Washington, D.C. – U.S. Senator Chuck Schumer today spoke on the Senate floor regarding stock buybacks and net neutrality. Below are his remarks which can also be viewed here:
Mr. President, when the Republican Majority forced through a $1.5 trillion tax cut to big corporations and the richest Americans, a big question was: what will those companies do with the money? Roughly $1 trillion of that $1.5 trillion bill was aimed at the big corporations.
Republicans promised that corporations would reinvest the savings from the tax bill, stimulating jobs and economic growth.
Democrats warned that corporations would do what’s best for themselves, not necessarily what’s best for workers or the economy. There’s often a dichotomy as we have learned over the years.
It’s been only a few months since the Republican tax cut was signed into law. And while a few corporations here and there have announced annual bonuses, a whole lot of hoopla from the president and the Republicans, but we don’t hear a peep now that they’ve been announcing an avalanche of corporate stock buybacks. An absolute bonanza from corporate leaders and for wealthy shareholders.
Over $200 billion in corporate buybacks have been announced since January, putting corporations on pace to spend over a trillion dollars this year buying back their own stock.
This morning, the oil and gas giant Chevron announced that it expects to restart its share repurchasing program since halting it in 2015. Why? Because they just reaped $2 billion in savings from the Republican tax bill. Chevron told the Houston Chronicle last week that it was planning no major changes to the benefits given to its workers, let me repeat that, Chevron, no major benefits to its workers but huge stock buybacks, huge. Is that what America wants? No, but that’s what’s happening as we predicted with this tax bill.
The Chevron example is not alone unfortunately, my fellow Americans. An analysis by Just Capital found that just 6% of the savings companies got from the tax bill are going to [employees], while 58% are going to shareholders in the form of dividends, share buy-backs or retained earnings.
The problem is that buybacks don’t really help workers or average Americans. They don’t really grow the economy. In fact, the money corporations spend on buybacks crowds out investment in the things that do help workers and help our economy: research and development, new equipment, new hires, and better pay for employees. But those things, the benefits are in the long term. The corporate CEO, the board, the leaders of the corporation, the big ones, get an immediate benefit when they buy back stock. The stock goes up, shareholders are happy, workers and America gets no benefit.
What buybacks accomplish is the funneling of even more money to corporate executives and wealthy shareholders. Buybacks don’t help the American workers, they don’t grow the economy. By taking stock off the market, corporations inflate the value of their stock holdings. Who holds all this stock? Not average Americans. The richest 10% of America owns 80% of the stocks. That’s including pension funds and everything else.
So when corporations goose their stock, those benefits are going to tiny piece of the pie – the upper crust.
This is the legacy of the tax bill. Further benefits to the wealthy, incentives to raise corporate pay and stocks. No real help. Minimal real help for workers.
Just as Democrats predicted, the Republican tax bill has unleashed a tsunami of corporate backslapping, while working Americans get left behind.
Now, on an entirely different matter. Yesterday, Washington became the first state to institute its own net neutrality requirements after the Republican-led FCC voted to repeal net neutrality in December, helping the big ISPs, hurting the average consumer. Typical of what this Senate on the Republican side and what our president has been doing. Over half of all states have similar legislation pending in their state legislatures.
These states are rightly concerned about what the end of net neutrality may mean for their residents.
When the Republican-led FCC repealed net neutrality, they handed the large Internet Service Providers, your cable company, all the cards. They said do what you will with the internet. ISPs could charge consumers more for faster service, or start segmenting the internet into packages, forcing consumers to purchase faster times for their favorite websites.
Big companies could pay to get faster internet service while startups, small businesses and average Americans are left in the slow lane. High-demand websites that offer streaming television, sports, and movies could be slower if you don’t pay up. Public schools who don’t pay for premium service could be put at a significant disadvantage. In rural America, where there is less competition, ISPs will wield even greater power to raise prices on consumers without fear of losing business.
An Internet without net neutrality is a tale of two Internets, where the best Internet goes to the highest bidder, those with the money, and everyone else loses.
Democrats want to keep the internet free and open, like our highways – accessible and affordable to all Americans, regardless of your ability to pay, where you live, or the size of your business. No slow lanes. No paying for internet packages, like cable. No one set of rules for big corporations and another for everyone else. Every American should be able to affordably and easily access the internet. That’s what Democrats believe.
I’m glad Washington State has already taken action to reinstitute net neutrality, but we need to do it across the country. Democrats have put together a CRA that would undo the FCC’s decision and put net neutrality back on the books. And as you can now Mr. President we will be able to bring that to the floor. Every Democrat has signed on, but only one Republican, Sen. Susan Collins. I say to the other fifty Republicans who are in this chamber. Whose side are you on? Whose side are you on? The big cable providers or the average consumer who depends on the Internet? This vote will determine that.
I urge all Americans, particularly our younger people to contact their Senators and demand they sign up to save the Internet.
One final thing, Mr. President. President Trump campaigned as a populist. But what he’s been doing and our Republican colleagues have been doing over and over and over again -- whether it’s what they tried to do on health care, whether it’s the tax bill, whether it’s net neutrality, or anything else -- they want to help the wealthiest and most powerful. They’re the ones who back them and fund their campaigns. That’s wrong. That’s not what America wants.
The only good news I can see out of this is that Americans are realizing this. Over seventy percent of people believe President Trump favors the wealthy over the middle class, despite how he campaigns and despite his occasional rhetoric and tweets. They’re realizing that the Republican Party seems to favor them, it’s just that Democrats, whether we had the presidency or the House majority and Senate were able to block these things until now. Now, the wealthy and powerful are getting far too much and I believe my Republican colleagues will reap the whirlwind.