Congressional Record, Volume 163 Issue 196 (Friday, December 1, 2017)

[Congressional Record Volume 163, Number 196 (Friday, December 1, 2017)]
[Senate]
[Pages S7655-S7712]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

TAX CUTS AND JOBS ACT--CONTINUED

The PRESIDING OFFICER. The Senator from Florida.

Motion to Commit

Mr. NELSON. Madam President, the matter that is before the Senate is
the motion I have offered. It simply is, in this tax bill, the
corporate rate is reduced from 35 percent down to 20 percent, and that
is permanent, but the modest, middle-class tax breaks are not
permanent, and in 7 or 8 years they cease to exist. They sunset. So, in
this tax bill, you want to give permanent, huge corporate cuts, from 35
down to 20. By the way, if the American corporation is doing business
overseas, it is basically a zero tax rate, which is an incentive to go
overseas, send jobs overseas. American jobs are lost while giving those
huge corporate breaks at the same time it is giving modest breaks to
the very people who need the tax cuts; that is, hard-working American
families, the middle class. Then, oh, by the way, in 7 or 8 years,
vamoose, it is gone, no tax break. It goes back up. It is a tax
increase. That is simply not fair.
So this little motion simply says go back to the Finance Committee
and correct this inequity. Go back to the Finance Committee, make the
middle-class tax cuts permanent, and then get the Finance Committee to
offset those with revenue from someplace. Do you know where that
someplace should be? It ought to be the huge corporate tax cuts. That
is where the revenue ought to be taken back from to give that revenue
or tax cuts to the middle class. It is a simple issue of fairness.
I am delighted to be joined by my colleague from Minnesota.
I yield the floor.
The PRESIDING OFFICER. The Senator from Minnesota.
Ms. KLOBUCHAR. Madam President, I thank Senator Nelson for his
leadership on this motion. It is a very simple motion for a very simple
proposition; that is, that the Tax Code should be simpler. That is
true. We should make it more streamlined. That is true, but our focus
should be helping the people of America.
Our problem with the bill that is on the floor right now is that it
is weighted much too heavily in terms of helping the wealthiest among
us and not the middle class. Senator Nelson's amendment, which I am a
proud cosponsor of, gets right to the meat of this, to the bread and
butter, to helping the middle class with their groceries--since I used
meat and bread and butter--but also with their mortgages, with paying
for college, with everything they need to do. Our problem with the bill
right now is that too much of it goes to the top.
In fact, when you look at the numbers, it is quite startling. The
first

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thing you notice for the middle class is that $1.4 trillion in
additional debt comes out of this bill. Now, our colleagues were
claiming until yesterday, well, that is going to be offset with all
this economic growth we are going to see. What did we find out? Even
when you consider that--and this is by the nonpartisan Joint Committee
on Taxation that looked at this. They are like the umpire. They do the
scorecard. They looked at this, and they said: Yes, it is about 1.4,
$1.5 trillion in debt. It does produce some economic growth, but guess
what. The net is over a trillion dollars in debt.
Now, whose shoulder is that going to be on? That debt is going to be
on the middle class and their kids and their grandkids, and that is the
No. 1 reason why I am so concerned about this bill and why I stood with
17 other Democrats, including Senator Nelson, just this last week and
said: Come to the table. This is your moment for our colleagues on the
Republican side of the aisle. While the White House is busy sending out
tweets and going after this person and that person and this group and
that group, someone has to govern, and this is their moment to govern,
to work with us on a bill that doesn't add this debt that gives the
middle class more than just a lump of debt in their stocking.
What Senator Nelson's amendment smartly does is, it says: Let's go
back and actually have hearings. Let's go back and in a deficit-neutral
manner help the middle class. That is what we have to do.
Even though we appeared to be very close to voting on this bill, we
still don't know what exactly is in the final version of this bill. We
know what isn't in it. Where is this Buffett rule that would make it
more fair for everyone? What are we doing about the oil giveaways? What
are we doing about the carried interest loophole? None of this is in
the bill. Instead, there is $1.4 trillion in debt. So that is why I
strongly support Senator Nelson's amendment.
I would also add other amendments that should be considered that I
have submitted: savings for servicemembers to help lower the out-of-
pocket costs for National Guard members, an amendment that would help
address the cost millions of people face when they are providing elder
care for loved ones, an amendment that would make it easier to use 529
education savings accounts to help workers develop the skills they need
for 21st century jobs, and also other ones related to agriculture.
Senator Nelson's amendment and all these amendments are geared and
focused on the middle class. We are living in a time when the wealthier
have been getting wealthier and the middle class have been losing
ground. They may have jobs now because our economy has rebounded, but
the cost of things has gotten so expensive, whether it is their cable
bill, whether it is the cost of sending their kids to college, and,
with this tax bill this is our opportunity to address that.
A tax bill should be the value statement for our government, the
value statement for America. So I ask my colleagues to come back to the
table, to come back to the table to talk about a bill that would bring
down that corporate rate. I am all in favor of that.
I have 18 Fortune 500 companies. I know how important they are to
jobs in my State, but they don't have to go down to the extreme rate
that they are. Instead, that money should be used to help the middle
class, while bringing down the corporate rate, while bringing in that
money from overseas and plugging some of it into this Nation's
infrastructure to literally help us with the roads and bridges and rail
we have now, but that isn't in this bill.
So we tell our colleagues this is a moment in time where you could
actually work with us on something that makes sense for America. Don't
squander it.
I appreciate the time from Senator Nelson and his leadership.
I yield the floor.
The PRESIDING OFFICER. The Senator from Mississippi.
Mr. WICKER. Madam President, on behalf of the majority, I yield back
all time.
The PRESIDING OFFICER. The Senator from Florida.
Mr. NELSON. Madam President, we yield back all time as well.
The PRESIDING OFFICER. All time is yielded back.
The question is on agreeing to the Nelson motion to commit.
Mr. WICKER. Madam President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The clerk will call the roll.
The legislative clerk called the roll.
The result was announced--yeas 48, nays 52, as follows:

[Rollcall Vote No. 290 Leg.]

YEAS--48

Baldwin
Bennet
Blumenthal
Booker
Brown
Cantwell
Cardin
Carper
Casey
Coons
Cortez Masto
Donnelly
Duckworth
Durbin
Feinstein
Franken
Gillibrand
Harris
Hassan
Heinrich
Heitkamp
Hirono
Kaine
King
Klobuchar
Leahy
Manchin
Markey
McCaskill
Menendez
Merkley
Murphy
Murray
Nelson
Peters
Reed
Sanders
Schatz
Schumer
Shaheen
Stabenow
Tester
Udall
Van Hollen
Warner
Warren
Whitehouse
Wyden

NAYS--52

Vote on Motion to Commit

The PRESIDING OFFICER. The question is on agreeing to the Baldwin
motion to commit.
Mr. BARRASSO. Madam President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The clerk will call the roll.
The bill clerk called the roll.
The result was announced--yeas 48, nays 52, as follows:

[Rollcall Vote No. 291 Leg.]

YEAS--48

NAYS--52

Alexander
Barrasso
Blunt
Boozman
Burr
Capito
Cassidy
Cochran
Collins
Corker
Cornyn
Cotton
Crapo
Cruz
Daines
Enzi
Ernst
Fischer
Flake
Gardner
Graham
Grassley
Hatch
Heller
Hoeven
Inhofe
Isakson
Johnson
Kennedy
Lankford
Lee
McCain
McConnell
Moran
Murkowski
Paul
Perdue
Portman
Risch
Roberts
Rounds
Rubio
Sasse
Scott
Shelby
Strange
Sullivan
Thune
Tillis
Toomey
Wicker
Young
The motion was rejected.
The PRESIDING OFFICER (Mr. Kennedy). The Senator from Oklahoma.
Mr. LANKFORD. Mr. President, I ask unanimous consent that Senator
Cardin be recognized to offer a motion to commit, which is at the desk,
and that the time until 2 p.m. be equally divided in the usual form on
the motion; further, that at 2 p.m., the Senate vote in relation to the
motion with no intervening action or debate. I further ask that
following disposition of the motion, the majority leader or his
designee be recognized.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
The Senator from Maryland.

Motion To Commit

Mr. CARDIN. Mr. President, I have a motion at the desk.
The PRESIDING OFFICER. The clerk will report the motion.
The bill clerk read as follows:

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The Senator from Maryland [Mr. CARDIN] moves to commit the
bill H.R. 1 to the Committee on Finance of the Senate with
instructions to report the same back to the Senate in 3 days,
not counting any day on which the Senate is not in session,
with changes that--
(1) are within the jurisdiction of such committee; and
(2) in order to fix and enhance our country's
infrastructure, help create jobs, and responsibly use one-
time revenue for one-time spending, designate the revenue
raised by the deemed repatriation provisions of the bill for
infrastructure improvements.

The PRESIDING OFFICER. The Senator from Maryland.
Mr. CARDIN. Mr. President, I urge my colleagues to support this
motion.
This motion will send H.R. 1 back to the Committee on Finance with
instructions to return it within 3 days to deal with one of the
principal purposes of this act, and that is to create jobs. I am
pleased that I am joined in this effort by Senators Feinstein,
Blumenthal, Udall, Casey, Stabenow, Klobuchar, and Harris.
As I explained yesterday--but I want to just go over this, if I
could--this particular motion is based upon a bipartisan recommendation
in the last Congress that came out of the Senate Finance Committee. We
had working groups that took a look at the different aspects of our Tax
Code in areas that we need to reform, and there was general agreement
that we need to deal with the fact that American companies have earned
earnings overseas, and they have parked those funds overseas and have
not brought them back to the United States because of the differential
tax rates between our corporate taxes and the tax rates overseas. The
American companies were not willing to pay the taxes. So, therefore,
they leave the money overseas. To bring that money back is called
repatriation. So the money comes back to the United States. We have
done this before, and we imposed a lower tax rate in order to get the
money back here in the United States.
The challenge with that proposal is a couple things. But, first, it
is not a permanent revenue flow. It is a one-time-only revenue flow. We
had the numbers on the House-passed bill, which would bring in
somewhere around $300 billion of one-time-only revenue.
The problem is that H.R. 1 includes provisions that use those
revenues that bring that in as repatriation but uses the money on a
permanent basis to give permanent tax relief to businesses and that
puts us deeper in a hole as it relates to the deficit of this country.
This bill already is too expensive. We know that. I think my
Republican colleagues know that. The American public knows that--that
it will add to the deficit. We now have not only the scores that we
traditionally use from the Joint Committee on Taxation as to how much
it would cost, and we know it is somewhere in excess of $1.5 trillion--
closer to $2 trillion if you extend all the sunsets that are in the
bill--but, even now, we have the so-called dynamic score that takes
into consideration predicted economic changes that try to make it more
favorable, and that is in excess of $1 trillion. That is unacceptable.
It should be unacceptable to every Member of this body.
This amendment will help us in doing that, in that it will take at
least the $300 billion, which is one-time-only revenue, and not allow
it to be used in the budget itself. Instead, we wall that off and use
it for infrastructure.
I serve on the Environment and Public Works Committee, in addition to
the Senate Finance Committee. I can tell you that the unmet
transportation needs, water infrastructure needs, and energy
infrastructure needs in this country are well documented. We know we
need to modernize our transit systems, our roads, our bridges, our
water infrastructure, and our energy infrastructure. We need to
modernize them, particularly if we are going to be competitive. This
motion will set up the right priority for modernizing America's
infrastructure.
What does that mean with regard to jobs? Speaker Ryan used the number
of a little less than 1 million jobs that are created spending $1.5
trillion. That is about $1.5 million per job. That is not very good by
anyone's standards. We have projections that $300 billion--far less
than $1.5 trillion--will create 4 million great jobs here in America.
Here is a chance to really create jobs but at the same time produce a
much more up-to-date, modern transportation system for this country. I
have the honor of representing Maryland in the Senate. I can tell you
that we need significant resources to update our transit system. The
WMATA system is old and needs improvements, and needs further
investments. We are in the second worst congested area here in
Washington. We need investments in roads. Our bridges are in serious
trouble. We have a major water main break every day in this country--
every day. We need billions of dollars to fix our water infrastructure.
Here is an opportunity for us to speak to two major priorities. One
is fiscal responsibility. Let's do this in the right way, not spend
one-time-only money. Two, we can take care of the international tax
problems of American companies that have money overseas. Third, we can
repair our infrastructure without raising the debt.
I urge my colleagues to support this motion so that we can really
create jobs and not add to the deficit and to help the people of this
country.
I yield the floor.
The PRESIDING OFFICER. The Senator from Washington.
Mrs. MURRAY. Mr. President, I come to the floor this afternoon to
speak on behalf of myself, along with Senator Wyden, about the
incredible healthcare impacts that this tax bill will have on families.
It is astonishing just how far my Republican colleagues are willing
to run from the truth in order to jam this terrible tax bill through
Congress.
They said it was going to lower taxes for the middle class. Well, it
will not.
They claim it is going to create jobs. Experts tell us the exact
opposite.
They are once again telling families to place their faith on tired
trickle-down economic theories, and we have seen how that works. It
doesn't.
Unfortunately, I could go on, but I did come to the floor this
afternoon to clear up any remaining confusion about one particular
claim that Senate Republicans are making in order to justify handing
more tax breaks to massive corporations and the wealthy.
The Senate Republican tax bill includes a truly devastating
healthcare change that is going to raise families' premiums, cause
millions of people to lose their coverage, and create even more chaos
and instability in our healthcare markets. People have rejected every
single Republican attempt this year to undermine their healthcare, so
it is worth asking, why are they doing it again? Why are Republicans
doing it in this bill? The answer is simple. Republicans wanted to
spend the savings from taking away millions of people's healthcare on
tax cuts for those at the top.
Taking healthcare away from families to pay for big corporations' tax
breaks is bad enough; what makes it even worse is how they are trying
to deny what they are doing.
Senate Republicans are claiming that if they pass the bipartisan bill
that Chairman Alexander and I agreed on, all the damage from the
healthcare sabotage in their tax bill will somehow go away. They
couldn't be more wrong. Our bill, the Alexander-Murray bill, was
designed to shore up the existing healthcare system and deal with the
problems that President Trump and Republicans already created, not to
solve the new problems in this awful Republican tax bill. And just
yesterday, the nonpartisan Congressional Budget Office confirmed that.
Here is what they said will happen regardless of whether Alexander-
Murray becomes law as well: Premiums will go up 10 percent each year,
13 million people will lose coverage, and markets will be even more
unstable, which experts have said will cause some of our communities to
lose their coverage options.
There has been some discussion on whether passing something called
reinsurance, which is a program designed to help with the cost of
enrolling the sickest patients, might mitigate the serious damage this
Republican tax bill would do. The answer is no there as well. This
policy is good policy on its own, but it will not stop the premium
increases, and it will not stop the coverage losses and the chaos this
Republican tax bill will cause.
The Republicans are doing everything they can to avoid the facts, but
that doesn't make them go away. While hiding behind these bipartisan

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bills might seem like a good talking point in Washington, DC, political
cover doesn't pay families' medical bills or give them their coverage
back. It does not help people with preexisting conditions who may get
priced out of the market. It doesn't help people in communities where
markets are already unstable thanks to President Trump's year of
sabotage, meaning insurers are ready to exit if things get worse.
One more point. Over the last year of roller coasters on healthcare,
there is one thing we could count on; that is, President Trump and the
Republican leaders making empty promises. Republicans who are
comfortable voting for this awful tax bill because of promises they got
from President Trump--who called his own TrumpCare bill ``mean'' when
it suited him--and Republican leaders who have written check after
check they couldn't cash on healthcare are placing a bet that is more
than risky. In fact, this bet is so risky, it requires House
Republicans voting in favor of supporting ObamaCare changes they have
already said they oppose. If you have spent 5 minutes in this Congress,
you should know that getting House Republicans to support ObamaCare is
as tough a sell as it gets.
The truth is, if Republicans are serious about not undermining
families' healthcare, there is a very easy way for them to actually do
that. They can step back from the brink right now and work with
Democrats on healthcare and taxes in ways that actually help, not hurt,
the people we are supposed to be here to serve. They are far down the
road, I understand, but it is not too late. They can turn around. It is
not too late to do the right thing. That is what we are asking.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Oregon.
Mr. WYDEN. Mr. President, I want to pick up where Senator Murray left
off and emphasize to colleagues that not only would this bill raise
taxes on millions of middle-class families, but it would also be a
dagger in the heart of the Affordable Care Act, causing millions to
lose their coverage and raise costs for millions more. By gutting the
personal responsibility portion of the Affordable Care Act, this
legislation is going to take America back to the days when healthcare
was for the healthy and wealthy because it will green-light once more
discriminating against those with preexisting conditions. It will say
the insurance companies can go out and beat the stuffing out of
somebody who has a preexisting condition.
If that is not enough, evidence this morning in the paper shows that
this will trigger a new wave of health insurance scams and rip-offs
that are going to harm our people. This morning in the paper, they
talked about how this is going to encourage these cheap, junk, short-
term health insurance policies, which often lack consumer protections
and in so many instances have been a magnet for fraud and unscrupulous
sales practices.
For example, the paper this morning talked about how--I will read it.
``Examples abound of people who are dumped from such policies''--these
short-term policies--``or denied coverage, mired in debt and medical
bills totaling thousands, if not hundreds of thousands of dollars.'' It
documents the various sales tactics used to rip people off. I remember
what those tactics were like. When I was director of the senior
citizens, the Gray Panthers, at home, it was common for agents to sell
policy after policy that was not worth much more than the paper it was
written on. It sure sounds to me as though these short-term policies,
while a different time, are going to encourage the same kinds of rip-
off practices that are going to harm our people.
As we have touched on, we have heard from Senators on the other side
that they think that if they vote for this bill, what they are going to
be able to do is get two other bills that somehow will mitigate, will
eliminate a lot of the harm this horribly flawed bill is going to do.
It is going to harm millions of middle-class families who don't get a
fair shake in the marketplace and then inflict all this damage on
healthcare that I just described.
I happen to think these two bills are constructive bills. The
Alexander-Murray bill will make payments that will help limit the
amount low-income Americans pay for health insurance. Our colleagues,
Senators Collins and Nelson, have another constructive idea--
reinsurance money. That helps to stabilize the insurance market, which,
by the way, the President of the United States has worked so hard to
destabilize. The fact is, the Congressional Budget Office, which is the
nonpartisan group of experts we use, has made it clear that these two
bills will not even come close to wiping out the disastrous
consequences of the health provisions in this bill that the Senate is
about to vote for.
I want to be clear. This is not just a tax bill, not just a bill with
handouts to multinational corporations and a grab bag full of goodies
for campaign supporters and powerful, well-connected interests. It is
not just that. It is a big step backward in the cause of making sure
that all our people have affordable, accessible healthcare.
What we ought to be doing is looking at ways to come together and
find common ground on provisions that we know are cost-effective,
things like the children's health bill, which if I had my way would
have been passed a long time ago, and community health centers and
other vital provisions. We should be building on what we have, such as
holding down the cost of pharmaceuticals, for example, targeting the
middlemen who are at the heart of the problem. That is what we ought to
be doing.
We should not be doing what is on offer this morning. What is on
offer this morning is turning back the clock on American healthcare,
turning back the clock to those dark days when the insurance companies
could beat the stuffing out of somebody who had a preexisting
condition. We are better than that. We still have time. As I have said
on the floor, as the ranking Democrat on the Finance Committee, we
still have time to choose a different course. A few days ago, 17
Democratic Senators--led by Senators Manchin, Kaine, Donnelly, and
Heitkamp--came together and said: We want to find common ground on
taxes. I have written two bipartisan, comprehensive Federal income tax
bills, the most recent one with a member of the President's Cabinet.
We don't have to go this route. We don't have to go this route on
taxes. We certainly don't have to do it on healthcare. There are
approaches that would bring us together, and I have just described
several of them. What I know we shouldn't do is turn back the clock to
the days when healthcare in America was for the healthy and wealthy.
That is what you get when you green-light discrimination against people
with preexisting conditions. If they are healthy, no problem. If they
are wealthy, they can take care of it. We should reject this bill and
especially the provisions that relate to healthcare and that take
America back to dark days, horrible days when healthcare in America was
essentially for the healthy and wealthy.
I yield the floor.
The PRESIDING OFFICER. The Senator from Vermont.
Mr. SANDERS. Mr. President, it is no secret that I am strongly
opposed to this disastrous, unfair, and destructive piece of
legislation that we are debating today that will give massive tax
breaks to the wealthiest people in our country, to the most profitable
corporations, and to billionaire campaign contributors.
What really concerns me is that we are debating, as everybody
acknowledges, a very complicated and confusing piece of legislation
that is over 500 pages long. Here we are a few hours before we are
going to be voting on this legislation, and nobody has seen it. Nobody
even knows what is in this legislation. It is probably being written as
we speak right now. That is not a very effective or intelligent way to
deal with legislation that impacts every American and trillions of
dollars.
One of the concerns I have as we look at this bill is that there are
provisions in it that nobody really understands in terms of whom it
impacts and whom it benefits. As one example, buried in this
legislation, on page 503, section 14504, is a paragraph entitled
``Modification to Source Rules Involving Possessions.'' That is the
title of that section. What does that mean? As best we can understand,
it means that if you are a hedge fund manager who is a resident

