We are ready to go now. Take it all for joining the first remote hearing of the subcommittee on select revenue measures. We find ourselves in challenging times as evidenced by this new method of conducting Community Business in accord with the Public Health and safety recommendations. But the challenges we encounter here in congress are small compared to what i hear and see and what i am sure all of you here and see in our communities. Im glad we can move forward into the work that our constituents need given the difficult economic situations in which so many find themselves. The covid19 recession has laid bear the economic struggles of millions of American Families with almost no warning the shutdown claimed tens of millions of jobs, and American Workers and families felt the ground ball from under them. Many had been just barely scraping by and unable to save much for a rainy day, and the sudden loss of income has left them nothing. Food banks are Unprecedented Demand in the country is on the verge of a rent prices. Previously, so sufficient americans have lost their livelihoods and exhausted their financial reserves. The prepandemic prosperity never reached millions of American Workers and families, and now they are facing financial catastrophe. Strong Economic Growth over the last decade has abundantly rewarded the wealthiest in our nation, but that growth has not been broadly shared. Despite the strongest labor market in 50 years before the pandemic started in 2009 with 128 months of growth, over onethird of americans had sold of Financial Security that they wouldve been unable to cover an unanticipated 400 expense. Now after job losses, reduction in hours and reductions in income, so many of our neighbors are facing financial catastroph catastrophe. Congress acted swiftly at the outset of the pandemic, and we must do more to ensure that economically Vulnerable People do not fall into irreversible financial disaster. As businesses gradually reopen, many workers are coping with drastically reduced hours and lower paychecks that will not cover their bills. Even people fortunate enough to be returning to work will likely be struggling for some time to come. The house passed the heroes act last month, renewing democrats commitment to help american stay on their feet until their jobs come back. The heroes act extends and expense Economic Impact payments and broadens tax relief to the Child Tax Credit, the earned income tax credit, the child of dependent care tax credit. Also support workers with a more generous Employee Retention tax credit to maintain payroll and additional credits to cover fixed costs and employees covid19 related expenses. Now the Republican Senate must act. It cannot continue to ignore the needs of American Families. Millions of hardworking americans happen thrown out of work through no fault of their own, and they need help with the basics like rental assistance and food. This is no time to abandon our fellow citizens here they deserve and should be able to expect our support to bring this extraordinary disaster. Before you recognize Ranking Member smith for Opening Statement, i want to mention a number peace another piece allegedly of a provide vital to actually for a subset of americans with disabilities who live in the United States. Mr. Kelly and i have legislation, h. R. 2086 the Access Technology affordability act that would help blind employees and blind jobseekers get the equipment they need to gain and then retain employment during the covid19 pandemic. Working from home has made exponentially more difficult when your ability to work is so reliant on Expensive Technology that many dont have readily accessible outside of the workplace. I urge my colleagues to look at this legislation and work with me and mr. Kelly to advance it, and ask unanimous consent that the statement i have from the National Federation of the blind entered into the record. Hearing no objection, so ordered. With that i will recognize Ranking Member smith of nebraska for the purposes of an Opening Statement. Thank you, mr. Chairman for calling todays hearing. Partial shutdown of our economy into the covid19 pandemic, and congressional response to it, are both unprecedented. Before this pandemic shocked our nation, our economy was on an incredibly strong fluting. Footing. [inaudible] the highest wage gains in our economy were seen by lowwage earners because the demand for labor was so high. This downturn is unlike any other, unlike former crises it is the result of risky mortgages or technology stocks. The economic state were in today is result of state and local governments across the country asking americans to stay home, social distance and protect themselves and their families, their friends and their neighbors. This was important in order to lock them the virus. On a federal level among many things enacted the cares act on a bipartisan basis to keep the health and economic bridge with the goals of helping local businesses keep americans working and supporting workers who temporarily lost their job. Our economy needed a cushion so once help conditions printed reopening we could get up and running again. Theres too many unknowns unknowns we must deal with such as the future progression of this disease in a successful cares act programs ultimately will be in keeping our economy steady in the long run. However, we know americans are resilient and want to provide, want to work to provide for the family. Meaning main street businesses across my district tell me daily they desperately want to keep their doors open, keep paying their employees and be able to continue serving their community in the way they were earlier this year. For this reason our primary focus must be on ensuring future legislation is focused on reopening our economy and incentivizing the safe return to work. We are ready to work with you as well and to contribute. Mr. Rice is working on a bill which will help businesses reopen safely, restore worker and Customer Confidence and create a temporary tax incentive to the end of 2022 up businesses defray costs, reconfiguring work. The cares act provided aid to our main street businesses. A popular ppp program was nothing short of successful in buttressing our economy these past few months, but for help may be needed. That is why we should also additional ideas up businesses maintain liquidity during these trying times. Which will help them keep their doors open and employees on the payroll as we resume our economy. In order to make sure returning to work is more rewarding than staying at home, mr. Gray has introduced a bill that would provide two weeks of enhanced Unemployment Benefits to americans [inaudible] ensuring that america has a strong economic footing while coming out of the pandemic is vital to getting people back to work. That is why we should make america more competitive in the global marketplace by increasing r d incentives. We also recommend helping americans are already on the sidelines return to the workforce is much more challenging now than it was just three months ago. Demand for workers isnt the only issue. The pandemic has also made it harder for workers to access transportation, childcare and other resources necessary to successfully remain in the workforce. We were working to address these issues prior to the pandemic, and the need to Even Stronger now. In 2018 we introduce the childhood successful actual states that utilize programs to bring americans most in need into good paying jobs. Our reforms would require states to work directly with the individual to connect them with jobs and also improve the ability of states to utilize tanf funds to assist with supports like child care and transportation to help people stay in the workplace. These were bipartisan ideas two years ago, and would continue to support them now. Mr. Chairman, we must work on a bipartisan basis to provide tax relief necessary for employers to resume employing, help workers continue working to ensure access to Economic Opportunities available to every american. Thank you. I yield back. Thank thank you, mr. Smith. Without objection all members Opening Statements will be made part of the record. Thank you to our distinguished witnesses for taking the time to appear before us today to discuss these very important issues. I would like, im going to introduce the witnesses before we get started here first. Amy matsui a senior counsel at the National Womens law center where she works on Economic Issues affecting low and moderate income of women and families with a special emphasis on federal and state tax policy. Indivar duttagupta is the coexecutive director at the Georgetown Center on poverty and inequality at the Georgetown University law center. He leads work to develop and advance ideas for reducing domestic poverty and economic inequality with particular attention to gender and racial inequality. Allison bovellammon is the director of policy strategy for Childrens Health watch at Boston Medical Center where she leads the federal policy work of the program directed at improving economic wellbeing through Healthcare Systems, integration to address social risk factors among patients and families locally and nationally, and inform policies that improve child and family health. The next witness, ms. Rodriguez, im going to ask our colleague, ms. Delbene, to introduce her. Ms. Delbene . Are you unmuted . You may need to unmute. We will give her a a little tie to get on and then i will introduce the last witness, Kyle Pomerleau is a a resident fellw at the American Enterprise institute where he studies federal tax policy. Before joining aei, mr. Pomerleau was chief economist and Vice President of Economic Analysis of the Tax Foundation where he led the macroeconomic and tax Modeling Team thank you, mr. Chairman. It is my honor to introduce can you hear me . Can you hear me . Can you hold on one second . I am. I am unmuted. Okay, hold on. Where he was Vice President of Economic Analysis of the Tax Foundation would led the tax and modeling titman road on various tax policy topics including Corporate Taxation, International Tax policy, carbon taxation, and tax reform. And now i would yield to ms. Delbene to introduce our final witness. Can you hear me, mr. Chairman . We can hear you, yes. Please go ahead. Now we dont hear you. Ms. Delbene, are you there . Now we can see you. Sorry about that. Thank you, mr. Chairman. Great. Its my honor to introduce Martha Rodriguez, a bilingual Early Childhood educator at an and a proud member of which emphasize womens voices on issues of national im sorry. Can you hear me now . It must be my connection. We can hear you. Im trying. I am here, but, im here but im not sure if ive a strong connection because you keep losing me. You are going in and out. Why dont, for the record, recognize that your constituent, Martha Rodriguez can you hammy . Hear me . We hear you now. Go ahead. Let me just say that ms. Rodriguez is ms. Delbene needs constituent or close friend. They worked together. Ms. Delbene have nothing but glowing comments to make for her, and she is a bilingual preschool educator facing economic hardships as a result of the covid19 recession. She has lost her job. Her husband lost one of his two jobs, and theyve been left with parttime work. She and her husband have two Young Children, and i know that ms. Delbene and you wanted make that introduction, and sadly, we are still wrestling through the challenges of the technology of these platforms that we are going to be using. Now, first, let me say thank you to all the witnesses for taking your time to be here. Each of your statements we made part of the record in its entirety. I would ask that you summarize your testimony in five minutes or less. To help you with the time please keep an eye on the clock that should already be on your screen. If you go over your time i will notify you with a tap of my virtual gavel. We will proceed with ms. Matsui. Thank you, chairman. Chairman thompson, Ranking Member smith, and members of the subcommittee, thank you for the opportunity to testify. My name is amy matsui and im the director of income security and senior counsel at the National Womens law center. The covid19 crisis longstanding racial and gender inequity. Many black and Indigenous Women of color, women with low income and immigrant women struggle to make ends meet even before the recession, and lack enough savings to cushion the impact of economic downturn. Women are dominant in many frontline jobs such as health care, child care and social service workers. Many of which are poorly paid and or present substantial gender and racial wage gap. Women are also overrepresented in sectors that it suffered devastating job losses such as retail, restaurant and other service sectors. Health disparities already faced by women special black women Indigenous Women, women of color, transgender women and women with disabilities have been exacerbated during the pandemic. In short, the women into hundreds of color who experienced the greatest disadvantage before covid19 has been hit the hardest. Against the backdrop back of al reckoning with Racial Injustice it is critically important to prioritize policy responses to the pandemic the center women and girls of color, especially black women and girls, and provide what they need to live, learn and work with safety and equity. Congress now has the opportunity to enact past policies that would advance racial and gender equity, increase Economic Security and mitigate the effects of the recession. While many individual tax provisions leave out women, people of color and people of low income, refundable tax credits like the earned income tax credit and Child Tax Credit especially benefit women of color. These credits lose income boost income by narrowing wage gaps, proving health, education and implement employment outcor families, and reducing poverty. Moreover, improving the childhood independent tax credit most importantly by making it refundable what help low and moderate income families among whom families of color and women heading households are disproportionally represented meet the high cost of childcare. Refundable tax credits along with direct payment are also critically important interventions during recession. They relieve the financial distress experienced by fans of lost