[Congressional Record Volume 163, Number 160 (Thursday, October 5, 2017)]
[Senate]
[Pages S6329-S6331]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                               Tax Reform

  Mr. President, finally, on the Republican tax plan, I have so much to 
say about this plan. It is so awful in so many ways: huge tax cuts for 
the wealthy and the powerful, raising taxes on middle-class people--
which I am going to talk about in a minute--blowing a huge hole in our 
deficit, and to fund the tax cuts for the rich, cutting Medicare and 
Medicaid by close to $1.5 trillion.
  We are all in favor of a serious tax reform debate. We have mentioned 
our guidelines: no tax cuts for the 1 percent, no increase in the 
deficit, and do it in a bipartisan way. The Republican plan does just 
the opposite. That is why Democrats are so opposed. It lavishes tax 
breaks on the rich, pays for it by cutting Medicare and Medicaid, and 
leaves everyone in the cold, except the very wealthy.
  Today I want to focus on one provision of the GOP tax plan: the 
repeal of the State and local tax deduction. The Republican plan raises 
taxes on millions of middle-class families across the country by 
repealing the State and local deduction. Forty-four million Americans 
take that deduction. That is about one in eight. It is about one in 
four or five families who take that deduction. One-third of all 
taxpayers take the deduction. It is almost one in three. They don't 
just get a few pennies back. They get several thousand dollars off 
their taxes each year. It is not just a rarified group in States like 
Massachusetts, New York, and California. The reason it brings in $1.3 
trillion is because it affects so many people throughout the entire 
country.
  If you do not believe me, look at the numbers. Look at these charts. 
I am posting the percentages for each State. Forty-six percent of the 
people in Maryland get an average deduction of $12,900. Connecticut 
gets 41 percent. I showed one of my colleagues that Virginia is higher 
than New York. Thirty-seven percent get an $11,000 deduction.
  Massachusetts, Oregon. To my colleagues from Utah, 35 percent of Utah 
taxpayers get an average deduction of $12,954. In Utah, they say: Well, 
the standard deduction makes up for it. With most families, the 
standard deduction will not because we are taking away the standard 
exemption so it is a wash if you are a family of three.
  Let's keep going. Minnesota and New York. I want to show my 
Republican colleagues how it would affect some of their States. Let's 
take Georgia. One-third of all taxpayers get an average

[[Page S6330]]

