[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]




 
                   EMPOWERING A PRO-GROWTH ECONOMY BY

                 CUTTING TAXES AND REGULATORY RED TAPE

=======================================================================

                                HEARING

                               BEFORE THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                     ONE HUNDRED FIFTEENTH CONGRESS

                             SECOND SESSION

                               __________

                             JUNE 20, 2018

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 115-101
                           
             [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
             
             
                               __________            
             
                  U.S GOVERNMENT PUBLISHING OFFICE
                  
31-477 PDF		 WASHINGTON : 2018


                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                    JEB HENSARLING, Texas, Chairman

PATRICK T. McHENRY, North Carolina,  MAXINE WATERS, California, Ranking 
    Vice Chairman                        Member
PETER T. KING, New York              CAROLYN B. MALONEY, New York
EDWARD R. ROYCE, California          NYDIA M. VELAZQUEZ, New York
FRANK D. LUCAS, Oklahoma             BRAD SHERMAN, California
STEVAN PEARCE, New Mexico            GREGORY W. MEEKS, New York
BILL POSEY, Florida                  MICHAEL E. CAPUANO, Massachusetts
BLAINE LUETKEMEYER, Missouri         WM. LACY CLAY, Missouri
BILL HUIZENGA, Michigan              STEPHEN F. LYNCH, Massachusetts
SEAN P. DUFFY, Wisconsin             DAVID SCOTT, Georgia
STEVE STIVERS, Ohio                  AL GREEN, Texas
RANDY HULTGREN, Illinois             EMANUEL CLEAVER, Missouri
DENNIS A. ROSS, Florida              GWEN MOORE, Wisconsin
ROBERT PITTENGER, North Carolina     KEITH ELLISON, Minnesota
ANN WAGNER, Missouri                 ED PERLMUTTER, Colorado
ANDY BARR, Kentucky                  JAMES A. HIMES, Connecticut
KEITH J. ROTHFUS, Pennsylvania       BILL FOSTER, Illinois
LUKE MESSER, Indiana                 DANIEL T. KILDEE, Michigan
SCOTT TIPTON, Colorado               JOHN K. DELANEY, Maryland
ROGER WILLIAMS, Texas                KYRSTEN SINEMA, Arizona
BRUCE POLIQUIN, Maine                JOYCE BEATTY, Ohio
MIA LOVE, Utah                       DENNY HECK, Washington
FRENCH HILL, Arkansas                JUAN VARGAS, California
TOM EMMER, Minnesota                 JOSH GOTTHEIMER, New Jersey
LEE M. ZELDIN, New York              VICENTE GONZALEZ, Texas
DAVID A. TROTT, Michigan             CHARLIE CRIST, Florida
BARRY LOUDERMILK, Georgia            RUBEN KIHUEN, Nevada
ALEXANDER X. MOONEY, West Virginia
THOMAS MacARTHUR, New Jersey
WARREN DAVIDSON, Ohio
TED BUDD, North Carolina
DAVID KUSTOFF, Tennessee
CLAUDIA TENNEY, New York
TREY HOLLINGSWORTH, Indiana

                     Shannon McGahn, Staff Director
                     
                     
                     
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    June 20, 2018................................................     1
Appendix:
    June 20, 2018................................................    39

                               WITNESSES
                        Wednesday, June 20, 2018

Kerrigan, Karen, President and Chief Executive Officer, Small 
  Business & Entrepreneurship Council............................     6
Miles-Olund, Lori, President and Chief Executive Officer, Miles 
  Fiberglass & Composites, Inc., on behalf of the National 
  Association of Manufacturers...................................     7
Sasser, III, Ford, President and Chief Executive Officer, Rio 
  Bank, on behalf of the Texas Bankers Association...............     9
Silvers, Damon A., Policy Director and Special Counsel, American 
  Federation of Labor and Congress of Industrial Organizations...    10
Stevens, Paul Schott, President and Chief Executive Officer, 
  Investment Company Institute...................................    12

                                APPENDIX

Prepared statements:
    Kerrigan, Karen..............................................    40
    Miles-Olund, Lori............................................    47
    Sasser, III, Ford............................................    55
    Silvers, Damon A.............................................    61
    Stevens, Paul Schott.........................................    71

              Additional Material Submitted for the Record

Waters, Hon. Maxine:
    The New York Times article entitled, ``Blue-Collar Trump 
      Voters Are Shrugging at Their Tax Cuts''...................    90
Duffy, Hon. Sean P.:
    Written statement from the Council of Insurance Agents and 
      Brokers (CIAB).............................................    95
Huizenga, Hon. Bill:
    Insert entitled, ``Since the Tax Bill Passed, Hundreds of 
      Companies Have Offered Their Employees Bonuses, Raises, and 
      Enhanced Benefits''........................................    98

 
                        EMPOWERING A PRO-GROWTH

                        ECONOMY BY CUTTING TAXES

                        AND REGULATORY RED TAPE

                              ----------                              


                        Wednesday, June 20, 2018

                     U.S. House of Representatives,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The committee met, pursuant to notice, at 11:04 a.m., in 
room 2128, Rayburn House Office Building, Hon. Jeb Hensarling 
[chairman of the committee] presiding.
    Present: Representatives Hensarling, Pearce, Posey, 
Luetkemeyer, Huizenga, Duffy, Stivers, Ross, Pittenger, Wagner, 
Barr, Rothfus, Tipton, Williams, Poliquin, Love, Hill, Zeldin, 
Trott, Loudermilk, Mooney, Davidson, Kustoff, Tenney, 
Hollingsworth, Waters, Maloney, Velazquez, Sherman, Lynch, 
Scott, Moore, Perlmutter, Himes, Foster, Kildee, Delaney, 
Sinema, Beatty, Vargas, Gottheimer, Gonzalez, and Crist.
    Chairman Hensarling. The committee will come to order. 
Without objection, the Chair is authorized to declare a recess 
of the committee at any time. And all members will have 5 
legislative days within which to submit extraneous materials to 
the Chair for inclusion in the record.
    The hearing is entitled, ``Empowering a Pro-Growth Economy 
by Cutting Taxes and Regulatory Red Tape.'' I now recognize 
myself for 2-1/2 minutes to give an opening statement.
    Tomorrow marks the 6-month anniversary of the Tax Cuts and 
Jobs Act, and throughout the economy, we have seen incredible 
good news that has made a great difference in the lives of our 
constituents. Not only do we have tax relief, but we have a new 
regulatory agenda under this Administration to right size 
regulation and to help market participants actually comply and 
to ensure that the burden of this regulatory infrastructure is 
minimized so that we can have economic growth. And indeed, we 
do.
    Average economic growth is now back to 3 percent. And why 
is that important? It is important because, historically, no 
nation in the history of the world has enjoyed sustained 3 
percent economic growth like the United States of America. And 
historically, you will see that the vast majority of job 
creation, the vast majority of income increases, the vast 
majority of poverty reduction, all happens in 3 percent plus 
economic years.
    So far, in just 6 months, 1 million new jobs have been 
created. Unemployment is now tied for a 50-year low. Incomes 
are on the rise. Fastest in a decade. Business investment is on 
the rise. Consumer confidence at a 17-year high.
    Small business optimism--and there is no better economic 
stimulus than business optimism--second highest level in 45 
years. But not only do I see it in the stats, I hear it from my 
constituents. Just in the last couple of weeks, I heard from 
Brad at Wills Point: The bank my wife works for has given two 
raises and increased benefits since the passage of the Act.
    I heard from Jim in Royse City in the 5th District: We take 
home $300 to $400 more per paycheck.
    I heard from Eugene in Chandler: I will save about $1,500 
in taxes this year. I am retired and on Social Security and a 
401(k) plan. Now, I will be able to travel a little more and 
see my grandchildren more.
    It is making a difference, but there is so much more to be 
done. There are some looming clouds on the horizon, including 
the fact that we are in a 2-decade decline in companies going 
public. As recent as 2016, we saw entrepreneurship at a 40-year 
low. If we are going to compete with China, and particularly 
China 2025, if we are going to make sure that we have sustained 
3 percent economic growth, there is much more to be done.
    The tax bill is behind us. The capital formation bill lies 
ahead of us. I hope that is something we can do on a bipartisan 
basis.
    I now recognize the Ranking Member for 3 minutes for an 
opening statement.
    Ms. Waters. Thank you, Mr. Chairman.
    Since we are taking the time today to discuss the effects 
of H.R. 1, the Republican tax scam, I would like to make it 
very clear what is really in this law.
    The tax scam contains massive giveaways to the Nation's 
largest banks. And Americans for Tax Fairness in an analysis 
finds that as a result of the lowering of the corporate tax 
rate, the Nation's six largest banks will collectively save an 
estimated $14 billion in 2018 alone. Another report predicts 
that Wells Fargo will gain the most from H.R. 1 of any bank in 
the country.
    Banks are already posting record profits, but that isn't 
enough for my colleagues on the other side of the aisle. No, 
instead they push through this legislation that is lining the 
pockets of mega banks with even more money.
    The tax scam also provides huge benefits to hedge funds and 
other Wall Street firms, with 20 percent deduction for 
passthrough businesses. According to Americans for Financial 
Reform, 70 percent of passthrough businesses are in the 
financial sector. So all Americans should understand that this 
law has been very intentionally engineered by my colleagues on 
the other side of the aisle to benefit huge corporations on 
Wall Street and millionaires and billionaires at the expense of 
hardworking Americans and future generations.
    Rather than using this windfall to increase wages or hire 
more workers, corporations are overwhelmingly using the money 
for stock buybacks. According to Americans for Tax Fairness, 
corporations have announced over $457 billion in planned stock 
buybacks since the GOP passed this tax scam.
    Let's also be clear that this giveaway to wealthy 
individuals, Wall Street banks, and big corporations, explodes 
deficits by trillions, leaving future generations to foot the 
bill. And despite claims by my colleagues across the aisle, 
there is not one credible analysis out there that finds that 
the tax scam pays for itself.
    So while my colleagues on the other side of the aisle are 
sure to sing the praises of this tax scam, the facts are not on 
their side.
    And with that, I yield back the balance of my time.
    Chairman Hensarling. The gentlelady yields back.
    The Chair now recognizes the gentleman from Michigan, Mr. 
Huizenga, Chairman of our Capital Market Subcommittee, for 1 
minute and 15 seconds.
    Mr. Huizenga. Thank you, Mr. Chairman.
    It has been nearly 6 months, as you had said, since this 
overhaul. But since December, we have seen job creators of all 
sizes around the country, including West Michigan, respond 
positively despite what the Ranking Member might be saying.
    Let me tell you a few examples from West Michigan. The 
Tyson's plant, just outside my hometown in Zeeland, Michigan, 
gave nearly 900 hourly employees at the facility $1,000 bonus 
as a direct result of this tax reform legislation signed by 
President Trump. It is also a direct result of this new bill, 
Tyson is going to invest significant resources in this plant 
making it even more environmentally friendly and opening a new 
product line that will create 65 new jobs.
    Last month, Amazon announced that it was investing $150 
million to build a distribution center in Gaines Township, 
which is expected to create 1,000 full-time positions with 
benefits. In fact, one of the benefits being reported is an 
astounding 95 percent college tuition reimbursement for its 
employees.
    Now, we have these smaller and medium-sized businesses. 
ADAC Automotive, which was founded in Grand Rapids and has 
locations across West Michigan, announced a $20 million 
investment in expansion that will create 50 new jobs. Almond 
Products, a manufacturing company in Spring Lake, adding 72. 
Bekins, an appliance retailer in Coopersville, is going to add 
between 10 and 20.
    Here is one of my favorites. Zach, the barber. Zach's 
Barber Shop is going from two shops to three shops, and he has 
also given all of his cutters a wage increase.
    So there are hundreds of small businesses like that. Let's 
build on this success.
    Chairman Hensarling. The time of the gentleman has expired.
    The Chair now recognizes the gentleman from Michigan, Mr. 
Kildee, for 1 minute.
    Mr. Kildee. Thank you, Mr. Chairman.
    And look, let's just put the cards on the table. Under 
Republican leadership, all the committees are holding these 
hearings to try to sell what they couldn't sell 6 months ago, 
and that is a tax bill that disproportionately benefits people 
at the very top.
    There was a report that was just released that shows that 
while people at the top of the income scale, the top 1 percent 
on average get $57,000 in tax relief, while a middle-income 
family in Michigan might get $700 bucks, they give back $1,500 
through increased healthcare premiums that they end up paying 
as a result of the fact that the very tax bill that was 
supposed to provide relief increased healthcare costs for 
working families.
    So when you see the anecdotes listed on the other side--and 
I get it--I am curious as to why companies are providing one-
time bonuses rather than pay increases. I am also curious as to 
why the anecdote of $250 billion going to CEOs and wealthy 
shareholders through stock buybacks isn't being mentioned. That 
is where most of this money went.
    This is a tax scam and we ought to make sure that people 
understand that.
    Thank you. I yield back.
    Chairman Hensarling. The time of the gentleman has expired.
    The Chair now recognizes the gentleman from Missouri, Mr. 
Luetkemeyer, Chairman of Financial Institutions and Consumer 
Credit Subcommittee, for 1 minute and 15 minutes.
    Mr. Luetkemeyer. Thank you, Mr. Chairman.
    With economic growth expected to surpass 4 percent and 
unemployment matching the lowest rate in half a century, 
American optimism is high and our economic future is bright. 
Thanks to President Trump's leadership, the American economy is 
finally on the right track.
    While I am home in Missouri, I hear stories of how tax 
reform is positively affecting my constituents' lives. One such 
story is that despite a bad winter, the local car dealer in 
Jefferson City told me he had one of the busiest Februarys in 
his history. He credits one event as the reason for his 
customers being able to afford new cars: Tax reform.
    Another constituent of my mine, a small business owner in 
St. Charles told me that because of passage of the Tax Cuts and 
Jobs Act, she was finally able to expand her business and hire 
more employees.
    Simply hoping this economic minute continues would be a 
mistake. Thankfully, the President just signed into law the 
most significant pro-growth banking regulatory reform bill in 
decades. The tax bill is imperfect and tweaks will need to be 
made, but economic prosperity is within reach.
    A more reasonable tax structure and responsible regulatory 
regime will continue to support a surge in U.S. economy.
    Mr. Chairman, with that, I yield back.
    Chairman Hensarling. The gentleman yields back.
    The Chair now recognizes the gentleman from California, Mr. 
Sherman.
    Mr. Sherman. A wise man said, ``If I see far, it is because 
I stand on the shoulders of giants.''
    Some 15 million jobs were added to this economy between 
when Dodd-Frank became effective and when Obama left the Oval 
Office. That 15 million added to the 2 million that we have 
seen since has given us a low unemployment rate. But 15/17 of 
that job increase occurred before Trump entered the Oval 
Office.
    As to the tax bill, you can have a 0 percent tax on the 
profits of your factory only if you move the factory overseas. 
Harley-Davidson has learned that. And as soon as the President 
capitulates on trade, and he will, you can be sure that other 
companies will learn it as well and move their factories 
overseas. Zero Federal tax.
    And finally, imagine if Countrywide had had a program. They 
give you 500 bucks upfront, maybe $1,000 bonus. And then in the 
fine print, they increase the family mortgage by $34,500. Every 
one in this room would have said that is an outrageous consumer 
rip off.
    Yes, people have gotten some $500 and $1,000 bonuses, but 
your share of the increase in the national debt, if you are a 
family of five, is $34,500. Not even Countrywide would think to 
increase your debt by that amount and sell it to you with a 
$500 or $1,000 bonus check.
    I am pleased to see that our committee has done all its 
work and can now critique the work of the Ways and Means 
Committee, and I look forward to a discussion of this.
    Chairman Hensarling. The time of the gentleman has expired.
    Today, we welcome the testimony of five witnesses that I 
will introduce.
    Karen Kerrigan, I believe, has testified before. She is the 
President and CEO of the Small Business & Entrepreneurship 
Council (SBE). In addition, she chairs the Small Business 
Roundtable and is a member of the National Women's Business 
Council and the U.S. Treasury's Taxpayer Advisory Council. She 
received her bachelor's degree in political science from SUNY 
Cortland.
    Next, Lori Miles-Olund, the President and CEO of Miles 
Fiberglass and Composites, testifying on behalf of the National 
Association of Manufacturers. She previously was the President 
of the Pacific Northwest Chapter of the Society of the Plastics 
Industry and the North Clackamas County Chamber of Commerce. 
She received a double major in marketing and in psychology from 
Portland State University.
    Next, we have Ford Sasser, the President and CEO of Rio 
Bank, and is testifying on behalf of the Texas Bankers 
Association. In addition, he serves on the board of directors 
for the Texas Bankers Association, and was previously on the 
board of directors for the State Bar of Texas.
    And if you will allow a Chairman's privilege, he is a 
Fightin' Texas Aggie Class of 1976. Gig 'em. I so rarely have 
people from my alma mater in front of me, so I thought I would 
take that privilege.
    Damon Silvers, who has also testified before us before, 
Policy Director and Special Counsel for AFL-CIO (American 
Federation of Labor and Congress of Industrial Organizations). 
Mr. Silvers serves on the Investor Advisory Committee of the 
SEC (U.S. Securities and Exchange Commission)--or has--and is 
on the Treasury Department Financial Research Advisory 
Committee--and along with myself--had the opportunity to serve 
on the oversight panel of TARP. Previously worked in the 
Harvard Union of Clerical and Technical Workers. Received his 
bachelor's degree, JD, and MBA from Harvard University.
    Mr. Silvers, good to see you again.
    Last but not least, another fairly frequent witness before 
our committee, Mr. Paul Stevens, President and CEO of the 
Investment Company Institute. Previously, Mr. Stevens was a 
partner in Dechert, a financial services group, and was the 
general counsel of ICI. He received his bachelor's degree from 
Yale and his JD from the University of Virginia.
    Each of you will be recognized for 5 minutes to give an 
oral presentation of your testimony. For those of you who have 
not testified, please turn on your microphone before 
testifying. And pull the microphone fairly close to you.
    And in addition, there is a lighting system. So green means 
go, yellow means you have a minute, red means please wrap it 
up.
    Without objection, each one of your written statements will 
be made part of the record.
    So, Ms. Kerrigan, you are now recognized for your 
testimony.
    Thank you all for appearing.

