[Congressional Record Volume 163, Number 132 (Thursday, August 3, 2017)]
[Senate]
[Pages S4820-S4822]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               TAX REFORM

  Mr. HATCH. Mr. President, last week, I joined the Senate majority 
leader, the Speaker of the House, the chairman of the House Ways and 
Means Committee, the Treasury Secretary, and the Director of the 
National Economic Council in issuing a joint statement on tax reform.
  I ask unanimous consent that the text of the joint statement be 
printed in the Record at the conclusion of my remarks.
  Since the statement's release, critics and naysayers have said quite 
a bit, some even going so far as to declare their opposition to the 
statement. That is a little odd, given that the statement is not a bill 
or a tax plan; it is simply a statement of agreed upon principles for 
tax reform.
  That is not to say it was insignificant. Quite the opposite, in fact. 
The joint statement is an important development in the overall tax 
reform effort for several reasons.
  For example, over the past several months, the favored tax reform 
narrative among some in the pundit class has been that Republicans are 
deeply divided. According to this narrative, Republicans in the Senate, 
the House, and the administration all have such fundamentally different 
views on tax reform that it will be impossible for us all to get on the 
same page.
  Some of that was, to use an outdated description, pure poppycock.
  When the administration puts out a framework that calls for a 15 
percent corporate tax rate while the House blueprint has a 20 percent 
rate target, that is not really a disagreement. Both sides want to 
lower the corporate rate significantly, and the general idea in both 
cases is to reduce the rate as much as is reasonably possible.
  Admittedly, there were some key differences of opinion. At the outset 
of this Congress, with a newly elected Republican President, it was 
fair to say that the House, Senate, and White House were on different 
pages when it came to some aspects of tax reform.
  However, with last week's release of the joint statement, the leaders 
in this effort--in both congressional chambers and in the executive 
branch--have declared that, as of now, we are singing off the same song 
sheet. There are, of course, details that will need to be worked out, 
but all parties are in agreement on the key principles and have enough 
confidence that the process can move forward in Congress without the 
fear that the House, Senate, or administration will take drastically 
different approaches in crafting a tax reform package.
  That is very significant. I have been working on tax reform for more 
than 6 years now, and this is the first time that we have had anything 
approaching this level of unity across the various Chambers and 
branches of government.
  Another significant marker in the joint statement is the agreement 
that the tax-writing committees will do the lion's share of the work in 
producing the actual tax reform legislation and that the leaders are 
committed to moving through regular order, by which I mean committee 
markup processes prior to floor consideration.
  This is key because one of the criticisms I have heard about 
Republicans' tax reform efforts is that the bill is being drafted 
behind closed doors I have even been scolded, sometimes pointedly, over 
why I have not held a Finance Committee hearing on ``the bill,'' even 
though there is no complete bill in place at this time.
  Outside groups, some overtly aligned with the Democrats, have already 
put forward budget scores for the House

[[Page S4821]]