break of $9,000. Look at these numbers, my colleagues. I am going to 
send them to every one of you. Look how it affects your State.
  Here we go. Iowa, 29 percent of all people get a $10,000 break, on 
average; Pennsylvania, 29 percent, an $11,000 break; Arizona, 28 
percent, a $7,000 break.
  My friend from Idaho, I didn't know he would be here, but his number 
on the chart--28 percent of Idahoans get an average of an $8,800 break. 
Do you want to take that away from them? The standard deduction doesn't 
make up for it if you have one child or more. Nebraska, 28 percent get 
an $11,000 deduction.
  By the way, these numbers come from a group that put it together, but 
it is from the IRS. These are IRS numbers.
  South Carolina, 27 percent, $8,000; Missouri, 26 percent, $9,800; 
Ohio, 26 percent, $10,000. Kentucky, my dear friend the Republican 
leader, in his State, 26 percent of the people--one out of four--get 
that State and local property deduction, averaging $9,995. Do you want 
to take that away?
  Alabama, where our dear friend the Presiding Officer is from, gets 26 
percent. One out of four of his constituents get an average break of 
$5,900. Kansas, 25 percent, gets an average break of $9,400.
  I am saying these numbers because our friends on the hard right, who 
just want to lower their own taxes, are telling everybody, oh, this is 
just in four States--Massachusetts, New York, California, New Jersey.
  No, it is across America.
  Let's keep going. I am having a good time. I hope you all are.
  Oklahoma, 24 percent of the people get an $8,000 break. I think this 
is Mississippi, 23 percent, gets a $6,300 break; Louisiana, 23 percent, 
close to one out of four, $6,700. Texas, the great State of Texas, 
where our majority whip comes from, 23 percent, close to one out of 
four Texans, get a $7,800 break. Indiana, 23 percent get an $8,700 
break; Florida, 22 percent get a $7,300 break. Wyoming--it wouldn't 
affect Wyoming because it is a rural State--22 percent get a $6,300 
break.
  The State that is least affected is still very affected. South Dakota 
and West Virginia, only 17 percent of the people get a $9,000 break in 
West Virginia and a $6,000 break in South Dakota. North Dakota, 
Tennessee, and Arkansas--21 percent, 19 percent, 18 percent breaks, 
between $4,900 and $6,800.
  The Achilles' heel of this bill--there are many--is State and local 
deductibility. It kills the middle class and the upper middle income 
people. It doesn't really affect the rich. They do not pay a lot of 
property taxes, the bulk of these deductions. They make their money in 
high-income places. They have a lot of stocks and a lot of bonds. It is 
the middle class and the upper middle class who get clobbered by this 
tax break. The standard deduction does not undo it because you lose the 
standard exemption. Even if you are just a husband and wife without 
kids--
  Mr. President, I am going to ask unanimous consent that the debate be 
delayed for a few minutes. I know my colleagues are--well, I just need 
to finish my remarks. I am almost done.
  The benefit of State and local deductibility affects every State, 
every city, every town, every municipality, and goes deep into the 
middle class and the working class.
  One other point I have to make, now realizing this, some of our 
Republican colleagues are saying we will modify it. Folks, there is no 
real way to modify the provision to eliminate State and local 
deductibility. If you want to give a choice that will not work--because 
for middle-class taxpayers, it is only the combination of their 
itemized deductions, such as State, local, mortgage, and others, that 
make it worth it for them to itemize.
  If you have to choose between the mortgage deduction and your 
property tax deduction, it is a loser. So they say: Well, we will just 
do this for the very rich. Yet, as I mentioned, that is not where the 
money is. Where are you going to cap it? It is mostly a middle-class 
deduction. If you cap it, say, for people whose incomes are above 
$500,000 or $1 million, you don't bring in much money. So it is a 
loser. You cannot fix it. Get rid of it. You cannot fix it. The plans 
that are being done still continue to hurt the middle class 
dramatically.
  The Republican plan to repeal State and local cannot be fixed, 
modified, or tweaked around the edges. Each of the proposals does not 
work. It must be scrapped. The State and local deduction affects 
everyone, even the almost one in five taxpayers in the lowest States 
where it affects the fewest people. It is just one of the many flaws in 
this broken, broken framework.
  Let's start over. Don't just do a Republican plan that appeals to the 
handful of very wealthy corporations and very wealthy individuals. Work 
with us on a fair plan that helps the middle class, not the very 
wealthy. We are ready, but if you do the same thing that you did on 
healthcare in trying to do it by yourselves, I think that you will meet 
with the same fate that the healthcare bill did.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Ms. WARREN. Mr. President, I ask unanimous consent that Senator Crapo 
and I both be allowed to speak for 5 minutes on the nomination of 
Randal Quarles.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Ms. WARREN. Mr. President, every time President Trump has the choice 
between standing up for American families or standing up for wealthy 
banks and giant corporations, he chooses the rich guys.
  Time and again, he has promised that he would ``never be beholden to 
the lobbyists or the special interests,'' but he has appointed dozens 
of Big Business executives and lobbyists to senior positions in his 
administration. During his campaign, he promised that he would not let 
the Wall Street guys get away with murder, but after he was sworn in, 
he loaded up his economic team with Goldman Sachs executives. Over and 
over again, he has promised to drain the swamp, but then he appointed 
an army of lobbyists and industry insiders to positions that oversee 
the industries that paid them for years.
  Randal Quarles is just the latest in this long line of corporate 
appointments. He is President Trump's nominee to the Federal Reserve's 
Vice Chair for Supervision. He has gone through the revolving door so 
many times that it is hard to keep up--from a big Wall Street law firm, 
to the Treasury Department, back to the Wall Street law firm, back, 
eventually, to the Treasury Department, then to a private equity fund, 
followed most recently by a trip to another private equity fund. Now 
Mr. Quarles is ready for another spin through the revolving door.
  The Vice Chair for Supervision of the Fed is one of the most 
important jobs in the government. After the 2008 crisis, Congress put 
the Fed in charge of supervising the biggest banks. That included banks 
and other financial institutions that would bring down the whole 
financial system with them if they went under--the so-called ``too big 
to fail'' institutions. The Fed is what stands between millions of 
American families and another economic catastrophe that could rob them 
of their jobs, their savings, or their homes. After the 2008 crisis, 
Congress created the Vice Chair for Supervision position to lead 
efforts to supervise these giant institutions. There is no other 
position in government that has a more important role in stopping the 
next financial crisis.
  So what kind of supervision and oversight does Mr. Quarles believe 
in? His motto seems to be, ``Whatever the big banks want, give it to 
'em.''
  Mr. Quarles has spent more than a decade in private equity and 
investment management, where he has argued repeatedly for weaker rules 
for giant banks, including relaxing the rules for stress tests that 
evaluate banks' soundness, lowering capital and leverage standards, and 
repealing the Volcker rule.
  At his hearing before the Banking, Housing, and Urban Affairs 
Committee, I showed Mr. Quarles a 124-page list of financial rule 
rollbacks from a lobbying group for the biggest banks in the country. I 
asked him to tell me which of those dozens of changes he disagreed 
with. He couldn't name one--not one.
  The No. 1 thing that we need from a Vice Chair for Supervision is 
independence from Wall Street--a demonstrated willingness to stand up 
to the wishes of

