[Congressional Record Volume 163, Number 159 (Wednesday, October 4, 2017)]
[Senate]
[Pages S6295-S6298]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                               Tax Reform

  Mr. President, on one final matter, the Republican tax plan, we 
Democrats have long said that we are willing to work with our 
Republican colleagues on tax reform, and we laid out our principles 
early on so that there would be no mistake about them. We wanted tax 
reform to be deficit neutral. It shouldn't increase the deficit. For 
every reduction in rate, they ought to close a loophole. We wanted it 
to go through regular order, not the way healthcare did, not 
reconciliation, but work with us. You would get a much more sensible 
product. Most importantly, we didn't want to give a tax cut to the top 
1 percent. They are doing great already. God bless them. They don't 
need any more tax relief. It is the middle class that does. But the 
framework the GOP released last week violates all three of these 
commonsense principles, vastly favoring the wealthy over working 
Americans.
  I have spoken several times about tax breaks for the rich included in 
this package--lowering the top rate from 39 to 36 percent, repealing 
the estate tax, opening up a gaping tax loophole for hedge fund 
managers, wealthy Wall Street firms, lobbyists, and law firms by 
lowering the rate on passthroughs so that these rich people would pay 
only 25 percent on their personal income tax while other people pay a 
lot more.
  This morning, I want to highlight not only how the Republican plan 
favors the rich but also sticks it to the middle class. This is 
something that the Acting President pro tempore has brought up.
  Just this week we found a bombshell contained within the GOP 
resolution they are using to pass tax reform. The Republicans plan to 
cut Medicare by $473 billion and Medicaid by more than $1 trillion. It 
can be a little hard to find, but it is right there in the GOP budget--
$473 billion for Medicare, $1 trillion for Medicaid.
  If you are an older American, if you have a family in a nursing home 
or someone in treatment for opioid addiction and you think the GOP plan 
doesn't affect you, think again. The AARP--not a political 
organization, it simply represents the interests of the elderly--sent a 
letter yesterday opposing this Republican plan, the one in the House, 
and I think we have one in the Senate as well. It is the same group 
that represented senior citizens and fought the debacle on healthcare 
that the Republicans proposed.
  The Republicans are proposing to pay for their giant tax cut to the 
rich by gutting Medicare and Medicaid. That is the bombshell this week. 
That is the nugget that will destroy their whole plan. Americans are so 
against those kinds of cuts.
  Amazingly, it is just like the inverse of the Republican plan on 
healthcare. In each case, they gut healthcare for Americans who need it 
most to pay for taxes for Americans who need it the least.
  The healthcare plan focused on cuts to Medicaid but snuck in tax cuts 
for the rich. This plan focuses on tax cuts to the rich and sneaks in 
cuts to Medicare and Medicaid.
  The GOP budget is another page out of the same playbook. The GOP plan 
contains another punch to the gut of the middle class.
  This is what the Acting President pro tempore, I believe, spoke about 
yesterday.
  In the form of the repeal of the State and local deduction--44 
million Americans take the State and local deduction. That is one-third 
of all taxpayers. This is not just a small, rarified group in 
California or New York. It is across the country. They get an average 
of several thousand dollars off their taxes each year. That includes 40 
percent of taxpayers making between $50,000 and $75,000 per year and 70 
percent of taxpayers earning from $100,000 to $200,000.
  This is a middle-class tax deduction worth several thousand dollars a 
year, and the GOP tax plan yanks it away. Taking it away means double 
taxation on middle-class families.
  For many families, this will not be offset by a larger standard 
deduction in the GOP plan. Largely due to the elimination of State and 
local, the Tax Policy Center estimates that 30 percent of those making 
between $50,000 and $150,000 and 60 percent of those making between 
$150,000 and $300,000 will see a tax increase with the GOP plan, and 
that is after doubling the standard deduction. By the way, don't think 
that it is just a few States; the numbers are astounding across the 
country, as folks in every State claim this deduction. I say to my dear 
friend the chairman of the Finance Committee that 35 percent of Utahns 
take this deduction, 33 percent of Georgians, and 32 percent of 
Coloradoans.

