[Congressional Record Volume 163, Number 181 (Tuesday, November 7, 2017)]
[Senate]
[Pages S7041-S7046]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                               Tax Reform

  Mr. THUNE. Mr. President, we are getting close to making tax relief 
for Americans a reality. Last week the House released its tax reform 
bill, and this week we expect the Senate Finance Committee to release 
our version. In the coming days, the tax committees in both Houses will 
review the bills, and then we will debate them on the floor and develop 
a final version.
  After years of economic stagnation, Americans are ready for relief. 
They are ready to keep more of their hard-earned money. They are ready 
to finally see a real pay increase, and they are ready for access to 
more economic opportunity. That is what our tax reform bill is going to 
provide.
  To start with, our bill is going to put more money in Americans' 
pockets by lowering their tax rates and doubling their standard 
deduction. Under our bill, a family making $24,000 a year or less will 
not be paying any taxes, and families making more than $24,000 a year 
will be paying significantly less than they are paying today. We are 
also going to help families by substantially increasing the child tax 
credit, and we are going to simplify and streamline the Tax Code so 
that it is easier for Americans to figure out what benefits they 
qualify for so they don't have to spend a lot of time and money filing 
their taxes.
  But that is only the beginning. Americans don't just want to keep 
more of their hard-earned money. They also want to be making more of 
it, but Americans have had a hard time doing that lately. Wages have 
been stagnant for years, and new opportunities have been hard to find.
  So in addition to reforming the individual side of the Tax Code, we 
are going to reform the business side so that we can give Americans 
access to the kinds of jobs, wages, and opportunities that will set 
them up for a secure future. In order for individual Americans to 
thrive economically, we need American businesses to thrive.
  Thriving businesses create jobs, they provide opportunities, and they 
increase wages and invest in their workers. Right now, though, our Tax 
Code is not helping businesses thrive. Instead, it is strangling both 
large and small businesses with high tax rates. Small businesses are 
incredibly important for new job creation. They play a huge role in the 
economy in my home State of South Dakota and other States all across 
the country, but the high tax rates that too many small businesses 
currently face can make it difficult for them to even survive, much 
less thrive and expand their operations.
  So we are going to lower taxes for small businesses so that they can 
grow and hire new workers. We are also going to allow small businesses 
to recover their capital invested in things like inventory and 
machinery more quickly, which will free up capital so they can use that 
to expand and create jobs. Right now it can take small businesses 
years, or in some cases even decades, to recover the cost of their 
investments in equipment and facilities. That can leave them extremely 
cash poor in the meantime, and, needless to say, cash poor businesses 
have a hard time expanding, hiring new workers, or increasing wages. 
Allowing small businesses to recover their investments more quickly 
will mean more jobs and more opportunities for American workers.
  In addition to high tax rates on small and large businesses, another 
thing that is decreasing jobs and opportunities for American workers is 
our outdated worldwide tax system, which is discouraging American 
companies from investing their profits here at home in American jobs 
and American workers. Having a worldwide tax system means that American 
companies pay U.S. taxes on the profit they make here at home as well 
as on part of the profit they make abroad once they bring that money 
back to the United States. The problem with this is that American 
companies are already paying taxes to foreign governments on the money 
they make abroad. Then, when they bring that money home, they too often 
end up having to pay taxes again on part of those profits and, I might 
add, at the highest tax rate in the industrialized world. It is no 
surprise that this discourages businesses from bringing their profits 
back to the United States to invest in their domestic operations, in 
new jobs, and in increased wages.
  Between 1982 and 2003, when the U.S. tax rate was much more 
competitive with those other countries, there were 29 corporate 
inversions where U.S. companies moved abroad. Between 2003 and 2014, 
when other countries were dropping their corporate tax rates and 
shifting to territorial tax systems, there were 47 such inversions.
  Our tax plan addresses this drag on our economy by moving from our 
outdated worldwide tax system to a territorial tax system. What does 
that mean? By shifting to a territorial tax system here in the United 
States--a move, I might add, that is supported by Members of both 
political parties--we will eliminate the double taxation that 
encourages companies to send their investments and operations overseas. 
Combine that with a reduction in our high corporate tax rate, and we 
can provide a strong incentive for U.S. companies to invest their 
profits at home in American jobs and American workers instead of 
abroad.
  Business tax reform is essential to reversing the economic stagnation 
that we have seen in recent years. The White House Council of Economic 
Advisers estimates that the tax reform framework that Republicans have 
presented will boost economic growth by

