[Congressional Record Volume 163, Number 186 (Tuesday, November 14, 2017)]
[House]
[Pages H9241-H9247]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               TAX REFORM

  The SPEAKER pro tempore (Mr. Fitzpatrick). Under the Speaker's 
announced policy of January 3, 2017, the gentleman from California (Mr. 
Garamendi) is recognized for 60 minutes as the designee of the minority 
leader.
  Mr. GARAMENDI. Mr. Speaker, a moment ago, you heard from my colleague 
from California (Ms. Judy Chu) about the tax bill. She put the first 
page of H.R. 1 up and she added this little percentage, H.R. 1 percent. 
I thought that was not only accurate, but it really does reflect what I 
was going to show a moment ago, and then I decided to use hers.
  H.R. 1 is really about the 1 percent. The top 1 percent wealthy 
Americans would get 50 percent of a $1.5 trillion gift from the 
American people, which really amounts to an enormous transfer of wealth 
from the working men and women of America who depend upon programs like 
education--and that was discussed by my colleagues a few moments ago--
and depend upon medical services from Medicare, Medicaid. In 
California, we call it Medi-Cal.
  But what is going to happen here with this $1.5 trillion tax cut--and 
when you add the interest to it, basically, a $2.3 trillion bogus deal 
that our Republican colleagues are putting forth--is what I call the 
Texas two-step. This really is Mr. Brady from Texas' program to really 
do a two-step, together with the Speaker of the House, Mr. Ryan.

  The two-step was laid out in the budget bill, and the two-step is 
this:
  First, make a monumental tax cut that really is for the superwealthy. 
And then as soon as you get that signed by President Trump, you do the 
second step, which is to do massive cuts so that you can deal with the 
deficit.
  So I am going to just bring up the issue of the deficit for just a 
moment with this. I don't expect you to really look at all of these 
numbers, but this is the structural deficit that exists today: $563 
billion structural deficit. Every year--this year and in the past 
years--we are running a serious deficit: $1.5 trillion. Ten years from 
now, it is going to be over a $1 trillion-a-year structural deficit.
  So what does H.R. 1, the 1 percent bill, do to you?
  What it does is it adds to the structural deficit this year $115 
billion; and, in 2027, it will add $155 billion.
  You can look at it this way--and perhaps this is a little easier to 
understand. It is about the deficit, and this is why the two-step is 
going to happen.
  By the way, all of the deficit hawks that once occupied that entire 
array on the right side of the congressional House of Representatives 
disappeared. They migrated. They migrated south or somewhere. But I 
will tell you this: as soon as this H.R. 1 percent passes, the deficit 
hawks will return with a mighty force to make cuts.
  So here is what happens to the deficit: it starts down there--this is 
the annual, not the total deficit--and rises to this in 2027. This 
little orange across the top is what will be added. We don't deal with 
the deficit directly.
  So here is the deal, folks: cut taxes now so that the superwealthy, 
five of which are in President Trump's administration--oh, yes, 
eliminate the estate tax. Great idea.
  Do you know what that means to the Trump family?
  If his wealth is $10 billion, as he says, what it means is that 
somewhere around a $4 billion tax avoidance. Eliminating the estate tax 
and the Trump family immediately saves $4 billion. But maybe his net 
worth is really only $4 billion. So maybe it is just a $1 billion tax 
savings. That is just on the estate tax alone.
  This is a bad deal for Americans. It will increase the deficit and it 
will create what we call the Texas two-step. Or maybe we should call it 
the Speaker Ryan two-step.
  Mr. Speaker, let me introduce a couple of my colleagues who have 
joined us today from the State of New York.
  Mr. Speaker, I yield to the gentleman from New York (Mr. Suozzi) to 
comment on this piece of legislation and what it means to his 
constituents.
  Mr. SUOZZI. Mr. Speaker, I thank Mr. Garamendi for bringing this 
Special Order to the floor today.
  Mr. Speaker, I am here to point out the unfairness of the Republican-
led bill for tax reform, as they claim, that would be devastating to 
New York's middle class families.
  I want the people at home to know that the U.S. Conference of 
Catholic Bishops have said:
  ``This proposal appears to be the first Federal income tax 
modification in American history that will raise income taxes on the 
working poor while simultaneously providing a large tax cut to the 
wealthy.''

[[Page H9242]]

  Mr. Speaker, this bill is flawed and unfair on many levels. One thing 
I have learned since taking office back in January, here in this 
Congress, is how very different the regions of this country are. It is 
different from State to State and it is different from place to place. 
The amount of money that people make in different regions is different. 
Their cost of living is different, their property tax bills are 
different, and their State income taxes are as different as night and 
day.
  There are now 105 million full-time jobs in the United States of 
America. Fifty-nine million of those jobs pay less than $50,000 a year. 
Eighty-six million of those 105 million full-time jobs pay less than 
$75,000 per year. In my district, the average salary is actually higher 
than that, but so are their property taxes, so are their income taxes, 
and so is there cost of living.
  While this bill could be a net positive for some Americans in many 
regions--in my region and in many other regions, and in my State and my 
district specifically--this bill is a huge net negative for middle 
class families.
  One particularly devastating element of this proposal is the 
elimination of the State and local tax deduction that would be patently 
unfair to the over 250,000 hardworking families in my district that 
rely on that important deduction. New Yorkers claim the State tax 
deduction more than just about any other State. In my district, we have 
more people in the State than any other place that claim the State and 
local tax deduction. It is the top 10 of the Nation.
  Let's look at the some of the specifics of what actually happens in 
my district:
  People making between $50,000 and $75,000 in my hometown of Glen Cove 
will see a 39 percent tax increase. In my hometown of Glen Cove, a 
family that makes between $100,000 and $200,000 will pay, roughly, 
$2,100 more in taxes under this plan.
  In Huntington, every single family making over $50,000 a year will 
see a tax increase. Every family in Huntington making between $50,000 
and $75,000 a year will see--get this--a 135 percent increase on what 
they currently pay. Every family making between $100,000 and $200,000 a 
year will see a $3,000 tax increase.
  In Whitestone, every individual tax filer making $50,000 or more will 
see a tax increase, regardless of their income.
  Mr. Speaker, the evidence is crystal clear for people in my district 
and in many places throughout this country.

