that women have been disproportionately harmed by
+job losses during the pandemic from February to May 2020. As
+our Nation lock downed, more than 11.5 million women lost their
+jobs, compared to 9 million men. Black and Latino women have
+suffered the highest rate of job losses. The pandemic has
+forced many women out of the labor force entirely.
+ Over the last year, we've seen a two percent drop in
+women's labor force participation, and mothers of children 12
+years old and younger were three times as likely to lose work
+than fathers of children the same age.
+ So, Professor Stiglitz, why have women disproportionately
+lost their jobs and left the labor market during the pandemic,
+and why is it important to get women back into the work force?
+ Mr. Stiglitz. Well, first, let me--Professor Spriggs
+remarked earlier, identified some of the factors that affect
+different groups, in particular, there's a differential
+representation across the economy. The sectors, the hospitality
+sectors have been most adversely affected by the crisis, and
+these are sectors where women are a larger fraction of the
+labor force, and disproportionately in jobs that are affected,
+and other service sector frontline jobs as well.
+ And that pattern is partly a reflection of discrimination,
+a historical discrimination in the labor market. And, so, one
+of the very important aspects of the pandemic is it has exposed
+historical legacies in our economy, discrimination, access to
+healthcare that become much more apparent as result of the
+pandemic.
+ Mrs. Maloney. Thank you for that clarification. The
+American Rescue Plan takes critical steps to help women get
+back on their feet and back into the labor force. The law will
+give working families an increase in the child tax credit, the
+earned income tax credit, provides emergency paid leave, and
+expands childcare assistance. It also provides more than $180
+billion to quickly reopen our schools.
+ Professor, how will these provisions of the American Rescue
+Plan help bring women back into the work force and our overall
+economy?
+ Mr. Stiglitz. Well, this is related to what we've been
+talking about before. The ability to get money to children
+means that the families can afford childcare, and that enables
+them to get back into the labor force. The sector-specific
+programs in the bill affect sectors where women are
+disproportionately represented, and so--and minorities, and so,
+again, will help recovery be a more balanced recovery than the
+less comprehensive measures that we took last spring.
+ One of the important aspects of this bill was that it was
+much more comprehensive in dealing with some of the sectors
+that had been left out of the earlier measures.
+ Mrs. Maloney. Thank you so much, Mr. Chairman, and I yield
+back, and thank you to all the panelists.
+ Chairman Clyburn. Thank you, Mrs. Maloney, for yielding
+back.
+ The chair now recognizes Ms. Malliotakis.
+ Ms. Malliotakis. Thank you, Majority Whip. I wanted to talk
+a little bit about Mr. Kudlow, because he's from New York, and
+I'm from New York, and, certainly, we're experiencing a lot of
+the same things, and a lot of the same frustrations. The
+funding that was given to the states, the formula which changed
+under President Trump and the last Congress, the funding was
+based on population. In this Congress, it was based on
+unemployment rate. It seems that it almost incentivized states
+and local municipalities to keep the economy shutdown, to
+implement arbitrary restrictions. And then on top of it, they
+also prevented states from lowering taxes. Those states that
+did receive the money could not use it for tax deductions.
+ I had actually sought to freeze taxes and require those
+states that were receiving it to not now have their cake and
+eat it too, take the money from the Federal Government and then
+increase the property taxes, for example, in the city level, or
+the income taxes in the state level. And because of that
+provision that was placed, we're now seeing the opposite occur
+where the New York state legislature and the Governor are
+saying they want to further increase taxes and, you know, we
+know that that's already driving people out of the state.
+ I wanted to know what kind of impact you think that will
+have, and do you think that's something that should be
+revisited by Congress so that way, the burden is not further
+placed on the New Yorkers that live there?
+ Mr. Kudlow. Absolutely. I never understood the perverse
+incentives that money would be generated, cash from Washington
+would be generated to states on the basis of their higher
+unemployment rates, because that is an incentive to keep the
+economies locked down. And the whole point of this, as several
+have observed today, we've got to open up the economy and open
+up the schools. We've created, you know, very grave
+consequences for children, for parents, for the work force, for
+women, for minority groups.
