John Garamendi

Mr. GARAMENDI

Mr. GARAMENDI. Thank you very much for that perspective on agriculture. I have been in agriculture all of my life. I run a ranch. I know that the men and women that are in agriculture in California, they need to be able to finance their operations. These are not easy times, they need to extend their credit. They are going to come back, they have in the past, but they really need that credit. But what we have seen very, very clearly in the last year is that Wall Street is interested in their profits. I put this one up, but here's the one that makes me mad. This is what really upsets me. We're looking at 2007, the $137 billion of bonuses for Wall Street executives. 2008, that was in the midst of the great crash, it came down to zero. After they had caused this crisis, after they had lost trillions of dollars of retirement funds, the value of homes collapsing, they still rewarded themselves with $123 billion of bonuses. And then 2009, as we began to come out of this, instead of lending $145 billion to your farmers, to your dairy men, to the men and women that want to manufacture and create jobs, no, no, they gave it to themselves, $145 billion of bonuses. How did they manage to do this? Well, they took the Troubled Asset Relief money and turned it around, stabilized the companies--which was all to our benefit--but then, instead of using that money to restart the American economy, instead of using that money to make loans to the small businesses and others across America and to help people who are losing their homes with their mortgages upside down, no, no, they decided that they needed $145 billion of bonuses. Mr. Welch, who was here a few moments ago, had the right idea; he said tax these bonuses and send that money to Main Street. That is where I'm coming from and I think that's where the America people are. On the other hand, our friends on the other side of the aisle, no, no, they don't want to do that. The question for Americans is this: Where do you stand? Who are you fighting for? For Main Street, for working men and women of America; or are you fighting for Wall Street? It's very clear since I've been here that the Democratic side of the aisle is fighting for Main Street and for the men and women that are working. General Leave

Mr. GARAMENDI. Well, the question really is, whose side are you on? Are you on the side of average Americans out there, the middle class, the men and women that are trying to get a job, the men and women that are working, or are you on the side of Wall Street? You raised a very interesting point about loans. Let's put it this way: the American taxpayer gave to the bank some $400 billion to stabilize that financial industry, and it was necessary. No one is doubting the necessity of it. Every other industrialized country in the world also shored up their financial institutions, and it worked. We want that money back, but it's not coming back to the businesses that are in our communities. And then we look here, in 2009, the total lending by U.S. banks fell 7.4 percent, the steepest drop since the outset of World War II in 1942. At the same time, there were enormous profits, and we will come to the profits of Wall Street where many of those profits are a direct result of the money that the American people used to stabilize Wall Street. We want that back, and we want to make it very, very clear: we are on the side of the working men and women out there, the middle class, the small businesses, Main Street. That's where we stand. It's interesting that when the bill came up, and you spoke to this a moment ago, our colleagues on the Republican side voted ``no.'' When it came time to rein in Wall Street, they voted ``no.''

Mr. GARAMENDI. At least that's the American way. If you have an issue, a policy issue, you take it to the legislative body, and it comes up for a vote, yes.

Mr. GARAMENDI. Well, I have seen some of that here recently in Washington. Apparently one person can stop legislation, and I think it's happened some 50 times in a certain legislative body that we are not supposed to--

Mr. GARAMENDI. It's been a great pleasure for me to serve in the House with you, Mr. Andrews, and also to be able to deal with these fundamental issues. We were just talking a moment ago about the lending to small businesses and the fact that the big U.S. banks have reduced it, but also if we look at the 22 Wall Street firms that got the most of the bailout, they have reduced their small business lending by some $12 billion last year in 2009. I have now been joined by our colleague from the great State of Vermont, Mr. Peter Welch.

Mr. GARAMENDI. Thank you. It seems to be profit before people, profit before business. And for those of us in the Congress, it's really a question where do you stand. Do you stand with that community bank in Vermont, or do you stand with the big Wall Street banks? It was very, very clear, I had been here 3 weeks when this House took up the Wall Street reform. And I was really surprised. I thought, well, everybody must understand the necessity to rewrite the reform package, to rewrite the rules of the road so we don't have another collapse. I know that this side of the House, the Democratic side of the House, voted for those reforms, and on the Republican side of the House, very, very few voted for those reforms. So the question was answered to me, where do you stand? We were standing with reform, we were standing with reining in Wall Street, and our Republican colleagues did not want to go there. So what does it mean for western Pennsylvania? Let me call upon the gentlewoman from Pennsylvania (Ms. Dahlkemper). You were here. How did this transpire? What took place?