  Mr. President, I ask unanimous consent to have printed in the Record 
a list of how many taxpayers are affected in every State by removing 
State and local deductibility and how much it will cost them on 
average.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

 FIGURE 7.--PERCENTAGE OF TAX UNITS THAT USE THE SALT DEDUCTION AND THE
                       AVERAGE DEDUCTION BY STATE
------------------------------------------------------------------------
                                            % with SALT    Average SALT
                  State                     Deductions      Deduction*
------------------------------------------------------------------------
MD......................................              46         $12,931
CT......................................              41          19,664
NJ......................................              41          17,850
DC......................................              40          16,442
VA......................................              37          11,288
MA......................................              37          15,571
OR......................................              36          12,616
UT......................................              35           8,291
MN......................................              35          12,954
NY......................................              35          22,169
CA......................................              34          18,437
GA......................................              33           9,158
RI......................................              33          12,434
CO......................................              32           9,017
DE......................................              32           9,194
IL......................................              31          12,523
WI......................................              31          11,653
NH......................................              31          10,121
WA......................................              30           7,402
IA......................................              29          10,163
HI......................................              29           9,905
NC......................................              29           9,587
PA......................................              29          11,248
AZ......................................              28           7,403
MT......................................              28           9,357
ID......................................              28           8,862
ME......................................              28          11,431
NE......................................              28          11,088
SC......................................              27           8,765
VT......................................              27          12,407
MI......................................              27           9,648
MO......................................              26           9,886
OH......................................              26          10,444
KY......................................              26           9,955
AL......................................              26           5,918

[[Page S6296]]

 
KS......................................              25           9,425
NV......................................              25           5,989
OK......................................              24           8,201
MS......................................              23           6,302
LA......................................              23           6,742
TX......................................              23           7,823
IN......................................              23           8,756
FL......................................              22           7,373
NM......................................              22           7,091
AR......................................              22           9,116
WY......................................              22           6,306
AK......................................              21           4,931
TN......................................              19           5,611
ND......................................              18           6,864
WV......................................              17           9,462
SD......................................              17           6,098
------------------------------------------------------------------------
* Calculated as SALT deduction amount divided by number of SALT
  deductions.


