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Waters: GOP Budget Ignores Inequality and the Racial Wealth Gap

Financial Services Committee considers budget priorities for fiscal year 2016

In a highly charged meeting of the Financial Services Committee to consider the fiscal year 2016 “Budget Views and Estimates” Congresswoman Maxine Waters (D-CA), Ranking Member of the Financial Services Committee, chastised Committee Republicans for putting forth a budget that fails to provide real solutions that will address the problems of income inequality, the racial wealth gap, slow wage growth, unemployment and a secure social safety net.

She released the following statement, which can be found here.

“Thank you, Mr. Chairman.

Today, this Committee gathers to consider the majority’s Budget Views and Estimates for fiscal year 2016.

Mr. Chairman, most economists will tell you that at present, the American economy is experiencing a period of robust growth. In fact, over the past three months, the U.S. economy has created more than 1 million jobs – the best stretch of hiring in 17 years.

There is no denying that the policies put into place by President Obama and Congressional Democrats in the aftermath of the crisis not only prevented a depression, but helped lay the foundation for the thriving economy that many Americans are benefiting from today.

However, we should not pretend that all is well for all Americans. Many of us still have not recovered from the devastating losses of the Great Recession. Broad-based, generational and systemic inequities continue to distort progress and opportunity for tens of millions of Americans – most especially low and middle-income Americans and communities of color.

The Budget Views and Estimates offered by the Republican majority overlooks this problem. But more concerning – it fundamentally misdiagnoses how we can begin to solve it. Income inequality, the racial wealth gap, slow wage growth, unemployment and a secure social safety net cannot be solved by the free market, limiting government’s involvement or privatization. Complex social problems require thoughtful, proven and pragmatic policy strategies – not slogans or simple ideology.

The Recession wiped out two decades of growth in family wealth and income. Although many of our highest earners – including those in the top one percent – have fully recovered, African-American, Latino, Native American and other historically disadvantaged populations – who have a much larger proportion of their wealth in homeownership –are still underwater.

The racial wealth gap is widening. According to the Federal Reserve Bank of St. Louis, the average wealth level for whites is $134,000 – as compared to $91,000 for Asians, and – astonishingly – only $14,000 for Latinos and $11,000 for African-Americans. These appalling numbers only get worse upon deeper analysis. Though only one in nine whites has less than $1,000 in assets, that ratio is one-in-four for Latinos and one-in-every three for African-Americans.

What’s more is that between 1989 and 2013, the share of net worth for the top third of the US population increased from 47 percent to 67 percent of overall wealth in the country. Meanwhile, during that same span, the bottom two-thirds of the population saw their percentage decrease from 55 percent to 33 percent.

A rising tide does not lift all boats. Too often, only the wealthiest among us – and not the workers themselves – benefit from the tremendous gains in productivity we’ve seen in recent decades.

And despite Republicans’ claims to the contrary, a free market run wild cannot solve these grossly uneven and unstable social disparities. In the areas of housing, consumer protection, income security, and community development – there is an indispensable and integral role for the federal government to ameliorate the structural disadvantages that persist along class, racial and ethnic lines in this country.

That’s why Democrats on this Committee support budget decisions that will address these disadvantages, in addition to a strong and stable financial system focused on protecting consumers and safeguarding the savings of working Americans.

This means full funding for Department of Housing and Urban Development programs that provide public housing, work to end homelessness and preserve access to affordable rental housing targeted to low-income families. It means focusing on sensible housing finance reform, not the PATH Act, which would put homeownership even further out of reach for many families. And, it means bolstering protections for the investing public, thereby rebuilding confidence in our equity markets and lowering the cost of capital for all American businesses.

Unfortunately, the Budget Views and Estimates presented by the Republican majority would take us in exactly the wrong direction.

Thank you, and I yield back.”


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