[Congressional Record Volume 163, Number 167 (Tuesday, October 17, 2017)]
[Senate]
[Pages S6427-S6445]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CONCURRENT RESOLUTION ON THE BUDGET, FISCAL YEAR 2018--Continued
The PRESIDING OFFICER. The Senator from Wyoming.
Amendment No. 1116
(Purpose: In the nature of a substitute.)
Mr. ENZI. Mr. President, I call up amendment No. 1116.
The PRESIDING OFFICER. The clerk will report.
The senior assistant legislative clerk read as follows:
The Senator from Wyoming [Mr. Enzi] proposes an amendment
numbered 1116.
Mr. ENZI. I ask unanimous consent that the reading of the amendment
be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The amendment is printed in today's Record under ``Text of
Amendments.'')
Mr. ENZI. 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. DURBIN. 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the quorum call be rescinded.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. DURBIN. Mr. President, I ask unanimous consent to speak as in
morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DURBIN. Mr. President, I come to the floor to discuss the
Republican tax reform plan and what impact it will have on the fiscal
health of our Nation but especially the impact it will have on working
families across the United States and in my home State of Illinois.
I have represented Illinois in Congress both as a House Member and as
a Senator for a number of years. I am proud to say that during my
career, I have not shied away from tackling big issues.
[[Page S6428]]
Maybe one of the toughest assignments I have ever had was in 2010,
when President Obama created the National Commission on Fiscal
Responsibility and Reform. It was known as the Simpson-Bowles
Commission. I was one of 18 Republicans and Democrats given the
responsibility of trying to find a way to balance America's budget and
reform our country's largest spending programs and our Tax Code.
This was no small task, but it was an important one. We spent month
after month in bipartisan meetings working at it. Nearly a year after
the Commission was created, we were asked to vote on the final report.
Simpson-Bowles was not a perfect plan, but I decided to vote in favor
of the report, and I knew it would be controversial, but I believed
then, as I do now, that there is only one honest way to reduce debt:
cut spending, raise revenues, do not ignore the Tax Code. Bowles-
Simpson did just that. It raised revenue by eliminating a lot of the
exclusions and deductions and efforts of the Tax Code to reward certain
companies and special interests, and it cut spending for both defense
and nondefense. To say nothing of the months-long bipartisan process--a
far cry from the current reconciliation that we have been going through
this year on the healthcare issue--there simply is no comparison
between the Simpson-Bowles deficit reduction plan and what the
Republicans want to bring to the floor of the U.S. Senate and House
this year in the name of tax reform.
Simpson-Bowles was about balancing our budget responsibly. It raised
nearly $88 billion in revenue over the first decade, and unlike the
Republican tax plan, it boosted the standard deduction and still
retained the personal exemptions families claim on their taxes. It
protected middle-income families from backdoor cuts, and--and I
underline this--it ensured that the wealthy in America paid their fair
share of taxes.
If there is one thing I can never understand, it is why the
Republicans, in the name of budget deficits or in the name of tax
reform, always end up in the same place--always cutting taxes on the
wealthiest people in America. Where in the world is that coming from? I
have met a lot of wealthy people in the course of my life; not one of
them, with a straight face, has said to me: Senator, I desperately need
a tax cut. They don't. Yet that is the fallback default position on
every Republican plan.
Importantly, the Simpson-Bowles plan provided details of the hard
choices necessary to reach our goal. There is simply no comparison
between that comprehensive, bipartisan plan to balance the budget and
the highly fiscally irresponsible Republican tax reform plan before us
now that will literally add $2.4 trillion to the national debt.
How many times have Members on the Republican side of the aisle come
to the floor to pose for holy pictures and to preach to us about the
deficit? Now that they are in the majority and they have a President of
their party, what is the first thing they do? They propose adding $2.4
trillion to the national debt.
Where are my colleagues across the aisle who have been the first to
speak out and admonish the Democrats about their failure to recognize
the Federal debt? Where is my colleague the majority leader of the
Senate who was so quick to rail on the ``alarming level'' of our
national debt during the Obama years? He is silent now.
Even the most stalwart of self-proclaimed fiscal hawks on the right
are falling in line behind this phony plan, which would allow for $1.5
trillion in unpaid-for tax cuts--clinging on to economic growth
projections no responsible economist would dream of using. They used to
call this economic theory of cutting taxes on the rich and economic
growth the Laffer curve. I have never heard a better named description
of an economic theory. It is a laugher. And this Laffer curve inspired
the Governor of Kansas to bring that State to near fiscal ruin, trying
to apply that great theory and watching his State crumble in the
process.
History has proven that tax cuts simply do not yield economic growth.
The economic growth promises of the Bush tax cuts turned out to be
completely false. Those tax cuts for the wealthy ballooned our deficits
and our debt and contributed to a scandalous rise in income inequality
in the United States of America.
Tax cuts don't pay for themselves, and I know my Republican
colleagues know that.
When Republicans' rosy estimates of economic growth do, in fact, fail
and the deficit is sky-rocketing, the Republican budget spells out
exactly how they plan to pay for the tax cuts on the backs of hard-
working Americans. Listen to this. To pay for the tax cuts for the
wealthiest people in America, the Republican tax reform plan--now, get
this--uses $1 trillion in cuts from Medicaid and more than $470 billion
in cuts from Medicare.
Think about it. Health insurance for the elderly in America will take
a $470 billion cut under the Republican tax reform plan--for what? To
give tax cuts to the wealthiest people in our country--go figure--and
then $1 trillion in cuts in Medicaid.
What is Medicaid for? Isn't it just health insurance for the poor?
Well, in some respects, that is a good general description, but it is
so much more. The Medicaid Program, which the Republicans return to
time and time again to cut, is critically important for parts of
America. Half of the children born in the State of Illinois are taken
care of by Medicaid. Their mothers are taken care of before the baby is
delivered and after. Plus, it is the No. 1 source of health insurance
for the disabled across America. They want to cut $1 trillion out of
it. I haven't even gotten close to the most expensive part of Medicaid.
Two-thirds of seniors in America in nursing homes count on Medicaid to
pay for their medical bills.
The Republicans want to cut $1 trillion out of Medicaid to give tax
cuts to the wealthiest people in America. What is going to happen to
those folks in nursing homes? What is going to happen to the disabled
who count on Medicaid? What is going to happen to those mothers and
their babies? That is a legitimate question to ask.
Make no mistake, the real answer for who pays for these cuts doesn't
involve fake economics; it involves real families across America.
Let's look at the plan for what it is. While claiming to fix our
broken Tax Code, this Republican tax reform plan would instead provide
nothing short of a windfall for the wealthiest in our country and stick
hard-working families in Illinois and across the country with the bill.
Under the Republican plan, no less than 80 percent of the benefits go
to the top 1 percent of wealthiest Americans. Eighty percent of the
benefits go to the wealthiest people in this country. That is more than
three-quarters of all tax breaks going to people who make more than
$730,000 a year. Is that why Members of the Senate were elected--to
take care of people making more than $730,000 a year? Not in my State.
What about the middle-income Americans this plan is supposed to help?
The Republican plan would raise taxes on nearly one-third of Americans
who make between $50,000 and $150,000 a year. One-third of them will
pay higher taxes. That is not tax relief for working families. In fact,
the Republican plan would eliminate the State and local tax deduction--
a deduction used by one-third of all taxpayers to reduce their tax
bill. That has been part of our Tax Code from the beginning, and here
is the theory: We believe, in the current Federal Tax Code, you
shouldn't pay a tax on a tax. It is basic. If you are paying $1,000 in
property taxes where you live right now, should you be taxed on that
$1,000? Under the current Tax Code, no. You are able to deduct State
and local taxes. The Republicans eliminate that deduction. If they have
their way, families with homes, families who pay sales taxes will pay a
Federal tax on the State and local taxes they pay. This deduction
currently allows families who pay State and local income or sales taxes
to deduct those taxes from their Federal income tax. In other words,
this deduction prevents families from double taxation--once by the
Federal Government and again by the State. Yet the Republicans
eliminate this deduction.
In Illinois, we rank fifth in the Nation for people who are helped by
the State and local tax deduction. The taxpayers I represent will be
hit especially hard. Nearly 2 million Illinoisans--roughly a third of
the taxpayers of my State--claimed more than $24 billion in
[[Page S6429]]
State and local tax deductions in 2015. If Republicans have their way,
almost 2 million people in Illinois would be double-taxed on an average
$12,500 of earnings. That is just plain wrong.
Republicans would have you believe that State and local tax deduction
only helps the wealthy, but most people who take this deduction make
less than $200,000 a year.
Even families who do not claim the State and local deduction will see
their taxes increase under the Republicans' so-called tax reform plan.
The Republican plan eliminates the personal exemption worth $4,050 a
person. A family of four making $50,000 a year in my State will pay
$887 more under this part of the Republican tax reform plan. Getting
hit by losing the State and local tax deduction and then turning around
and losing a personal exemption, a family of four in Illinois making
$50,000 will pay $887 more a year, just on that provision, in Federal
taxes.
What are the Republicans raising taxes on my middle class for? They
are raising taxes on middle-income families to provide massive tax cuts
for corporations to the tune of $2.6 trillion over the first 10 years,
and--Mr. and Mrs. America, sleep well tonight--we are going to take
care of that with economic growth. Here is the reality: Corporate
profits are soaring in America. Today, corporate profits in the United
States of America as a share of gross domestic product are at record
highs; corporate taxes paid to the Federal Government as a share of
GDP, record lows. What is the Republican approach to those two facts?
To cut more corporate taxes.
Wouldn't it be good to have someone come to the floor and say:
Instead of just looking at corporate taxes, why don't we look at
corporate employees? How are they doing? We know how they are doing.
They are falling behind. They are more productive than ever. The
corporations are more profitable than ever. Yet the disparity in income
in America gets worse. We have the best workers in the world--no
apologies. They do great work. They don't get paid enough. The answer
on the Republican side is to give the corporations more tax breaks. I
say the answer should be something else.
Why don't we address the fact that CEOs in America make 271 times the
average wage of their employees? Two hundred seventy-one? Come on. If
they are going to head up these corporations, of course they are
entitled to be paid more--their profitability, their entrepreneurial
spirit, their talent, and all the rest--but 271 times? American workers
are still waiting for their pay raise, and they won't get it with this
Republican tax reform plan.
While American workers and their families continue to wait for their
turn, the Republicans seemed determined to provide tax cuts to
corporations and the wealthy rather than make the Tax Code work for
working families. This has to stop. It is time we look at tax reform
and economic growth in terms of the family room, not the boardroom.
The very successful Warren Buffett said:
My friends and I have been coddled long enough by a
billionaire-friendly Congress. It's time for our government
to get serious about shared sacrifice.
Thank you, Warren Buffett. I agree.
If Republicans want to get serious about fixing the faulty incentives
in our Tax Code and provide working families some relief, it is time
they stop clinging to the Laffer curve and this failed trickle-down
policy that giving a tax break to the wealthiest person in America can
only help the poorest person in America.
I know these are difficult and complex issues. It is no secret in
Washington how difficult tax reform can be. But these are issues that
deserve robust, bipartisan debate. Now is not the time to abandon any
semblance of fiscal responsibility and rush through this deficit-
exploding plan that has no prayer of paying for itself with growth.
I hope my Republican colleagues will look beyond the boardroom and
seize this opportunity to reward and incentivize businesses to make
real investments in the United States and its workers. Look at this Tax
Code. If you own a big business in my State of Illinois and want to
move your business out of Illinois--to Mexico or China or you name it--
we are going to give you a helping hand. Our Tax Code says that the
cost of the moving expenses are deductible. You don't have to pay taxes
on those; we are going to give you a break to move your business. What
are we thinking?
For goodness' sake, why don't we have what Senator Sherrod Brown and
I are submitting as an amendment--a patriot employers tax break, a
patriot corporation tax break. You keep your business in Illinois. You
keep your business in Ohio. When your workforce grows, it is American
workers who get the jobs, and the wages you pay for 90 percent of them
have to be at least $15 an hour. You have to provide health insurance
and a basic retirement plan that is fair. Give a veterans preference,
please, to the men and women who served our country. And then we will
give you a tax break. We won't give it to the company that is ready to
move overseas; we will give it to the company that is ready to invest
in the United States and U.S. workers. I think that is a tax policy
most Americans would say makes sense. Why aren't we talking about that
kind of approach instead of finding a way to give a tax break to the
wealthiest?
American workers and families are watching this debate, and they are
still waiting for a better deal.
Mr. President, 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. HATCH. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Portman). Without objection, it is so
ordered.
Mr. HATCH. Mr. President, this week, the Senate will vote on a budget
resolution for fiscal year 2018. While there are many elements to this
particular resolution, most of this Chamber's and the public's
attention are on the reconciliation instructions related to tax reform.
Before I go too far, I first want to thank Chairman Enzi and all of
our colleagues on the Budget Committee for their work on this
resolution. Chairman Enzi has been a critical player in the ongoing
effort to reform our broken Tax Code, and his work to craft this budget
resolution and move it out of committee has been critical to this
effort.
For the next step, he is going to need help passing the resolution
here on the floor. I think we will get there.
Specifically, this budget resolution contains a $1.5 trillion
reconciliation instruction for tax reform. That is a good number,
putting meaningful tax reform within reach.
As the debate over the budget and the instruction moves forward, I
think it is critical that everyone understand what tax reform will do
for our country and, perhaps more importantly, what will happen if we
fail.
Tax reform has been the chief focus of the Senate Finance Committee
for years now. In the 6\1/2\ years that I have been the lead Republican
on the committee, we have had about 70 hearings focused on the Tax
Code. In the vast majority of those hearings, we have heard both
Democrats and Republicans acknowledge the inefficiency of our current
tax system, with very few members having spent their time and energy
defending the status quo, which is not at all surprising.
Our current tax system imposes undue burdens on middle-class
families. Our current tax system is obscenely complex, riddled with
credits, exemptions, and deductions, many of which were designed to
benefit special interests. Our current tax system's complicated rate
structure makes it difficult for families to plan and, for some
workers, creates a disincentive to work for additional earnings. Our
current tax system subjects American businesses and job creators to the
highest tax rates in the industrialized world. Our current tax system
creates incentives for businesses to move headquarters and operations
offshore, eroding our Nation's tax base. And our current system has
forced companies to keep trillions of dollars offshore, preventing
further investment and growth here at home.
Reform of this broken system is long overdue. The last major overhaul
to our Tax Code was more than three decades ago. Even if the Tax Code
hadn't changed dramatically since that time,
[[Page S6430]]
the economy of 1986 was dramatically different from the one we have
today. Of course, the code has undergone a number of piecemeal changes
since the 1986 reform, but that approach has left us with a system that
simply does not work.