jobs or wages especially those without savings that wouldve helped them with the financial shock. In addition women and families with low incomes and low levels of cash on hand tend to spend cash benefits quickly to buy groceries, pay bills and purchase of the necessities. Expanded refundable tax credits and direct assistance would pump funds back into the economy to mitigate the recession. Indicators that congress provided for a onetime direct payment but more must be done. Some especially vulnerable individuals and families are left out of the Economic Impact payment including certain dependence and households who file tax returns using and individual tax identification number. In addition, millions who do not ordinarily file a tax return are likely to miss out on payment and people of color are disproportionally represented within this group. Moreover, while Economic Impact payment help those who receive them, many families have already spent them and the more resources to pay bills as they come due. Importantly, the heroes act would build and improve on the relief for working families in the cares act. The heroes act would improve Economic Impact payment to stild many defendants and families who are left out of cares act and enact an additional payment. In addition, the heroes equity neck improvements to the eitc so lowincome workers not cling children are not tax in the poverty come improvements to the Child Tax Credit that would lift millions above the poverty line and improvements including refund ability to the child and dependent care tax credit that would ensure low and moderate income families can access this tax incentive. The tax code has the potential to dance racial and gender inequity and sport an economy that works all of us. Thank you for the apple did testify today and i welcome any questions that you might have. Ms. Matsui, thank you very much. Now mr. Duttagupta, you are recognized for five minutes. Thank you, chairman thompson, Ranking Member smith, and members of the subcommittee. My name is indivar duttagupta. I wanted to come before the subcommittee to speak to the importance of letting tax cuts is working people and families during this recession. Ive worked on tax policy for over a decade in with ways and Means Committee fact endeavor is for, during and following the 2008 financial crisis. Crisis. If we are to learn anything from that time it is this. Policymakers must avoid ending prematurely. Not after long after the recovery act in 2009 policy negotiated and our economy needed 89 pain for months to the jobs gap. In other words, it took nearly seven and a half years to create enough jobs to make up for those lost and to absorb new workers. We now face a far deeper recession might have the opportunity to avoid repeating the past and avert the suffering. Cbo estimates i nearly 16 trillion output gap over the next decade. Individual families are facing record level of unemployment and hardship. Net job losses during the pandemic amounted to nearly 20 million and upwards of 35 million workers may be receiving a waiting to receive unemployment assistance. Workers of color, women have been especially hardhit. To be sure, early federal response including the Families First Coronavirus Response act and cares act provide an essential down payment but it is simply not enough. These measures however unprecedented actually failed to match in duration and depth the financial struggles families are facing now and through at least 2021. The covid19 Linda Mcmahon recession warrants additional measures that are substantial. Despite the worst economic condition in generations some key federal support programs are even slated to end in the coming weeks and at a time when households and state and local governments are cutting back on spending, the federal government alone can spend more to help us whether the crisis. Welldesigned federal spending today is an investment of the durable and equitable recovery for families, communities and businesses. We must marshal a wide range of strategies to ensure that would build a stronger economy coming out of this recession. We must, these strategies should be targeted. While structural fixes to the tax code are necessary, there are a number of measures we can take right now to a mitigate the crisis, including, one, providing additional and more inclusive recovery rebates or economic regardless of immigration status, age or banking status. Number two, expend earned income tax credit to more aggressively phasein for family with modest earnings and to reach all adult workers without qualified to children with a larger credit and more household in puerto rico. Three, increasing the maximum Child Tax Credit providing that maximum credit for children in the poorest households, including families of older children. Four, making the challenge and dependent care tax credit for the refundable to help families meet the high cost of care, and five, establishing a meaningful option to pay more refundable tax credit outside tax on time as we do to help families to afford Health Coverage through Health Insurance marketplaces. In yet these provisions and more are in the heroes act which been waiting in the senate for weeks lets not forget that theres a virus threatening the lives of billions of americans beyond the 117,000 or more who already died from covid19. The Actions Congress takes or fail to take in the coming weeks will determine whether we prevent financial ruin and unbearable hardship for millions of workers in families. People of sacrifice their livelihoods to save lives. Our lowest paid workers and black people come Indigenous People and of the people of color are special at risk if we fail to provide ongoing support. Table of all races and ages are expecting entirely preventable joblessness, foreclosures, disease and death. By helping people afford, supporting Families Mental Health and wellbeing, to improving childrens longterm health, tax policy is Public Health policy. With its ability to reach tens of millions of households, the texas is a vital tool in fighting this recession as well. Together with other key policies including expansions of s. N. A. P. Housing assistant and unemployment assistance can increase support for child temperament and robust paid leave instead a local, tax policies can deliver assistance now and jumpstart a lasting recovery. Health watch is network of pediatricians and Public Health workers committed to advancing equity and improving the health of Young Children and their families by informing policies that alleviate economic hardships. Were honored to lead the Healthy Families eitc collation, a network in massachusetts for improving credits. As i discuss with Children Health watch at bostons medical center, families and children are worried about paying for rent and food on the table in coming months. Families of color and immigrant families are dispoe disproportionately affected. The depth and the breadth of this crisis will affect a generation of children. The choice in congress could change this. Families need urgent relief and longterm support through direct payments and refundable credits to weather the effects of this crisis. The work of Childrens Health watch we interview parents of Young Children in hospitals, boston, baltimore, philadelphia, little rock. Our work demonstrates when families are unable to afford food, rent and utilities. The health of children and families suffer. During the great recession, we show that families of children, immigrant families were hit hard and experience high rates of hardship well after the recession. Its deeper and more devastating for many of these families. And this reality is playing out in clinics where Childrens Health watch has research sites. At Boston Medical Center where some of our families struggle to afford basic needs prior to covid19 we were alarmed at the rapid increase in hardships. In response our Pediatrics Department has taken extraordinary steps to distribute groceries, gift cards, diapers, cleaning supplies, created an emergency Housing Assistance fund. Staffs have worked tirelessly to ensure that families are connected to all available state and federal resources, including an effort led by a street cred, making sure that families are able to claim their Economic Impact payments. All of these efforts are on top of the essential pediatric care and mobile vaccine unit. While these efforts were necessary to support patient families we are keenly aware that they do not reach enough families, are insufficient for fully Meeting Needs and unsustainable over the longterm. Strong federal responses are necessary to adequately respond to a crisis of this scale. While the virus itself has largely spared most children, we cannot lose sight of the fact that families with children will likely suffer the greatest longterm Health Consequences of this economic crisis. Nationally children are pushed deeper into poverty and economic hardships are skyrocketing particularly among black, latinx and immigrant families in turn with health disparities. All hope is not long. The benefits of the tax credit and income credits, lifted them out of poverty, and increased Work Force Participation. Infants born with low birth weights, better Mental Health for children and their mothers and improved life expectancy. The centers for Disease Control and infection today implementing the rapid longterm measures to to pre to reduce the Economic Impact payments, payments excluded 30 Million People at income eligible families, namely immigrants, teenagers, and young adults and adults with disabilities. The heroes act includes expansion and improvements to the Economic Impact payments, Child Tax Credit and income tax credit and reduced Child Poverty and improved health for years to come. These measures are needed now. Children and families struggling to afford basic needs cannot continue to wait. Using the tax codes to administer tax benefits to families throughout recovery are not only important for alleviating hardship, theyre part of the publics infrastructure for building a healthy population well beyond the end of this pandemic. Thank you. Thank you very much. Ms. Rodriguez, you may proceed. Good morning congressman, Ranking Member. I live in washington, and im proud member of the mom rising. Im also a bilingual childhood educator. I have two incredible children, a daughter 11 and son who is eight. And this is Economic Disaster for my family. We provide families immediate relief. During this uncertain time, as well as make changes to our tax code and support the health of struggling families. Thank you for the opportunity to testify today. Before the pandemic, my husband and i each worked two jobs to make ends meet. My husband worked as a bartender as well as kitchen help in the school. And i work as a by lingual instructor and we worked long hard hours to provide for our children. We live paycheck to paycheck and struggling for savings. And middle of march our workplace suddenly closed due to the pandemic. I lost both of my jobs on the same day my husband lost his job as a bartender. Overnight my husband and i went from four jobs to just one. Suddenly, we were now worried about contracting this terrible new virus, we were also worried about how we will cover basic expenses, like food, and our mortgage. We have to apply for Unemployment Insurance, but i was not approved because i hadnt been working parttime jobs. My husband still has his job as teaching helper so his Unemployment Benefits are limited. Hes still working about 20 hours each week, but that job alone is not enough to pay our bills. We are not sure what to do. The job market is very tough right now and we worry about public jobs that will put us at risk of contracting the virus still. Were looking to get a job at costco or target, some of the few employers that are hiring in our community. But my husbands schedule changes every week. It will be very hard to find a second job that is willing to schedule him around his first. For now my kids are home from school and one of us needs to take care of them. Theres no way we could afford child care. Im working very hard to home school them right now so its important that we do everything to keep them on track. This situation has caused a financial crisis for my family. We want to be working, but were not sure what we will be able to do. We are depending on our Mortgage Lender has given us three months extension, but once that runs out we owe them a lot of money that we simply dont have. We are terrified and dont know what we are going to do when the extra rent runs out. The rent checks issued in april, we have a huge of shortterm relief for us. We use to give up with bills so we are now saving a at the end of this pandemic, whenever that will be about you while these checks were helpful, our mortgage alone is about 1500 a month. Families like mine are struggling and we wont have many options. We need additional relief. If we are going to get back on our feet. In certain time improving and expanding the earned income tax credit and the Child Tax Credit will also be a huge help to my family. We can no we cant know what our income will look like over the next year so when we do return to work, its hard to say where well be working, which will be or how secure those jobs will be. Improvement made in the heroes act like increasing the earned income tax credit and the Child Tax Credit and making fully refundable will give us peace of mind that our challenge is here as this year comes. All of these measures will go a long way in helping parents like us, as well as our communities and struggling economy. To recover from the pandemic we need to address the needs of working Families First and foremost. For the families and the tax code, i hope you will remember my story and thank you. Thank you very, very much. You may proceed. Chairman thompson, Ranking Member smith and members of the subcommittee, thank you for the opportunity to speak today about tax policies and the federal governments response to the covid19 pandemic. In my testimony ill make four points. First, although there is room for improvement, the tax provisions in the care act provide timely Economic Relief to individuals and businesses. Two, there are signs that the economy is doing somewhat better, but it is still not in great shape and businesses and individuals will need additional Economic Relief. Any additional assistance to the tax code should be well targeted and temporary. Three, lawmakers should avoid denials of appropriate tax relief and finally, although the federal governments fiscal imbalance must be addressed at some point. Lawmakers should avoid raising taxes while the economy is still. In response to the economic slowdown, congress has passed five pieces of legislation providing a total of 3. 