[[Page S7042]]

between 3 and 5 percent. That is good news for the economy. More 
specifically, however, it is good news for American workers, who can 
expect to see their incomes rise as a result. A study from the White 
House Council of Economic Advisers estimates that reducing the 
corporate tax rate from 35 percent, where it is today--the highest, as 
I said, in the industrialized world--down to 20 percent, which is more 
competitive with our competitors around the world, would increase 
average household income by $4,000 annually. Think about that. Reducing 
the tax on businesses in this country would increase average household 
income for families in America by $4,000.
  A Boston University professor and public finance expert, Larry 
Kotlikoff, found that lowering the corporate tax rate to 20 percent 
would increase household income by $3,500 per year on average. This was 
most recently confirmed by Martin Feldstein, a Harvard professor and 
former Chair of the Council of Economic Advisers, who noted in the Wall 
Street Journal this week that corporate tax reform is likely to boost 
household income by $3,500 per year.
  There are lots of analysts, lots of experts who are looking at these 
proposed changes to the Tax Code and the tax reform that we are 
attempting to get through the Congress this year and onto the 
President's desk, and they have concluded that not only will it reduce 
taxes--the tax burden, the amount of tax that is paid by middle-income 
families in this country--but the reduction in the rates on businesses 
will also increase the number of opportunities for better paying jobs 
and higher wages and it will raise that annual income--that average 
household income--that is so desperately in need of a boost.
  It has been a rough few years for the American economy and for 
American workers. I think all you have to do is to look at the numbers 
and you know that most Americans haven't seen a pay raise in almost the 
last decade. But with comprehensive tax reform, the next few years--and 
the next few decades, for that matter--can look very, very different.
  Republicans' tax reform legislation is going to provide direct relief 
to hard-working Americans, and it is going to create the kind of 
economy that will give workers access to more jobs, to better 
opportunities, and to higher wages, not just for the near term but for 
the long term.
  I look forward to working with my colleagues on the Senate Finance 
Committee, under the leadership of Chairman Hatch, to put the final 
touches on our bill and to take it up in the committee next week. Then, 
I hope we can bring that bill to the floor of the Senate and have an 
open debate, process amendments, and pass something through the Senate 
that we can conference with the House of Representatives, put it on the 
President's desk, and move our economy in a direction that will provide 
a brighter and more prosperous future for American workers and American 
families.
  It is time to give the American people some relief.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. VAN HOLLEN. Thank you, Mr. President.
  Mr. VAN HOLLEN. Mr. President, I rise today to strongly oppose the 
legislation that has emerged from the House of Representatives that 
pretends to provide tax relief to middle-class Americans, but if you 
take a look at it and you look at the analyses that have already come 
out, what it really is, is another big tax giveaway to millionaires, 
billionaires, and big, multinational corporations.
  I believe we should do tax reform. We should take our Tax Code and 
clean up a lot of the junk that has gotten into our Tax Code that is 
not there for good public policy reasons and is there because someone 
had a high-powered lobbyist. We need to clean up our Tax Code, we need 
to reform our Tax Code, and we need to do it in a way that helps the 
middle class and doesn't add more big breaks for big corporations.
  Unfortunately, this Republican plan does the opposite of tax reform. 
What it does is doubles down on big tax breaks for big corporations and 
the superwealthy.
  There is a headline today based on the analysis. The New York Times 
looked at it. ``Republican Plan Would Raise Taxes on Millions'' of 
middle-class families. I can tell you that is very true in my State of 
Maryland. In fact, it is going to be true in States throughout the 
United States of America. We are going to see millions of middle-class 
families paying more under this plan. In fact, this analysis that is 
discussed in the Times found that 45 percent of middle-class families 
will see a tax increase under this plan once it is fully implemented. 
That means that families making between roughly $50,000 a year and 
$160,000 a year--about half of them are going to end up paying higher 
taxes under the Republican plan.
  Here is one of the double standards that you see continuing 
throughout the Republican tax plan: Big corporations not only get big 
tax cuts--$1.5 trillion--but they are going to go on forever. In 
middle-class families, many people will see an immediate tax increase. 
Others will initially see a little tax cut. But for individuals and 
families, it is the great disappearing tax cut--a little sweetener to 
make the bill look good in the early years, but the bill takes away all 
those tax cuts for middle-class families, on average, and then actually 
increases the burden on a family of four making $59,000 under the plan.
  For corporations, a $1.5 trillion tax cut over 10 years--permanent. 
For folks in the middle, many will see an immediate tax increase, and 
the tax increase will stay in place. Others will see a little tax 
decrease, but as the years go by, many of those are going to see their 
taxes go up. It is a major corporate tax cut financed in large part by 
millions of middle-class families paying higher taxes.
  Just to give a sense of how well the folks at the very top will do, 
there is a headline from the Wall Street Journal--this is not a 
Democratic-leaning newspaper--``Banks Sidestep a Big Tax-Plan 
Pitfall.'' Right here in the second paragraph of the Wall Street 
Journal article, it says this: At a 20-percent corporate tax rate, 
banks stand to be among the biggest winners from tax reform. That is 
according to S&P Global Market Intelligence. The five biggest 
diversified banks alone might have had tax savings of $11.5 billion in 
2016 at that rate--the biggest sum for any subindustry group tracked by 
S&P. The biggest banks do just great under this Republican plan. 
Middle-class families are left paying the bill.
  If you look at this on the individual side, the top 1 percent 
wealthiest Americans in this country are going to get an average tax 
cut of $65,000--that is per person, on average. If you are in that top 
1 percent, an average family will get a $65,000 tax cut. That means 
that 48 percent of the benefit of all the tax cuts in this Republican 
plan goes to the top 1 percent. Let me say that again and just flip it 
around. The top 1 percent wealthiest households are going to get 48 
percent of the dollar benefit of this tax cut. That doesn't sound like 
a plan focused on improving the situation of middle-class taxpayers. 
They are the ones who are going to have to finance many of those tax 
cuts for the very wealthy and big corporations.