+ We have got to get the lockdown ended. Let's open up
+everything. That's why I think the only good
+ [inaudible]. And the other point I'll make on New York
+City, look, I'm reading, I guess, this morning or yesterday,
+New York City--it's being proposed that New York City would
+have a 15 percent personal income tax. Is that--I mean, this is
+coming from Albany or the legislature? To me, that is just
+extraordinary, because the city is already lost lots and lots
+of people, one of the worst records in the country. Smart folks
+are not going to stand around and pay a 15 percent income tax.
+They're just not going to do it, and the devastation to the
+city's economy would be even worse than it already is, and New
+York City is, I regret to say this because I'm a lifelong
+resident. Mrs. Maloney is, in fact, my Congresswoman, and has
+been for a very long time, but the city has not been in good
+shape and a 15 percent tax rate would be awful.
+ I mean, some of these states have surpluses. Some of these
+states have surpluses, and they're still raising taxes. Now
+that has no macroeconomic sense in my judgment.
+ Ms. Malliotakis. And as you drive the wealthier New Yorkers
+out, obviously the middle class, working class are left holding
+the bag, and the burden gets placed on them. With regards to
+the CDC in opening schools, because it was mentioned earlier,
+that Republicans voted against the money for the schools.
+However, there was--$25 billion was the estimate of the CDC to
+reopen America's schools, and in the December package, there
+was $64 billion put in, which is more than enough. So only
+under a mismanaged government would it cost eight times as much
+than the original estimate to do what we're supposed to be
+doing here.
+ So, really, the burden has been--$64 billion was approved.
+It's been there since December. It's been sitting there, most
+of it unspent. We've given some to New York. New York has not
+fully reopened the schools, and so, do you really think this is
+an issue of more money needed or is it just an issue of these
+local municipalities doing their job and just reopening?
+ Mr. Kudlow. Well, I think it's an issue of reopening. I
+think it's an issue of ending the lockdown. I mean, look in the
+bipartisan packages, last April and last December, put hundreds
+of billions of dollars. I helped negotiate these bipartisan
+packages. Hundreds of billions of dollars were allocated to
+states for schools, for education. And what we're seeing--and
+one of the other members raised that--is in a lot of states
+around the country, the teachers don't want to teach. A lot of
+these urban teachers union, I regret to say--I'm not against
+teachers. I think it's the leadership that does the damage.
+ My wife and our two sisters-in-law were both all teachers,
+but the point I'm making is, they don't want to teach in the
+urban districts. The mayor of Chicago had to fight her own
+teachers union to get them to teach. The CDC has said many
+times, it is safe to teach even without the vaccine, but now
+the vaccines are proliferating.
+ So, I don't understand this. I think we have wasted a lot
+of money and I think too much spending is, you know, going to
+be an excuse to raise taxes and that tax increase is going to
+be devastating to this economy.
+ We could have a great recovery, we could have a great
+recovery if we limit spending, keep taxes low, keep regulations
+low, and keep energy portfolios large, not small. Then we have
+a terrific recovery, by far, the best in the world.
+ Chairman Clyburn. The gentleman's time has expired. The
+chair now recognizes Mr. Raskin for five minutes.
+ Mr. Raskin. Thank you, Mr. Chairman.
+ You know, I was amazed to see Mr. Scalise, the ranking
+member, reach back to last year's talking points when he tried
+to shift the blame for hundreds of thousands of American COVID-
+19 deaths from President Trump to President Xi in China, and
+the reason that they dropped that embarrassing tactic, you'll
+recall, is that Trump praised President Xi's performance and
+the Chinese Government's performance on COVID-19 37 different
+times, which is why I introduced multiple articles to that
+effect, including the many times Trump has praised China's
+handling of the Coronavirus pandemic.
+ The point is that Trump's lethal, recklessness, and
+incompetence in the COVID-19 crisis manifested in his promises
+that it would magically disappear by Easter or by summer
+vacation, and his hawking of quack medical cures like injecting
+yourself with bleach and his refusal to develop a nationwide
+strategy pitting the states against each other produced the
+greatest public health debacle in American history.
+ Now, when he was President, the Democrats still, despite
+all of his recklessness and malice and negligence, despite all
+of it, we worked with Republicans to pass four bipartisan
+relief bills that help prevent the economic crisis from
+plunging into a full-blown economic depression, but we couldn't
+even get a single Republican vote for the $1.9 trillion
+American recovery plan that is going to finally crush the
+disease and spread science and vaccination across the country
+and lift millions of people out of poverty and unemployment.