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of the Virgin Islands, you will be able to get a major tax break on
capital gains and a 90-percent reduction in tax liability on your
income.
It has been estimated that corporations and the wealthy are avoiding
over $100 billion each and every year by stashing their cash in the
Caribbean and other offshore tax havens. It appears that this provision
will make a bad situation even worse. In adding insult to injury, it
appears that this provision may help only a handful of wealthy hedge
fund managers who have claimed residency in the Virgin Islands. It has
been estimated that this provision alone--one provision in a 500-plus
page bill--will cost over $600 million in lost revenue in the next
decade--$600 million in lost revenue when we have a $20 trillion debt
and 40 million people who are living in poverty.

Now, I see no Republican Senators on the floor, but I am sure that
staff is watching this discussion. I have a question that I would like
to discuss with Senator Wyden but, more importantly, with some of our
Republican colleagues.
What I would like to ask my Republican colleagues is whether there
has been a hearing on the need to provide tax breaks to wealthy hedge
fund managers who have established residency in the Caribbean.
I would say to my friend from Oregon that there are a lot of problems
facing our country--a declining middle class, 40 million people living
in poverty, 28 million people having no health insurance. I am not
aware that one of the great crises facing this country is the need to
provide tax breaks to wealthy hedge fund managers who have established
residency in the Caribbean. It may be one of those great national
crises that I have missed, but I don't quite perceive it as being an
issue that the American people seem to be deeply concerned about.
I hope that my Republican colleagues--maybe Senator Hatch or others--
will come to the floor and tell us who this provision benefits. Are we
talking about one hedge fund manager? Are we talking about two? Are we
talking about three hedge fund managers who are going to divvy up some
$600 million in tax breaks over the next decade?
I ask my colleague from Oregon, who is the ranking member of the
Senate Finance Committee, his thoughts on the issue.
Mr. WYDEN. I am very pleased that my colleague from Vermont is
discussing this issue on the floor. The Finance Democratic staff has
been looking into this and has been working also with the Senator's
staff, and I think that it would be fair to say that every few hours,
this bill just seems to get worse. I mean, we don't know if, in the
middle of the night, somebody will add another round of favors for the
powerful interests, the politically well connected. What I can tell the
Senator is what we have been able to put together as of now.
In 2004, legislation was written that we were very much involved in
that helped eliminate the loophole by requiring U.S. citizens to be
bona fide residents of the Virgin Islands and imposing U.S. tax on
income effectively connected with the United States. Now, in the dark
of night, as I have indicated, it appears that we have a provision that
is relaxing this rule.
From our conversations, I know the Senator understands that we all
want to help the people of the Virgin Islands after a devastating
hurricane. Are we helping people by creating a huge, new loophole,
possibly for a handful of those people who are especially well
connected and can get to the Finance Committee? I am convinced that if
one looks at the Paradise Papers and the Panama Papers, what they were
warning about in those papers was of all of these efforts to stash
money and create new options for people to wheel and deal in offshore
accounts.
So my colleague is right. I continue to wonder why, when we want to
ask these really important questions about special interest favors and
when we look to the other side, we have this barrier between both sides
of the aisle. We need somebody here to explain to us and explain to the
American people how this has seemed to just fly out of the sky.
I am very appreciative of the Senator's raising a question about what
looks like yet another scam that has come into a process that has been
one big sham from the beginning. I appreciate my colleague's question.
Mr. SANDERS. I thank the Senator very much.
I would just say, according to a number of independent studies,
despite what President Trump and the Republican leadership are saying,
the overwhelming bulk of the tax benefits in this legislation goes to
the top 1 percent. I believe the number is 62 percent that goes to the
top 1 percent.
Mr. WYDEN. If my colleague will yield, there is no question he is
correct that in terms of stacking the deck, this is not just stacked to
the top but to the top 1 percent or a fraction of the 1 percent.
Mr. SANDERS. You have 62 percent of the benefits going to the top 1
percent. Meanwhile, by the end of the decade, my good friend, Senator
Wyden from Oregon, there is no question but that tens of millions of
middle-class Americans will be paying more in taxes; is that correct?
Mr. WYDEN. There is absolutely no question about that. We are looking
at something like half of the middle class to be paying more in taxes
come 2027.
Mr. SANDERS. So here we have a nation today that has a grotesque
level of income and wealth inequality--worse than at any time since the
late 1920s. The top one-tenth of 1 percent now owns almost as much
wealth as the bottom 90 percent, and 62 percent of all new income is
going to the top 1 percent. The Republicans' solution is to make this
grotesque inequality even worse by giving 62 percent of the tax
benefits to the top 1 percent.
I want to get back to this one point. I suspect that when you rush a
bill of this magnitude through the U.S. Senate when there have been
virtually no hearings, no experts, no real ability to have significant
debate and discussion at the committee level, what you are going to
find the day after this bill is passed are absolutely outrageous
provisions.
I suspect--I don't know, and I would like my Republican colleagues to
help us here; I cannot verify because we don't have the information--
that on page 503, section 14504, there is a provision that will provide
$600 million in tax breaks over a 10-year period that will end up in
the pockets of a handful of Wall Street hedge fund managers. That is
what I suspect. Maybe I am wrong. Therefore, I hope that some of the
Republicans who put this provision in the bill will tell us how this is
going to benefit the people of the United States or the Virgin Islands
or anyplace else.
Again, I am speaking to the ranking member of the Senate Finance
Committee, who knows something about this.
Is this an issue, Senator Wyden, that has been discussed for 1
minute?
Mr. WYDEN. Not for a minute.
The reason my colleague's questions are so important is that this is,
certainly, an example of what seems to turn up every few hours,
practically in the middle of the night.
My colleague raised a very good point with respect to the development
of this bill. I mean, we are talking about making $10 trillion worth of
changes in tax policy on the fly--without a hearing. The Senator's
colleagues have said--Chairman Enzi and the Budget Committee--and I
have heard it several times on the other side--that there were 70
hearings on this bill. There was not one on this piece of legislation.
It certainly didn't examine this issue. It didn't examine the question,
for example, of what is going to happen to people with this dagger to
the Affordable Care Act.
I can tell this to my colleague because he is right to talk about how
one brings parties together. I know my colleague did that as part of a
major bill on the Veterans' Affairs Committee with Senator McCain. Our
former colleague Bill Bradley mentioned that when he wrote a tax bill,
he flew all over the country to work with Republicans. In this case,
apropos of my colleague's question, not only did no one do that sort of
thing, but they wouldn't even walk down the corridor to talk about
working with the other side.
Mr. SANDERS. Let me make two points as I wind down here.
One, yesterday, I challenged my Republican colleagues, after this
bill is passed, to tell us and tell the American people that when they
rack up a deficit of $1.4 trillion, they are not going to

[[Page S7660]]

come back and cut Social Security, Medicaid, Medicare, education,
nutrition.
Tell the American people that you are not going to balance the budget
and compensate for your huge tax breaks to the rich and large
corporations by going after the middle class and working class of this
country.
I challenged my Republican colleagues yesterday to come to the floor
and tell the American people that they would not do that. They have not
responded to that challenge.
The second challenge today is to tell us what is in section 14504,
page 503. This is a provision that would provide $600 million in tax
breaks to my Republican colleagues. Who is going to get those tax
breaks? We believe--and tell us if we are wrong; maybe we are--that we
are talking about a handful of hedge fund managers. Who are they? How
many of them are there?
I would ask, respectfully, that Senator Hatch or any other Republican
come down to the floor and tell us who benefits from section 14504.
Mr. WYDEN. Will my colleague yield for a moment?
Mr. SANDERS. I will.
Mr. WYDEN. I want to ask the Senator a question because I am not sure
that we have really laid out the timetable of what is ahead. My
colleague, of course, who is our ranking Democrat on the Budget
Committee, is very up on this.
We have all been concerned because we have seen it before. You pass
these big tax cuts. You get on a sugar high for a relatively short
period of time. Then the deficits start rolling in. What we see next
are the cuts in the programs that are a lifeline for millions of
people--the anti-hunger programs, Medicaid, Medicare, Social Security.
I saw comments in the paper that what my colleague is concerned about
has already been announced by the Speaker of the House. I understand
that what the Speaker of the House has said is that his next plan is to
take up the issues of what he calls entitlement reform. They are not
talking about the things that the American people care about and that I
am going to hear about at townhall meetings at home this weekend--
holding down the costs of prescription drugs. They are talking about
rolling back the safety net--Medicaid and the anti-hunger programs and
Social Security.
Is that my colleague's understanding?
Mr. SANDERS. Absolutely. That is absolutely what they will do. They
will talk about saving Social Security; they will talk about
entitlement reform. What they mean is cutting Social Security, cutting
Medicare, and cutting Medicaid.
As the Senator has indicated, it is not some kind of an abstract,
theoretical idea. That is what Speaker Ryan is already talking about.
More to the point, that is exactly what was in the budget that was
passed here several months ago.
Mr. INHOFE. Will the Senator yield for a unanimous consent request?
Mr. SANDERS. I will.
Mr. INHOFE. Mr. President, I ask unanimous consent that at the
conclusion of the remarks by the Senator from Vermont, I be recognized
for up to 10 minutes.
The PRESIDING OFFICER. Is there objection?
Without objection.
Mr. WYDEN. Reserving the right to object, if I could, I don't think
the UC was granted.
Mr. INHOFE. I have a point of inquiry. Was the UC already granted--
the unanimous consent request?
The PRESIDING OFFICER. The Chair said ``without objection'' because
the Chair did not hear objection.
Mr. WYDEN. Well, I would like to reserve my right to object at this
time.
The PRESIDING OFFICER. Is there objection?
Mr. WYDEN. Reserving my right to object, and I will not object. I
would just like to make sure that our colleague from Oklahoma and our
colleague from Washington are both accommodated in this matter.
Senator Sanders and I have finished. I believe Senator Cantwell said
that Senator Inhofe will go ahead. We thank Senator Cantwell for her
usual collegiality.
Senator Inhofe will go first and I ask unanimous consent that Senator
Cantwell follow Senator Inhofe, and I will withdraw my reservation.
I withdraw my reservation and I ask unanimous consent that Senator
Cantwell follow Senator Inhofe.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. SANDERS. Mr. President, let me conclude my remarks.
I would urge my Republican colleagues to come down to the floor of
the Senate and explain to the American people what section 14504 is
about and who benefits from some $600 million in tax breaks over a 10-
year period. Is it two hedge fund managers? Is it five hedge fund
managers? What is it?
That is my request, and I hope we can get a response to that quick
question as quickly as possible.
With that, I yield the floor.
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. INHOFE. Mr. President, let me pause in this class warfare for
just a minute to make a couple of observations that I think are
certainly important to me.
First of all, I agree that no one has said that the underlying bill
is perfect.
Incidentally, I will not respond to the Senator's specific request
until I have time to go back and get the proper response, and then I
will be glad to do it. But I will say this. We are going to have a
conference. There is going to be opportunity for us to go and get some
of the things ironed out--some of the things we are both concerned
about. There are a couple of things I want to serve notice right now
that I am going to be concerned about. One is that the bill that we
have punishes trust ownership. It doesn't treat the trust ownership the
same way it does ordinary ownership. I think they both should be
treated equally. I talked to a number of people who will be
participating in this on the other side of the aisle, and I would like
to kind of serve notice that we are going to be talking about this,
because I think it is very, very significant.
The second thing is that we hear a lot of good ideas. Certainly,
there is this idea that somehow there isn't a good idea unless it
emanates from this body. I have to tell you this. It is interesting for
me to be standing here because I am not on any of the committees that
have anything to do with this bill. I am not on the Finance Committee,
and I am not on the Budget Committee. If you want to talk about
defending America and roads and highways, I will talk to you about
that. That is my specialty. I am on those committees and have senior
leadership in those committees. But as a Member not directly involved
in this debate, I have looked at it and I have heard good ideas from
the outside. I heard one a week ago that actually came from the Hugh
Hewitt show. I heard an idea that I tried to pick apart, and I can't
find any faults with it. So I have developed an amendment that we are
going to have that will address this idea that I am talking about. That
amendment would offer an alternative to those who have retirement
programs, where the individual is not to pay for the income until the
withdrawal date--say, age 59\1/2\.
The amendment would provide that there would be a one-time
opportunity to withdraw up to 25 percent of the retirement account for
a single flat fee of 10 percent in lieu of paying income tax at that
time.
There are a lot of benefits that I think are pretty obvious. We are
talking about retirement programs where the individual is not to pay
for the income until the withdrawal dates--let's say, at age 59\1/2\.
This would have the immediate revenue of 10 percent of all savings that
are withdrawn, and this would actually amount to billions of dollars.
We are talking about immediate dollars, not dollars that may be there
in the future.
Now, you could argue that this might reduce some revenue at some
future date because the individuals will have already pulled this out
for a fee of 10 percent. So, perhaps, it would have some negative
effects in the distant future. But when you stop to think about the
benefits--I know a lot of people on the other side of the aisle don't
realize this--we are going to have huge benefits.
If you just look at what has happened in this administration in the
second and third quarter of this year, we have gone through years in
the Obama administration with maybe a 1.5-percent