6 trillion in Economic Relief. A significant portion of that was in the form of tax relief in the cares act. The cares act included rebates for individuals. Tax relief for businesses and payroll tax relief. The largest provision in the cares act were the Economic Relief package for households. Businesses received an increase in cash flow through the tax code as well and that was through temporary expansion of net operating loss reductions and and taxable income among others. Although i think there are ways you could improve these tax provisions in the rebates, i think they generally did a good job providing assistance to individuals. Over the last couple of weeks, weve seen some signs that the economy is improving, however, the economy will remain well below its potential for at least several years. Just today, the Labor Department reported that another 1. 5 Million People filed for Unemployment Benefits last week. Businesses and individuals will need additional. If lawmakers continue to use the tax code to provide assistance, they should assure the tax relief is temporary, as well as targeted to both individuals and businesses affected by the pandemic. Unfortunately, some recent proposals have failed to be geared toward addressing the current economic situation. For example, the white house has suggested a number of narrow Tax Deductions for activities and likewise. The heroes act suggested limiting state and local tax deduction. These provisions are unlikely to be helpful and targeted to those in need. Related, i think that lawmakers should look at the tax relief. The heroes act, House Democrats would pare back the loss provisions provided to businesses in the cares act. For example, theyve reinstate the pass through and make it permanent. In addition allowing carry back for corporations it would disallow the use ever carry backs for corporations such as executive compensation, dividend and stock buyback and wouldnt allow losses to be carried back to years before 2017. I think theres little justification for these arbitrary limits. The recession caused by the pandemic and the federal response will add more to that as tax revenues fall and spending increases. Lawmakers may have an interest in addressing those imbalances at some point, through tax increases, and spending cuts. However, today the cost of borrowing is very low. The yield on the 10year treasury has been 1 since april and federal interest costs have remained relatively low the past few years, even when Interest Rates were higher. Raising taxes now or cutting spending would impede Economic Relief and recovery. And taxes on businesses would reduce the cash flow and make it more difficult for them to maintain payroll. Likewise, higher taxes on individuals would have a shortterm negative impact on their budget. So to conclude, tax policy has been an important component to the federal governments response to the pandemic in this economic slowdown. While there is room for improvement, many provisions provided relief for businesses and individuals, and although tax policy can provide temporary relief, there is a limit to its effectiveness in the current situation. Ultimately, the most effective way to get the economy back to normal is to get the virus under control. Thank you. Thank you investigate without objections, each member will be recognized for five minutes to question our witnesses. We will not observe the gibbons rule in this remote setting and instead go in order of seniority, switching between majority and minority members, members are reminded to unmute yourselves when youre recognized for your five minutes. I will begin by recognizing myself. Miss rodriguez, im sorry to learn of the difficulties your family has been experiencing and hope that youre able to get back on your feet as quickly as possible. Did your family receive a stimulus check . And if so, were you able to use it on necessarilies to help your family cover expenses . And if you were to receive another stimulus check, would it be helpful to your family, and if so, how do you think you would use that . Yeah, we did, we received the check and it was really helpful for our family. We pay our mortgage and we pay food. So if we receive another we would really helpful. Right now we just receive an email yesterday that the school is not going to be the same, so it can be right now so im pretty sure im not going to im the third person in the classroom so im really nervous about to have my job back and over who is going to take care of my kids so im thinking about and so many parents they dont know whats going on in the school right now, in School System is going to change. So it would be really helpful because im really, really sad about it. I was like i really like to i really love my job, but im really nervous about whats going on with my family, you know . I love my house and i dont want to lose what i have right now. I dont know whats going on. I dont have family here and i know how hard it is to pay child care. So even if my husband return to work as a bartender, its going to start working like 25 of the people or 55 of the people, so its not going to be the same as before, you know . So im really nervous about that. Thank you. Thank you very, very much. I cant imagine how difficult it would be and youre a family of two with four jobs before this. Theres families that are in every bit as bad a situation. Thank you. Mr. Welcome back to the committee. Were pleased to have you with us. I want to inquire what the pandemic recession is helping us understand about the prepandemic level of financial fragility among American Families. With food banks facing demand and the country on the verge of a rent crisis, give or take 13 weeks into the situation, it seems clear that the supposedly strong prepandemic economy did not give millions of families the opportunity to build up a cushion. Is that the case . Yeah, thank you to chairman thompson, its a delight to be back. That is exactly right. If the pandemic didnt reveal for those who didnt already know how fragile the financial circumstances were of a large share of households. Even after the longest economic expansion in history, in recorded u. S. History, im not sure what would. First, lets not forget that the overall Unemployment Rate masks enormous variation with africanamericans. For example, typically facing double the Unemployment Rate of white workers in the u. S. Economy. Second, its already been pointed out, a very few families could weather any sort of financial emergency, you know, several hundred dollars. This is Federal Reserve Consumer Finance data, but other data confirmed the struggles that families would face if they went just a week without a paycheck. And then let me ask you on that. What alternative policies should congress pursue in the future that would help more low and middle inkm families obtain Financial Stability during the next Recovery Period . Thats a great question. Look, first i think that we have a major challenge in this country of low paying jobs and unpredictable and unfair Work Schedules on top of it. So we need to, obviously, raise the minimum wage, complement that with robust support like the earned income tax credit, but also, we need to deliver a basic floor of income to folks, including through Something Like the American Families act which the heroes act includes a version of to ensure that every child in this country lives in a household with at least some minimum income. We live in a country where at the end of the day, cash is essential. We can do a lot and need to do a lot through care giving. For instance, our friends called for at least 50 aboutle in Child Care Funding for immediate relief which would create jobs directly and indirectly and thinking about a new care economy and investing in these jobs would help families weather these crises. Why is that . Right now you lose your job, you could also lose access to child care right now because of the pandemic. Schools have to shut down. So families are struggling every which way and we can do a lot more to create jobs that arent going to be off shore, that arent going to be outsourced and that enable other jobs. Theres more, but i think the tax and transfer system and direct spending can do a lot to help families prepare for and weather any future crises. Thank you. Given the pay gap between men and women, which is sizable for white women compared to white men, but even more sizable for hispanic and africanamerican women, can you tell us more about the role that the eitc and the refundable Child Tax Credit in fighting disproportionate poverty levels amongst women . Thank you for the question, congressman. I would like to say that the improvements between the eitc and the Child Tax Credit and heroes act have particularly low wage jobs, including health care jobs, restaurant work, retail, nursing jobs, and these are jobs with low pay that women tend to be disproportionately represented in especially women of color. So its a little bit of a cycle that women with work, face wage gaps are more likely to be eligible for the tax credit for families, like the earned income tax credit and the Child Tax Credit, but as a result, its helped more by the credits because the boost in income and benefits for the family that are provided. Thank you very much. And then im interested in the fact that your organization is dedicated to improving the health of low income children and your organization became advocates of the earned income tax credit and the refundable Child Tax Credit as a means of promoting better child health. Can you tell us more about how it was that you came to understand those two things being so closely connected . Yes, thank you. Over our two decade history, they continually tried to seek out policies that not only address family economic hardships, but also are able to mitigate the Poor Health Outcomes with hardship. So when we were approached with this Research Question around 2014 whether refundable credits could be a policy lever for Childrens Health. We were eager to learn more. In talking to experts and with people with experience and social Service Providers and doing a deep dive on the literature. It was not just a policy that could reduce poverty and increased Work Force Participation which of course it is, theres an emerging body of evidence around the impact that it would have on child health. Namely, there are multiple studies done that show that expansions of the earned income tax credit has been associated with decreases and low birth weights. Which is incredibly important for child health for a couple of reasons. When children are born at a low birth rate, implications for the longterm growth and health and development, its costly to Health Systems and yet, there are few medical intertensions that we can deploy that effectively reduce the risk of low birth weight and the way in which earned income policy credits are due. And we started working on this because it showed the power that putting financial monetary resources in the pockets of families can have on both shortterm and longterm health outcomes. Thank you very much. Now, i recognize the Ranking Member, mr. Smith, for five minutes. Thank you, mr. Chairman. As you discussed in your opening testimony, the cares act contains many targeted tax provisions that provided relief to individual families and businesses. For individuals and families, the cares act provided for a onetime payment sometimes called an Economic Impact payment, allowing for penaltyfree distributions from the retirement accounts and provides an above the line deduction for up to 300 in charitable giving. For businesses, the cares act provided for the mid operating losses which allows businesses to receive tax refund provided, a relaxation of the interest rule and allowed the refund refunds known as cuts. They were designed to provide tax relief to families and businesses and we have the stories in our district as to the help that its provided. Id like to focus on the tax policy thats targeted the businesses. Were sometimes told that if the tax policy helps business, it cannot be positive for individuals, and workers. Why is this not the case . Can you give some examples how business and tax policies actually collectly helps workers . Yes, thank you. So i think to some degree the distinction between business tax relief and individual tax relief isnt a very helpful distinction because a lot of these proposals that were put forth were to provide one direct assistance to individuals and assistance to businesses. And assistance to business were an attempt to help businesses maintain payroll, maintaining payroll would mean a connection between business of the individual so they can keep their employment. And one example of this, from the cares act, was actually the deferral of the employers side payroll tax. This deferral allowed businesses to delay the tax to pay on the payroll that they pay to their workers. Its effectively for a short period of time reduces the after tax cost of keeping employees hiredknow, Holding Everything else hostage should make it easier for workers to keep connected to their jobs. There are other examples of this, too, in the general tax code about how tax policy that can affect investment can eventually impact workers, but i think its less of a concern in the context of the cares act. Okay, you also testified that congress should avoid raising taxes at this stage of the recovery while the economy is obviously still weak. Will you elaborate why that would be unwise . As i mentioned in my testimony, that one of the goals of the Economic Relief was the cares act or other provisions as to increase liquidity for businesses and to help households maintain their budgets and continue to pay their mortgage and their bills. And that i think raising taxes for businesses or for individuals would