                   STATEMENT OF KAREN KERRIGAN

    Ms. Kerrigan. Thank you, Mr. Chairman, Ranking Member 
Waters, and members of the committee. It is an honor to be here 
this morning to discuss how tax relief is helping the economy 
and small businesses, as well as to discuss additional reforms 
that would enable entrepreneurs and their firms to take full 
advantage of opportunities in this growing economy.
    This committee and its members have been very helpful in 
advancing important legislation to improve capital access and 
capital formation. Many of these bills have been supported by 
my organization, and on behalf of SBE Council, I thank you for 
your leadership and your work.
    In my written testimony, I note an array of reform bills to 
improve capital formation, most of which are strongly 
bipartisan, that are especially timely and needed, given strong 
small business optimism, their positive outlook on the economy, 
and their future plans for expansion, hiring, and investment.
    Small business optimism has remained strong and consistent 
for over a year-and-a-half, and has been buoyed by the Tax Cuts 
and Jobs Act. Regulatory certainty followed by tax relief has 
been a powerful policy mix that has markedly improved the 
business environment, revenues and sales for small businesses, 
and their growth opportunities.
    All the key surveys that measure small business confidence 
are consistent in their findings. Confidence is exceptionally 
high and, by some measures, has reached historical highs.
    The views of our members are consistent with these surveys 
and with the findings of key indexes that have reported on the 
effects of the new tax law. It is providing them with extra 
capital to compete in the economy.
    The spring 2018 Bank of America report found that 
entrepreneurs identified the new tax law as game-changing for 
the health of their businesses. Seventy-one percent expect to 
receive savings from the new tax law, and many have plans to 
use these funds to fuel growth, investing back into their 
businesses, providing raises and bonuses, hiring more 
employees, expanding operations, paying off loans, and making 
capital improvements. A May 2018 LendingTree survey shows 
similar results with 65 percent of small businesses expecting 
to see tax savings.
    Again, these savings are being channeled to productive use, 
and whether entrepreneurs decide to pay off loans, make capital 
improvements, increase wages, or higher more workers, each and 
all of these actions are important to the health and viability 
of their firms, as well as for the strength of the overall 
economy.
    Looking forward, small business outlook for the future of 
their firms and the economy is very positive. The BOA reports 
find that 60 percent say their revenues will increase for 2018, 
and the same percentage plan to grow their businesses over the 
next 5 years.
    This positive economic environment is being sustained by 
solid consumer confidence and stronger business investment. And 
I note the specific numbers in my written testimony.
    So moving forward, I will wrap up where I began, and that 
is access to capital. It is more important than ever that the 
bills, the reforms advanced by this committee and the full 
House, in many cases, make their way into law.
    The Helping Angels Lead Our Startups Act, Fostering 
Innovation Act, Encouraging Public Offerings Act, among others, 
include commonsense reforms that will improve capital access 
and lead to powerful results for entrepreneurs and small 
businesses. Also, the latest bills considered by the committee, 
the Main Street Growth Act and Small Company Disclosure 
Simplification Act, will do the same.
    We believe it is also time to revisit and implement reforms 
to regulated or Title III Crowdfunding. It is doing what its 
supporters, like us, hoped it would, and with some updates to 
the JOBS Act, the early and positive successes will grow 
exponentially.
    Also, thankfully, the Congress is updating thresholds 
across many areas of the law, and the same needs to be done to 
section 1224, small business stock, which allows investors to 
deduct losses, taking on investments in C-corp startups. The 
current thresholds were last updated in 1978.
    These last two items I mentioned, along with the other 
reforms championed by this committee, are critical to helping 
entrepreneurs and startups take advantage of growth 
opportunities in this economy. They also could play a 
significant role in mobilizing capital and fueling the success 
of opportunity zones that have also been established by the new 
tax law.
    In conclusion, Mr. Chairman, there has been great progress 
for entrepreneurs and small businesses. More work needs to be 
done. And SBE Council stands ready to work with you and the 
committee members to ensure vibrant and competitive U.S. 
capital markets, which in turn will help entrepreneurs and 
firms access the capital they need to grow, innovate, and 
compete.
    Thank you.
    [The prepared statement of Ms. Kerrigan can be found on 
page 40 of the Appendix.]
    Chairman Hensarling. You gave 30 seconds back. We 
appreciate it.
    Ms. Miles-Olund, you are now recognized for your testimony.

                  STATEMENT OF LORI MILES-OLUND

    Ms. Miles-Olund. Good morning, Chairman Hensarling, Ranking 
Member Waters, and distinguished members of the committee. My 
name is Lori Miles-Olund, and I am president of a small family 
run manufacturing company based in Oregon City, Oregon, Miles 
Fiberglass and Composites. We principally make products for the 
wind turbines, RVs, railroads, utilities, and the military.
    I am also a member of the National Association of 
Manufacturers, NAM, the Nation's largest industrial trade 
association and the unified voice for more than 12 million men, 
women who make things in America.
    Six months ago, Congress passed tax reform legislation that 
continues to give a significant lift to the American economy; 
manufacturing, in particular. Consider the brand-new NAM 
Manufacturers' Economic Outlook Survey released just this 
morning. This quarter's optimism rating of 95.1 percent is the 
highest ever. It is the latest in a series of record-breaking 
optimism ratings, thanks in large part to the tax reform.
    So the economy is on a roll. And here is what you are 
probably thinking. What does this mean for my constituents? 
Here is what the NAM found when it recently polled members on 
the impact of tax reform.
    Eighty-six percent said they plan to increase investments, 
77 percent said they plan to increase hiring, 72 percent said 
they plan to increase the wages or benefits. This data is 
reflective on a palm card that is being delivered to your 
offices. I also have copies with me that I would be happy to 
share.
    It contains some more numbers too, like 115,000, the number 
of manufacturing jobs created since the Tax Code came into 
effect on January 1. It is about double the 63,000 created over 
the same time last year. It is a vast improvement over the 
24,000 lost in 2016.
    At my company, we have seen a dramatic increase in demand 
since the passage of the tax reform. Last year, we had sales of 
$6.8 million. This year, we are on a path to produce $12 
million in sales. This demand-driven growth is resulting in 
tangible benefits for our employees, community, and company.
    First, we are increasing our hiring. We plan to create 35 
new jobs by the end of the year, which represents a huge 70 
percent increase in our 50-person workforce.
    Second, we are raising wages and increasing benefits for 
our employees. We are already increasing our starting wage by 9 
percent. Now, we are implementing a new learn-to-earn program, 
which offers employees the ability to increase their pay 
further by up to $1.50 an hour for each time they get trained 
in a new skill.
    We are also reinstituting a bonus program, offering each 
employee a share in the company's profits on a quarterly basis, 
and planning to absorb the cost of rising healthcare premiums 
as a company, rather than passing them on to our employees.
    Finally, we have also started providing a gas stipend to 
make commuting to work more affordable.
    Third, we are investing in our company. We are working hard 
to upgrade our facilities. We have plans underway, for 
instance, to consolidate our current two locations into a 
single, more modern building. Not only will this improve our 
efficiency, but it will also help logistically to have all our 
employees communicating and collaborating under one roof. We 
are also planning to purchase a state-of-the-art ventilating 
system that will be better for the environment. We also have 
plans to purchase our first CMC machine.
    Fourth, we are helping our community. We currently offer 
four scholarships at our local community college, but we would 
like to do more. We partnered with the Scouts to help them earn 
their composite merit badge and had put this on hold until this 
year. In the fall, 50 Scouts will come to our facility and 
build fiberglass skimmer boats.
    Manufacturers called for the passage of tax reform for many 
years. Now it has finally happened. As the owner of a Main 
Street business, I see the benefits of tax reform firsthand. We 
are just one small family owned manufacturer, but we expect the 
entire sector to deliver on the tax reform promise.
    The good news is our fellow manufacturers feel the same 
way. The NAM recently launched a national campaign called, 
``Keeping Our Promise'' that is helping tell the stories of how 
manufacturers are already helping to improve lives and 
livelihoods. The campaign has featured stories for many 
companies already, including ours. And the plan is to continue 
doing so on a regular basis moving forward.
    Thank you for inviting me to testify before you today. I am 
happy to answer any questions.
    [The prepared statement of Ms. Miles-Olund can be found on 
page 47 of the Appendix.]
    Chairman Hensarling. We now recognize you, Mr. Sasser, for 
your testimony.

