[Congressional Record Volume 163, Number 25 (Monday, February 13, 2017)]
[Senate]
[Pages S1095-S1098]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                          Cabinet Nominations

  Mr. SCHUMER. Mr. President, candidate Trump ran a populist campaign 
that promised so much to working America. Many of those themes were 
actually echoed in his inaugural address, but ever since President 
Trump took the oath of office, he has gone about breaking promise after 
promise to the working people of this country.
  A predictable pattern is beginning to emerge. This President uses 
populist rhetoric to cover up a hard-right agenda. We still hear the 
remnants of candidate Trump's populism in his speeches, but his actions 
as President don't match up. Just an hour after he had delivered 
populist words on the steps of the Capitol in his inaugural address, 
the President signed an Executive order--his first, I believe--that 
jacked up the price on Americans trying to afford a mortgage.
  Ever since, we here in the Senate have been working through the 
President's Cabinet, which is filled not with champions of the working 
class, not with people who came from the working class but with a slew 
of superrich nominees, Washington insiders, and corporate types who 
have spent their whole careers sticking it to the working man.
  A President's Cabinet provides insight into how they will govern and 
what their priorities will be. The President has shown his hand by 
selecting the most anti-working class Cabinet we have ever seen.
  The slate of nominees we will soon consider, including Steve Mnuchin 
for Treasury, Andrew Pudzer for Labor, and Rick Mulvaney for OMB, show 
the yawning gap between the President's audacious promises to working 
America and the practical reality of his administration, which is 
steadily stacking the deck against them.
  This evening we will debate the nomination of Steve Mnuchin for 
Treasury, a Cabinet post that will have oversight over Wall Street.
  Candidate Trump spent the campaign lambasting elites and criticizing 
Wall Street. He said:

       I'm not going to let Wall Street get away with murder. Wall 
     Street has caused tremendous problems for us.

  Those are his words, but what does President Trump do? With one of 
his first Executive orders, he started the process to try to roll back 
Wall Street reform, undoing protections we put in place after the 
financial crisis to prevent another one from occurring. He wants to 
eviscerate the one agency that sticks up for consumers when they are 
being ripped off by payday lenders or debt collectors--the CFPB. That 
is a broken promise.
  Candidate Trump said at his rallies: ``When you cast that ballot, 
just picture a Wall Street board room filled with the special interests 
. . . and imagine the look on their faces when you tell . . . them: 
`You're fired!' ''
  But President Trump told Steve Mnuchin, a Wall Street insider with

[[Page S1096]]