work against that goal. And make Economic Relief more difficult and may make than they otherwise would be. Okay. Thank you. Ms. Rodriguez, thank you so much for your participation here in the hearing today. I think its important that we hear from you and i know that you represent many families who are struggling and you are giving voice to many of those folks who certainly are a vital part of our country. Would you feel that it would be helpful if we did provide incentives to businesses so you and your husbands jobs were actually safe to return to. Thank you for asking. Can you repeat the last thing again, please. Sure. Do you believe it would be helpful if businesses received incentives sore you would see a safe workplace to return to so that the you know, measures could be taken, that employers could make, to make sure that the disease that the virus does not spread in the workplace, whether its the equipment and the gear or the technology for sure, yes. Okay. Well, i appreciate that. Helpful. Yes, i real appreciate we really want to go back to work. I expect thats our goal and i appreciate you sharing that, your perspective is vital and im glad that weve had this opportunity to hear from you. Thank you. Thank you. Thank you, mr. Smith. Mr. Doggett, youre recognized for five minutes. Can you hear me there, mr. Chairman . I can hear you. Great, thank you. Thanks to all of our witnesses. As they have indicated, the widening income gap and Racial Disparity that we have in America Today have been intensified by this pandemic, but they are longstanding. We know that people of color are overrepresented in our frontline jobs from Nursing Homes to meat packing. Theyre keeping our country open, but often with low pay in relatively unsafe conditions. I believe that every action that our Committee Takes must look to providing relief that addresses this inequality. At the very least, lets not make matters worse. We could look to the 2008 crisis as an example because there, while the big banks and their executives who contributed so much to causing the crisis were covered rather swiftly. Many middle class and working families are still not fully recovered from being hit so hard and now they face the pandemic and the economic crisis related to it. As we consider how to best deliver assistance to working families through the tax code we also need to recognize for years our tax code has helped to perpetuate inequality instead of reducing it. Through the years our house ways and Means Committee has played a major role in widening income in america, particularly during the republican 2017 tax law which showered benefits on the wealthiest, and disproportionately benefitted white families while leaving behind families of color. Too often the committee, even when it is pursuing worthy objectives, like encouraging retirement savings, leaves the poor behind and widens the gap. Unfortunately, the pandemic relief that has been enacted in recent months, repeats some of these mistakes. Under the cares act, 60 of the tax provisions costs for this year are for businesses, most of which come with no Strings Attached to ensure that a Company Maintains payroll. The Congressional Budget Office recently affirmed that aid to state and local governments and other direct expenditures are far more effective as stimulus than tax expenditures to Corporate Tax breaks. While Corporate Tax breaks offer less stimulus, theyre effective and efficient in widening the income gap. While low income work like ms. Rodriguez, the socalled losses provision that was included in cares, delivered an average of 1. 6 billion no Strings Attached for just 43,000 taxpayers. These were people that average more than a Million Dollars in annual income already. This Privileged Group pocketed over 80 of the benefits, which at a total cost of 135 billion was more assistance to them than all of the hospitals in america through the same act. The heroes act would repeal that horrible provision, though it remains to be seen how great a priority is being placed on that repeal in negotiation. Many large corporations now claim that the more than 400 billion dollars in tax breaks that theyve received from cares is just not enough. As the stock market soars and while hundreds of billions of additional assistance for large corporations remains untouched and available through the Federal Reserve, they claim they need more to ensure liquidity. As Small Businesses and front line workers are struggling with millions of americans as pointed out, who has not yet gotten a stimulus check or excluded because they used an i10 to file taxes. Some large corporations are already seeking a second helping and republicans seem determined to deliver it to them while opposing relief to the families that we have provided through the heroes act. President trumps economic advisor, larry kudlow says what we need to do is slash the Corporate Tax rate in half for companies that bring jobs home. Unfortunately, the trump tax law already allows these to pay half the u. S. Tax rate on an offshore investment and in some cases, even zero. And since no tax break, however well zero, i think we end up paying for nothing if we adopt the kudlow approach. While republicans have stood in the way of expanding refundable tax credits for working people like the eitc and the Child Tax Credit which as weve heard today are so effective in lifting people out of poverty, theyre now lining up to make tax breaks for Large Businesses refundable so they use the fancy name of monetizing tax credits. Let me just ask if she degrees that the most effective stimulus is providing direct assistance to those who need it the most and that we should avoid giveaways to those at the top in favor of taking that approach. Thank you for your question, congressman. I do agree for working families who make up and power our economy, especially the frontline workers and meeting our basic needs at the moment. Providing support and assistance for those families in the tax cody strongly believe it should be the gentlemans time expired. Let me remind members to leave enough of your five minutes questioning time for the witnesses to get an answer in. Well now go to mr. Rice. Youre recognized for five minutes. Mr. Rice . There you go. The most effective Antipoverty Program would that be another government stimulus check or would that be so, i think it depends on where we are with the virus. So if we think that the economy is paced to reopen and that individuals think its safe to go back to work, that can allow recover and people get back to work and earning a paycheck. However, if we are still cautious and we feel that the that we still need to fight the virus, as i mentioned at the end of my testimony, that is probably a little more Economic Relief is necessary for the time being. The biggest portion of the corporate relief that mr. Doggett was referring to earlier was the Payroll Protection Program. What did the Payroll Protection Program [inaudible] yes, so very generally, it provided forgivable loans to Small Businesses to keep the workers employed. And to keep the workers employed. So the workers really [inaudible] or, repeat that. To keep the workers employed so the workers were really the primary beneficiary of that, correct . Yeah, this goes back to my earlier point that theres really not much its not useful to make a distinction between relief for businesses and relief for individuals because this is an entity that thats the proper unit of analysis here. And the purpose of it was to encourage businesses to keep employed people who they would otherwise have laid off, correct . Correct. So, i dont know the jury may still be out on its total effectiveness, but the goal of it was to keep the employees and the employer relationship maintained. I live in a big resort area called myrtle beach, south carolina, and i can tell you that there was no industry more affected by this virus than the tourism and hospitality, and it shut down hotels and restaurants, actually 1700 restaurants in my district and those places were actually ordered shut. They couldnt have people into their businesses and i have heard from employer after employer after employer thanking me because they were able to keep their employees on payroll through the Payroll Protection Program throughout this pandemic. They were to protect employees, and able to keep their businesses together and now that the restrictions have eased, the people are back to work. They have survived because of it. And the beneficiary for that have been the frontline workers. People on the lower end who otherwise would have been laid off for months have gotten paychecks continued because of this provision in the cares act. So i would strongly push back on mr. Doggets characterization that it was big business. And the Payroll Protection Program was limited to Small Businesses, correct . Yes. And also you reference the fact that we need to ensure when people go back to work that theyre safe. Would you think its a good idea to perhaps have a credit for businesses at some level, the government would help them make their workplaces safe for people to come back to work . So, i think there is logic to the underlying idea to make sure that businesses are improve the environment for workers so they feel safe to go back to work. Whether thats a tax credit or other sorts of incentives. I think thats up in the air. Im somewhat of a tax policy purist. Id like to see less stuff in the tax code, but i do understand the logic here. And mr. Doggett said that the republicans held the line for credit for people on the lower end. Is the republican tax bill that not one democrat voted for, did it change the Child Tax Credit at all . Yes, the tax cuts in did expand the Child Tax Credit and again, i thought mr. Doggett just said he thought it held the line gets expanding tax credits for did it expand the Child Tax Credit . It did expand the Child Tax Credit. The gentlemans time expired. I now recognize mr. Larson for five minutes. Well, thank you. Mr. Chairman, i want to thank all of our witnesses as well for their testimony. Covid19 has demonstrated both Public Health as a nation in our economy and i thank for pointing that out theyre linked and tied. And if were successful, we have to address both. I think its helpful to have hearings like this with expert witnesses because truly, thats what we need to do. And in his testimony he talked about the success of the cares act instituted by democrats and joined with republicans in coming up with the solutions. The heroes act presents that same opportunity, but so does the opportunity here for us to address whats going on. I want to submit for the record, on tuesday, it was the Federal Reserve chairman Jerome Powell who testified in front of the Senate Banking committee. I submit for the record his Opening Statement. What chairman powell said is that is low income households have experienced by far the sharpest drop in employment while job losses for africanamericans, hispanics and women have been greater than that of any other groups. If not contained and reversed, the downturn could further widen gaps in economic wellbeing. That the long expansion had made some progress in closing. Our colleague, our great colleague, john lewis has said that at its core, this is a civil rights issue. And chairman powell points out, our Nations Health and economy is inextricably linked and tied. The expression i want to get to is that we have an opportunity here to come to th together. I have long believed we can take our existing programs and expand upon them. For example, the this committee has taken up the cares act. And this xhcommittee is thought to deal with reform. And with regard to Social Security, something that the congress has neglected for over 37 years, and hasnt had an expansion in 55 years. But if we argue, as i was taught in the private sector, that theres three legs on the stool, shouldnt we be seeking to prop up all three legs and make sure were providing the most basic requirements to those left behind. Including the 5 Million People currently on social distance who received below minimum income checks for their efforts that they paid into throughout a lifetime. My first question is, i would like to ask mr. According to the center for budget and priorities, connecticut residents were missing on their Economic Impact payment if they dont fill out a form with the irs. These constituents are most likely to be the lowest income earners. Can you expand or expound on the programs there are high efficiency rates, tic and of course, Social Security. Absolutely, this is a Crucial Point you bring up, representative larson. We can write policy in congress and not have it have the intended effect when we dont think hard about what peoples lives are really like. So, we should keep in mind how much people who actually participate and can benefit from the programs, expert as much as anyone else. So the recovery rebates or Economic Impact payments are right now likely to miss up to 12 million or so people otherwise eligible and would need outreach. But we could have done more to take advantage, for example, the snap program or the wick program which have extraordinarily high participation and could have helped us reach a lot of the households who desperately need the resources. Look, nobody wants a program to be inefficient and to be slow to respond, but what we need to do is think hard about who various programs reach and the eitc for workers with qualified children, for example, has extraordinary participation rates of 80 or potentially more, but then you look at participation among workers without qualified children and the participation rates are maybe half that and thats likely because the credit is so modest. So, it was great to see. Unfortunately, due to a lot of pressure, but at the Treasury Department and the irs ultimately took advantage of its ability to deliver payments through the Economic Impact payment, through Social Security, through veterans, and other programs, and i think that Going Forward we need to make sure that thats not optional and that in fact, the Treasury Department works even more extensively to reach a lot of folks who are likely to be left out. Thank you. The gentlemans time has expired. Expired. Youre recognized for five minutes. Nice to see you. Thank