From Rescue to Recovery: Building a Thriving and Inclusive Post- Pandemic Economy, House hearing transcript (March 17, 2021), GovInfo CHRG-117hhrg43985, PDF
Summary
The House Select Subcommittee on the Coronavirus Crisis heard testimony on building a post-pandemic economy at this March 17, 2021 hearing. Asked by Chairman Clyburn whether the economy could have been counted on to recover on its own had Congress not enacted the American Rescue Plan, Professor Stiglitz answered “No,” adding that there had already been scarring. Ranking Member Steve Scalise said CBO had projected over 4.5 percent growth without the $1.9 trillion, and Larry Kudlow, former National Economic Council Director, said the economy may grow at eight percent this year and that “The key is opening the economy.” William Spriggs of the AFL-CIO and Howard University also testified.
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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
(
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 Minority
Columbia 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., Georgia SCOTT FRANKLIN, Florida
JOHN P. SARBANES, Maryland JAKE LATURNER, Kansas
JACKIE SPEIER, California PAT FALLON, Texas
ROBIN L. KELLY, Illinois YVETTE HERRELL, New Mexico
BRENDA L. LAWRENCE, Michigan BYRON DONALDS, Florida
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 Minority
CAROLYN B. MALONEY, New York Member
NYDIA M. VELÁZQUEZ, New York JIM JORDAN, Ohio
B ILL F OSTER, Illinois M ARK E. GREEN, Tennessee
JAMIE RASKIN, Maryland NICOLE MALLIOTAKIS, New York
RAJA KRISHNAMOORTHI, Illinois MARIANNETTE MILLER-MEEKS, Iowa
(II)
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.
(III)
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 mil-
lion 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 Ameri-
cans 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 suf-
fered greater economic harm than men.
Last summer, former chair—Fed Chair Ben Bernanke and cur-
rent Treasury Secretary Janet Yellen testified before this com-
mittee 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 pan-
(1)
2
demic. This is encouraging news. But our economy has still not re-
placed roughly 10 million jobs that existed last year.
And Fed Chair Jerome Powell has cautioned that the official un-
employment 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 over-
all unemployment rate in February was 6.2 percent, the rate for
White Americans stood at 5.6 percent, while the rate was 8.5 per-
cent 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 ur-
gently 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 econo-
mies 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 Manage-
ment 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 eco-
nomic inequities.
To succeed in building a strong and inclusive post-pandemic
economy, we must, first and foremost, invest in our Nation’s infra-
structure, 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 invest-
ment has broad support across the country from Democrats, Repub-
licans, and Independents. Every member of this committee rep-
3
resent 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 pov-
erty 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 com-
munities. 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 sustain-
able 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 inves-
tigations on school reopenings, fundamental health and drug addic-
tion 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 spread-
ing 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 com-
mittee, this Select Subcommittee should be leading—the leading
voice in Congress educating the American people that some Gov-
ernors managed their states dramatically better than other Gov-
ernors. And we could be sharing those best practices, which, by the
4
way, those best practices in the states, these incubators of democ-
racy 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 ori-
gins of the pandemic and why,’’ close quote. Other voices from both
the left and the right have raised the same concerns. But the si-
lence 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 let-
ter 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 ini-
tiated 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 peo-
ple 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 in-
volved 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 si-
lence 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.
5
A year into this pandemic, we know many cities made dev-
astating mistakes on school closures. Back in March and April of
last year, maybe the mistakes then would have been understand-
able, 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 ac-
tually spend this money and get kids back in the classroom. Unfor-
tunately, 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 class-
room, 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 busi-
nesses 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 crit-
icism, 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
6
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 shut-
downs, 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 state-
ment. 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 hear-
ings.
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 im-
portant it is. But for some reason, my Republican colleagues re-
fused 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 hear-
ing, 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 Na-
tional 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.
7
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 affirma-
tive.
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 PRO-
FESSOR, COLUMBIA UNIVERSITY, NOBEL LAUREATE IN ECO-
NOMICS
Mr. STIGLITZ. [Inaudible] I would like to begin by congratulating
Congress and the administration on what they have already accom-
plished.
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 dis-
cussing 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 in-
crease 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 re-
sulted.
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 Govern-
ment 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 bet-
ter: 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—
8
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 pro-
gram 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 invest-
ments 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 ad-
dressed in future legislation. First, I would have been happier if
some of the key provisions, such as extended unemployment insur-
ance, 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 auto-
matic stabilizers.
Second, many of the actions need to be made permanent. For in-
stance, those related to reducing child poverty.
There’s so much to do for a truly strong resilient, just, and sus-
tainable economy. And let me just list a few of those issues very
briefly.