  Mr. SCHUMER. I urge my colleagues to look in the Record and see how 
it affects them. You are fooling yourself if you think that you are not 
affected by the State and local deductibility.
  Of course, if you are a family of four in one of those States, the 
repeal of State and local could be a killer because, again, you would 
lose the personal exemption. The larger the family, the greater the 
loss of exemption.
  I want to make one final point on tax reform. This is related to two 
people whom I know, and I knew one of them before he ever arrived in 
Washington. I have to make this point because what I heard them say 
over the weekend just turned my stomach. It was astounding. It was 
awful.
  Over the weekend, we heard some pretty extraordinary claims from 
Republican legislators and Cabinet officials about what the GOP tax 
plan was all about, but Gary Cohn and Secretary of the Treasury Steve 
Mnuchin deserve a special admonition.
  Chief White House economic adviser Gary Cohn actually said: ``The 
wealthy are not getting a tax cut under our plan.'' That is not a 
surmising of what he said; that is a direct quote. ``The wealthy are 
not getting a tax cut under our plan.'' Comments like that should make 
everyone's head spin. According to the Tax Policy Center, the top 1 
percent would reap 80 percent of the benefits of the GOP plan. The top 
0.1 percent--the folks who make more than $5 million a year--would get 
a break of more than $1 million a year.
  Some might argue, of course, that it will cause economic growth. I do 
not think that it will, but at least make your real argument. Do not 
hide it. You know that the American people do not agree with you. That 
is why you hide it.
  Only in Wonderland, where down is up and up is down, could Gary 
Cohn's comments be believed. It is something like out of the Ministry 
of Truth from George Orwell's ``1984,'' which would be to cut the top 
rate by 4 percent and repeal the estate tax--yes, no tax cuts for the 
wealthy. Bunk. It is why the Washington Post gave Gary Cohn four 
Pinocchios for his statement. If they had allowed more Pinocchios on 
the scale, I am sure he would have gotten them. He earned them, 
unfortunately.
  What about Secretary Mnuchin? His lack of credibility resembles Gary 
Cohn's. He said that he believes the GOP plan would reduce deficits by 
$1 trillion. ``We think there will be $2 trillion of growth. So we 
think this tax plan will cut the deficits by a trillion dollars.'' 
Mnuchin's claim is fake math at its worst. As was written in the 
Washington Post, no serious economist, liberal or conservative, 
believes that a tax cut boosts economic growth so much that the tax cut 
pays for itself, let alone adds $1 trillion in revenue as Mnuchin 
claims. Four Pinocchios were given by the Washington Post. I am sure 
that he too--Steve Mnuchin--would have earned more Pinocchios.
  Gary Cohn and Steve Mnuchin claim to be economic experts, and they 
both used to work at Goldman Sachs. If they had used this kind of math 
at Goldman Sachs, they would have been shown the door a long time ago. 
As I said before, they should know better, and they do know better. 
They ought to stop deliberately misleading the American people. It 
demeans them. It demeans the administration. It demeans the debate in 
this country.
  Mr. President, I ask unanimous consent that the time during the 
quorum calls be divided equally between both sides.
  The PRESIDING OFFICER (Mr. Cotton). Without objection, it is so 
ordered.
  Mr. SCHUMER. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill 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, I did not get a chance to hear the 
distinguished Democratic leader's remarks, for Chairman Hatch and I 
were in the Senate Finance Committee. We managed to pass, by an 
overwhelming bipartisan vote, the Children's Health Insurance Program--
a vital program for 9 million kids. So that is a bit of good news in 
that this important piece of legislation is advancing. I do know that 
the Democratic leader touched on a number of very important issues, 
particularly some of these comments that have been made by top advisers 
to the President with respect to taxes.
  I am struck by the fact that Mr. Gary Cohn, the President's top 
economic adviser, said last week that middle-class folks were going to 
get $1,000 in tax relief--set aside the fact that that does not look to 
be true for a number of middle-class folks who have kids. I am also 
struck by the comment that followed. Mr. Cohn said that not only are 
middle-class families going to get $1,000 worth of tax relief but that 
they would be able to go buy cars or remodel their kitchens. You just 
think to yourself, with that kind of tax cut, that you would be buying 
a very small car or remodeling a very small kitchen. The fact is, that 
is not, in my view, a comment that reflects a real understanding of 
what middle-class folks in America are going through. I don't see very 
many of them buying cars for $1,000 or remodeling their kitchens for 
$1,000.
  That comment was accompanied by the comments of Treasury Secretary 
Steve Mnuchin, who not only said a couple of days ago that tax cuts 
would pay for themselves--a statement that was contradicted by 
Republican economists yesterday in the Senate Finance Committee--but 
that there would be something like $1 trillion left over. Mr. Mnuchin 
continues to make the case that there is somehow a magical growth fairy 
here in the American economy that nobody else knows about, including 
Republican economists.
  I am one who believes that behavior does matter, and I am going to 
talk about a bipartisan approach to taxes in a minute--a responsible, 
bipartisan approach to taxes, not one that helps the 1 percent or 
creates a huge new deficit or that kind of thing. I think that you will 
generate some revenue, and Doug Elmendorf said that when he was the 
head of the Budget Office, but it is not going to generate hundreds and 
hundreds of billions of dollars, as in the case of what Mr. Mnuchin is 
talking about, which is something like $2 trillion. There is no 
economic support for that.
  You have the President's economic team and his top advisers trying to 
defend the indefensible, and I will go into that more a little bit 
later today.
  Right now, I think it is important that we have a response that I am 
going to deliver to the distinguished majority whip, who is a member of 
the Finance Committee, who made some comparisons between the Republican 
plan and the bipartisan legislation that I wrote--after months and 
months of hard work--with two of our former Republican colleagues, 
Senator Gregg and Senator Coats. Senator Coats is now a member of 
President Trump's Cabinet.
  The comparison that somehow the Republican plan is like the 
bipartisan approach that I wrote--these extreme ideas in the Republican 
plan--is not just a bit of a stretch or a little off base; there is 
absolutely no comparison--none--between the bipartisan proposal and the 
extreme Republican plan. The distinguished majority whip, in my view, 
offered a complete and total misrepresentation of what the two 
proposals are all about, and I am going to illustrate this in two 
ways--first, with respect to the policy.
  The Republican tax cut framework green-lights the entire wish list 
for major multinational corporations and the wealthy. There is a 
massive corporate tax cut that overwhelmingly benefits shareholders. 
When it comes to international taxes, there is a pure territorial 
system with barely a nod to