you, mr. Chairman. If i were to actually reach out to and forgive me i have a new coonhound who decided to just visit me. If i were to reach out to what policies on the tax front could we adopt that would do multiple things, help stability for those of our brothers and sisters on the lower side of the economic deck strum, but would also start to get economic expansion, some velocity as quickly as possible, and i understand that we have an unknown in front of us and that is whats happening with the if i said give me one or two things that the committee shou should have the most opportunities in our society. What would they be . Thank you for the question. So, i think that there are two things considered. One, and ive already been over this, that there are still a lot of individuals and businesses that need relief. I think that if individuals continue to need relief, that another round of payment is justified for businesses. If the down turn continues and the economy is south, the loss provision, or the i think that lawmakers should look forward for the provisions in the tax cuts and jobs act that are going to expire. For example, in 2022, the 100 appreciation with start to save time and intellectual and these are things that could work again and the economy that would reduce cash flow and could be paused if the economy is not up and running by then. If i came to you, and we had those provisions, is there a model i could convince my friends on the other side that these could have impact on job vitality. Ang we see the hardship and suffering out there. From a policy standpoint, the money for child care and what do we do to actually get employment and opportunity because before this happened, we were finally seeing sort of that miracle, weve had about 24, 30 months of a really breakthrough in wage gain for our i always hate this term, but our low eest quartile. I know its getting back to that, but from a tax standpoint, if i asked you for snus three, what are they . We should be modest what the impact of a tax policy could have at a time like this. I go back to virus containment and staying out of the way and also think that resubmitting some of the provisions that phase out, whether thats expensing or amortgagization, those are the things that you should look at. In tax policy, whether its for Economic Growth or anything, theres no Silver Bullet so i want to use any type of implied direct offset type of incentive for hiring or for business to do employment of individuals at certain salary thresholds, what would you consider . If we were looking to reduce the after tax cost of hiring people, that could be some combination of payroll tax cuts for employers or earned income tax expansion, those are roughlily similar in their effectiveness. Thank you. Thank you, mr. Chairman, thats sort of what i was looking for. Were now going to go to a two to one ratio with our members asking questions. Miss sanchez, youre recognized for five minutes. Thank you, mr. Chairman, i want to start by thanking our witnesses today, because their testimony has been possible. I hope that my colleagues on the other side of the capital tabling take note even a little bit. Families cannot wait for relief. And the tax code not one that gives them a handout, one that gives them a fair chance. I have been proud to Champion Care givers and workers. As a mother to a 11yearold i know all too well how difficult it is to not have child care. Im proud that my legislation to help cover employees expensed related to the pandemic was included in the most recent package that passed the house. But we have to do better for care givers and not surprisingly the majority of care givers are working moms and other working women. California has four and a half million family caregivers that provide estimated 63 billion in care, and the pandemic is severely impacting this unique population and we have to do better for them. Can you share your thoughts on ways that we can better target our work to help these people, specifically family caregivers. Thank you for the question, congresswoman. I will say that many of the tax provisions in the heroes act, including expanding the refundable tax credits will hopefully provide relief and support for family care givers. As you noted, women often tend to shoulder the burden of caregiving responsibilities disproportionately and there have been stories because the child care system has not had the support it needs in order to operate safely, help child care providers make it through the pandemic and enable safety regulations to be met, there is a concern that women, who tend to be lower paid in a family, may end up having to leave the work force or cut back on paid work in order to provide care. So i think the tax relief thats in theroes act, includin making the tax refundable, if paired with an investment in Child Care Fund and as well as the family and paid medical leave provision and making those more permanent and comprehensive all help families balance their work and caregiving responsibilities. Thank you. Were trying to get people into the work force not sideline them and for too many women thats the reality if there are not investments made in child care. Ms. Rodriguez, new for sharing your very personal story and honest struggles with us today. Your experience is not unique, its like many people in the communities which i represent and you speak on behalf of millions of working parents mo are finding themselves just caught in this situation where they dont have the financial wherewithal to keep their family together. Hopefully your input will help members on this committee renew their commitment to fight on behalf of working parents. Youve heard many comments and questions made by Committee Members today. Im wondering if you have any thoughts youd like to share based upon what youve heard so far . I think were fighting for one reason. You know. We dont know whats going on with this virus that we really want to go back to work and we want child care for our kids and we want a safe place to start working. Its the most important thing. And we really need relief like right away because we are not sure whats going on with our jobz and i dont feel like secure to go out and work anywhere because i have two kids and i want it live for them, you know . They are my reason and i want to be good for them. So, i think we are going fighting for the same reason and i think its very important to have like a relief directly to a person who make taxes, even though if theyre legal or not. If they pay taxes, they can have a check. Thank you. If youre paying taxes and they are important for the country, you know, because they are contributing with the taxes. Thank you, mrs. Rodriguezment i totally understand that and i do want to get to a last question because its something that you touched on. Miss matsui, im hoping you can talk about the interplay between tax assistance and direct systems. And they must go hand in hand and im hearing a little of that from miss rodriguez. Can you comment on that . Yes, new for the question. As you know, child care providers are operating on very low margins, many have closed and those that are operating are working at half capacity. They dont have the funds, many of them, to have kind of the health and safety materials that they need. So in addition the Child Care Development block grant through the child care and Development Fund offers direct assistance to families, to low and moderate working income families. Unfortunately one in six eligible children can receive those funds because of the at the current level of funding. So the refundable tax credit can help parents who cannot afford child care, pay for the child care that theyve already paid out of pocket, but it has to work in tandem with both direct assistance that pays for child care as it comes do and support the child care system. The tax cuts punjab zack expanded the Child Tax Credit to 2000 for taxpayers with income of science 400,000 to republicans failed to increase the refundable credit to that same amount. The earned income threshold was loaded or increase the credit percentage or a limited the child earned income altogether. The tax cuts and job act ensures the poorest americans whose children arguably would benefit from the increased the most student benefit, which is a big reason why last year i introduced the American Family act with congresswoman delauro which would meaningfully expand the Child Tax Credit irrigators act included a wonder expansion of the Child Tax Credit making it fully refundable, increasig the amount of 3000 per child and 3600 for children under six. Make 17yearold qualified 17yd children gives the secretary authority to provide enhanced credit as an advanced for a monthly payment. New research from the said on poverty and social policy at Columbia University shows that prepandemic a Child Tax Credit expansion like that included in the heroes act would cut the Child Poverty rate by twofifths and the poverty rate for black children in half. With the covid19 reception current Property Rights are protected be higher than these estimates and the heroes act would reduce Child Poverty from this higher baseline. Ms. Rodriguez, thank you again so much for being here today from our great state of washington. Under the Child Tax Credit expansion and heroes act, families could receive 250 per child and 300 300 per child r the age of six each month. I wonder if he could talk about how the expansion of the Child Tax Credit in that way would help your family and the importance of making sure that the senate acts quickly to make that happen. Well, it would be really good because right now we have that pay food and the food is really expensive, let me tell you. Everything going up. So it will have liked to say many as before. This money will be really helpful because we dont want to be like a public charge, like asking for more and more help. So this directly will be great. I will be really happy and we dont feel like while were going if were going to have food or not or if, we have to pay our bills or save money for food, will be really helpful. But will be better directly to our families because if you guys get money to an employer, sometimes they dont get it, itll pass the money to families so it would be better if we have the money directly. Thank you. Ms. Bovellammon, what you think is needed to build a longterm Financial Stability for families and address the racial inequality that is been highlighted by this crisis . Thank you for the opportunity to respond to this. Right now the health of communities, particularly marginalized communities, i really want in center and our discussions and we are releasing the devastating effects that those disparities can have any context of this virus. But the epidemic of poverty and racism that predate this virus have been making people sick and has been shortening peoples lies for generations. I really think now is the time to have this discussion as you are raising, because the inequities that have been created by this virus and have been created by this current recession are just being exacerbated. They are not being created. They are being exacerbated. If you want to live in a country where every child born has an opportunity to thrive, then we need bold policies like the sun in the americas family act and others that extend benefits, increase the credits for families starting with the lowest income families so that theyre able to afford basic needs today, tomorrow, well after the end of this pandemic for longterm stability and health of our children. Thank you so much, and i yield back, mr. Chairman. Thank you. The gentleman from illinois is recognized for five minutes. Thank you, chairman thompson and Ranking Member smith, and i want to thank the witnesses for their valuable testimony today and for holding this hearing. And mr. Pomerleau, you mentioned in your Opening Statement you highlighted a little bit just kind of the unprecedented measures we engaged in as a conkers when it comes to response to the coronavirus, and you look at the amount of money, over 3 trillion that we have appropriated and put into the economy, really unprecedented amount. Thats the most money where ever spent in history of our country in the short period of time in terms of our response. In addition we allowed the fed through the cares act the ability to put another three, 5 trillion into the economy and so all of those things obviously had been, particularly the appropriate money has been on the proverbial federal credit card and didnt have a Rainy Day Fund and so this continues to add to our debt. We are up to 25 trillion this country is in debt, and that debt has been created, is going to cause us problems down the road. Im going to comment on that in the second, mr. Pomerleau Geoffrey Kemp but it think as a look at as part of this hearing today and look at what are the next steps to incentivize growth to allow people to prosper and thrive and get people back to work, get to the economy that we had, precut wood which was the y life died in terms of unemployment, come in terms of opportunities come in terms of jobs, in terms of stock market, all of those things. I do think we have to look sector by sector and business entity by business entity in terms of who is been to support effective moving forward. Obviously its also i think important and i believe obviously health and safety is number one priority that we have to look out for as we continue have covid with neither a cure, treatment of vaccine. But shutting down the economy will not accomplish the goals of safety and health. Again went to find that balance, that measured approach moving forward to do that. I believe in order to restore our economy to its precome with the strength it is essential workers and consumers are safe, participating in the workplace. Thats why we as republicans and a number of democrats support tax incentives to businesses to take the steps necessary to ensure that this isnt the case and that we are able to open businesses safely. That brings p2 p2 a piece of legislation i want to mention called the clean start back to work back to work credit act that im sponsoring with Stephanie Murphy of florida, and we believe this is again looking at what other priorities than people can go back to work safely, what