+ Now, Republican experts acknowledge that this economic help
+is badly needed. Just a few weeks ago, Mr. Kudlow interviewed
+former Treasury Secretary Steve Mnuchin, who called for more
+fiscal stimulus saying, quote: ``My preference would be to see
+a fifth bill, and then a sixth bill, if needed.'' Mnuchin
+explicitly rejected the argument that we suddenly can't afford
+to help impoverished struggling Americans, working class people
+who have been hit the hardest during COVID-19. He said, I felt
+all along we need to spend what we need to spend.
+ Professor Spriggs, do you agree with Trump's former
+Treasury Secretary Mnuchin that we need to spend what we need
+to spend in order to confront and transform this crisis?
+ Mr. Spriggs. Yes. And what we revealed is, how big the
+problem of inequality in this Nation is. We passed two bills in
+the spring. By December, that money had dissipated and the
+economy had gone back into a stall. That money had been
+necessary just to keep the economy afloat. We don't appreciate
+how deeply people in the bottom 20 percent have no liquidity
+and, therefore, have to have a lot of money pumped into them
+during these crises.
+ When we came out of the 2001 downturn, the biggest thing
+that was a drag was our ignoring the people at the bottom. This
+rescue plan that just passed, fortunately, pays attention to
+people at the bottom, so that we can keep their consumption up.
+ Mr. Raskin. Professor, the labor movement has always been a
+strong ally of small business. We couldn't get any Republicans
+to support the amazing small business provisions in the rescue
+plan, but now that we passed it, a number of our Republican
+colleagues are celebrating the value in it. For example, on
+March 10, Senator Roger Wicker tweeted about the strong support
+in the bill for independent restaurants, writing: ``This
+funding will ensure small businesses can survive the pandemic
+by helping to adapt their operations and keep their employees
+on the payroll.''
+ Do you agree that the American Rescue Act will help
+restaurants and the people who work in restaurants, Professor
+Spriggs?
+ Mr. Spriggs. Yes. This is one of the areas that had been
+slow to be able to get assistance. They had not had access to
+the PPP in the same way. And in Europe, they kept everyone on
+payroll. This is going to be an interesting experiment when we
+come out of this globally to see whether keeping people on
+payroll was the better way to do this. We, the United States,
+have very high unemployment rate compared to industrial
+partners.
+ Mr. Raskin. Great. We've got a lot more work to do. The Fed
+Chairman, Jerome Powell, warned in recent testimony that the
+economic recovery remains uneven, and far from complete and the
+path ahead is highly uncertainty.
+ Professor Stiglitz, in light of this uncertainty which
+still overhangs the economy, do you believe Congress needs to
+take additional steps to ensure a complete, strong, economic
+recovery, including investments in the Nation's ailing
+infrastructures, the roads, the highways, the rail systems,
+cybersecurity, and so on?
+ Mr. Stiglitz. Obviously, the pandemic has exposed a lot of
+the weaknesses in our economy. The extent to which the $1.9
+trillion will enable us to get back to near full employment is
+still uncertain. There are some who think we'll have an eight
+percent growth. But regardless of that, the need to address the
+problems that have been with us for so long--our inequality,
+the lack of infrastructure, the weaknesses in our healthcare
+system, the problems in our environment, all these need to be
+addressed, and they need to be addressed quickly.
+ Mr. Raskin. Mr. Chairman, finally, I think my time's up. I
+am just asking unanimous consent to submit a letter that was
+sent to Speaker Pelosi and Minority Leader McCarthy from 19
+different educational groups in the country requesting support
+for the American Rescue Act, so that we could reopen the
+schools across America, and it was signed by the school
+superintendents, the American Federation of Teachers, the
+National Rural Education Association, and so on, 19 groups
+representing schools all across America asking for us to reopen
+the schools with the American Rescue Plan. And I ask unanimous
+consent to enter this letter into the record.
+ Chairman Clyburn. Without objection, so ordered.
+ Mr. Raskin. And I yield back. Thank you.
+ Chairman Clyburn. Thank you very much for yielding back.
+ All time has expired for questions. I do not see the
+ranking member. I see his space--there he is. The chair would
+now yield to the ranking member for any closing statement he
+would like to make.