Fundamental change is what our tax system needs--change that takes
the entire system into account and change that will create a tax code
that, at the very least, looks as though it was designed on purpose.
That is what we aim to provide once the Senate and the House have
passed a consensus budget resolution.
On the Finance Committee, we are working to craft legislation
pursuant to the guideposts in the unified framework released last
month. Our bill, based on the uniform tax reform framework, will give
much needed relief to millions of low- to middle-income families. It
will level the playing field for Americans and for American job
creators and promote more investment in the United States.
In the end, all of this will mean bigger paychecks for American
workers, a more vibrant U.S. economy, and more American jobs. But
without this budget resolution, we are unlikely to get there.
Don't get me wrong, I would like to produce a tax reform product that
could get 60 votes. I have spent years asking my Democratic colleagues
to meaningfully engage in this effort. To be sure, there have been
Democrats who have been willing to put themselves out there on tax
reform in recent years, including the former Finance Committee
chairman, Max Baucus, and our current ranking member, Senator Wyden.
But they have generally been the exception.
When President Obama was in office, many Democrats typically talked
about tax reform only in the context of raising revenues to fuel
additional spending, which isn't tax reform at all. It is simply
raising taxes.
Under President Trump, the focus, at least among many in the
Democratic leadership, seems to be about preventing passage of anything
that could be viewed as a win for the President and Republicans in
Congress. Perhaps I am wrong about that--and I hope I am--but when we
are talking about tax reform these days, most of the talk from my
friends on the other side of the aisle has been about unreasonable and
unprecedented process demands.
That is unfortunate. There are a number of areas of tax reform where
Democrats and Republicans are largely in agreement. Those areas include
middle-class tax relief, bringing down the corporate rates, and fixing
our international tax system to make American companies more
competitive.
Given these shared concerns, I am still hopeful that some of our
Democratic colleagues will join us in this effort. I remain willing to
work with any Member of the Senate who wants to engage in this effort
in good faith.
Historically speaking, tax bills that pass through the budget
reconciliation process tend to have support from both parties. In fact,
when Republicans have held the White House and Congress, purely
partisan tax reconciliation bills have not been enacted. That being the
case, I think the unified framework envisions a tax reform approach
that both parties can and should support.
Long story short, I haven't given up on producing a bipartisan tax
reform package. But, once again, we need to pass this budget resolution
if we are going to move the ball forward. That being the case, I urge
my colleagues to support the resolution before us this week and to work
with us as we develop tax reform legislation that will help middle-
class families and job creators throughout the country.
With that, I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. CORNYN. 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. CORNYN. Mr. President, the first step to achieving our goal of
overhauling our antiquated and uncompetitive Tax Code is passing a
fiscal year 2018 budget resolution, and we have made the first step in
that journey earlier today. No one should be confused about this. A
vote for the budget is a vote for tax reform. In converse, a vote
against the budget is a vote against tax reform.
I don't know anybody in America who thinks that our Tax Code is a
paragon of simplicity, efficiency, and virtue. To the contrary, I think
most Americans realize that our Tax Code is simply too complex and that
our Tax Code punishes taxpayers here at home by keeping overseas money
earned overseas, rather than being brought back home and being invested
in jobs and wages in America.
The budget resolution will steer our Nation into a safer and sounder
fiscal course through a combination of restraining spending, reducing
tax burdens, and strengthening our economy. Strengthening our economy
really needs to be the focus, like a laser, that we have on what we are
all about here--trying to get the economy to grow again faster.
We know that since the great recession of 2008, our economy has
experienced anemic economic growth. Last quarter we saw that our
economy, instead of growing at the annual rate of about 1.8 percent,
grew at 3.1 percent. Why is that important? Well, when the economy
grows faster, that means that people are finding more work to do and
they are paying their taxes to the Treasury. That eases the financial
burdens of the U.S. Government while allowing people to keep more of
what they earn in their pockets.
Here are some of the goals that we are attempting to accomplish by
the 10-year budget resolution. First of all, we want to try to restrain
Federal spending, parts of which go up at the rate of 5.5 percent or
more a year and is about 70 percent of what the government spends. I
know most people focus on the 30 percent that Congress appropriates,
but, really, that is not the biggest part of the problem. That 30
percent includes about $600-plus billion for defense spending alone.
But the 70 percent of the money that is spent on auto pilot through
mandatory spending programs grows at the rate of about 5.5 percent per
year. That is the reason why we are seeing huge annual deficits and
unsustainable debt. So restraining spending is an important goal of our
budget.
Reducing nondefense discretionary spending is also important. Part of
having a budget is establishing our priorities. That is what we do in
our household budgets. That is what we do in our individual budget.
That is what countries need to do in their budgets. We need to
determine what our No. 1 priority is.
Well, I happen to believe that the safety and security of the
American people is our No. 1 priority. That is why I believe defense
spending is so important. While there are other things we would like to
do, just like there are other things we would like to be able to buy as
an individual or as a household, sometimes you simply can't afford it,
recognizing the priorities that are important to you and to your
family. Defense spending is the No. 1 priority of the Federal
Government. Nobody else can do that. We can't do it as individuals. We
can't do it as States. That is why it needs to be our national
priority.
This budget also provides for the maximum level of defense funding
allowed under the law, while allowing for an adjustment if an agreement
on revised funding levels is reached. It provides a glidepath to an on-
budget surplus, leaving aside Social Security entirely.
Most importantly, the budget will provide Congress with the roadmap
forward in the goal of being able to pass tax reform and ultimately
allowing middle-class Americans to keep more of their hard-earned pay.
Helping working families is one of the most important benefits of tax
reform, but it is not the only benefit. Equally important is enhancing
our Nation's competitiveness in a global economy and achieving growth
for our job creators.
We have a self-inflicted wound caused by our Tax Code when competing
with other countries around the world. We have the highest corporate
tax rate in the world. Why is that important? Why should we care what
corporations pay in taxes? Because that influences how much money is
paid to shareholders. It influences how much money can be paid in wages
to people employed by
[[Page S6431]]
businesses. What we have seen frankly is a negative incentive for
companies to move their businesses overseas.
About a week or so ago I remember reading an article--I think it was
in the Wall Street Journal--that said IBM now has more employees in
India than it has in the United States. I am sure that is caused by a
number of circumstances--perhaps access to the workforce, perhaps the
markets that are available to the company--but I have to believe that
at least some of that is caused by our Tax Code. It is cheaper, more
efficient, and more cost effective to develop those jobs and that
business overseas than it is here at home. Why in the world would we
want to sustain that status quo? That is one of the things we are
trying to do in our tax reform--enhancing our competitiveness and
achieving growth for our job creators right here in America.
It used to be that reducing the business tax was a bipartisan effort.
In 2011, when President Obama was President of the United States, he
gave a speech to a joint session of Congress where he called it a
national priority, recognizing that having the highest corporate rate
in the world moved business overseas and it hurt workers here in
America.
The Democratic leader, our friend and colleague from New York, has
previously advocated reducing that corporate tax rate because he
recognizes the benefits to workers and working families right here in
America. So, occasionally, we have to remind them, when they come out
and say harsh and frankly untrue things about what we are trying to do,
that they used to be for the very same things that we are now
advocating for today.
There are other significant pieces, too, such as those that affect
the people in my State and those who work in the energy sector. It is
no secret that Texas leads the Nation in energy production. I know
people think that it is only about oil and gas, but we are actually the
No. 1 electricity producer from wind energy in the country. So we
believe, literally, in an ``all of the above'' policy when it comes to
energy.
We know that some parts of the energy sector, particularly those
refiners in the oil and gas sector, spent the past month and a half
trying to recover from Hurricane Harvey, and at least 25 refineries
were closed temporarily because of the storm. Why should you or I care
about refineries that were closed because of the storm? Because all you
had to do after Hurricane Harvey hit Texas was to look at the price you
pay for gasoline. It has skyrocketed because of the closed refineries.
It actually benefits the entire Nation and consumers when energy prices
are low.
Operations have now resumed in some areas and, thankfully, some of
those higher prices at the pump have dropped, but the hurricane
underscored the need to ensure our energy sector's ongoing dynamism and
vitality. That is where tax reform can help as well.
One component of our proposal is a territorial tax system. Companies
such as Apple, IBM, ConocoPhillips, and ExxonMobil all have
headquarters in the United States, and they have earned money overseas.
One has to wonder: Why in the world wouldn't they want to bring that
back to the United States and invest it in businesses and paychecks
here in America? That is because under our current tax structure, they
have to pay taxes on the money they earn overseas, but if they want to
bring it back to the United States, they have to pay taxes again up to
a 35-percent corporate tax rate on the same money. So they make the
rational decision and keep the money overseas. They build their
businesses there and hire more workers abroad and not here at home. Why
in the world would we want to maintain that sort of self-destructive
status quo?
A new territorial tax system is going to be an important part of tax
reform, and it is not to help big businesses. It is to help workers who
are looking for work or people who are working who have had stagnant
wages and are looking for a little extra in their paycheck each month.
That is why it is so important.
In addition, we plan to help decrease the cost of investing in things
like new plants and equipment in America. Things like expensing rather
than depreciating over many years investment in new equipment and new
businesses are really important to encourage those businesses to
modernize their plants and, again, to hire more workers.
Tax reform represents an opportunity to cement America's position as
the world's largest energy producer, as well, rather than one of those
regulatory exercises that, unfortunately, happens far too often and
ends up increasing the cost of creating jobs in the energy sector. I
will continue to be an advocate for the countless number of Texans
whose livelihoods depend on this sector of our economy while it
continues to face challenges on a multitude of fronts.
Getting back to my point about the price of gasoline, if we drive a
car, we are all paying for gasoline. It just makes sense to do what we
can to help that price get lower, and we all benefit. One of those ways
we can do that is through regulatory reform and the second is through
tax reform.
NAFTA
Mr. President, I mentioned Hurricane Harvey earlier, but that is not
the only challenge. Another potential challenge, I should mention, is
NAFTA. This is the North American Free Trade Agreement, which is a 20-
year-old trade agreement that includes Canada, Mexico, and the United
States. This is a topic I will have a chance to speak about further at
the Hoover Institution this afternoon.
As most of us know, the NAFTA negotiations are ongoing. President
Trump has said--at least his administration, Ambassador Lighthizer, and
the Commerce Secretary have said that their attitude toward
renegotiating NAFTA is first to do no harm. I really appreciate that
because NAFTA has been an important part of our trading relationships
with Mexico and Canada, and it supports about 14 million jobs in
commerce between our 3 countries in North America.
Since the administration announced its intent to revisit NAFTA, I
think it is important to revisit the critical role that NAFTA has
played in all North American energy markets, including electricity,
renewables, oil, and natural gas. As I wrote in a letter to Ambassador
Lighthizer this summer, each market is highly integrated with and
remains dependent on vital energy infrastructure and trade crossings
that border the United States, Canada, and Mexico.
Free trade and the free-trade agreements, such as NAFTA, allow the
United States to maximize the benefits of being the world's largest
energy producer. If you have been paying attention, you know that our
energy industry has undergone dramatic changes over the past two
decades. I remember when we were worried about having to import
liquefied natural gas from places around the world to our own shores
before the natural gas revolution took place here in America, thanks to
improvements in technology and drilling techniques.
Now we have such cheap and plentiful natural gas that we can export
that gas around the world. It is just not an economic boom. It is a way
for us to provide alternative energy resources to some of our friends
and allies around the world, particularly in Europe, where Mr. Putin
uses energy as a weapon, threatening to shut off energy supplies if
countries in his neighborhood don't cooperate.
So opening Mexico's energy market has positioned U.S. companies to
meet Mexico's needs for technical expertise and capital. As my friends
south of the border reminded me, they said the Eagle Ford shale, which
is one of the most plentiful sources of natural gas in the world,
doesn't stop at the Rio Grande. So as we provide additional technical
expertise and capital to Mexico, we can expect for them to experience
the sort of energy renaissance we ourselves have experienced in the
United States.
During the NAFTA negotiations, we should seek to promote North
American energy security by maintaining and protecting rules that
reduce or eliminate barriers to U.S. investment in Mexico and Canada.
Opportunities like this are why NAFTA could benefit from an update
rather than a repeal.
Former Secretary of State George Shultz reminded us yesterday in the
New York Times that NAFTA has helped a wide range of U.S. manufacturing
industries like auto, electronics, and aerospace become more
competitive relative to their foreign competitors. Secretary Shultz
also pointed out
[[Page S6432]]
how that increased competitiveness is fostered. It has resulted mainly
from the development throughout the last 24 years of strong vertical
supply chains that take advantage of economies of scale. Thanks to
NAFTA, economic production can take place wherever in North America it
is most efficient.
Let's remember all of this as negotiations continue. Let's seek to
preserve all of the good we have inherited from NAFTA and update all
that is outdated in NAFTA.
I yield the floor.
The PRESIDING OFFICER. The Senator from Arizona.
(The remarks of Mr. Flake pertaining to the introduction of S. 1974
are printed in today's Record under ``Statements on Introduced Bills
and Joint Resolutions.'')
Mr. FLAKE. I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant bill clerk proceeded to call the roll.
Mr. ALEXANDER. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Strange). Without objection, it is so
ordered.
Mr. ALEXANDER. Mr. President, I ask unanimous consent to speak for up
to 10 minutes, followed by the Senator from Washington, Mrs. Murray, to
speak for up to 10 minutes
The PRESIDING OFFICER. Without objection, it is so ordered.
Healthcare
Mr. ALEXANDER. Mr. President, later this week, Senator Murray and I,
with other Senators, will introduce bipartisan legislation to give
States additional flexibility to create more choices of health
insurance policies in the individual market and to extend cost-sharing
reduction subsidies during 2018 and 2019. These subsidies pay for
copays and deductibles for millions of low-income Americans who buy
health insurance on the Affordable Care Act exchanges. Our goal is to
stabilize and then lower the cost of premiums and to enable all
Americans to have access to health insurance.
Our legislation will be based on the four hearings and other meetings
that the Senate's Health, Education, Labor, and Pension Committee held
last month. I am chairman of that committee, and Senator Murray is the
ranking Democratic member. These hearings and meetings were bipartisan.
They were lengthy. They were remarkable in this sense: They engaged
nearly 60 Senators from both political parties in extensive
discussions. We not only had the four hearings, which involved the 23
members of our HELP Committee, but we invited any other Senator who
wished to come to a committee meeting ahead of time to meet the
Governors and the State insurance commissioners and others who were
testifying, and 37 did. So we have had extensive participation by 60
Members of the U.S. Senate through four hearings and a variety of
committee meetings in the process that developed this legislative
proposal that Senator Murray and I have agreed upon.