a clean, safe, sanitize workplace, and what our bill does is create a temporary tax credit to help businesses cover the increased costs of training, to up properly sanitize sanitized surfaces, cleaning services, cleaning supplies and ppp as a start to reopen. And qualified entities can apply for 50 refundable tax credit of up to 25,000 per unique location up to 250,000 maxima. We believe i just like us very, very important. Secondly, when we think sector by sector another one that is been disproportionally affected has been the Beauty Industry, barbershops, beauty salons. Many states theyre just starting to open and again ive introduce a piece of legislation with congresswoman delbene and also with senator portman and senator cardin that is called the Small Business tax fairness and compliance simplification act, and in short our goal is to extend section 40 5b currently available to restaurants to the Beauty Industry and barbershops because they have been disappointed with affected. We believe this is important for that industry and look for to working on behalf of that. Having mentioned that, mr. Pomerleau, one is a good comment on my earlier comments about the amount of debt we continue to great in this country and the ramifications of that and the fact we will not be able to spend our way out of this corona epidemic. Thank you. Thank you. Even before the pandemic, the cbo projected that federal debt held by the public, the percent of gdp was run 80 . This year it would climb to about 90 97 in 2030 and jamaican the additional spending, the relief would be over three children, it is about 4 trillion and that doesnt account for the slower economic output that we are already seeing and includes that more. So it is certainly something to keep in mind, but as a mention in my testimony i dont think its something to be concerned right now. I think the cost of doing too little in Economic Relief is greater than doing too little. If you just look at the indicators here for u. S. Treasury risk below 1 and federal spending on interest expenses been below 2 for many years and has continued to be below 2 . So were not seeing it is crowding out to too much more important government spending. It seems we still have space. That said, it is something that will need to be addressed in future and im hoping it is addressed after we installed the current economic issue. Thank you. The time of the gentleman has expired. Ms. Moore, you are recognized for five minutes. Him him you may have to unmu. Thank you, mr. Chairman. My time is limited sector choose what you want to talk about very carefully because i would love to have questions of each and everyone of you. Well start out by saying how good it is to know that [inaudible] always good to know that somebody is [inaudible] i guess i want to start out by saying to ms. Martha rodriguez, when they say that unemployment has been lowered among africanamericans or latin folks, they are talking about folks like you and your husband, the people with so whenever you hear that we have lower Unemployment Rate, think about what it had been when you had your four jobs and no one should have to work four jobs to take care of a family. I wanted to ask mr. Pomerleau a question. You made a comment we should not raise taxes while the economy is bleak. And i guess, im wondering do you also think we should not raise taxes on the poor . As others have said you today that we can tax people into poverty and we can do that by being austere, for example, being in denial that we need of Economic Impact payments. Would you agree, mr. Pomerleau, were protecting wealthier people are people who are more secure that we should also not raise taxes on the poor . Yes. And its a pretty good transition from a previous statement. There is more reason to be basing taxes on lower income taxes are high i i mean, those who dont pay taxes either. Those who need things like the economy Child Tax Credit. Do you endorse those proposals which where people dont necessarily have [inaudible] provide them with money . So i think theres a question as to whether you should be credit or providing additional checks to individuals. One of the virtues of the onetime Economic Impact payments that could become two times is a student which the release can be provided. Okay. Wait a minute. Im just trying to say, let me move on. This pandemic is, we have heard from other experts here that we can expect the Economic Impact to last probably through 2021. That being the case, i guess i want to know whats the sustainability of things like the Economic Impact payments versus expanded earned income tax credit . And maybe i ought to ask allison to take up the rest of the time talking about the process now of building some recovery. Because if weve got, i saw several of you have said that poverty among children is now at 40 . So can you just share with us the importance of putting in place something to prevent hunger, starvation and homelessness and Health Problems among children . Yes. It is important as Economic Impact payment for shortterm relief. We know that this is going to go well into the future we dont have to look very far, great recession, Child Poverty rates things like the earned income tax credit and federal tax could really worth expected in mitigating those hardships. Thank you so much. Let me ask you this. I have a proposal and im so pleased that you look through it, just comment on what it might do for our Economic Foundation Going Forward. Yes. I think a couple of [inaudible] children, people with disabilities and elder extend benefits to those [inaudible] income tax obligation, that they a lot of other taxes and so it would extend the credits to those people. It also provides Monthly Payments which i think is important. If you want to know the Health Benefits often goes to things like behaviors and reductions in and we know that we need those sorts of Healthy Behaviors like purchasing nutritious foods, like reducing the stress of paying bills. We need to be able to do that every single month. Thank you. Thank you. My time is expired. I want to recognize mr. Larson for a unanimous consent request. Thank you, mr. Chairman. Mr. Chairman, i would like to submit for the record is statement from the insured Retirement Institute as well as the joint trade Association Letter to help Retirement Savers recover from the pandemic. And i thank you and i missed that before and thank you for the opportunity to submit that for the record. Without objection, so ordered. Could all members please mute . Were getting some feedback. Thank you. Mr. Boyle does not wish to inquire. I recognize mr. Beyer for five minutes. Thank you, mr. Chairman very much. I would like to turn to mr. Pomerleau first. You discussed your opposition to quoteunquote arbitrary limitations on tax benefits on the corporate side. I would like to push back and say theres not much arbitrary about trying to rein in excessive ceo compensation, which as of 2019 was 271 to one over the average worker. By comparison in 1965 it was 20 to one. The average ceo of fortune 500 made more than 17 million in 2018. Buybacks 85 of that money went to either stock buybacks or shareholder returns. Mostly to manipulate ceo pay. If were against arbitrary limitations how about the rebates in the cares act which would be limited taxpayer with dependent arbitrarily limited to taxers with children under the age of 17 . You had an adult child with significant disability or your taking care of your alzheimers parents, you are not eligible for that. Perhaps more arbitrary based on corporate practices. Wouldnt you think perhaps that we should expand those things from the fair act and get rid of the arbitrariness of limiting this . I have no problem expanding the definition of what is considered at the end of the Economic Impact statement. I estimated that using, switching from the definition of Child Tax Credit which is children under the age of 17 to using the definition that is used for the dependent exemption under prior law would expand eligibility by about 26 million dependence. Thank you very much. And mr. Duttagupta, ive been a major proponent of expanding Unemployment Compensation and specifically tried to tie those benefits to Economic Conditions as long as theyre necessary id want to thank you for all of your will be helpful advice in this arena. Because expanded unopened conversation has been a vertical lifeline for millions and millions of people, but with good reason were focusing on responses to this crisis. But as you and of the panelists have eloquently noted and as our wonderful witness from washington state, covid19 has fallen hardest on those who have the least and ability expose the underlying economic wealth inequality in our society. Mr. Duttagupta, doesnt a point to our need to think beyond the nearterm as we structure tax policy in response to this crisis . Thank thank you, including fr leadership on ensuring that our response is what a tie to Economic Conditions. And i would definitely agree with you. We are benefiting from the fact that people did not experience the great depression. They established Social Security act and took other measures that created at least some foundation for us today to be able to get some money out the door quickly, and with all of its struggles, Unemployment Insurance system is one of the only come one of the only ways we can get our weekly checks to people who need it. I think that the last economic expansion, again, one of the longest and not the longest in u. S. History still left millions of households behind and inequality persisted at the extreme levels including extraordinary racial wealth gap where we made little progress. The gaps are actually worse today than they were more than a century ago. So we really should take the opportunity Going Forward to think about how we can lay the foundation for a much stronger economy. I realize that in the midst of a crisis we are trying to put out fires, but afterwards we should ask ourselves do we want to rebuild the same sort of structure or can we build a new one . One thing i i would add is thae havent said this directly but a major reason why families here are struggling to even a minimal amount of cash on a weekly or monthly basis, in the 1996 welfare law we got cash assistance, and we are paying the price to this day. So proposals like representative del bene, American Family act are very much worth pursuing and it makes a lot of sense to include a version of that in the heroes act but we should really ask ourselves whether it makes sense for them to be much more permanent and durable well beyond this crisis. Give very much. The time of the gentleman has expired. Mr. Arrington, you are recognized for five minutes. Chairman thompson and Ranking Member smith, thank you for hosting this hearing, and great discussion. Its incredibly important to deliberate and debate how best to move this country forward into, through the Recovery Period and back to the precovid performance that we were seeing that was unprecedented. I think its important because its a blessing if there ever was one going into this unprecedented Public Health crisis to have the fundamentals the way they were prior to covid, and having the lowest unemployment in 50 years, having wages increasing and more for the lowend income earner than the upper income, among the many other things, is a fantastic position to be if youre going to be able to bounce back. I think ms. Matsui would probably appreciate at least the outcome. She might debate whether it was as a result of progrowth tax policy. I would say it was absolutely a huge part of that, that women were, and minorities, with those who benefited the most in tax, with the tax reform. Im looking at a New York Times article that talks about the Hispanic Women making the most gains in employment, and that the most of any prime Age Working Group were women, and with the lowest unemployment in africanamerican and other minority groups. Thats something i think we can all champion and cheer for and be proud of. Ms. Rodriguez, i really appreciate your story, and certainly represent hardworking families all across the country, and i thank you for your testimony. We certainly need to find ways to shore up the safety net and provide the sort of temporary target assistance to help folks like you, but if you can have the choice between more government assistance and stimulus checks and whatever programs we can create, or you can have a job back and you can have the certainty of an income and a place that you would go and do what you do to provide service and provide for your family, which one would you prefer to this point. And i want to go back to work. Work. I really want to work on a want to work in a safe place, you know . This is what i want. And if im going back to work and the school is not going to be the same, im going to have childcare. I think everybody we are going to need childcare at this since. So, ms. Rodriguez, i so appreciate your desire to work because i think that the most important thing we can do to get our country out of this sort of temporary recession and back to a strong rebound and recovery and an economy that was growing like i described is to reopen the economy. In texas we are about 75 open and we are really trusting the citizens of texas to know how to safely return to work. And we know that there is a more risk now because of covid, it is going to be with us for a while. And that we can do some basic things to try demand to those risks, but we trusted the people of texas and i think longterm, those families are going to be so much better off that if we just try to find ways to temporarily keep them just hanging on instead of permanently sustainably going back to work and making a living. Did you feel like you would know how to responsibly and safely go back to work at this point, knowing what we know about covid . Right now it is summertime and i dont have job because it is summertime, so, but if everything is going to be okay i will return to work for the next school year. And hope everybody will be doing the same thing, but the thing that we receive email at school is not going to be the same. So this is something that we have to work on it because if the school is going to be we have to keep home and school and it will be so hard to work and be parents at the same time, you know . I bless you. Thank you so much. The time of the gentleman has expired. I now recognize mr. Flossie for five minutes mr. Swazi. Thank you, mr. Chairman. Think at all the witnesses for the work that youve done here today and for your insights. We appreciate all of your time and your help here today, would ask mr. Pomerleau a question if i may. Mr. Pomerleau, do you think the state and local governments are an important part of the National Economy . Yes. State and local governments are important employers and a lot of people currently employed there. I think the number is about 20 Million People are employed in state and local governments, correct . That seems about right. There been about 1. 