[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Some of that was, to use an outdated description, pure poppycock.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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