+ Mr. Scalise. Again, I want to thank the chairman for having
+the hearing, as well as our witnesses for talking about some of
+the challenges we're facing as a Nation. I think Mr. Kudlow's
+points were well-heeded that, as we've seen our economy
+starting to bounce back, the last thing we need to do are
+things like raise taxes, put heavy regulations, go start
+punishing industries in America because that is what would slow
+down our recovery. We don't need to look very far to see where
+some states have done it much better than others.
+ Again, I would like this committee to put some time into
+looking at what states have done well, so that we can try to
+replicate it, so that we can try to encourage other states as
+they're getting these big windfalls of money, and I think we've
+seen states like California will get over $40 billion when they
+have a $10 billion surplus. Not sure if that's the best use of
+money when we're borrowing this money from our kids to give
+checks to states that are already experiencing surpluses, to
+give checks to felons in prison. No one's explained why that
+has anything to do with COVID relief.
+ Even giving money to school systems when Ashley Hinson, my
+colleague from Iowa, had a bill that would say, if schools get
+new money, they have to use it to actually reopen their
+schools. I thought that was what we were all about, except that
+the majority blocked those kinds of bills from moving forward,
+or those kind of amendments from even being offered.
+ So it's one thing to say you want to reopen schools, but
+when you don't even bring an amendment, or allow us to bring an
+amendment that would dedicate the money to reopening schools,
+are you really for reopening schools? So I would like to see us
+continue to focus on being targeted at helping where problems
+exist, helping our small businesses, helping families who are
+struggling; not sending checks to everybody, but sending checks
+to people who are actually in need, especially not sending
+checks to felons who are in prison. We're already paying for
+their costs, and they're paying their debt to society. They
+don't deserve a check from the taxpayers that are borrowed from
+our kids.
+ Again, the states that have done it well, they're examples
+all across this country. Where states did things right, let's
+let those successes be highlighted. Let's not replicate those
+mistakes and states like New York where they still are trying
+to cover up the data on deaths, why were there so many deaths?
+Because Governor Cuomo violated the guidelines that President
+Trump's administration put out there, forced the seniors to go
+back into the nursing homes with COVID, and even banned the
+nursing homes from testing for COVID, and then, unfortunately,
+we saw thousands of deaths. Those families need answers. We
+ought to be focused on giving them those answers.
+ So, hopefully, we focus on helping people in need, not just
+borrowing money for our kids, to give money to states who are
+experiencing surpluses because they happen to be run by
+Governors who shut things down and decimated their economy.
+ With that, I would yield back.
+ Chairman Clyburn. Thank you very much. And let me close
+this hearing by thanking our witnesses for being here today. We
+appreciate the tremendous expertise you have shared as Congress
+works to tread a path for a strong and equitable post-pandemic
+economy.
+ Today's hearing made clear that economic hardships caused
+by the Coronavirus pandemic have disproportionately impacted
+Americans who were already vulnerable. This includes low-wage
+workers, women, and Black and Latinx Americans.
+ Today's hearing also made clear that there are steps our
+government must take now to ensure that the economic recovery
+does not leave the most vulnerable behind, so that Americans
+can obtain the assistance they need, while we work to vaccinate
+Americans and contain the virus. Imagine the success of the
+American Rescue Plan, I am hopeful that the administration will
+follow the recommendations in today's letter that I've made
+reference to earlier, so that we can chart our progress toward
+a more inclusive economy with hard metrics.
+ The Select Subcommittee must conduct appropriate oversight
+so that Congress can move from rescue to recovery efficiently,
+effectively, and equitably. This starts with bold action to
+invest in our country's infrastructure through these
+investments we can create good-paying jobs in all communities,
+building the infrastructure we need for a more prosperous and
+equitable future.
+ In the years following the financial crisis in 2008, we
+witnessed how an economic recovery can leave communities behind
+and exacerbate inequities, not to mention how uneven and
+inequitable, the country's response was after the Great
+Depression and World War II. As we climb out of another
+economic crisis, we must have both an opportunity and an
+obligation to ensure that we have the country's response to
+this post-pandemic economy working for all Americans.
+ We must heed the lessons of the past and the valuable
+insight from our witnesses here today to ensure that we build
+back better.
+ With that, without objection, all members will have five
+legislative days within which to submit additional written
+questions for the witnesses to the chair, which will be
+forwarded to the witnesses for their response.
+ This hearing is now adjourned.
+ [Whereupon, at 1:14 p.m., the committee was adjourned.]
+
+ [all]
+