Vermont Business Magazine Senator Bernie Sanders (I-Vermont), Chairman of the Senate Budget Committee, Tuesday delivered an opening statement at the committee's hearing titled “Corporate Profits are Soaring as Prices Rise: Are Corporate Greed and Profiteering Fueling Inflation?”
The hearing is livestreamed on the Budget Committee’s website and Sanders’ social media pages.
Sanders’ remarks, as prepared for delivery, are below.
Senator Sanders
I call this hearing to order. Let me thank the members of this committee for being with us in person and those who will be attending remotely.
Let me thank Senator Graham for the work he is doing as Ranking Member.
And let me welcome our witnesses who are hear this morning.
Corporate greed is nothing new. It has been going on for the past 40 or 50 years.
It manifests itself in the extreme wealth and income inequality that we have been seeing in which the 2 wealthiest people in America own more wealth than the bottom 42 percent – over 130 million Americans.
It manifests itself in corporations paying their CEOs 350 times more than their average worker as they receive huge salaries, stock options, “golden parachutes” and a wide range of perks while workers struggle to pay their bills, send their kids to college and save for their retirement. In the 1950s, CEOs made about 20 times more than the average worker. In the 1980s, CEOs made 42 times more than the average worker. In 2000, CEOs made about 120 times more than the average worker. And today they make over 350 times what the average worker makes.
Corporate greed manifests itself in the massive amount of union busting that we have been experiencing in which large corporations spend millions of dollars to deny workers their constitutional right to organize while forcing workers who belong to unions to make unacceptable concessions like eliminating pensions and major pay cuts.
And today, it is manifesting itself in corporation after corporation using the pandemic, the war in Ukraine and the specter of inflation to charge Americans higher and higher prices for gas, good and housing while the billionaire class and large corporations are doing phenomenally well and have never had it so good.
The American people have had enough. They are outraged at the unprecedented level of corporate greed that is taking place all around them.
In America today, while the average worker is making $40 a week less in real wages than he or she made nearly 50 years ago, corporate profit margins are at a 70-year high and CEOs have seen huge increases in their compensation packages.
Let me give you just a few examples: While the average price of a gallon of gas in America is near a record high at $4.17 a gallon, guess what?
Yesterday, shock of shocks, Exxon Mobil reported that its profit from pumping oil and gas alone in the first quarter - will likely hit a record high of $9.3 billion. Meanwhile, big oil CEOs are on track to spend $88 billion this year alone not to decrease supply constraints, not to address the climate crisis, but to buy back their own stock and hand out dividends to enrich their wealthy shareholders.
Here’s more corporate greed. Amazon recently raised the price of its prime membership by 16.8 percent, while increasing its profit by 56 percent last year to a record-breaking $33 billion – and, by the way, avoided $5.2 billion in taxes.
Meanwhile, the founder of Amazon, Jeff Bezos, became $83 billion richer during the pandemic and is now worth $188 billion making him the second wealthiest person in America.
More corporate greed. Tyson’s, a major meat producer, has increased the price of beef by 32 percent, the price of chicken by 20 percent and the price of pork by 13 percent. Meanwhile, Tyson Foods has increased its profits by 140 percent last quarter to $1.1 billion and gave its CEO a 22 percent pay raise last year to $14 million while, its owner, John Tyson, nearly doubled his wealth during the pandemic and is now worth $3 billion.
Here’s corporate greed and the outrageous cost of prescription drugs. Last year Pfizer, Johnson & Johnson and AbbVie – three giant pharmaceutical companies -- increased their profits by over 90 percent to $54 billion. Meanwhile, the CEOs of just 8 prescription drug companies made $350 million in total compensation in 2020.
In other words, the problem is not that a low-wage worker got a 50 cent raise two weeks ago and a $1,400 check from the government last year as some of my Republican colleagues will tell you.
The problem is that corporations are making record-breaking profits and over 700 billionaires in America became nearly $2 trillion richer during the pandemic while engaging in obscene levels of price gouging.
The American people want us to take action.
They are sick and tired of large corporations making record profits and, in a given year, paying nothing in federal income taxes.
They are sick and tired of billionaires paying a lower effective tax rate than a teacher, a nurse, a truck driver or a firefighter.
They want Congress to address corporate greed and make sure that the wealthiest people and most profitable corporations pay their fair share of taxes.
In order to address this crisis, I have introduced legislation to enact a windfall profits tax modeled off of a bill signed into law during World War II.
During the 1940s, our country understood that it was unacceptable for companies to make obscene profits when our brave young troops were fighting and dying to protect our country and our allies.
Now, I’m not here to tell you that we are facing the same set of problems today. But I will tell you that during this terrible pandemic, during Putin’s murderous invasion of Ukraine it is also not acceptable for corporate America to make obscene profits by ripping Americans off at the gas station, at the grocery store or any other sector of our economy.
And let’s be clear. When we talk about corporate greed we are also talking about the enormous concentration of ownership that exists in America today and the lack of competition which has allowed companies to drive prices higher and higher.
In terms of agriculture, just 4 firms in America control 85% of the corn seed market, 82% of the beef-packing market, 76% of the soybean seed market, 66% of the pork processing market and 54% of the poultry processing market.
In terms of transportation, 4 large companies control 67 percent of our airlines and 83 percent of our railways, while just 3 companies control 80 percent of cargo shipping.
In terms of healthcare, over the past 20 years, there have been approximately 1,600 hospital mergers while 90 percent of metropolitan hospital markets are considered highly concentrated.
In terms of our entire economy, we should all understand that just 3 Wall Street firms (BlackRock, State Street and Vanguard) control $22 trillion in assets and have been aggressively pushing corporations to buy back their own stock and make huge amounts of money from mergers, acquisitions and other anti-competitive behavior.
If we are serious about combatting inflation and lowering prices, we must aggressively use the anti-trust laws that are on the books and introduce new ones, as necessary, to break up behemoth corporations and increase competition.
Now, is corporate greed the only reason for inflation? No, it is not. The severe supply chain crisis and the micro-chip shortage are also contributing to higher consumer prices.
But let me remind my colleagues that over the last 30 years, as a result of our disastrous unfettered free trade policies, corporate America has shut down many thousands of factories and shipped millions of good-paying American jobs to low-wage countries.
Maybe, just maybe, if we did not make it so easy for corporations in America to move abroad our supply chain crisis and micro-chip shortage would not be as serious as it is today.
Bottom line: We need an economy that works for all of us, not just those on top.
Senator Graham, you are now recognized for your opening statement.
WASHINGTON, April 5 – Sen. Bernie Sanders