                  STATEMENT OF FORD SASSER, III

    Mr. Sasser. Thank you, Chairman Hensarling and Ranking 
Member Waters. My name is Ford Sasser. I am the President and 
CEO of Rio Bank in McAllen, Texas. Rio Bank is a community bank 
in deep south Texas along the Texas and Mexico border. Our 
market is about 90 to 95 percent Hispanic.
    Our bank has approximately $350 million in total assets 
with eight locations in Hidalgo and Cameron Counties, and we 
employ approximately 110 people. The staff of our bank is 89 
percent minority, with 72 percent being female. The FDIC has 
labeled our bank as a minority bank because of the makeup of 
both our shareholders and our board of directors of the 
company.
    I am here today representing the Texas Bankers Association. 
The TBA is the Nation's oldest and largest State banking trade 
association, and we are proud to represent 433 member banks. 
TBA's membership is composed of commercial banks and savings 
and loan associations. Approximately half of our members are 
State-chartered organizations and the other half have national 
charters.
    Texas is blessed to have a strong banking environment, and 
Texas bankers take great pride in the fact that our banks 
weathered the financial crisis of 2008, 2009, and 2010 as well 
as they did.
    Today, I look forward to discussing with you how the 2017 
Tax Cuts and Jobs Act affected Rio Bank, my industry, and my 
customers. As you are aware, my industry has seen an onslaught 
of new and amended regulations placed on it over the last 10 
years as a result of the failures of others. This has not only 
caused a burden on my bank, but on my customers. While recently 
we are seeing steps taken to reduce the regulatory burden on my 
bank and on my customers, nothing has more positively impacted 
the bank or its customers than the 2017 Tax Cuts and Jobs Act.
    At Rio Bank, we have recently announced the signing of a 
definitive merger agreement with another bank in our market. 
This merger will grow our company from a bank with $350 million 
in assets to $550 million in total assets.
    Additionally, we are 1 month into a 19-month construction 
project for a new corporate headquarters that will contain 
125,000 square feet in a six-story building.
    This acquisition and decision to build a new building are a 
result of the positive direction we see the economy moving. We 
are very bullish on the economy, both in the Rio Grande Valley 
and across the State of Texas, and our capital investment is a 
reflection on that commitment.
    In January of this year, our bank joined other banks and 
companies across the Nation and paid bonuses to our employees. 
We paid each of our employees $1,000 bonus, regardless of how 
long they have been working with the bank. A teller that had 
just joined the bank only 1 week earlier was both surprised and 
excited to be receiving this bonus check. It will be remembered 
as one of the happiest days in our bank. I had an employee tell 
me with tears in her eyes how good the timing was to get this 
check.
    As a community bank, we are the lifeblood of small 
businesses. Lending to these small businesses is what allows 
them to expand their book of business. Adding new customers, 
property, plant and equipment, and hiring more employees are 
all what is necessary to facilitate that expansion. That is 
when they look to their community bank for loans. We have to 
determine a business's capacity to repay debt when qualifying 
those businesses for loans. Having a lower tax rate for these 
businesses provides more money to service debt and thereby 
qualifying more small businesses to get the much-needed credit 
that they use to grow their companies.
    The 2017 Tax Cuts and Jobs Act has been a great stimulus to 
the economy.
    I thank you for inviting me to this hearing, and I look 
forward to answering any questions that you may have.
    [The prepared statement of Mr. Sasser can be found on page 
55 of the Appendix.]
    Chairman Hensarling. Mr. Silvers, you are now recognized 
for your testimony.

                   STATEMENT OF DAMON SILVERS

    Mr. Silvers. Thank you. And good morning, Chairman 
Hensarling and Ranking Member Waters and members of the 
committee. I am Damon Silvers. I am the Policy Director and 
Special Counsel of the AFL-CIO. On behalf of America's working 
families, we appreciate the opportunity to testify on the 
Republican tax bill this morning.
    What are the fundamental characteristics of the Republican 
tax law? The Republican tax law is regressive. It gives more 
money to wealthier Americans than to middle- and low-income 
Americans, both in total and on a percentage of income basis. 
And the Republican tax law is anti-labor. It shifts the tax 
burden from capital to labor, and rapidly accelerates the 
multi-decade trend shifting the Federal tax burden from 
corporations to households and families.
    This shift in the tax burden from capital to labor is 
likely, by the way, to make worse the already cavernous racial, 
wealth, and income gap.
    The Republican tax law borrows money to redistribute 
upward; money that America should be investing in our future 
through infrastructure and education. And finally, and perhaps 
most shockingly, the Republican tax bill is a job killer. It 
results in a tax system that charges lower taxes on corporate 
profits earned offshore than on corporate profits earned by 
creating jobs here in the United States. It is an intentional 
giveaway of your and my tax dollars to people who choose to 
kill U.S. jobs.
    So what are the economic consequences of the Republican tax 
bill for working people? First, America's big companies are not 
reinvesting the money they are saving in taxes. They are paying 
that money out in the form of stock buybacks and dividends.
    S&P Dow Jones now estimates by the end of 2018, just 1 
year, U.S. public companies will pay out over $1 trillion in 
stock buybacks. As a result, the Federal Reserve's tracking of 
new orders of non-defense-related capital goods shows 
investment levels flat since the end of last summer at levels 
below that of the period from 2010 to 2015.
    The consequences of these underlying trends is that the 
Republican tax bill so far has had no impact at all on job 
creation. Job creation in the U.S. economy continues its slow 
decline from peak levels late in the Obama Administration.
    But the most telling failure so far is in wages. Wages have 
been flat in real terms and aggregate across the economy since 
the passage of the Republican tax bill. My fellow witnesses 
have described bonuses. The fact that bonuses have been the 
primary way in which the small minority of employers that have 
passed anything on is why wages are not rising. And if you 
break out wages by segments of the labor market, you see that 
in the last year, average hourly wages for four out of five 
workers in the private sector have gone down in real terms. And 
that is only the high performance of the top of the labor 
market that is holding the aggregate wage numbers even.
    So one way of capturing what is really going on here is 
looking at what happened at Walmart, America's largest private 
employer. Walmart disclosed it expected to receive a $2.2 
billion tax cut for 2018. At year end 2017, Walmart paid a one-
time bonus of $400 million to its employees. It financed this 
bonus by laying off simultaneously 10,000 employees.
    Walmart also announced it was going to raise starting pay 
for its lowest paid workers, which had said would cost $300 
million a year. How does that add up over 10 years? What is the 
real numbers? $22 billion plus in tax breaks for Walmart, half 
of which are going to go to the richest family in the world, a 
group of people who could fit behind me in this room.
    Cost savings from the layoffs of as much as $5 billion a 
year, half of which will go to those same handful of 
individuals. A one-time bonus for new hires that many 
economists say Walmart likely intended to give anyway in the 
context of a tightening labor market.
    Punch line: 85 percent of the tax breaks go to 
stockholders. The super rich get the majority of that money.
    Now, let me turn to financial regulation. Like other large 
corporations, America's largest banks have benefited handsomely 
from the Republican tax law. The biggest six banks that control 
more than 70 percent of the Nation's bank holding company 
assets are projected to receive $14 billion in tax breaks in 
2018 alone.
    This is not surprising because key features of the 
Republican tax law are designed to benefit the largest banks in 
ways that community banks cannot benefit. Because, for example, 
community banks cannot take advantage of the zero tax rate for 
offshore operations.
    Consequently, it seems likely that the Republican tax bill 
will add to the levels of concentration in America's banking 
system.
    In the wake of these actions, Congress should move in an 
entirely different direction with a modern-day Glass-Steagall 
that disconnects finance from speculation and facilitates 
lending to America's businesses.
    In conclusion, we believe that Congress should amend this 
act by beginning, by passing the No Tax Break for Outsourcing 
Act sponsored by Congressman Doggett, and by ending the 
preference for capital gains over actually earned income.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Mr. Silvers can be found on page 
61 of the Appendix.]
    Chairman Hensarling. Mr. Stevens, you are now recognized 
for your testimony.