5 1. 5 bin people have been laid off or furloughed from state and local governments during this recession, which is double 200 people that a been been laid off or furloughed and the quoteunquote great recession. Yes. The layoffs have it people that both work for the private and public sector. Do you think the federal come as a role in helping to help the state and local governments . The way i see it is that state governments in contrast to the federal government, they really cant borrow in the same way. They are restricted by bounce budgets amendments so when revenue goes down because of the economy goes down, and governments are going, state and local governments the two tighten their belt and that could lead to layoffs and that could lead to people unexpectedly losing their jobs. I know theres concern about pension bailouts and things like that but i think at very limited, lawmakers at the federal level should look at what state and local governments are losing in revenue. So we need the federal government to help the state and local governments, you would agree, right . I think theres a place that. We dont want local governments to raise taxes. Correct. One of the options speeded we dont want them to raise taxes and we dont want him them to contribute to lay off employees, correct . Correct. The only choice for state and local governments would be massive deficit there facing, 615 billion. Though i think they can use their raise the taxes or fire more employees from both of what you think are bad ideas, or get help from the federal government. I think you would agree with the state that the governor hogan, governor cuomo, chair and vice chair, quote each day that Congress Fails to act, states are being forced to make cuts that will devastate essential services the American People rely on and destroy the economic recovery before it even gets off the ground. I think you would agree with that statement generally, when you . Yeah, and as revenue declines for states can states would have to react by reducing. The republican president of u. S. Coverts of mayors says quote my message is straightforward and urgent. American cities are still being devastated by this pandemic and it is imperative that congress and administration take swift action for the beginning of the next fiscal year which for many cities is july 1, thats from a mayor cornett, the president of u. S. Conference of mayors. So mr. Pomerleau, youre the quoteunquote republican weights here today but you are agreeing that our state and local government need assistance and they need it urgently. Otherwise they will be forced to either raise taxes which we dont want them to do and is unlikely, or continue to further erode the National Economy by firing employees. Who is going to be affected by that . People would be affected are our schools, 47 of the funding of schools and the United States of america is provided by state governments and the stakes are devastated right now. The rest of the money states provide the biggest percentages are for health and Human Services work the next biggest after that is for public safety. I would urge you please, mr. Pomerleau, any influence you have on my republican colleagues to please encourage them that it is essential for our nation to recover from this recession affected by this pandemic is for us to find and find quickly our state and local governments. And when Mitch Mcconnell says this is a blue state bailout and state and local government should file for vacancy, its really the height of hypocrisy when, in fact, his state every year receive subsidies from the federal government for states from states like my new york because with three to six hardest hit count and the United States of america and by Congressional District alone that of an affected by this pandemic. So thank you, mr. Pomerleau for your cooperation. Thank you to all the witnesses. They could to my college and thank you so much to the chairmen and Ranking Member for their assistance, and i yield back. Doctor ferguson may be having some problems. Lets skip them right now, come back to him. Let us know when your situation is change. We will go to mr. Davis from illinois, recognize for five minutes. Ms. Chu, you are recognized for five minutes. Thank you, mr. Chairman. The cares act provided fans with Economic Impact payment to pride quicken direct Financial Stability during an uncertain time. It provides 1200 per adult and 500 per child. I was disappointed, however, that only individuals who filed with a Social Security number were eligible for this payment. You are over 4 million workers in the United States who file taxes using an individual tax identification of and theyre all left out of this release. These are workers who pay taxes and contribute to the local economies but are not eligible for relief. What is worse is that even filers by the Social Security number were left out if they were married to a itin filer. That is outrageous. All the members of the family could an american citizens, but if that one person was a itin filer, all of them lost out. And yet itin filers paid 23. 6 billion in taxes in 2015. Covid19 doesnt discriminate in many of the excluded families are experiencing hardships to the effects of the virus like so Many Americans and thats what i introduced a coronavirus immigrant families protection act which would ensure that itin filers unmade eligible for these payments and was included in the heroes act which the house passed in may. Mr. Duda goopy, can you expand on how excluding itin from some covid19 relief would cause further economic disparities for people of color . Thank you for drawing attention to is really important issue. Fundamentally every time we exclude a marginalized group from relief and assistance and support were undermining the Public Health response and the recovery. You mention over 25 billion a year in taxes is paid by itin filers can even when you subtract out the benefits, both benefits received, you still have a very substantial net payment of over 15 billion in that taxes based on 2015 data, for example. This pandemic is made utterly clear that our country faces severe Racial Disparities in health and economic outcomes. One of the ways that we can address those disparities, longstanding disparities, is by ensuring that we include everyone regardless of immigration status. And we should note here that when we are talking about workers with itin, they are voluntarily complying with the tax law trying to contribute to the u. S. , both broadly in the labor market and also with regard to taxes. And it includes even folks who are from europe as well as folks from canada. Disproportionally certainly people from central america, asia, africa and well. The final point i would make his right now would you think about essential frontline workers, in many ways we are really being buoyed by undocumented immigrants and itin filers. We owe it to them who are in many cases the frontline workers and our health professions, in agriculture, keeping our food supply system working so the people can still eat if they have the resources to afford the growing cost of food at home. We really owe it to them and it will be in interest of our Public Health and of our economy to ensure that their included in all future relief. And ms. Matsui, and a short time i have remaining, there are disparities and especially for women of color. I was shocked to see a woman in Company Making only 72 cents a dollar for every white man. Can you discuss the disparities and Say Something about the remedies . Thank you very much for the question. Yes, the refundable tax credits of the eitc and Child Tax Credit are very important. In 2191. 6 million a a he i women benefited from eitc and cdc, and because the expansions are targeting a particular and would benefit job such as healthcare workers where the workers are kind of so probably featured in taking such a strong role now, the relief and theres at would also benefit those workers to help to imitate the wage gap and also help them meet basic needs. Thank you. I yield back. Thank you. Thank the gentleman. Now recognize mr. Kildee for five minutes. Thank thank you, mr. Chairmar recognize me and could align me to participate on this subCommittee Hearing today which is so important. This hearing has highlight i think in but he still terms the pressing needs for continued support our working families. Last year i introduced the working families tax relief act with my colleague on the ways and Means Committee mr. Evans, which makes important improvements to the earned income tax credit and the Child Tax Credit. These credits are critically important in expanding and would positively impact 46 million american households here the fact is even before that coronavirus pandemic, to many working families have been struggling just to make ends meet just to put food on the table, even with the help of the current eitc and Child Tax Credit. So this pandemic has really only increase the burden on these households. A majority of whom being impacted our communities of color, both impacted by the disease and by the economic consequence. Our recovery will take a long time. Weve heard that already testified to. Expanding his credits is important to helping these families. Of course the heroes act included important expansions of eitc and the Child Tax Credit. But until the defendant acts, these family are still looking a really long road ahead. My question for the panel, perhaps starting with ms. Matsui, is to help clarify a point. Because listening to some of my colleagues, one would assume that there is a choice either between Business Loans and tax credits or even expansion of ui, and eitc and Child Tax Credit. Can you help starting perhaps with ms. Matsui, help expand what eitc and Child Tax Credits are important, or without the necessary support that most of us, virtually all of us agree to and supported when it comes to visit support . We were there with the paycheck protection program. We supported it. We continue to support it. In fact, senator booker and i along with republican calls have a bipartisan bill to expand Small Business support so were all in a day. Can you address what it is not nesser for us to choose between Small Business and assuming that they will then produce benefits for working people and something that clearly makes the case for benefits or working people like eitc and the Child Tax Credit . If you could respond, ms. Matsui. Thank you very much for your question and thank you for your leadership on the refundable tax credit including the working families tax relief act. I do appreciate the question because what we know about women and workers who were in the lowest paid profession is that even when they are working fulltime before the pandemic, incomes are falling below the poverty line or near poverty. They are not making enough on their paychecks alone to support their family. What the refundable tax credits do is operate as a way to supplement and operate as an incentive to keep at work but those a necessary things that they need in order to meet the basic needs to support their families. At the same time as ms. Rodriguez, my father witness pointed out, you cant come back to work until the job to go back to until its an horned to support businesses just use childcare industry as an example. So many childcare providers dont have the wherewithal to spend on investment in health and safety requirements or spacing out children so they can social distance and responsibly operate. So theres both need to have the resources that they Small Businesses and employers can safely support the workers, and both in the meantime but as an ongoing basis to support the lowest income workers who are going to work every day, generating activity our economy and fulfilling roles all of us rely on but cant feed their families. Thank you for the question. Thank you very much. Thank you, mr. Chairman for holding this really important hearing, and and i yield back y time. Thank you. Antifa purchases. I will now recognize mr. Schneider of illinois for five minutes. Thank you, mr. Chairman. Thank you, like mr. Kildee said, thank you for allowing me to participate in this hearing. Though im not an official member of the connector to spend a wonderful opportunity to it from the witnesses i want to thank the witnesses for spending the time with us and sharing your perspective that i was to with billy and something that mr. Suozzi touched on and the thrill state of okemos play an important to our economy. The challenges they are facing unprecedented as they are literally on the front lines come First Responders protecting our basic necessities, everything from water and sanitation, basic needs and delivering the services and thats why introduce earlier the supporting state and local leaders act. This is Bipartisan Legislation that would provide need to state and local governments to let them take a very same taxable deductions are private sector poised but they can to keep their people on the payroll. Critical that facility at situation of having to lay people off. One of the things in relation to it but if i had a single word to describe the crisis were in weather is for businesses, municipalities, for workers and families, its uncertainty with this crisis. Businesses operating in an apartment where they may not know if they can open up abnormal operations. Ms. Rodriguez, you touched on that. We dont know what normal means whether its going to be a month from now, six months from now or a year. The workers are facing incredible job uncertainty with respect to their job