  This tax reform plan, as it is called, is a punch in the gut to 
middle class taxpayers. These are hardworking people who deserve to be 
lifted up, not slapped down, by draconian tax increases that offset tax 
cuts going to the superrich.
  How could anyone support a bill that targets our middle class in such 
a way is unfathomable. When I was elected to Congress, I came here 
ready and willing to work--and I still stand ready and willing to 
work--across party lines to get things done, even tax reform. I want to 
see tax reform in this country, but I can't compromise my values. I 
can't let down the families in my district who are going to be hurt by 
this plan.
  Mr. Speaker, I urge my colleagues on both sides of the aisle to try 
to do what is right: protect the hardworking Americans--the hardworking 
New Yorkers--who play by the rules and ask for very little in return by 
voting against this ill-conceived legislation, and protect the State 
and local tax deduction for our middle class.
  Mr. GARAMENDI. Mr. Speaker, I thank Mr. Suozzi for his remarks. I 
appreciate him bringing to my attention the SALT--the State and local 
tax.
  What basically happens is the Republicans are putting salt on the 
wound and causing an enormous amount of pain for Americans--certainly 
in California, another high-cost State; Illinois; New Jersey; and 
Massachusetts. This is a problem for about 50 percent of the population 
of this Nation that is going to see enormous things.
  In my own State, there are 120,000--not 250,000, as in the 
gentleman's State, but 120,000--who are looking at somewhere over a 
$12,000 loss deduction.
  Mr. SUOZZI. Will the gentleman yield?
  Mr. GARAMENDI. Mr. Speaker, I yield to the gentleman from New York.
  Mr. SUOZZI. Mr. Speaker, I just want to point out that in the State 
of New York, there are many Republicans who have come out against this 
tax bill because of the fact that it will hurt so many middle class 
families.

                              {time}  1745

  Eliminating the State and local tax deduction is completely and 
patently unfair. This State and local tax deduction has been in place 
for over 100 years. Why should someone pay taxes on taxes they have 
already paid to their State and local governments?
  Mr. GARAMENDI. Mr. Speaker, there is one additional factor--I know 
this is the case in California and also in New York--and that is both 
New York and California are net contributors to other States. In our 
State of California, even with this deduction, far more tax revenue 
flows to the Federal Government than Federal Government revenue comes 
back to the State of California. It is probably in the 15 to 20 percent 
net loss range to the State of California, and I think in New York it 
is similar.
  Mr. SUOZZI. Mr. Speaker, I just wanted to point out, in the State of 
New York, we send $48 billion a year more to the Federal Government 
than we get back from the Federal Government. We are the largest net 
donor in America to the Federal Government.
  We are contributing this money to subsidize many programs that our 
colleagues don't want to support, but we are also supporting their 
States. Many of the blue States in America, quite frankly, are huge net 
donors to the Federal Government, and many of the red States are huge 
net takers from the Federal Government. This is just another slap in 
the face to States like ours.
  Mr. GARAMENDI. Mr. Speaker, Mr. Suozzi and I could probably spend a 
couple of hours going back and forth.
  Mr. Speaker, I yield to the gentlewoman from Washington (Ms. 
Jayapal), who comes from the far side of the continent from New York, 
Washington State.
  Ms. JAYAPAL. Mr. Speaker, I thank the gentleman from California (Mr. 
Garamendi) for yielding, but also, most of all, for his leadership on 
so many critical issues around jobs and infrastructure and, of course, 
for pulling together this Special Order hour tonight on this very 
important subject, because I think that the American people should 
understand that Republicans in Congress are trying to literally rewrite 
the U.S. economy with no hearings. There were a couple of markups, but 
those are not hearings.
  We only just have been receiving some of the information about what 
is even in the bill to be able to then see what the effects are. The 
reality is that we owe it to the American people to share how this bill 
will affect their wallets, their housing, their education, their 
healthcare.
  Contrary to what the majority would have you believe, this tax bill 
is yet another vehicle for Republicans to raise taxes on millions of 
middle class families and reward the wealthiest and the largest 
corporations by handing them trillions of dollars worth of taxes.
  I think that Democrats certainly would love to see, as my colleague 
said, real tax reform; by that, I mean tax reform that benefits the 
middle class and tax reform that would allow us dollars to invest in 
jobs, in infrastructure, in education, in healthcare.
  The twist this time that I find interesting is that the Republican 
majority has mysteriously jettisoned its dogmatic fidelity to reducing 
deficits because--make no mistake about it--however you slice it, this 
Republican tax bill will explode the budget deficits.
  Mr. Speaker, Representative Garamendi talked about the two-step 
earlier, and that is right. We are all going to be dancing a two-step, 
because what the Congressional Budget Office literally just released is 
an analysis that said that this tax bill will lead to an immediate $25 
billion cut in Medicare.
  This bill has many provisions in it. We have been talking about the 
State and local tax deduction elimination, and that is very important 
to my home State of Washington. We have about 800,000 people who are 
able to utilize that deduction and were able to reduce their tax 
liability by more than $2,600 in Republican and Democratic districts