  I know our Republican colleagues recognize what a vulnerability this 
is because our colleague, Senate majority leader Mr. McConnell, said 
about the tax bill in an interview last Saturday: ``At the end of the 
day, nobody in the middle class is going to get a tax increase.'' To 
understand what that means, he is saying that not a single middle-class 
household out there in the country is going to see their taxes go up. 
Well, I don't know what tax plan he is talking about, but it is 
certainly one that hasn't seen the light of day yet because the bill 
that has come out of the House will raise taxes on millions of middle-
class families, and that is a fact.
  Just the other day, in an interview on FOX News, Speaker Ryan said: 
``We are making sure every middle income taxpayer is a winner here.'' 
Every middle-class taxpayer is a winner here. Well, that is certainly 
not true of the plan that was just marked up in the Ways and Means 
Committee of the House because there are a whole lot of families in the 
middle class who are big losers under the Republican plan--in fact, 
millions of them around the country.

[[Page S7043]]

  I don't know what plan they are talking about. I am looking forward 
to seeing the Republican plan that doesn't raise taxes on any middle-
class family in the United States. That should be our policy. We should 
not be increasing the burden on middle-class families in order to 
finance a $1.5 trillion tax cut for big, multinational corporations, 
but that is the way it is right now.
  Homeowners are going to be especially hard hit under this Republican 
plan because a lot fewer homeowners will utilize the mortgage interest 
deduction, and the Republican plan also slashes the deduction for State 
and local taxes. In fact, they eliminate your option to deduct State 
and local income taxes. The result is going to be that a lot of middle-
class homeowners are going to pay a lot more. That is why the Realtors 
oppose this bill. These are the folks in our neighborhoods who are 
buying and selling homes. They are folks who have their ears to the 
ground in our communities.
  Here is what the president of the National Association of Realtors 
said about this bill: It ``threatens home values and takes money 
straight from the pockets of homeowners.''
  In fact, they had a study done by PricewaterhouseCoopers that said 
that if you are a homeowner and your income is between $50,000 and 
$200,000, adjusted gross income, you will see an average tax increase. 
They also predicted that home values across the board could drop by 10 
percent, and it is not clear when they would recover their value.
  The National Association of Home Builders is also opposed to this 
legislation because of the impact it will have on home ownership and 
the prices and value of people's homes around the country. They said:

       The House Republican tax reform plan abandons middle-class 
     taxpayers in favor of high-income Americans and wealthy 
     corporations. The bill eviscerates existing housing tax 
     benefits by drastically reducing the number of homeowners who 
     can take advantage of mortgage interest and property tax 
     incentives.