blueprint and the President's tax framework, even though there are not 
enough specifics in place to score anything yet. Those scores, 
generated by whatever is in the imagination of the outside groups, and 
not based on any facts, tell tall tales. They say there will be tax 
cuts for the rich, big businesses and a parade of horrors. Democrats 
here in the Senate, as well, have spoken of the horrors of the 
Republican ``tax plan,'' even though there is not a detailed plan in 
place. Again, the horrors represent pure fiction.
  It is simply not the case that a bill is being drafted behind closed 
doors. It was never going to be the case. I have stated several times 
in recent months that I intended to have a robust and transparent 
process for tax reform in the Senate. The joint statement confirms that 
both chambers of Congress will take that kind of approach.
  The Finance Committee is already hard at work. We have been talking 
about specific reform proposals for months now, and every member on the 
majority side of the committee is ready to do the work. More broadly, 
the committee has been at work in a bipartisan way on tax reform for 
many years now.
  We have a number of great members on the Finance Committee, all of 
whom--at least on the Republican side--are committed to working toward 
this effort. I will continue to gather their input with an eye toward 
crafting a tax reform bill and moving it through the committee this 
fall. Once again, the committee process is going to be robust; I intend 
to hold multiple hearings and full markup.
  The joint statement also noted that Republican leaders hoped that our 
Democratic colleagues would be willing to participate in this effort.
  That should be no surprise. I have been calling on my Democrat 
friends to work with us on tax reform for months, even years.
  For months now, I have been come to the floor on multiple occasions 
to ask my Democratic friends to come to the table.
  I held a bipartisan hearing on tax reform in the Finance Committee 
just a few weeks ago, where we heard from experts on both sides of the 
aisle.
  Earlier this week, the committee had another bipartisan hearing, this 
one on affordable housing. Of course, most of the Federal affordable 
housing incentives are found in the Tax Code, meaning that issue will 
undoubtedly be part of the larger discussion.
  These hearings are just the latest in very long line of bipartisan, 
tax-related hearings in the Finance Committee.
  So there really shouldn't be any doubt that, when I sign onto a 
statement that includes a call for bipartisanship, the call is both 
serious and sincere.
  In addition, there is quite a bit of bipartisan agreement over the 
policy principles noted in joint statement.
  As I said here on the floor just a few weeks ago, a number of 
Democrats--including a number of our Senate colleagues and the two most 
recent Democratic Presidents--have expressed support for lowering the 
U.S. corporate tax rate, which is the highest in the industrialized 
world.
  Prominent Democrats, including the distinguished minority leader, 
have publicly supported reforms to our international tax system in 
order to make American businesses more competitive and prevent erosion 
of our tax base.
  Both of these concepts are prominently mentioned in our joint 
statement.
  The statement also talks about tax relief for middle-class families 
and reduced burdens on small businesses. Democrats, last time I 
checked, were largely in favor of this as well.
  So long story short, there is nothing in the statement, either in 
terms of process or policy, that should discourage a number of 
Democrats from getting on board with this effort.
  Yet, earlier this week, every member of the Senate Democratic 
Caucus--except three--signed onto a letter they purported to be a call 
for compromise and bipartisanship. However, if you read the details of 
the letter, it was really a set of up-front demands peppered in between 
political attacks.
  First and foremost, my colleagues demanded in their letter that 
Republicans not use budget reconciliation to move a tax reform bill.
  That has been a precondition for Democratic involvement in this 
effort for months now, among other demands unrelated to tax reform, 
and, as I have said many times, it is preposterous. The demand that 
Republicans agree upfront to a particular process is really 
unprecedented and, not to put too fine a point on it, a little 
nonsensical.
  If Democrats are willing to engage in good faith on tax reform, why 
would they first demand that we ensure their ability to block it from 
ever even coming to the floor before they would be willing to engage on 
the substance? The logic is a little dizzying, to say the least.
  On top of that, if reconciliation remains on the table, why would 
that stop Democrats from agreeing on the substance?
  Obviously, budget reconciliation gives the majority the tools it 
needs to move legislation--under specified rules and conditions--
without the threat of a filibuster, but nothing in the rules requires 
reconciliation to be partisan. In fact, historically speaking, tax 
bills moved through reconciliation tend to get bipartisan support. For 
example, the so-called Bush Tax Cuts of 2001 and 2003 were passed 
through reconciliation; yet there were both Republicans and Democrats 
voting in favor of the package.
  Recent history shows that working together on the substance of policy 
is not precluded by the existence of a reconciliation instruction.
  In 2009, with a reconciliation instruction in place, Senate 
Republicans in the Finance Committee participated in the healthcare 
reform process, with hearings, roundtables, and bipartisan discussion 
groups, before we were shut out of the final ObamaCare bill. 
Republicans did not operate as though there was a prerequisite of no 
reconciliation before discussion could occur.
  In 2013, with a $1 trillion tax-hike reconciliation instruction in 
place, Senate Republicans in the Finance Committee participated in 
discussions that produced 10 bipartisan tax option papers; we 
participated in what was called a blank slate approach to tax reform; 
and we participated in discussion draft conversations. Republicans did 
not operate as though there was a prerequisite of no reconciliation 
before discussion could occur.
  Now, our friends on the other side are critical of us when we follow 
the path they, themselves, took. They are insisting that we do what 
they would not do when similarly situated. They are not participating 
on the same constructive basis we did when we were in their place. From 
their leader on down, they act as if the past does not exist or that we 
are ignorant of it. Before applying too clever a rhetorical lash to 
those on this side, my friends on the other side should heed the advice 
of Lord Byron: ``Keep thy smooth words and juggling homilies for those 
who know thee not.''
  If Democrats will work with us to reach agreement on the substance of 
tax reform, the process by which it moves through the Senate shouldn't 
really be a concern. Any implication that the process will necessarily 
dictate the substance is misleading.
  Ideally, the tax reform process would be bipartisan, particularly 
here in the Senate. That would be the best-case scenario for the 
effort.
  In a perfect world, reconciliation would not be necessary.
  For that to happen, the Democrats would have to be willing to engage 
in a reasonable manner. In my view, opening the discussion with a 
demand that Republicans unilaterally disarm and commit to not using the 
tools we have under the rules of the Senate--the very tools that have 
been used by both sides in the past--smacks of disingenuousness. If 
they are truly willing to engage constructively on these efforts--and I 
hope they are--we should begin by talking about the substance, not 
dealing with process demands.
  I hope that what we are seeing is posturing. I hope that my 
Democratic colleagues will recognize the significance of the unity 
expressed in last week's joint statement and get on board for what will 
hopefully be a historic effort.
  If they do not, Republicans should be willing to use the tools at our 
disposal to move tax reform without Democratic support. That would 
include reconciliation.
  The majority leader has indicated that he is willing to go that way. 
I am willing to go that way as well.
  However, to get us to the point, a number of things have to happen, 
not