                    STATEMENT OF PAUL STEVENS

    Mr. Stevens. Thank you, Chairman Hensarling, Ranking Member 
Waters, and members of the committee for this opportunity to 
testify.
    ICI has a long history of supporting well-conceived 
regulation. We believe it is a critical ingredient in 
preserving the confidence that 100 million U.S. shareholders 
place in ICI's (Investment Company Institute) members to manage 
almost $22 trillion in their assets.
    I will focus on three areas that the Institute believes are 
critical to striking the right balance between protecting 
investors and markets on the one hand, while preserving 
efficiency, promoting capital formation, and spurring economic 
growth on the other.
    First and foremost, we must avoid regulation that is 
unnecessary or inappropriate or based on faulty analysis. Two 
recent examples illustrate how harmful this type of regulation 
can be. The first involves the Financial Stability Oversight 
Council, or FSOC, and its authority to designate nonbank 
financial companies as systemically important financial 
institutions, or SIFIs. The second relates to the Department of 
Labor fiduciary rulemaking.
    We commend the committee for its leadership helping H.R. 
4061, the FSOC Improvement Act, pass the House with strong 
bipartisan support. We repeatedly caution that FSOC could seek 
to exercise the SIFI designation authority in a manner far 
broader than Congress intended.
    It is vitally important, in our view, that Congress act now 
to reform SIFI designation authority, and in doing so, enhance 
its ability to mitigate systemic risk.
    The DOL (Department of Labor) fiduciary rulemaking also 
provides a cautionary tale of how not to make sound regulation. 
Now, ICI strongly supports the principle that financial 
intermediaries should act in the best interest of their clients 
when they offer personalized investment advice. Throughout the 
DOL rulemaking process, however, it was clear that the rule was 
premised on deeply flawed regulatory impact analysis that 
ignored key facts on the retirement advice marketplace.
    The final rule was so misguided that the mere prospect of 
its application caused disruption that left hundreds of 
thousands of retirement savers without investment advice. We 
are pleased that the SEC is now taking the lead on this 
important issue, coordinating with DOL.
    The second point I would like to make focuses on the need 
to avoid overly broad or overly prescriptive regulations that 
can impose inefficiencies, burden competition, and ultimately 
retard economic growth.
    A good example in our industry is the SEC's liquidity risk 
management rule. Daily redeemability is a defining feature of 
mutual funds, and ICI supports requiring funds to have a formal 
liquidity risk management program. But the SEC goes too far by 
requiring that funds classify the liquidity of each and every 
portfolio holding and report on the liquidity at least monthly. 
This so-called bucketing of portfolio holdings is far too 
prescriptive, turning an otherwise useful rule into one that is 
proven to be costly and vexing to implement.
    ICI believes a more principle-based approach, as 
recommended by a recent report from the Treasury Department, 
could better serve funds and their shareholders.
    The SEC and Chairman Jay Clayton deserve commendation for 
their willingness to reexamine aspects of the rulemaking 
framework, and we hope the Commission will remain open to the 
possibility of future changes as well.
    This brings me to my third and final point. Regulation has 
cumulative costs over time. Now, the registered fund industry 
is a highly competitive one. Thanks to an array of diverse 
players, U.S. shareholders pay lower costs than ever before, 
enjoy higher returns on their investment, and have a wide 
variety of choice. But we can't take this competition and the 
benefits it provides for investors for granted.
    The associated costs and burdens of new regulatory 
requirements threaten to bring our industry to a tipping point 
where it is no longer economically viable for smaller or 
midsize firms to stay in or to enter the mutual fund business.
    Exercising close oversight and considering the cumulative 
cost of regulation affecting registered funds will help ensure 
that the industry can continue to serve the interest of fund 
investors and also the interest of a growing economy.
    I will close by offering brief recommendations in two other 
areas. Over the past 2 decades, the number of public companies 
has dwindled from more than 7,300 to approximately 3,500. This 
hampers individual investors trying to build wealth and meet 
financial goals because most cannot participate directly in 
these private markets, and very few mutual funds invest in 
private companies. Consequently, we urge the committee to 
support regulatory efforts to increase the attractiveness of 
our public capital markets.
    Finally, in my testimony, I suggest a sensible change to 
Tax Code that would increase U.S. mutual fund's ability to 
compete for foreign investment dollars and help spur further 
innovation and job growth in our industry.
    Thank you for your attention. I look forward to your 
questions.
    [The prepared statement of Mr. Stevens can be found on page 
71 of the Appendix.]
    Chairman Hensarling. I thank you and all the witnesses for 
their testimony.
    The Chair now yields himself 5 minutes for questioning.
    Ms. Miles-Olund, would you consider--would you characterize 
a $500 or $1,000 bonus as a scam?
    Ms. Miles-Olund. No. Our--
    Chairman Hensarling. Would you characterize a 233 percent 
401(k) increase in contribution, would you characterize that as 
a scam?
    Ms. Miles-Olund. No, sir.
    Chairman Hensarling. Would you consider a $4 increase in 
hourly wages, would you characterize that as a scam?
    Ms. Miles-Olund. I don't believe so.
    Chairman Hensarling. I think you just testified that your 
company is now giving a gas stipend for employees?
    Ms. Miles-Olund. Yes.
    Chairman Hensarling. Is that a scam?
    Ms. Miles-Olund. No, I don't believe so.
    Chairman Hensarling. I wouldn't think so. And yet we hear 
these stories throughout the economy.
    Mr. Sasser, your organization, the Texas Bankers 
Association, of which I have had a long association with--I 
have appreciated your testimony before--I have heard from a 
number of banks in your organization. One said: Due to the new 
tax law, our bank provided each employee 50 shares of our bank 
stock.
    Heard from another one that says: Our bank has seen a 
dramatic increase in loan demand, 10 percent in the first 5 
months of 2018.
    We had another bank that said: We awarded internal bonuses. 
We have seen an uptick in loan demand with capital formation. 
We have expanded hiring throughout our bank.
    Heard from another one of your member banks: We are 
increasing our employer match and our 401(k) plan from $1,500 
to $5,000.
    Heard from another one that said: We have hired two 
additional loan officers and paid substantial bonuses to 
employees.
    What is going on?
    Mr. Sasser. Well, Mr. Hensarling, I think that what you are 
seeing is the economy is improving, the tax reduction is 
providing more funds for--as I said in my oral statement--for 
banks to make more investment in their facilities, in their 
employees, and more important, we are starting to see our 
customers are able to do more because they have more.
    We can talk more about this later, but we are able to 
qualify more customers because they are able to take less of 
their income to pay taxes and have more available to service 
debt. That is how we qualify borrowers.
    Chairman Hensarling. Well, that is obviously quite 
important.
    Mr. Stevens, you have heard a number of people, for lack of 
a better term, actually vilify stock buybacks. Is that a 
particularly unhealthy economic activity, in your opinion?
    Mr. Stevens. Mr. Chairman, in the simplest terms, a stock 
buyback is an exchange of stock for the same value in cash. It 
reduces the number of outstanding shares of the company and can 
increase earnings per share. Any benefits of a stock buyback 
accrue to all of the company shareholders, including 
shareholders who own the shares of the company through a mutual 
fund. Mutual funds, in fact, hold about a quarter of all the 
outstanding stock of U.S. public companies.
    Chairman Hensarling. So a lot of this would include seniors 
and working families trying to make car payments and--
    Mr. Stevens. Absolutely.
    Chairman Hensarling. --healthcare premiums?
    Mr. Stevens. Half of all mutual fund-owning households have 
annual incomes of $100,000 or less. A third of them have 
incomes of $75,000 or less. So they participate in the benefit 
of these stock buybacks just as all other shareholders in the 
company would.
    Chairman Hensarling. Ms. Kerrigan, you have said that 
reforms are still needed to help small businesses leverage the 
growing economy. In my opening statement, I alluded to the fact 
that we roughly have now half the IPOs (initial public 
offerings) today that we had 20 years ago. Yet China's IPO 
market seems to be quite healthy. And we know about China 2025.
    So, again, the banking bill is behind us. The Senate has 
committed to act on a capital formation bill. Fortunately, 
there is a history of those being bipartisan, as you well know. 
The Jobs 1.0 Act was signed into law by President Obama, who 
said it was an important step in the journey to lower barriers 
to capital for small businesses and entrepreneurs.
    What else do we need to do? Why should this committee be 
focused on this?
    Ms. Kerrigan. Well, the good news is the committee is 
already focused and has passed--
    Chairman Hensarling. You noticed.
    Ms. Kerrigan. --so many of these measures. All of them in 
total will really do a lot to improve entrepreneurship, 
encourage capital formation and access.
    The bills that you recently marked up, more to come, all of 
these are very important for our capital markets and for the 
entrepreneurial ecosystem.
    So I list a lot of those in my written testimony. And I 
think the key is getting the Senate to act. And I know they are 
taking steps right now, and we are working as much as we can 
over on that side to get some of these things enacted into law.
    Chairman Hensarling. Thank you. My time has long since 
expired.
    The Chair now recognizes the Ranking Member for 5 minutes.
    Ms. Waters. Thank you very much.
    Mr. Silvers, we are currently in an affordable housing 
crisis, and in particular, an affordable rental crisis. 
According to the National Low Income Housing Coalition, 11 
million rental households in the United States pay over 50 
percent of their income on rent. And nearly three-quarters of 
those households are extremely low income.
    In the context of the current rental housing crisis, the 
Low Income Housing Tax Credit program is a critical resource 
for the production and preservation of affordable housing. 
Unfortunately, under the Republican tax scam, the value of 
these tax credits has decreased. In fact, according to one 
estimate, the tax scam law will reduce affordable rental 
housing production by nearly 235,000 homes over 10 years. This 
will also have ripple effects resulting in the loss of jobs and 
businesses and business income associated with affordable 
rental housing development, as well as a loss of tax income for 
the Government due to the loss of income.
    Can you elaborate on the damage that this will have, not 
just to the rental housing market, but across the economy?
    Mr. Silvers. Representative Waters, you raise an important 
issue that I think runs through both the tax bill and larger 
public policy right now, which is that there is interest on the 
part of the majority party in lifting, in moving the numbers in 
our tax law that benefit wealthier people, according to 
inflation, but not doing so when it benefits working people.
    The low income housing tax credits in the context of 
runaway inequality in our major cities is critical, both to the 
well-being of the folks who will then be able to afford housing 
for their families through increased rental development, but it 
is also critical to maintaining diversities and workforces 
necessary to sustain prosperity. But as you said in your 
question, the value of those credits is diminished dramatically 
and over time by the Republican tax law.
    I have to add here that in addition to this, the obvious 
number in our country's public policy that doesn't seem to ever 
move with inflation is the minimum wage, which is profoundly 
connected to the issues of housing affordability. You need to 
have affordable rental housing. You also need to have an income 
that can support it.
    As my fellow witnesses testify, even the most generous 
American businesses, which I recognize I am seated among, are 
not actually raising wages; they are generally simply paying 
one-time bonuses. One year from now, inflation will have eaten 
away these companies' employees income.
    Ms. Waters. I am so pleased you mentioned minimum wage. And 
as you have said, we have all of this bragging about the 
bonuses that have been given, but do you know or do you have 
the information to help us to understand how many of these 
businesses that have received these big tax breaks are 
increasing the minimum wage to at least $15 an hour?
    Mr. Silvers. Ranking Member Waters, I do not know of any 
large business which in reaction to the Republican tax law has 
raised their minimum wage to $15 an hour. There are some 
businesses that have done so. They have pretty clearly done so 
in reaction to mass protest by their employees or local and 
State efforts to raise the minimum wage.
    In general, those businesses that seem motivated in some 
respect by the tax bill have offered bonuses, one-time bonuses 
that will not add to the long-term prosperity of their 
employees. But the reality here, and you see it if you dig into 
the testimony of my fellow witnesses, is the businesses that 
are even offering the bonuses are a tiny minority, both 
businesses by number and by employee count.
    So depending on what number you look at, the number of 
businesses actually doing anything for their employees in any 
kind of coincidence with the tax bill is somewhere between 5 
and 15 percent.
    Ms. Waters. And you alluded to inflation and how a lack of 
the increase in wages really harms the average worker who has 
not gotten an increase in wage, and this one-time bonus is 
being described as something significant that the businesses 
have done as a result of the tax increase. You want to 
elaborate on the lack of increase in wages?
    Mr. Silvers. Yes. Well, thank you. I will be very brief 
about this. What we are seeing in the economy as a whole and 
for the work force as a whole, which is, after all, the real 
measure of the tax bill, is flat wages. But it is worse than 
that, because it is quite clear that the majority here in 
Congress intends to whack workers with substantial increases in 
healthcare and retirement costs that are going to eat away at 
their income.
    Frankly, the wealthy here are laughing all the way to the 
bank and the bankers are laughing there too.
    Ms. Waters. Thank you very much.
    Chairman Hensarling. The time of the gentlelady has 
expired.
    The Chair now recognizes the gentleman from Missouri, Mr. 
Luetkemeyer, Chairman of our Financial Institution 
Subcommittee.
    Mr. Luetkemeyer. Thank you, Mr. Chairman.
    After listening to Mr. Silvers, it is just amazing that our 
tax bill is doing anything. It must be the worst thing; it is a 
ball and chain around our economy, around our workers that we 
have ever done. And in spite of the fact that we have the 
lowest unemployment since 1969, job creation is going through 
the roof, consumer confidence is going through the roof, I was 
understood last night that we actually got nine separate car 
companies that are expanding or moving to Michigan.
    Ms. Miles-Olund, you represent National Association of 