decades of experience in that board room he described, ``You're 
hired,'' as his Treasury Secretary, no less. That is a broken promise.
  A President who is a true champion for working America would never 
consider unwinding protections that were designed to make our financial 
system more secure and protect hard-working Americans from the risky 
practices too often seen on Wall Street.
  For the Secretary of Labor, the President picked Andrew Puzder, a man 
who once said he prefers robots to human employees because, in his 
words, they are always polite, they always upsell, they never take a 
vacation, they never show up late, there is never a slip and fall, or 
an age, sex, or race discrimination case.
  Secretary Nominee Puzder, the guy who is supposed to be protecting 
laborers--working people--actually said that.
  I want to read it again. It galls me that this man is nominated for 
Labor Secretary. Why does he prefer robots to human employees? 
Secretary Puzder: They are always polite, they always upsell, they 
never take a vacation, they never show up late, there is never a slip 
and fall, or an age, sex, or race discrimination case.
  This is a man who has such disdain for workers that he said the 
minimum wage is a big mistake, and while at CKE Restaurants, his 
company, he continually outsourced American jobs.
  A President who is a true champion of working America would never 
even consider selecting a nominee like Andrew Puzder to run the Labor 
Department. It is another broken promise to the working men and women 
of America. Amazing.
  What President Trump did during the campaign and said during the 
campaign and in his inaugural address is almost the exact opposite of 
what he is doing now. You could not find a more anti-labor nominee for 
Labor Secretary than Mr. Puzder.
  Now, what about OMB? The President selected Representative Mike 
Mulvaney, whose congressional career is a direct rebuke to key promises 
Candidate Trump made to working America. Candidate Trump promised that 
he was ``not going to cut Social Security like every other Republican 
and I'm not going to cut Medicare or Medicaid.''
  That is a quote from Candidate Trump.
  But who does he choose for OMB? A pick who has relentlessly argued to 
cut both of these programs, including bill after bill that would end 
both Medicare and Social Security as we know it.
  Our new Health and Human Services Secretary--who, unfortunately, 
passed this Chamber because our Republican colleagues are just marching 
in lockstep to the President--is in exactly the same vein.
  A true champion of senior citizens, of the working man and woman, 
wouldn't hire someone like Representative Mulvaney or Representative 
Price to take an ax to the programs they have relied on for 
generations.
  Just 3 weeks in, the administration is stretching the boundaries of 
cognitive dissonance. The President still speaks like a populist but 
governs like a hard-right conservative. He promises to stick up for 
working families, but every decision he has made is rigging the system 
further against them.
  Every American who works hard for their paycheck, who desperately 
deserves fairer overtime pay, who is counting on Social Security and 
Medicare to be there when they retire should look at this Cabinet and 
be very worried.
  I know many working people voted for President Trump in hopes that 
they would change the power structure in Washington, as he promised so 
many times. His Cabinet is the first way to see if he really meant it. 
His Cabinet is the first way to measure: Is President Trump measuring 
up in his Presidency to what he promised in his campaign?
  It turns out President Trump was using populist rhetoric to cover up 
a hard-right agenda, which will be carried out by this bevy of 
billionaires and bankers and hard-right idealogues--broken promise 
after broken promise.
  Candidate Trump said that Washington was a place where ``the hedge 
fund managers, the Wall Street investors . . . and the powerful 
[protect] the powerful.''
  ``But I'm fighting for you,'' he said to working Americans.
  If these first 3 weeks are any indication, that is a broken promise.
  The nominations of Steve Mnuchin, Representative Mulvaney, and Andrew 
Puzder represent broken promise after broken promise after broken 
promise. We Democrats, over the next several weeks, will make clear to 
the American people, as we continue to debate these nominations, that 
what President Trump said on the campaign trail is not what he is doing 
as President. He is breaking his promises to the working people of 
America.
  Many working people who voted for Mr. Trump are depending on him to 
do what he said in the campaign. Reading the tea leaves of the first 3 
weeks, working Americans are going to be deeply, deeply disappointed 
over the course of his Presidency.
  Thank you. I yield the floor.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The senior assistant legislative clerk proceeded to call the roll.
  Mr. WYDEN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. WYDEN. Mr. President, when you serve as the Secretary of 
Treasury, you are charged with a variety of responsibilities, and right 
at the center of your duties is to address taxes. This is an area that 
the nominee to head the Treasury Department, Mr. Steven Mnuchin, waded 
into very early on after his nomination became public.
  News leaked on November 29 of last year that Mr. Mnuchin was the 
President-elect's choice for Secretary of the Treasury. The very next 
day, Mr. Mnuchin appeared on a CNBC program and confirmed his 
selection. During an extended interview with CNBC, he introduced what I 
have come to call the Mnuchin rule. I will quote Mr. Mnuchin directly 
with respect to what he said: ``Any reductions we have in upper income 
taxes would be offset by less deductions, so there would be no absolute 
tax cut for the upper class.''
  I will repeat that last part of the Mnuchin rule: ``no absolute tax 
cut for the upper class.''
  Mr. Mnuchin is the President's nominee for Treasury Secretary. This 
is a position that has been held by American economic giants like 
Alexander Hamilton, Albert Gallatin, Salmon Chase, Henry Morgenthau and 
Lloyd Bentsen. When a nominee for Treasury Secretary makes a pledge 
like Mr. Mnuchin's, it really ought to mean something. It ought to 
stand for something.
  Unfortunately, it already looks as though the Mnuchin rule is on the 
ropes. The very first act of the 115th Congress and a unified 
Republican government, repealing the Affordable Care Act, shatters the 
Mnuchin rule.
  The Affordable Care Act repeal scheme that Republicans kicked off 
months ago, in my view, is a Trojan horse of tax breaks for the most 
fortunate. Nobody outside the top 4 or 5 percent of earners would get 
any of that break. Most of it would go to households in the top 1 
percent of earners--even then, the top one-tenth of 1 percent--and it 
is paid for by taking insurance coverage and tax cuts for health care 
literally out of the hands of millions of working people.
  Then it is back for another whack at the Mnuchin rule later this 
year. Last week, the New York Times published a story talking about Mr. 
Mnuchin, which said that ``his guarantee appears impossible to fulfill 
either under the tax overhaul that the House Republicans are pushing or 
similar, sketchier proposals that Mr. Trump has offered.''
  Mr. President, I ask unanimous consent to have printed in the Record 
the article titled ``Treasury Nominee Vows No Tax Cut for Rich. Math 
Says the Opposite.''
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                             [Feb. 9, 2017]

   Treasury Nominee Vows No Tax Cut for Rich. Math Says the Opposite.