[[Page H9243]]

across our State. This deduction is significant to our communities 
because, really, it guards against double taxation.
  The Fraternal Order of Police just came out against what I am calling 
the Republican tax scam and the SALT deduction elimination in 
particular, the State and local tax deduction elimination.
  Why did the Fraternal Order of Police come out against this?
  They came out against this because they understand the two-step that 
we are going to be dancing. They know that this tax bill and those 
kinds of deductions are ultimately going to lead to, and this is their 
words: endangering the ability to fund these essential law enforcement 
agencies that actually keep our communities safe.
  Another crucial mistake that the Republican tax bill makes is 
eliminating tax-exempt bonds. For folks who are out there who are 
listening, the way to think about this is, if you have an affordable 
housing problem in your community, if you have a shortage of housing, 
which is happening across the country, then these tax-exempt bonds are 
the way that we help encourage and leverage local and State dollars for 
affordable housing, with these tax-exempt bonds. They advance, also, 
vital transportation projects, and they support infrastructure projects 
and hospitals and colleges and charities.
  For example, in my district, Seattle Pacific University has been able 
to use these private activity bonds to finance nearly $42 million in 
construction and renovations to the library and to the school of law. 
Similarly, the University of Washington Medical Center has been able to 
use these bonds to finance critical medical research that has been 
beneficial across the country.
  In eliminating several education-related tax deductions, the 
Republican tax bill is also cutting off valuable paths forward for 
students of all ages to not only improve their lives, but also to join 
a workforce that depends on 21st century skills.
  Mr. Speaker, I know that Mr. Garamendi spent a lot of time on this, 
but repealing the student loan interest deduction is in this bill.
  Let me just remind people that we have $1.4 trillion in student loan 
debt across the country. That is actually more than credit card debt in 
this country.
  This bill, in order to get tax cuts to the largest corporations and 
wealthiest 1 percent of individuals, would repeal that interest 
deduction for student loans. In Washington State, that would harm more 
than 275,000 taxpayers who claim that benefit, and it would raise their 
yearly taxes by more than $1,000 a year, on average.
  This bill also hurts our responsible employers who provide tuition 
assistance to help workers continue their studies at associate's or 
undergraduate or graduate levels. Tens of thousands of students in 
Washington State have benefited from this deduction, and that is true 
across the country. Nationwide, it is estimated that 70 percent of all 
companies offer tuition assistance.
  There is another provision in this bill that everyone should be 
concerned with, and that is eliminating the medical expense deduction. 
That deduction basically says that, if you are suffering from a long-
term, very expensive disease, if you have somebody in a nursing home 
and you have to pay for expensive long-term care for people, or maybe 
somebody who has cancer, that you can deduct medical expenses for those 
kinds of illnesses. This bill says: No more.
  Once again, repealing the estate tax, which benefits 5,400 of the 
wealthiest families in this country, in order to provide that tax 
benefit, we are actually going to take away this critical tax deduction 
from regular working families around medical expenses.
  Finally, Mr. Speaker, the Republican tax bill repeals the new markets 
tax credit, which, again, was created, really, to incentivize 
investment in low-income and rural areas. That tax credit is 
responsible for creating more than 12,000 construction jobs and an 
additional 11,500 jobs in related industries across my State, just as 
an example. It is extremely shortsighted to repeal that, especially for 
an administration and a party that says that they care about investing 
in jobs and infrastructure.
  We haven't seen any package for jobs and infrastructure. I am not 
sure if you have, but I certainly haven't.
  The reality is that this bill, because of this two-step that Mr. 
Garamendi described, which I will just remind people what that is: the 
transfer of trillions of dollars in wealth from the middle class to the 
largest corporations and the top 1 percent, and then through exploding 
the deficit, which this bill does, suddenly triggering automatic cuts 
as well as a rationale for cutting more from Medicare, from healthcare, 
from education, from transportation. That is what we are looking at.
  The early word on the Senate Republican tax bill seems to be just as 
bad, because I just heard before coming onto the floor that Senate 
Republicans are now saying that, once again, they are going to try to 
strip healthcare from Americans by including a repeal of the Affordable 
Care Act individual mandate.
  My State knows exactly what happened because we had a situation like 
that about a decade ago, and we had to dig our way out of that. What it 
meant was that, essentially, healthcare became way too expensive for 
everybody. There were too many people who were not buying healthcare, 
so you were stuck with all the people who needed healthcare, who were 
very sick. It exploded costs and, literally, Americans across the 
country ended up suffering because of that.
  They weren't able to get rid of healthcare. Three times we have 
beaten that back. The American people, Republicans and Democrats in 
urban and rural districts across the country, said: No. We want our 
healthcare. Do not take our healthcare away from us.
  Once again, the Republicans plan to incorporate this provision and 
try to once again strip healthcare.
  Mr. Speaker, insanity is said to be doing the same thing over and 
over again and expecting a different result. I really fear for the 
threshold that we are crossing. I fear for our economy; I fear for our 
middle class families; I fear for our low-income families; and I fear 
for the future of this country and for the future of our children, 
because the reality is what we should be doing, if we were going to 
raise money through taxing people more, is we should be investing that 
money into infrastructure, jobs, healthcare.
  Not only are we not cutting the taxes for people who need it the 
most, but we are increasing their taxes to give a tax break to the 
wealthiest, and we are destroying all of the investments that we need 
to make into the U.S. economy and into our communities and into our 
middle class families.
  This is an incredibly important issue. I don't think people realize 
that the Republicans are trying to push through a vote on this bill as 
early as this Thursday.
  I really believe that there are some Republicans across the aisle who 
have come out already and said that this is not a bill that helps our 
families, that helps our middle class families and our communities. 
They have been courageous to say that.
  Mr. Speaker, I want to thank them for doing that, and I want to urge 
other Republican colleagues across the aisle to do the same thing so 
that we can protect the livelihoods of our children and our families 
into the future.
  Mr. Speaker, I thank Representative Garamendi so much for his 
leadership and for his constant speaking out on the need to invest in 
infrastructure and jobs.
  Mr. GARAMENDI. Mr. Speaker, I thank the gentlewoman very much, 
Representative Jayapal, for her comments. She brought to our attention 
the inconsistencies that are in this piece of legislation.
  Everywhere I go and people talk about this, they say: I don't 
understand why they want to do that. I don't understand why, with a 
growing economy and the economy actually moving along pretty well, 4 
percent-plus unemployment and growth somewhere in the 3 percent range, 
why they want to totally turn the American economy upside down in a way 
that does not create growth.