According to witnesses at our hearings, according to the
Congressional Budget Office and Congress's Joint Tax Committee, without
these cost-sharing payment reductions, premiums will rise, the Federal
debt will increase to pay for the higher subsidies by $194 billion over
10 years, and up to 16 million Americans may find themselves living in
counties where no company sells insurance in the individual market.
Imagine yourself as a 45-year-old songwriter in Tennessee who loses
her job, has three kids, goes to the individual market, and finds that
she can't buy health insurance; no company is offering it because we
did not act. Those are the consequences we are talking about.
Witnesses also testified that one way to lower costs for consumers is
to give States more flexibility than the Affordable Care Act now allows
to design health insurance plans that give consumers more choices.
We have purposefully limited our proposal to two themes: first, 2
years of temporary cost-sharing payments and, second, amendments that
would give States meaningful flexibility in using the section 1332
innovation waiver, which is already a part of the Affordable Care Act.
The problem with the waiver is that while it was designed to give
States the opportunity for innovation, it has been very restrictive. It
limited the number of opportunities States could use. It would be like
saying to someone: You can drive anywhere you want to in the United
States as long as you end up in New York or in Nashville or in
Birmingham, AL. Our goal is still to protect patients but to give
States more flexibility in offering more choices.
There are, of course, many other good and useful ideas that would
improve Federal laws regulating health insurance. There are many on the
Republican side, and there are many on the Democratic side. There are
probably even ideas that both of us would agree on, but Congress has
been stuck for 7 years in a partisan stalemate over the Affordable Care
Act. Most of that stalemate is about the individual insurance market.
Most people get their insurance from the government, Medicare, or
Medicaid. Most of the rest of the people get their insurance from their
employer on the job; that is 50 or 60 percent of Americans. Only 6
percent of Americans get their insurance in the so-called individual
market. It is about 350,000 people in Tennessee. Every single one of
them is very important, and every single one of them is terrified by
the skyrocketing premiums in that market and by the possibility that
they might not be able to buy insurance at all in that market if we
don't act.
We concluded that the best course would be to take this limited,
bipartisan first step, which would avoid the chaos that could occur
during 2018 and 2019 if premiums continue to skyrocket and millions of
Americans find themselves without a way to purchase health insurance.
Once we complete this limited first step, then we can take the second
and the third steps.
I want to undersell this proposal rather than oversell it. It has
significant advantages in terms of cost-sharing reductions, which make
it more likely that premiums will stabilize in 2018 and actually go
down in 2019. It has significant advantages in changing the law so that
States will have more flexibility in offering choices, which is another
way to lower costs, but it is only a limited first step.
Senator Murray and I hope that by the end of the week we can present
Senate leadership--Senator McConnell and Senator Schumer--with the
support of a significant number of Republican and Democratic Senators.
We then hope the Senate will pass the legislation, the House will agree
to it, and the President will sign it.
During the last several days, I have had encouraging discussions with
President Trump, who called me on two different occasions, encouraging
me to work with Senator Murray to come to a bipartisan agreement. I am
grateful to him for that encouragement, and I am grateful to her for
her patience and for working on this so diligently for such a long
period of time. I see she has just come to the floor.
I think one other thing Senator Murray and I can agree on is that we
hope our next legislative assignment is easier than this one. I think
we both also agree that the sooner we act, the better, so Americans
will have the benefit of lower premium costs and the peace of mind of
knowing that they will be able to buy insurance for themselves and
their families.
I would like to say through the Chair to Senator Murray that I asked
for 10 minutes to speak, and then I asked for 10 minutes for her to
follow me. I am about finished, and when I am through, then she has the
floor, according to my request.
I ask unanimous consent to have printed in the Record a brief summary
of the agreement that Senator Murray and I have.
There being no objection, the material was ordered to be printed in
the Record, as follows:
lower premiums, more state flexibility, zero score, avoid chaos in
2018, 2019
Make Section 1332 State Innovation Waivers Work
Amend law to provide meaningful flexibility for health plan
designs
--Example: Iowa waiver
--Example: higher co-pay opioids, lower co-pay statins
--Example: Medicaid savings for Sec. 1332 costs (NH)
--Repeal 2015 Regulation and Guidance
``Alaska for All'' (Maine, Minnesota)
[[Page S6433]]
--State-based program to cover very sick
--20% premium decrease for everyone
--NO new federal spending; savings help pay for the fund
Streamline approval process
--Governors apply for waiver
--Federal waiver approval time in half
--Fast-track approval for emergency situations
--Fast-track approval for ``me too'' waivers
--Waivers can last longer (6 years)
--Harder for future administrations to cancel waiver
--Model waivers help states get approved faster
New Copper Plan: Catastrophic Insurance All Ages
Interstate Health Insurance Compacts: Texas Public Policy
Redirect Existing User Fee Funding to States for Consumer Outreach
2 Years Funding Cost Sharing Reduction Subsidies (Zero score), No
Double Dipping by Insurance Companies
Chaos Without Cost Sharing (CBO, JCT, CMS):
--20% average premium increases in 2018
--$194 billion new federal debt over ten years
--50% counties with one insurer today--would get worse
--Up to 16 million Americans with zero insurance options on
exchanges
--Four-lane highway to single payer solution
Mr. ALEXANDER. Mr. President, I have said repeatedly over the last
several weeks that while it is important that the two of us, as the
chairman and the ranking member of the HELP Committee, come to an
agreement, that is not nearly enough because our real job was and is to
see if we can find, among a significant number of Republicans and a
significant number of Democratic Senators, a consensus that will cause
this to be enacted, will cause the Senate to pass it and the House to
pass it and the President to sign it. In my opinion, we wouldn't have
come to an agreement ourselves unless we thought that was likely.
I will not go into the specific provisions that are in this, except
to briefly summarize them. The first group of them makes the section
1332 innovation waivers work by giving more flexibility. In New
Hampshire, for example, the State would like to use Medicaid savings to
help pay for the cost of its Affordable Care Act waiver, and this would
allow that. In Maine, for example, the State has applied for a waiver.
The waiver has been approved, but the use of the funding has not been
approved. This would allow that. Alaska, Oklahoma, Iowa, for example,
all have waivers in line that they would like to submit to give a
greater variety of choices in their States and hopefully lower premium
costs, but it is too restrictive under the current conditions.
About the only sort of waiver that the current Director of the
Centers for Medicare and Medicaid Services can approve is the Alaska-
type waiver, which is a good idea. Alaska created a reinsurance fund,
which helped the very sick Alaskans, immediately lowered premiums 20
percent for all other Alaskans, and then used the savings from the
lower subsidies as a result of the lower premiums to pay for 85 percent
of the cost of the fund. Minnesota has tried a similar thing. Maine did
that on its own a few years ago. We have streamlined the approval
process for those waivers, so that can be done more easily.
I would emphasize that a number of these, while they are limited
proposals, could not be done in a budget reconciliation process. They
had have to be done with 60 votes.
The proposal also includes what we call a new copper plan,
catastrophic insurance for all ages. We still keep the patient
protections; that is, preexisting conditions, et cetera. We still keep
the essential health benefits, but we allow someone who is healthy and
young, for example, to pay a higher deductible and a lower premium if
that is what they choose to do. We direct the Department of Health and
Human Services to go ahead and write regulations to encourage
interstate health insurance compacts. We compromised on the outreach
funding and agreed that we will spend about twice as much as or more
than President Trump wanted to expend, but we will do most of that by
grants to the States. And of course we agree on 2 years of funding for
the cost payments.
Finally, I would say that if we do not do this, according to the
Congressional Budget Office, the Joint Tax Committee, and CMS, premiums
next year will increase 20 percent, there will be a $194 billion
increase in the Federal debt over 10 years, and up to 16 million
Americans might find themselves unable to buy insurance through the
individual market. In my view, this agreement avoids chaos, and I don't
know a Democrat or a Republican who benefits from chaos.
I thank President Trump for his encouragement to me and to Senator
Murray to try to succeed on this. I thank Senator Schumer, the
Democratic leader, for creating an environment in which we could get to
this point. I thank the majority leader, Senator McConnell--despite his
focus on tax reform--for allowing us to work together and try to do
this. I especially thank Senator Murray, who, whenever she sets about
to get a result, I have found, she usually gets one. I could not have a
better partner to work with on difficult issues in the Senate. In fact,
the one thing we probably most agree on, we found the most difficult to
solve; that is, in 2018, we want to make sure that the cost-sharing
payments go to the benefit of consumers, not the insurance companies. I
want that. Senator Murray wants that. The President wants that. My
Republican colleagues want that. And I know Democrats want it. We
believe we have strong language in our proposed agreement to do that,
but we are going to make sure that it is the strongest possible
language.
I thank the Presiding Officer. I look forward to working with Senator
Murray over the next few days to see if we can find a consensus among
Republicans and Democrats to present to the Senate leadership. I hope
that we can then pass it, the House will pass it, and the President
will sign it.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. Mr. President, I wish to thank Chairman Alexander for
his tremendous work on this. I am very grateful for his leadership in
supporting a bipartisan discussion under regular order in the HELP
Committee and his determination to see it to this point and beyond.
I remember very clearly back in July when it was clear that the so-
called skinny repeal didn't have the votes to pass. We talked right
then and there about getting to work on ways to stabilize the
healthcare market and protect patients and families from premium spikes
as a result of the uncertainty this administration caused. We were able
to engage nearly half the Senate in our hearings and conversations on
the HELP Committee, and we found that there was a lot more that we
agreed on than we disagreed on when it came to strengthening healthcare
and controlling costs in the near term.
Since then, actions by this administration have made our work more
urgent. So I am very glad Democrats and Republicans agreed to work
together to address this, and I am extremely pleased that, with the
input of Members on both sides of the aisle, as well as Governors and
patients and advocates, we were able to reach an agreement that I hope
will set the healthcare discussion in Congress on a very different path
than the one we have all seen for the last 7 years.
This agreement provides certainty on the reduction of out-of-pocket
payments for the next 2 years. It will address attempts by this
administration to keep people from getting enrolled in the care they
need. It takes a number of very strong, bipartisan steps to offer
States more flexibility to innovate in the way the Affordable Care Act
intended, without undermining the essential health benefits, such as
maternity care and mental health coverage, or burdening people who have
preexisting conditions.
This is an agreement I am proud to support, not only because of the
important steps to strengthen our healthcare system but because of the
message it sends about the best way to get things done in this
Congress. The way to deliver results, as Chairman Alexander says, for
patients and families is to work under regular order, to find common
ground rather than retreating to partisan corners, and to hear from our
experts and our families and our Members on both sides of the aisle
rather than reciting talking points to each other. We know that is true
because
[[Page S6434]]
just a month ago, the idea of an agreement between Republicans and
Democrats on healthcare seemed impossible at best, if not improbable.
Thanks to the strong, bipartisan work of Chairman Alexander and many of
our Members, we have been able to bridge the divide.
I strongly believe that patients and families in every State across
our country will be stronger if we can get this agreement signed into
law. I urge my colleagues to not only support it but to continue
working together because there is no question we have work to do.
I thank Chairman Alexander and all the Republicans and Democrats who
have been so engaged in this effort, and I echo the comments of Senator
Alexander about what is in the bill. I won't repeat them. I agree with
his last comments that we both want to make sure the payments go to
consumers. We are working on that language, and I wish to assure our
colleagues that is our joint intent as we get this language finalized
and put into place.
I thank the Presiding Officer for this short amount of time during a
busy day on the floor. I again thank Chairman Alexander, and I remain
committed to him to get this done in the right way for the people of
this country.
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. HEINRICH. 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. HEINRICH. Mr. President, I rise to oppose this deeply flawed
budget that is terrible for America and particularly harmful to working
families.
The Republican plan that we face today is a budget-busting first step
toward issuing massive tax breaks to special interests and to wealthy
individuals. This proposed budget fails to improve economic growth or
to drive up wages. It should look awfully familiar to all of us because
it is a retread of the failed trickle-down economics which exploded
budget deficits in the 1980s and squandered the budget surplus we had
briefly in the early 2000s. That trickle-down theory ruined our budget
and failed to grow the economy then, and we cannot afford to relive
those failed policies now.
Our Nation faces significant economic challenges today that need to
be addressed directly. Wages have barely improved in the past 20 years;
the costs of education, childcare, and other essential living expenses
continue to climb.
Job creation is slowing. From February through September of this
year, the economy added the lowest number of jobs in 7 years. Wages are
also falling this year. Since the Trump administration took over, 39
States and the District of Columbia have seen workers' wages decline,
after adjusting for inflation. Nearly 4 in 10 rural families don't have
access to high-speed internet and the opportunities it affords.
We all know many of the communities we represent, in both rural and
urban areas, still have not fully recovered from the great recession.
Yet this budget only makes life harder for working families by cutting
vital programs and critical services that invest directly in those
communities. The Republican budget ignores our current reality and
makes it tougher for American families to afford a college education or
access quality healthcare coverage. As we saw through last week's
executive actions, the Trump administration remains singularly focused
on taking away healthcare from 20 million Americans and sabotaging the
system for those left. This proposed budget would take us deeper down
that destructive path.
The Republican 2018 budget cuts more than $5 trillion over the next
decade in healthcare, education, transportation, medical research, and
other critical investments. It slashes Medicaid by $1 trillion and
Medicare by more than $470 billion. When they are done, these budget-
busting tax giveaways will leave other Federal efforts with a gaping
$660 billion hole, bringing our domestic Federal investments as a share
of our Nation's GDP to the lowest levels since the Hoover
administration.
If you are at home listening, all of that sounds pretty unbelievable.
Washington Republicans wouldn't really jeopardize our Nation's
healthcare, our educational system, our rural communities, and bust the
budget all at the same time, right? Unfortunately, all of that is true
when we look at the details of this failing budget. Again, this is all
based on a brazen theory that led to the failed and harmful tax
policies of the past.
The real question we should be asking now is, How do we improve our
communities, grow our economy, and drive up wages for hard-working
families? That is what I am focused on when I look at the budget.
Republicans believe step one should be to take funds out of Medicare,
out of education, out of infrastructure, and pull healthcare away from
the working poor. Then step two of their plan is to give all that money
to wealthy political interests under the ruse that regular people,
someday, will be better off because America's elite investing class
will have done something spectacular with the money we just sucked out
of our communities.
It is truly amazing that this idea continues to resurface because the
promise of wild economic growth and trickle-down benefits has failed to
materialize time and time again. What we have found is, working
families, rural communities, and others who are robbed to finance this
type of plan are the ones who suffer, all to put money into other
people's pockets.
Who exactly loses in this budget? For starters, senior citizens, who
will see Medicare cut $470 billion, to be exact. Let me say that again.
This Republican budget cuts Medicare to the tune of nearly half a
trillion dollars.