Manufacturers. What have you seen?
    Ms. Miles-Olund. Well, for me, particularly in Oregon, our 
sales are way up, and we can't find enough workers. And that is 
where we are, as well as when I talk to other constituents in 
Oregon, it is the same problem; you can't find enough workers.
    Mr. Luetkemeyer. Prior to the tax bill, there were 
companies leaving this country with their headquarters--it was 
called inversion--to be able to take advantage of a lower tax 
rate in other countries. Since that, since we have passed the 
tax bill, my understanding is that that has stopped. Is that 
correct?
    Ms. Miles-Olund. That is what I have seen. Our phones 
started ringing off the hook in January, just from Genie, Lift, 
Vestus, all kinds of--
    Mr. Luetkemeyer. And, in fact, some of those companies 
actually have come back.
    Ms. Miles-Olund. Yes.
    Mr. Luetkemeyer. I was talking to one just the other day. 
They had 600 employees. They took it out of the country, went 
to Southeast Asia, and now have come back to the United States. 
It is amazing how that works.
    Ms. Kerrigan, you represent small business entrepreneurs. 
In this committee back last spring, we had Chairman Yellen of 
the Fed in here, and she was quoting a Fed survey that talked 
about how great everything was with small businesses and 35 
percent. And so my comment to her was, well, you are only 
telling part of the story, Madam Chair, because 35 percent of 
them were able to get money. The other 65 percent weren't 
getting any loans at all because they didn't want to get any 
loans at all.
    Since we have passed the Regulatory Relief Act, for what we 
have done, as well as all the new rules and regulations that we 
have taken off the books and the tax cuts, businesses now have 
money to invest, and it seems as though they are back in the 
game. Would that be a fair statement?
    Ms. Kerrigan. Oh, very much so. There was a lot of 
confidence over the past year-and-a-half. And definitely the 
tax relief has fueled growth and has fueled investment. And the 
demand is so high, and I would agree in terms of the whole 
worker issue, that many of our members, because of demand, 
because they need the workers are raising wages in order to 
attract workers and retain those workers as well.
    Mr. Luetkemeyer. So the statistics that I see, and which 
are obviously different than Mr. Silvers, are that the average 
wage growth is there. Average workers' wages are going up 
across the board around the country. Is that what you see?
    Ms. Kerrigan. I do. And I know the NFIB report, the recent 
one that they put out, when they found that the compensation 
increases are historically a 45-year high. A Gallup Small 
Business Index also finds that 60 percent of small businesses 
plan to increase wages over the next several months.
    Mr. Luetkemeyer. Mr. Sasser, as a banker myself, I can tell 
stories all day about how important it is for the individuals 
to have increased wages by allowing them to keep more of their 
money. This is what they did. They allowed--the tax cut allowed 
people to keep more of their money.
    It is not the Government's money. It is their money, which 
is a very important point. Which, right now, many members on 
the other side of the aisle support a tax increase, which means 
they believe that the Government has a right to the money in 
your pocket.
    As a banker, have you seen an increase in loan demand as a 
result of people being able now to afford to come in and 
perhaps purchase things that they couldn't afford before with a 
bonus check and with funds that they now have extra in their 
pocket?
    There was a statistic out by the Federal Reserve, I think, 
that 46 percent of the people can't afford a $400 bill tonight. 
What do you see in that regard, sir?
    Mr. Sasser. Well, we are certainly seeing consumers being 
able to buy more. But just as important, I am also seeing 
businesses able to grow. I see their profits up. I see them, 
because of having to pay less taxes, they are able to borrow 
more money in order to grow their businesses.
    Mr. Luetkemeyer. Isn't it wonderful that they actually get 
to keep their money and invest it as they see fit rather than 
the Government investing it for them.
    Mr. Stevens, I have a, very quickly, just one quick 
question, a follow up on the Chairman here with regards to 
buybacks. You were just saying a minute ago that when you buy 
it back, that the entity or the individuals you purchased that 
stock back from, they get cash for that, do they not? And then 
they get to reinvest it again, right?
    Mr. Stevens. Correct.
    Mr. Luetkemeyer. And that is how you stimulate growth, with 
all less. Also, do you not have a stronger company whenever you 
have a company that is buying its stock back, and they can 
leverage that strength to do more things?
    Mr. Stevens. It can certainly be accretive, and there are 
lots of reasons they would do it. Dividends are another way of 
returning capital to shareholders.
    Mr. Luetkemeyer. Thank you very much. My time is expired. 
Thank you, Mr. Chairman.
    Chairman Hensarling. The time of the gentleman has expired.
    The Chair now recognizes the gentleman from Massachusetts, 
Mr. Lynch.
    Mr. Lynch. Good morning. Thank you, Mr. Chairman and the 
Ranking Member, for holding this hearing. I want to thank all 
the witnesses for helping this committee with its work.
    And, Mr. Silvers, in particular, thank you for all of your 
work on behalf of working families in this country for a very 
long time. I have appreciated your counsel and your advocacy on 
behalf of workers and their families.
    One of the more bizarre aspects of the Republican tax bill 
which was really mystifying to me was the fact that it treated 
companies better who ship their jobs overseas than--at least 
their affiliates that moved overseas and created jobs in other 
countries, than it did the companies that stayed here and put 
Americans to work. I could not figure that out. And then on 
repatriating the profits that they made overseas, again, they 
were treated very generously, I would say, better than American 
companies.
    And we were hoping here, and we had debate in committee, 
and I know on Ways and Means about, if we could just put a 
decent tax rate on that money coming back into the country, we 
could have paid for a huge infrastructure bill where no 
American company or taxpayer would actually pay for that. It 
would come from foreign profits from those companies that move 
jobs overseas. I thought it was a perfect solution, but it was 
a missed opportunity in this bill.
    Can you talk about that, about creating the incentives to 
create jobs in this country for Americans, instead of giving 
more favorable treatment to companies to move their jobs 
overseas?
    Mr. Silvers. Congressman, thank you for asking about that. 
I view this particular provision of the tax bill as the most 
egregious provision in the bill and the one that is most 
misleading. I have been careful in my testimony not to 
characterize the bill, as a whole, as a scam, but I believe 
this provision is a scam in the sense that when President Trump 
ran for office in 2016 he talked extensively about how we had a 
system--about a complicated system of corporate taxation called 
deferral that subsidized companies moving jobs offshore by 
enabling companies not to pay taxes until they brought the 
money back.
    One would assume that if you were saying that there was 
something wrong with that you wouldn't be in favor of a tax 
measure that didn't tax companies' offshore profits at all, 
right? And it seems to me that campaigning against a kind of 
complicated tax benefit, and then instead of fixing it, making 
it a thousand times worse, is the textbook definition of a 
scam.
    Now, I think this is even more egregious because you really 
are making it very difficult for the leaders of America's 
businesses to do the right thing. It is very difficult to ask a 
corporate CFO to make the choice between building a plant on 
Main Street, for example, Mr. Sasser's hometown, when the tax 
rate even in this bill will be 22 percent, whereas, if you 
build that plant in a tax haven, Ireland, one of the export 
processing zones in the Caribbean, you can get a 0 percent tax 
rate in the company you are operating in and a 0 percent tax 
rate here.
    A person, a fiduciary is going to have a hard time doing 
the right thing. I am not sure it is that person's fault who 
makes that decision. I think that responsibility lies here in 
Washington at the White House and in the offices of the 
leadership of this Congress.
    Mr. Lynch. Thank you. Thank you, Mr. Silvers, I agree. 
There are a lot of people that had opinions on the tax bill, 
but--and I like to get a diverse set of opinions. I do want to 
note that Goldman Sachs, one of the reports that I read, 
Goldman Sachs reported--it basically led out the bill and 
predicted winners and losers, and it projected that the single 
biggest winner in the banking sector, from this Republican tax 
bill, will be Wells Fargo, Wells Fargo, who robbed, robbed 
their own--their own customers.
    Set up fake accounts, charged them fees without any 
authorization, basically robbed their own customers, got 
billion dollar fines, but then to the rescue rides the 
Republican tax bill and makes them the biggest winner, biggest 
winner, permanent tax cuts and regular working Americans who 
got robbed, they get a temporary tax cut only to be dealt with 
later.
    So I want to thank you, Mr. Silvers, again, for your great 
work, and I yield back the balance of my time.
    Chairman Hensarling. The gentleman yields back. The Chair 
now recognizes the gentleman from Michigan, Mr. Huizenga, 
Chairman of our Capital Markets Subcommittee.
    Mr. Huizenga. Thank you, Mr. Chairman. And I am just 
stunned by some of the conversations that are happening here 
about these bonuses. This is the equivalent of calling these 
crumbs, and that doesn't matter to people, and that somehow or 
another this is not going to move the needle at all.
    And this notion of having $15 an hour and that the 
ludicrous statement that there hasn't been a major company that 
has announced any of these kinds of movements of wages. I guess 
the 940,000 employees that work at Charter Communication 
wouldn't qualify as a large company, apparently, or in our 
space with the Financial Services Committee that we work with: 
PNC Bank, Bank One. I have a list here that I am tempted to 
submit that is regional banks, Great Western Bank Corp, Regions 
Bank, Humana increased its wages, Wisconsin based--sorry, I am 
stealing your thunder with Johnson Bank raised it. Key 
Corporation, MB Financial, Marsh & McLennan, SunTrust. It goes 
on and on and on.
    So, Mr. Stevens, I have a question for you. So we have seen 
about these bonuses, $1,000, $2,000. In the long run what would 
a $1,000 investment today translate 30 years from now if 
someone were to take that bonus and invest it?
    Mr. Stevens. Albert Einstein called compounding the most 
powerful force in the universe. So if you took a $1,000 bonus 
today and you decided to invest it, and you invested it in an 
individual retirement account quite conservatively in a 60-40 
mix of stocks and bonds over a 30-year period you would have 
$20,000 for retirement before taxes.
    Mr. Huizenga. That crumb just got bigger.
    Mr. Stevens. A lot bigger.
    Mr. Huizenga. OK. It might even be a loaf of bread at that 
point.
    Mr. Stevens. Well, and, Chairman Huizenga, there are also 
reports that companies are using this opportunity to improve 
their 401K plans and so--
    Mr. Huizenga. So people can take part of that wage increase 
that they have gotten, add it to their own retirement and the 
company then matches it oftentimes or sometimes--
    Mr. Stevens. It could be an increased employer match. So if 
you think about an employee that is earning $50,000, and there 
is a 1 percent increase in the employee match over a working 
life that is going to be on the order of $100,000 additionally.
    Mr. Huizenga. Now we are talking about a bakery. We went 
from crumb to loaf to now we got a bakery going here. So OK--
    Mr. Stevens. That is right.
    Mr. Huizenga. I think that is the point. This is all about 
making sure that we have an active economy. And you want to 
talk about minimum wage, there is nothing greater that moves 
wages than economic activity rather than having a Federal 
Government mandate coming down--oh by the way, we have tried 
some--tried some of those shovel-ready stimulus package 
programs that have gone out. I was in the State legislature in 
Michigan when those not-so-shovel-ready programs were getting 
jammed in, and many believed that at least a good significant 
portion of that was wasted taxpayer dollars.
    Very quickly in the last minute and a half we have here I 
want to talk a little bit about IPOs and the lack of what is 
happening and why these companies are turning to private 
capital instead of going to public because I think we all agree 
very few Joe and Jane six-pack and Joe and Jane 401K are able 
to invest in these private companies. They are able to invest 
in these public companies, but what are some of the drawbacks 
why companies aren't doing this?
    Mr. Stevens. Why they are not becoming--
    Mr. Huizenga. Why they are not becoming public companies?
    Mr. Stevens. Well, I think there are two major forces at 
work, Mr. Chairman. One is they are incredible sources of 
private capital they can now tap. That is the whole private 
equity market. And a second is because there are downsides, 
regulatory burdens, and other things about becoming a public 
company. I really commend the SEC and Chairman Clayton for 
looking at how some of those might be addressed to reduce the 
disincentives, and I do agree with him that once a company goes 
through the process of becoming a public company they are a 
stronger and better company for it.
    The reason that we are concerned about this is because the 
hundred million ordinary investors that we serve can't access 
those private equity markets. We depend upon a robust and 
growing public sector.
    Mr. Huizenga. And so what do you think is the biggest 
deterrent? Is it the regulatory side of that hurdle? We have 
seen estimates of it being millions of dollars to convert from 
a privately held company to a publicly held company.
    Mr. Stevens. It is certainly a costly process, but it has 
costs and consequences that, over a longer period of time, 
because you are subject to disclosure, you are subject to 
reporting, you are subject to a whole series of SEC 
requirements.
    Mr. Huizenga. My time has expired. Thank you.
    Chairman Hensarling. The time of the gentleman has expired. 
The Chair now recognized the gentleman from California, Mr. 
Sherman.
    Mr. Sherman. I want to address Mr. Stivers' discussion with 
Mr. Stevens. Says that $1,000 bonus could be $20,000 30 years 
from now, but this tax bill increases your family's share of 
the national debt by $34,500 over the next 10 years, but then 
to make things even, since we are talking 30 years from now, 
you take that same rate of increase for another 20 years, to 
the year 2048, and you are looking at nearly $200,000 as your 
share of the--of your family's share of the increased national 
debt all to get that $1,000 that if you invest with Mr. Stevens 
grows to $20,000.
    So as long as--Countrywide executives were pikers, why 
didn't they come up with this? You slap a $34,000 mortgage on a 
family's home, you give them a $500 or a $1,000 bonus, you tell 
them you have done something spectacular, and then you 
illustrate it further by saying that $1,000 bonus could grow to 
20,000 while, of course, the debt on your house is growing just 
as quickly.
    Mr. Chairman, if you go and you want to see a horse race 
and you want it to be interesting, you may have to put a 
handicap on one of the horses. If you have a thoroughbred 
racing against an old nag, you put 300 pounds on the 
thoroughbred. And now we have a debate here about an old nag of 