                          (By Patricia Cohen)

       The newly christened ``Mnuchin rule''--the assurance given 
     by the Treasury nominee Steven T. Mnuchin that ``there would 
     be no absolute tax cut for the upper class''--seems as if it 
     was made to be broken.
       Mr. Mnuchin initially made the statement during an 
     interview on CNBC in November,

[[Page S1097]]

     after President Trump chose him for the cabinet. At Mr. 
     Mnuchin's confirmation hearing, Senator Ron Wyden, an Oregon 
     Democrat, rebranded the comment as a ``rule,'' transforming a 
     throwaway line into a formal pledge.
       Whether it will be kept may become clearer in two or three 
     weeks--the timing Mr. Trump mentioned Thursday for delivering 
     a ``phenomenal'' tax plan.
       Although Mr. Mnuchin said any rate reductions at the top 
     would be offset by the closing of fat loopholes, his 
     guarantee appears impossible to fulfill either under the tax 
     overhaul that the House Republicans are pushing or similar, 
     sketchier proposals that Mr. Trump has offered.
       Redesigning the tax code with an eye fixed on lower rates 
     has been a Republican mission for decades, and one that Mr. 
     Trump adopted. That prospect, combined with a promised 
     regulatory retreat, has pumped up the stock market and fueled 
     optimism among business leaders.
       At the same time, the president has raised expectations 
     among his working-class supporters that ``the rich will pay 
     their fair share,'' and that ``special-interest loopholes 
     that have been so good for Wall Street investors, and for 
     people like me, but unfair to American workers'' will be 
     eliminated. Mr. Mnuchin, soon to be one of the 
     administration's top economic policy officials, promised ``a 
     big tax cut for the middle class.''
       Yet analyses of the president's and the House Republicans' 
     plans consistently conclude that the wealthy will receive the 
     largest tax cuts by far.
       Start with the House blueprint, which at the moment is the 
     closest thing to a working draft that exists. The nonpartisan 
     Tax Policy Center, a joint project of the Urban Institute and 
     Brookings Institution, found ``high-income taxpayers would 
     receive the biggest cuts, both in dollar terms and as a 
     percentage of income.''
       How big? ``Three-quarters of the tax cuts would benefit the 
     top 1 percent of taxpayers,'' if the plan were put into 
     effect this year, it said. The highest-income households--the 
     top 0.1 percent--would get ``an average tax cut of about $1.3 
     million, 16.9 percent of after-tax income.''
       Those in the middle fifth of incomes would get a tax cut of 
     almost $260, or 0.5 percent, while the poorest would get 
     about $50.
       That split would worsen down the road, the Tax Policy 
     Center says: ``In 2025 the top 1 percent of households would 
     receive nearly 100 percent of the total tax reduction.''
       Those wary of any potential liberal bias could turn to the 
     conservative-leaning Tax Foundation. Its analysis found a 
     smaller gap between the wealthy and everyone else, but a gap 
     nonetheless. The foundation concluded that four out of five 
     taxpayers would see only a 0.2 to 0.5 percent increase in 
     after-tax income, while those in the top 1 percent of the 
     income scale would save at least 10 times as much, or 5.3 
     percent. That's nearly $40,000 extra for those at the top, 
     compared to $67 for those smack dab in the middle of the 
     income scale.
       ``The Mnuchin rule is already being broken as Republicans 
     look to strip away hundreds of billions of dollars in 
     Affordable Care Act tax credits for working Americans to pay 
     for a giant tax break for the wealthy,'' Senator Wyden said. 
     ``Bottom line is it's unfair to cut benefits that the middle 
     class depends on, all so the wealthy pay a lower rate.''
       Mr. Mnuchin did not respond to a request for comment.
       Republicans argue their plan makes everyone a winner--that 
     lower taxes will unleash an enormous swell of economic 
     growth, raising wages, incomes and tax revenue all around.
       The historical record does not offer much support for the 
     claim that slashing taxes for the most affluent creates 
     growth. Yet even assuming the rosiest of forecasts, the top 1 
     percent, according to the Tax Foundation, would still receive 
     close to a $l00,000 tax cut--32 times as much as a middle-
     income family.
       Mr. Mnuchin has offered his own formula for adhering to the 
     standard he laid down, explaining that ``any reductions we 
     have in upper-income taxes would be offset by less 
     deductions.''
       That would require some otherworldly mathematical magic, 
     however.
       Consider the list of proposals that would reduce taxes on 
     the rich:
       Cut the top income to 33 percent, from 39.6 percent.
       Cut taxes on capital gains, 70 percent of which flow to the 
     top 1 percent.
       Eliminate the estate tax, which applies to a tiny number of 
     people, couples that have estates bigger than $10.8 million.
       Eliminate the 3.8 percent surtax on high earners' 
     investment income that has been used to subsidize health care 
     for poorer Americans.
       End the alternative minimum tax, which currently limits 
     deductions for high earners.
       Lower taxes on cash flow and income that passes from small 
     businesses to their owners, which also primarily benefits 
     wealthier Americans.
       Now, what deductions could be eliminated that would offset 
     all those cuts at the top? There aren't many, said Alan 
     Viard, an economist at the conservative American Enterprise 
     Institute. If Republicans insist on lowering taxes on top 
     wages, capital gains, estates and cash-flow and pass-through 
     income as advertised, ``there's not a lot of latitude to 
     limit itemized deductions further,'' Mr. Viard said.
       Any plan to curb itemized deductions would be partly offset 
     by Mr. Trump's plan to increase the standard deduction. 
     Curtailing mortgage deductions for the most expensive homes 
     is probably a good idea, Mr. Viard said, but that isn't going 
     to do much to raise revenue from those at the top of the 
     income pyramid, and the deduction is already roughly limited 
     to the interest paid on $1 million in mortgage debt.
       Such alternative ideas, however, assume that the Mnuchin 
     rule will have a meaningful impact on what the White House 
     will propose or Congress will debate. Not everyone is 
     convinced that it will. As Mr. Viard said, ``I don't know how 
     much interest there is in fulfilling that statement by 
     Mnuchin, however it's interpreted.''

