Formatting necessary for an accurate reading of this text may be shown by tags (e.g., <DELETED> or <BOLD>) or may be missing from this TXT display. For complete and accurate display of this text, see the PDF.
[Page S819]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
STOCK BUYBACKS
Mr. SCHUMER. Mr. President, one other issue--I mentioned earlier that
one of the major consequences of the Trump tax bill was the explosion
of stock buybacks. In 2018 alone--just 2018--U.S. companies announced
plans to repurchase more than $1 trillion of their own stock. It is a
staggering figure and the highest amount ever recorded in a single
year.
When companies buy back their own stock, it boosts the earnings of
wealthy shareholders and executives but does little for average
workers. The vast majority of Americans don't own stocks. In fact, the
top 10 percent of Americans own 85 percent of stocks, total.
When corporations direct so much of their resources to buy back
shares, they restrain their capacity to reinvest profits in R&D,
equipment, higher wages, medical leave, pensions, worker retraining,
and more.
I would like to see a study of how many companies bought back their
stocks while leaving pensions underfunded. What is happening is that
corporations are promising their workers that they will have a good
life in retirement, and, instead, the corporate executives and their
top shareholders are enriching themselves.
Think about this. Between 2008 and 2017--the last 10 years--466 of
the S&P 500 companies did stock buybacks. Do you know how much? It was
$4 trillion. That is equal to 53 percent of their profits. More than $1
out of every $2 in profit just went to stock buybacks--not improving
our economy, not helping workers, and not helping communities. Then
another 30 percent went to dividends. It is the same thing. When more
than 80 percent of corporate profits are going to stock buybacks and
dividends, something is really wrong in the state of corporate America
and the state of our economy.
It wasn't always this way. From the mid-20th century up until the
seventies and even into the eighties, American corporations shared a
belief that they had a duty not just to their shareholders but to their
workers, to their communities, and to their country, which helped them
grow and prosper, along with our schools, our roads, and everything
else. That created an extremely prosperous America for corporate
America but also for American workers in the broad middle of this
country.
But over the past several decades, workers' rights have been
diminished, and corporate boardrooms have been obsessed, slavishly, to
shareholder earnings. The only people they seem to want to help are
their shareholders.
I hear it. I talk to CEOs, and they say: Well, maybe it is the wrong
thing to do this or that, but I just have to go for the shareholder.
And the shareholder often has only short-term interest. The explosion
of stock buybacks is, perhaps, the most pernicious way that this new
corporate ethos manifests itself.
My friend and colleague Senator Sanders and I have written a joint
op-ed in today's New York Times, outlining how we propose to curb the
overreliance on stock buybacks and, instead, encourage corporate
America to make more productive investments that help workers and
communities therein.
We are planning to introduce legislation that will prohibit a
corporation from buying back its own stock unless it invests in workers
and communities first, including doing things--there will be a list--
like paying people $15 an hour, providing 7 days of sick leave,
offering decent pensions, more reliable healthcare, putting money into
training workers, and providing equipment. These are the kinds of
things we always thought American corporations would do and now they do
scantily when compared to how much they do in terms of buybacks.
I know many of my Democratic colleagues have focused on these issues,
including Senators Baldwin, Booker, Casey, Warren, Schatz, and
Gillibrand. We all believe that this Congress, this Senate, should vote
on legislation that demands that corporations commit to addressing the
needs of their workers and communities before the interests of wealthy
shareholders.
I yield the floor.
____________________