a tax bill, one that will increase the debt for every family of 
five by $34,500.
    And so what you do is you have four presenters on one side 
and one presenter on another. Four times as many opening 
statements on one side as the other. But this tax bill is so 
bad I don't think that is enough. I think you need to have 20 
witnesses on one side and Mr. Silvers on the other, and even 
then you are not going to be able to sell this thing.
    We are talking a lot here about red tape. Let me just say 
that if there are 100 pages of regulations affecting an 
industry, then a few hundred companies have to read 100 pages 
of regulations. Every small business in this country is going 
to end up reading 10,000 pages of case law just on the issue of 
what qualifies as passthrough income eligible for this 20 
percent exclusion. Not people in one industry, the whole 
economy, not regulations designed to answer your questions but 
the mutterings of judges about an individual case from which 
you will hope to divine what that incredibly impossibly drafted 
provision will provide.
    Mr. Silvers, I want to go back to this international thing 
because we do know that the President is going to completely 
capitulate on this trade issue, it is just a matter of whether 
he does it before or after the midterm elections. And then 
every company in our country will know that they can have a 0 
percent U.S. tax, perhaps a 0 percent total tax just by moving 
their factory overseas.
    Under our present--there is an answer to this called 
worldwide unitary taxes, which is a whole different system. All 
the corporations in the world are united in hating us, all the 
multinationals. And I will ask you--well, if a television set 
is designed in Japan and manufactured in Taiwan and sold in the 
United States where are the profits earned under our present 
tax accounting system? I won't ask you that question because it 
is a trick question. The answer is the Cayman Islands.
    And until we move to a worldwide unitary system it will 
continue--we will continue to see not only will the profits of 
that factory not be taxed in the United States, but the 
intellectual property created in the United States with 
research that is eligible for research credits and research 
deductions will then be parked in the Cayman Islands and the 
royalties distributable to that intellectual property.
    Mr. Stivers--what else have we missed about this tax bill, 
Mr. Silvers.
    Mr. Silvers. What have we missed? I think that the real--in 
addition to the incentives to kill jobs, which you have just 
talked about--
    Mr. Sherman. Right. Not kill them just move them overseas.
    Mr. Silvers. From the perspective of the working people 
from the United States that would be kill them. I think that 
the most troubling thing about this bill is the way in which it 
drains our future. It takes money that should be--takes money 
that should be used for the desperate needs of this country and 
infrastructure and education and hands it to the people who 
least need it.
    Mr. Sherman. Thank you.
    Chairman Hensarling. The time of the gentleman has expired. 
The Chair now recognizes the gentleman from Wisconsin, Mr. 
Duffy, Chairman of our Housing and Insurance Subcommittee.
    Mr. Duffy. Thank you, Mr. Chairman. This is a rich, rich 
conversation. Republicans want to send jobs overseas? In the 
last year and a half there are more jobs that are open than we 
have people who can fill those jobs, and our bill is sending 
jobs overseas? That is rich. And I think if you look at this 
debate some people might sit and scratch their head and say 
what is going on here?
    This is a simple debate between American style capitalism, 
also known as free enterprise, and a collectivist socialist 
model that has been taken over by the Democrat party. That is 
the debate we are having.
    So if I say, Ms. Miles, you can keep more of your money and 
you can invest it in your business, and you might have a little 
less rule and regulation, we over here think that is a good 
thing. You are going to probably innovate more, you are going 
to create more and probably provide more jobs for the families 
in your community.
    Over here on the other side they will say oh, no, we are 
letting you take too much of our money. Mr. Silvers believes 
that the profit that you make is his money. Did he ever sweat 
in your factory? Did he ever invest one dollar of capital in 
your family's business? Has he?
    Ms. Miles-Olund. I don't believe so.
    Mr. Duffy. Sweat at all in your factory?
    Ms. Miles-Olund. No.
    Mr. Duffy. Take any risk in your factory?
    Ms. Miles-Olund. No.
    Mr. Duffy. But lo and behold, guess what, he owns part of 
your profit, it is his. And if we let you keep a little more of 
your money, I am stealing from him. I am a thief. That is what 
they believe. This is amazing stuff. Tax scam? Impeach Trump? 
The economy is rocking. People are enthused. If you lose your 
job, you go on the street and you can get another one, and they 
will pay you more and probably give you better benefits.
    Two years ago under Obama leadership you lost your job, you 
were out of work. You were on unemployment and food stamps. Not 
today because free enterprise wherever tried works. This model 
that they are advocating for, old Soviet Union, Cuba, 
Venezuela. It destroys economies. It guts the middle class. 
They are eating zoo animals in Venezuela. And you can laugh, 
but when women are prostituting themselves in Venezuela to put 
food on the table, it is no joke. You can laugh at that all you 
want. But that is what is happening with socialism. I have to 
tell you--
    Mr. Sherman. Will the gentleman yield?
    Mr. Duffy. No, I will not yield. I will not.
    Mr. Sherman. Will you identify any elephants eaten in the 
United States under the Obama Administration?
    Chairman Hensarling. The time belongs to the gentleman from 
Wisconsin.
    Mr. Duffy. I want to make another point about the debate 
that is happening today. You have in California, you have 
unions who support usually different folks in this Congress to 
say I am fighting for the little guy. I am fighting for a 
minimum wage. I want to fight for $15 an hour of a wage in 
California because I am fighting for the little guy.
    But as the unions in California are fighting for a $15 
minimum wage, one that Mr. Silvers works for, all the while 
they will say, but if you unionize, guess what? Anyone know? 
You can pay our people less than $15 an hour. So it is not 
really about giving people a higher wage. It is about 
empowering a union. Otherwise, why would you say $15 an hour is 
right. It should be right whether you are in the union or not 
in a union.
    In Wisconsin, one of our largest employers, which I know 
the gentlelady from Wisconsin knows well, they are paying no-
skills-out-of-high-school-full-time work 15 bucks an hour. And 
if you work the second shift you get another dollar an hour. 
And if you work Saturday it is 2 more dollars an hour. So if 
you work the second shift on Saturday and Sunday, 18 bucks an 
hour with a high school graduation. That is amazing. What a 
growing economy and free enterprise can offer an economy in the 
middle class. What it does for upward mobility.
    But I am shocked to listen in here. People tell America 
that they did your work. They sweated in your shop. They took 
risk to grow and expand. They are the ones that feed the 
families in your community. And when this Congress gives you a 
tax break you are stealing.
    What do you think, Ms. Miles-Olund, when we give you a 
little tax break and let you keep a little more of your money, 
what do you do with it?
    Ms. Miles-Olund. We reinvest it in the company, and we pass 
it on to our employees.
    Mr. Duffy. God bless you. I yield back.
    Chairman Hensarling. The time of the gentleman is expired. 
The Chair now recognizes the gentlelady from Wisconsin, Ms. 
Moore.
    Ms. Moore. Well, thank you so much, Mr. Chairman. And I too 
am from Wisconsin, and I walked in on the discussion of 
communism and the free market, so is this the right committee?
    I want to direct my questions starting with Ms. Kerrigan 
from the Small Business and Entrepreneurship Council. Thank you 
so much for your testimony. I did take time to peruse it, and 
you talk a great deal about consumer confidence and some 
surveys that you have done, the optimism that this tax bill has 
provided. Then you went on to talk about how increased wages 
and benefits, you talked about 15 percent of these proceeds 
from the tax bill would go toward wage increases and bonuses. 
Can you just give us a breakdown of what percentage of those 
wage increases went to CEOs versus regular employees?
    Ms. Kerrigan. The surveys that I mention are surveys of all 
small business owners, so these are--they are surveying small 
business owners asking them what they are doing with their tax 
savings.
    Ms. Moore. So 15 percent--
    Ms. Kerrigan. So they are passing them on to their 
employees in the form of higher wages. Different surveys have 
different results. I think the one that you are referring to--
    Ms. Moore. OK, OK. Thank you very much for that. I don't 
have my glasses on, so I am having a hard time seeing names 
here, forgive me, but our banker I have a question for you. The 
presidency of a real bank on behalf of the Texas Bankers 
Association.
    One of the things that many of my colleagues have noted is 
that Wells Fargo was the major beneficiary of this tax bill, 
and what we have also noticed is that the structure of the tax 
bill 70 percent of the benefits went to businesses in the 
financial sector, brokers, hedge fund managers, and so on.
    And so I guess my question for you is twofold. Number one, 
the year-end bonuses that people got, is that customary? Did 
this tax bill incentivize banks to give bonuses or is this 
something that they do regularly.
    Mr. Silvers . Ms. Moore, the bonus that I spoke of that our 
bank gave in January was purely the result of the--
    Ms. Moore. So you never gave bonuses before then--
    Mr. Silvers . We did. We also gave our traditional bonus 
the first of December, which we were doing even before the 
tax--
    Ms. Moore. Exactly. You gave bonuses year end all the time, 
so this tax bill didn't have any--
    Mr. Silvers . Yes ma'am this was above and beyond that.
    Ms. Moore. OK, so you gave wage increases. How much did you 
give the CEO versus the workers?
    Mr. Silvers . We adjust our employees' salaries on an 
annual basis. The reason that we gave the bonuses in January is 
because, as you well know, a lot of companies were giving those 
bonuses.
    Ms. Moore. Exactly--
    Mr. Silvers. I am not--
    Ms. Moore. Bonuses versus--OK. I don't have much time, but 
you did answer my question.
    Mr. Silvers . Well, I just want to make sure you 
understand. I compete with those companies that also got the 
same tax breaks, and I have to keep those employees.
    Ms. Moore. I got you. Mr. Silvers, was this tax bill worth 
it? We have heard people, have waxed on about the bonuses and 
consumer confidence. I can't bake a consumer confidence. When 
you consider the increase in the healthcare bills that people 
are going to pay as a result of destroying the Affordable Care 
Act, the $1,000 bonuses that people have, was this tax bill 
worth it in terms of the increase in the debt?
    We heard so many people talk about compound interest, which 
is going to work against us when you consider the added debt, 
the $34,000 that we have added to each person's debt. Was this 
tax bill worth it to the average person out there?
    Mr. Silvers. Congresswoman, all I can tell you is that 
despite the efforts of a number of people in this room to hide 
this, you can't find the tax bill in the economic data. Wages 
are flat in real terms. Wages are down for most Americans in 
real terms. GDP growth is flat trending slightly downwards. It 
is not 3 percent, it is 2.2. Job growth, again, trending 
slightly downwards.
    There is no significant trend in the U.S. economy, which 
can be seen to have been affected by the tax bill at all. The 
only thing the tax bill appears to have done is distributed 
several trillion dollars from working people to rich people.
    Chairman Hensarling. The time of the gentlelady has 
expired.
    Ms. Moore. Thank you so much. My time has expired.
    Chairman Hensarling. The Chair wishes to alert all members 
that there are currently three votes pending on the floor, 
approximately 10 minutes left in the first vote. We will 
recognize one more member and then recess for the vote series.
    The Chair now recognizes the gentleman from Kentucky, Mr. 
Barr, Chairman of our Monetary Policy and Trade Subcommittee.
    Mr. Barr. Thank you, Mr. Chairman, and we have heard a lot 
of commentary today, editorial commentary about the tax cuts 
mostly positive. Mr. Silvers has expressed some reservations 
about the tax cut bill. Interestingly, with all of his 
discussion about the criticisms of tax cuts, we are actually 
seeing some pretty strong numbers in the economy.
    Surveys are showing the highest level of business optimism 
in 34 years, consumer confidence is a near 2-decade high. 
Unemployment at a 17-year low on track to fall to a rate not 
seen since the late 1960's, and my own State of Kentucky 
unemployment is the lowest rate it has ever been recorded in 42 
years since the Bureau of Labor Statistics began providing that 
data.
    The labor participation rate for people in their prime 
working years is at the highest level in a decade. The economy 
has added over one million jobs since the tax cuts were 
enacted. There are now more job openings than unemployed 
Americans. Despite Mr. Silvers' statement that--and his 
statement contradicting the testimony of job creators right 
here in the room that wages aren't going up, the Department of 
Labor recently announced the largest annual increase in wage 
growth since the end of the Recession and following three 
consecutive quarters of economic growth averaging 3 percent, 
the nonpartisan Congressional Budget Office is now forecasting 
growth to be nearly 3-1/2 percent. All of this corroborates the 
anecdotal evidence in my own district.
    Darryl in Estill County, Kentucky told me as a retired 
railroader he has a taxable pension. He is getting over $49 a 
month increase in his paycheck. The owner of a small community 
bank in my district told me that despite what my friend on the 
other side of the aisle was saying about increased healthcare 
costs, he said that because of the tax relief for his community 
financial institution he was going to be able to contribute 
more to the bank tellers' healthcare costs and lower their 
premiums because of tax cuts.
    And then there was the owner of--the CEO of a medical 
clinic, who told me that because of tax cuts the ownership of 
the medical clinic was going to be able to expand creating 
construction jobs and expanding medical services to their 
patients.
    And then there is Chris who started as a deliveryman for a 
pizza franchisee. He worked his way up. He started buying 
franchises, and now he owns multiple franchises. He told me 
because of tax cuts he was going to hire more workers. He was 
going to give them all a raise. He was going to open up a new 
franchise because of tax cuts.
    And then there was--then there was the lady who worked in 
the factory in Berea, Kentucky, who told me that because of tax 
cuts she and her husband were going to be able to afford to buy 
a bigger home so that their kids would no longer have to share 
a bedroom. They could live in two rooms now.
    So it is statistics. It is data. It is facts. And it is 
also anecdotes. It is just as plain as the nose on everyone's 
faces. These tax cuts are working. They are working. And so, 
Ms. Kerrigan, what would you say to Mr. Silvers who says that 
wages aren't going up? Ms. Miles-Olund, what would you say when 
the survey of the National Association of Manufacturers says 
that over 75 percent of manufacturers in America are going to 