[[Page S6297]]

the kind of tough rules that are needed to protect workers and the 
middle-class folks in the center of our tax base.
  There is, in the Republican plan, a brand-new passthrough loophole. 
It is as big as the Grand Canyon. It is the Grand Canyon of loopholes 
in the Republican tax proposal, which invites tax cheats to skip out 
from paying their fair share to Social Security and Medicare.
  The Republican plan eliminates the estate tax, which today only 
touches estates worth more than $11 million or $5.5 million for a 
single individual. The top rate goes down, and the bottom income tax 
rate goes up. When doing the math on what the Republicans have on 
offer, we are looking at upwards of $4, $5, $6, or $7 trillion in tax 
giveaways to the most fortunate.
  It is a different story under the Republican proposal if you are 
middle class. You probably have a lot of unanswered questions. All you 
know right now is that it virtually guarantees that, in order to pay 
for the giveaways to the wealthy and corporations, current middle-class 
tax breaks are going to be on the chopping block--the personal 
exemption, incentives for retirement savings, education, and home 
ownership, to name just a few. From everything we know, when you set up 
these kinds of extreme approaches, when you raise the parts of the Tax 
Code that are a giveaway to those at the top, what you see is the 
middle class getting hurt.
  Instead of tripling the standard deduction, which is what we did in 
our bipartisan bill, the Trump people double it, but then they take 
away the personal exemptions for working-class folks. So unlike our 
proposal, where the middle class can count on hundreds and hundreds of 
dollars in their paycheck when you triple the standard deduction, under 
the Republican proposal, they give it with one hand by doubling the 
standard deduction and take it away with the other hand by eliminating 
the personal exemption. So you have a very stark difference between the 
bipartisan proposal that I offered with Senator Coats, a member of the 
President's Cabinet, and what the Republican extreme plan is all about.
  The bottom line is that the Republican plan seeks to raise those 
parts of our Tax Code that are all about the middle class, and they are 
doing it to pay for the giveaways for those folks at the top. That is 
not what we did in the bipartisan plan at all. Any middle-class person 
can sit at their kitchen table and look at the bipartisan plan that I 
was involved with and see how the middle class wins. They get hundreds 
and hundreds of dollars more in every paycheck by tripling the standard 
deduction, and they can see how they as middle-class folks--say, who 
make $70,000 and have a couple of children--lose under the Trump 
proposal.
  Now there are other differences between our bipartisan plan and what 
the Big 6 and the Trump administration want. The bipartisan plan was 
scored as revenue neutral by authoritative independent tax experts. It 
made the Tax Code more progressive. The fact is, what we offered--
Senator Coats, Senator Gregg, and I--was an actual bill. It was the 
product of weeks and months of work.
  Senator Gregg and I--and I think it is fair to say that all Senators 
may not be aware of this, but Senator Gregg was a top economic thinker 
with whom the majority leader consulted--sat next to each other for 
months in order to put together what is still the first and only 
comprehensive Federal bipartisan tax reform plan since 1986. It was an 
actual bill. It wasn't four pages of rhetoric.
  In the spring we got one page. It was shorter than your typical 
drugstore receipt. Now I guess we are up to four pages, when you take 
out all this kind of white space. Our bill was an actual bill and was 
designed to give everybody in America a chance to get ahead, not just 
those in the 1 percent, not just those who have real clout and power.
  I have always said that this is the heart of the difference. We have 
two Tax Codes in America. We have one for the cops and the nurses. It 
is compulsory. Their taxes come right out of their paychecks--no Cayman 
Islands deal for them. Then we have another Tax Code for the high 
flyers--the fortunate and well-connected. They can pretty much pay what 
they want when they want to. The bipartisan proposal that I wrote with 
Senator Gregg and Senator Coats helps the first group, the cops and 
nurses, but it was also fair to everybody. It gave everybody a chance 
to get ahead. The Republican plan is another big gift to that second 
group, the group that can decide what they are going to pay in taxes 
and when they are going to pay it. So we really couldn't have two 
proposals that are more different.
  The fact is, the Republican framework looks less like a real effort 
at tax reform than a shameless attempt, in effect, to accommodate the 
President's boast about the biggest tax cut ever. The bottom line is 
that it is a giveaway to those at the top, and it robs from the middle 
class.