A fair and better designed tax system could close loopholes, en-
hance economic efficiency, promote growth, and reduce the admin-
istrative 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 par-
ents’ 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 af-
ford 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.
9
Before concluding, I would like to say a word about the macro-
economics 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 en-
suring 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 par-
ents. 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 Mem-
ber Scalise, for this invitation to give testimony before your sub-
committee today on the issue of rebuilding America’s economy in
the wake of the novel Coronavirus. I am happy to offer this testi-
mony on behalf of the AFL–CIO, America’s house of labor, rep-
resenting 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 ad-
dressed 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 inequal-
ity 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 en-
sure 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 lack-
ing resilience during economic downturns. Addressing those dis-
parities is very expensive.
10
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 re-
solved the debt of that conflict having higher marginal tax rates on
high incomes, pursuing full employment policies to keep the econ-
omy 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 edu-
cation.
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, Mis-
sissippi, 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 in-
cludes 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 par-
ticipation 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 pri-
vate-funded matter. It has a disproportionate impact on Black fam-
ilies 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
11
that includes workers in rural areas who must have access to ade-
quate 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 inequal-
ity 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, sig-
nificant rollback of regulations, energy independence, and also
tough and fair trade policies, particularly with China, that pre-pan-
demic, in the first three years before we got hit by this awful catas-
trophe, we had a broad-based inclusive economic growth rate, a re-
surgence and renaissance of the economy, which middle and lower-
middle income folks did better than upper-income folks by a signifi-
cant degree. And minority groups, be they African Americans, His-
panic 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 story-
book.
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 mil-
lion 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 per-
cent raise in net wealth. Poverty rates for African Americans, His-
panic Americans, Asians, women reached their record low numbers.
Inequality declined dramatically. All this was a complete reversal,
12
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 un-
employment 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 over-
regulated economy, if we end fossil fuels and end energy independ-
ence, 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 bipartisan-
ship 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 larg-
est 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 any-
thing else, work requirements have been decimated in this bill, and
people want to make that permanent. That goes against what Clin-
ton 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, gentle-
men, I think the private enterprise economy is going to deliver the
goods for all Americans far better than a top-down, heavy govern-
ment, 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.
13
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, exac-
erbating 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 pe-
riod 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 oth-
ers 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 unemploy-
ment 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 pe-
nalizes 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 re-
cover. 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.
14
Chairman CLYBURN. Well, thank you very much.
I’ve got 25 seconds. I’m going to yield back to the ranking mem-
ber.
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 econ-
omy back on track. We have seen some really strong indicators al-
ready, 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 ex-
pressed about that. But one of the people who expressed real con-
cern 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 can-
celing 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 ad-
dress 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 recog-
nize, 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 warm-
ing 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
15
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, re-
ducing 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 nat-
ural catastrophe effect. The pandemic is different from the Great
Recession or the Great Depression. And these ideas of wild spend-
ing 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 sec-
onds 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. Be-
cause, 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 busi-
nesses, ending unnecessary lockdowns. And the whole key, the big-
gest 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 vac-
cine, 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
16
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 Demo-
crats 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 in-
dulgence.
Good morning, Mr. Kudlow. I wanted to just touch on your ref-
erence to the vaccines associated with Operation Warp Speed. I as-
sume 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 Ameri-
cans 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 Feb-
ruary 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
17
that’s not accurate as we’ve now seen 540,000 deaths, approxi-
mately.
On March 24, 2020, in an interview—I’m sorry, in a press con-
ference, 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 con-
tinue 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 situ-
ation 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 con-
taining 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 ac-
tually had a very horrible situation. And that lack of candor really
matters, because it shows a lack of leadership by the Trump ad-
ministration.
I’d like to turn your attention to another issue, which is the econ-
omy. Mr. Kudlow, in April 2008 in the National Review Magazine
during the Great Recession, you said, quote, ‘‘recessions are thera-
peutic. 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 unemploy-
ment 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
18
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 appre-
ciate your cooperation and your patience. I am in the middle of an-
other 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 mi-
norities nationwide, Latinx, Black Americans are more than twice
as likely to have died from COVID–19 when age is taken into ac-
count. People of color have also lost their jobs at higher rates dur-
ing 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 dif-
ferent 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 unemploy-
ment 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 dis-
proportionately 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 discrimina-
tion 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
19
that this played an important role in the tremendous and dis-
proportionate 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 unem-
ployment 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 ex-
perience 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 for-
get that our actors, the member of SAG-AFTRA have been hit the
hardest of all groups by not having live performances. The compa-
nies that would hire them are musicians and the American Federa-
tion of Musicians and our symphony orchestras and our opera or-
chestras 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 work-
ers 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 econ-
omy prior to COVID?
