Schumer Floor Remarks On Tomorrow’s State Of The Union Address And Schumer’s New Proposal To Address The Scourge Of Stock Buybacks And Help American WorkersFebruary 4, 2019
Washington, D.C. – U.S. Senator Chuck Schumer today spoke on the Senate floor regarding President Trump’s Upcoming State of the Union address – the state the Trump economy, our health care system, the Trump administration, and the president’s foreign policy. He also spoke on his and Senator Bernie Sanders’ new plan to address the scourge of stock buybacks and encourage productive investments in American workers. Below are his remarks, which can also be viewed here:
Tomorrow, President Trump will belatedly report on the State of the Union before a joint session of Congress. The reason for the delay, of course, was the thirty-five-day government shutdown, which President Trump precipitated as an attempt to extract taxpayer money for a wall he promised Mexico would pay for. A pointless exercise if there ever was one. A pointless exercise that punished hundreds of thousands of innocent public servants and took billions of dollars out of the economy.
So we are all so glad the government is back open and federal workers are back on the job, getting paid. But the recent government shutdown speaks to the fundamental uncertainty about the state of our union.
Tomorrow, the president will say – predictably – that the state of our union is strong. But the truth is, the state of the Trump Economy is failing America’s middle class, the state of the Trump Healthcare system is failing American families, and the state of the Trump Administration is embroiled in chaos and incompetence. The state of the president’s foreign policy is incoherent, inconsistent, cynical in the extreme, and has undermined American power and our national interest.
So in sum, the state of our union is in need of drastic repair.
Let’s begin with the state of the Trump Economy. Corporate America has cashed in on the Trump tax bill, but Working America has been left behind. Since the tax bill passed over a year ago, corporations announced plans to repurchase more than $1 trillion of their own stock – a practice which benefits corporate executives and wealthy shareholders but not many average workers. Meanwhile, Reuters reports that the tax bill had no major impact on whether businesses made capital investments or hired more workers. The very wealthy, the big powerful corporations, they fed this line: “Help us and everyone will be helped.” Our Republican friends swallowed that hook-line-and-sinker, but the only good news about this tax bill that passed last year is it showed what a false promise that was. Billions, a trillion for the wealthy, through stock buy-backs and other things. Virtually nothing for American workers.
The president promised, remember this, his tax bill would deliver a $4,000 raise to the average household. The reality is that wages for average workers have remained quite stagnant. Workers are making less today than they did in 1973 after adjusting for inflation.
The effect of the Trump Economy has been a deepening of the inequalities and wealth disparities that threaten the future of the middle class, and the future of the American dream. The rich are getting richer, the middle class is being hollowed out, that’s the state of the Trump Economy.
How about healthcare? The state of our healthcare system is dire. Premiums are higher than they should be, out-of-pocket costs are higher than they should be, and the uninsured rate is once again rising – the result of relentless sabotage by the Trump Administration and Congressional Republicans.
The Trump Administration expanded junk insurance plans, supports a lawsuit that would end protections for Americans with pre-existing conditions, all but eliminated programs that help people find the right coverage for themselves and their families, and continues to routinely propose and approve policies that cause people to lose coverage and health insurance markets to spiral into chaos.
Any time any one of us goes home, just have to be home for a short time and you’ll hear people with horror stories. How they had a normal procedure and they’re told that this doctor was not covered or that procedure is not covered, and it’s several thousand dollars out of their pocket which they cannot afford. Or were told one other horror story or another. A cost of something like Insulin went way through the roof, when it should be available because it does so much for those on diabetes. Story after story we hear, and those aren’t isolated. That is the state of the Trump Healthcare system.
The past two years have been a wholesale assault by the Trump Administration on Americans’ healthcare. I doubt President Trump will mention that tomorrow, but if you ask American families the number one problem they face, it’s the cost of good healthcare which seems more and more out of reach. So, the state of the Trump Healthcare system: dire.
What’s the state of the Trump Administration? The state of the Trump Administration is chaos. Underqualified staffers cycle in and out of our governments most powerful positions. Cabinet secretaries are fired over Twitter. Hundreds of important positions are unfilled or covered by someone in an “acting” capacity, including the chief of staff, the attorney general, the defense secretary, the interior secretary, the OMB Director, and the EPA director.
Hardly a week goes by without news of a high-profile firing or resignation from the White House. President Trump publicly belittles people working for him. That’s no way to incent people to work hard. An NPR study found that the Trump Administration has had the most cabinet turnover of any administration in more than a century. Three cabinet secretaries have been fired or resigned in scandal (Price, Zinke, Pruitt). One resigned in protest – probably the best cabinet member we had, General Mattis – who couldn’t take Trump’s zigzags on policy and his lack of sharing information. Another had his nomination pulled before it could be considered (Puzder), which is not altogether rare for this president. Since the start of the administration, more than 40 of President Trump’s nominations have been withdrawn. They don’t know how to vet. The President makes these off-the-cuff decisions based on how someone looks, and we all pay the price. The state of the Trump Administration and how he runs the government: chaos.