  I think all of us know that this is not some left-leaning group. We 
are talking about the National Association of Home Builders finding 
that the Republican plan abandons middle-class taxpayers in favor of 
high-income Americans and wealthy corporations. That is their finding 
based on their analysis of the bill.
  Here is the catch. It is that double standard again. Just as I said 
earlier, you have the tax cuts for big corporations going on forever, 
but there is much less tax relief for some middle-income taxpayers, and 
it takes effect early but then phases out. You also have a situation 
where, if you are a big corporation, you get to deduct all of your 
State and local taxes. In fact, if you are a multinational corporation 
and you are in China, you get to deduct taxes you pay to the Government 
of China. But if you are a household in Maryland or any of our States, 
you don't get to deduct the taxes you pay to your State and local 
governments. So you are paying taxes twice on that dollar--once to the 
State government and again to Uncle Sam out of the same dollar.
  Fitch Ratings looked at this and concluded that it will put dramatic 
strains on State and local budgets since people in those States are not 
going to be able to take those tax deductions. Either you are going to 
see dramatic cuts to school funding or healthcare, or you are going to 
see State and local governments raise the property taxes in those 
States. So you get hit coming and going if you are a middle-class 
homeowner.
  This also damages our economic development efforts in many parts of 
our country. It repeals the new markets tax credit. While it doesn't 
get rid of what President Trump said was a huge giveaway, the hedge 
fund loopholes--I can't remember how many times during the Presidential 
campaign Candidate Trump talked about how the hedge fund tax break was 
a total giveaway. That is not eliminated in this Republican bill. They 
keep the big hedge fund loopholes, but here is what they get rid of. 
They get rid of the ability of people with high medical expenses to 
deduct those expenses from their taxes.
  They even take away the additional standard deduction that currently 
applies to taxpayers who are at least 65 years of age or who are blind. 
There are many folks who are in that category who are also going to see 
their taxes go up. Seniors are going to see their taxes go up, which is 
why the AARP has raised the alarm about that provision and others.
  While they keep the big hedge fund loopholes, they get rid of the 
ability of families who adopt children to take a tax credit to help 
cover the costs of adoption.
  They get rid of provisions of the Tax Code that help students and 
teachers and schools. If you are a teacher who has been spending money 
to buy textbooks and other materials for your class, you used to be 
able to deduct the costs of what you are buying to help your kids. They 
take that away in the same bill that they give big corporations a big 
$1.5 trillion tax break. If you are a student who has been struggling 
to afford college bills, you no longer get to deduct the interest on 
your student loans.

  If you are an employer who is currently receiving an incentive to 
employ veterans who have served our country, sorry, that is gone too.
  So I want to get this straight. You are going to take away the 
ability of people with high medical expenses to take a deduction. You 
are going to take away the ability of college graduates to take a 
deduction so that their expenses are more affordable. You are going to 
take away the ability of people to get the adoption tax credit. And you 
are going to take away incentives for people to hire our veterans. But 
you are going to keep the hedge fund loophole and you are going to give 
a $1.5 trillion tax cut to big corporations. That is what this bill is 
all about.
  Finally--and I am going to talk about this at greater length some 
other time--look at the international tax provisions in this Republican 
bill and how they are structured. I really urge my colleagues to take a 
look at this. They actually increase the incentives for U.S.-based 
businesses and companies to move their operations overseas. That is for 
two reasons. No. 1 is that when you reduce the international tax 
rates--when you say, essentially, that a U.S. corporation that moves 
its jobs overseas now just pays the tax in that country and has no U.S. 
tax obligation; we, under this bill, are at 20 percent--you still have 
an incentive, obviously, to move your operations to a very low tax 
place like the Cayman Islands.
  But, then, there is an effort to address that issue in this bill. The 
problem is the effort to address that provision doesn't work at all. 
Here is the current situation: A lot of corporations try to park what 
are known as their intangible assets in the Cayman Islands or other tax 
havens. These are things like the value of patents. You make a great 
discovery, and you get a patent from the U.S. Patent Office, and you 
make royalties off of that patent. Then, you have a lot of good 
lawyers, and essentially you park that patent in the Cayman Islands. 
That really has no tax obligations, so all the profits that derive from 
that patent are not subject to any tax--or maybe 1 or 2 percent tax.
  So in this Republican bill, there is an effort to try to address that 
issue--at least it pretends to address the issue--but the problem is 
that it doesn't.
  Here is what they say. They say: Well, we are going to catch you if 
you park your money in a place like the Cayman Islands because we are 
going to have a tax of 10 percent--a foreign high-return tax is what 
they call it. The way they determine whether you are making an excess 
profit is you look at your tangible assets in that country and you 
determine whether the profit you have made is over 8 percent. That is 
the way it approximately adds up under this bill. But here is the 
problem: It is an average international minimum tax, not a per-country 
minimum tax.
  So let me tell my colleagues what a company that wants to reduce its 
tax obligation does. They move their company offshore. They take a 
company, say in Baltimore, MD, that is worth $100 million, and they are 
making a $5 million profit today here in the United States and they 
will be taxed at 20 percent, and then they have this profit from the 
Cayman Islands at $2 million. Under that previous provision I talked 
about--this effort in the Republican bill to protect against what they 
call