[[Page S7661]]

increase in GDP, and we have enjoyed 3 percent in the second quarter
and 3.3 percent in the third quarter. That is a huge increase. For each
1 percent increase over a period of 10 years, we are talking about $3
trillion. So we are all considering this.
This amendment that we are talking about that merely allows people to
take money out that is already their money is something that would have
a great stimulation in the economy. I am one of the few ones who was
around here--not in this body but in the other body--and I was aware of
this back during the Reagan years of 1981 and 1986. In 1981, the amount
of revenue that we had coming into the Federal coffers was $469
billion. Ten years later that was $750 billion. That was after the
first great reduction. Let's remember that reduction took the top rates
down from 70 percent to 50 percent. Again, in 1986, when the total
revenue was $569 billion, there was a further reduction. The top rate
went down from 50 percent to, I believe, 28 percent.
Now, with all of those reductions, that increased 10 years later from
$569 billion to $1 trillion. Consequently, we know that if we can
stimulate the economy, we are going to have more revenue coming in.
That is a fact. I think this will be something that I think a lot of
people can look at.
I talk about when you get into the conference. I will not be one of
the conferees, and I am aware of that, but there are a lot of good
ideas out there along with those on the floor today. They will be
pursuing them at that time. That is assuming we pass this bill, and I
think we will pass it.
Additionally, tax reform will ensure that American families and
businesses see a meaningful reduction in their tax burden. The Senate
bill provides a substantial tax deduction to small and family
businesses that are structured as passthrough entities. These small and
family businesses are household names such as Love's Travel Stop, the
Country Stores, Hobby Lobby. We are all very familiar with Hobby Lobby.
By the way, I will say that in the event there is anyone here who has
not been down to see the Museum of the Bible, that is Hobby Lobby who
paid for that. Those are the types of people who would benefit.
Unfortunately, the Senate does not allow tax deductions for these
companies or passthrough entities if they have trusts. This is not
right.
For these companies trusts were for long-term business purposes, not
to evade their fair share of taxes. These companies use the income to
invest capital in operations to grow their businesses, to hire people,
and to contribute to the economic growth that we need in this country.
We should not penalize passthrough companies for their businesses
because they are trusts. My amendment would fix that.
With that, I yield the floor.
The PRESIDING OFFICER. The Senator from Oregon.
Mr. WYDEN. Mr. President, I ask unanimous consent that Senator
Cantwell and Senator Van Hollen be allowed a total of 15 minutes to
discuss some very important issues.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
The Senator from Washington.
Ms. CANTWELL. Mr. President, I come to the floor with my colleague
from Maryland to talk about the State and local tax deduction.
I thank the ranking member of the Senate Finance Committee for his
hard work on trying to articulate what is fair tax policy for
Americans. Senator Wyden and I come from parts of the country with
probably some of the most unique tax codes. He doesn't have a sales tax
in Oregon. We don't have an income tax in Washington.
We are not an expensive tax State. We are not an expensive tax State.
There are other States such as Texas, Nevada, and Florida that also
don't have an income tax. Under this bill, those States and the
citizens of those States, like many others, are going to be penalized.
Middle-class Americans are going to have their taxes raised to give a
tax break to corporations.
So while we might want to discuss what is fair tax policy as it
relates to the competitiveness of our economy, the good news for the
people of the State of Washington is that we have very competitive
businesses, whether it is Microsoft or Amazon or Starbucks or Costco or
Boeing. They are all working hard. They are all working in multiple
places, and yes, they are all doing really, really well.
The question is, Do we need to reduce their corporate rate so
significantly, and to do so, take money out of the pockets of middle-
class families across the United States of America?
The reason I mention Senator Wyden and the States of Oregon and
Washington, is that, even though we have a unique tax code, our State's
economy has grown faster than the national average every year since
World War II. That is to say, the uniqueness of our tax code has not
hurt us, and yet in the State of Washington we have had the highest
minimum wage for a long time in the United States. Now we are raising
it in various parts of our State. We have had a unique view of where
our revenue should come from.
Why now? Why now? After 100 years of tax deductibility by taxpayers
in this country, why are you taking away their ability to deduct only
to give a tax break to corporations that are making record profits?
After 100 years, why are you doing this?
Well, I think some of my colleagues have said it best. They have
called it double-taxation. You are going ahead after 100 years and
saying it is OK to tax the same amount that we pay to the State that
you also are going to tax at the Federal level. As one article
mentioned, ``Alexander Hamilton in the Federalist Papers said the
Federal Government might try to monopolize taxation to the entire
exclusion and destruction of State governments.''
That is right. Our Founding Fathers said: Do not have double
taxation. So for 100 years--100 years--we protected the citizens of
this country. Yet someone over there is thinking: Do you know what? I
need $1.4 trillion. Where can I get it? Let's do it on the backs of
middle-class families, because they might not notice until 2019 when
their tax bill comes and they have a different equation.
I get that my colleagues think they have solved this problem by
getting rid of the deductions and now all of a sudden giving you a
double standard deduction. I have done the math. I have done the math
for us in Washington State, and over 300,000 people in Washington will
see their taxes go up immediately, probably paying anywhere from $750
to $1,000 more in taxes. Is that fair? They are sitting in the shadow
of these large companies who are making record profits and doing quite
well, asking why are they the funders of this tax break. Why are they?
Why are we getting rid of a policy that has existed in our country for
over 100 years and penalizing them just to give this corporate break?

I can tell you I don't buy the notion that this is going to trickle
down to productivity and wage growth. I know what is driving
productivity and wage growth in my State. It is a great, educated,
skilled workforce. It is staying ahead of innovation whether it is
making software or new ways of doing business, and, yes, it is a
constant challenge. Those businesses tell me all the time we need more
infrastructure, we need more affordable housing, we need a better
transportation system, we need better education. So they are very
concerned about the ideas in this legislation.
So you are going to tax immediately about 300,000 Washingtonians with
a higher tax rate and, according to the Joint Committee on Taxation and
other entities, probably by the time this is done, at the end of this
bill, over a million Washingtonians are going to pay more money. That
is why I am so concerned, along with other States that have been
fighting this battle for so long. Why now? Why now? What is the urgency
that you are taking away the ability of my citizens to deduct their
local sales tax, their property tax, and, in the House case, other
expenses, whether they are medical or education or their mortgage? It
is just beyond me, when the middle class has suffered so much and has
not recovered from the downturn in the economy, that you think the best
economic strategy is to take money out of the middle-class taxpayer.
I ask unanimous consent to have printed in the Record a letter from
the National Governors Association from Governor Sandoval from Nevada.
I mentioned they don't have an income tax. They are highly sensitive to
this issue.

[[Page S7662]]

There being no objection, the material was ordered to be printed in
the Record, as follows:

National Governors Association,

September 22, 2017.
Hon. Richard Neal,
Ranking Member, Committee on Ways & Means, U.S. Senate,
Washington, DC.
Dear Majority Leader McConnell, Minority Leader Schumer,
Speaker Ryan, Minority Leader Pelosi, Chairman Hatch, Ranking
Member Wyden, Chairman Brady, and Ranking Member Neal: The
nation's governors appreciate congressional efforts to reform
and improve federal tax policy. Federal and state tax systems
are complex and often interconnected. Therefore, as Congress
considers reforms, we urge you to maintain the balance
between state and federal tax systems by preserving the
income exclusion for municipal bond interest and the
deductibility for state and local taxes.
The financing engine that drives U.S. infrastructure is the
$3.8 trillion municipal bond market. Changes to federal laws
and regulations should not increase issuance costs to states
for municipal bonds or diminish investor demand for them. If
federal changes make issuing municipal bonds cost-prohibitive
for states and local governments, then fewer projects could
be funded, taxes could rise, fewer jobs created, and economic
growth will suffer.
Governors also believe that no federal law or regulation
should preempt, limit, or interfere with the sovereign rights
of states. A mark of sovereignty includes the ability to
develop and operate revenue and tax systems. Deductibility of
state and local taxes has contributed to the stability of
state revenues that are essential for providing public
services. We encourage you to avoid changes to the tax code
that would undermine the ability of state and local
governments to meet the needs of the citizens whom we all
serve.
Eliminating state and local tax deductibility, moreover,
exposes a higher share of an itemizing taxpayer's income to
federal taxation because it adds back mandatory payments of
state and local taxes already paid, as taxable income.
Federal tax reform requires an intergovernmental
partnership because decisions at the federal level will
affect state and local governments profoundly. We look
forward to working with Congress on bipartisan tax reform to
maintain balance between our systems and modernize the
federal tax system to meet the needs of our citizens.
Sincerely,
Gov. Brian Sandoval,
NGA Chair.
Gov. Steve Bullock,
NGA Vice Chair.

Ms. CANTWELL. Mr. President, their letter says that the deductibility
of State and local taxes has been a part of their stability, and they
are about meeting the needs of their citizens.
So the notion that we have the National Governors Association, the
homebuilders, the Realtors, so many people concerned about this is
falling on deaf ears. I guarantee you it will not fall on deaf ears
when the citizens have a chance to respond to this.
The notion that we not only are taking away this ability to deduct,
but we are also in this legislation making a change to the way
inflation is calculated, what is called Chained CPI--I am not going to
bother to explain the details to you, but I will tell you this. It will
change your tax bracket, and you will be in a higher tax bracket. So
besides giving you less deductibility, they are changing a formula and
making you pay more taxes.
This bill needs to slow down. It needs to focus on what will help our
economy grow, and economists don't believe this bill is going to do
much to help the economy grow. It is going to give those corporations
money to pay for dividends. Seventy-five to eighty percent will go to
their shareholders, and those shareholders and the stock market will do
well.
What we also need to focus on is the investment that middle-class
families need to stay in their home, to make education affordable, to
pay for healthcare, and to have communities work. The fact is, the
Fraternal Order of Police is also against this legislation because of
taking away of this local deductibility. It is like Hamilton said: Why
are you doing this at a Federal level? I thought the other side of the
aisle was the States' rights people? I thought they were there to
protect the uniqueness of the Tax Code to say that States have rights,
to say that States ought to be able to decide their own future. Well,
after 100 years, you are taking that away today, and you are going to
hear from the citizens of this country who are upset that they have to
pay higher taxes just to give these very successful companies a
corporate tax break.
I yield to my colleague from Maryland.
The PRESIDING OFFICER. The Senator from Maryland.
Mr. VAN HOLLEN. Mr. President, may I inquire how much time remains on
the unanimous consent agreement for this amendment?
The PRESIDING OFFICER. The Democrats have approximately 6 minutes
remaining.
Mr. VAN HOLLEN. Thank you, Mr. President.
I see Senator Menendez from New Jersey has arrived. He is a
cosponsor, together with Senator Cantwell and myself, on this
amendment, and I want to thank Senator Cantwell for her leadership. She
has covered a lot of important points.
The main one is, from the beginning of our Federal Tax Code in 1913,
we have established a principle in the United States to avoid double
taxation. It makes no sense that any citizens of this country send a
dollar of tax to their State governments to help schools or roads in
their State, and then they are turned around and taxed on that same
dollar by the Federal Government, but that is exactly what this
Republican tax plan is doing.
Now, weeks and weeks ago, the Republican leader, Senator McConnell,
and the Speaker of the House, Paul Ryan, made these public statements
about how these Republican tax bills weren't going to raise taxes on
anybody. They both had to publicly reverse those statements because, in
order to provide huge tax breaks to the biggest corporations of this
country, this bill will require millions and millions of middle-class
families to increase their taxes, and a main vehicle for doing that is
by removing the deduction for those citizens.
I am just going to give you some quick numbers: 100 million Americans
today use the deduction for State and local taxes. In fact, half of the
families in my State of Maryland use it. Thirty-eight percent of
taxpayers making between $50,000 and $75,000 claim the State and local
deduction. That is 7.6 million households. Fifty-six percent of
taxpayers who make under $100,000 claim the State and local deduction,
and 86 percent of taxpayers making under $200,000 claim the State and
local deduction.
It is wrong to double tax those families in order to provide a huge
tax break for big corporations. Just to add insult to injury, the
corporations in our State still get to deduct their State and local
taxes. We just don't let the people in our State do the same thing.
Let's adopt this amendment.
The PRESIDING OFFICER. The Senator from New Jersey.
Mr. MENENDEZ. Mr. President, I am here to support the motion offered
by Senator Cantwell, to speak out against a tax bill that is nothing
short of highway robbery on New Jerseyans.
This tax plan is about one thing. It is about cutting taxes for
wealthy corporations and asking working families to pay for it. It is
especially bad for middle-class families in New Jersey, New York,
Washington, Maryland, and other high-earning States that make bold
investments in education, that drive the most innovation, that generate
the most Federal revenue.
Don't let the Republicans fool you if they airdrop an amendment at
the last minute that throws a few crumbs at New Jersey families and
call it a victory. Carve-outs, caps, and exceptions are nothing but
gimmicks meant to distract the public from what is really going on. No
matter how you slice it, gutting or even limiting the State and local
tax deduction is a direct assault on middle-class families in America's
highest earning, most economically productive States. By gutting the
SALT deduction, Republicans will literally force millions of middle-
class families across America to pay taxes on their taxes.
In 2015 alone, nearly 1.8 million New Jersey households deducted a
combined $32 billion in State, local, and property taxes from their
Federal tax bill. These families aren't living large. They are middle-
class folks who had to work hard for every dollar they have. In fact,
IRS data shows that more than 85 percent of taxpayers who claim the
SALT deduction make under $200,000 a year and over half make under
$100,000 a year. So it is wrong to ask millions of Americans who had to
fight their way into the middle class to pay more just

[[Page S7663]]

so big corporations can pay less, and rubbing salt in their wounds is
the fact that Republicans let corporations keep on deducting their
State and local taxes on top of the huge tax cuts lavished on them by
this tax plan.
If deducting State and local taxes is so important for big
corporations that make billions of dollars each year, Republicans
should understand why it is so important for middle-class families in
cities and suburbs across America. That is why I am offering this
motion with Senator Cantwell to send the bill back to committee to fix
this fatal flaw and restore the SALT deduction. If it is good enough
for huge corporations, it should be good enough for middle-class
families.
I have heard many of my Republican colleagues complain about the SALT
deduction as if it is some subsidy for States like New Jersey, and that
hypocrisy is just amazing to me. Far from subsidizing successful States
like New Jersey or New York, the SALT deduction actually benefits the
entire Nation, which is able to share in the economic rewards created
by the high-powered economies of States like New Jersey, and now
Republicans want to take even more. Well, we are sick and tired of it,
and we want our money back.
I will make a deal with any Republican from a taker State. Since you
are so opposed to subsiding other States, how about you take all of the
extra Federal dollars you receive beyond what you pay and transfer it
back to donor States like New Jersey? Sound like a deal? I don't think
so.
Each and every year, States like New Jersey, New York, and Virginia
generate billions of dollars in Federal revenue that go to Americans in
less productive, lower income States that are more reliant, more
dependent on Federal spending. They are America's economic powerhouses,
America's donor States, precisely because they invest in public
education, law enforcement, mass transit, infrastructure, and economic
opportunity for all.
It is no surprise that everyone from the Fraternal Order of Police to
the American Hospital Association, to AARP support keeping the State
and local tax deduction. Taking it away is a direct threat to the
funding States need to educate our kids, keep cops on the beat, equip
first responders and firefighters, and provide healthcare to the most
vulnerable--all this just to give big corporations big tax cuts.
If multinational corporations get to keep deducting their State and
local taxes, there is no reason to stop millions of middle-class
Americans from doing the same. Make no mistake, any reduction in the
State and local tax deduction is a direct assault on America's highest
earning, most innovative, most economically productive States. Guess
what. All Americans will lose out when America's economic powerhouse
States aren't so powerful anymore.
I urge my colleagues to stop punishing success, stop interfering in
State government decisions, and join me in protecting the SALT
deduction. Vote for the motion to recommit.
I yield the floor
The PRESIDING OFFICER. The Senator from South Dakota.
Mr. THUNE. Mr. President, we are about to embark upon a vote that I
think will be historic, a once-in-a-generation opportunity, in my view.
The last time we did major tax reform in this country was 1986, 31
years ago. Believe it or not, I happened to be a staffer here back
then. Although my boss was not on the Senate Finance Committee, I was
the tax LA in the office, and so I had the opportunity, in a very small
way, to be a part of the 1986 Tax Reform Act, which at that point was
landmark legislation, very historic, very far-reaching, and had a
profound impact in a positive way on the economy.
Well, here we are 31 years later--long overdue, I might add, to get
to the point where we once again can do something fundamentally about a
tax code that is completely outdated, completely antiquated, and puts
us at a competitive disadvantage with countries around the world with
whom we have to compete. So we have an opportunity today--and we will
have an amendment process here that will get started very soon in which
Members will have an opportunity to lay down their amendments, to
debate them, and to get them ultimately voted on, but when it is all
said and done, I believe we will have a final product that moves us
fundamentally in a different direction when it comes to our tax policy,
in a direction that is good for jobs, that is good for growth--economic
growth--and that is good for wages in this country for hard-working
families and people who have been living paycheck to paycheck for a
really long time.
We didn't get here overnight. There has been a lot said about how
this is all of a sudden rushed to the floor. I have to tell you that I
got on the Senate Finance Committee in 2011, and since 2011 when I
joined the committee, we have had 70-plus hearings on tax reform. We
have had 70 hearings examining different aspects of the tax reform,
listening to recommendations about how it might be changed, how it
might be modernized, how it might be updated, and how it might be
improved. It has been a long, methodical process to get us to where we
are today.
Two years ago, in 2015, the chairman of the committee, Senator Hatch,
created five working groups, and each of the working groups had a
specific area of responsibility to look at different elements of the
Tax Code and come up with a series of recommendations for how it might
be improved. I was privileged to chair one of those working groups,
along with Senator Cardin. We had both Democrats and Republicans
participating in that process.
At the end of it, each of the working groups submitted
recommendations, many of which, I might add, are included in the mark
we are going to be voting on later today. A lot of those ideas came
from those bipartisan working groups. So there are a lot of Democratic
and Republican ideas that have been incorporated into this legislation.
I would hope, in the end, that there might be some Democrats who
ultimately will vote for it. But I think it is important to note, for
those who believe that perhaps this was somehow rushed in here, that
there has been a lot of thought over a long period of time. There were
not only months but years--literally years--of work that has gone into
bringing us to where we are today.
When the bill was introduced--the mark was put out there by the
chairman--that put in place a process in the committee where we had a
markup. So we spent 23 hours over several days marking up the bill. We
voted on 63 Democratic amendments in all 69, or thereabouts, amendments
on the bill while it was being marked up before it was reported out
here to the floor.
Since it was reported out of the committee, there have been a number
of changes that have been made in response to concerns and issues that
have been raised by individual Senators on both sides of the aisle. And
that brings us to where we are today.
I say that by way of context to let people know that this has been a
long process--an arduous process, I might add--and frankly one that is
really overdue. I happen to believe profoundly that it is high time
that we undertake the important work of readapting and readjusting our
tax policies to reflect an economy and a marketplace that is very
different from the last time this was done in 1986.
So that gets us to where we are today. In trying to figure out how to
modernize, how to update our Tax Code, there are a couple of things
that clearly needed to be dealt with. One is that we have a tax system
that has the highest rates among businesses in the industrialized
world. We have a 35-percent rate for corporations. When we look at
every other industrialized country around the world--look at the OECD
average; it is down around 22 percent. A number of countries have gone
well below that. We continue to hemorrhage jobs and businesses and
profits to other places around the world because our tax rate, our Tax
Code, frankly, isn't competitive.
We operate in what is known as a worldwide tax system in which not
only do you pay a tax in a country in which the income is generated,
but you also pay a tax when it comes back into the United States at the
higher level, at the 35-percent rate. So that also had to be adapted,
and we are moving now more toward what is called a territorial tax
system in which the income is taxed in the jurisdiction in which it is
generated. I believe that will make us a much more competitive economy
globally and make America a much more attractive place to do business.