Children, working families, and people in need of opioid treatment
will be pounded by Medicaid cuts of more than $1 trillion. Medicaid
cuts will lead to millions losing their coverage. They will unravel the
progress we have made fighting the opioid epidemic, jeopardize mental
health coverage, and force many rural hospitals to close.
The hit will be especially hard in rural areas, where more than 12
percent of rural hospital revenue comes from Medicaid. In New Mexico,
Medicaid actually accounts for more than 20 percent of hospital revenue
in rural areas.
For seniors, the Medicare and Medicaid cuts together will have
devastating consequences. Let's look at one example, Alzheimer's
disease. Medicare and Medicaid together pay for nearly 70 percent of
care for those 65 and older with Alzheimer's. These deep cuts will
force families to make a terrible choice between working and caring for
their family members. Already, 15 percent of caregivers to someone with
Alzheimer's have left their jobs or retired early in the past year due
to their caregiving responsibilities. Cutting Medicare and Medicaid,
when Alzheimer's costs are getting higher and no cure is in sight, will
saddle individuals and their families with massive costs and hardship.
The devastation this budget will create does not stop there. More
than 8 million students will see their Pell grants cut by one-third.
That is right. Republicans want to cut investments in education so they
can give special interests a tax break. These are Americans who are
striving for a college degree, who just want a fair shot at opportunity
without being crushed by debt. Pell grants are the primary form of
financial aid for so many students, giving them access to an education
that might otherwise be out of reach.
This chart pretty much sums up what I have been saying about the
priorities reflected in this budget: tax cuts over investments in
things like Medicare, Medicaid, education. The picture is pretty clear.
They are taking direct investments away from our people and our
communities and instead giving those dollars away as part of a
convoluted plan that leaves the wealthy better off.
What is more amazing about this plan is that Republicans have changed
budget rules to allow them to add $1.5 trillion to the debt while doing
it. For many years, the Conrad rule in the Senate specifically
prohibited reconciliation legislation from increasing the deficit in
the first 10 years. It was what reconciliation bills were designed to
do--reduce the deficit. Then, Republicans repealed that rule in 2015
and
[[Page S6435]]
threw any illusion of fiscal responsibility out the window.
Remember when Republicans believed in fiscal responsibility and
balanced budgets? Under President Trump, Republicans barely give these
values lip service--and this year's budget goes even further than
before to reject fiscal reason. It removes a Senate requirement for the
CBO--the Congressional Budget Office--to issue a cost estimate a day
ahead of votes on the Senate floor, the so-called 28-hour rule. Why?
Because they want to hide how fiscally irresponsible these votes are
from their constituents and the American people.
Finally, the Republican budget assumes far faster growth than the CBO
could possibly justify under even the rosiest assumptions. This
backward math says that their budget magically delivers $1.24 trillion
in deficit reduction. According to the Tax Policy Center, the
Republican tax plan will reduce revenues by $2.4 trillion over the
first 10 years and another $3.2 trillion over the next 10 years. The
actual cost far exceeds the Republican estimates.
Where do all the tax cuts go? Most of them go to wealthy folks who
are doing just fine without them. We don't need to be doling out tax
breaks to wealthy trust-funders when families in Las Cruces, Gallup,
and Santa Rosa are struggling to make ends meet, don't have high-speed
internet, and haven't gotten a raise in years, in some cases.
Under this Republican plan, the top 0.1 percent will receive a tax
cut of more than $700,000 a year. It would take a typical household in
my State nearly 15 years--15 years of work and earning--just to match
the giveaway being provided to a single wealthy investor under this
budget. That is not just wrong, it is downright sickening.
Part of this massive benefit to the rich comes from the creation of a
special rate for passthrough income of 25 percent. This plan is
designed to help large law firms and hedge funds that, in my mind,
don't need a special tax break to further enrich themselves. Millions
of working families will actually face higher taxes as a result. Under
the Republican tax plan, nearly 8 million working households will
actually see an average tax hike of $794. Now, $800 may not seem like a
lot if you are working on Wall Street, but $800 is a lot for people
working hard on relatively modest incomes in New Mexico.
Unfortunately, as I said earlier, we have seen this movie before. We
don't need another bad sequel.
This Republican plan delivers higher deficits and fewer community
investments. Tax cuts in 1981 and the early 2000s led to less revenue
as a share of GDP and higher deficits. The national debt nearly tripled
under President Reagan and nearly doubled under President George W.
Bush.
We have also seen the dangers of reckless tax cuts for the wealthy at
the State level. In Kansas, Republicans slashed individual rates by
more than 20 percent and abolished taxes on passthrough income. Sound
familiar? Since the tax cuts were enacted in 2012, the State's revenue
plummeted, and Kansas has buckled under an economy that has trailed the
United States in job, wage, and economic growth.
A recent study found that for tax cuts to pay for themselves, the
economy would have to grow $5 to $6 for every single dollar of cuts.
Yet the nonpartisan Joint Committee on Taxation found that tax cuts
generate nowhere near that amount. According to them, each dollar of
tax cuts would lead to only 4 cents to, at best, $1.25 in new economic
activity.
The evidence is clear. Large tax cuts for special interests and for
the rich simply don't pay for themselves. As we have seen, time and
time again, trickle down only works in fake, so-called think tank
models, not in real life.
Rather than rely on disproven theories, we should be investing in
what we know actually works in increasing wages and accelerating
economic growth. Expanding the earned-income tax credit, for example,
has proven to be effective at increasing the living standards of
working families. It effectively raises their wages. Let's strengthen
and make fully refundable the child tax credit.
Instead of slashing infrastructure spending, as this budget does, we
should be investing to prepare our Nation to compete. Investing in
infrastructure is proven to create good-paying jobs and stimulate our
overall economy. President Trump talked about infrastructure investment
incessantly on the campaign trail. Where is that rhetoric today? Where
is that commitment today? Sending kids to high-quality pre-K is shown
to improve both theirs and, for that matter, their parents' economic
outcomes.
We need to invest in clean energy because it is cheaper, because it
is good for the economy, and because all of our future livelihoods
depend on addressing climate change. The renewable energy sector is a
place where jobs are growing rapidly in New Mexico--and not just in
urban metro areas but especially in rural communities.
We need to invest in Federal research and development that has led to
the internet, to the GPS, to the laser, and to lifesaving medical
breakthroughs. We must ensure that startups can access the capital they
need to launch and grow their businesses, whether they are in rural New
Mexico or downtown Detroit. We need to close the digital divide so that
every person in America, regardless of ZIP Code, has access to high-
speed internet that connects people and communities to financial and
educational opportunities.
Democrats have a plan to grow the economy, to increase wages, and to
improve the lives of folks who work on Main Streets across this
country. Our plan connects people with the opportunities that will
exist tomorrow.
The Republican plan is very different. It is written by the lobbyists
on K Street, with much of the benefit flowing to the investment bankers
on Wall Street. Regrettably, Republicans are pursuing the same partisan
process with the budget and with tax reform that failed when they tried
to repeal the Affordable Care Act.
The cost of Republican chaos and backward thinking is growing by the
day, and this budget will continue that process. We need bipartisan,
pragmatic solutions to the challenges that our country faces.
To all of my colleagues, we are asking simply to do what we know
works. Let's work across the aisle through regular order to get things
done for our constituents.
Mr. President, I yield back.
The PRESIDING OFFICER. The Senator from Utah.
Mr. LEE. Mr. President, I wish to thank my colleague, the Senator
from Wyoming, chairman of the Budget Committee, Mr. Enzi, for allowing
me, as the vice chairman of the Joint Economic Committee, some time on
the Senate floor to discuss the budget.
Our budget process is important, and it has long been in a period of
neglect. It needs reform. That is what I am here to talk about today.
There are so many areas that are affected by our budgeting process or,
at least, that should be. In fact, it is difficult to conceive of any
aspect of the Federal Government that couldn't be or shouldn't be
addressed through the budgeting process.
When we look at the budget process, it is important for us to focus,
to one degree or another, on the Budget Act of 1974. This is an old
law. Forty-three years in statute has not exactly improved it. It
hasn't matured into something better. In other words, rather than a
piece of art that has appreciated in value over time, this is something
more akin to the 8-track tape player that you might have purchased in
1974 to go inside your Ford Pinto, which would explode upon impact.
This is something that didn't really improve in the 43 years since it
was passed, especially not the way we have followed it or, better said,
the way we have utterly failed to follow it.
One of the best ways to describe the budgeting process, prescribed by
the Budget Act of 1974, is that it is nonbinding. It is less
legislation than it is legislative fiction. It is aspirational in the
sense that it aims for what could be and what should be, except no one
actually aspires to it. In Congress, we don't get to the aspiration,
basically, ever. It is reminiscent almost of the immortal words of St.
Augustine. When he was undergoing his transition to Christianity, he
famously said: ``Lord, grant me chastity . . . but not yet''--always
wanting to restrain oneself later and not now, even though the need for
restraint, the need for reform is present now, is calling out for
reform right now. That is why it is important to remember that what
comes next is
[[Page S6436]]
important, and next is now. We are discussing the budget this week, and
it is important that we focus on these issues right now.
We do have a system that has to be kept carefully in balance. That
balance depends on Congress keeping the national interest front and
center. It depends on Congress being willing to restrain itself and
follow the dictates of our constitutional structure. We have failed on
these scores.
Congress collectively, actively, almost defiantly avoids the very
type of accountability built into our constitutional structure--the
type of accountability called for by article I of the Constitution.
Article I, the very first clause of the first section of the first
article of the Constitution, makes clear that if you are going to make
policy within the Federal Government, if you are going to establish
norms that will be enforceable as generally applicable laws within our
Federal Government, you have to go through Congress.
``All legislative Powers herein granted shall be vested in a Congress
of the United States, which shall consist of a Senate and House of
Representatives.'' Article I, section 1 tells us that.
Article I, section 7 tells us that in order to make a law in our
Federal system, you first have to pass something through the House of
Representatives and the Senate, and then you have to submit it to the
White House. You cannot make law without going through that process.
That process is also worked in for a budgeting process.
The way the Budget Act of 1974 is supposed to work, the way our
budget process is supposed to operate is that we will pass a series of
laws appropriating money in various aspects of the Federal Government.
We have a budget that gets passed first, which is an aspirational
statement not submitted to the President. It is a resolution passed
jointly by both Houses of Congress that sets budgeting priorities.
Then, following from those priorities, there are supposed to be 13
separate appropriations bills that spend money, that allocate the
scarce resources of the Federal Government, understanding that they are
finite to each of the major areas of government spending.
There will be one bill, for example, that funds National Defense.
There is another bill that will fund our Justice Department or Federal
court system. There is another bill that will fund, for example, our
national parks, and so on and so forth. When you follow that formula,
you avoid the kind of circumstance in which we push all spending
decisions into one legislative package, setting up a potential for
disaster.
A common analogy that I sometimes use to describe this is, imagine if
you live in an outlying area, in an area where there is only one
grocery store for 100, maybe 200 miles around. Upon moving there,
suppose, on your way home from work, you receive a phone call from your
significant other telling you to stop by the store: Don't come home
without bread, milk, and eggs. You don't need everything else. Just get
bread, milk, and eggs.
You go to the grocery store. You get your shopping cart, and you put
in your bread, milk, and eggs. You get to the checkout counter. You put
out your bread, milk, and eggs.
The cashier says to you: Excuse me, there is a problem. You can't buy
just bread, milk, and eggs. This is a special kind of store where you
can't buy bread, milk, and eggs unless you also buy a bucket of nails,
one-half ton of iron ore, a Barry Manilow album, and a book about
cowboy poetry. In fact, for that matter, this is the kind of store
where you have to buy one of every item in order to buy anything else.
That is kind of what it is like every time we pass a spending bill
lately because, even though the Budget Act of 1974 contemplates 12 or
13 separate appropriations bills, each addressing one discreet aspect
of the Federal Government's spending, we end up, more often than not--
in fact, basically every single time for the last 6 of \1/2\ years I
have been serving here, and even longer than that, we end up passing
either a continuing resolution, which basically is a reset button
saying that we will continue to spend next year at the same rate we
have been spending this year, subject to these minor exceptions or,
alternatively, we might pass an omnibus spending bill, which can be
1,000, maybe 2,000 pages long, sometimes longer, and identify all the
areas in which we will be spending but put into one unified bill.
The problem with these bills, the way we have tended to do continuing
resolutions and omnibus spending bills, is that we tend to consider and
pass them under a compacted time agreement in the final hours or
minutes before a cliff. By ``cliff,'' I mean an arbitrary deadline,
after which a spending measure already in place will expire. So if
there is a spending bill that expires on September 30 of a particular
year, it is not uncommon for us to address a spending bill on September
30, sometimes late in the day on September 30 or in the days leading up
to it.
It is not uncommon for Members of Congress to be told at that moment:
You have two choices. You can either pass this as is and have
everything funded more or less as it has been or you can shut down the
government.
Nobody really wants to cause a government shutdown. Certainly, nobody
wants to be accused of shutting down the government.
Most Members tend to vote for it, and then the American people
continue to get what they have been getting. They continue to operate a
Federal Government that spends about $4 trillion a year, with little or
no control, even by the people's own elected Representatives in
Congress, whose job it is to do these things over their own government.
This is wrong.
We shouldn't be governing this way. Yet there is a touch of irony in
this in that we govern this way, I think, at least in part, because of
a fear of public outcry against the process or criticism about the
process in which we might engage. Yet, as we undertake this process,
which undercuts that process altogether and sidesteps it, as we have
avoided that studiously in order to avoid criticism, we have seen
Congress's approval rating plummet. In fact, if you look at most
opinion polls these days, it puts our approval rating as an institution
right around 10 percent. The last time I checked, in the United States
of America, that makes us less popular than Fidel Castro. It makes us
only slightly more popular than the influenza virus, which is rapidly
gaining on us.
If what we are wanting to do is avoid criticism, then the last thing
we ought to do is continue to do what we have been doing, which is to
consolidate all spending decisions into one legislative package to be
addressed at the end of the fiscal year, telling Members they have to
either vote for it or be blamed for a government shutdown. That is
wrong. That shuts out the American people, and it makes their
government unaccountable to them.
In the process, we avoid reforming a lot of programs that need
reforming. Among other things, we avoid reforming entitlement spending.
It is important when we think about entitlement spending and how it
needs to be reformed to remember the immortal words of President John
F. Kennedy, who said that ``to govern is to choose.'' But today, to
budget is not to choose or to choose in advance not to choose, to avoid
choosing altogether.
We are $20 trillion in debt, and we choose to ignore that. Twenty
trillion dollars is an enormous amount of money, as is the interest we
pay on that sum every single year, which is about $250 billion a year--
an enormous sum of money in and of itself. But that isn't the scary
part. The scary part is that $250 billion, which is what we spend every
year on interest on our national debt, is roughly the same interest
payment we had about 20 years ago. I believe our national debt was one-
sixth or one-seventh of its current size. The only reason it is even
that low is because our Treasury yield rates--the interest rate at
which the U.S. Government pays its creditors--is at an all-time
historical low.