  Mr. Speaker, I yield to the gentleman from New York (Mr. Nadler), 
bouncing back across the continent and picking up, once again, in New 
York. I thank the gentleman for joining me, and I look forward to his 
words and the wisdom that he brings from Manhattan.
  Mr. NADLER. Mr. Speaker, I thank the gentleman for yielding, and I 
thank

[[Page H9244]]

him for organizing this Special Order on this terrible Republican tax 
scam.
  This scam is a desperate, disgraceful attempt to line the pockets of 
the wealthiest Americans and corporations at the expense of the middle 
class.
  And for what?
  We are told the corporate and upper income tax cuts will result in 
more investment, in greater economic growth, which will yield more jobs 
and more revenue for the country and higher wages for the middle class, 
but that is bull.
  They have run this scam twice before. Ronald Reagan passed similar 
upper class tax cuts and told us they would generate such economic 
growth that they would pay for themselves. George W. Bush pulled the 
same scheme.
  What happened?
  President Reagan's cuts sent the national debt--the national debt 
accumulated from George Washington through Jimmy Carter, which was a 
little less than $800 billion in 1980--from $800 billion to $4.3 
trillion 12 years later, quintupled.
  President Bush's tax cuts turned the projected 10-year, $5.65 
trillion surplus--remember at the end of the Clinton administration, we 
were having surpluses, and the projected surplus over 10 years was 
$5.65 trillion. His tax cuts turned that, in 8 years, into $10.63 
trillion debt.

                              {time}  1800

  It turned a $5.6 trillion surplus into a $10.6 trillion debt. So the 
argument that these kinds of tax cuts for the upper-income people and 
for corporations generate greater economic growth to generate more tax 
revenues has been tried twice, not to mention in Kansas, recently. It 
doesn't work.
  There is nothing in this bill to argue that this tax scam will have a 
different impact on the economy than Reagan's or Bush's. In fact, this 
scam is so skewed toward the rich and corporations, it could actually 
be worse.
  The bill would eliminate the alternative minimum tax. To put it in 
perspective, in 2005, the only year for which we have at least the 
summary pages of Donald Trump's tax returns, in that year, Donald Trump 
paid $38 million in taxes. Of that, $31 million was the alternative 
minimum tax.
  The Republicans want to eliminate the only tax that we actually know 
that Donald Trump has ever paid. His taxes would have been $5 million, 
not $38 million, if it weren't for the alternative minimum tax. Of 
course, he wants to eliminates it.
  Republicans will repeal the estate tax, despite the fact that the 
estate tax is paid by only the wealthiest 5,000 estates in the country 
every year--two-thousandths of 1 percent.
  Wealthy Americans would also see immediate personal benefits from 
cuts to corporate taxes. This bill immediately and permanently cuts the 
corporate tax rate to 20 percent from 35 percent. It also cuts the 
rates for pass-through corporations from 39 to 25 percent.
  Once again, Republicans claim this will help small businesses, but it 
simply isn't true. These pass-through corporations are extremely 
wealthy partnerships and private companies. If you need a good example, 
I have a great one just outside my district; it is called the Trump 
Organization, which is organized as a pass-through corporation.
  Now, they tell us that middle-income businessmen will profit by this, 
but middle-income businessmen are not paying more than 25 percent to 
start with, so this will only benefit the rich, again.
  But while billionaires and corporations will enjoy all these 
benefits, the Republican bill hands working families ticking time 
bombs. Unlike the corporate tax changes, which are permanent and 
indexed to inflation, every benefit in the Republican tax scam for the 
middle class sunsets after 5 years or is indexed to a slower rate of 
inflation.
  Speaker Ryan brags about a family earning $59,000 a year getting a 
$1,500 break in their tax burden next year. Well, even in his example, 
by 2023, that family is right back where they started; and by 2027, 
they will be paying $500 more than they were this year.
  This bill wipes out nearly every deduction and credit that helps 
working families make ends meet--the deduction of State and local 
income taxes, which hundreds of thousands of middle-income New Yorkers 
rely on each year.
  When the income tax was first enacted to finance the Civil War, and 
when it was re-imposed to finance World War I--and we have had it since 
then--we have always had a deduction for State and local taxes. Why? 
Because you shouldn't be taxed on a tax. You shouldn't be taxed doubly. 
It is unfair. But now we will be.
  The medical expense deduction, which families use to pay for 
everything from fertility treatments to nursing home care, this 
deduction says: If you are a middle-income family, and your out-of-
pocket expenses, beyond your insurance, if you have insurance, beyond 
your Medicare, if you are a senior citizen, total more than 10 percent 
of your total gross income, you can deduct your medical expenses to the 
extent it exceeds 10 percent of your total gross income.
  So it has got to be large. If your income is $75,000 a year, you can 
only deduct the medical expenses that exceed $7,500, not the first 
$7,500. This will be gone, too.
  Now, if you have got parents in nursing homes, you depend on this. If 
you have got a child with cerebral palsy--God forbid--if you have got a 
kid with cancer, you depend on this, but it is going to be gone.
  The student loan interest deduction will be gone. So people go to 
school, they go to college, they come out with these terrible, huge 
debts. They have to repay the student loans. At least they can deduct 
the interest on the student loans. Not anymore.
  The adoption tax credit, child care spending accounts, even 
deductions for teachers who buy school supplies for their classrooms, 
all gone. And why? To pay for tax breaks for billionaires and 
corporations.
  But, as has been pointed out, under this scam, corporations keep 
these deductions for their income. They keep the State and local tax 
deduction, but individuals don't.
  How can Republicans claim this bill helps the average American when 
families are denied the deductions that corporations get to keep?
  If this bill is so blatantly harmful to working families, why are my 
Republican colleagues so crazy about it?
  Does it create jobs or give the economy a boost? No. As I said, we 
have tried that twice before with disastrous results. Kansas, 
Brownbackistan as they call it, after Governor Brownback tried that, 
with disastrous results, so that the Republican legislature had to 
increase taxes earlier this year, over the Governor's veto, to start 
getting out from 4-day school weeks.
  Under this plan, Republicans would tax companies less when they 
produce goods overseas than when they produce them here in the U.S. It 
is a giant incentive to large corporations to send jobs overseas.
  And if you ever doubted the Republicans were doing this at the 
bidding of corporate donors, well, just last week, Chairman Brady, of 
the Ways and Means Committee, tweaked an excise tax multinational 
corporations opposed and gave those corporations back $100 billion in 
revenue. No such change was made for working families.
  Now, we know--we know from experience--that a few years from now the 
Republicans will use the $1.7 trillion deficit this scam creates to 
say: Oh, my God. Look at this massive deficit. We have to make terrible 
cuts to Social Security, to Medicare, to education, to infrastructure, 
not that we want to. We love Medicare. We love Social Security, but we 
have got to savage them in order to pay for these terrible deficits 
which we created.