Mr. GARAMENDI. Mr. Speaker, I request permission to engage in a colloquy with my colleagues. Mr. Speaker, tonight I would like to focus on the great trauma and pain that Americans are suffering from. We could start with it looking like that, but, really, you turn this around and you can see what's happened over the last 2 years. Americans are in a world of hurt. I recall so clearly in California, the area I represented--actually, the entire State as I would travel around--we would talk to people who were saying that they were in the real estate business; they were buying houses. And my wife and I, as we would drive to work, she would often say, How could it be? They don't have any money? What is going on? What was going on was the great scam and the great fraud of this century, and the result is seen so clearly on this chart. Beginning in the year of December of 2007, there was actually a little uptick in jobs during that Bush administration year, and then came the crash and things came down around all America. And we see the falloff in jobs over the years from December 2007 until the change of administrations in 2009. Some 700,000 jobs were lost in December and January of 2008--and January of 2009. And then we have a new administration, and we begin to turn things around. And joining me tonight are Members of Congress who were here during that period of time, who were engaged in the key pieces of legislation. The financial institutions literally were on the verge of collapse. And so in November and December of 2008, the Troubled Asset Program, the TARP program, was put in place. The result of that was ultimately a stabilization. Nearly $400 billion was transferred to the banks, the big Wall Street banks. Some $200 billion, or nearly $200 billion, is still there. And to this day, those banks have neglected Main Street. They have taken care of themselves. But even so, we've seen, as a result of the Democratic Party's legislation and the work of my colleagues, we've seen a gradual and steady improvement. The job losses began to tail off, and ultimately now in 2010 and February and March we've actually seen an increase in the number of jobs and no longer the decline that has so paralyzed this Nation. Why did it happen? What was it all about, and what can we do about it? Joining me tonight, as we discuss this issue, are five legislators, Members of Congress who have played key roles in the passage of legislation that has set things straight and has reined in Wall Street. Let me introduce first my colleague from the great State of New Jersey (Mr. Andrews). Please share with us your experiences and the legislation that you and your colleagues are so much involved in.

Mr. GARAMENDI

Mr. GARAMENDI. That's $1,000 per child. That is the child tax credit.

Mr. GARAMENDI. We couldn't get rid of that old, broken-down Bronco, but we were in the market for a new car and we did buy one. We've gone through several parts of the tax policy and the stimulus program. And a lot of folks out there think the stimulus program didn't do any good. Well, we know that in terms of the macroeconomics of the Nation, that it actually did. Together with the bank bailout--which I've got a lot of problems about the way that was done, and that was in the previous administration, in the years of the Bush administration-- but together it stopped the collapse. Other nations did their piece of it too, but it stopped the collapse. And just this last month in March we actually saw job growth in America; we actually saw jobs growing, net increase in the number of employed people. Whether that's going to continue month to month in the future, we hope so, but the stimulus program actually has worked. It has reduced the tax burden for American families, for the middle class, the largest middle class tax cut in anybody's memory, and at the same time has created a lot of new jobs. Mr. Tonko, you talked about the holistic approach, that this wasn't just about tax cuts for this and tax cuts for that, but there was a larger program that was envisioned here.

Mr. GARAMENDI. Mr. Kagen, I think you want to have some final words here, and then the remaining two of us, and then we will wrap this up.

Mr. GARAMENDI. Now, there's a piece of information I'm going to carry with me the rest of my life, four counties.

Mr. GARAMENDI. Would that be the Cleveland area?

Mr. GARAMENDI. Thank you, Mr. Tonko. I know the normal greeting on the floor is ``the gentlewoman from Ohio,'' but I've watched this Representative work on the floor and on the committees, and while she's extraordinarily polite, I'm not sure that--well, let's just say tenacious and determined. Thank you for joining us, Representative Sutton from Ohio.

Mr. GARAMENDI. There's a heads-up for all of the taxpayers, all the working men and women out there that may not have taken advantage of this $400 per person or $800 per family, to make sure that in their tax return they actually reach out and get that benefit. So that's a significant reduction in their taxes.

Mr. GARAMENDI. Let's do that. We will go through those eight specific tax cuts that really helped American families, middle class families. And I would like to have our colleague from New York, Mr. Paul Tonko, take up and tell us the New York piece of it. And then in a few minutes, our colleague from Ohio, Betty Sutton, will join us. So, Mr. Tonko.