Laws of mathematics are such that what goes down must inevitably come
back up. As soon as it does come back up, even if it comes up only to
its historical average and doesn't rebound above that average, in a
short period of time, within a few years after that, we will find
ourselves going from about $250 billion a year in interest on debt to
about $1 trillion a year in interest on debt, leaving ourselves with
the uncomfortable, darned-near impossible
[[Page S6437]]
prospect of having to cover a $750 billion shortfall--this on top of
our existing sprawling national deficit--without any clear means of
doing so.
Congress, in many cases, fears reform, but reform remains necessary
to make programs structurally reliable and fiscally sustainable. In
other words, we are fearing the wrong thing. A lot of people in my home
State of Utah fear snakes, understandably. We have rattlesnakes in
parts of Utah. Rattlesnakes can do a lot of damage to you if they bite
you. You don't want to mess with a rattlesnake. But sometimes we fear
the wrong things, at least in the sense of, in addition to a lot of
rattlesnakes, we also have a lot of deer. They should actually fear
deer more than rattlesnakes. More people die in the United States every
year as a result of deer causing automotive accidents than they do from
rattlesnake bites altogether. Sometimes we fear the wrong things.
We fear making reform. But reform is not what we should fear; we
should fear the consequences of failure to do that.
In some ways, the central unifying problem isn't just about the debt
or dysfunction but the distrust. Congress has squandered the trust of
the American people, and we as an institution have a responsibility to
work hard to win back that trust. The only way to win back that trust
is through real reform. We have to put the national interest ahead of
our own interests, our own political interests and the special
interests that are constantly moving here in Washington, DC. That work
can begin with this very budget. It should begin with this budget.
Budgets provide us with an opportunity to discuss our priorities. Those
priorities always need to be all about reform.
This budget is far from perfect, but in understanding that it is not
perfect, it is a vehicle to begin the real process of reform. Nowhere
is this more important than with tax reform, and this will set in
motion those events that can culminate in real, genuine, and much
needed tax reform.
There are a couple of odd quirks within our Federal Tax Code. First
of all, its sheer length and complexity are a problem. Arthur Brooks
from the American Enterprise Institute said that complexity is itself a
subsidy--a subsidy that disproportionately benefits the well connected,
the wealthy, the well educated, the specialists who handle the
complexity and profit from it. One hundred years ago, our Tax Code was
only a few hundred pages long. Today, our Tax Code, depending on what
you count, can fairly be described as much closer to 100,000 pages than
to a few hundred.
Among the many problems we can find in the Tax Code is the marriage
tax penalty, which many Americans are familiar with, whereby a hard-
working American couple might pay higher taxes only because of the fact
that they happen to be married. This is wrong, and it needs to be
fixed.
There is a related point--a related flaw--that is much less well
known than the Tax Code marriage penalty, and that is the Tax Code
parent penalty. Let me explain what that is. Imagine two couples--
couple A and couple B. Imagine that couple A and couple B are identical
in every respect but one. In other words, they both have the same
income, they both have the same pattern of charitable contributions,
mortgage interest, State and local taxes, and so forth. Everything that
affects their taxes is the same except one thing: Couple A has three
children and couple B chooses to remain childless. Because of the way
our Tax Code interacts and intersects with our senior entitlement
programs--namely, Social Security and Medicare--we end up penalizing
parents, creating this parent tax penalty. Let me explain that a little
bit.
Let's call couple A--the couple with three children--Jack and Julie.
According to very modest assessments made by the U.S. Department of
Agriculture, Jack and Julie, with their three children, will incur
costs of about $700,000 as they raise their children. These are the
costs of raising children. I believe it is a little faulty--there are a
number of things it doesn't include--but it is an estimate produced by
the U.S. Department of Agriculture. Jack and Julie, our hypothetical
couple A, will spend $700,000 raising their three children to maturity.
It doesn't take into account the non-economic costs associated with
parenting or the myriad benefits that go along with that--but $700,000.
That is the amount they will put into raising these three children.
That cost doesn't benefit just Jack and Julie, it doesn't benefit just
their three children--no, the way our system works, the way Social
Security and Medicare work, it also goes to stabilize, to shore-up
entitlement benefits for tomorrow's retirees, because Social Security
and Medicare operate on a pay-as-you-go basis. Today's retiree benefits
are paid by today's workers. Today's workers will be tomorrow's
retirees. Today's children will be tomorrow's workers and will be
paying the retirement benefits of today's workers, tomorrow's retirees.
Let's look at couple A, back to Jack and Julie. Jack and Julie
operate solely with Julie's income. Jack is a stay-at-home father.
Meanwhile, Julie has a good job that pays $75,000 a year. As you look
at this chart, it shows how the pay stubs Julie receives twice a month
might look.
I would imagine many Americans look at this the same way I do. People
approach their pay stubs with a degree of trepidation. It is almost
easier not to look at it when you see all the things the government
does to your paycheck each time it goes through.
Jack and Julie look at Julie's pay stub when it comes out twice a
month, and they see a few things, including the fact that, in addition
to the $205 that is withheld from her Federal income tax twice a month,
she also sees $41.84 withheld for Medicare, $178 withheld for Social
Security, and $144 withheld for State income tax.
So when we look at Julie's pay stub, we see that what Julie is paying
into Social Security and Medicare is roughly the same as what we will
see from couple B, who chooses to remain childless. Couple B has every
right not to have children. We don't want to penalize anybody regarding
their decision on whether to have children. But the point here is that
the investment Jack and Julie are making into the Social Security
system comes twice--first as they pay their taxes, including their
Social Security and Medicare taxes--and with Social Security taxes, by
the way, that is also going to play a role in determining the Social
Security benefits for which Jack and Julie will one day be eligible
when they retire. Yet the Tax Code doesn't adequately take into account
the $700,000 they are investing into their own children and that those
children will make it possible for couple B to receive their Social
Security and Medicare benefits when they retire. That is why we need to
fix the parent tax penalty.
The parent tax penalty consists of this unique interaction between
our tax system and our senior entitlement programs and doesn't take
into account the intense investment in financial terms that America's
moms and dads make in their children.
By increasing the child tax credit, we could offset this penalty. One
of the proposals out there would involve raising it to, say, $2,000 per
child. I think that would be great. I could even go higher than that,
but $2,000 wouldn't cover the whole problem, it wouldn't undo the whole
penalty, but it would go a long way toward offsetting that. I would
welcome that. That would be a good development. There are people just
like Jack and Julie Jones all over this country who would benefit from
that, and the American people as a whole would benefit from it. Social
Security and Medicare would be more stable and made more sustainable by
this change.
The next step we need to make with tax reform involves making the Tax
Code more pro-worker. A lot of people criticize the Tax Code for the
fact that it has the highest corporate tax rate in the industrialized
world at 35 percent. I believe that the best reform we could achieve
would be substantial. There are a lot of people who are talking about
reducing the corporate tax rate to maybe 15 percent or 20 percent. I
hope we can get to something like that, and that would be a great first
step. What I would really like to do is to bring that down not to 25
percent or 20 percent or 15 percent, I would like to see it brought
down to zero. Let me explain why I believe that.
A corporation consists of and is animated by two things: capital and
labor, investors and workers. Investors and workers join together and
form partnerships to make profits. Both of them
[[Page S6438]]
pay a share of the corporate tax. In the United States, forces of
globalization have benefited from this arrangement between workers and
investors. The forces of globalization have benefited the investor
class more than the workers. In this new global economic environment,
we need to think about how to increase the returns to workers.
Globalization has helped the investors, and policy now needs to go
out of its way to help the workers. One way to do that would be to
eliminate the corporate tax altogether and tax investment income the
same way we do regular income. That would shift the worker share of
business tax to business owners. This would immediately do two things:
It would give a raise to American workers, who really need it, and it
would turn the United States into an irresistible magnet for foreign
investment in the United States of America. In one stroke, the most
profitable, favorable tax strategy in the global economy would be
creating American jobs.
The current code gives preferential treatment to U.S. investors
sending their money overseas. While this is their right to do, this is
not something we should be incentivizing and pushing them into, which
is exactly what the status quo does. Reform would give preferential
treatment to international investors coming here, which is, after all,
what we want. Let's level the national playing field between the
working class and the investor class, while tilting the global playing
field toward the United States rather than pushing it outward, away
from our great country.
If these tax reforms could be set in motion through this budget or at
least set in motion indirectly if not directly, the Tax Code would
finally start working again for American families and finally start
benefiting hard-working American mothers and fathers.
Another issue that we struggle with significantly in the Federal
Government involves Federal regulations. This, too, is something we
could start to address through the budgeting process. Our Federal
regulatory system is economically damaging. This is something that
strangles small business. It inherently--by its very nature, it inures
disproportionately to the benefit of large, established, incumbent
businesses, those that can afford an army of lawyers, accountants,
lobbyists, and compliance specialists, that benefit from a heavy system
of regulation, which is often made heavier still at the urging of the
largest, wealthiest, most established companies because these Federal
regulations provide a natural restriction on entry, a natural barrier
that disincentivizes and in some ways disables would-be competitors
from joining and entering into the marketplace. One thing we know about
competition is that it brings down costs and it raises quality, and
that is a good thing.
Federal regulations also create a sort of constitutional distrust.
They themselves represent a harsh deviation from the natural
constitutional order. I mentioned a few minutes ago the provisions of
article I. Article I, section 1, and article I, section 7 require that
Federal laws be passed by Congress. Federal regulations get around
that.
Sometimes Congress chooses voluntarily to delegate to someone else
the task that we, by operation of the Constitution, are supposed to
perform and not to delegate to someone else. This administrative action
makes things easier on occasion for Congress, but that is a bug, not a
feature. The Constitution never was intended to make life easier for
Members of Congress.
Let me explain how this happens and how it shows up here. It happens
sometimes with good intentions. Congress wants to approach a particular
issue, solve a particular problem without necessarily having to go into
the difficult, painstaking, line-drawing process that inevitably is
brought into question anytime we are trying to solve a problem through
lawmaking. In other words, Congress will identify a problem and pass a
law that says, for instance: We shall have a good law in area X, and we
hereby delegate to agency Y the power to make and enforce rules
carrying the force of generally applicable Federal law that will carry
out the objectives we have outlined in our legislation.
In other words--let's get to something more approximating a real
example. Congress, for instance, passes a law that says: We shall have
clean air. We hereby delegate to the EPA the power to decide what clean
air is, what pollution is, what acceptable limits on pollution might
be, and what penalties will befall polluters. And then those same
regulators, those same people at that same agency who made all the
rules defining pollution and defining acceptable limits for pollution,
prescribing penalties, they are the same people who also enforce them.
You have the lawmakers who are also the law enforcers, and none of them
are subject to an election.
Now, I don't mean to disparage the character or the capabilities of
any of the fine people who work at the EPA or any of our other Federal
bureaucracies. For the most part, these are well-intentioned, hard-
working, well-educated, and highly specialized public figures or
government employees, we might say, but there is a difference.
People in Congress are not magically empowered with any gifts for
coming up with good legislation any more than any other American is,
but there is a difference. We are elected, and we are subject to the
people at regular intervals. You can fire your U.S. Senator every 6
years, you can fire your Representative every 2 years. You cannot fire
a government bureaucrat. As Ronald Reagan said, the closest thing we
see to eternal life on this Earth is a new government program. The
closest thing you can find to a lifelong career is in government, in
many government bureaucracies.
What this has produced is a profound proliferation of Federal law. We
have been able to make more things Federal, and we have been able to
make more Federal laws as a result of the fact that Congress now
delegates away far more of its legislative power than it actually
exercises. Let me explain what I mean.
I keep in my office two sets of documents. I welcome any of you to
come by. In my office, we serve Jell-O every Wednesday at 3:30. For
reasons I don't entirely understand, Utah consumes more Jell-O than any
other State in the Union on a per capita basis. The Utah Legislature
has actually designated Jell-O as Utah's official State snack. Now, I
will be clear that these are not Jell-O shots. They are not tainted
with alcohol or anything like that, but we serve Jell-O every Wednesday
at 3:30. You are all invited to join us any time you would like. If the
Senate is in session and if it is Wednesday at 3:30, it is time for
Jell-O.
When you come by my office for Jell-O Wednesday, you will see two
stacks of documents that I have represented in this graph. One stack of
documents is a few inches tall, it is about 3,000 pages long, and it
consists of the laws passed by Congress last year. The other stack is
13 feet tall, it is about 96,000 pages long, and it consists of last
year's Federal Register.
For those of you who are fortunate enough not to know what the
Federal Register is--and I really do envy you--it is the annual index,
the compilation of Federal regulations. First is their release for
public notice and comment, and then later is their finalized Federal
Register.
These are laws. These are not just rules exclusively deciding what
time the lights will go on and off at the Commerce Department or what
times the gates will be staffed at this or that Embassy. No. Many of
these are regulations that impose affirmative obligations on the
American people, sometimes with criminal penalties, often with
substantial civil penalties attached to them, and yet they are not
passed by anyone who is elected. In many cases, they are not even
written by people who are accountable to anyone who is, in turn,
elected. This is a problem.
During 2016, Congress enacted 214 laws; whereas, the agencies issued
3,853 rules. Those are 18 rules that were put in place by Federal
agencies for every 1 law that was enacted by Congress. This is not
without consequence. This is not just an abstract constitutional
violation.
This costs the American people a lot of money, and it costs them
money in a way that is kind of invisible. You have the Tax Code. You
have your pay stub. I showed you that chart earlier from Julie's pay
stub showing how much the government takes out of each paycheck. That
is visible. That is tangible. That is something she can see each week.
There is another bite that
[[Page S6439]]
gets taken out of each and every one of her paychecks that is
invisible, and that bite is taken out by these Federal regulations,
meaning everything that Jack and Julie, everything that every one of
you, everything that every American purchases, every good or every
service is made more expensive by these Federal regulations. In fact,
it is fair to say really that the costs of compliance with these
Federal regulations are passed on disproportionately to America's poor
and middle class who pay for those regulations through higher prices on
goods and services, diminished wages, unemployment, and
underemployment, and it is not insignificant.
Twenty years ago, when I first started studying this problem, I was
shocked to learn that this backdoor, invisible, highly regressive form
of tax--that is the cost of compliance with Federal regulations--stood
at $300 billion a year. That was astounding to me, stunning. Today that
number stands at about $2 trillion a year. In 20 years, we have seen
the cost of complying with Federal regulations multiply nearly
sevenfold. That is troubling.
If the cost of complying with U.S. Federal regulations were a
country, if it were the GDP, the $2 trillion in compliance costs, that
is roughly the same as the gross domestic product of India and Italy.