  Mr. WYDEN. After breaking the Mnuchin rule once, the majority is now 
planning to fast-track a second tax break for the wealthy. This one 
will be even larger; in fact, it could be 10 times bigger or more. My 
guess is that a lot of Americans are wondering what has happened to all 
the campaign talk about fixing the Tax Code and really going out there 
and standing up for the working people. As the Republican nominee, the 
President said he was the guy to repair the country's broken tax 
system. The particulars of the Trump plan were buried deep in the 
business pages and on his Web site, but the broad strokes of the 
message were pitched in rallies across the Nation: Donald Trump alone 
knew how to do the job because he had taken advantage of the rules 
himself, and he was ready to crack down on those who weren't paying 
their fair share.
  One of the few specifics Donald Trump offered on the stump was that 
he would close the carried interest loophole. That, of course, has been 
a favorite of investment fund managers. It would be great if it were 
actually true. In reality, the promise turned out to be pretty much 
just a head fake. Rather than closing the loophole and asking 
investment fund managers to pay their fair share, the Trump plan 
actually gives them a 25-percent tax cut. In fact, the Trump plan 
slashes tax rates for corporations and the wealthy across the board at 
a cost of trillions of dollars.
  The President and Mr. Mnuchin might defend this plan by claiming it 
is a tax cut for the middle class, so I want to spend just a few 
minutes checking in with that part of the plan. If we read the fine 
print, we will notice that one of the Trump tax plan's big casualties 
is something called head of household status. That is a particularly 
important benefit for a lot of middle-income taxpayers because it 
reduces their bills. What would it mean for head of household status to 
go away? Millions of working Americans, mostly single parents, would 
get hit with tax increases.
  Furthermore, the Trump plan eliminates key personal exemptions for 
millions of other middle-income families. It pushes a lot of families 
into higher tax brackets than they are in today. The administration 
touts its proposals for a larger standard deduction and a new child 
care tax credit as the cure-all for its tax increases on the middle 
class and on working people, but the math just doesn't add up. Families 
who are struggling to get ahead today are going to pay higher taxes 
tomorrow.
  So let's recap the Trump tax plan: a multitrillion-dollar tax break 
for the wealthy and corporations and a gut punch of higher taxes for 
working families.
  At this point, it would be generous to say that the Mnuchin rule is 
now on life support. If we wanted to design a tax plan to push more 
Americans out of the economic winners circle, the Trump plan is what 
you would come up with. When I look at the Trump tax plan that Mr. 
Mnuchin would be in charge of spearheading, it looks to me as though 
the administration has zero interest in cleaning out the rot that is 
right at the heart of America's tax system.
  Here is what it is all about, in my view. The Tax Code today is a 
tale of two systems. If you are a wage earner--a welder in Portland or 
a nurse in Louisiana--your taxes come straight out of your paycheck. 
They are compulsory--no special deals. You can even see the numbers 
right on your pay stub. Once or twice a month, out it comes. There are 
no special tax-dodging strategies or loopholes to winnow down the tax 
bill for the welder in Portland or the nurse in Louisiana. You can't 
set up a John Doe, Inc., in a Cayman Islands P.O. box to shield your 
income from taxes.

