Oregon Fourth District Congressman Peter DeFazio addressed delegates and guests Sept. 28 at the Oregon AFL-CIO’s biennial convention in Eugene, Oregon. It was the third and final day of the meeting of delegates to the state’s 112,000-strong federation of labor unions.
Some say the economy is all doom and gloom. But we’ve got to look again. Just think about it:
- CEO pay at the Fortune 500 is up over 10 percent; that’s about $700,000 for each of those executives struggling to make ends meet.
- Bonuses by the big Wall Street houses this year will again average well into the six digits.
- Corporate profits are up 80 percent.
- Corporations are sitting on over $2 trillion of cash.
- And millionaires and billionaires are enjoying the lowest effective tax rate in 100 years.
Yep, the view at the top is pretty rosy.
Partially in response to this, in response to the fact that the president wants to decrease the deficit and invest at the same time, he proposed something last week called the Buffett tax [editors note: named after billionaire Warren Buffett, who is calling for such a tax.] It would ask billionaires and millionaires and speculators, those who make most of their money unearned — as opposed to wages and salary — that they shouldn’t pay a lower rate of tax than a teacher, an electrician, or a checkout person at Albertsons. That seemed fair to me.
So I started listening to the Republican response. They said it’s class warfare. It’ll hurt job creation. It won’t raise money. Those are arguments are very telling. I have a few direct quotes:
“This is really the Dr. Kevorkian plan for our economy. It’ll kill jobs, kill businesses, even kill the higher tax revenues the suicidal tax increasers hope to gain.” Another representative said, “Class warfare may win political campaigns, but it doesn’t spur economic growth. Raising the capital gains tax may garner political capital but not create any jobs.” And then finally, of course, from the Speaker [of the House]: “We don’t have a revenue problem. We have a spending problem.”
Unfortunately, those are all quotes from 1993, when Bill Clinton proposed that we raise the taxes on the top bracket of people in the United States of America — those who have done the best and get the most advantage of our system. And do you remember the result? The result was we balanced the budget. We paid down debt. They paid their fair share of taxes, and we had 3.8 percent unemployment because we could afford to invest in this country.
If those are the bad old days, I want to go back.
[Today it’s the] same argument, the same script, and they’re wrong again.
You know, we have the economy that tax cuts and deregulation will give us. We’ve been cutting taxes for 10 years since the Bush tax cuts; $5 trillion of debt has been accumulated by cutting taxes, particularly on those at the very top. And look at what it’s done for our country, look at the unemployment rate. Is it working? No, it’s not working. Tax cuts do not put people back to work.
Deregulation actually nearly destroyed our economy and the world economy — the deregulation of Wall Street. It’s just amazing to me that after what happened on Wall Street anybody could say they’re too regulated. Really? Let’s see. From the 1930s until about 2000 we had something called the Glass-Steagall Act that separated the gamblers (the investment bankers) from the commercial bankers. That was repealed. And when the gamblers took over the commercial banking industry and started gambling with people’s deposits, and then lost a bunch of money with bad bets, suddenly they turned to the government to bail them out and save Wall Street. Well, my opinion is we should have let a few more of them go down. I voted against the bailout of Wall Street, and we’ve got to put some of them in jail. [applause]
We did adopt a modest re-regulation of Wall Street last year, not anywhere near what I would do, and the Republicans have done everything they can to stonewall that. They say that will hurt our economy.
Just think about all the productive things that go on in Wall Street — these people that trade one stock a hundred times in a minute with a computer. That creates stable funding for our corporations, for the growth of the country? Or the people that speculate on fuel: Even the Exxon/Mobil CEO says probably 75 cents of what you’re paying at the pump today you’re paying to people on Wall Street who are speculating on gasoline — something that wasn’t allowed before deregulation. We need to re-regulate these reckless practices that are dragging down the real economy of our country. [applause]
[Congressman] Darrell Issa from California, the chair of the Government Oversight Committee, is holding a hearing on “job-killing” regulations. Now, I’m not making this up. This is true. The Republican committee members say, and this is from a news report, that the free market should handle giant pythons … which they identify as an important job creator in the snake-breeding industry, any tampering with which would devastate a small but thriving sector of the economy. One witness invited to testify told lawmakers that the rules [regulating pythons] threaten as many as a million law-abiding American citizens and their families and destroy jobs. You see, they’ve got a little problem in Florida. Burmese pythons are over-running the Florida Everglades. And they say they could live all the way up the Oregon Coast. But the Republicans say this is one of their key seven regulations they want to repeal to put people back to work in this country. … This is how crazy they are on this stuff.
Turning back to the real world, another form of deregulation we’re suffering from is so-called “free trade.” Free one-way trade into the U.S., not free reciprocal trade, or fair trade. You know, there’s a scandal about the Solyndra company in California that went bankrupt making advanced photovoltaic cells. They may have had internal problems, but the real reason they went bankrupt is because the Chinese have undercut the market with their cheap photovoltaic cells. The Chinese have adopted laws that say you can’t sell photovoltaic cells in China unless they’re made by a Chinese company in China. But here in the U.S., we allow them to come in, undercut our market, bankrupt firms, and take over a whole new industry, like we have in industry after industry. It’s time to stop these job-killing free trade agreements and retaliate against this. [loud and sustained applause]
The president has led the way with the Buffett tax. It’s a good start. Apparently according to a book that just came out, a sort of tell-all book by [Ron] Suskind, the president also supported the concept I’ve put forward, of a transaction tax. Well, what is a transaction tax? It’s something we had in this country from 1916 to 1966. It was a modest tax — two-tenths of a percent on every transaction on Wall Street. Now, back when Congress had more guts and was less influenced by special interests, at the height of the Great Depression, FDR went to Congress and said, “I need money to rebuild this country and put people back to work. Where can we get some money?” Congress doubled the tax, to four-tenths of a percent per transaction on Wall Street. Wall Street said it’s the end of capitalism; we’ll all leave the country. Of course, the stock market only went up from there, because the real economy got fixed and they followed the real economy up. Well, that tax expired in 1966.