security, and that affects their benefits such things as Health Insurance and retirement planning. Families are struggling to put food on the table and make ends meet and the economy in this uncharted territory. Wherever possible we rely on the federal government to try to provide some of the certainty. Thats what weve been talking about today. For businesses is to understand the best practices and adapting to a Common Social distancing. For families trying to stay safe if we know when we emerge from this crisis life in general and in particular the economy post covid mr. Cotton will be vastly different from what preceded it. I hope that meets galvanize support for a national big family policy and it reflexively for workers to work from home but we need to get businesses, workers and families the certainty they need to make it through this crisis. The strongest will congress and the federal government has used thus far to impart for the Economic Impact payments. They provide workers and comes with the certainty they have some Financial Assistance in getting through this crisis. They provide businesses and sustain consumer spending. Beyond being an appropriate effective proven an antipoverty tool, the eit insureds working families have economic wherewithal to emerge from this crisis and get back on the road to prosperity. That being said we are at a critical moment in our nations history and i think we have a real opportunity here to reform our tax code to ensure it works for all americans. We do know with the economy will look like once we get to this pandemic we do know that a commie with a different side like the witness to address how at this difficult moment in time we can make positive change in particular for struggling workers and families. Ms. Matsui, maybe we can start with you. Thank you for the question. I will say that it does seem like a moment given the importance that weve seen for the care sector, and as my fellow witness mr. Duttagupta mentioned earlier, to invest in childcare as a public or to make sure that the burden is not placed either on parents to meet the costs of shelter, on the workforce and providers to provide a highquality learning environment that is also safe and children need. So investments in the childcare sector to make sure not only that they survived the Coronavirus Crisis but it is recognized as a public good and that we dont continue to devalue the labor of caregivers i think would be a very important step in restarting the economy. Thanks. Mr. Duttagupta . Thank you. Just quickly i would add, first i think we need to make sure that we have the social infrastructure in place and the administrative infrastructure in place to reach families when they need help. It was far too hard to get resources into families, much easier for the Federal Reserve to backstop the business sector than it should have been. We need to make sure that the people have access to free banking. We need to make sure that people ongoing support just as we were able to in the past dialup Social Security payments which was mentioned earlier. If with ongoing payments to families to make sure that at a basic floor it would be much easier to dial the up in the future. Great, thank you and apologize to the other witnesses but i dont want to overextend my time. I yield back. Is dr. Ferguson finished with his call . I will go to mr. Panetta for five minutes and then come back to dr. Ferguson. You are recognized for five minutes. Thank you, mr. Chairman. I appreciate you holding this hearing, and i also do appreciate along with other member who just testified in front of me for allowing me to sit on this Committee Hearing and to talk to come had opportunity to talk to but more important listen to the witnesses that have been here today. Thank you to all the witnesses who have taken the time to come and present your site of things. I truly appreciate that opportunity. I also want to thank congresswoman eshoo for the work that she has done on something that is very important to us you on the Central Coast of california to her work on the coronavirus immigrant Family Protection act. Obviously here in the soluble of the world we have a number of immigrants coming in interpreting to our number one industry and our economy, contributing to our culture and it was unfortunate that they were not benefited, even mixed hams were not recipient of the benefits of the cares act and hope we continue to push the issue especially with her leadership style look for to continuing to help her and be a part of that. Obviously we note that the pandemic has taken a toll on everyone but as of todays witnesses have highlighted, its not taking a toll of everyone its not taking told everyone equally. Congress has responded boldly. I think we all understand that with the 2. 2 trillion cares act which provided direct mantra payments come supplemental Unemployment Benefits, and put in place certain protections for renters and homeowners. However, we all recognize that more needs to be done. Yes, we provided temporary relief but that is sort of all it was. It was just temporary. And yes, they preserve our economy, but as has been highlighted by your hearing today, mr. Chairman, left out a number of those who continue to contribute to our economy. And we should be looking at ways beyond just returning to where we were. We can take this opportunity to create a more equitable economy, yes, by extending the eitc, providing the cdc, creating a more resilient social safety net and yes just being better prepd for the next economic downturn one of the ways i think weve tried to do that in the cares act but also in the heroes act is looking at housing. Here the Central Coast am unfortunately housing is very, very expensive and they can prevent a number of people from continue with their lives, especially in this difficult time. Now yes, renters protection of been put in place but i think there needs to be more when it comes to rental assistance to families. I do believe we must confront an issue of housing supply, not just rental assistance but housing supply which we can do through the tax code through programs like the low Income Housing tax credit. I would like to direct this question to mr. Duttagupta, in that it want you to talk about the availability of Affordable Housing, how it can be a challenge for families and how it compounds of the challenges they are facing this time during the pandemic but in other, in all times like youre on the Central Coast. Thank you for the question. Housing is for the vast majority of low and moderate income families the single biggest part of their budget. And the lack of supply of Affordable Housing has been a longstanding problem especially during this economic expansion. Just to underscore that, it was not delivering benefits for everyone. And in particular it can lead to challenges of not only overcrowded housing it also lack of access to jobs or schools and education opportunity. And so we need to really do a lot more to tackle housing. We have just a fraction of people who are even eligible for Housing Assistance which is more on the demand side than the supplyside, but look, we need to create new jobs coming out of this crisis. We can think about creating jobs in the cares sector, we continue but doing it with regard to the Climate Crisis as well that we can also get with regard to physical infrastructure. We dont have enough Affordable Housing. People can be put to work to build that. We dont have, clean water still to this day parts of the country, including flint, michigan. People can be put to work to meet these national needs. So thank you for your leadership and drawing attention to the issue and i hope we do take seriously the need for doing far more than our to address housing burdens in this country. Thank you at a pulse like give a shout out to Suzan Delbene for her efforts when it comes to low Income Housing tax credit. Thank you for that as well. But also sticking with you, professor, the Multiplier Effect, i think its been interesting how weve seen it, saving personal savings rate increase but obviously with lowincome individuals and families that hasnt been the case. Theyve been putting right back in the economy. Briefly can you address the Multiplier Effect . Absolutely. In three words or less. It is there and if you give people more certainty, it will be more. There you go. I yield back. Thank you again. [inaudible] mr. Ferguson with us . Well, we have heard from all the witnesses. Thank you all very much for participating. Thank you mr. Chairman, i am online. Whoa, there he is, all right. Im going to recognize you for five minutes. Thank you, mr. Chairman. First of all i would like unanimous consent to enter in the written test of my colleague who could not be with us today. Without objection, so ordered. Also there is a letter to the treasury that he would like injured into the record as well. I would ask unanimous consent on that. Without objection. So, mr. Chairman, thank you for holding this important hearing, and listen, i look at where we are in the country right now and im starting to be able to see some differences between different parts of the country that are opening up and those that are not and a look at whats happening here in georgia and it is Pretty Amazing to see the rebound in the economy. I had the pleasure of going out and touring around my district this past week, and one of the citys that it went to see that has completely depend on tourism told me that the sales tax revenue for the city, for the entire year, was only off 1000 from the same three lasher which i think is pretty remarkable. It shows when the economy opens back up, people can go about their normal business and do ways. I think they are doing, i think what we are seeing here in georgia is that we are seeing a rebound in the economy. We still have tremendous capacity in our Healthcare System to be able to take care of individuals that need to be in go into the hospital and to think what weve done here is we did exactly what we set out to do, which is to been the infection rate curve down so we didnt overwhelm the hospital. They were about stopping the spread of virus, it is not slowing the spread of the buyers and the think that and hats off to america for and that i think it is time to smartly reopen this country and return the dignity of work to peoples lives and lets start in a very methodically rebuilding this Great American economy. So with that being said, i think there have been some good ideas discussed here. I think we need to be incredibly innovative with the tax code, not just in the short term but as we need to look ahead what our economy will be. I think one of the areas that we can all agree on, we have two protect American Intellectual property and make sure that we recognize the intellectual property is the backbone of future manufacturing. The ideas and the processes that we develop in america, those are going to lead to the new manufacturing process, whether its in biotech or genetics, whether its in traditional manufacturing. So mr. Pomerleau, the thing i would like to ask you, do you think it would be advantageous for us to consider things in the tax code that would make repatriating intellectual property possible and more advantageous . Thank you for the question. So i think this is actually a pretty good tax policy question here, so the tax cuts and jobs act did two things that may impact intellectual property and investment, and lawmakers might want to revisit both of those in the future, although it may not be appropriate within a pandemic setting. The first is that the tax cuts and jobs act scheduled the treatment of intellectual Property Investments to go from being us and expense Meeting Company could fully deduct those costs the first year, starting in 2021, those would need to be amortized or deducted in stages over five years. This was pascoe idol think theres a strong policy justification for it. I was more for raising revenue to offset the cost of the corporate rate reduction. The downside is that it would increase, reduce the return to intellectual Property Investment in the United States and reduce the amount that we would have overall in america picks i think that lawmakers should address that if they are concerned about intellectual Property Investment. The second is the treatment of intellectual Property Income overseas. Tax cuts and jobs act did change the treatment of ip income to the low tax income in the treatment of ip stashed here before it derived a tangible income. Those provisions were meant to kind of level the Playing Field in terms of taxation, intellectual property products, whether theyre placed you are placed abroad. A lot of members have on both sides about and that is access to broadband in rural communities. I think weve got a unique opportunity right now to showcase the talent thats in rural america. But theres some great advantages to hiring folks that work in rural areas. The problem is in this economy they dont have access to broadband so im thinking about not only how do we expand broadband and what are the right tax policy needed to help the private sector invest smartly in a much different way in broadband but also how to think about. Do you think it would be helpful if you had a tax Credit System that favors somebody in a Rural Community as opposed to an urban community . The gentlemens time has expired so if you could get back to Mister Ferguson in writing on that and certainly an issue thats shared by all members of congress and the need has been shown now with the reliance on telemedicine through this pandemic and just distancelearning that theres a lot of good there. Thank you for raising it. That concludes all of our questions. I want to thank the witnesses for joining ustoday. Please be advised that members have two weeks to submit written questions to be answered later in writing. Those questions and your answers will be made part of the formal hearing record busie the economic downturn. Good afternoon. I am calling this hearing to order. Thank everyone for joining our second official remote hearing. Saying that standing house and Committee Rules are in practice and will continue to apply during remote hearings. Members will be expected to continue to adhere to the
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