Wednesday, May 22, 2024

Family income needs to track corporate gains, Mulvaney says

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So which leading liberal politician said this on a visit to the Charlotte area last Friday?

“For the last 70 years through 2007-2008, every time corporate profits went up by 1%, household incomes went up by 1%. Then something happened in 2007-2008. Since then, corporate profits have been going up 11% while household wages have only been going up 0.3%.

“That connection between successful American businesses and successful American families has been broken. We think that is in large part because of our tax system and the way it encourages corporations to move profits overseas. So corporations have been doing great, and shareholders are doing great because they make money wherever the company is making money. But workers make money when the companies make money here in the United States.”

It wasn’t Elizabeth Warren. It was conservative Mick Mulvaney, the Trump Administration’s director of the Office of Management and Budget, answering questions at a news conference at Movement Mortgage, the fast-growing lender based in Lancaster County, S.C. (He later spoke to 40 local executives in a private meeting.)

Mulvaney is the Charlotte lawyer who entered Congress after upsetting incumbent Democrat John Spratt in 2010, the first Republican to win South Carolina’s Fifth District since 1883. Though Mulvaney initially endorsed U.S. Sen. Rand Paul for president, Donald Trump named him OMB director.

Mulvaney was in a jovial mood Friday. He was speaking about a quarter mile from his South Carolina home, and the Movement offices were buzzing with surely the wildest collection of Halloween costumes and decorations ever displayed in corporate America. It was the most distracting news event he’d ever attended, Mulvaney joked.

But his main enthusiasm stemmed from the recent U.S. House of Representatives vote approving a budget resolution that proposes a “framework” of tax cuts for corporations and middle-income Americans. Details are expected to start rolling out on Wednesday, while House Speaker Paul Ryan wants a final vote by Thanksgiving.

The U.S. Senate now only needs a majority to pass tax reform, giving “obstructionist” Democrats little role in the outcome, Mulvaney says. “The Democrats are understandably upset.” Indeed, U.S. Senator Chuck Schumer of New York and other Democratic leaders say the plan mainly enriches the wealthy and will accelerate the federal deficit. But Mulvaney predicts five to seven Democrat senators will eventually join the 52 Republicans in passing the package.

To promote the plan, Republican congressional representatives including North Carolina’s U.S. Rep. Virginia Foxx are sending out press releases promising that households with $45,000 annual income will receive a $4,000 benefit. Asked if that is credible, Mulvaney said the estimate came from a Council of Economic Advisers study and the predicted gain is actually $4,000 to $9,000.

“That goes back to reestablishing that connection between corporate earnings and household earnings. If we can get back to that same connection, when companies make money, families make money, that’s when we think we’ll see $4,000 every single year in the pockets of American families.

Asked about the recent criticism of Trump by U.S. Senators Jeff Flake and Bob Corker, Mulvaney said results are what matters. “It’s always disappointing to see people break off from the party. But at the end of the day, this is going to be a results-driven administration. The success or failure of this administration won’t be based on a tweet or a relationship with a senator. It will be can we pass tax reform? Can we then go back and repeal and replace Obamacare or get infrastructure done in the spring? More importantly the end goal, can we get to where American families start to benefit from the economic boom we expect to see for the next couple of years? That’s how we will be measured.”

David Mildenberg
David Mildenberg
David Mildenberg is editor of Business North Carolina. Reach him at

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