  That is what they are building in now. That is what this tax bill is 
designed to produce.
  The Republicans are scamming America. They are offering a facade of 
lower taxes that most Americans will never see, in exchange for massive 
and permanent tax breaks for the wealthy and corporations, and 
guaranteed cuts down the road, in fact, some of them right away, to 
Social Security, Medicare, Medicaid, education, infrastructure.
  I do not accept that deal, and the American people shouldn't have to 
either. We can find bipartisan common ground that allows us to support 
working families, create jobs, and see every American pay their fair 
share.
  American corporations, huge corporations, have $2.4 trillion stashed

[[Page H9245]]

abroad, which they don't pay taxes on until they bring it home. We 
don't have to allow that. We can make them pay taxes on it right away, 
whether they bring the money home or not.
  Why should we encourage them to keep the money abroad, to create jobs 
abroad, by telling them they don't pay taxes if the money is abroad?
  And the Republican bill just makes that worse. This Republican tax 
scam is not a fair plan. It is not a plan to increase the economy. It 
is not a plan for economic growth. It is not a plan for fairness to the 
middle class.
  Let me just say one other thing. A number of years ago, while we were 
told--I have seen ads--we were told by the Republican leaders that the 
economic growth from this bill will produce huge gains for the average 
family. Never mind the tax cut that the average family will or won't 
get.
  Because of the economic growth from this tax plan, wages will go up, 
and the average person will get $1,500 or $1,800 or $2,000, depending 
who you are listening to, in extra wages.
  Well, a number of years ago, we were told the same thing about a 
bankruptcy bill. This bankruptcy bill that the big banks pushed and all 
the Republicans pushed, we were told that if we passed this bill, the 
banks would save so much money from certain deadbeats that the average 
American would save $400 a year in lower interest rates.
  I offered an amendment to say: Fine, mandate that the interest rates 
be lowered. And, of course, the Republicans voted that down.
  Well, we passed that bill. We passed that bill 12 years ago. Have you 
seen the interest rates go down? The interest rates are still sky high. 
The banks raked in the money, hand over foot. The lobbyists did very 
well. The Republicans collected the campaign contributions. The 
American people did not benefit.
  Same thing here. There will be no increase in economic growth as a 
result of this bill. There will be no increase in benefits. There will 
simply be a huge sucking sound as the money is taken from the middle 
class and low-income people and given to the superrich.
  This bill is disgusting. It ought to be rejected.
  Mr. GARAMENDI. Mr. Speaker, I thank the gentleman for bringing us the 
view from New York. He is quite correct about what happened during the 
great crisis in 2008, 2009. The American public, probably to the tune 
of about $1 trillion, bailed out Wall Street. And here we go again. 
Major support for the American corporations who are hiding trillions of 
dollars overseas.
  Let me just give you one other example. There is a lot of talk around 
here from our Republican friends that somehow, if we reduce the 
corporate tax rate, we will see jobs being generated and some $4,000 a 
year of new money in the pockets of American workers.
  Really? You think so?
  Let me give you an example of one of America's great corporations, 
AT&T. I think we all know AT&T. We probably have them on our 
smartphone. In the last decade, AT&T was capable, using various tax 
loopholes and deductions, to lower its effective corporate tax rate, 
not to 20 percent, but to 8 percent.
  So over that period of time, while they were reducing their effective 
tax rates, that is their real tax rate, from whatever it was to 8 
percent during that decade, did they create new jobs? No.
  What they did was to lay off 80,000 workers. And at the same time, 
guess what? The CEO, he raked in $124 million.
  So what is going on here?
  The American corporations, back in the seventies and sixties, 
actually invested more than 50 percent, almost 60 percent, of their 
after-tax profits in expanding their business--investment in plants and 
equipment and wages and hiring people.
  Today, less than 10 percent is spent on expanding their businesses. 