[[Page S7664]]

We get the corporate rate, the business rate, down to 20 percent. And
when I say businesses, that is what we call C corporations. There is a
slightly different treatment for passthrough businesses. Those are your
partnerships, LLCs, and sole proprietorships, things like that. But we
also significantly reduce rates on small businesses. We believe that is
important to growth. This needs to be a pro-growth bill. We want to
grow our economy at a faster rate because a faster growing economy, an
economy growing at rates that are more normal to historic averages,
means that we are creating better paying jobs. That means we are
lifting wages in this country.
Wages have been flat for so long. For the last decade or so, the
American people have rarely had anything that could be characterize as
a pay raise. That is why we needed to update our business tax rates,
our business tax code, so that we can get the economy producing and
growing at a faster rate to generate those good-paying jobs and provide
higher wages to American families and American workers. We believe this
bill does that.

I think the changes that have been made in addition to lowering the
rate--allowing for expensing of capital investments allows businesses
to recover their cost of investment faster, accelerate that cost
recovery, which enables them to get that capital they can use to expand
and grow their operations and thereby, again, create those better-
paying jobs. Those are key changes that are fundamental to greater
economic growth, better jobs, and higher wages in our economy.
There have been a lot of analyses and studies that have been done
that demonstrate how, in fact, that might work. If you look at what the
President's Council of Economic Advisers says, they suggest that
lowering the rate on businesses will generate $4,000 in additional
average household income on an annual basis. That is an additional
$4,000 in the pockets of families in this country as a result not just
of the tax reductions, which I will get to in just a moment, but the
changes we made on the business side of the code generate an additional
$4,000 annually per household. There is another study out there by
Boston University. They conclude that it would increase the average
household income by $3,500, which is slightly less than $4,000.
It is safe to say that families in this country, households in this
country, and people in this country are going to benefit, because when
you create a more favorable environment, favorable conditions for
investment and creating jobs, you get competition for labor.
Competition for labor raises the price of labor. When the price of
labor goes up, companies have to pay higher wages. That means bigger
paychecks for American workers. That is precisely what these particular
studies have shown.
Let me say, too, because I think that as I have listened to our
colleagues on the other side--they consistently make the argument that
somehow these are tax cuts for the rich, which I don't think is any
surprise. That is normally what they say anytime we have a debate about
reducing taxes.
My experience here, in the time I have been in Washington, both as a
Member of the House of Representatives and now as a Member of the
Senate, has been that, generally speaking, Democrats like to grow
government. We like to grow the economy. We believe the best way to
lift all boats--to generate better paying jobs, to improve the quality
of life and standard of living for American families--is to get a
stronger economy that is creating those better paying jobs and raising
wages in this country.
Suffice it to say that our colleagues on the other side have attacked
this bill, as they do most bills. This is no exception. Most of the
attacks are on reform bills for delivering too much relief to high-
income earners. I have to say that I take issue with that because I
think, if you look at the actual content, the substance of the bill,
you will come to a very different conclusion.
I said this before, and I mean it sincerely: I hope people don't take
it from me. Sit down and look at your own tax situation. Plug in the
changes that we are making here, and find out if you come out better or
worse than you are today.
I will tell you that if you look at the average family of four with a
combined annual income of $73,000, you are going to see that they are
going to see a $2,200 tax cut. A $2,200 tax cut is what your average
family of four making $73,000 in this country is going to see. What
does that represent to them? That is a 60-percent reduction, a 60-
percent tax cut relative to what they are paying today under current
law.
By reforming the Tax Code and putting these changes in place, the
average family of four with a combined annual income of $73,000 will
see a $2,200 tax cut or about a 60-percent reduction in what they are
paying today. Why does that happen? Well, it happens because we are
making some changes that provide significant relief in the Tax Code
relative to families when they file their taxes.
The first, of course, is we double the standard deduction. The
standard deduction is the amount that people can deduct from their
income right away, from their adjusted gross income. That lowers the
amount that is actually taxable to start with. Under our legislation,
the standard deduction for both married couples and those who are
filing single--they actually get a doubling of the standard deduction.
The second thing we do in our bill--and if you are raising kids, this
will dramatically reduce the tax burden you will have--is we double the
child tax credit, which under current law is $1,000 per child. Under
this legislation, that will double to $2,000 per child.
The other thing we do is we lower rates. We have a significant rate
reduction through all the different brackets in the code.
The combination of doubling the standard deduction, doubling the
child tax credit, and lowering rates means that middle-income families
are going to pay less in taxes.
We think we have found the right balance in designing a bill that
delivers tax relief to hard-working, middle-income families in this
country. At the same time, we are reforming the business side of our
Tax Code in a way that unleashes our economy and unleashes those job
creators and a lot of that investment that has been sitting on the
sidelines and allows our small businesses and our larger businesses to
expand their operations, and as they do that, they will have to hire
more workers and pay those workers higher wages.
We think the combination of those features of this bill makes this a
bill that is very beneficial to middle-income families in this country.
Those are just a few of the features of the bill that lead to, as I
said earlier, an average tax cut for a typical family of four of $2,200
or about a 60-percent reduction over what they are currently paying.
As we have listened to the debate from the other side, they attacked
it as being a tax cut for the rich. They attacked it for being rushed
out here. They attacked it for being a windfall for corporations. It is
very predictable. There is nothing new in any of these arguments. I
have been around here long enough to know in advance what the other
side is going to say. But in this case, these arguments simply don't
comport with reality. They just don't fit the facts. They don't fit the
data.
With respect to the issue of who pays, we pay a lot of attention--and
we should--to tax burdens in this country. One of the things this
legislation we will be passing today does is it maintains in the law
the progressivity in our Tax Code. We have the most progressive Tax
Code, I would argue, in all the world. So we paid very close attention
to this to make sure that the tax burden, when all is said and done,
doesn't change very much from where it is today. So people of different
income groups, income categories, continue to pay similar burdens to
what they are paying today.
What this shows is that those in the $20,000 to $50,000 category
today pay about 4.3 percent of the entire tax burden, the taxes
collected in this country. People who earn between $20,000 and $50,000
pay about 4.3 percent. Under our legislation, that will go down to 4.1
percent. Those in the $50,000 to $100,000 category--earners in that
group today pay about 16.9 percent of all the taxes collected. That is
their share of the tax burden. Under this legislation, that will go
down to 16.7 percent. Again, that is a slight reduction in the overall
tax burden relative to what they have today. Those making $100,000 or
more

[[Page S7665]]

actually will see their taxes tick up a little bit--not a lot but a
little bit. They are currently paying 78.7 percent of the tax burden in
this country, and that will go up to 78.9 percent. So those at $100,000
or more are paying almost 80 percent of all the taxes that are paid or
collected in this country today, and that number is very similar to
what it would be--up a little bit. But that is really the only category
that is going to pay more relative to what they are paying today.
To me, that is a demonstration, clearly, of how--when we went through
this process, we committed to ensuring that there was fairness in the
code, and we paid attention to the tax burden to ensure that people
continue to pay their fair share and that particularly those in the
upper income categories pay their fair share.
Another argument that has been made by our colleagues on the other
side--which is interesting to me because it is a revelation to many of
us that all of a sudden they are concerned about deficits--is that
somehow this is going to blow up the deficit. Well, we did allow for a
net tax cut in this. There is about $5.5 trillion of tax cuts overall,
about $4 trillion of which is offset by what we call base broadeners,
or killing and getting rid of preferences and loopholes and deductions
in the code, and the balance of which will be made up through economic
growth. There are debates about how much growth will occur in the
economy, but I think it is fair to say that this is going to grow the
economy.
Even the Joint Committee on Taxation, which uses numbers that, to me,
are completely inaccurate--I mean, it is hard to feature that over the
course of the next decade, our economy isn't going to grow at more than
1.9 percent, but that is what they assume. Just by way of example, over
the last two quarters, it has grown to 3.3 and 3.1 percent. If we can
continue to build on that, we will more than pay for and have lots of
revenue left over when this is all said and done. So if you assume
modest amounts of economic growth--about two-tenths, three-tenths of 1
percent of additional growth in the economy per year--it more than
covers what we are talking about here in terms of the shortfall of
forgone revenue associated with this tax legislation.
We have a bill that is based upon reasonable assumptions about
growth. We have a bill that, if our economy really does pick up--and I
believe it will if we put the right policies in place that encourage
investment, track investment into this country, and provide the right
incentives for businesses to expand their operations--we will see an
entirely new economy where 1.9 percent growth, which has become the
normal for too many people--there are too many people in this country
who don't know anything but 1.9 percent growth. We can do so much
better than that. This is America, the greatest economy on the face of
the Earth. We ought to be able to get up to that 3 to 3.5 percent
growth rate. If we do, this economy will take off, American businesses
will start, entrepreneurs will start creating jobs, and we will have
higher wages and bigger paychecks for American workers.
I hope we get a ``yes'' vote later today on this.
I yield the floor.
Ms. COLLINS. Mr. President, today I wish to join in a colloquy with
the majority leader to address concerns that I have with the tax reform
legislation that we are considering and to thank him for the many
discussions that we have had over the past months about this bill.
I have made clear that I don't think that the repeal of the
individual mandate should have been included in the tax bill. Rather, I
would prefer to see the mandate issue and the other flaws in the ACA
addressed through a series of discrete bills that can be thoughtfully
targeted to correct specific problems. That said, I have long-supported
the repeal of the so-called individual mandate because I do not believe
that the Federal Government should force any American to buy healthcare
coverage he or she either does not want or cannot afford. Eighty
percent of the people who pay the penalty imposed by the mandate make
less than $50,000 a year.
Nevertheless, it appears very likely that the individual mandate
repeal will be part of this legislation. Unless we take action, that
repeal will almost certainly lead to further increases in the cost of
health insurance premiums--premiums that are already too expensive
under the ACA. Therefore, I believe that it is imperative that Congress
take action to mitigate this likely premium increase.
There are two steps we can take to help remedy this situation. First,
we need to pass the Bipartisan Health Care Stabilization Act of 2017,
legislation authored by HELP Chairman Alexander and Ranking Member
Murray. This legislation will not only give States critical flexibility
to better manage their insurance markets, but will also provide funding
in 2019 and 2020 for cost-sharing reductions received by low-income
enrollees in the ACA exchanges.
Mr. McCONNELL. From its inception, I have opposed the individual
mandate because it is simply wrong for the Federal Government to
require someone to purchase a particular product, particularly one they
do not want and cannot afford. I agree that Alexander-Murray can help
provide certainty and flexibility for State insurance markets in the
absence of the mandate and will support passage of the Bipartisan
Health Care Stabilization Act, ideally prior to the adoption of any
final tax reform conference agreement and certainly before the end of
this year.
Ms. COLLINS. I thank the majority leader for his response. Second, it
is critical that we provide States with the support they need to create
State-based high-risk pools for their individual health insurance
markets. In September, I introduced the bipartisan Lower Premiums
Through Reinsurance Act of 2017, a bill that would allow States to
protect people with preexisting conditions while lowering premiums
through the use of these high-risk pools. That bill would create a menu
of options States could use to design reinsurance programs, which in
turn would be eligible for Federal ``seed money'' grants that could
leverage section 1332 ``flow-through'' funding to finance the programs.
States may also add funds from other sources to the mix.
We know from the experience of Alaska and Maine just how effective
such high-risk pools can be. Alaska's pool reduced a projected 40
percent rate increase to just 7 percent this year and is expected to
contribute to a 20-percent decline in premiums next year. Maine saw
similar results in its program, the Maine Guaranteed Access Reinsurance
Association.
I believe that passage of legislation to create and provide $5
billion in funding for high-risk pools annually over 2 years, together
with the Bipartisan Health Care Stabilization Act, is critical for
helping to offset the impact on individual market premiums in 2019 and
2020 due to repeal of the individual mandate.
Mr. McCONNELL. I believe that State high-risk pools are a much better
alternative to Federal mandates. I will also support passage of your
bill and this funding to create high-risk pools, ideally prior to the
adoption of any final tax reform conference agreement and certainly
before the end of this year.
Ms. COLLINS. I thank the majority leader
The PRESIDING OFFICER. The question is on agreeing to the Cardin
motion to commit.
Mr. THUNE. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The clerk will call the roll.
The senior assistant legislative clerk called the roll.
The result was announced--yeas 43, nays 57, as follows:

[Rollcall Vote No. 292 Leg.]

YEAS--43

Baldwin
Bennet
Blumenthal
Brown
Cantwell
Cardin
Carper
Casey
Coons
Cortez Masto
Donnelly
Duckworth
Durbin
Feinstein
Franken
Harris
Hassan
Heinrich
Heitkamp
Hirono
Kaine
King
Klobuchar
Leahy
Manchin
Markey
McCaskill
Menendez
Murphy
Murray
Nelson
Peters
Reed
Schatz
Schumer
Shaheen
Stabenow
Tester
Udall
Van Hollen
Warner
Whitehouse
Wyden

[[Page S7666]]

NAYS--57

Alexander
Barrasso
Blunt
Booker
Boozman
Burr
Capito
Cassidy
Cochran
Collins
Corker
Cornyn
Cotton
Crapo
Cruz
Daines
Enzi
Ernst
Fischer
Flake
Gardner
Gillibrand
Graham
Grassley
Hatch
Heller
Hoeven
Inhofe
Isakson
Johnson
Kennedy
Lankford
Lee
McCain
McConnell
Merkley
Moran
Murkowski
Paul
Perdue
Portman
Risch
Roberts
Rounds
Rubio
Sanders
Sasse
Scott
Shelby
Strange
Sullivan
Thune
Tillis
Toomey
Warren
Wicker
Young
The motion was rejected.
The PRESIDING OFFICER (Mr. Boozman). The majority leader is
recognized.
Mr. McCONNELL. Mr. President, I ask unanimous consent that there now
be 30 minutes for debate only, with no amendments or motions in order,
with the majority leader being recognized at the conclusion of that
time.
The PRESIDING OFFICER. Is there objection?
Mr. WYDEN. Reserving the right to object.
The PRESIDING OFFICER. The Senator from Oregon is recognized.
Mr. WYDEN. Mr. President and colleagues, the Senate is looking at
making $10 trillion of changes in tax policy on the fly. This is the
biggest change in Federal income tax policy in more than three decades.
This is legislation that will determine our country's economic future
for a generation, and, at this time, the Senate does not have the
language the Senate will be voting on. My colleagues have been saying
that they are out looking for it.
I have a couple of questions I would like to ask the distinguished
majority leader.
When will the Senate be able to actually see the full text of this
legislation?
Mr. McCONNELL. Mr. President, I would say to my friend from Oregon
that there will be plenty of time for him to read it.
Mr. WYDEN. Again, through the Chair, we are talking about complicated
materials. We are talking about extraordinarily difficult, technical
issues under the best of circumstances. While I respect the majority
leader, to just be told we will have plenty of time to read it, what I
can say--coming on top of the fact that we didn't have a single hearing
on the actual legislation, nothing with regard to specifics--I think on
this side of the aisle we have a right to some sense of when we will
actually be able to see this. It strikes me as a reasonable and pretty
straightforward request, given the fact that the American people have
been kept in the dark about this for so long.
So, again, I respectfully ask the majority leader: When will it be
possible to see the full text of this bill?
Mr. McCONNELL. Mr. President, I say to my good friend from Oregon,
there were 4 days of hearings on the bill in committee with the
committee report sent out at least 2 weeks ago. I am totally confident
our friends on the other side are fully familiar with almost all
aspects of this. He will certainly have an opportunity to read the
final version, but he is very familiar with the various parts of this.
There was plenty of time to look at it in committee, and, as I said,
there will be plenty of time to read the final version of it before we
vote.
Mr. WYDEN. Further reserving my right to object, I know that on the
other side there has been discussion of scores and scores of hearings.
I would say to the distinguished majority leader, there was not one
single hearing--not one--on the specifics with respect to this
legislation. There was not one single hearing on the health changes the
majority seeks to make that put a dagger into the heart of the
Affordable Care Act.
So I will ask my colleague once more, and if we don't get a sense of
what time we are actually going to see this bill, I intend to object.
The PRESIDING OFFICER. The Senator from South Carolina is recognized.
Mr. SCOTT. Mr. President, reserving my right to object, I am not sure
what meeting I sat through for 12 hours about 2 weeks ago, where we
essentially litigated each aspect of this legislation. I am not sure
where we have been for the last several years as we have had, for the
last 5 or 6 years, several hearings.
The reality of this legislation is that every facet of it is
something we have discussed. There is not a new part--not a new part--
to the legislation. Yes, we have fused it together over time. There is
no doubt about that. But to sit here and say that we have not had
opportunities in the Finance Committee to hear the facets of the bill
is just disingenuous.
Mr. WYDEN. Will my colleague yield for a question?
Could my colleague tell me when the hearing was held on the health
changes envisioned in this legislation?
Mr. SCOTT. Mr. President, it is not a secret that our party and this
body have been working on healthcare for about 10 years. Anyone who
doesn't understand and appreciate that the individual mandate and its
effects in our bill take nothing at all away from anyone who needs a
subsidy, anyone who wants to continue their coverage--it does not have
a single letter in there about preexisting conditions or any actual
health feature.
The reality is, what our plan does on the individual mandate is good
news for the average American. Here it is----
Mr. WYDEN. Will my colleague yield?
Mr. SCOTT. Here it is. Here is the good news for every American. They
ought to hear loud and clear that 80 percent of the folks who are
punished--punished--by the individual mandate live in a household of
less than $50,000 of income, and one-third of those folks live in a
household of less than $25,000. Therefore, the benefit of our actions
is to set folks free from being penalized for doing nothing.