Mr. GARAMENDI. Madam Speaker, thank you so very much for the opportunity to address the House on a rather important matter. I got a call from my accountant, and he said, Are you going to get your tax information in so we can actually get you filed by the 15th? I said, I will do my best. So we're in the process of doing that. So I suspect most Americans are also thinking seriously about taxes. And what I want to talk about tonight and share with my colleagues from Wisconsin, Ohio, and New York is the tax issues that have come about over these last 15 months. I left California this morning to fly here to Washington, D.C., and this session, and as I picked up the Sacramento Bee, on the front page was a headline that said, Tax refunds the largest ever, 2,600 and some dollars per family in California. I said, Whoa, how did that happen? I thought taxes had gone up. I looked into it and asked my staff to dig out some information, and, in fact, taxes have actually gone down in a very, very serious way here as a result of the stimulus bill that was passed. Now, one of my, I guess, sad situations is I wasn't here to vote for the stimulus bill. I was just elected in November of 2009, so I didn't have the opportunity to really vote for what turns out to be one of the largest middle class tax cuts in American history. So when I arrived here in Washington, I asked some of my friends and colleagues help me understand and explain how it came to be that these incredible and important tax cuts actually happened. The first thing they said was, Yes, the stimulus bill did it. We voted for these tax cuts, I think over $300 billion, and not one Republican voted for the tax cuts. I'm going, That is not true. All they talk about is tax cuts. You mean they didn't vote for the tax cuts? No. Not one Republican voted for the tax cuts. I asked my colleague, Dr. Kagen from Wisconsin, to share his insights and his perspective on what took place with the stimulus bill, which was 14 months ago. Dr. Kagen.

Mr. GARAMENDI. Thank you very, very much. For me, having arrived just 3 months ago in a special election and not being able to vote on this extraordinary stimulus bill as the three of you did, I really want to congratulate you and thank you for the work that you have done here. And to be able to join in the continuing process of growing the American economy, using very wise and targeted tax cuts to help working men and women, working families and middle class, focusing there, which is really the heart of America, and to see what you have done and then the new follow-up legislation that we worked on in December, January, and February and through the rest of this year, it is a great privilege for me to be able to work with you on that. Then to find that these tax cuts are actually creating new businesses. The green economy, it is actually happening. I hear the advertisements on the radio in California and in the newspaper, new businesses starting up to install the solar panels, to do the caulking, to do the windows, to move us into energy independence. This is really a great moment in which we are transitioning the American economy, and, frankly, it is the Democrats that are doing that. Most of the work, the heavy lifting this last year was done without any Republican support. It was done by the Democrats. We don't want to be too partisan here, but we also need to point out the real facts of who it is that voted for $300 billion of tax cuts for middle-income Americans. It was the Democrats. We need to understand who it is that's moving forward with the green economy. It was the Democrats that did that. And we have got more to do. And we are going to come back on the floor in the days ahead and we are going to talk about some of the specific tax cuts that went to businesses to stimulate the small businesses--we covered mostly working families today, but we need to do that--and then the jobs bills that have been passed. It is a great privilege to work with you, and I want to thank you for the opportunity to share this evening. Thank you very much. Madam Speaker, I yield back my time.

Mr. GARAMENDI. And we have seen the advantage of these tax credits in the stimulus bill in the manufacturing heart of America, which is just outside Cleveland, represented by Congresswoman Sutton. Congresswoman?

Mr. GARAMENDI. So this tax credit for families and students----

Mr. GARAMENDI. You were telling me earlier that you have some 50,000 college students in your district?

Mr. GARAMENDI. I want to come back to you in a few moments and pick up something that really did stimulate the American economy, not directly on tax policy but something that was very, very important. And we'll just let people be curious about what it was that created the highest monthly volume of automobile sales in the most recent years. Mr. Kagen, we were talking earlier about some of these eight principal things, and I know you wanted to pick up another one. We started to talk about the Making Work Pay, $400 per person and $800 per couple. Why don't you talk about another one and carry it for a while.

Mr. GARAMENDI. Everybody that I talk to about COBRA says, well, wait a minute, nobody can afford COBRA. They are unemployed. How could they possibly afford COBRA? And you are telling us that in the stimulus bill, in the Recovery Act, that 55 percent of the cost of COBRA--you lose your job, you want to continue your health insurance, that is covered?

Mr. GARAMENDI. Now, that's a very important one. All of the economists that look to the future of this Nation and our ability to compete say that we have to have a well-educated workforce. And so in the stimulus bill there is a $2,500 tax credit for the family or for the student.

Mr. GARAMENDI. This is a very, very important piece of getting ready for the recovery and preparing our students and our workers for the opportunities out ahead. Mr. Tonko, you wanted to pick up another piece of this, so have at it.

Mr. GARAMENDI. So for somebody that goes into their home and puts in energy efficient windows or a solar system or solar hot water, they can get 30 percent tax credit on that. It is very interesting that, again, during the recess, the number of new businesses that come about as a direct result of that tax credit, advertising all over the radio about this company or that company going to be putting in new windows or a solar system, so businesses are actually coming about because of the tax credit that's available to homeowners.