  The differences don't just end with these specifics that I have 
described here. We took a fundamentally different approach. With 
Senator Gregg and Senator Coats, we were digging into the cobwebs of 
every dark corner of the Tax Code. We brought together principles on 
which both sides had to find common ground with a lot of sweat equity.
  If you are going to write a partisan bill, you can go off on your own 
and do your thing. The fact is, if Senators Gregg, Coats, and I had 
written separate bills on our own, they would have looked very 
different, but the bill we wrote together, starting with Senator Gregg 
and I, was the first comprehensive bipartisan tax proposal in a quarter 
century. Senator Coats, to his credit, did yeoman's work in updating 
it. There is no comparison from a process standpoint between that 
bipartisan work that was done to update the system of more than a 
quarter century ago and the Republican tax cut framework.
  The majority leader said from day one, at the beginning of the year, 
that he didn't want Democratic input on tax reform. He said: We are 
just going to do it on the ``our way or the highway'' approach with 
reconciliation. Reconciliation is a rejection of bipartisanship through 
and through.
  I note that the Presiding Officer is the tallest Member of the 
Senate, along with Senator Strange, and I talked fairly frequently with 
our former colleague Senator Bradley, who was another tall Democrat on 
the Finance Committee with a much better jump shot than me. He has 
described the bipartisan efforts of 1986, with key officials in 
President Reagan's administration, Jim Baker and Don Regan, who spent 
months talking to Democrats--months and months--before anything 
happened. That is not what happened here. The specifics are very 
different, and the process is very different.
  Recently, my Democratic colleagues and I came forward with our 
principles for reform, and it was just a matter of a few hours before 
Leader McConnell rejected them in the media. One administration 
official actually said that tax reform would be worse if it included 
Democratic ideas, and the ``go it alone'' mentality is pretty obvious 
when you look at the framework that came out last week.
  The tough questions haven't been answered. For those at the top, it 
is all sweet and no sour. There was not a single shred of Democratic 
input in the framework--not one Democratic fingerprint anywhere to be 
found. The administration officials in charge of selling it to the 
public are, in my view, executing a con job on the middle class.
  So I wanted to come here today to highlight some of the recent 
comments that the Senate Democratic leader has made with respect to 
some of these out-of-touch comments we have heard recently from key 
administration officials, like Gary Cohn and Steve Mnuchin, and I 
wanted to make sure that Senators heard--after the comments of the 
Senate Republican whip--that they now know that there is no comparison, 
none, between the bipartisan proposal that I had the honor to write 
with Senators Coats and Gregg, which brought the two parties together, 
and the framework that came out last week that forced even more 
polarization between the parties. The reality is that this Republican 
proposal, this tax cut framework, is so radically skewed toward the 
wealthy and the big corporations, that it makes Ronald Reagan's 
landmark reform look like the work of rabid socialists.

[[Page S6298]]

  So I appreciate the chance to set the record straight by outlining 
the differences between a recent bipartisan bill with two influential 
Republican Senators with whom I had the honor to work and the extreme 
Republican framework that came out last week. These plans are not just 
trillions of dollars apart based on the numbers. It is clear they are 
written with entirely different goals in mind.
  Our view is that tax reform ought to be about giving everybody in 
America the opportunity to get ahead. What we have said is that, 
instead of it being an ``our way or the highway'' partisan approach, we 
ought to be doing--particularly in the area of tax reform--what has a 
storied history. The key to a successful tax reform, based on that 
history, is working in a bipartisan way.
  I will close with the comments about the Democratic principles, which 
is that we are not going to give relief to the people at the 1 percent, 
we are not going to break the bank, and we are going to focus on the 
middle class. Those principles don't even go as far as ideas advanced 
by President Reagan, where he said that we are going to treat income 
from a wage and income from investment in the same way.
  I close by way of saying this. No. 1, the distinguished Republican 
whip is wrong when he compares the bipartisan bill I have been a part 
of to what the administration's tax framework is all about. No. 2, the 
right way to do this is to focus in a bipartisan way, not through 
partisanship only. The principles that we have outlined on our side, 
when you compare them, do not even go as far as some of the ideas 
embraced by the late President Reagan.
  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. BURR. 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. BURR. Mr. President, I ask unanimous consent that we start the 
scheduled 11 a.m. vote now.
  The PRESIDING OFFICER. Without objection, it is so ordered.