Mr. WYDEN. Will my colleague continue to yield?
Mrs. MURRAY. Will the Senator from Oregon yield?
Mr. WYDEN. In just one moment.
Will my colleague yield for a question?
I believe I have the floor.
The PRESIDING OFFICER. Is there objection to----
Mr. WYDEN. Reserving the right to object.
Mr. SCOTT. Regular order.
The PRESIDING OFFICER. Is there objection to the request?
Mr. WYDEN. It is my intention, Mr. President, to come back every 30
minutes until we get an answer to the question. I just asked my
colleague from South Carolina if there was a hearing on the sweeping
changes that are being proposed in this bill, the Affordable Care Act.
I asked him for a date. He said nothing with respect to----
Mr. TILLIS. Mr. President, regular order.
Mr. WYDEN. Mr. President, we will be back in 30 minutes to continue
this.
The PRESIDING OFFICER. Without objection, it is so ordered.
There will now be 30 minutes of debate.
The Senator from Colorado.
Mr. BENNET. Mr. President, on the matter that was being discussed--I
am on the Finance Committee. There has not been a hearing on this bill,
not a single hearing. A markup is not a hearing. People might say,
well, why is that a big deal? Why is that relevant? Because a hearing
is an opportunity for the American people to say whether they want this
bill or not. A hearing is an opportunity for an economist to come to
the Senate and say whether they want this bill. A markup is a chance
for Senators to say what is on their mind, not for the American people
to be able to say what is on their mind. That is what I am thinking
about today.
I wanted to start my remarks with a little bit of a history lesson
because this Chamber seems to forget what it has said, where it has
been, and it is only if you have a case of terrible amnesia that you
can support this legislation.
When Bill Clinton left the White House, he left his successor a
projected surplus of $5.6 trillion. That is what George Bush inherited
when he became President. The Senate was actually having hearings about
what to do with the surplus and whether that surplus constituted some
sort of threat to the economy. That is what he left behind. Then,
George Bush, with this Congress, cut taxes in 2001. They didn't pay for
those tax cuts. They didn't need to because they would pay for
themselves. That is what they said. It is exactly

[[Page S7667]]

what they are saying today. It is exactly what they are saying today.
In 2003, they passed another tax cut, and they didn't pay for it, but
they said it would pay for itself. Incredibly, the 2003 tax cut came
after we had invaded Iraq under a pretext by that administration. Not
only did we never ask the American people to pay for those wars, we cut
their taxes and put the burden on their children. That supply-side
economics, which is exactly the same movie we are seeing today,
resulted in the worst recession since the Great Depression.
We had a 10-percent unemployment rate when Barack Obama became
President of the United States. Guess what else we had. We had a $1.5
trillion deficit, not a $5.6 trillion surplus--a $1.5 trillion deficit
because of two unpaid-for wars, because of two tax cuts that weren't
paid for that were going to pay for themselves, and because they passed
something called Medicare Part D--the prescription drug program for
seniors--that they didn't pay for. The minute Barack Obama became
President, they said it was his deficit. They wouldn't lift a finger to
help working people in America who had lost their jobs in the worst
recession since the Great Depression, brought on by their own economic
policies and by the fecklessness of some of the largest banks in this
country. They wouldn't lift a finger.
Then-Minority Leader Mitch McConnell said in 2011--this is in 2011--
``Now, we've reached the point where our deficits and debts are so
large they're suffocating job growth, threatening the wider economy,
and imperiling entitlements.'' That is when we were in the depths a
recession we had not seen since the Great Depression.
When Barack Obama left office, the deficit was about $550 billion.
Today, it is $660 billion. As a result of this plan, J.P. Morgan was
telling us, yesterday or the day before, that this will be the largest
nonrecession-caused deficit in our history since World War II. What a
disgrace. And for what? To give taxes to the wealthiest people in
America.
This is an unusual thing to do, but I am putting up the Republicans'
chart. This is their chart. The Senator from Pennsylvania is on the
floor. This is their chart, where they are telling my farmers and
ranchers in rural Colorado that they should be satisfied with these
percentages they are giving them, these rate cuts they are giving them.
You can't eat percentages. You can't feed your family on rate cuts. You
can't run your farm or your ranch on rate cuts.

Do they think they are not going to get it figured out? Colorado's
Republicans are too smart for this bill. They are too smart for this
bill. So are Colorado's Democrats and Independents. Unlike us, they
actually have to worry about the next generation of Americans. That is
all they do. They know our politics is not up to that. It is not up to
the aspirations they have for their kids and for their grandkids.
No piece of legislation could illustrate how right they are than this
piece of legislation and the mistruths that have been used to sell--the
President going to Missouri and saying: This is a middle-class tax cut.
This hurts the rich like me.
No, it doesn't. What people are concerned about, and what they will
be concerned about is, their aftertax income as a result of the changes
that are being made, and this is the best year. I didn't bring out the
worst year. This is 2019. This is what you are going to be getting. It
is great if you are up here, and you are making more than $1 million--
where, by the way, I have not met a person who says they have cashflow
problems that this tax cut is going to help them with.
I know a lot of people in Colorado--and I will bet you in Arkansas
and in Pennsylvania--who are still struggling because middle-class
family incomes have been flat for 20 years, and the costs of housing,
higher education, early childhood education, and healthcare are forcing
them to make choices that their parents and grandparents never had to
make for their kids.
What a shame to be taking healthcare away from 13 million people in
this bill, instead of trying to make the system better. This bill
rejects all the testimony we had in hearing after hearing on the
Health, Education, Labor, and Pensions Committee.
This is my final chart. This is the math of this bill. This bill
takes $34 billion a year--not 1 year, a year--in tax cuts and gives it
to 572,000 taxpayers. You can't even see that. I know you can't see it
on the TV. It looks like a pencil line because that is the scale. That
is how few people there are in our economy--572,000 people getting $34
billion. If you include the estate tax, which I didn't here, it is $39
billion. It is $40 billion going to families who are lucky enough to
make more than $1 million a year. These are the taxpayers who make
$50,000 or less in our economy. There are 90 million of them, not
572,000. There are 90 million of them. They get $14 billion out of this
bill. That is an average tax cut of $160--$7.50.
These aren't talking points. This is the math that is at the heart of
the deal the Republicans have said is a middle-class tax cut. You know
what is even worse about it? Just like the 2001 tax cuts, just like the
2003 tax cuts, they are not paying for it. They are borrowing the money
from middle-class families all over the country, from the sons and
daughters of teachers, firefighters, and police officers. That is who
is going to have to pay back that bill. And for what? To end poverty in
America? No. To invest in infrastructure or healthcare or to strengthen
our safety net? No. To fritter it away on $34 billion worth of tax cuts
for the wealthiest people in America.
I am going to close by saying this. Before I got here 9 years ago, I
never would have believed that something this cynical could happen on
the floor of the Senate. I wouldn't have believed it. Colleagues of
mine who said for years that this is all just about getting to cuts to
Medicare, Social Security, and Medicaid, I would say: No, it is not.
People care about this. They want to sort out our fiscal condition. I
was wrong. They were right. This is about that. That is what they are
going to come back here and do. It is going to be really hard to
withstand it.
President Trump, after all this for the last 10 years around here,
since we were fighting, trying to fight out of the worst recession
since the Great Depression--which we did, by the way--in the name of
fiscal responsibility, we had fiscal cliffs; in the name of fiscal
responsibility, we had government shutdowns; in the name of fiscal
responsibility, we passed 30 temporary budgets that no school district
in Colorado could get away with once. Have we managed to restore our
fiscal health? No. Have we piled on more debt for our kids and
grandkids? Yes. That is what is going to happen here.
It is no wonder, when we elected a President, somebody who told the
American people--and was nominated by the Republican Party and elected
by the United States of America--President Trump promised that he would
eliminate our debt ``over a period of eight years''; that he would
deliver ``a giant, beautiful, massive'' tax cut--that was supposed to
be for the forgotten man. Unless the people making over $1 million are
the ``forgotten man,'' he didn't deliver on that--pass ``one of the
largest increases in national defense spending in American history;''
while saying, ``I'm not going to cut Social Security . . . and I'm not
going to cut Medicare or Medicaid.''
There is a job that every American has to do for the next generation
of Americans; that is, to leave more opportunity, not less, to the
people who are coming after us. This bill that has been so falsely
described and written in such a way that it actually denies the middle
class in America benefits it really could use and does so by putting a
bunch more debt on the backs of their children is something this Senate
should reject.
I yield the floor.
The PRESIDING OFFICER. The Senator from Pennsylvania is recognized.
Mr. TOOMEY. Mr. President, I am going to be brief. I am going to
yield to my colleague from South Carolina, and I think my colleague
from South Dakota has a few comments.
I want to respond to some of the points my colleague from Colorado
made. First, I want to thank him for bringing out our chart. What our
chart illustrates is that every category of income earners in America
gets a tax cut under our plan. If you look toward the left of the
chart, you see that the biggest reductions go to the people in the

[[Page S7668]]

lowest income categories in a percentage term. My colleagues said
percentages don't matter. I am a little bit confused because it seems
to me that I think they do matter. I will give you an example.
Under our tax plan, our tax reform, and our working-class and middle-
class tax cuts, the average single head of household--a single mom who,
as head of household, has one child and earns the average income of
$41,000, which doesn't make her a millionaire, or not typically, with
$41,000--is going to have a $1,400 tax cut. That is a 75-percent tax
cut for her. Now, maybe our colleague from Colorado thinks that
percentage doesn't matter. I think it probably matters to her. A 75-
percent reduction in the taxes that she has to pay probably matters to
her. It is probably pretty helpful.
You could take the case of a family of four who earns the median
national income. That is $73,000. On average, they will have a $2,200
tax cut. That is a 60-percent tax cut. So I am at a loss as to why that
doesn't matter to that family. I think it matters a lot. I think that
family can do a lot with that $2,200.
The fact is that our bill lowers taxes for every category of income
earner, and the proportionate share is the greatest for the lowest
income earners. This is good for working Americans and middle-class
Americans.
I yield to my colleague from South Carolina.
Mr. SCOTT. Mr. President, this is what I find astonishing. We have
been talking about this for a number of months. Frankly, for years we
have been talking about tax reform. Actually, since 1986 we have been
talking about tax reform. Our plan removes millions of low-income
Americans from having to pay taxes.
I think it is interesting that our friends' argument on the left is
sincere but wrong. It misses the fact that if you are living in a
single-parent household, with a mother or a father who is working
paycheck to paycheck, getting another $100 a month is real money. Why
are we not talking about the actual benefits to the specific people who
benefit from this tax reform? When Senator Toomey talks about the
typical American family seeing its taxes slashed by 60 percent, why is
that specific savings of $2,200 not a meaningful--perhaps,
transformative--savings that allows someone now to save for college or
to save for retirement?
To me, this is where the rubber meets the road. Yes, here on the
other side of the Potomac, it is OK to talk in platitudes. I prefer to
talk to individuals about the impact of our actions in their households
and the impact of our actions in their accounts. It is a very simple
way of doing the math. You don't have to pull out a calculator for a
75-percent savings for the average single parent who makes $41,000. The
reason that we use $41,000 is that that is the average income of a
single head of household. The reason that we use $73,000 is that that
is the typical American family's income.
When we are talking about the benefits, we are talking about real
people--people like Sherry, back in South Carolina, a single parent
with two kids, who is trying to start a business, who is struggling to
keep her ends together, believing that someone, somewhere, sees her,
that the decision makers in Washington don't see her as invisible or
unimportant. I am not talking about tax philosophy. I am talking about
real people who need their money more than the government does.
If we are going to talk about tax cuts and tax revenues, let us be
clear that in the 1920s, during the Mellon tax cuts, which slashed the
high rate from 70 percent down to the twenties throughout the 1920s,
revenues went up by 61 percent. Under the Kennedy administration, we
cut taxes, and tax revenues went up to the government from those
cohorts from whom we cut it.
So what we have is a history. Our friends on the other side say that
there is no actual history. Well, there is history that proves that. In
the cohorts where the brackets are and where the cuts occur, we can
demonstrate that the revenues have increased.
I yield for the Senator from South Dakota.
Mr. THUNE. Mr. President, how much time is left on our side?
The PRESIDING OFFICER. There are 8\1/2\ minutes on the majority's
side. There are 2\1/2\ minutes on the Democrats' side.
The Senator from Colorado is recognized.
Mr. BENNET. Mr. President, I don't want to get in the way of my
friend from South Carolina, for whom I have tremendous respect.
Point 1, nothing that I said was about anything other than real
people. The real people in Colorado are going to be able to do this
math, and they are going to know what it says.
Point 2, those 1920s that you mentioned ended up with, then, the
worst depression since the beginning of the country, and we had the
worst income inequality in 1928. Guess when the next time was that that
happened. It was when George Bush handed over the keys to Barack Obama.
That was the next moment in time, when he was leaving, that we had that
kind of income inequality. That has not been fixed, and that is not
being fixed by this plan. It is being made worse by this plan for all
of the reasons that I said.
The final point that I will make--and then I will stop and get out of
the way--is that, if you have this much conviction, at least you could
pay for it. It would be nice for you to pay for it.
I yield the floor.
The PRESIDING OFFICER. The Senator from South Carolina is recognized.
Mr. SCOTT. Mr. President, I will say to my friend from Colorado that
we are having a spirited debate. We are diametrically opposed on the
issue, but we do have some common ground on other issues that we are
working on together. I appreciate your passion. I know you are sincere.
I will tell you that there is a truth that is, perhaps, missing from
the conversation, and it is simply this: If you don't control spending,
you cannot raise enough revenue to keep up. When you look back at the
cataclysmic occurrences throughout history, one thing you will find
very quickly is that even with more revenue, if your spending outpaces
your revenue, you are going to find yourself in a challenging
predicament.
I yield for Senator Thune.
The PRESIDING OFFICER. The Senator from South Dakota.
Mr. THUNE. Mr. President, our country has always been about
opportunity. The American dream is the hope that your kids and your
grandkids and those who come after you will have a better life than you
have had. One of the ways we do that is that we get a growing,
expanding economy that creates better paying jobs, more opportunity,
and higher wages. When you get higher wages, you improve that standard
of living, and you improve that quality of life. That is what Americans
aspire to. That is what all American families--moms and dads--aspire to
for their kids and those who are going to come after them.
I would say to our colleagues on the other side, who, like I said,
have a newfound interest in deficits and debt, that one of the ways in
which you deal with deficits and debt is to grow the economy. When you
get an expanding economy that is creating better paying jobs, more
people are working, more people are investing, more people are taking
realizations, and more people are paying taxes. What history has shown
is that when you have a vibrant, growing economy, you get more
government revenue.
Of course, the official scorekeepers, whether you use the
Congressional Budget Office or the Joint Committee on Taxation, both
agree that you are going to get more revenue when you get more growth
in the economy. There might be a slight difference of opinion about how
much. The CBO, I think, says that for every one-tenth of 1 percent
increase in the GDP, you see an additional $273 billion in tax revenue
that is generated over a decade or, to put it a different way, almost
$3 trillion for every percentage point increase in gross domestic
product.
If you want to get serious about dealing with America's fiscal
problems, you have to restrain spending, which there hasn't been much
appetite for around here in the time that I have been here. You also
have to get the economy growing and expanding. That is what this
exercise--what we are going through here in reforming our Tax Code--is
really all about, because 2-percent growth is not good enough.

[[Page S7669]]

This 2-percent growth is not and should not be the new normal for the
American economy.
That is what we have had for the last 8 years. During President
Obama's entire time in office, we didn't have a single year--not 1
year--in which the GDP was more than 3 percent--not 1 year. If you go
back historically--literally to the end of World War II, about 1948--
and roll forward to today, the average in the American economy has been
3 to 3.5 percent, but there has not been a single year in the last 8
years in which we have had 3 percent growth in the economy.
What does that mean?
That means that, without that kind of growth, businesses are not
expanding. They are not investing, they are not hiring new workers,
they are not paying those workers more, and you end up with flat wages.
We have had, literally, a decade now of flat wages, where American
families and individuals have not seen any growth in their incomes.
What we hope to accomplish through all of this will be changes made
to the Tax Code that will increase investment through lowering rates on
businesses, allowing them to recover their costs of investment faster,
and accelerating their cost recovery. Those are changes--those are
reforms in our Tax Code--that will help unleash this economy and get us
back, closer to normal, when we were creating those good-paying jobs.
Then, we can start doing something, at the same time, about spending
around here, and we will start seeing those deficits go down. The best
thing that can happen for the American economy, the best thing that can
happen for the American family, and the best thing that can happen for
the American worker is to have a growing, vibrant economy.
To my colleagues on the other side who consistently get up and say
there is no benefit to this that will be delivered to middle-income
families in this country, again, I will say what has already been said
by my colleagues from South Carolina and from Pennsylvania, which is to
look at a typical family of four with a combined annual income of
$73,000, who under this tax cut bill will receive a tax cut of $2,200--
a 60-percent reduction over what they are paying today under current
law. That is what that average family of four will see.
Now, the Senator from Colorado said that he doesn't believe that
Colorado Republicans are for this. I can tell you who is going to be
for this--the people, the families, who get the $2,200 tax cut. That is
$2,200 they are going to have in their pockets.
You heard my colleague from South Carolina talk about that family
that lives paycheck to paycheck or about that single mom who wants a
better future for her kids. How do we help them? One of the ways we
help them is to reduce the burden--the take--that their government
takes from them every single year and to allow them to keep more in
their pockets. Let's give them bigger paychecks, and let's let them
decide how to spend the money.
That is a fundamental difference that we have had around here for a
long time. We come here believing that the way you help American
families is to start growing the economy rather than growing the
government, allowing the American people to make decisions that are in
their best interests and in the best interests of them and their
families about how they want to save for retirement, how they want to
help their kids get college educations, how they want to improve their
lives, rather than sending the money to Washington, DC, and letting
Washington spend it. That is, fundamentally, the difference, I think,
that we are talking about here.
As to the arguments that have been made by the other side, they just
aren't based on facts. The data tells a different story as the Senator
from Pennsylvania pointed out. Look at the chart. Look at the
percentage of tax cuts. Who benefits? We have worked very, very hard on
this bill to maintain progressivity in the Tax Code so that we have tax
relief delivered to those hard-working American families, to those
hard-working American taxpayers who need a break, who are living
paycheck to paycheck.
Honestly, I hope, when this is all said and done, that not only will
we be able to pass this bill but that, maybe, we will get a few
Democrats who might decide that it will be in the best interests of
their constituents to help their families and their States realize more
income in their pockets and bigger paychecks and, hopefully, an
opportunity to live out their versions of the American dream for them,
for their kids, and for their grandkids. That is what the American
experience and the American dream are really all about. When we take
more and more here in Washington, DC, that means that American families
have less with which to help themselves and to plan for their futures.
Our time has expired.
Mr. WYDEN. Mr. President, how much time remains on our side?
The PRESIDING OFFICER (Mr. Cruz). The majority controls 1 minute, and
the Democrats control 1\1/2\ minutes.
Mr. WYDEN. Mr. President, I will take our 1\1/2\ minutes.
The PRESIDING OFFICER. The Senator from Oregon.
Mr. WYDEN. We have just a minute and a half. The hour is late. I want
to repeat once again that we still do not have this bill. We have seen
apparently, in the last few hours, tax changes that involve billions
and billions of dollars. The American people have a right to know what
is in this proposal, and certainly we on this side of the aisle have a
right to know about it.
I am struck by the comments of my colleagues on the other side that
learning the facts about what the Joint Committee on Taxation had to
say about the Republican proposal--0.8 percent growth, $1 trillion
short in spending--has had absolutely no effect on the discussion we
are having from the Republican side.
I see my friend the distinguished majority leader here, and I believe
he will propound a unanimous consent request. As he knows, I will have
another reservation, and we will discuss this some more.
The PRESIDING OFFICER. The majority leader.
Mr. McCONNELL. Mr. President, I ask unanimous consent that there now
be 30 minutes equally divided for debate only, with no amendments or
motions in order and with the majority leader being recognized at the
conclusion of that time.
The PRESIDING OFFICER. Is there objection?
Mr. WYDEN. Reserving the right to object.
Mr. McCONNELL. I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. McCONNELL. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Is there objection to the majority leader's unanimous consent
request?
Mr. WYDEN. Reserving the right to object, Mr. President, I understand
that we are going to get the proposal from the majority shortly. I come
back again to the fact that there are changes apparently worth billions
and billions of dollars, like the passthrough provision. We need to be
able to see these. The American people have a right to know.
I believe the majority has indicated that we will get this shortly,
and I withdraw my reservation and will point out that if we don't get
it shortly, I will stay at my post and keep objecting because the
American people have a right to know that tax policy is being made in
the dark.
The PRESIDING OFFICER. Without objection, it is so ordered.
Who yields time?
The Senator from Colorado.
Mr. GARDNER. Mr. President, I want to talk about the importance of
passing this tax reform legislation for the people of Colorado. What we
have is an opportunity to see real wage growth in this country--
something we haven't seen for far too long. Over the past decade, I
think people who are on both sides of the aisle have recognized that
while there might be some economic job activity, job creation taking
place, while we might see some low economic unemployment numbers in
States like Colorado, what we haven't seen is the kind of wage growth
we know we can create.
Under the analysis done by nonpartisan think tanks in Colorado, they