[[Page S7044]]

high-return tax areas--they would normally have captured some of the 
income generated from profits in the Cayman Islands. But when I move my 
company from Baltimore to, say, the United Kingdom, I actually then 
escape having to pay that tax on my monies in the tax haven.
  So the bottom line is that this Republican bill, because it has this 
average 10 percent minimum tax provision, is going to encourage 
American businesses and companies to move overseas. If that is not what 
the intention is, I urge my Republican colleagues to fix this right 
away. It hasn't been talked about much.
  There have been a couple articles recently about it. Gene Sperling, 
Kim Clausing, and others have gone through the economics of this, and 
it would make the situation a lot worse compared even to today in terms 
of these incentives.
  The bottom line is, in addition to this being a $1.5 trillion tax 
break for big, multinational corporations, paid for and financed by 
folks in the middle--which, even after you see the middle-class 
families pay more, results in a $1.5 trillion addition to the debt, but 
even after all of that--after the big tax giveaway to big corporations, 
it has an incentive to add insult to injury for them to move their 
businesses and factories offshore.
  I hope we will take a big step back and stop rushing a bill through 
as a matter of political imperative. We need to get this right. We 
should have hearings. We should have folks from all different walks of 
life and folks who will be impacted by this bill in many different ways 
come and testify to Congress about this bill. Then, let's get together 
on a bipartisan basis and actually do something that works for the 
American people, not something that is going to clobber the middle 
class and provide this huge windfall tax break to big multinational 
corporations, while encouraging them to suck jobs and factories from 
the United States overseas.
  We need to start again on this. I urge my colleagues to do that.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Hoeven). The Senator from Ohio.
  Mr. PORTMAN. Mr. President, I don't know where to begin. I want to 
speak about the tax reform proposal but will start by responding to my 
colleague from Maryland--and he is a colleague and friend--to say that 
he must be talking about a different tax reform proposal than we are 
talking about because, frankly, so much of what he said is not 
consistent with the legislation that I have seen the House proposing 
and certainly not consistent with the legislation we are talking about 
here in the Senate.
  Let me start with his claim that there is a $1.5 trillion tax cut for 
big corporations. That is simply not true. You can look at the House 
proposal because it is now out. You can see the fact that it does have 
tax relief, and it has tax relief targeted at middle-class families. He 
is right about the fact that it has a lower rate for our multinational 
businesses, but he also knows that our current system is absolutely 
broken, and what is occurring is precisely what he is suggesting might 
occur if we were to change the code, which is companies and jobs and 
investment are going overseas.
  He talked about the fact that we haven't had hearings. Since I got 
elected to the Senate in 2010, we have had 70 hearings in the committee 
I serve on, which is the Finance Committee. I would encourage people to 
look at what we did 2 years ago. We set up five bipartisan task forces 
on tax reform. I cochaired one of them. It was actually on the very 
topic my colleague was talking about.
  I would encourage him to look at the working group paper on 
international tax reform and the need for us to go to a lower rate--20 
percent--to be competitive, to get just below the other industrialized 
countries, and then to have the opportunity to go to a new type of tax 
system that enables us to bring back the money that is locked out 
overseas. Unbelievably, there is $2.5 trillion to $3 trillion of 
earnings that are overseas. Much of that could be brought back, and 
that is what this tax proposal does.
  Significantly, that report my colleagues will see was coauthored by 
two Members of this body, one Republican and one Democrat, because all 