raise wages? What is the disconnect? And, Ms. Miles-Olund and 
Ms. Kerrigan.
    Ms. Miles-Olund. I am just speaking to what I am seeing on 
the street, and I am talking with my constituents, my 
colleagues, it is just--it is going--they are going up. The 
minimum wages and the base wages are going up. And one thing is 
it is the demand for workers. We have to be more competitive, 
and as we are more competitive we have to raise that rate 
because we want those people to come work for us.
    Mr. Barr. Ms. Kerrigan?
    Ms. Kerrigan. Well, I think the same. I think the set of 
statistics belies things that are actually happening on the 
ground with our small business owners in terms of the demand, 
the economy, B to B, more customers buying things, but also, 
the indicators and the trends. Everything from wage growth 
investment going up.
    Mr. Barr. In my last 30 seconds if I can reclaim my time, 
Mr. Silvers talks about this tax cut bill being a win for the 
rich. You hear this narrative that this is a win for the rich. 
Here are the facts. The nonpartisan Tax Policy Center, 
households in the top 20 percent of income earnings will pay 87 
percent of the Federal income taxes collected in 2018 compared 
to 84 percent last year. By the way, last year that is a large 
percentage.
    By contrast, those in the lower 60 percent of income 
earnings will contribute only 4.3 percent of Federal income 
taxes compared to 5.3 percent last year. That is not a win for 
the rich. That is a win for the lower and middle income 
Americans. Yield back.
    Chairman Hensarling. Pending the conclusion of votes on the 
floor the committee stands in recess.
    [Recess.]
    Chairman Hensarling. The committee will come to order. The 
Chair now recognizes the gentleman from Georgia, Mr. Scott, for 
5 minutes.
    Mr. Scott. Thank you very much, Mr. Chairman. This is 
indeed a very interesting and very informative hearing on the 
tax bill, which normally we would have in Ways and Means being 
a tax bill, but it is here, but it raises some very 
interesting, profound questions because we have a frequency on 
this committee of putting up--I don't see it up now, but just a 
tickety-tickety-tick of the growing national debt. And here we 
are exploring a bill that would very definitively add over $1 
trillion to that national debt, and it is not just me saying 
it, it is according to a nonpartisan joint committee on 
taxation found that the Republican tax bill will cost this 
country to its debt $1 trillion even when accounting for the 
estimated effect on economic growth.
    And it brings me to the big picture here of economic growth 
because in a way it could very well hamper economic growth, and 
that is why I think that this is a good hearing because it 
gives us a chance to explore it. There is a growing gap between 
the haves and the have-nots in this country. There is a shift 
of jobs going overseas. This is what makes it so attractive to 
many of our industries. We yet don't know the full impact of 
that.
    So, Mr. Damon Silvers, now you said something very 
interesting, and I can't remember it all, but you said, and I 
want you to repeat this because you said a lot of brilliant 
things this morning, and I was trying to write them down, but 
you said something, and this is what I caught, that this bill 
takes money away that could be used to really help, to deal 
with what I talked about closing the haves and the have-nots 
dealing with other issues that would better lay more of 
equality of economic benefits distribution than harrowing it to 
people who need it really the least, and I think that is pretty 
much what you were saying. And I want you to explore on that.
    But I also want you to deal with particularly your opinion 
on the effects of H.R. 1 on the overall economic growth, and 
when I say overall economic growth, I am talking about economic 
growth for everybody. You can't have economic growth if it is 
just position up to the top 1 or 2 percent of the wealthiest 
people in this country. Can you?
    Mr. Silvers. Congressman, let me address your first point 
first. As I said earlier, this country has a severe need for 
public investment. We have a $3 trillion plus infrastructure 
deficit, most of which is in public assets. That is 
infrastructure--that is our inheritance from responsible prior 
generations that built this country that is deteriorating. In 
order for us to be competitive with countries like Germany, and 
China, and India that are rapidly investing in the technologies 
of the future we probably need to put something between another 
$2 and $3 trillion into our Nation's infrastructure on top of 
the maintenance.
    This bill is borrowing money to redistribute to the 
wealthiest among us money that would be better used, in the 
view of the AFL-CIO, to invest in our Nation's infrastructure. 
The same thing can be said for our Nation's educational system.
    Now, you talked about the question of distribution. The key 
thing we need to do in this country in order to be competitive 
and in order to tap the productive capacity of our laborforce 
is to ensure that our infrastructure is universally available. 
This was the genius of the New Deal. We live in a prosperous 
country because the New Deal brought electric power to every 
household. In the world we live in today we need broadband to 
every household. I would then say that in relation to your 
second question--the Chairman is telling me my time has 
expired.
    Chairman Hensarling. I believe the Chairman is. The time of 
the gentleman from Georgia has expired.
    The Chair now recognizes the gentlelady from Missouri Mrs. 
Wagner, Chair of our Oversight and Investigations Subcommittee.
    Mrs. Wagner. I thank you, Chairman Hensarling. Last year 
Boeing, which employs over 5,000 of my constituents not to 
mention the multiplier effect on the supply chain side of that 
announced that they would be investing $300 million as a direct 
result of the Tax Cuts and Jobs Act. Those dollars, which will 
be divided equally between charitable giving, workforce 
training, and workplace improvements will have a real impact 
for a generation of workers in St. Louis.
    In addition to news like that from companies across the 
country, GDP growth is, in fact, on the rise, on the rise for 6 
consecutive quarters and then some. Our job market is strong. 
Unemployment is at a record low. And small businesses are 
finally optimistic along with the American people and consumers 
about the prospect of growing and reinvesting.
    Ms. Miles-Olund, your company isn't the size of Boeing, so 
to speak, but are you seeing these same opportunities? Are you 
making increased capital investments in your company as a 
result of tax reform and how has tax reform enabled you to make 
these investments?
    Ms. Miles-Olund. We have seen an uptick in large contracts 
with larger companies, such as Genie, Winnebago, larger 
companies, not so much the small onesies, twosies jobs that we 
had been getting. We are using these to get ISO certified, that 
is something that we had not been before, and also to implement 
our training program to be more competitive and to deal with 
the labor shortage issue that we have as well as invest in our 
community college so we can partner with them for labor.
    Mrs. Wagner. You are investing in the community college, 
investing in training, things of this nature?
    Ms. Miles-Olund. Yes.
    Mrs. Wagner. Wonderful. U.S. Bank, which is based in my 
home State of Missouri and has a large presence in my district 
announced in January that they would give $1,000 bonuses to 
almost 5,000 employees in Missouri while increasing wages for 
another 1,300 employees to $15 per hour.
    Mr. Sasser, you actually know how this feels since your 
bank also gave $1,000 bonuses to your employees. Can you tell 
me why that is important to your employees?
    Mr. Sasser. Well, certainly our employees appreciate, 
appreciated the bonus that we had given to them, but let me 
also say that we didn't just give a bonus just because it made 
us feel good one time. My competitors, other banks in my market 
they also got the same tax break that I did, and I not only 
compete for deposit customers, compete for loan customers, but 
I compete for qualified employees. And so it is imperative that 
I pay my people a competitive wage. These are trained people 
that are very good at what they do. They are what makes our 
company successful, and so, paying the bonus, sure it made us 
feel good, but it was something we have to do in order to be 
competitive. We want our people to be well paid.
    Mrs. Wagner. And all boats rise for all employees across 
the board.
    Mr. Sasser. Exactly. We want everybody to be successful. 
That is why I am in the banking business. I love making people 
be successful.
    Mrs. Wagner. So do I. Ms. Miles-Olund, during the first 
quarter of 2018, U.S. private sector wages saw their biggest 
gain since 2008, and I think Mr. Sasser has just given 
testimony to that. How has tax reform enabled you to pay your 
employees more?
    Ms. Miles-Olund. We increased our minimum wage by a dollar 
and then with the training program that we put in we have made 
it so that every time they learn a new skill they receive a 
$1.50 raise.
    Mrs. Wagner. Wow. Well, we have seen it time and time again 
now that companies are also investing in training for their 
employees and offering increased benefits. How does this afford 
new opportunities for your employees that they otherwise might 
not have had?
    Ms. Miles-Olund. I did see an uptick in our 401K people 
opening up a 401K, which--
    Mrs. Wagner. So they are investing for their future?
    Ms. Miles-Olund. That really made me happy. I think three 
or four people bought a new home this year, too, so, again, 
very happy about that.
    Mrs. Wagner. Buying new homes, investing in their 
retirement savings or for a rainy day, investing in 
communities, training, wages, I thank you for your testimony 
here today. Mr. Chairman, I think my time has expired, and I 
shall yield back.
    Chairman Hensarling. The gentlelady yields back. The Chair 
now recognizes the gentleman from Illinois Mr. Foster.
    Mr. Foster. Thank you, Mr. Chairman. And I would like to 
thank the committee here for their anecdotes. I come at this as 
someone who started a small business with $500 from my parents, 
and that company now manufactures approximately 70 percent of 
all the theater lighting equipment in the United States. We 
have kept all the manufacturing in the midwest. Our total 
employment just went over 1,200 people. And so I am very proud 
of that and as well as proud of my brother, who has actually 
been running the business for a while. But I speak I believe 
for both me and my brother when this tax cut that we got was 
not something that we asked for and not something that we need.
    And now, Mr. Sasser, you said something interesting that 
your customers do more when they have more. OK. I actually 
agree with that. I believe the real job creator is a customer. 
Customers come from the middle class, and we have to focus on 
making the middle class healthy. Now, there is actually a 
number for this. If I can have the household net worth slide, 
if that is coming up I believe there is a third one. That one.
    In the last couple weeks, the Federal Reserve made the 
historic announcement that household net worth has now gone 
over $100 trillion, and so I think that is a number that is 
interesting to compare to the $15 trillion of publicly held 
debt that our Government has when people say there is no money 
and we must cut Social Security and that we must cut Medicaid 
and so on that I think the narrative that there just isn't 
enough money is demonstrably false. $100 trillion is the wealth 
of Americans, and it is historic.
    Interestingly, it is up by $45 trillion during the Obama 
recovery, and that is a fundamental number. Unfortunately, of 
course, your customers and all Americans lost about $13 to $15 
trillion during the Republican crisis of 2007-2008.
    Now, Mr. Sasser, when your families in America lost $15 
trillion, did they do less because they had less?
    Mr. Sasser. Well, obviously, Mr. Foster, when people have 
less they do less. My customers are like me. They are like my 
bank. And that is they learn to live within their means. 
Whatever your income is if you live beneath your means you are 
going to grow your net worth. Has nothing to do with the amount 
of income you have. It is purely how you manage those revenues 
you have coming in.
    Mr. Foster. So you believe that the drop of $15 trillion of 
household net worth during the Republican collapse of 2008 was 
due to mismanagement of individual finances?
    Mr. Sasser. I am not sure that I understand your question 
about a Republican crash.
    Mr. Foster. I would like to move on here, but I think 
people should keep the $100 trillion in mind. It is a 
fundamental number when people say that there isn't enough 
money in this country and we must cut Medicaid and Social 
Security.
    Second, and as well if you look at this it is hard to see 
any effect of either the election of Donald Trump or the tax 
cut on the trajectory here. And I think, I am also in addition 
to being a businessman I am a scientist, so I am sort of a 
numbers guy, and if you look at any of the numbers there has 
been nothing since the election of Donald Trump or the tax bill 
that looks very different than a simple continuation of the 
trajectory set by the Obama recovery. This is one example of 
it. If we can go to the next slide.
    Another interesting thing that has changed actually in 
terms of banks is that after many years of strong growth in 
business loans by banks they have flat-topped since the 
election of Donald Trump, and I think this is an interesting 
observation to make. What is it about the election of Donald 
Trump that caused bank loans to businesses, Main Street 
businesses to flat-top? Mr. Sasser, do you have any theories 
about that?
    Mr. Sasser, I am not familiar with the chart that you have 
or where those numbers came from.
    Mr. Foster. They come from the Federal Reserve. They come 
from the Federal Reserve.
    Mr. Sasser. OK. That is not what I am seeing in my bank.
    Mr. Foster. I understand the anecdotes, but I am a numbers 
guy, and I would like--if you have any theories if you could 
answer for the record, any theories for why things have flat-
topped since the election of Donald Trump I would appreciate 
it. And the last slide here, if I could.
    We have heard a lot about the job market here, and so, it 
is interesting to look at the effect of layoffs. This is--the 
plot here is the number of layoffs it is what our initial 
claims for unemployment insurance, what economists use as a 
proxy, and you can see the big effect here happened in March 
2008 when without a single Republican vote the Democrats passed 
the stimulus, and the Federal Reserve stimulated the economy as 
best they could. And so that is the fundamental change. Again, 
you can see no change at all since either the election or the 
tax bill. What we see continuously if you look at the numbers 
are a continuation of the economic growth triggered under 
President Obama. Then the best you can say is that so far 
President Trump has not wrecked the Obama recovery. Thank you. 
I yield back.
    Mr. Pittenger [presiding]. The gentleman's time has 
expired. The Chair recognizes the gentleman from Florida, Mr. 
Ross, for 5 minutes.
    Mr. Ross. I thank the Chairman. I thank the panel for being 
here. While I am excited by the outstanding performance of 
today's economy, the strength of our job market, and the 
optimism of businesses and consumers alike, I want to 
underscore how important it is for us not to become too 
complacent.
    As we have seen over the course of the last 2 years 
elections do have consequences, dramatic consequences at that. 
And while we were fortunate to have President Trump and his 
progrowth agenda succeed in the last election our ability to 