[[Page S7670]]

estimate that wages would grow--after-tax income--by over $3,000. That
is incredible wage growth for families who many people estimate and who
other economists have said could see a financial hardship if they were
asked to come up with $400. In fact, we know that if over one-third of
people in America had to come up with $400 today, it would create a
financial crisis in their household.
We heard our colleague from Pennsylvania and our colleague from South
Dakota talking about the fact that a family earning a median household
income of $73,000 would see a 60-percent reduction in their taxes next
year. A single parent with a child, earning $41,000 a year, would see a
75-percent tax cut.
Let me read a headline from a story in Colorado. The headline of this
article is ``How Tax Reform Can Empower This Drive-in Theater Owner to
Expand Her Business.'' What she is talking about is the fact that if
she sees lower taxes at the 88 Drive-in--that is an iconic drive-in in
Commerce City, CO. If you see this drive-in, you will know exactly--it
is iconic on the landscape. She believes that if her taxes are lower,
she will be able to move forward and buy the property next door, which
will allow her to expand her business. She talks about the fact that
she has to turn people away because so many people are going to it and
they don't have enough room. She wants to expand, but she is held back
by our uncompetitive Tax Code. If we cut taxes, she will be able to buy
land, expand the business, and create more jobs. It is a greater
opportunity for her, her family, and the people of Colorado.
This is really an opportunity to see the kind of growth and wage
growth that we haven't seen in this country for far too long.
I have held several roundtables on taxes throughout the Eastern
Plains of Colorado, where I live. People are worried about their income
because they haven't seen the kind of economic growth, the numbers in
employment growth that they have in the Front Range, in Denver. I have
held roundtables on the Western Slope of Colorado, in Southern
Colorado, Northern Colorado, and they are all very worried about a
country that is not as competitive as it used to be. They know that
with a competitive tax code, they would see those jobs and investment
come back into this country once again.
People in Pueblo, CO, know they need jobs brought back into their
community because while many areas of Colorado have seen very low
unemployment rates, they haven't seen the kind of growth other areas
have. They know that with a competitive tax code that brings jobs and
money back from overseas, that will provide real relief to a single
parent with a child at home and to a family of four working hard to
make ends meet. They are going to pay less taxes next year as a result.
They are going to be able to spend the money they want to in Pueblo,
CO, to put it into an investment that they want to in Brighton, CO. It
will be an investment that somebody in Craig, CO, wants to have. That
is what they are focused on. They want to get the money into their
pockets. They earned it. They should keep it, not Washington, DC, where
they make bad decisions on how to spend their hard-earned dollars.
To my colleagues who oppose this bill, we have talked about the
opportunities for the American people to see real wage growth. This
bill does it. We talked about the opportunity to bring jobs back from
overseas. This bill does it. We talked about the opportunity to get
businesses hiring again and expanding. Nonpartisan estimates show that
this bill would create nearly 1 million jobs--new jobs created by this
bill. It is a great opportunity for us, and I thank the people who have
worked so hard on this bill, my colleagues in South Dakota,
Pennsylvania, and others.
Mr. President, I yield back my time.
The PRESIDING OFFICER. The Senator from Pennsylvania.
Mr. CASEY. Mr. President, I rise to talk about a subject matter that
this bill deals with that we are not hearing a lot about. I wanted to
start, though, with the basics in terms of the overall debate.
I have said many times in the last number of days and weeks when we
have reviewed the House proposal and when we reviewed the Senate
proposal that was voted on in the Senate Finance Committee before
Thanksgiving--I described the Senate bill as a giveaway to the
superrich and big, multinational corporations. I still believe that.
I hope that when we see the new version of the bill, I won't have to
say that again, but I am afraid I will. I am afraid that when we look
at some of the data on what the tax impact would be on certain income
brackets in the United States, even starting in the first year where
the analysis starts, 2019--I am looking at page 3 of a report by the
Tax Policy Center dated November 20 and based upon the Senate bill. In
that year, tax year 2019, table No. 1 focuses on three income
categories: folks making between $50,000 and $87,000; folks making
between about $310,000 and $750,000; and others making above $750,000,
so basically the top 1 percent. Here is what they find. The Tax Policy
Center tells us that the first group, the family making $50,000 to
$87,000, would receive an average tax cut of about $900, or 1.4 percent
of after-tax income. The next group, the $310,000 to $750,000 income,
gets a tax benefit that amounts to about $12,000, or 3.5 percent. The
top 1 percent--$750,000 and up--they get a tax break of $34,000, or 2.2
percent.
Probably the most significant numbers in there by way of comparison
aren't necessarily the dollar amounts, although I would ask why the top
1 percent needs $34,000 in 2019. I don't think that should be part of
our legislation. I would like to see all of the tax benefits to the top
1 percent go to the middle and those trying to get to the middle. But
let's do the comparison.
In the first year, in terms of these families making $50,000 to
$87,000, they get 1.4 percent. The folks making between $310,000 and
$750,000 get 3.5 percent--more than two full percentage points higher.
Why is that? Why do people making $310,000 to $750,000 get a much
bigger percentage tax cut than people making $50,000 to $87,000? The
third category is the top 1 percent, and they get 2.2 percent. So I
have problems with this legislation just based upon that. Why does the
top 1 percent need one more penny? Why do very wealthy people--maybe
not quite the top 1 percent but the 95th to 99th percentile, the
$310,000 to $750,000 category--why do they need a tax break?
Guess what. It doesn't get any better down the road. And I am not
talking about 2027, where it is cataclysmic for families in the middle;
let's talk about 2 years before that. It is still bad. It is still 3
percent, by comparison, for the very wealthy, people making up to
$750,000. The top 1 percent are still getting 2.1 percent. But the
income category between $50,000 and $87,000 gets 1.2 percent of the tax
cut, so they will be getting worse in 2025. Why is that? As my
colleague, the senior Senator from Colorado, shows in that chart, why
do people making more than $1 million need $34 billion in 1 year? I
don't understand it.
Let me focus in particular on part of the debate about which we
really haven't had much discussion. The impact of this tax bill may be
the only substantial effort that will be made on tax reform for years,
if not decades. We know that the last time any kind of major tax reform
was done was 1986, so three decades have passed since the last tax
reform effort. So this is a critically important moment not just for
taxpayers, not just for the economy, not just for families generally,
but especially for children.
In a bill of this significance, a bill of this impact, one major
question should be asked, among many: What will be the impact on
children? What is the child impact statement, if we were to draft one,
if we had to articulate that? What is the impact on children of this
legislation?
Well, there are a lot of organizations around the country that pay
attention to public policy as it relates to children. I am looking at a
letter dated November 28 and signed by a long list of organizations
that advocate on behalf of children, and I will just read some of the
headlines from this letter.
The first headline says: ``The Senate tax plan threatens child care
programs and funding for the future.''
The second major headline says: ``The Senate tax bill's proposal to
cut the Affordable Care Act would harm children's health and well-
being.''

[[Page S7671]]

The next headline says: ``The Child Tax Credit proposal in the Senate
tax bill would not help families who struggle to pay for child care.''
The next headline says: ``The Senate tax bill also takes away other
tax benefits that ordinary families rely on.''
Mr. President, I ask unanimous consent that this letter be printed in
the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Dear Senator: As members of the Child Care/Early Learning
Coalition, we urge you to vote against the ``Tax Cuts and
Jobs Act.'' This bill would eliminate existing benefits in
the tax code for children and families, as well as undermine
critical supports, including those related to child care and
early education, in the future.
The Senate tax plan threatens child care programs and
funding in the future. The Senate tax bill, which consists
largely of massive tax cuts for businesses and the wealthy,
is estimated to increase the deficit by about $1.4 trillion
over ten years. The budget agreed upon by the House and
Senate provides a roadmap of how Congress will seek to offset
this increase in the deficit: by cutting federal spending
and, in particular, by slashing programs and services that
provide working families with a basic standard of living.
That means this tax bill will ultimately lead to cuts in
programs that are integral to the wellbeing of children and
their families, including Medicaid, SNAP, public education,
and the Child Care and Development Block Grant.
The Senate tax bill's proposal to cut the Affordable Care
Act would harm children's health and well-being. The Senate
bill would repeal the ACA's individual responsibility
provision, a requirement that most people enroll in coverage
or pay a penalty. Estimates from the Congressional Budget
Office (CBO) show that repealing the ACA's individual
responsibility provision would increase the number of
uninsured by 13 million over 10 years and raise insurance
premiums in the individual markets by 10 percent. Children's
health and well-being suffers when their families lack the
health insurance they need to see a doctor when they are sick
or for preventive care. The Senate has already rejected an
attempt to repealing the ACA, and now the bill would sneak
this in in order to fund even larger tax cuts for high-income
households and corporations.
The Child Tax Credit proposal in the Senate tax bill would
not help families who struggle to pay for child care. The
Senate tax bill would increase the Child Tax Credit (CTC),
but does not make this increase fully refundable. As a
result, lower-income families will not receive the full
benefit: for example, a single mother working full time at
the federal minimum wage and earning $14,500 would only
receive an additional $75 in CTC benefits. In addition, the
tax plan bills adds a new requirement--providing a Social
Security Number for each child claimed for the refundable
portion of the CTC--which could exclude a significant number
of children in immigrant families. This is not an approach
targeted to help families striving to make ends meet, and
does nothing to address the high cost of child care with
which so many working families struggle every day.
The Senate tax bill also takes away other tax benefits that
ordinary families rely on. Even though the Senate tax bill
proposes increasing the CTC (and doubling the standard
deduction), the bill also proposes eliminating personal and
dependency exemptions, eliminating the deduction for state
and local taxes, and eliminating deductions for some
employment-related expenses. This would leave many families
worse off. And the Senate bill makes all of the tax benefits
for families temporary, expiring at the end of 2025, even
though the proposed corporate tax cuts are all permanent.
There is a better way to help families and children and to
build a strong economy now and in the future. Instead of
these ill-conceived tax cuts, Congress can help families
through the tax code by enacting the Child and Dependent Care
Tax Credit Enhancement Act of 2017, and ensure that all
children and families who need it get high quality child care
and early education by enacting the Child Care for Working
Families Act.
Sincerely,
Association of Asian Pacific Community Health Organizations
(AAPCHO), Center for American Progress, Center for Community
Change Action, Children's Defense Fund, Children's Leadership
Council, CLASP, Every Child Matters, Family Focused Treatment
Association, Generations United, Health Care for America Now,
Jumpstart, Make it Work, Mi Familia Vota, National
Association of Family Child Care Providers, National
Association for Bilingual Education, National Association of
Social Workers (NASW), National Council of Jewish Women,
National LGBTQ Task Force Action Fund, National Physicians
Alliance, National Women's Law Center, NETWORK Lobby for
Catholic Social Justice, SparkAction, The Institute on
Taxation and Economic Policy, United Auto Workers, Working
Families Party, ZERO TO THREE.

Mr. CASEY. That is just one brief assessment of the impact of this
legislation on children, but I think that should be a question we ask
of every major piece of legislation.
Mr. WYDEN. Mr. President, will my friend from Pennsylvania yield
briefly?
Mr. CASEY. Yes.
Mr. WYDEN. He is a very fine member of the Finance Committee.
I don't remember any discussion in our committee about how this
specific legislation affects children. My colleague is really the
expert on the subject, and maybe he can tell me if he recalls such a
thing with respect to this specific legislation and what it means for
children. I don't remember such a discussion.
Mr. CASEY. Mr. President, I want to say to the senior Senator from
Oregon, as the ranking member of the committee, he will remember, as I
do, that in the course of that so-called markup, which is a fancy
Washington word for having some debates and offering amendments, there
was no hearing--no hearing for days, and there has still been no
hearing on the Senate bill passed out of the Finance Committee and the
new version of the bill that we will see right now. So, in the course
of that discussion, there were no hearings.
It would have been helpful to us and to the American people if we had
the major organizations come in before the Finance Committee and give
us testimony about the impact on children--organizations that have
spent decades advocating on behalf of children, doing public policy
research as it relates to children, but we never heard that because
there were no hearings, not a single hearing on the bill. There was
discussion, and there were questions for some tax policy experts, but
nothing in the way of hearings that could probe very deeply on what
happens to kids.
I think the American people would like to know more about what will
happen with the child tax credit, for example. There has been a lot of
talk on the Republican side about the child tax credit; they are
allegedly making it better. Well, the Senate Republican plan does
increase the maximum tax credit for children from $1,000 to $2,000 per
child. That sounds pretty good so far, right--$1,000 to $2,000. But
because the bill limits refundability, a mom working full-time at
minimum wage will see only an additional $75 in the child tax credit,
while a married couple earning $500,000 would become newly eligible for
the maximum $2,000-per-child credit.
According to the Center on Budget and Policy Priorities, 10 million
children--10 million--live in families who would get $6.25 or less per
month in the additional child tax credit in this bill. So there is not
much improvement in the child tax credit on maybe the only tax reform
bill that this body will consider for the next 30 years. Let's say it
is only 10 years. Wouldn't it be nice to have some testimony from
experts across this country who live and breathe the work of being
advocates for children, who study every bill to determine whether it
impacts on children. Wouldn't it be nice to have their testimony maybe
on the child tax credit, maybe just on the child and dependent care tax
credit, which is the only tax provision in law right now that helps
people pay for childcare.
Ask any family: What is your No. 1 concern, other than making ends
meet and maybe paying for higher education? Other than a few priorities
like that, their No. 1 concern is how to pay for childcare, but there
is no testimony on that issue that relates to the bill. There is no
testimony at all because there were no hearings on the bill. How can
you have a child impact statement, how can you even generalize about it
without a hearing?
Of course, we need more than generalizations. We need specifics. So I
think we have to ask those questions and be focused on children in a
very specific way.
Here is the last thing I will say. This opportunity to come together
in a bipartisan fashion, which has not happened in this case--but we
have the opportunity, and the majority could have taken a different
path. They could have said to us months ago: Let's have a bipartisan
process. Let's not move to a pathway that requires only 51 votes. Let's
have a real bipartisan process on tax reform as they did in the mid-
1980s, resulting in the 1986 bill. They could have said: Do you know
what? We have a bipartisan concern about children. We like the child
tax credit. We like the child independent care tax credit.