Instead, they are pumping up their stock prices with buybacks and with 
dividends.
  So what is going down?
  Tell me that this is going to somehow create jobs.
  And, by the way, the gentleman didn't quite pick this one up, so let 
me add to the weight of this terrible bill. They use what is called 
territorial tax system. Terrific. Corporations will not be taxed for 
their profits globally, but, rather, they will only be taxed for their 
profits within the United States, so it is even a further incentive to 
offshore your jobs to the lowest tax place in the world: Bahamas. Used 
to be Ireland, but the EU decided that Ireland was cheating the rest of 
the European countries; put a stop to that, so now they are off.
  Apple, a great California company, abandoned Ireland and is now, I 
think, located in the Jersey Islands off the coast of Great Britain.
  Scheme, scam, the American public is going to be the beneficiary? No. 
It is going to be the victim, is going to be the victim of this great 
transfer of wealth.
  The gentleman had one more point to make, and then I would like to go 
to my colleague, also from New York and what we still call the East-
West Show.
  Mr. NADLER. I do have one more point to make, and the gentleman 
reminded me of it.
  In 2004, when we had the repatriation, we told the big corporations 
they could bring all the offshore money home and pay only a fractional 
tax on it; they were going to create jobs and so forth. And what 
happened? They didn't create jobs. They had buybacks. They enriched 
their executives. They didn't create jobs.
  The fundamental problem with this analysis is not that corporations 
don't have enough money to invest, and, therefore, if you give them 
lower taxes they will have more money to invest; they have plenty of 
money to invest. They don't see the investment opportunities, and that 
is a different problem. There is plenty of money to invest. They are 
rolling in cash. There is not a dearth of investment opportunity. There 
is not a dearth of investment cash.
  So if you give them more cash, they will pay their CEOs higher. They 
will put more money into stock buybacks. The shareholders may benefit, 
but they won't hire more workers. The economy won't benefit; and we 
will be taking money away from the middle class and lower-income 
people, and we will be taking money away from the governments, local 
governments, that have to spend the money on schools, housing, health, 
roads and bridges, and so forth to build up this country.
  Mr. GARAMENDI. Mr. Speaker, I yield to the gentleman from the great 
State of New York (Mr. Tonko).
  Mr. TONKO. Mr. Speaker, I thank Representative Garamendi for leading 
us in this Special Order. It is so important that the public understand 
what is happening here with this issue.

                              {time}  1815

  The first response ought to be: Here we go again.
  Trickle-down has not worked in the past--the far past, the recent 
past. It is not going to work again.
  When does trickle-down become trickle-up?
  Well, to suggest that this is a tax reform act is really pulling a 
trick on the public. This is about a tax cut, and a tax cut for 
corporations, a tax cut for the wealthiest amongst us.
  This trickle-down theory becomes trickle-up because you are taking 
and raising the taxes on some 36 million families, those that would be 
classified as middle class families, those who work day in and day out 
and don't even earn a minimum wage, but they are working. The poorest 
amongst us, the lowest bracket, gets an increase in its rates.
  How is this fair? How is this economic or social justice?
  Both measurements prove that it is false. It is not economically 
sound. It is not socially just. What we are doing here is playing a 
game with the economy, and we are putting the economy, the American 
economy, at great risk.
  We have seen major efforts made since January of 2009 to grow the 
economy, and now we have this scam, this trickery, to go and do a 
trickle-up: take from the working families, deny their purchasing 
power, weaken their purchasing power, and give it to corporations, give 
it to the upper income strata in this country. That is a formula for 
disaster, and we are going to pay wickedly for this effort.
  We have always heard about deficit situations. When President Clinton 
was in office, when President Obama was in office, the Republicans 
would talk about a deficit situation. There seems

[[Page H9246]]