It’s time to re-impose the tax, in a new vein, and we call it the speculator tax. I’m working closely with the national AFL-CIO on this. We hope to put forward our proposal this month, because actually the European Union is looking at a similar tax. The British already have one. And I haven’t noticed all the investors have left Fleet Street in London to go live in Third World countries where they have to pay half a percent per transaction. Tom Harkin from Iowa and I are going to propose a very modest tax. We haven’t set a percentage yet; probably as little as one-tenth of 1 percent.
But because of the unbelievable volumes created by speculators and computer trading, that could yield a couple hundred billion dollars a year. And economist like Joe Stiglitz and others who I follow say it would also have the effect of reining in this wild speculative activity, and spikes in the stock market — driving up and down the price of goods or fuel for their own advantage. We need to look at steps like that to help raise money to pay for rebuilding the real economy and not just continually coddle the Wall Street economy.
We need to let ALL the Bush tax cuts expire. [loud and sustained applause] Done with that, been there, done with that.
And we need to invest. Yeah, we’ve got a deficit, and I want to deal with it. But if we do these modest steps — asking the wealthiest among us to pay their fair share, letting the Bush tax cuts expire, imposing a modest tax on speculative activity on Wall Street — we will have the resources we need to rebuild our crumbling infrastructure.
Those who work in construction know it well: 150,000 bridges on the national highway system need repair or replacement. With Buy America [requirements], that’s American steel, that’s American jobs, that’s making country more efficient. We have 40 percent of the pavement of the national highway system that doesn’t just need an overlay — it needs to be dug up and the whole thing redone. We have an $80 billion backlog in our major cities in our transit systems — our 19th and 20th century transit systems — to bring their capital equipment up to date. Again, think of the jobs: Oregon Iron Works makes street cars. American Bridge, down in Reedsport, makes bridges.
These are jobs for American workers. A lot of them would be union workers. They would be Davis-Bacon [prevailing wage] wages, good wages and benefits, and we would make our country more efficient, more competitive with he rest of the world, solve our congestion problems, stop wasting fuel, stop the [vehicle] repairs that are caused by all the problems with this infrastructure. We must do that. We need to do that. For a modest amount of money — for one quarter of the cost of extending the Bush tax cuts — we could put three and a half million people to work rebuilding our infrastructure. [applause] How many people did those tax cuts put back to work? And if you’re unemployed, guess what? You don’t get a tax cut.
So the investment is necessary, and it’s not just in infrastructure. Somehow the current in Washington DC, with the Republican majority in the House, says deregulation, tax cuts, and then laying off police, fire, teachers … that will give us a booming economy. Now, how does that work again? Actually they’ve killed more jobs than they’ve created this year. I don’t know that they’ve created a single one. But they’ve certainly killed a bunch of jobs. And we need to make those investments, in not just our public physical infrastructure, but our public health infrastructure and our educational infrastructure.
If we don’t educate the next generation of American workers well, we aren’t going to be able to compete in the world. They aren’t going to be prepared for the work and the challenges of the new workplace. If we don’t have basics like police and fire … what kind of country are we when we can’t afford those sorts of things?
It breaks my heart when I saw a story this summer. The Lane County sheriff is down to 20 hours a day, and there was a little problem just outside of Springfield, where I live. And they called 911, and they said, “We’re sorry, it’ll be four hours, because there’s no deputy on shift.” Four hours before we can respond. What kind of country is that?
I mean, the rich don’t care. They’ve got private security. They don’t care about congestion: They fly over it in their helicopters and in the back seat of their chauffeur-driven limousines. They don’t care about our nation’s aviation infrastructure: They get in their private jets and go off to their private vacation places with all their friends.
That’s not a vision for the majority of people in this country. Unfortunately, that’s the vision that’s been dominating in Washington DC. And it’s time for it to end. It’s time for a government that meets the needs of all the American people, that helps give all of us a shot at the American Dream. And that’s got to be where you come in.
This next election is going to be a mess. We deregulated one other thing. Well, we didn’t deregulate it; the radical activist right-wing Supreme Court deregulated it. They deregulated campaign finance. They overturned a hundred years of precedent and said that not only are corporations people, and not only is money speech, but corporations can secretly contribute and run campaigns.
I had a little experience with that. I had one jerk from Wall Street spend $750,000 personally against me. Now, he didn’t even miss it, because he spent more than that on a model train, according to news reports. But to me, that’s a lot of money.
But that’s going to be repeated time and time again against progressive Democrats, against labor Democrats, people who care about the working people of this country. They are going to come after us. If they can come after you in the Fourth District of Oregon … my friend Bruce Braley [Iowa Democrat and founder of the House Populist Caucus] and I, and others who are part of the Populist Caucus and the Progressive Caucus, they’re gonna go after everybody everywhere, and we’re gonna need you.
We’re gonna need you as we always have, to knock on doors and make phone calls. But we’re also going to have to ask that the AFL-CIO begin to fight back in this same game. You can be outspent two-to-one, maybe three-to-one, if you’ve got good values, and still get elected. But get up to four- and five-to-one, and you’re going to end up with the best Congress money can buy, and that’s a disaster for the future of this country.
So we’ve all got to get energized. We’ve all got to fight back. We’ve all got to get ready for this next election. I’m looking forward to your support. Thank you very much.