20
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 econ-
omy 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 Ameri-
cans whose wages were rising faster than middle class and upper-
class individuals. It was good for every single person in our econ-
omy. Is that right?
Mr. KUDLOW. Yes, indeed. Poverty fell, inequality fell. Mr. Jor-
dan, 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,
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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 hard-
est. 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 wit-
nesses. 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 Med-
icine, 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 slight-
ly delaying the second dose, the scientific research shows signifi-
cantly curves the virus to spread by increasing the number of peo-
ple 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 admin-
istration 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.
22
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 per-
cent 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 aver-
age 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 fail-
ure 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 dog-
matically 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 al-
most $2 trillion more to our debt, while almost $1 trillion of pre-
viously 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 eco-
nomic 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
23
more money if they have a higher unemployment rate, which
means they have an incentive to keep lockdowns. I never under-
stood 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, open-
ing 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 ad-
ministration 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 fac-
tory.
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 be-
come 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 invest-
ment, and we’ll get it back simply in capital gains taxes when
those are realized. We’re going to get back that investment hun-
dreds 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 pret-
ty 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?
24
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 in-
crease at the bottom. The problem at the bottom is, they have al-
most 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 mis-
take we made is we didn’t spend enough and, therefore, the recov-
ery 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 recov-
ery 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 re-
covery.
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 Eu-
rope 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 be-
cause 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 ef-
fects 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 finan-
cial crisis in your testimony mentioning that of the three things our
financial system had to do, which is to allocate capital, do it effi-
ciently, 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
25
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 recog-
nizes Congresswoman Malliotakis. Can she hear me? The chair
now recognizes Congresswoman Malliotakis. The chair now recog-
nizes 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 eco-
nomic recovery policy. It’s important that the information we use
to measure the success of recovery tells a complete story of who ac-
tually 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 ac-
tually mentioned that as an important tool going forward. It was
also mentioned that breaking down the unemployment rate by var-
ious 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 num-
bers show that women have been disproportionately harmed by job
losses during the pandemic from February to May 2020. As our Na-
tion 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?
26
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 econ-
omy. 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 histor-
ical discrimination in the labor market. And, so, one of the very im-
portant 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 fami-
lies an increase in the child tax credit, the earned income tax cred-
it, provides emergency paid leave, and expands childcare assist-
ance. 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 econ-
omy?
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 bal-
anced 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 popu-
lation. 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
27
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 Con-
gress so that way, the burden is not further placed on the New
Yorkers that live there?
Mr. KUDLOW. Absolutely. I never understood the perverse incen-
tives 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 par-
ents, 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 per-
cent personal income tax. Is that—I mean, this is coming from Al-
bany 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 be-
cause I’m a lifelong resident. Mrs. Maloney is, in fact, my Con-
gresswoman, 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 Repub-
licans 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 govern-
ment 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 munici-
palities 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
28
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 dis-
tricts. 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 prolifer-
ating.
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 dev-
astating 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 re-
covery, 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 Gov-
ernment’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 unemploy-
ment.
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 fis-
cal stimulus saying, quote: ‘‘My preference would be to see a fifth
bill, and then a sixth bill, if needed.’’ Mnuchin explicitly rejected
29
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 inde-
pendent restaurants, writing: ‘‘This funding will ensure small busi-
nesses can survive the pandemic by helping to adapt their oper-
ations 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 unem-
ployment 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 eco-
nomic recovery remains uneven, and far from complete and the
path ahead is highly uncertainty.
Professor Stiglitz, in light of this uncertainty which still over-
hangs the economy, do you believe Congress needs to take addi-
tional steps to ensure a complete, strong, economic recovery, in-
cluding 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 uncer-
tain. 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 envi-
ronment, all these need to be addressed, and they need to be ad-
dressed quickly.
30
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 Amer-
ican Rescue Act, so that we could reopen the schools across Amer-
ica, 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 ask-
ing 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 mem-
ber. 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 bor-
rowing 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 amend-
ment 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
31
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 administra-
tion put out there, forced the seniors to go back into the nursing
homes with COVID, and even banned the nursing homes from test-
ing 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 bor-
rowing money for our kids, to give money to states who are experi-
encing 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 appre-
ciate 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 Ameri-
cans 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 govern-
ment 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 rec-
ommendations 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, effec-
tively, 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 exac-
erbate 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 coun-
try’s response to this post-pandemic economy working for all Amer-
icans.
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 legisla-
tive 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.]
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