to be no concern about deficit here, a deaf ear to the deficit.
  Borrowing to spend. Borrowing to spend. Borrowing $1.5 trillion, 
which probably amasses to $2.1 trillion to $2.3 trillion with the cost 
of borrowing, and using that borrowing to spend on the wealthiest 
amongst us, be they families, individuals, or corporations.
  How does that make economic sense? How does that help the economy?
  When we look at this situation, we are going to impact your average 
family in any of our districts, those who are working to maintain a 
household, to perhaps put aside some savings for improvements of that 
household or to assist their children in their pursuits of a career, be 
it apprenticeship programs or college programs. We are going to hurt 
these families.
  Students will realize that their tuition deduction is eliminated--
eliminated. Students will realize, former students, that their loan 
interest deductions will be eliminated.
  I heard a lot about this, Mr. Speaker, when I was home over the last 
two weekends. We have always deducted exorbitant medical expenses when 
we did our taxes. We prepared that for our accountant because we had 
exorbitant medical fees, medical expenditures, be they for families who 
are walking through life with Alzheimer's or who are fighting cancer or 
who have chronic illnesses. They deserve to have that deduction.
  I am told, on average, it is $9,000. Seventy-three percent of people 
who make that deduction are earning less than $75,000. This is a brutal 
response to America's working families. It is a harshness tossed 
against this economy that has finally started to churn over the last 
several years. Now we step up and want to wreck all of that.
  We have all sorts of efforts that deny various professions, teachers, 
for one, who will not be able to deduct for classroom expenses where 
they will, out of their own pocket, provide greater resources for the 
children who are in their classes that they teach. They are 
facilitating this discovery, self-discovery, within children. They are 
digging into their pockets to make that experience all the more real, 
all the more magical, all the more important, and here we are going to 
deny teachers to deduct those expenses, but we won't do that for the 
businesses that want to reach into their own pocket and spend.
  We look at this situation, and we understand who gets a fair shake in 
this deal, in this scam, and it is regrettable.
  Now the talk of a Senate version bringing in the individual mandate? 
Dollars that are made available for families to realize healthcare 
coverage, and we are going to penalize them and use that to help pay 
for this borrowing? This is a disaster.
  America needs to see this with its eyes wide open and to call your 
individual Representatives and ask them to tell you how you are going 
to benefit from this package.
  Somebody today told me it is a once-in-a-lifetime opportunity for tax 
reform--tax reform. Is there reform in this mess? There are the same 
old loopholes. We grow more loopholes, and they are getting a tax break 
in addition. What are we doing to our economy here? This is a terrible 
bill.
  When it comes to the SALT deduction, the State and local tax 
deduction, you will destroy States by requiring double taxation on the 
investments they make in their own programs in their State. That will 
severely impact upon people in my home State of New York.
  I think it is a disaster that this House, this majority, the entire 
majority, would allow this bill to come to the floor.
  Before you tell me how you are going to vote on this bill, tell me 
how you tried to stop it from coming to the floor because it hurts so 
many Americans. Thirty-six million families will be impacted. They will 
see a tax increase. That is not my word. It is not Representative 
Garamendi's word. It is coming from the Tax Policy Center.
  People are putting this one under the microscope, and they are 
detailing what is in here and what is not in here, and this is a scam. 
It is bringing down an economy. It is taking it in the wrong direction. 
It gives tax breaks to corporations that want to grow their prosperity 
offshore and making it more productive for them to take jobs overseas.

  How can we tolerate this? No wonder they are trying to rush the bill 
now. Get it done in a day or two before America finds out what is in 
it. This is a tax disaster, not a tax reform. It is a tax cut for the 
wealthy at the expense of the working families and those who work below 
minimum wage in this country, people who make it their goal to be self-
sufficient, and now this is how they are rewarded.
  Mr. GARAMENDI. Mr. Speaker, I yield to the gentleman from Florida 
(Mr. Hastings).
  Mr. HASTINGS. Mr. Speaker, I thank Mr. Garamendi for bringing this 
Special Order.
  Mr. Speaker, I just want to tell you, in 7 minutes, I, along with the 
other members of the Rules Committee, will be meeting on what is 
described as an emergency meeting. That emergency is what you all have 
been describing. We were originally scheduled to meet at Rules 
tomorrow, and now, in an effort to jam this measure through, we are 
meeting in an emergency capacity.
  What the American public needs to know is the substance of what you 
two gentlemen and others have been talking about, but please know this: 
every Member deserves the right to contribute to these bills when they 
affect all of our constituents and will lead to millions of Americans 
paying more in taxes.
  You all will handle the substance, but I thought that I would add 
that in with my thanks to Mr. Garamendi. It is just atrocious what is 
going on, and not just Democrats or Republicans, but many persons who 
sent their Representatives here are not going to have their 
Representatives be heard.
  Mr. GARAMENDI. Mr. Speaker, reclaiming my time, as an esteemed member 
of the Rules Committee, there is an emergency meeting to push this bill 
to the floor without any public hearings. Is that correct?
  Mr. HASTINGS. Mr. Speaker, no hearings whatsoever, and yet the 
Speaker stood up and said that we are following regular order.
  We are not following regular order at all.
  Mr. GARAMENDI. Mr. Speaker, my recollection in the 1986 Reagan tax 
reform, it took 2 years of public hearings all around the country and 
some 30 hearings in the House Ways and Means Committee, probably a 
similar number on the Senate side before the bill came to the floor. 
There were many, many amendments that were offered.
  Mr. HASTINGS. Mr. Speaker, in addition to hearing from experts and 
from affected entities around the country, now we are doing it in 2 
weeks.
  Mr. Speaker, I have to go to the Rules Committee, but I thank you all 
for what you are doing.
  Mr. GARAMENDI. Mr. Speaker, I appreciate the work that the gentleman 
does there trying to protect the American public from this hasty--Mr. 
Hastings, thank you so very much.
  Mr. Speaker, I yield to the gentleman from New York.
  Mr. TONKO. Mr. Speaker, I just would love to point out, I would 
encourage middle class America to raise its voice. Raise your voices, 
because when we look at the repeal of the individual mandate that is 
being suggested here, you are going to rip away healthcare from some 13 
million Americans, and that alongside the 36 million families in this 
country that are going to see a tax increase.
  Before that hits home, stand up and speak out. And if you are not 
going to get a tax increase, if you might get crumbs off the table 
because, remember, if you weren't at the table, and this was done in 
veiled secrecy, if you are not at the table, you are probably on the 
menu.
  Here you are going to have these families, 36 million that will get a 
tax increase, but if you are going to get maybe a crumb off the table, 
that sunsets, and the other benefits are going to go forever.
  This is a monumental change in a tax cut policy. It is not reform. It 
is tax cuts for the wealthy and corporations at the expense of working 
families.
  Finally, I would just make mention that there would be an immediate 
$25 billion cut in Medicare. The efforts that were made under the last 
administration to bring more stability to Medicare, to make certain 
that it had a longer life out there, are now going to be wiped away. 
That is a very important program to Americans, very important program. 
We cannot afford to