[[Page S7672]]

We like the earned-income tax credit. All of those are good policies.
We want to make them better. We want to have a bipartisan effort to
infuse all of those policies with even more funding, more help to make
them more robust for our children, but that never happened.
Once again, because of what the majority did, the pathway they
selected to passing their bill with only Republican votes--and that was
their choice--we will have a tax bill that will not have a child impact
statement, will not have hearings about the impact on children and
families, will not have any of that. Once again, we will prove that
Washington, DC, never misses an opportunity to miss an opportunity,
especially as it relates to children and families. That is particularly
insulting to the American people and regrettable because we have a
moment here where we are trying to do tax reform and because it is not
bipartisan, because there were no hearings on the bill, the impact on
children will never ever be fully assessed. That is not just a tragedy,
but that is a real insult to our families and to our children.
I yield the floor.
The PRESIDING OFFICER. The Senator from Pennsylvania.
Mr. TOOMEY. Mr. President, how much time is remaining on the majority
side?
The PRESIDING OFFICER. Ten and a half minutes remains.
Mr. TOOMEY. OK. Thank you, Mr. President. I will be brief because I
think my colleague from South Carolina has a comment he wants to make.
Let me respond just briefly to my colleague from my State of
Pennsylvania. Our bill increases the child tax credit. Our bill lowers
the tax burden on every category of income earners, including working
families, middle-income families--every category.
As my colleague from Colorado demonstrated kindly, he showed in the
chart that the biggest proportional savings go to the lower-income
families, and the pro-growth policy is going to create more job
opportunities at higher wages. So let's see: more money in child tax
credit, less taxes owed on the part of families, more job
opportunities, and higher wages. I think it is a pretty safe bet that
this is good for kids. I think it is a pretty safe bet that when
families get to keep more of their money, that is probably good for
their kids. I think most of my constituents would probably agree with
that.
We have heard folks on the other side suggest that we are actually
not cutting taxes on the middle class. This is unfortunate because we
have enough areas where we disagree without having to make up areas
that aren't true. Our friends on the other side like higher taxes; we
like lower taxes. They like to redistribute wealth; we like people who
earn it to keep wealth. We focus on growing the economy; they want to
grow government. We have honest differences in priorities, so I wish we
would focus on where there are actual differences and the facts in
question. But there is no question that we are lowering taxes on
middle-income families because we are lowering taxes on every category
of wages.
The people who are watching on C-SPAN and the people who are
listening in the gallery must get a little frustrated and must ask
themselves: Well, who can we believe? We hear one side say: This is
lower taxes for working families. We have the other side say: Oh, it is
higher taxes.
I have a suggestion. I know there is a solution. You could look it up
at Joint Committee on Taxation, but that is tedious. You have to go to
the website, you have to find it, and then you would see in the
tables--because they are unambiguous--that taxes owed go down in every
category.
Do you know when people are going to know for sure what the answer
is? It is going to come in January when the withholding in their
paycheck changes and when their take-home pay goes up because the taxes
they owe go down. I know we are still a few weeks away from that, but
when this passes and gets signed into law, the proof is going to be
very clear, and people are going to see it.
Here is a quick word about the repeal of the individual mandate. My
friend and colleague from Oregon described it. I am paraphrasing, but I
think I will get it about right. He described the repeal of the
individual mandate as driving a stake through the heart of ObamaCare or
something equivalent to that. I couldn't help but think: What an
incredibly damming indictment of ObamaCare. Think about what that
means.
Think about what they are saying if repealing the individual mandate
drives a stake through the heart of ObamaCare. The individual mandate
is the provision which says that you have to buy this whether you want
it or not. You have to. You are forced to. The government dictates the
terms, the government effectively dictates prices, and you must buy it.
If you don't, you will get hit with a penalty, a tax penalty.
We don't actually repeal the mandate, but we eliminate that tax
penalty, and that is going to be very helpful for low- and middle-
income families, working-class families. In Pennsylvania, 83 percent of
all the people who get hit with this individual mandate tax live in a
household with income of $50,000 or less. That is who is paying this.
But what I wanted to stress for a moment is what a damming indictment
it is of ObamaCare that it only works, according to its proponents, if
people are forced to buy the product. It is so badly designed, it is so
terrible that people will not buy it voluntarily, despite huge
subsidies.
We don't change any of the subsidies. They are all available to
anyone who wants to participate. We don't change the rules. We don't
change eligibility. We don't change anything except one thing. We say
that if you decide this plan doesn't fit your family or if you decide
for all the subsidies you get it is still not worth it for you to have
this plan and you opt out, you will no longer be punished with this
tax. That is the only thing we do in this bill.
Since we eliminate that coercion, which forces people to buy it, our
colleagues on the other side say that drives a stake through the heart
of ObamaCare. It seems to me that a product or a service that people
have to be forced to buy and that is killed if they are not forced to
buy it probably isn't a great deal for those people, and I think we
just got that admission.
With that, I yield to my colleague from South Carolina.
The PRESIDING OFFICER. The Senator from South Carolina
Mr. SCOTT. I will say, Mr. President, that my colleague from
Pennsylvania did such a good job that there is little left to say. I
was fumbling because I was just confused on what I would say, and I
will be honest with you that there is just not much to say.
If I were to reinforce a couple of points that the Senator did not
cover, they would be that at our last Finance hearing, which lasted--I
thought it was 12 hours; it was 23 hours--we had our friends on the
other side offer 63 amendments. To say that they are not engaged in the
process is to forget the 63 amendments offered over 23 hours.
Senator Toomey did such a good job that I am just going to sit back
down.
Mr. THUNE. Mr. President, Senator Scott and I and the Senator from
Pennsylvania were all there at what we call the markup.
Mr. SCOTT. We were.
Mr. THUNE. My recollection is like his, and, frankly, my
recollection, when it comes to all the work that went into getting us
to where we are dates back a long way. I joined the Senate Finance
Committee in 2011. I am not sure when the Senator from South Carolina
joined or the Senator from Pennsylvania, but it was shortly after that,
I think.
Since I have been on the Finance Committee, we have had 70-plus
hearings--70-plus hearings on tax reform. We have looked at every
facet, every aspect, every element of the Tax Code. We even went so far
2 years ago, in 2015, to create five working groups. We all
participated in those, along with, I might add, our Democratic
colleagues, each of whom had a key role in helping with the final
recommendations that were put forward. A lot of what is in this bill is
based upon the work that was done by those working groups. There isn't
a single shred of the Tax Code that we haven't covered and haven't
studied in great detail.
Then, of course, as the Senator from South Carolina pointed out, when
it came time to mark the bill up, we spent several days--23 hours
debating back and forth, listening to each other, and in some cases
arguing. In some

[[Page S7673]]

cases, those were very spirited arguments. The Democrats offered 63
amendments, all of which got votes in the Senate Finance Committee.
So for anybody to suggest that this has been anything but a
transparent process based upon years of work and buildup and lead-up to
get us to where we are today is absolutely misstating the facts. I
think the work we have done in advance of this has led to a product
that is the culmination of a great deal of thought, a great deal of
input, and a great deal of research from not only experts in the field
but fellow Members--Democrats and Republicans--Senators and staff--who
have gotten us to where we are today.

I think the fact, which has been pointed out many times, that a
family that is living paycheck to paycheck will now get the benefit of
a doubling of the standard deduction and a doubling of the child tax
credit, frankly, I happen to believe--contrary to my colleague from
Pennsylvania--is a pretty big deal. If you are a family who has any
sort of tax liability, that tax credit is a dollar-for-dollar credit
against that tax liability. An increased portion of that is refundable
under this legislation.
If you look at the lower rates we have in the bill, that middle-
income family in this country stands to benefit significantly as a
result of this to the tune of--if you are a family of four with a
combined annual income of $73,000--an additional $2,200 in your pocket.
That is $2,200 in the American family's pocket that they get to decide
how to spend.
As the Senator of Pennsylvania pointed out, don't take our word for
it. You can sit down, if you like to, and look at the features of the
bill. Look at your individual tax situation. Plug in these changes, and
I think you will find you are going to see a pretty significant
reduction in your tax liability.
When January rolls around when this passes, people will get their
check. When they look at their withholdings, they will realize they
have a lot more money. That paycheck is bigger. The paycheck is going
to be bigger. Why? The amount taken out in terms of Federal taxes is
going to be significantly smaller. That is a good thing for the
American family.
That is why this debate and the bill we have before us are so
important, not only to those families who are trying to build a
stronger, brighter, and more prosperous future for themselves and their
families but also for this American economy. With the other changes
that are made in the bill, it is going to lead to better paying jobs
and higher wages that are going to lift the boats of all Americans.
Americans haven't had a pay raise, literally, in about the past
decade. We haven't had a single year in the Obama years of 3 percent
growth, which has been the historical average going back to the end of
World War II. We are growing at 1.5 to 2 percent. We don't happen to
believe that is good enough. We think we can do better. That shouldn't
be the new normal. The American economy is the greatest economy on the
face of the Earth. We ought to be able to grow at 3 to 3.5 percent.
I can tell you, ladies and gentlemen, that the average middle-income
family in this country is not only going to get a big tax cut--which
means they are going to get a bigger paycheck and have more money in
their pocket--but they will get the benefit of the higher wages coming
with a growing, more dynamic economy that it reflects.
I yield the floor.
Mr. WYDEN. Mr. President, I would just like to respond briefly to the
Senator from Pennsylvania, who is baffled by why we are so opposed to
the health provisions of the bill. The Congressional Budget Office says
that the majority's provisions will cause 13 million people to lose
coverage and premiums to go up 10 percent. This morning's paper makes
the point that it will bring back junk insurance, which once again will
allow discrimination against people with preexisting conditions.
I will use the last 30 seconds that I have, as we await the majority
leader, to say, once again, that the American people and the Congress
are actually going to find out some information about what is being
offered.
I would just like to close my use of the minute by pointing out now
another double standard. It sure looks like lobbyists on K Street have
more and better information about what is about to be offered than do
Democrats in the Senate. So what we are talking about is that we have
seen one double standard after another. The tax breaks for the middle-
class are temporary, and the wealthy get permanent ones.
The PRESIDING OFFICER. The Senator's time has expired.
All time has expired.
The Senator from Pennsylvania.
Mr. TOOMEY. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. CASEY. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Is there objection?
Mr. TOOMEY. I object.
The PRESIDING OFFICER. Objection is heard.
The legislative clerk continued with the call of the roll.
Mr. SCOTT. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Strange). Is there objection?
Without objection, it is so ordered.
The Senator from South Carolina is recognized.
Mr. SCOTT. Thank you, Mr. President.
I ask unanimous consent that there now be 30 minutes, equally
divided, for debate only, with no amendments or motions in order and
with the majority leader being recognized at the conclusion of that
time.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
The Senator from Oregon.
Mr. WYDEN. Mr. President, here we are now at 4:15. We still have not
seen this bill--a $10 trillion bill, the biggest tax bill in more than
three decades, with changes involving billions and billions of dollars
made, apparently, overnight.
I have made it clear that when the leader, Senator McConnell, comes
back down, we expect to see this bill. We were told essentially an hour
ago that we would see this in a matter of minutes.
The American people have a right to know that even though the
majority wants to make $10 trillion worth of tax policy changes on the
fly, this side of the aisle is going to insist on knowing what is in
the bill.
My colleague has been very patient, and I wish him to be recognized
on our time now.
The PRESIDING OFFICER. The Senator from Minnesota.
Mr. FRANKEN. Mr. President, I rise this evening in opposition to the
tax bill before us. I think the problem in our country isn't that
wealthy people in this country aren't wealthy enough; the problem is,
the wealth gap has grown to the highest levels in my lifetime. This
bill would make that wealth gap even bigger.
Senator Paul Wellstone often said: ``We all do better when we all do
better.'' He knew the economy does better when there is a strong middle
class and when working families have more money to spend.
Unfortunately, the Republican tax bill does the opposite of what Paul
Wellstone argued for. Instead of helping working families, it raises
taxes on at least 14 million of them, and it uses this revenue to give
$1 trillion to the superrich, all while adding $1.5 trillion to our
national debt. This is, at its core, an awful bill.
When President Trump took office, he pledged that he would look out
for the ``forgotten men and women,'' not the wealthy. This bill is a
betrayal of that commitment.
I believe Congress should work on a bipartisan basis to make our Tax
Code fairer and simpler for working families, and that is what I have
advocated for since I joined the Senate. Democrats have made a good-
faith effort to work in a bipartisan manner on a tax reform bill with
Republicans, but Republicans have chosen, from the very start of this
Congress, to take a purely partisan approach that has left Democrats
entirely out of the discussion.
We all know this bill is being rushed through Congress so Republicans
can claim a legislative achievement by the end of the year. That is not
the way you get a fairer, simpler Tax Code. You get a fairer, simpler
Tax Code by having hearings with outside witnesses.

[[Page S7674]]

You get a fairer, simpler Tax Code by giving Americans an opportunity
to weigh in as it is being drafted, to review the bill, and to share
their views. You get a simpler, fairer Tax Code by doing it in a
bipartisan manner, not by excluding Democrats entirely from the
drafting of the bill.
The fast-track process Republicans are using is just like the
Republicans' equally partisan, equally secretive, and equally rushed
attempt to repeal and replace ObamaCare earlier this year. Americans
deserve better.
In their effort to get this bill through before Americans realize
just how damaging it is, many Republicans have made some misleading
claims about it.
For example, Republicans often cite the fact that the bill would
double the standard deduction that families can claim on their tax
return. That is true, but they always seem to leave out the very
important fact that their bill would also eliminate the personal
exemption. The personal exemption is about $4,000 for each family
member, so when compared with a $12,000 increase in the standard
deduction, it means households with two parents and more than one child
would be worse off under the Republican tax bill than under current
law; for example, with two children.
Sometimes they argue that doubling the child tax credit from $1,000
to $2,000 would offset the loss of the personal exemption, but under
their plan families who most need the help would get hardly anything
from the increase in the child tax credit, which is not refundable. So,
for instance, a family living off a minimum wage earner would benefit
by only about 75 more dollars under this bill's revised child tax
credit, not the full $1,000 some Republicans promise, but the
Republican bill would also now allow people earning up to $500,000 a
year to claim the full tax credit of $2,000 per child. That is $500,000
a year, up from $110,000 as it is now. So that is $75 more per child
for a minimum wage earner and $2,000 per child for someone making
$500,000 a year. That is just not fair.
We hear from my friends on the Republican side that tax cuts always
pay for themselves. Ask the people of Kansas about that. When Kansas
cut taxes in 2012 and in 2013, State revenues plummeted, Kansas slashed
university budgets, canceled highway projects, and had to borrow $1
billion to fund their public pension plan. Schools around the State
started going 4 days a week. Teachers moved across the river from
Kansas City, KS, to Kansas City, MO. From 2013 to mid-2017, the Kansas
economy underperformed that of nearly all its neighbors and the United
States overall in economic growth, private sector job creation,
passthrough business formation, and labor force participation. Finally,
corporations begged the legislature to raise their taxes, which they
did, over the Governor's veto.
That is Kansas; take the whole country. Bruce Bartlett, Ronald
Reagan's economic adviser, wrote a few weeks ago:

The Tax Reform Act of 1986 reduced the top personal tax
rate to just 28 percent from 50 percent, and the corporate
percent to 34 percent from 46 percent. Yet there was no
increase in the rate of economic growth in subsequent years,
and by 1990, the economy was in deep recession.

Tax cuts don't magically pay for themselves.
I would also like to highlight the Republican hypocrisy on budget
deficits. For many years, Republicans have used budget deficits as an
excuse to block important pieces of legislation. In fact, even now, we
are in danger of stripping health insurance away from 9 million
children because of difficulties finding offsets for reauthorization of
the Children's Health Insurance Program. Yet, when it comes to the tax
bill, only a handful of Republicans have raised concerns about the fact
that it would add $1.5 trillion to our national debt.
We know from experience that as soon as the ink is dry on this bill,
Republicans will cite the rising national debt caused by this bill as a
reason to cut key programs that millions of Americans use every day--
things like Social Security, Medicare, Medicaid, job training,
education, infrastructure, and affordable housing. In fact, under their
budget resolution that Republicans adopted just 2 months ago, they laid
out their plans for these reductions, which would include over $1
trillion in Medicaid cuts and $470 billion in Medicare cuts.
This bill would also trigger automatic cuts to some key programs. So
in exchange for the bill's minimum tax cuts for some working families,
starting in 2018, there would be an automatic 4-percent reduction in
Medicare payments and a zeroing out of other key accounts--a zeroing
out of the Crime Victims Fund, farm price support programs, and the
social services block grant that provides funds to Meals on Wheels,
youth counseling, and other important services for vulnerable people.
There are many better uses for $1.5 trillion. President Trump said he
wanted to work with Congress on a $1 trillion infrastructure package to
rebuild our roads, our airports, our ports, and to build broadband
across America. I have said I would like to work with the President and
my Republican colleagues on a comprehensive bill, but this bill would
make it impossible to enact a $1 trillion infrastructure package the
President promised and which we have really heard nothing about.
There are too many other flaws with the Republican bill to highlight
them all now, but I would like to raise one that is particularly
important to Minnesotans. The bill before us today would eliminate the
State and local tax deduction. It is an important deduction because
when people deduct the taxes they pay to their State and local
governments, first of all, it prevents the double taxation of their
income, and it enables our local communities to make investments in
public safety and education, childcare, and infrastructure. According
to the Tax Policy Center, 34 percent of Minnesotans claim the State and
local tax deduction, with an average deduction of almost $13,000.
Eliminating this deduction means a significant tax increase for those
families and would make it harder for local communities in Minnesota to
raise the revenue necessary to make vital investments.
I have heard outrage over the Republican approach to tax reform from
a very wide range of my constituents. I have heard from Minnesota
farmers about how it would undermine agricultural cooperatives, which
are really important to Minnesota. I have heard from Minnesota students
who are concerned it will force them out of graduate school. I have
heard from Minnesota homebuilders and developers who say it would cut
affordable housing construction in half. I have heard from Realtors who
say the bill could crater the real estate market. I have heard from
many ordinary Americans who say the bill is simply unfair.
Americans deserve a fairer, simpler Tax Code, not the debt-funded
giveaway to the wealthy that Republicans are trying to force through
the Senate today. That is why I oppose this bill, and I urge my
colleagues to oppose it as well.
I yield the floor.
The PRESIDING OFFICER. The Senator from South Carolina.
Mr. SCOTT. Mr. President, we have heard a lot about this bill over
the last several hours and, frankly, several weeks, and we have had a
lot of conversations over the last several months, but, today, December
1, 2017, at 4:24 p.m.--and I hope we remember this because I have
finally heard the definition of ``fearmongering.''
Someone once said that fear is an acronym for false evidence
appearing real. What we have heard today is that because of the passage
of this bill, the Crime Victims Fund will be zeroed out. We heard the
social services block grants will go away. We heard there will be cuts
to Medicaid. I want all the folks in this Chamber to remember the time
so that if they ever have to go back and find it, they will know it was
December 1 at 4:24 p.m. when it was said.
So here is my thought: A few months into 2018, when your takehome pay
has increased because the government is taking less of your hard-earned
money--punishing you less and rewarding your success more--just
remember to check and see if there is any money in the Crime Victims
Fund; I would suggest they check and see if there are any dollars in
the social services block grant; and I hope they will check and see if
there has been a cut to Medicaid because if you cannot find those cuts,
there is one reason: They do not exist.
I look forward to hopefully passing this bill today. I hope we do. I
look forward to the American people taking

[[Page S7675]]

the time to remember the exact time, the exact date that this was said,
and then do the research necessary to draw their own conclusion. The
first conclusion that will be easy to come to is that when you look at
your pay stub and you see there is more money in it in 2018 than there
was in 2017, just remember how it got there. It is not because of what
we do, because there are some folks on this side of the Potomac who
believe we actually have Federal dollars. There are no Federal dollars.
Every penny we spend in Washington comes from a taxpayer somewhere.
There are no Federal dollars; there are simply taxpayer dollars
arriving in Washington to be used in some way.