of these task forces, these working groups, were bipartisan. My 
colleague in that effort was a Senator from New York by the name of 
Chuck Schumer, who now happens to be the Democratic leader.
  So I think there is a consensus, at least in the real world, about 
the fact that our current Tax Code is hopelessly broken and we have to 
fix it. And if you are against helping our companies to stay American 
companies, that must mean that you believe that they ought to become 
foreign companies, which is exactly what is happening. To me, it is an 
outrage that the U.S. Congress is allowing this to happen.
  Ernst & Young, which is a public accounting firm, recently came out 
with a study showing that 4,700 companies that have become foreign 
companies over the past 13 years would still be American companies if 
we had the kind of tax reform proposal that we are proposing. In other 
words, if you had this 20 percent rate I talked about, this competitive 
international system, you would have 4,700 more American companies 
here, providing jobs, making investments, contributing to their 
communities.
  It does matter that a company is headquartered here versus 
headquartered overseas. We have done an analysis of this. We have done 
an investigation of this. We have determined that when companies leave, 
they don't just change their headquarters, they take investment and 
jobs with them.
  I would refer my colleagues to the work of the Permanent Subcommittee 
on Investigations; again, bipartisan work about the fact that we have 
to fix this broken Tax Code.
  The Congressional Budget Office, which is the nonpartisan group here 
on Capitol Hill that gives us advice on the impact of tax reform on the 
economy, on deficits, on revenues, has a report which says that if you 
do lower the business tax rate to make these companies competitive--
again, the alternative is going overseas--the benefit of that goes to 
shareholders, goes to workers. They say in their analysis that 70 
percent of the benefit goes to higher wages and more benefits for 
workers.
  Think about it. That makes sense. If a company is not competitive, 
they can't pay the kinds of wages we want them to pay. We want to get 
wages up. They can't pay the kinds of benefits we want them to pay. We 
want to get benefits up.
  So although I hope that we can have a spirited debate about aspects 
of this legislation, we should stick to the facts. We should not 
attempt to make this yet another partisan issue in this town, where we 
are attacking something not so much on the merits but because the other 
side thought about it.
  I will tell you, when you look back historically, it isn't just the 
working group that Senator Schumer and I cochaired on this 
international front where we have to get this rate down. We have to 
become competitive. We have to save our jobs here. But look at another 
bipartisan effort that is talked about a lot and is not agreed to by 
all Democrats or all Republicans; that is, the Simpson-Bowles proposal. 
This was several years ago. They looked at the tax policy and deficit 
issues. Simpson-Bowles--totally bipartisan, supported by a bipartisan 
group of U.S. Senators who, at the time, were on that commission--said 
that we ought to go to this lower rate and territorial system. This is 
not a partisan issue or at least it hasn't been until now. Let's not 
make it one.
  Yes, it is true that there is tax relief in this proposal. The 
proposal the House has proposed--the proposal the Senate is likely to 
propose later this week--does have tax relief, and we believe that tax 
relief is appropriate.
  We believe we have to give middle-class families in my home State of 
Ohio and around the country a little break right now. Why? Because they 
are seeing their expenses go up, especially healthcare, but also other 
expenses. I say ``especially healthcare'' because that is the single 
largest increase in expenses; it is in the healthcare area--
deductibles, copays, premiums--but also on food, housing, and other 
costs, including tuition if you are trying to send your kids to school. 
These expenses have skyrocketed, yet wages are flat, meaning people are 
facing this middle-class squeeze.