The cost of complying with Federal regulations is slightly less than
the GDP of India and slightly more than the GDP of Italy. That is sad,
that is stunning, that is a constitutional problem, and it is a public
policy problem. The 2016 Federal Register contains 95,894 pages--the
highest level in its history and 19 percent higher than the previous
year of 2015, which contained 80,260 pages.
In the absence of trust, we need an abundance of transparency, and
that is what constitutional lawmaking is all about. We need to restore
that constitutional order by passing reforms like the REINS Act,
which would require congressional assent before major rules are put
into place. It would require Congress to affirmatively enact a
regulation into law before an economically significant regulation could
take effect.
There are some other areas where we need transparency--in higher
education and healthcare. These things appear to have little in common
at the outset, and yet, in many ways, they have a lot in common in that
they are two areas where there has been a lot of Federal involvement
where there probably shouldn't be and where that Federal involvement
has made things more opaque and less transparent and resulted in higher
costs.
In higher education, I highlighted the need in the last Congress for
reforms through my introduction of the Higher Education Reform and
Opportunity Act, which would have opened up the accreditation process.
Currently, the higher education system in America has been commandeered
by the iron triangle, consisting of the U.S. Department of Education,
Federal accreditation bodies, and institutions of higher education in
this country. Unless you are part of that iron triangle, you can't
really break into the higher education market because you can't get
Federal higher education assistance.
As a result, things like apprenticeships, distance learning, massive
open online courses--or MOOCs, as they are sometimes described--suffer.
They get left out. The upshot is, if we reformed this area, we would
have more opportunities to get postsecondary skills and training, we
would lower the cost of higher education, we would save money for both
borrowers and taxpayers alike, and we would have more people able to
pursue their chosen vocation.
With healthcare, as in higher education, Federal influence is driving
up prices while outcomes are flatlined. In 2009, Congress doubled down
on what wasn't working when they passed ObamaCare. The results were
instability, lost coverage, new plans, higher premiums, and higher
deductibles at the same time.
Meanwhile, you had a whole lot of concentration of market power in a
few companies. The top 10 health insurance companies in 2008--the year
President Obama was elected President--had combined profits of about $8
billion a year. Last year, that number skyrocketed to $15 billion a
year. The difference was ObamaCare.
ObamaCare made it easier for those companies to see their profits
skyrocket, but they did so on the backs of America's poor and middle
class. With ObamaCare, we also had the unsustainable expansion of
Medicaid, a failed program we should be trying to rescue people from,
not trap them in. We need to repeal and replace ObamaCare.
As we look toward reform, a guiding principle should always be
restoring the constitutional principal of federalism or some might call
it localism or the principle of subsidiarity. The idea is that you
should govern locally, as locally as possible. There is a reason for
this. The Constitution requires it, but it is also the case that we all
benefit when we follow that constitutional system. It allows more
Americans to get more of the kind of government they want and less of
the kind of government they don't want. Bad things happen when we
ignore federalism, as we have over the last 80 years and increasingly
so over the last decade. There are some examples of that.
One involves transportation. Our Interstate Highway System was
created by the Federal Government in the 1950s under the leadership of
President Eisenhower. He acknowledged that for national security and
interstate commerce reasons, it would be a good idea to have an
interstate highway system. So we proposed--and Congress passed into
law--a gasoline tax that would fund the establishment, the creation of
an interstate highway system. The idea was always to hand that
interstate highway system back over to the States after the project was
completed, which it has been now since the 1980s. Yet we are still
collecting a Federal gasoline tax--18.4 cents per gallon, to be
precise. Yet that 18.4 cents per gallon still doesn't ever seem to be
sufficient, even though the Interstate Highway System has been
completed since the 1980s and even though, stunningly, you could
maintain the existing Interstate Highway System for about 4 cents per
gallon. So where is the rest of it going? Well, it is going to purely
local projects: surface roads, bike paths, all sorts of other things,
many of which might well be worthy but aren't necessarily Federal in
nature.
Another example involves public land. A lot of people were surprised
to learn this--especially people from the East--but the Federal
Government owns and controls about 30 percent of the land in the United
States. A lot of people in the East aren't aware of this because, in
every State east of Colorado, the Federal Government owns less than 15
percent of the land. In no State west of Colorado does the Federal
Government own less than 15 percent and, in many States like my own,
that number is much larger. In fact, in my State, the State of Utah,
the Federal Government owns 67 percent of the land.
Let's set aside the question, for a minute, of why the Federal
Government needs to own that much land at all and why it needs to own
30 percent of the landmass in the United States. If it is going to own
that much, why does it disproportionately own so much land in States
like mine, especially when that harms people in States like mine?
You see, in Utah--this map shows Federal land. Anyplace you see
white, that is non-Federal land. If you see any of these colors
represented here, that is one type of Federal land ownership or
another. Where you see color on this chart, that is where the Federal
land is owned and controlled by the Federal Government and the local
taxing authorities can't tax it. As a result, people have to go to the
Federal Government for a ``Mother May I'' in order to even cross the
property or utilize the property for some legitimate business or
personal need, and the local taxing authorities can't tax it. This
harms westerners disproportionately, and it is wrong. We need reform in
this area.
We also need to get the Federal Government out of the business of
thinking it needs to own this much land and into the business of
thinking, if it is going to own that much, then it needs to allow
taxing authorities to collect at least a rough equivalent of property
tax.
Also, in the area of primary and secondary education, because public
education is so important, the Federal Government needs to stay out of
the K-12 education arena. In other words, what is taught in the K-12
classroom
[[Page S6440]]
needs to be decisions made by teachers in consultation with parents,
principals, local school officials and, in some cases, State officials,
not from Washington, DC. That is not an appropriate decision to make
from Washington, DC, unless you are talking about educational
experiences perhaps in the District of Columbia or a U.S. territory or
on a military base or something like that.
The Federal Government should have no role in K-12 public education.
That is not our job. We have to remember the text of the 10th Amendment
echoing the structure of the original Constitution: that powers not
granted to Congress and not prohibited to the States are reserved to
the States respectively or the people. That has to mean something. In
order for it to mean something, there has to be some limit to what
powers are, in fact, granted to the Federal Government.
Over the last 80 years, we gradually drifted away from this idea. We
concluded that every problem in society is a government problem and
that every government problem is a Federal problem. That is wrong. That
has harmed the American people.
We need to restore federalism, localism, and subsidiary. This will
free the people of the tyranny they feel as the result of a lost
election. At any given moment in America, there are people who are
disappointed about the last election, especially so with House
elections, Senate elections, and the occupant of the White House. At
any given moment, the people who feel as if they are not well
represented in Washington--either at the U.S. Capitol or at the White
House or both--can be counted in the tens, if not hundreds of millions.
We will end this tyranny if we return a lot of that power.
In other words, let's say someone living in Connecticut might not
quite be on the bandwagon of ``make America great again.'' If they
don't want to make America great again, they can want to make
Connecticut great again. In other words, federalism allows more people
in America to get more of the kind of government they want and less of
the kind of government they don't want. It allows more people to have
more of a say because local governments, while not perfect, are more
responsive to their local constituencies. It better protects both the
minorities and majorities. It lowers the temperature of our national
politics. One of the reasons national politics have become so
contentious is because everything has been centered in Washington, DC.
There is no reason it has to be that way. In fact, the Constitution
says it should never be that way.
Finally, with regard to federalism, there are a few things that only
the Federal Government can do. Those things include national defense,
establishing a uniform system of weights and measures, coming up with a
uniform system of laws governing immigration and naturalization and a
uniform system of laws governing interstate and foreign trade or
commerce. Those things that can be done only by Congress must be done
well. When we are so busy doing the things we are not supposed to do,
we fail to do those things that only we can do. That is yet another
reason to restore federalism.
Then, whatever is left over, whatever remains, whatever we can't
bring back, needs to be fixed. It needs to be made to work. Whatever we
don't return to the States can be made more effective and more
efficient, and we should do that.
The 1974 Budget Act, as I explained at the outset of my address
today, is outdated. We have to reform it. The Congressional Budget
Office and the Joint Committee on Taxation use formulas that are opaque
and unknown, that are effectively a black box. This is wrong, and we
have to get rid of those.
That is one of the reasons I introduced the CBO Show Your Work Act,
so they can't just tell us anymore: You can't know why we reached the
conclusions we reached that have stunning implications for law and
public policy.
From budget, to taxing, to spending policy and policymaking, the
constant theme is inertia. One could argue that the consistent theme is
nostalgia. We are stuck in that era of the Ford Pinto and the eight-
track cassette player. Americans are being held back, not only by
outdated policies but by a process that is out of date too.
We met the challenges of the 20th century with policies that met the
moment, but we have to be constantly updating, constantly overseeing
and tweaking and improving. Government may well move at the pace of a
turtle, but it can move, nonetheless, and move it must because the only
way to get to next is to focus on now.
In our increasingly personalized, customizable society and economy,
government's obsession with centralization is making these things
worse, not better. We need to govern locally and not nationally in
every single instance. We need to empower individuals and local
communities.
In Washington, we have to embrace accountability, especially the kind
of accountability prescribed by the Constitution. We can do better, but
we have to first recognize the need to do so.
The budget is indicative of all the problems we face in Washington.
It is also indicative of Congress's authority and its ability to create
solutions. We can do this. We can. We must. And together, we will.
Thank you, Mr. President.
The PRESIDING OFFICER (Mr. Johnson). The Senator from Virginia.
Mr. KAINE. Mr. President, I also rise to speak about the budget. I
find many points of agreement with my colleague from Utah.
Just to sort of jump into it, normally we wouldn't be having this
budget discussion in the fall. The Congressional Budget Act of 1974
suggests that the President would give us a budget in February, that we
would pass a budget by April, and that budget would then set top-line
numbers that would be given to the committees, that would then write
their authorizing bills with those budgetary numbers. Then it would be
handed over, and the appropriators would ultimately fashion
appropriations bills that were responsive to the budget and the
authorizing bills. We are into a new fiscal year, and the many of the
authorizing committees have already done their jobs.
I am on the Armed Services Committee. Probably the biggest piece of
legislation we do every year is the NDAA. We have already written it
without having a budget. We didn't have a budget top-line number this
year. We have gone ahead and written the bill, and the appropriators
are already working.
I think what everybody on this floor understands is that this really
isn't a budget debate; it is an effort to set up a set of instructions
around which to do tax reform via budget reconciliation. In my view,
this budgetary document fails as a budget, and it also fails as a good-
faith beginning to a tax reform discussion.
I want to talk about each of these: why this document fails as a
budget--I voted against it in committee, and I am going to vote against
it on the floor--and why it fails as an effort to initiate the
necessary process for reforming the Tax Code for the first time since
1986.
If you look at this document, the budget that is on the floor has a
whole set of priorities that are either wrong or completely
unrealistic. As an example, the budget proposes over $5 trillion in
spending cuts, $470-plus billion cut to Medicare, and an over $1
trillion cut to Medicaid. That would not only be a bad idea, but it is
completely unrealistic and unlikely to occur. These cuts are not going
to happen, and so it is just artificial.
Second, the budget does not address the primary budgetary reality--a
dangerous reality we are living under--of sequestration and budget
caps. It continues to gut domestic discretionary programs, to the tune
of over $600 billion over the decade.
Finally, just a particular item that I think is very important: The
budget proposes a fast track, a 50-vote process, to open up drilling in
the Arctic National Wildlife Refuge. That is really not a budgetary
matter; it is shoehorned into the budget because we like to assume we
are going to get a big chunk of revenue by drilling in the Arctic
National Wildlife Refuge. But this is a fundamental matter of
environmental policy that shouldn't be squirreled away in a tiny detail
on the budget.
I opposed drilling in the National Arctic Wildlife Refuge when it was
last on the floor in the mid-2000s. We were dealing with high oil
prices and overreliance on Middle Eastern oil. The energy situation has
completely changed.
[[Page S6441]]
We are moving to low- and no-carbon energy sources, and oil prices are
significantly lower. We are not relying on Middle Eastern oil. I would
also argue that the cost-benefit calculation now makes drilling in the
Arctic National Wildlife Refuge a particularly poor idea. I went to the
Refuge two summers ago and saw the environmental damage that would be
caused by drilling there, and I opposed it.
So the budget--from the unrealistic expense cuts to Medicaid and
Medicare that would really hurt people, to other cuts--is unrealistic.
The fact that it was being done after the authorizers and appropriators
were generally done with their work demonstrates that the budget isn't
that serious. What this is really about is coming up with an
instruction to begin the process of tax reform.
Tax reform done through the reconciliation process is a bad idea for
at least two reasons. First, it begins as completely partisan. If you
are going to do tax reform for the first time since 1986, you ought to
try to get the best ideas of both parties. But that is not what is done
with reconciliation. When you say ``We are going to do it through
reconciliation,'' you are saying ``We, the majority, have 52 votes. All
we need is 50 plus a tiebreaker. We are not going to listen to
Democrats. We are not going to meaningfully entertain the ideas you
have. We are going to do it on our own.''
I would venture to say that the same outcome as was achieved with the
effort to repeal the Affordable Care Act via reconciliation is going to
be the end result here. Trying to do something this important all on
your own, without meaningfully including the public and the minority,
almost destines it for failure.
The second reason it is a bad idea to do tax reform via
reconciliation is this: Matters in reconciliation are temporary, not
permanent.
I went to the Chamber of Commerce in Northern Virginia with Senator
Warner a couple of weeks back. We talked about tax reform. We talked
about the fact that it was needed to grow the economy, that it hadn't
been done for a long time. But what my business leaders want is tax
reform that is permanent. They don't want a tax reform bill where the
provisions expire, and because of the rules of reconciliation, that is
what happens. So to do tax reform via reconciliation is a mistake.
But let's go further and look at the tax reform ideas that have been
discussed by the administration and others that we will likely embark
upon if this budget passes. The budget sets up a mechanism for partisan
and temporary tax cuts that would increase the deficit by $1.5
trillion. The first page of the GOP's own budget talks about the
challenges of deficits:
``Continual overspending and its resulting deficits will
expand the Federal debt. During the next 10 years, debt held
by the public is slated to rise from 77 percent of GDP ($15
trillion) to 91 percent of GDP ($26 trillion).''
Why would we propose to increase the debt by $1.5 trillion in a
partisan, temporary tax reconciliation bill? If folks--especially the
GOP--are so focused on the deficit and debt, and we should be, why are
we including a mechanism in this instruction to raise the debt by $1.5
trillion? I think, again, the answer is that this is not a serious
proposal, and it is only the vehicle for partisan and temporary tax
cuts.