[[Page S4822]]

the least of which is the passage of budget resolution. For now, I am 
focusing on the substantive policies and proposals, and I will keep 
working with my colleagues on the Finance Committee to deliver on the 
tasks we were charged in the joint statement.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                            [July 27, 2017]

                     Joint Statement on Tax Reform

       Washington.--Today, House Speaker Paul Ryan (R-WI), Senate 
     Majority Leader Mitch McConnell (R-KY), Treasury Secretary 
     Steven Mnuchin, National Economic Council Director Gary Cohn, 
     Senate Finance Committee Chairman Orrin Hatch (R-UT), and 
     House Ways and Means Committee Chairman Kevin Brady (R-TX) 
     issued the following joint statement on tax reform:
       ``For the first time in many years, the American people 
     have elected a President and Congress that are fully 
     committed to ensuring that ordinary Americans keep more of 
     their hard-earned money and that our tax policies encourage 
     employers to invest, hire, and grow. And under the leadership 
     of President Trump, the White House and Treasury have met 
     with over 200 members of the House and Senate and hundreds of 
     grassroots and business groups to talk and listen to ideas 
     about tax reform.
       ``We are all united in the belief that the single most 
     important action we can take to grow our economy and help the 
     middle class get ahead is to fix our broken tax code for 
     families, small business, and American job creators competing 
     at home and around the globe. Our shared commitment to fixing 
     America's broken tax code represents a once-in-a-generation 
     opportunity, and so for three months we have been meeting 
     regularly to develop a shared template for tax reform.
       ``Over many years, the members of the House Ways and Means 
     Committee and the Senate Finance Committee have examined 
     various options for tax reform. During our meetings, the 
     Chairmen of those committees have brought to the table the 
     views and priorities of their committee members. Building on 
     this work, as well as on the efforts of the Administration 
     and input from other stakeholders, we are confident that a 
     shared vision for tax reform exists, and are prepared for the 
     two committees to take the lead and begin producing 
     legislation for the President to sign.
       ``Above all, the mission of the committees is to protect 
     American jobs and make taxes simpler, fairer, and lower for 
     hard-working American families. We have always been in 
     agreement that tax relief for American families should be at 
     the heart of our plan. We also believe there should be a 
     lower tax rate for small businesses so they can compete with 
     larger ones, and lower rates for all American businesses so 
     they can compete with foreign ones. The goal is a plan that 
     reduces tax rates as much as possible, allows unprecedented 
     capital expensing, places a priority on permanence, and 
     creates a system that encourages American companies to bring 
     back jobs and profits trapped overseas. And we are now 
     confident that, without transitioning to a new domestic 
     consumption-based tax system, there is a viable approach for 
     ensuring a level playing field between American and foreign 
     companies and workers, while protecting American jobs and the 
     U.S. tax base. While we have debated the pro-growth benefits 
     of border adjustability, we appreciate that there are many 
     unknowns associated with it and have decided to set this 
     policy aside in order to advance tax reform.
       ``Given our shared sense of purpose, the time has arrived 
     for the two tax-writing committees to develop and draft 
     legislation that will result in the first comprehensive tax 
     reform in a generation. It will be the responsibility of the 
     members of those committees to produce legislation that 
     achieves the goals shared broadly within Congress, the 
     Administration, and by citizens who have been burdened for 
     too long by an outdated tax system. Our expectation is for 
     this legislation to move through the committees this fall, 
     under regular order, followed by consideration on the House 
     and Senate floors. As the committees work toward this end, 
     our hope is that our friends on the other side of the aisle 
     will participate in this effort. The President fully supports 
     these principles and is committed to this approach. American 
     families are counting on us to deliver historic tax reform. 
     And we will.''

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