[Congressional Record Volume 163, Number 173 (Thursday, October 26, 2017)]
[Senate]
[Pages S6826-S6827]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               THE BUDGET

  Mr. SCHUMER. Mr. President, on taxes, later today, the House will 
likely vote on whether to pass the budget resolution that recently 
passed the Senate. My colleagues in the House should be aware that this 
budget will explode the deficit by $1.5 trillion. That is under the 
best of circumstances. That is under circumstances where they find $4 
trillion of pay-fors. That is probably unlikely. It will slash Medicare 
and Medicaid by $1.5 trillion, and it will set up the same awful 
partisan process that caused the Republican effort on repeal and 
replace to fail, because when you try to do it with one party, it is 
fraught with peril. If you do it in a bipartisan way, a few people on 
either side will try to pull the bill off course but they will not 
succeed because they don't have the votes.
  I remind my friends in the House who purport to be deficit hawks: You 
are voting for a budget that will increase the deficit by $1.5 
trillion. Many of these House Members, particularly in the conservative 
wing of the caucus, particularly those in the Freedom Caucus, have 
spent their entire careers on the barricades, railing against the evils 
of deficits. What a stunning hypocrisy it would be to abandon those 
principles today and vote for this budget simply because it gives tax 
cuts to the wealthiest of Americans and the most powerful, largest of 
our corporations.
  Now I would also remind my Republican friends in the House--
particularly those in New York, New Jersey, California, Pennsylvania, 
Virginia, Illinois, Washington, and Minnesota--that voting for the 
budget today is tantamount to voting for the elimination of the State 
and local tax deduction, and that would sock it to the middle-class 
taxpayers in their States and districts. To most of our Republican 
friends from those States, they are blue States, but there are red 
districts that are suburban, well-off. They will get clobbered if they 
take away the State and local deduction. Those are the constituents 
hurt the most--not the rich and not the poor--the middle class and the 
upper middle class. Not only will it raise their taxes dramatically, 
but most people would lose deductions between $10,000 and $20,000. That 
ain't chickenfeed.
  It would lower home prices. A recent study by the National 
Association of Realtors done by Pricewaterhouse Coopers, the esteemed 
accounting firm, showed that eliminating State and local would erode 
property values, the rock of the middle class, by 10 percent. To 
middle-class folks in New York and, I believe, around the country, 
their home is their piece of the rock. They struggle each month, paying 
the mortgage, paying the taxes, paying for the upkeep, but they are 
hoping that by the time they reach later middle age they will own that 
home, and that gives their kids a place or gives their kids a nest egg 
when they pass it on. But this bill, by eliminating State and local, 
reduces across America, on average, home values by 10 percent. So it is 
a double whammy to the middle class, raising their taxes and lowering 
their home values. Why would we do that?
  You don't have to take it from me. I will tell this to my Republican 
colleagues. Peter King is a hard, rock-ribbed Republican who has a lot 
of courage and who this morning was on TV talking about investigating 
Hillary Clinton, but here is what he said about repealing the State and 
local deduction. He said that it ``will devastate my district 
forever.'' That is a solid middle-class and upper middle-class 
Republican district on Long Island.
  Here is what else Peter King said: ``How anybody from New York and 
New Jersey can vote for this budget without knowing what is in the tax 
bill is beyond me.'' He was referring to the State and local tax 
deductions.
  I salute Peter King for telling it like it is. Having the courage to 
stand up and say to his own party's leadership: I will not forsake my 
constituents for a tax bill when I don't even know what the details 
will be. The remaining Members of the New York, New Jersey, California, 
and other delegations have

[[Page S6827]]

a decision to make. Will they protect the middle class and tens of 
thousands of homeowners in their districts or go along with the hard-
right agenda that will cost their constituents hard-earned money for 
groceries, home repairs, and other needs, and do that all so that the 
very wealthy can get a huge tax break and all so that the biggest 
corporations which are flush with money can have even more money--
wrong.
  I hear on the other side that we are talking about a tax bill for the 
middle class. To eliminate State and local deductibility hurts the 
majority of middle-class people in this country. That is what will 
happen if they keep that in there.
  Now, some will say, in the House--and I have heard one of my 
colleagues from New York, a Republican: Oh, that Schumer is a Democrat; 
he is beating up on Republicans. But I went through this in 1986, the 
last time we had tax reform. It was the Democrats who were pushing the 
bill--Senator Bradley, a legend in this Chamber, and Leader Gephardt, 
one of the Democratic leaders in the House. Despite their entreaties, I 
told them not only would I not vote for any reform bill that had State 
and local deductibility in it, but I would lead the charge and round up 
others, and I did. I got a lot of flak from my fellow Democrats, but it 
was the right thing to do for my middle-class constituency in southern 
Brooklyn. So when I ask our Republican colleagues to buck their 
leadership to help their middle-class constituents, it is something I 
did with the Democratic leadership the last time tax reform was on the 
floor.

  Some are already rationalizing their vote to approve the budget by 
putting their hopes in the vague possibility of some kind of compromise 
on State and local deductibility. The harsh fact is, there is no good 
compromise to be had on State and local. If you want to make taxpayers 
choose between the mortgage deduction and the State and local, it is 
like asking taxpayers to decide whether they want to cut off their 
right arm or their left arm. Some are talking about a cap. Well, where 
are you going to cap it? More than 50 percent of the total value of the 
deduction goes to taxpayers with incomes below $200,000. Cap it too 
low, and almost all those middle-class taxpayers get whacked. Cap it 
too high, and it doesn't raise enough money to offset all the cuts my 
Republican friends want to give the corporations and the top 1 percent. 
Republicans in the House shouldn't stake the votes on the prospect of a 
good compromise on State and local because there is not one to be had.
  The bottom line is, any Republican plan that limits SALT is the 
equivalent of robbing middle-class families of tax benefits and handing 
it over to the wealthiest Americans and biggest corporations. There is 
no--no--compelling reason to do it. People aren't clamoring for it. We 
don't need to take a trillion dollars from working families and give it 
to millionaire CEOs, period.
  If that weren't enough reason to vote no, the Republican leadership 
is still debating capping pretax contributions to 401(k) plans. Do you 
hear that, retirees and potential retirees? In their craving thirst to 
give the wealthiest people in America a tax break, they are going to 
say: You can't save money for retirement tax-free. What a gut punch to 
the middle class that would be. Despite the President's claims to the 
contrary, Representative Brady and Senator Portman have said that a 
401(k) cap is still on the table.
  So do you know what this bill has become? Again, in its desperation 
to help the wealthiest, it is like a quiz show. Which way do we hurt 
the middle class to pay for it? Door one is State and local 
deductibility. Door two is cap retirement. Who knows what they will 
pick in door three? It could be the mortgage deduction. Asking middle-
class people to choose which poison to take so they can help the 
wealthiest makes no sense.
  I would urge my colleagues in the House and here in the Senate: Stop 
doing this partisan bill that was dictated by the hard right, very 
wealthy individuals, very rich corporations, huge corporations. Work 
with us. We want to create a bipartisan bill that helps the middle 
class. We are for tax reform, and we can get something done.
  Please stop this train in its tracks early on before it is too late 
and you will regret it. There are large numbers of Democrats, including 
this minority leader, who want to sit down with Republicans and come up 
with a deficit-neutral, middle-class, small business-oriented, 
bipartisan tax relief bill, not a plan to benefit the richest 1 percent 
or the largest and most powerful corporations that are already flush 
with cash. We want to work with our Republican colleagues on a real 
bipartisan deal. Defeat this budget, and we will.
  I yield the floor.

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