The initial analyses I have seen of this tax proposal suggests a
couple of things. First, the tax benefits would overwhelmingly be for
folks at the top, the wealthiest, the folks who least need a break in
taxes. To give an example, the Republican proposal calls for the
elimination of the estate tax. That would cost more than $270 billion
over 10 years. The estate tax has high thresholds already. It affects
an extremely limited number of Virginians and a limited number of folks
in virtually every State. Giving up $270 billion to get rid of the
estate tax is enough to provide every child from a low- or moderate-
income family with access to free preschool. That is about 7 million
kids. You would still have enough money left over to take every student
off Head Start waiting lists. Which would you rather do--cut the estate
tax $270 billion for a few families or provide access to free preschool
to every low- and moderate-income kid in this country and take every
child on a Head Start waiting list off the list?
Second, the proposal has some gimmicks and special quirks that I
think need to be brought to attention. I hope we will bring it to
attention on the floor. Here is an example: The budget that is before
us repeals a rule that is currently in place that requires the CBO to
issue scores on legislation coming out of reconciliation at least 28
hours in advance of a vote. Now, 28 hours isn't that long, but at least
it is enough time for a Senator and staff to read a bill and understand
the consequences of the bill before voting. This Republican budget
repeals the transparency rule that forces the CBO to issue a score. I
have an amendment to not repeal the rule but to restore it and make it
stronger. There should be a CBO score to let every Senator and
especially the public know what we are voting on with respect to these
matters.
I will conclude and say this: Tax reform is important. Let's not
sugarcoat this. We are not really debating a budget on the floor. If we
were really going to debate a budget, we would have done it last
spring. This is all about setting the stage for tax reform. We haven't
done it for a long time. It is important. We should promote tax reform
that makes the Tax Code simpler and fair and that focuses on middle-
class working families and makes it easier to start businesses and grow
them. We shouldn't be doing tax reform that is partisan, that is
temporary, that increases the deficit, and that produces the
overwhelming benefit of a tax reform package to those at the top of the
income scale who don't need it.
It is my hope that we will have that debate in earnest on the floor
of the Senate. I would love to join my colleagues in a good-faith
effort to reform the Tax Code. Reconciliation and this particular
proposal is not the way to do that.
I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Rubio). The clerk will call the roll.
The senior assistant legislative clerk proceeded to call the roll.
Mr. GRASSLEY. 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. GRASSLEY. Mr. President, before I read from my remarks, I would
like to make the point that I get the impression that what some Members
of the other political party--but more often editorials and think
tanks--believe and want the public to believe is that there is actually
a tax bill produced by the tax-writing committees of the Congress,
something that is very definitive in what it does to the tax policy. I
want to make clear that there is no such document. All we have so far
is what is called a framework agreed to by the leaders of the two tax-
writing committees and the Treasury Department and the leaders of the
House and the Senate. You cannot draw conclusions about who is going to
pay what taxes just from the framework.
I will get into real detail on this, but the other thing I would like
to make clear is the fact that there are a lot of people drawing
conclusions about who is going to get tax benefits and who is going to
be hurt as a result of all this information that is out there, from
which no one can draw conclusions because there isn't any bill before
the Congress at this point. There will be in a matter of weeks.
The budget that we are debating this week paves the way for
fundamental tax reform. For more than a decade, both sides of the aisle
have talked about the need for tax reform that provides tax
simplification, tax fairness, and gives us the ability to increase our
economic competitiveness so that we can grow the economy.
Under President George W. Bush, we had a bipartisan tax reform panel.
Under President Obama, we had the bipartisan Simpson-Bowles Commission.
We have had individual Members also authoring tax plans, including a
bipartisan bill authored by Finance Committee Ranking Member Wyden, the
Senator from Oregon, and former Senator Coats, then representing the
State of Indiana.
In addition to these high-profile plans that have been out there over
the years, the Senate Finance Committee has also had countless tax
reform hearings over this extended period. The
[[Page S6442]]
committee also held a series of bipartisan options papers discussions
under then-Chairman Baucus. Additionally, under Chairman Hatch, we had
bipartisan tax reform working groups. All of this work over the years
has laid the foundation and informed the unified framework released by
the Big 6. That is the framework I previously referred to.
The influence of these prior discussions and proposals on the Big 6
framework is evident. In other words, all of that work that has gone on
over the years in different environs is bearing fruit now in getting a
consensus of what we ought to do in a broad way of moving forward on
tax simplification, tax reform, and tax cuts.
The framework is nothing but a framework and will be filled in with
details by the tax-writing committees. It is at that point that any
think tank, any Member of the other political party, any Member of our
political party, any college professors, any economists anyplace can
make some sound judgments as to the extent to which certain people
benefit or don't benefit from the legislation before us.
I think they ought to take into consideration that you have to think
about the country as a whole, which hasn't grown by more than 1.6
percent in each of the 8 years of the previous administration. If you
are going to have jobs created, you have to grow at about twice that
amount, at 3 percent or more. That is some of the thinking behind this
budget that is before the Senate right now and the thinking behind the
tax reform measures that will follow our adoption of the budget.
I will be repeating myself to some extent here, but for illustration,
I have a chart here comparing the Big 6 framework, the Wyden-Coats
bill, and the Simpson-Bowles plan to which I have already referred. You
can see here the main point about putting these three plans together is
to show similarity. All proposals would consolidate the current tax
brackets down to three. That is one point the chart makes.
Two plans provide for a top rate of 35 percent, while one provides
for a top rate of 28 percent. Yet the Big 6 framework, the framework
that will evolve into a piece of legislation called tax simplification,
tax reform, and tax cuts, is being criticized for having a 35-percent
top rate that somehow is a giveaway to the wealthy, whereas you can see
from this chart that plans that have been bipartisan in the past have
had the 35-percent top rate or less. Of course, the 35-percent tax rate
that is said to be a giveaway to the wealthy is not even the one that
proposes a lower 28-percent rate. The 28-percent rate is reserved for
the Simpson-Bowles plan. That Simpson-Bowles group was put together by
none other than a Democratic President.
Let me ask: Were Democratic members of the Simpson-Bowles Commission,
which voted for that plan, voting to give huge tax cuts to the wealthy?
Do our Democratic colleagues expect us to believe that a 35-percent top
rate is a sensible bipartisan compromise when offered by Democrats but
a giveaway to the rich once it is associated with this administration
or with Republican Members of Congress?
Well, another thing is the same: All three plans would repeal the
alternative minimum tax. This is very surprising. From listening to my
Democratic colleagues, I thought repealing the alternative minimum tax
was some nefarious plot to benefit President Trump, but that just
doesn't square with the reality and what has gone on in the Congress
over the last decade and a half with regard to tax reform. Repealing
the alternative minimum tax has had strong bipartisan support.
While serving as either chairman or the ranking member of the Finance
Committee, Senator Baucus and I introduced bipartisan, stand-alone
legislation to repeal the alternative minimum tax. We did that across
several Congresses. Of course, we were not successful. I hope this
Congress will be successful in doing that.
Our legislation eliminating the alternative minimum tax garnered
bipartisan support from across the political spectrum. The current
ranking member of the Finance Committee and the current minority leader
of the entire U.S. Senate even joined Senator Baucus and me at that
time in these efforts as cosponsors of that legislation.
At the time, a few years ago, the current ranking member even went so
far as to say that ``the alternative minimum tax should be Congress'
number-one priority for tax reform.'' I agree with what the current
ranking member of the Senate Finance Committee said a few years ago,
which I just quoted. The alternative minimum tax repeal should be a top
priority, and it seems as though it is going to be a top priority this
year because the alternative minimum tax adds needless complexity to
the Tax Code and often hits middle-income taxpayers rather than the
wealthy, as originally intended.
Let me give a history of the alternative minimum tax. I think it was
passed in 1969. Studies of wealthy people showed that about 150 people
who were very wealthy paid no income tax, and there was a feeling that
everyone ought to pay some tax. The alternative minimum tax was set up
to hit those 150 and some other people, but it wasn't ever indexed. Now
it hits millions of middle-income taxpayers. To help those middle-
income taxpayers who should have never been hit by the alternative
minimum tax--that is the rationale for doing away with it.
We even have the Internal Revenue Service's Taxpayer Advocate Service
repeatedly calling for the repeal of the alternative minimum tax,
noting that it ``does not achieve its original goal'' and ``stealthily
increases marginal rates for middle-income taxpayers.''
I want to move now to the corporate tax part of the framework. I am
back at the chart now. Similarity between these plans exists for reform
of corporate taxes. For instance, each one of these three plans seeks
to significantly lower our corporate tax rate.
The Wyden-Coats bill calls for an 11-percent reduction in the
corporate rate, bringing that rate down from 35 to 24 percent. The Big
6 framework aims for 20 percent as the highest corporate tax rate. Yet,
according to the ranking member of the Senate Finance Committee, the
corporate rate reduction in the Big 6 framework is ``a massive
corporate tax cut that overwhelmingly benefits shareholders.''
The last time I checked, the distribution of the benefit from a
corporate rate reduction is the same no matter what party or what
President proposed it. This chart shows that similarity between the
bipartisan plans and the Big 6 framework. I don't think the Senate
Finance Committee ranking member proposed a 24-percent corporate rate
when that Wyden-Coats plan was developed because he wanted to provide a
massive benefit to the shareholders he now talks about. I also know for
certain that isn't why the Big 6 framework aims for 20 percent.
The truth is, there has been a really big, growing, bipartisan
consensus that our corporate tax rate is out of step with other major
trading partners. Now, at 35 percent--and it has been at 35 percent for
decades--our corporate tax rate is the highest among developed
countries. While we have been at 35 percent, our major trading partners
have been lowering their rates. On average, their rates are more than
10 percent lower than ours, so averaging maybe about 24 percent.
Now, that obviously has a great impact on jobs in America because it
puts American companies at a competitive disadvantage globally, costing
American jobs. It has also strained our corporate tax system to its
breaking point as we have battled corporate inversions and foreign
takeovers. Now, how much in the last several years have we heard
Members of this body complaining about foreign takeovers and inversions
to skip the country, to save taxes? Well, that is one of the reasons
for reducing the corporate tax rate so that doesn't happen.
Moreover, a growing body of economic literature is showing that a
significant portion of the corporate tax does indeed fall on workers in
the form of lower wages. The nonpartisan Joint Committee on Taxation as
well as the Congressional Budget Office assumes 25 percent of corporate
tax falls on workers. So if you reduce the corporate tax rate,
according to congressional researchers here who work for us, one would
assume that workers are going to get 25 percent of that benefit to
their wages. We even have other studies--many--finding that workers
could bear more than 70 percent of the burden of a high corporate tax
rate.
While the exact burden borne by workers may be debated, the economic
[[Page S6443]]
research is very clear. A corporate rate reduction means a significant
wage increase for workers. In fact, the Council of Economic Advisers
very conservatively estimates that workers could see their wages
increase by more than $4,000 due to lowering the corporate rate to 20
percent.
In reality, there is very little in this tax framework that has not
had bipartisan support in the past or is not well within the mainstream
of bipartisan proposals before us. Once again, that statement I just
made is the purpose of this chart, to show that this bipartisan
agreement and what we have before the Congress coming up--the Big 6
framework--have so many likenesses in it that there is absolutely no
rationale for the partisanship we are having in the news media and on
the Senate floor talking about this framework. This is why the
accusations that the Big 6 tax framework is nothing more than a
giveaway to the rich--why that statement we hear so often is so
dumbfounding.
I want to move on to another issue about whether these are tax cuts
for the rich, and I want to show how one of the proposals before the
Congress will help the rich. More perplexing is that those who are
screaming ``tax cuts for the rich'' and saying it the loudest have also
been the most ardent supporters of maintaining one of the largest
loopholes for the wealthy; namely, the State and local tax deduction.
I know the minority leader was on the floor last week, I think,
citing IRS statistics to claim that the deduction was really a middle-
class benefit, but the minority leader told only part of that story. I
would like to look at some estimates by the liberal Tax Policy Center
that my Democratic colleagues like to cite so often. According to the
Tax Policy Center, 90 percent of the tax increase from eliminating the
deduction would fall on taxpayers with incomes exceeding $100,000, and
40 percent of the total would be paid just by taxpayers with incomes
exceeding $500,000 a year.
Think of it this way. Those with incomes exceeding $500,000 make up
less than 1 percent of all tax filers, yet receive 40 percent of the
deduction benefit of claiming the State and local tax deduction.
I would like to illustrate it a better way. I have a chart based on
IRS data that looks at the benefit of the deduction by adjusted gross
income. Prior to going to the chart, I think it is important to point
out that only about 30 percent of the taxpayers even itemize and have
the State and local tax deduction available to them because you have to
itemize to get that. This chart is going to focus on that 30 percent.
The first group I have highlighted on this chart are taxpayers with
incomes below $50,000. As we can see on the chart, only about 12
percent of the tax filers in this group claim the deduction. In other
words, 88 percent of the taxpayers in this category receive no benefit
from the State and local tax deduction. That 12 percent does get a
fairly nice benefit from it. They are deducting an average of a little
over $3,000 in State taxes for a State benefit of just under $500,
assuming they are in today's 15 percent bracket.
From further down the chart, we can see that the benefits afforded to
low- to middle-income taxpayers are very much dwarfed by the benefits
afforded to the wealthy or, as some of my Democratic colleagues might
have become accustomed to referring to them, the millionaires and
billionaires. Where only 12 percent of taxpayers with incomes under
$50,000 have any benefit from the State and local tax deduction, over
90 percent of filers with incomes exceeding $500,000 claim the
deduction. Tax filers in the $500,000 to $1 million range are, on
average, deducting more in State and local taxes--$53,000--than the
incomes of the taxpayers in the first group.
If we assume taxpayers in this second group are, under the current
law, in the 39.6-percent tax bracket, that translates into a tax
benefit of nearly $21,000. For those with incomes exceeding $1 million,
there is an average tax benefit of about $100,000.
So if you are truly interested in eliminating tax loopholes for the
rich, look no further than the elimination of the State and local tax
deduction. This elimination provides an opportunity to better target
more tax relief where we want to target it--to the middle class--making
up for any benefit the middle class may lose from deductions and then
some. In other words, the income tax would remain much more
progressive.
The Big 6 framework provides the tools to do a middle-income tax
reduction, including nearly doubling the standard deduction, reducing
the current 15-percent rate to 12 percent, and significantly increasing
the child tax credit. The framework also grants significant leeway to
the Finance Committee and the Ways and Means Committee to explore
additional options to ensuring middle-income tax relief.
In addition to being a benefit that overwhelmingly goes to the
wealthy, the State and local tax deduction also has the effect of
disproportionately benefiting States with high State and local taxes.
Essentially, the deduction allows wealthy individuals in high-tax
States to then offload some of their State and local tax burdens onto
taxpayers in other States.
