[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
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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.
____________________