[[Page H9247]]

have this go through in veiled secrecy on a rush in the next day or two 
without America knowing what is on the table.
  Mr. GARAMENDI. Mr. Speaker, I thank the gentleman, very, very much. 
There has been much discussion. We are going to be yielding this floor 
to our Republican colleagues, and I see them beginning to assemble, all 
of them who, just 3 weeks ago, were deficit hawks.
  I am going to point this out, and I am going to leave it here for my 
colleagues who will be talking about why we ought to increase the 
deficit.
  The current structural deficit is about $500 billion. We are going to 
add, just this year, $115 billion on top of that. You can see that. But 
over the next decade, that present structural deficit will grow to 
nearly $1 trillion a year, and we will add to it another couple hundred 
billion dollars.
  The deficit hawks have a choice. They can live with the deficit, 
forget they ever were deficit hawks and just increase the deficit with 
this 1 percent tax bill, H.R. 1, or they could do what I call the Texas 
two-step.
  Keep in mind, the chairman of the Ways and Means Committee is a 
Texan. The Texas two-step is first you seriously cut the revenues with 
this tax bill that is not a reform but, rather, a bill that actually 50 
percent of the $1.5 trillion reduction goes to the American 
corporations and the top 1 percent. Forget about the deficit or do the 
Texas two-step: cut the revenues and then cut the programs.
  What are the programs?
  You mentioned Medicare. Already in the budget that passed this House 
with Mr. Ryan as Speaker was a $500 billion reduction to Medicare and a 
$700 billion or $800 billion reduction to Medicaid, 60 percent of which 
goes to the elderly in nursing homes. That is what they have in mind.

                              {time}  1830

  Secondly, they are going to talk about a trillion-dollar 
infrastructure. No way. The money is gone. There will be no 
infrastructure program, no roads, no trains, no buses, no levees, no 
repair.
  Mr. TONKO. Mr. Garamendi, I would point out, in addition to tinkering 
with the public utility bonds out there, that public utility financing 
that will be devastated by this bill, adds to the further woes for 
building our investments and infrastructure of all kinds.
  Mr. GARAMENDI. Exactly, and you might add education to that. So what 
do you do? Student loans of which $1.4 trillion and nearly a trillion 
of that is owned by the Federal Government, these students are paying 
interest to the Federal Government; and to add to that, we are going to 
deny them the ability to deduct the loan interest that they are paying.
  This is really just hypocritical, and it is very harmful to the 
economy. We want to do job training. Forget it. The money is gone. The 
Texas Two Step will deny us the money that we need for education, 
reduce the revenues, and then cut the programs to attempt to bring back 
under control the deficit. It did not work. It will not work. And what 
it means is, the American economy that is recovering is going to be 
given a wallop on the side of its head, and we are going to see some 
real serious problems as we attempt to build the foundation for future 
economic growth. The money will not be there.
  Mr. Speaker, I suspect that that emergency meeting of the Rules 
Committee is to specifically deal with the problem that was announced 
by the Congressional Budget Office just 3 hours ago that said this tax 
bill will, because of the sequestration law--it is a law--will create 
an automatic $25 billion reduction in Medicare immediately and another 
$111 billion reduction in programs, not to be determined by the 
Representatives of the people of the United States but, rather, by Mick 
Mulvaney, the head of the Office of Management and Budget, who is known 
to be really weird in his budgeting proposal.
  He will make a $111 billion reduction all on his own, if this tax 
bill passes as it is written today.
  This is serious business, Americans. This is about your future. This 
is about your ability to have a decent job in America, a decent 
infrastructure, a decent education system, and medical services.
  What about the children's health program which is not yet in place? 
It is unbelievable that, without one public hearing, the Republicans 
are determined to pass a $1.5 trillion tax cut of which 50 percent of 
the benefit goes to the top 1 percent, and America's corporations are 
given yet another reason to offshore their jobs with what is called 
territorial pricing.
  This is where we are, folks. Wrap it up, if you will.
  Mr. TONKO. Mr. Speaker, I would just say: Let's do this with our eyes 
wide open. Trickle-down isn't going to happen. Tax reform, this is not 
tax reform. Certainly, tax cuts where you aid the upper-income strata 
and corporations at the expense of an increase of taxes to the middle 
class is what this is about. It is pathetic. It is devastating. It is 
disastrous, and it ought to be denied.
  Mr. GARAMENDI. Mr. Speaker, the gentleman is exactly right. Finally, 
as we turn this floor over to our Republican colleagues, I am really 
interested in hearing why--and I see one of our colleagues from my 
area--why in the Central Valley of California where anywhere from 
110,000 to 150,000 families who pay taxes are going to lose their State 
and local tax deduction? They will lose somewhere between $7,000 and 
$12,000 of deductions.
  That amounts to an increase in taxes anywhere from $1,500 to $2,000. 
I want to hear them explain why that is good tax policy. We will see 
what they have to say. They will be on the floor in a few moments.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Hollingsworth). The Chair would remind 
Members to direct all remarks to the Chair, and to formally yield and 
reclaim time when under recognition.

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