[[Page S7045]]

  We hear a lot of discussion on both sides of the aisle about the fact 
that we want to help the middle class. One way to help is to help the 
family budget, to get a little relief to these families so they can 
make ends meet and not just live paycheck to paycheck.
  It will also help the economy. It will help get more money into the 
economy to buy that car, to buy that appliance, to help move the 
economy forward. It is part of this reform bill--yes, it is--and we are 
proud of it.
  We also provide some tax relief on the business side to help small 
businesses. These are the so-called passthrough companies. About 90 
percent of the businesses in America don't pay their taxes as 
companies. They are not corporations in that sense. They pay their 
taxes through their individual tax return. They are called passthrough 
companies. Some call them LLCs, subchapter S, or sole proprietors or 
partnerships. These companies tend to be smaller companies, they tend 
to be family-owned. They need a little help too. So the proposal does 
provide significant relief for those small businesses. In the House 
proposal and the Senate proposal, it is hundreds of billions of dollars 
out of the $1.5 trillion tax relief. We think that is appropriate.
  Finally, again, on the business side, it will help make companies 
competitive to get the rate down so they can attract investment into 
America rather than having that investment and jobs going out of 
America, which is what is happening now. There are 4,700 companies that 
would be American companies today if we had this tax proposal in place 
over the last 13 years, but we didn't, and we should learn from that. 
It is Congress's responsibility to act to keep that from happening in 
the future.
  That is what this tax reform is about. It is about three things. It 
is about a middle-class tax cut allowing people to keep more of their 
hard-earned money. We think that is appropriate in these times.
  It is about helping to make our companies more competitive because we 
want more jobs and higher wages. Part of dealing with the middle-class 
squeeze is to provide a little help with the family budget with tax 
relief. Part is to get wages up. When people look at this tax reform 
proposal--right, left, or center--they are going to say the same thing: 
This is going to incentivize more investment. Some think more, some 
think less, but that investment in a tight labor market, as we have 
right now, is going to result in more competition for these workers, 
therefore, pushing wages up. That is what we want. That is what this is 
about. It is exciting.
  Third is to level the playing field internationally so American 
companies will not be going overseas. That is the whole point. We are 
not doing this tax reform proposal to encourage companies to go 
overseas. We are doing this tax reform proposal to incentivize them to 
stay in America and to attract more foreign investment here in this 
country so an American company can pay that premium for a foreign 
subsidiary, rather than the other way around now, where American 
companies are not just inverting. We have heard this word 
``inversions,'' going overseas and buying a foreign company. They are 
actually being taken over by foreign companies.
  That is the reality. We can't let it continue. We have to stand up 
and be counted, stand up for the middle class, stand up for our workers 
who are now competing with one hand tied behind their back, whether it 
is a big auto company like in my home State of Ohio--I toured five of 
these auto factories over the last couple of weeks, talked to them 
about the tax reform proposal and how it would work. They gave me their 
input. It is going to help. By the way, it is going to help whether you 
are a U.S. company or a foreign company. If you are a foreign automaker 
here in America or you have other foreign investments, a lower rate and 
immediate expensing--in other words, being able to write off your 
investments and equipment as you make them--that is all good for you 
too. So it will have both, the desired effect of helping American 
companies be competitive but, also, if you have foreign direct 
investment in your State and your community, they should be encouraged 
to put more money in America rather than somewhere else. If you are a 
Japanese automaker and you are looking around the world asking: Do I 
put that next investment in China, do I put it in Tokyo, do I put it in 
Europe and Germany, or do I put it in America, you will like this 
proposal because you will want to invest and be part of this too. That 
will help us give this economy a needed shot in the arm.
  There has been a lot of talk--and I heard it again today on the 
floor--that this is going to be bad for the deficit. I think there will 
be about $44 trillion of new revenue coming in, estimated, over the 
next 10 years. Yes, out of that amount of money, we are suggesting a 
$1.5 trillion tax cut relative to the score--the budget--we have to 
use.
  What does that mean? About $500 billion of that is simply saying, the 
Budget Office says the existing tax policy in place is only temporary. 
Some of it is only temporary. These are the so-called extenders. We 
know that is unlikely because we have always pretty much made these 
permanent, including a big one called bonus depreciation, which is most 
of that. Right away we think the way it is scored is not fair so we get 
down to about $1 trillion in tax relief over 10 years, again, with $44 
trillion coming in.
  What does that mean? It means you have to have a little more economic 
growth than is projected in order to not have a deficit and actually 
pay down the deficit through more revenue coming in. I think that will 
happen. Why do I say that? Because the projections we have to use are 
very conservative. The Congressional Budget Office is what we are 
using, and we are obliged to do that, which is fine. It is a 
nonpartisan group. They are saying economic growth over the next 10 
years will average about 1.9 percent of growth. The average over the 
past 30 years is about 2.5 percent. So they are saying our economy is 
not going to grow as fast as it has in the last 30 years. We will see. 
In the last two quarters, the economy grew at 3 percent and 3.1 percent 
so they don't seem to be on track with where the economy is going right 
now.
  More importantly to me, these proposals are pro-growth proposals--
whether it is help with regard to the business rate, which gets it 
below the rate of other industrialized countries rather than the 
highest rate in the entire industrialized world, which is where we are 
now. We have the highest rate in the industrialized world, and we are 
getting it below the average. That will increase investment and 
economic activity and jobs and, therefore, revenue.
  If it is the immediate expensing,--again, where you can write down 
your investments right away--that will increase investment in jobs, 
according to all the economists who look at that. They may differ on 
how much.
  If you look at the international side, where we are going to bring 
back some of that $2.5 trillion to $3 trillion that is stuck overseas, 
that certainly is going to be invested here in this country and help 
with regard to economic growth.
  There are a number of provisions. I talked about the small business 
provisions earlier which will help small businesses to be able to 
innovate, to be entrepreneurial, which is what we need more of--more 
new starts. That is going to help.
  All of that together is going to help with economic growth. How much? 
Instead of the 1.9 percent conservative estimate they have made for the 
next 10 years, let's say it grows 0.4 percent more than projected. I 
would attribute at least that much to this tax reform proposal because 
of what we just talked about, but if you believe it is going to grow at 
0.4 percent more than projected; in other words, instead of 1.9 
percent, 2.3 percent--2.3 percent growth would be below the average 
over the last 30 years--then you will actually see the deficit start to 
come down because of this tax reform proposal because the revenue will 
be there, not just to make it revenue neutral, but beyond that we will 
actually pay down the deficit. We haven't done that in a while.
  Back in 1997, 1998, 1999, 2000, we went through this before. We began 
to reduce the deficit annually. Do you know how it happened? 
Constraining spending helped, and that is part of our challenge in the 
Congress--how do we get our hands around the spending--but second is 
growing the economy. In that