[[Page S6331]]

the big banks and protect the interests of working families. There is 
not a speck of independence in Mr. Quarles' track record.
  Mr. Quarles' time in government also raises red flags. As Under 
Secretary of the Treasury for Domestic Finance, he was responsible for 
overseeing financial institutions, markets, and regulations in the 
years leading up to the financial crisis. Let me say that again. Mr. 
Quarles was the Treasury official in charge of helping to oversee Wall 
Street in the years leading up to the crisis. Does anyone want to point 
out how that worked out?
  If Mr. Quarles had wanted to stand up to the banks, he could have 
found and fixed systemwide problems in the markets before catastrophe 
struck. Instead, in 2006, when the banks were making gobs of money off 
of risky bets that eventually crashed the economy, Quarles gave a 
speech in front of a roomful of bankers and said: ``Fundamentally, the 
economy is strong, the financial sector is healthy, and our future''--
the banks'--``looks bright.'' Less than 2 years later, the entire 
system exploded and cost Americans, collectively, about $14 trillion.
  Make no mistake about it, confirming Mr. Quarles endangers the health 
of the economy. The last time that Mr. Quarles was in charge, he failed 
to act to protect the American people from the biggest recession since 
the Great Depression either because he missed the signs or because he 
deliberately ignored them. Either way, that makes him the wrong person 
for the job.
  American families deserve a strong leader as the Vice Chair for 
Supervision of the Fed who will fight hard to keep them safe. 
Everything we know about Mr. Quarles says that he will be fighting hard 
for the big banks. I will be voting no on Mr. Quarles' nomination, and 
I urge all of my colleagues to do the same.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAPO. Mr. President, I rise in support of the nomination of the 
Honorable Randal Quarles to be a member of the Board of Governors of 
the Federal Reserve System.
  Mr. Quarles has extensive government and private-sector experience 
dealing with both domestic and international financial markets. He is 
no stranger to public service in his having previously served in 
multiple top posts in the Treasury Department.
  Mr. Quarles has also been nominated to serve as the Vice Chairman for 
Supervision, a role that has never been officially filled. Instead, 
former Federal Governor Dan Tarullo has acted as the de facto Vice 
Chairman for Supervision in various ways, including by chairing the 
Federal Reserve Board's Committee on Supervision and Regulation, 
overseeing the Large Institution Supervision Coordinating Committee, 
and representing the Fed at the Financial Stability Board and in Basel, 
among other functions.
  In February, Chair Yellen committed in a hearing that she expected 
President Trump's nominee for Vice Chairman for Supervision to have the 
same responsibilities that Governor Tarullo had, including heading the 
Federal Reserve's Committee on Supervision and Regulation and 
representing the Fed at the Financial Stability Board and in Basel.
  I expect Mr. Quarles to perform those same duties in the interim, and 
I look forward to confirming him to that position soon. Mr. Quarles has 
strong bipartisan support and was voted out of the Banking, Housing, 
and Urban Affairs Committee with the affirmative vote of 17 to 6. If 
confirmed, he will play a key role in developing regulatory and 
supervisory policy for the Federal Reserve System.
  I urge all of my colleagues to support Mr. Quarles' nomination today 
and vote for his confirmation.
  I yield the floor.
  The PRESIDING OFFICER. The question is, Will the Senate advise and 
consent to the Quarles nomination?
  Mr. GRASSLEY. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The clerk will call the roll.
  The senior assistant legislative clerk called the roll.
  Mr. CORNYN. The following Senators are necessarily absent: the 
Senator from Mississippi (Mr. Cochran) and the Senator from Nevada (Mr. 
Heller).
  Mr. DURBIN. I announce that the Senator from Nevada (Ms. Cortez 
Masto) is necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 65, nays 32, as follows:

                      [Rollcall Vote No. 213 Ex.]

                                YEAS--65

     Alexander
     Barrasso
     Bennet
     Blunt
     Boozman
     Burr
     Capito
     Cardin
     Carper
     Cassidy
     Collins
     Coons
     Corker
     Cornyn
     Cotton
     Crapo
     Cruz
     Daines
     Donnelly
     Enzi
     Ernst
     Fischer
     Flake
     Gardner
     Graham
     Grassley
     Hatch
     Heitkamp
     Hoeven
     Inhofe
     Isakson
     Johnson
     Kennedy
     King
     Lankford
     Lee
     Manchin
     McCain
     McCaskill
     McConnell
     Moran
     Murkowski
     Nelson
     Paul
     Perdue
     Peters
     Portman
     Risch
     Roberts
     Rounds
     Rubio
     Sasse
     Scott
     Shaheen
     Shelby
     Strange
     Sullivan
     Tester
     Thune
     Tillis
     Toomey
     Van Hollen
     Warner
     Wicker
     Young

                                NAYS--32

     Baldwin
     Blumenthal
     Booker
     Brown
     Cantwell
     Casey
     Duckworth
     Durbin
     Feinstein
     Franken
     Gillibrand
     Harris
     Hassan
     Heinrich
     Hirono
     Kaine
     Klobuchar
     Leahy
     Markey
     Menendez
     Merkley
     Murphy
     Murray
     Reed
     Sanders
     Schatz
     Schumer
     Stabenow
     Udall
     Warren
     Whitehouse
     Wyden

                             NOT VOTING--3

     Cochran
     Cortez Masto
     Heller
  The nomination was confirmed.
  The PRESIDING OFFICER. Under the previous order, the motion to 
reconsider is considered made and laid upon the table and the President 
will be immediately notified of the Senate's action.
  The Senator from Idaho.
  Mr. CRAPO. Mr. President, I rise to make a unanimous consent request. 
We have been able to work out an agreement on further aspects of Mr. 
Quarles' nomination.
  I want to thank my ranking member, Sherrod Brown, for working with us 
on this and helping us to be able to move forward.

                          ____________________