turn around the economy by cutting red tape and passing tax 
reform just shows how quickly change can be made.
    I get on the website of GDPNow and the Federal Reserve Bank 
of Atlanta shows that we are right now in a trend for a 4.7 
percent GDP. That is phenomenal. We haven't seen growth of this 
economy over 3 percent in the previous two--the previous 
Administration for over 8 years. So we are on a progrowth plan. 
That is why I think it is absolutely critical for Congress to 
continue to pass laws that protect Americans from red tape and 
regulatory overreach while empowering regulators to do their 
job efficiently and effectively. I think reform of the 
Financial Stability Oversight Council and specifically passage 
of a bill which I introduced with Congressman Delaney, the FSOC 
Improvement Act must be a top priority.
    Mr. Stevens, I would like to ask you a few questions about 
the FSOC Improvement Act with which I believe you are familiar. 
In your testimony as an example of the unnecessary or 
inappropriate regulation you cite that FSOC and its process for 
designating nonbank financial companies are systemically 
important institutions. What is problematic about this? Let's 
face it, I get it about bank-centered institutions, but 
nonbank-centered institutions being designated as a SIFI under 
the current system is problematic, and it could pose serious 
problems for capital markets and investors. What say you?
    Mr. Stevens. Well, it is the consequences of the 
designation because the consequences under Dodd-Frank are that 
a nonbank will be regulated as if it were a bank.
    Mr. Ross. And not by its prudential regulator.
    Mr. Stevens. No, by the Federal Reserve in a system of 
enhanced--
    Mr. Ross. And with no method or manner by which to correct 
it or for that matter to rehabilitate.
    Mr. Stevens. The Federal Reserve understands the banking 
system. I do not think it understands asset management, and I 
think fundamentally asset managers don't fail like banks, they 
don't resemble banks, they don't pose the risks of banks.
    Mr. Ross. And there is never a run on asset managers, is 
there?
    Mr. Stevens. The long-term mutual funds stock and bond 
funds weathered the financial crisis better than any other part 
of the financial system.
    Mr. Ross. Do you think that making--that we are making 
FSOC's job harder by depriving them of the expertise of a 
prudential regulator in the remedial powers available to them?
    Mr. Stevens. Actually, I think the contrary. You are 
putting the subject-matter experts, the capital markets 
regulators that understand our industry up front and under your 
bill, which I appreciate your leadership on it, the Fed stands 
as a last reserve if the risk that is identified can't 
otherwise be addressed.
    Mr. Ross. Ms. Kerrigan, we have talked about the JOBS Act, 
and we want to continue to build on the JOBS Act especially in 
light of the enacted progrowth tax reform. How do you see the 
progrowth provisions of tax reform interacting with the JOBS 
Act and any other regulatory reform efforts originating out of 
this committee aimed at increasing access to capital in a 
capital markets?
    Ms. Kerrigan. Well, a couple things. One, we have a growing 
economy, and there is a lot of opportunity for entrepreneurs 
and small businesses in this economy, so now they need capital 
more than ever to take advantage of those opportunities. AXIS 
Capital has been an enduring challenge for entrepreneurs.
    Mr. Ross. It is the lifeblood of commerce.
    Ms. Kerrigan. Well exactly. But now a lot of these 
businesses have tremendous opportunities to grow, to invest, to 
do businesses with large businesses they need the capital in 
order to--
    Mr. Ross. And we are starting to see the flow of capital, 
aren't we, because of the tax reform plan, as well as what now 
we have just seen as the first couple weeks of a regulatory 
relief under the Dodd-Frank light, as I call it, we are 
starting to see capital come back into the markets, are we not?
    Ms. Kerrigan. We are. And so there is working capital and 
capital they currently have right now because of the Tax Cuts 
and Jobs Act that is allowing them to reinvest and expand, but 
I think if you really want to help a lot of these entrepreneurs 
and small businesses they need access to growth capital. And 
this is where the reforms that the committee has done that have 
already passed the House that they are considering to improve 
the capital markets and strengthen capital access is really, 
really needed right now.
    Mr. Ross. Thank you. Mr. Sasser, real quickly, I have only 
got a couple of 20 seconds. A key progrowth provision of tax 
reform can be the difference maker for a company and allow them 
to make significant capital improvements. Have you noticed your 
customers making capital improvements in their business as a 
result of immediate expensing?
    Mr. Sasser. Yes, we have.
    Mr. Ross. It is another form of capital, if you will, with 
immediate expensing.
    Mr. Sasser. That is exactly right. The revenue pie is only 
so big, and when the Government takes a big slice of it then 
that is less money available to service debt. As the Government 
shrinks the amount of money it takes from these businesses, 
that is more money available to service debt.
    Mr. Ross. I agree.
    Mr. Sasser. And with more money available to service debt, 
then we are able to provide more capital for businesses and 
growth.
    Mr. Ross. For business and growth. Thank you. My time is 
up. I yield back.
    Mr. Pittenger. The gentleman yields back. His time is 
expired. The Chair recognizes himself for 5 minutes.
    In 2003, I was elected to the North Carolina Senate and 
served there 3 terms. North Carolina at that time was the 
highest tax State in the southeast, both marginal rates and the 
corporate rates. As such, we were ranked around 44th in 
economic development.
    Following 2015 tax cuts in North Carolina, and regulatory 
reform, North Carolina is now a leader in economic development 
in this country. I am grateful that the good wisdom of our 
Congress followed the pattern, the direction of what we did in 
North Carolina to reduce these corporate rates that allowed 
companies to expand.
    Let's take a look at just what has happened in my own 
district. Frankly, Mr. Silvers, I would have been very 
depressed about the future of our country if I didn't 
understand the reality check of what has really happened not 
just in my State, in my city, but frankly, around the country.
    Randy Marion, a car dealer in Mooresville, North Carolina, 
he sells GMCs, Buicks, Chevrolets, and Fords. Last year he sold 
12,000 cars. This year he predicts he will sell 13,000 or more. 
That is an 8 to 10 percent increase. He attributes that because 
the consumer has more money in his pocket and more capability 
to go and buy a car. These are cars, American cars built by 
union folks.
    Another car dealer Felix Sabadas, Felix owned the biggest 
Mercedes dealership. Now he has acquired just a couple months 
ago, a big Ford--or started a new Ford and Lincoln dealership 
all because of a growing, emerging economy.
    Let's look at the banking system, something that I served 
on our community bank for a decade. 2010 since that time in 
North Carolina we lost 50 percent of our banks. Now just this 
year in the last 2-1/2 months, we have six de novo banks, new 
charter banks in North Carolina. This hasn't happened that much 
around the country during 2015, 2016, or 2017.
    These banks are in small towns. That have been depleted 
from capital and credit from the consumers. Now they are going 
back into those communities. North Carolina now will be a 
leader again in our economic development, but let's look at 
what has happened around the country.
    According to the housing market, our home prices are 
fastest pace since 2006. Zillow says it is up 8.7 percent. ABC 
says the Zillow estimates almost--are almost $40 billion that 
it will now be injected into the American housing market as a 
result of tax cuts to the Americans in 2018. This is not your 
conservative bit organization.
    Let's look at historic low black unemployment. Well, for 
the first time in U.S. history, the unemployment for African 
Americans fell below 6 percent as reported by NPR. A dramatic 
drop occurred in black unemployment, which fell to a record low 
of 5.9 percent, suggesting that African Americans are also 
benefiting from job gains in this booming economy. The jobless 
rates for Hispanics, teenagers, and those with less than a high 
school education are likewise at or near multidecade lows.
    BB&T, a major North Carolina banking institution announced 
$1,200 bonuses for 27,000 employees. Their base wage now will 
rise from $12 to $15 per hour. This wasn't mandated by the 
Federal Government. This is as a result of the demands of our 
economy. They have also injected and provided $100,000,000 in 
charitable donations.
    IET Insurance Group out of Raleigh, $3,000 a person bonuses 
for 685 employees. They were nonexecutive individuals. 
Requested Financial Holdings in Cornelius, $1,000 bonuses to 95 
employees. Their base wage hike went up to $15 an hour. This is 
market driven, not as a result of mandates. Apple Computers, 
now they are considering establishing their operation in the 
triangle area of North Carolina. There can be 10,000 jobs, but 
already we have five Apple stores here. They have given out 
$2,500 employee bonuses in the form of restricted stock units. 
Nationwide $30 billion in capital expenses over a 5-year 
period. These are remarkable results, something that is clearly 
attributed to a progrowth economy resulting from these 
legislative actions by our Congress. I hope and pray that we 
will stay on the same course to contribute to the American 
economy in the same manner. My time has expired.
    Ms. Waters. Mr. Chairman, a unanimous consent request.
    Mr. Pittenger. Yes.
    Ms. Waters. I would like to submit for the record an 
article entitled, ``Blue-Collar Trump Workers Are Struggling at 
Their Tax Cuts.''
    Mr. Pittenger. Without objection, so ordered.
    Are there any other witnesses? Yes, sir. Mr. Mooney, you 
are recognized for 5 minutes.
    Mr. Mooney. Thank you, Mr. Chairman, and thank you so much 
for coming to testify.
    And the goal of this committee is to get our economy moving 
again. We are seeing that this year, whether it is the tax cuts 
or the deregulation bills. I know some people want to see us 
fail, but frankly, free market works. Either you believe in 
free market or you believe in Government running everything and 
basically socialism. This country is founded on free market 
values.
    So we want to unleash the economy, let small businesses, 
individuals be successful. So I really appreciate, I have 
looked at your testimony, the organizations you represent, 
small businesses, manufacturers, investors. I really appreciate 
your being part of this process so we can hear from you and get 
bills passed and help our economy.
    So in that vein, I know that, well, in 2012, so we can see 
the results now, it has been over 5 years when we passed the 
JOBS Act to some SEC relief and hopefully get some small 
business startups and this could be for anyone, maybe Ms. 
Kerrigan or Mr. Stevens might have a little more information on 
it, but how has the JOBS Act helped small businesses and ECGs 
access the capital markets so far?
    Either of you want to try on that one?
    Ms. Kerrigan. Well, it has been terrific in many regards. 
Number one, if you look at debt inequity credit funding and 
allowing ordinary investors to invest in startups and regulated 
platforms that got off to a slow start only because the SEC 
took 4 years to implement that rule, those rules, but now you 
are seeing hundreds nearly 1000 startups being able to raise 
funds, start businesses, and in very competitive businesses. So 
that has been very, very promising, and we think with more 
reforms there is a tremendous opportunity to see growth in that 
regard.
    Just the commonsense things in terms of the JOBS Act in 
terms of scaling some of the rules and regulations, developing 
this emerging growth company designation has really initially 
helped to power the IPO market. I think now we need to make 
additional reforms to sort of get that going again. But the 
JOBS Act has been really terrific for capital formation and 
capital access and certainly there is a lot more regulatory 
reform and streamlining that can get done to improve--to 
improve the capital markets further.
    Mr. Mooney. Thank you.
    Mr. Stevens?
    Mr. Stevens. It is vitally important, Congressman, that we 
attend to the entire ecosystem as we think about capital 
formation, and that is from the smallest to the largest.
    Our members, their registered funds tend to focus on the 
larger of those, but you don't become a big company unless you 
are a successful small company first.
    We particularly want to see companies become publicly 
listed because then they are really eligible for us. And the 
reality is that small- and middle-size capitalization companies 
are more or less disappearing from U.S. exchanges, and we need 
to do something about that.
    Mr. Mooney. So as a follow up, I think Ms. Kerrigan 
mentioned, but it has been 5 years, we have seen what has 
happened with it, but are there more improvements now?
    We are passing lots of bill out of this committee. We are 
even getting some through the Senate. That is why I said at the 
beginning, we appreciate you being part of this process. It can 
be frustrating, but my mother fled a communist country, Cuba. 
At least here we have a process where people can have their 
grievances and their issues brought to Congress, pass the 
House, pass the Senate. I know it is a long process, but we 
have to work that process.
    We finally got a bill through. It wasn't as much as I 
wanted to do with the CHOICE Act, but we got something through, 
and we can continue to do that on other bills that help our 
economy.
    So now that it has been 5 years since the JOBS Act, any 
specific ideas of bills that we should pass here? Hopefully, 
the Senate will do their job. I do think our President will 
sign those bills. He is very pro free market economy.
    So any specific ideas you might want to share?
    Ms. Kerrigan. Well, I list many in my testimony. Some of 
those have already passed the committee, passed the House, and 
it looks like we are going to have to do it again or the Senate 
actually is moving on some things. There will be a hearing next 
week, and we will be testifying at that.
    The Helping Angels Lead Our Startups Act, the Fostering 
Innovation Act. I must list at least 10 reform bills in my 
testimony.
    I think one of the things that will be considered tomorrow 
by the committee is to extend the emerging growth company 
designation. It was a 5-year shock clock, if you will, but 
extending that to 10 years will help those existing companies, 
I think will even incentivize the IPO market even more.
    So just a lot of those commonsense things that, again, the 
committee is looking at and will be looking at in the near 
future.
    Mr. Mooney. Only 10 seconds left. Well, I will yield my 
time back to the Chair. Thank you.
    Mr. Pittenger [presiding]. The gentleman yields back.
    I would like to thank our witnesses for their testimony 
today.
    The Chair notes that some Members may have additional 
questions for this panel, which they may wish to submit in 
writing. Without objection, the hearing record will remain open 
for 5 legislative days for Members to submit written questions 
to these witnesses and to place their responses in the record. 
Also, without objection, Members will have 5 legislative days 
to submit extraneous materials to the Chair for inclusion in 
the record.
    This hearing is now adjourned.
    [Whereupon, at 12:45 p.m., the committee was adjourned.]

                            A P P E N D I X


 
                             June 20, 2018
                             
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