[[Page S7046]]

case, the capital gains rate of taxation was reduced. Then, suddenly, 
in the late 1990s, about $100 billion of revenue that nobody expected 
showed up in the coffers. That is how we got to a so-called balanced 
budget a few years early because tax revenues were greater than 
expected.
  I believe this will happen again. I believe that when you look at 
this proposal, it is conservative in the sense that it says: Yes, let's 
provide needed middle-class tax relief. Let's also do these things to 
grow the economy. Let's assume that because of all this, we are going 
to be able to improve the economic performance that is projected.
  It is a pretty disappointing projection. Let's face it, 1.9 percent 
growth isn't great for any of us. It isn't great to deal with the 
issues of poverty. It isn't great to deal with the issues of 
entrepreneurship and innovation. It isn't going to help us to afford 
the entitlements that are growing. We need better growth than that, we 
want more growth, and I think tax relief is the single-most important 
thing we can do right now.
  Yes, we should have more regulatory relief. Yes, we should do better 
in terms of getting the cost of healthcare under control. People are 
concerned about costs rising so fast, and we haven't been able to 
grapple with that issue. Yes, we should do more on worker training. We 
have a skills gap in this country. We have jobs available, and yet we 
don't have the skilled workforce to take those jobs. Yes, we can do 
more in terms of helping grow the economy through education and other 
things, but the one policy area that is crying out for reform is our 
tax system. It is antiquated. It is out of date. It is driving jobs 
overseas. It makes no sense. It can be simplified, and this simplifies 
the Tax Code. It can be made more fair, and this makes it more fair by 
helping the middle class more. It can encourage economic growth, and it 
does so through small business relief and relief for our multinational 
companies. It can help bring back trillions of dollars stuck overseas. 
That is what this does. That is the whole idea here.
  I am excited about this opportunity. The House of Representatives is 
working on their legislation now in committee. Next week, that will 
shift to the Senate and the Senate Committee on Finance. We will have 
the opportunity for an open process. As I noted, we have already had 70 
hearings in the Finance Committee just over the past 7 years since I 
have been in this Chamber. We have had working groups, including the 
bipartisan one I mentioned earlier, the five bipartisan working groups 
of that committee.
  We will have the opportunity at our hearing next week to have an open 
process--anybody can offer an amendment--and open discussion. We will 
have an interesting debate. It will be spirited. As we saw here today, 
we have some differences of opinion, but let's stick to the facts. 
Let's not make this partisan. Let's stick to the merits. Let's try to 
help the American people and our economy.
  Then we will come to the floor of the U.S. Senate, and the same thing 
will happen--an open process. Every desk you see in here represents a 
Senator who will have the opportunity, should he or she wish, to offer 
an amendment, to have a debate, to discuss the issue. It will be 
spirited at times, but, again, I hope it will lead to a result that 
actually helps do the things we were elected to do: to give our 
constituents--the people we represent--the chance to have a better 
life; to give middle-class families a little relief as they are facing 
this middle-class squeeze; to help grow this economy from the middle 
out, from the bottom up, from everywhere; to give us the ability to 
say, once again, that America is that shining example, that beacon of 
hope and opportunity for the rest of the world. That is what this is 
about.
  Let's not blow this opportunity. Let's get it done, let's get it to 
the President's desk for his signature before the end of this year, and 
let's make good on the commitments we have made to our constituents to 
help create a better economy and a better future.
  I yield the floor.
  The PRESIDING OFFICER. The majority leader.
  Mr. McCONNELL. Mr. President, I ask unanimous consent that 
notwithstanding rule XXII, at 4:30 p.m. today, Tuesday, November 7, 
there be 30 minutes of post-cloture time remaining on the Engel 
nomination, equally divided between the leaders or their designees; 
that following the use or yielding back of time, the Senate vote on the 
confirmation of the Engel nomination; and that if confirmed, the motion 
to reconsider be considered made and laid upon the table, and the 
President be immediately notified of the Senate's action; further, that 
there be 2 minutes, equally divided, prior to the cloture vote on the 
Robb nomination.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. McCONNELL. 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.
  Ms. KLOBUCHAR. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.