The continuity and effectiveness of American government has been deeply compromised by the turmoil and turnover at the White House.
Now, finally, the state of the Trump foreign policy – woefully backward. From Brussels to Beijing, President Trump has alienated our allies and emboldened our adversaries. Russia, China, North Korea – three of the worst and least democratic countries on earth, the countries that pose the greatest threat to America – they are treated with kid gloves while our allies like those in NATO get harsh words from this president. It’s inside-out. It’s topsy-turvy. It’s what his instincts and gut show, and they are totally wrong and without fact, without knowledge, without understanding history. And too often, the president has regrettably failed to champion free speech, freedom of the press, humanitarian rights, democratic values. Dictators and strongmen are ascendant in the president’s circle while allies are pushed to the fringe. Yes, the state of President Trump’s foreign policy is woefully backward.
Now, concerning the speech tomorrow night, the president won’t talk like this of course. What I expect the president to do is to ignore reality and spin his own fiction. A looming question is just how many falsehoods, distortions and made-up facts will appear in the president’s speech. How many times will he say something is “fake news” because it’s true. He doesn’t like to hear the truth. But Democrats, we’re not focused on the president’s rhetoric, his usual boasts or bluster or blame – so characteristic of this administration. We are going to continue fighting for American workers in this unequal economy, fighting for American families struggling to afford quality healthcare, fighting to bring accountability and stability to this government – sowing chaos – and fighting for a rational foreign policy that promotes both our interests and our values.
It is sad, the State of the Union. And let me just say, the number one reason the State of the Union has such woes is the president. I hope he changes in the next two years.
Now, one other issue. I mentioned earlier that one of the major consequences of the Trump tax bill was the explosion of stock buybacks. In 2018 alone – just 2018 – U.S. companies announced plans to repurchase more than $1 trillion of their own stock, a staggering figure and the highest amount ever recorded in a single year.
When companies buy back their own stock, it boosts the earnings of wealthy shareholders and executives, but does little for average workers. The vast majority of Americans don’t own stocks. In fact, the top 10 percent of America owns 85 percent of stocks total. And when corporations direct so much of their resources to buy back shares, they restrain their capacity to reinvest profits in R&D, equipment, higher wages, medical leave, pensions, worker retraining and more.
I would like to see a study of how many companies bought back their stocks while leaving pensions underfunded. Telling the workers they promised they would have a good life in retirement and instead enriching themselves, the corporate executives, and their top shareholders. That’s what is happening.
Think about this: between 2008 and 2017 – the last 10 years – 466 of the S&P 500 companies did stock buybacks totaling how much? Four trillion dollars. That’s equal to 53 percent of their profits. More than one out of every two dollars in profit just went to stock buybacks. Not improving our economy. Not helping workers. Not helping communities. And then another 30 percent went to dividends. Same thing. When more than 80 percent of corporate profits are going to stock buybacks and dividends, something is really wrong in the state of Corporate America and the state of our economy.
No it wasn’t always this way. From the mid-20th century up until the 1970s and even into the 80s, American corporations shared a belief that they had a duty not just to their shareholders but to their workers, their communities and their country, which helped them grow and prosper with our schools and our roads and everything else. That created an extremely prosperous America – for Corporate America – but also for American workers and the broad middle of the country. But over the past several decades, workers’ rights have been diminished, and corporate boardrooms have been obsessed – slavishly – to shareholder earnings. The only people they seem to want to help are their shareholders. I hear it. I talk to CEOs and they say, “Well, maybe it’s the wrong thing to do this or that, but I have to just go for the shareholder.” And the shareholder often has only short-term interest.
The explosion of stock buybacks is perhaps the most pernicious way that this new corporate ethos manifests itself.
So my friend and colleague Senator Sanders and I have written a joint op-ed in today’s New York Times outlining how we propose to curb the overreliance on stock buybacks and instead encourage Corporate America to make more productive investments that help workers and the communities they are in. We are planning to introduce legislation that will prohibit a corporation from buying back its own stock unless it invests in workers and communities first, including doing things – there will be a list – like paying people $15 an hour, providing seven days of paid sick leave, offering decent pensions and more reliable healthcare, putting money into training workers, and providing equipment. The kinds of things we always thought American corporations would do and now do scantily when compared to how much they do in terms of buybacks.
I know many of my Democratic colleagues have focused on this issue, included Senators Baldwin and Booker, Casey and Warren, Schatz and Gillibrand. We all believe that this Congress, this Senate should vote on legislation that demands that corporations commit to addressing the needs of their workers and communities before the interests of wealthy shareholders.