[[Page S1098]]

  But the rules are different for the powerful and the well connected. 
At their disposal are huge armies of lawyers and accountants who 
specialize in tax games. They specialize in tax tricks. With the right 
advice, the most fortunate individuals and corporations in the country 
can decide how much tax to pay and when to pay it. If anybody wonders 
why people in America feel the tax system is rigged and the rules are 
stacked against them, this is a big part of the answer. I intend to 
talk more about that, but I want to come back to highlight the 
difference between the welder in Portland and the nurse in Louisiana.
  When those hard-working Americans are out there working for a wage 
and once or twice a month have their taxes taken right out of their 
paycheck, they know they aren't getting anything special. It is 
compulsory. It is mandatory. They see it on their paychecks. Yet they 
get lots of news coverage and articles and the like, and they will see 
that for those who are fortunate, instead of paying taxes in a 
mandatory and compulsory way, they pretty much get to decide what they 
are going to pay, when they are going to pay it, and maybe nothing at 
all. It seems to me that as we look at the nominee for Treasury 
Secretary, we get a pretty good example of how it does play out in 
terms of taxes for those fortunate few and how his taxes stand in sharp 
contrast to that welder in Portland or that nurse in Louisiana.
  Not long after ending a 17-year run at Goldman Sachs, Mr. Mnuchin 
opened a hedge fund called Dune Capital in 2004. He set up an outpost 
in Anguilla and the Cayman Islands. That is not a move you make for the 
infrastructure or the ease of the commute. It is about a zero-percent 
tax rate.
  During Mr. Mnuchin's hearing, he claimed that having those overseas 
funds benefited American nonprofits. When he testified in front of the 
Finance Committee, he said: You know, the main thing we are doing with 
these overseas funds is we are helping churches and pension funds. But 
documents from the Securities and Exchange Commission show something 
quite different. In some cases, 100 percent of his investors were from 
outside of the United States, and setting up overseas allowed Mr. 
Mnuchin to help them avoid paying taxes. What was the end effect? Dune 
Capital was heavily invested in movies. So millions of dollars in 
profits from Hollywood exports, like the movie ``Avatar,'' were 
funneled to an offshore web of entities and investors, giving him the 
chance to skirt a U.S. tax bill.
  At a more recent point in his career, Mr. Mnuchin's bank was up for a 
merger. The deal had the potential to be a personal windfall for him 
and a small circle of others. A foundation Mr. Mnuchin chaired 
reportedly used tax-exempt dollars to fund a write-in campaign pushing 
for the deal's approval. During the public comment period on a 
potential merger, this is pretty much the equivalent of stuffing the 
ballot box.
  Now, as a nominee for a Cabinet position, Mr. Mnuchin could be in 
line for a special elective Federal tax deferral on money made by 
selling stocks and bonds. That is the very definition of getting to pay 
what you want, when you want. We hear a frequent and common defense 
when these kinds of tax tricks are brought into public view. It is true 
that the people who use them are following the laws on the books, but 
the outrage in our tax system, as I have said on this Senate floor, is 
what is legal. That is the real outrage with the American tax system, 
and it is outrageous that the Senate has allowed obvious gamesmanship 
to stay legal. It is outrageous that the administration and its chosen 
nominee for Treasury have shown no interest in changing it.

  When you are the Treasury Secretary, one of your paramount 
obligations is overseeing taxes. The last time the United States 
overhauled its Tax Code--this was in 1986--the Reagan Treasury 
Department played a huge role in that effort, and one of the core 
principles of that reform was treating wages and wealth the same way. 
Democrats and Republicans came together to pass a tax reform bill based 
on fairness. It said that the wage earner--that nurse in Louisiana or 
welder in Portland--their income and the income of those who made their 
money in finance and on Wall Street and the like would be treated the 
same. I see no indication that this administration is prepared to 
repeat that formula.
  The campaign promise to fix the broken, dysfunctional Tax Code--
Donald Trump's campaign promise--lured in a lot of voters. When I heard 
that Mnuchin rule the first time, I said that sounds pretty good--no 
net tax break for those who are the most fortunate. That sounds pretty 
appealing. The tax plans that the administration and Republicans in 
Congress have on offer now will not undo the disgusting unfairness that 
is right at the heart of the American Tax Code. In fact, it is only 
going to get worse.
  This issue has to be at the center of the debate on Mr. Mnuchin's 
nomination. I am particularly troubled by the fact that the evidence 
shows that the Mnuchin rule is already on the ropes.
  I intend to oppose this nominee. I urge my colleagues to do the same.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The senior assistant legislative clerk proceeded to call the roll.
  Ms. COLLINS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.