This new chart lists the top 10 States that benefit the most from the
State and local tax deduction. The States are listed, and we can see
the extent to which they benefit from it. We see we have New York at
the top, a little lower is California, and a little bit below that is
Massachusetts. It would seem to me that our Democratic colleagues like
to talk a big game about eliminating loopholes for the wealthy, but
when it comes down to actually doing it, they are more interested in
holding on to a tax subsidy that favors the tax-and-spend policies of
overwhelmingly blue States.
I yield the floor.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. MARKEY. Mr. President, I rise to speak about the Arctic National
Wildlife Refuge and the obscenity that will be the attempt by the
Republicans to insert into the budget bill an ability for the big oil
companies of our country to be able to drill for oil in this sacred,
pristine Arctic National Wildlife Refuge.
I first wish to thank Senator Cantwell from the State of Washington,
our great Democratic leader on the Energy and Natural Resources
Committee, for her leadership not just on this issue but on so many
other issues in the energy and environment area that we are having to
confront during this era of Donald Trump.
Let me just tell my colleagues that the Republican budget is
ultimately all about massive handouts to the 1-percent richest people
in our country and to huge corporations, while doing almost nothing for
working and middle-class Americans in our country. In this bill, the
Republicans will slash Medicaid and Medicare while at the same time
blowing a $1.5 trillion hole in the deficit to finance tax cuts for the
superrich. But if that weren't bad enough, tucked inside of the
Republican budget is a poison pill, one more massive corporate
handout--a giveaway of the Arctic National Wildlife Refuge in Alaska to
Big Oil.
Senate Republicans have included instructions for the fiscal year
2018 budget resolution that would open the door for drilling in one of
America's greatest natural resources. This GOP budget sets the stage
for Republicans to ram drilling in the crown jewel of America's
National Wildlife Refuge System through the Senate's using only a 50-
vote threshold. This is nothing more than a Big Oil polar payout. This
cold-hearted Republican budgetary scam only underscores the backward
priorities of President Trump and congressional Republicans.
As our fellow citizens in Puerto Rico look desperately for relief
from the devastation of Hurricane Maria, there has been no refuge in
the Trump administration. When tens of millions of Americans wanted to
be sure that their healthcare would be protected, there was no refuge
in the Republican Party. But the instant billionaires and oil companies
look for a tax cut, a refuge suddenly appears. That is when the
Republicans can find a refuge. Unfortunately, it is the Arctic National
Wildlife Refuge.
But the Republican plan to offset $1.5 trillion in tax cuts for the
superwealthy will only result in $1 billion being able to be raised
from allowing the oil companies to drill in this pristine refuge. That
plan neither makes any sense nor will it actually bring in any cents
sufficient to pay for this
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huge tax break and the deficit they are creating.
Maybe my colleagues on the other side of the aisle think there is a
different exchange rate above the Arctic Circle, but down here those
numbers don't even come close to adding up. This is exactly the kind of
polarizing politics we need to get away from--giveaways to Big Oil and
billionaires at the expense of the American people and our planet.
There is a long, bipartisan history of fighting to protect the Arctic
Refuge for future generations. It was Republican President Dwight D.
Eisenhower who began this bipartisan legacy by setting aside the core
of the Arctic Refuge in 1960. It was further protected by President
Kennedy and Senator Tom Udall's father, Secretary of Interior Stewart
Udall, during the Kennedy and Johnson administrations. Then,
Representative Mo Udall succeeded in doubling the size of the Refuge,
protecting even more of this untrammeled wilderness. Protecting this
special place has always been an issue that rose above party lines, and
it should continue to do so.
In 2015 the Interior Department recommended that Congress designate
this area as wilderness and not open it to drilling. In making that
wilderness recommendation, the Department of the Interior concluded
that the ``Arctic Refuge exemplifies the idea of wilderness--to leave
some remnants of this nation's natural heritage intact, wild, and free
of the human intent to control, alter, or manipulate the natural
order.''
The Coastal Plain is the biological heart of the Refuge. The Fish and
Wildlife Service has called it the ``center for wildlife activity'' in
the Refuge. It supports more than 250 species, including caribou, polar
bears, and migratory birds, but that is exactly where this Republican
legislation would allow Big Oil to drill, forever despoiling this
ecosystem.
Two years ago, we lifted the four-decades-old ban on exporting
American crude oil. As a result of that giveaway to the big oil
industry, we are now exporting more U.S. crude oil--nearly 1 million
barrels a day--than we could ever produce from drilling in the Arctic
Refuge.
We have a fracking revolution taking place in our country right now.
We hear it over and over from President Trump. We hear it from the
Republicans: There is a fracking revolution. We are on our way to
energy independence. We should lift the ban on exporting oil out of the
United States. We should start selling it around the world to the
highest bidder. We have so much oil that we can afford to send it out
of our own country. Don't worry about it; there is no problem with
exporting American oil.
As a matter of fact, what the Trump administration also says is this:
Don't worry about the fuel economy standards in America. We are going
to start to review them so we can lower--lower--the goals for our
country for making the vehicles that we drive in our country more
efficient.
Where do we put the oil in our country? We put 70 percent into
gasoline tanks. We don't have to be a detective to figure out what
happens if, instead of having our cars continue to get more and more
efficient in terms of reducing the amount of oil that we need, we have
our standards get lower and lower, and, as a result, we need to consume
more oil.
What does the Trump administration say? They say they are going to
review the fuel economy standards. They are going to take a ``we can't
do it'' stand. They are going to take an ``it's too hard to improve the
economy standards'' stand. That is what they said for four decades: It
is too hard.
But during the Obama administration they were able to put on the
books a standard that moves America to 54.5 miles per gallon by the
year 2025 in the United States of America--54.5 miles per gallon. That
is where the plug-in hybrid revolution comes from. That is where the
all-electric vehicle revolution comes from. That is where Elon Musk
comes from. That is where all of these statements coming from the
Chinese, the Indians, Volvo, and others come from. It is this movement
toward plug-in hybrids and all-electric vehicles, reducing the amount
of oil that we consume,--not just here in the United States, but around
the globe.
What does the Trump administration say? We can't do it. It is too
hard. We are going to review those standards. So they are saying: We
don't have the technological capability to accomplish something
that avoids the necessity of having to drill in a pristine wildlife
refuge--to put a gasoline station on top of something that should be
preserved for generations to come. They are saying: We can't improve
the fuel economy standards. We are going to export 1 million barrels of
oil a day. Guess what. We are going to go up into the Arctic Refuge in
order to find the oil so that the gas guzzlers can stay on the road and
so we can export oil to China. We are going to allow, finally, for the
Big Oil cartel--which is now taking over the Department of the
Interior, the Department of Energy, and the EPA--the ability to be able
to despoil one of the last untrammeled, perfect, pristine areas in our
country.
That is just fundamentally wrong, and we are going to have a vote on
it on the floor of the Senate during this budget debate. To raise $1
billion total as they run up a deficit of $1.5 trillion, they despoil
this sacred part of our country. It is immoral. It is wrong. It says
that the Trump administration is handing over the keys of our
government to the big oil companies. It is saying: No matter how many
hurricanes hit our country, no matter how warm the water is off the
coast of our country, they are going to remain in climate change
denial--that it is really not a problem. Therefore, you don't have to
increase the fuel economy standards. You don't have to reduce the
fossil fuels going into the atmosphere. You don't have to worry.
Climate change--ignore it. Fuel economy standards--we are not going to
do it. What is the one thing we will do? For the oil industry, we are
going to allow them to drill in the pristine Arctic wilderness. It is
immoral--fundamentally immoral.
For 60 years, going back to Eisenhower, we figured out how to protect
it. But now, at the height of a fracking revolution, with millions of
new barrels of oil; at the height of an incredible plug-in hybrid and
all-electric vehicle revolution, as we are reducing the amount of oil
we are consuming in our country; at the height of storms that are
assaulting every part of our Nation with an intensity we have never
seen in our history, the President says: I am going to ignore all of
those issues and just focus upon what Big Oil wants.
This is going to be a monumental debate we will have on the floor of
the Senate this week. I am looking forward to that debate because I
think the American people are going to want to know who has voted which
way on this critical environmental issue--the environment issue, in my
opinion--which will be taken on the floor of the Senate this week and
will be led by our great leader on energy and environment issues,
Senator Maria Cantwell, from the State of Washington. She has been a
clear, consistent, insistent voice on these issues.
I think this week we are going to have the kind of historic debate
the American people will want us to have on this issue.
I yield the floor.
The PRESIDING OFFICER. The Senator from Washington.
Ms. CANTWELL. Mr. President, I come to the floor to speak against the
budget resolution's containment of language that might direct our
colleagues in the future to open up drilling in the Arctic National
Wildlife Refuge. I thank my colleague from Massachusetts for his
leadership on this issue and for being on the Senate floor tonight to
talk about how important it is that we continue to maintain this
Wildlife Refuge as it exists.
Our public lands have been under assault from this administration. It
comes in all forms. It certainly comes in the form of trying to use the
Antiquities Act in reverse and, basically, to say: You can open up
public lands for drilling.
This really caused a controversy in Utah with the Bears Ears National
Monument. There are Tribes, sportsmen, fishermen, and hunters who value
the public lands in this national monument and who don't want to see it
turned over to companies or individuals who want to mine or drill for
oil and gas to the detriment of the monument resources. Now the budget
resolution will allow for a ``for sale'' sign on
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some of our public lands to give a tax break to millionaires.
It is not that this is the only issue. As I said, there is the notion
that the administration is taking our public lands and trying to turn
them over to be developed, the notion that they are giving land to coal
companies so they can harvest coal off of Federal lands and then not
charging them a royalty rate which is compensatory and fair to the
American public. We tried to fix that. Obviously, this Secretary of the
Interior is trying to roll that back and give coal companies a
sweetheart deal.
Now we have an EPA Administrator who, basically, has had a mining
company CEO walk into his office and say: By the way, we want to
develop a mine at the headwaters of Bristol Bay in Alaska, home of the
largest salmon run and probably responsible for 50 percent of sockeye
salmon around the world. Immediately after the mining executive left
the EPA Administrator's office, the EPA Administrator sent out a letter
saying: Let's toss aside Clean Water Act safeguards to protect Bristol
Bay, move forward on this idea of allowing the mine application to
proceed.
So much for due process, so much for preserving what has taken the
American public more than a hundred years to put together so that the
public can recreate on public lands--so, yes, hunting, fishing, Native
American, and recreational communities are all upset.
What is the latest play? Let's stick in the budget resolution
language providing for the opening of the Arctic National Wildlife
Refuge to oil and gas development--something that has been so precious
to the United States of America--basically a Serengeti for wildlife, an
intact arctic ecosystem that doesn't exist in other places in the
United States. Yet people are trying what I call a sneak attack, just
like they did 12 years ago, just as people tried to open up the Arctic
refuge for development before and on its own merits couldn't get it
enacted into law. They put it in the Defense appropriation bill,
thinking that there is no way people could vote against money for the
troops--that is how we can get the Arctic National Wildlife Refuge open
for mineral development.
But it didn't work then, and it is not going to work now. The
American people are not for legislative sneak attacks, backdoor ways to
move legislation that could never pass on its own merits. I know the
President wants to get a big budget package together, get healthcare in
there, throw in Arctic National Wildlife Refuge drilling, hope that
people can't vote no, and move forward. I would say, if this is such a
wonderful idea, let it stand on its own merits.
This area, as we can see, is a very pristine part of the United
States. And now some people are saying: Oh, well, we could do some sort
of drilling. Why do you want to have drilling in a pristine wildlife
refuge? When people say: Oh, well, there are refuges that have had
drilling--if that was prior to it being declared a refuge, yes, but
this is a pristine area that we decided to set aside. Why? Because, as
I mentioned, it is a Serengeti, it is an arctic Serengeti of caribou
and other wildlife, over 200 different species of birds that come to
the area, to say nothing about the population of polar bears in the
region. Why do we want to destroy this? It is not that we are somehow
thinking that we are going to get oil reserves out of it for our
Nation. In fact, the issue is really, with the price of oil and the oil
export market that has now been created, oil produced here is going on
to the larger world market. So why is it that we think this is going to
help us in the United States?
People are trying to use a budget process to increase the deficit by
$1.5 trillion to pay for tax cuts for wealthy people. They are willing
to degrade the environment as a way to pay for tax cuts for the
wealthy. I don't agree to it. I don't think the American people agree
to it. They know that this iconic wildlife refuge has been attacked
many times. They know that every time, someone has had to come up with
some backdoor way of trying to get the refuge opened. I think my
colleagues should understand and take note that these have all failed.
They failed in the past because this idea is not the brightest, most
brilliant idea in America. It is not the thing that is going to turn
the U.S. economy around. It is not the thing that is going to help us
get tax reform. It is not an idea that is even going to help us with
the bipartisan effort to move forward on an energy package. If you
think about it, we passed an energy bill out of here last Congress with
85 votes. If this was something that could be done in that package, it
would have been done in that package.
I know that we are going to have more oil and gas exploration in
Alaska. I know there is going to be more exploration in many parts of
the Arctic. There is going to be a rush of Arctic nations to look at
oil drilling off of our coast and in the Arctic Circle. The United
States should get ready and participate in those discussions. I am
first in line to say that we need a fleet of icebreakers to be prepared
and be ready for the advent and the change in the Arctic. There will be
many discussions about where responsible drilling should take place. I
guarantee you, even if you opened up the Arctic National Wildlife
Refuge, it would not stop this debate about more drilling in Alaska.
Let's remember that we set aside this pristine area for a very
specific purpose: to keep the uniqueness that has existed in this part
of the world--just a very small piece of it. Continue to have the
debate in other parts of Alaska and in the Arctic about what the
development of oil resources are going to be.
I encourage my colleagues not to fall prey to another backdoor
attempt at trying to open up the Arctic National Wildlife Refuge. Don't
fall for a cynical bill where somehow somebody is going to try to cram
everything in it and say: You can't vote against it because it has too
many things for your State. Let's do the work that it takes to do
bipartisan work--work together, agree on the things that we can agree
on, and move forward. I guarantee you, our energy policy will be better
in America for doing that.
I yield the floor.
The PRESIDING OFFICER (Mr. Rounds). If no one yields time, then time
will be charged equally.
The Senator from Wyoming.
Mr. ENZI. Mr. President, I ask unanimous consent that following
leader remarks on October 18, 2017, that it be in order to call up the
following amendments; that the time until 3 p.m. be for debate on the
amendments, equally divided between the managers or their designees;
and that following the use or yielding back of that time, the Senate
vote in relation to the amendments in the order listed, with no second-
degree amendments in order prior to the votes: Hatch amendment No. 1144
and Sanders amendment No. 1119.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ENZI. Mr. President, Senators should be prepared for additional
amendment votes to occur during the series at 3 p.m.
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