I am only suggesting that the average American can spend their money
in the way best for their family significantly better than we can.
So I hope the good people of this country who are paying attention to
this very important debate will be able to remember 4:24 p.m. so they
can review the tape, review the video, the DVR--or whatever you call it
nowadays--and see for themselves what was said or go someplace online
and figure out, at the end of 2018, the middle of 2018, the beginning
of 2018, has something actually changed other than that you have more
money in your paycheck?
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The senior assistant legislative clerk proceeded to call the roll.
Mr. PORTMAN. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. PORTMAN. Mr. President, I ask unanimous consent that there now be
30 minutes equally divided for debate only, with no amendments or
motions in order and with the majority leader being recognized at the
conclusion of that time.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
The Senator from Oregon.
Mr. WYDEN. Mr. President, I have just seen an air-dropped list of
provisions--there seem to be upwards of 30--and it sure looks as if the
lobbyists have been working overtime. They must have earned a holiday
gift with this new bonanza of goodies.
We still await a bill that we are going to read, although I saw
something that might actually be a bill. So we are going to use this
time so colleagues can get into some of these questions about this
array of treats that the lobbyists seem to have figured out how, in the
last few hours--perhaps overnight--to carve out for their benefit.
To start our discussion for our 15 minutes, I believe my friend and
colleague Senator Merkley is going to start.
The PRESIDING OFFICER. The Senator from Oregon.
Mr. MERKLEY. Mr. President, I thank my senior colleague from Oregon
for his leadership in this debate on these important tax provisions.
There is so much at stake here for the future of our society as we have
been debating what we see as one provision after another that is
designed to make the richest Americans richer while increasing the
taxes on some 87 million middle-class Americans. Then, we get this
nice, little list. Republicans have given the lobbyists a list of 30
special interest provisions, circulated it, and said: This is what we
are going to put in our managers' amendment for all of you.
My colleague from South Carolina was speaking a moment ago about one
that hasn't even been filed--life insurance provisions. What is that?
Maybe my colleague would like to come to the floor and explain it and
explain why this is being circulated to lobbyists, to the swamp,
instead of to the Members of the U.S. Senate. Thirty of these
provisions--who knows what all is in this. Isn't there any form of
transparency or integrity left in this Chamber in terms of legislative
debate? Have the American people had a chance to see this list? It is
online now. The few who might be listening in might be able to see
these titles, but this is not the way to do business in the U.S.
Senate. This is not the way to do the people's business. This is the
way to do the swamp's business.
What happened to clearing the swamp? What happened to that? How is it
that the richest Americans are making out like bandits rather than the
middle class doing well under this bill? Why is that? Why are there
billions of dollars going to the richest Americans by eliminating the
alternative minimum tax? Why are there hundreds of billions of dollars
going in other provisions, including changing the upper limit tax
brackets, including the passthroughs for affluent, highly successful
LLCs? How about that?
What is this list, and why haven't the American people seen all of
the details about it? This type of chicanery is inappropriate. Take and
give the list to the Members of the Senate, not to K Street. This close
partnership between the Republican majority and K Street, filling them
in, doing those special favors, and not even filling in the body here
so we can have a conversation about each of these items, this is
absolutely a horrific way to do business. This is the way the powerful
and the privilege want business to be done. My Republican colleagues
are working with them hand in hand instead of working for and by the
American people.
The PRESIDING OFFICER. The Senator from Ohio.
Mr. PORTMAN. Mr. President, this is a big day because we are about to
provide tax relief to millions of people in Ohio and around the
country--middle-class tax cuts, doubling the standard deduction,
doubling the child tax credit, lower rates for people in every bracket.
In my home State of Ohio, we have the opportunity to see people who are
making $50,000 a year, with two kids, see a 26-percent tax cut. That is
important.
My colleague just talked about his concern about some of the
provisions that are before us. I will say, these have all been filed.
That doesn't always happen around here, and it should. These have all
been filed, and people can go on rpc.senate.gov. These were made
public. Nothing is on this list that hasn't been filed publicly.
Just looking at it, the biggest one that my colleague talked about as
being something to help rich people is the deduction for property
taxes. It is capped at $10,000. There is a deduction for allowing
people to deduct their property taxes, which is incredibly important
for middle-class families around the country. Some people on the other
side want to go much further and provide much larger deductions and
make those for State and local taxes.
By the way, their proposal would go primarily to upper income people,
the proposal they have. That benefit goes primarily to those who are
making higher incomes. How is it paid? It is a $10,000 deduction for
property tax. It is paid for by exactly the provision my colleague from
Oregon just complained about because he said he wanted to be sure
people had to pay an alternative minimum tax, and that alternative
minimum tax is being used to pay for this middle-class tax cut we are
talking about. Anyway, that is the biggest item by far.
The second biggest item is for the passthrough companies. These are
the smaller businesses in America, and it is to try to have some more
parity between the passthrough companies and the so-called C
corporations. Again, that is something that is really important to
small businesses in my home State of Ohio and around the country.
I encourage him to take a look. All of these have been filed. He can
look at them now or he can go online, as any citizen can, and take a
look at these things. I would say that at the end of the day, I know we
had a difference of opinion on whether there should be tax cuts, but we
think tax relief is appropriate right now. We think the middle-class
families who have not seen an increase in their wages, not just for the
last few years but the last couple of decades, need a little help.
Their expenses have not gone down. They have gone up. Wages have been
flat. That middle-class squeeze is addressed through these tax cuts--on
average, about $2,375 for an Ohio median-income family. That is
important.
People who are working paycheck to paycheck will find this to be
incredibly important. Maybe they can put a little more money aside for
retirement. Maybe it can help with their healthcare costs, which have
gone up

[[Page S7676]]

dramatically as wages have been flat. Maybe they can help people be
able to buy a car or to make a car payment if they already have a car.
These are real tax cuts. They are going to help middle-class families.
Again, I hope my colleagues will look at some of these changes, like
the $10,000 deduction for property taxes paid for with the alternative
minimum tax changes and help us be able to make this legislation even
more generous for folks in the middle class, as they say they are for.
With that, I would like to ask my colleague from South Carolina, who
has been very involved in the child tax credit, ensuring we have a
reduction of the brackets, if he would have a few comments on those.
Mr. SCOTT. Mr. President, I thank my good friend from Ohio.
I say to Senator Portman, may I see that list? I have been on the
floor and, unfortunately, I have not been able to get a copy of the
list. Obviously, you have been able to have your staff get it or go
online and get a copy of this list. I think my good friend from Oregon
said they needed their good friends who are lobbyists to supply them
with a list.
I am not sure what the other side is missing. They had control of the
House, the Senate, and the White House for a couple of years, and they
increased spending without doing anything about revenues, other than
trying to have a tax increase a few years ago, $630 billion of tax
increases, and somehow they have missed the correlation between higher
taxes and lower revenues. We have gotten it right that oftentimes lower
taxes actually increase revenue, which has been proven from the
twenties, sixties and eighties.
It is good news that my friends on the left are finally thinking
about the national debt. We had a couple hundred years of life in
America that produced about $10 trillion of national debt. Eight years
after Democratic leadership, we have a national debt of $20 trillion. I
find it a tad disingenuous that my friends on the left are going to
counsel us about debt when, in fact, their record is so clearly
obvious. When it comes to the benefits this bill has for those folks
who are working paycheck to paycheck, as the country saw its debt
double in the last 8 years, what they did not see double were their
wages. As a matter of fact, their wages were stagnant. Why? Because
when you take money out of the private sector economy and place it into
the hands of the government, you do not grow the private sector
economy. It is a simple formula.
While wages were flat, the economy grew at an anemic 1.9 percent,
even though they doubled the national debt from $10 trillion to $20
trillion. It is fascinating that my friends on the left, looking for
ways to create lobbyist loopholes, are on this floor lecturing anybody
about debt. We, on the other hand, aren't thinking about lobbyists or
our friends on the left. We are thinking about the American people, the
hard-working group of individuals who find themselves too often at the
end of too many weeks with too little left in their pockets.
We are not asking the American people to just believe us. What we are
saying with great clarity is, starting in paychecks in 2018, because of
our tax cuts targeted toward the typical American family, you will see
in your paycheck more of your hard-earned money. This is how we say
there is proof in the pudding. It is simply to take a look and see how
much of that money is left.
To my good friend from Ohio, my friends on the other side of the
aisle are starting to overcook my grits just a little bit. I don't mind
having a vigorous debate on facts, but to sell fear--as I said a few
minutes ago, fear being false evidence appearing real is just turning
the heat up on my grits. I have to tell you, this leads to an unhealthy
outcome for the American people because at the end of the day, the goal
is not for us to be right and for them to be wrong. I don't think their
goal is for them to be right and for us to be wrong. It is kind of
simple. The goal is, and always should be, for the people we represent
to be better off because of our decisions in Washington. I can tell
you, passing this tax reform bill will leave the typical American
family with 60 percent--60 percent--of a tax cut.
I yield back.
Mr. PORTMAN. I thank my colleague.
I yield back.
The PRESIDING OFFICER. The Senator from Michigan.
Ms. STABENOW. Mr. President, my friend from South Carolina said the
proof is in the pudding. I would suggest the proof is in your paycheck.
That is what I suggest.
We had a chance yesterday with my amendment to absolutely guarantee
that my friends on the other side of the aisle believe what they are
saying; that people are going to get a minimum of $4,000 in increased
wages. I offered an amendment to simply say that in a couple years from
now--2 years from now, 2020, we can make it 2021 or 2025, just pick a
day when folks are going to get $4,000 in their wages, and we will put
that in an amendment and pass it.
The truth is, there is no guarantee in this bill. If my friends on
the other side of the aisle believed that there would be $4,000 more in
wages in middle-class families' pockets with this supply-side trickle-
down economics tax cut, they would have voted for my amendment
yesterday, which simply says that if there is a $4,000 increase in
wages, the tax cut continues. If it doesn't, if they don't have $4,000
more in people's pockets, then the tax giveaway stops because all it
means is it is adding to the national debt.
I am all for anything that puts money in people's pockets. I have
sponsored and voted for tax cuts for small businesses, manufacturers,
farmers, and families over the years in public service and here in the
Senate, and I want to do that; close tax loopholes that are taking jobs
overseas, not increase new ones, which, by the way, this bill does, a
new $4 billion tax loophole for oil companies--not closing tax
loopholes. If folks really believe this, if they really believe the
numbers, let's lock it down. The proof is in your paycheck. That is
what families in Michigan are saying. They want to know it is in their
paycheck. They want to know it is a guarantee. You know what, they are
very skeptical. Because the truth is, in the past, supply-side
economics/trickle-down economics has not worked. You say that it is
going to trickle down. People in Michigan are still waiting. They are
still waiting to catch it. It is not trickling down. We do have
examples. What are the facts?

With the tax cut in 1986, 10 years after that, the wages of working
people in this country were flat. They did not go up. That is a fact.
With President Bill Clinton in his effort to balance the budget in
1997, I was pleased. I had only been in the House for 6 months and went
in and had the opportunity to balance the budget, which we did for the
first time in 30 years.
What happened during that process? Actually, taxes on wealthy people
were raised a little bit to give a middle-class tax cut and invest in
education, which I know our distinguished Presiding Officer cares
deeply about, and innovation. What happened? There were 22 million jobs
that were created.
Then we went into 2001, 2002 with President George W. Bush, and there
was a big tax cut in 2001, a supply-side/trickle-down tax cut. We were
told that it was going to put money in people's pockets. It didn't. It
created debt. In 2003, we had another supply-side tax cut that was
going to put money in people's pockets. It didn't. It created a huge
debt. We had wars that weren't paid for. Then it went into the biggest
recession that we have seen outside of the Great Depression with the
financial crisis, and 8 million people lost their jobs. People lost the
equity in their homes and their pension values. It was terrible.
President Obama came in in 2009 and had to try to begin to dig out of
the hole. That is a fact. He began to dig out of that hole and put
things back together for folks. It was a big hole, and a lot of
families are still feeling that hole. I know that is true in Michigan.
So part of me may feel a little skeptical when I am hearing: Have I
got a deal for you. Let's try supply-side economics one more time, and
this time it really is going to create jobs and really is going to put
money in your pockets.
There is no proof of that. There is no proof that this grows the
economy to be able to cover the costs of the tax giveaways whether you
look at supply-side economics, whether you look at new dynamic
scoring--the new ways of scoring on things--to make it look better.
That didn't even show up. What I

[[Page S7677]]

would say is that the proof is in your paychecks, for the people who
are watching.
There is a lot going back and forth, and it is very confusing because
we hear one thing from one side, and we hear the exact opposite from
the other. I understand how confusing this is, but I would just ask
this:
Why weren't my friends willing to support my amendment that would say
that if folks really get the $4,000 minimum amount being promised in
increased wages, then this goes on, and if they don't, then the tax
giveaway stops? Why didn't they support that?
Mr. WYDEN. Will the Senator yield?
Ms. STABENOW. Yes.
Mr. WYDEN. I think my colleague--my seatmate--is making a very
important point. Of course, people always wonder, well, is this kind of
a Democratic position or a Republican position? I want to make it clear
that I believe that Tom Barthold, the head of the Joint Committee on
Taxation, which is our independent tax umpire, essentially agreed with
you. In committee, I believe we asked him whether he thought this huge
reduction in the corporate tax rate would translate into $4,000 in the
pockets of working families in Michigan and Oregon. Is that my
colleague's understanding?
Ms. STABENOW. Absolutely. We asked that question, as you know, and he
indicated that that was not the case. I continue to hear it over and
over again. We have heard it from the President of the United States
and the Secretary of the Treasury. We have heard it from folks on the
floor. Just today, we have seen it in charts on the floor. That is
great. If that could really happen, I would support that. It has never
happened, and my colleagues will not support guaranteeing that it will
happen.
This is about putting up or shutting up, in my opinion. That is what
we would say in Michigan. It is about whether we are going to guarantee
folks that this time around, it is not just a sales job, that it is
actually going to end up in their pockets.
I see my friend and colleague from Pennsylvania, who offered this
amendment in committee. I was pleased to join him in committee, and he
knows, in Pennsylvania, like I do, that we have gone through some rough
and tumble times, and we still have folks who are working too hard at
not just one job but two jobs, trying to hold it together, having not
seen the pay raises they deserve and have worked for. They want to know
that this time around is not going to be voodoo economics and that it
is actually going to increase their paychecks.
Mr. WYDEN. Will my colleague yield for a question?
Ms. STABENOW. Yes.
Mr. WYDEN. My understanding is that you and Senator Casey in
particular have been out here--and we are so glad to have our colleague
from Connecticut--wondering when in the world we would actually get to
see this legislation.
Ms. STABENOW. Right.
Mr. WYDEN. This pile of papers, for all practical purposes, is what
we have been waiting for for days.
Ms. STABENOW. I hope you are a speed reader.
Mr. WYDEN. I am going to try to do some, but as far as I can tell, it
sure looks like a lobbyist's wish list. There are going to be a lot of
folks happy on K Street as they try to shop for the holidays because of
the fees they have put together in working to get these changes into
the Republican proposal.
I appreciate my colleague for giving me the opportunity to make sure
that the public knows now that, at this late hour, we are finally
getting, after days, the opportunity to see the bill that is actually
the bill.
Ms. STABENOW. Before turning this to my friend and colleague from
Pennsylvania, I do want to mention just one thing that I understand is
in there. There may be things that I am supportive of in there. We
don't know. We are trying to figure it out.
One thing that I don't understand, with all of the talk about
supporting workers and middle-class workers, is that there is a
provision in the bill that reads ``prohibit cash or gift cards as
employee achievement awards.'' So if somebody works very hard and is
getting some kind of achievement award, does that mean he would not be
allowed to get a bonus? I mean, I don't know why in the world we would
be going after people's employee achievement awards. That doesn't sound
like help for the middle class to me.
I now yield to my friend from Pennsylvania and thank him for his
leadership.
The PRESIDING OFFICER (Mr. Alexander). The Senator from Pennsylvania.
Mr. CASEY. Mr. President, I thank my colleague from Michigan for
focusing on the issue of wages because that was the promise--right?--
that if you give corporations a tax cut of more than $1.3 trillion--
with a ``t''--all of a sudden, you are going to see wages go up, and
workers are going to do a lot better. We know that hasn't happened in
recent history. We will see if the Republican argument is correct.
I want to put a few facts on the record in light of the debate this
afternoon. Many people in both parties have been referring to the
documents of the Joint Committee on Taxation, the JCT. I am looking at
one of the documents right now to go through some data. This is dated
November 27. It is D-17-54 for the Joint Committee on Taxation. Here is
some basic data.
The Joint Committee on Taxation, which is, of course, Congress's
official scorekeeper, finds that in 2019--right away, early in the
implementation of the bill, if this bill is to pass and if the version
we just received is to pass--the Senate plan increases taxes on nearly
13 million families earning under $200,000 a year. That is what the
document tells us.
That is the under-$200,000 category and 13 million families just in
2019. If you break it down further in terms of folks making between,
say, $50,000 and $75,000 and then $75,000 and $100,000, almost 20
percent of Americans earning between $50,000 and $75,000 a year will
see a tax increase or a tax cut of less than $100. That works out to be
about $9 a month. Those individuals will have that tax consequence in
2019. So between $50,000 and $75,000 will see either a tax increase or
a tax cut of $100 or less.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. CASEY. Then you take the category of $75,000 to $100,000, and
almost 17 percent of Americans in that income category will see a tax
cut of less than $9 a month.
In the grand total between $50,000 and $100,000, 7.7 million
Americans will either see a tax increase or a tax cut of $100 or less.
I don't call that tax cuts for the middle class.
I yield the floor.
The PRESIDING OFFICER. The Senator from Ohio.
Mr. PORTMAN. Mr. President, I wish I could convince my friend from
Michigan--and she is my friend--about the $4,000 per family that would
come from the pro-growth policies here, many of which she supports. She
wants her businesses to be competitive, and they are not now. It is an
outrage that our companies have to use a tax code that puts the workers
in those companies in a disadvantageous position every day. It is not
just about inversions, and it is not just about companies getting taken
over.
By the way, last year, three times as many American companies were
taken over by foreign companies as the other way around. Over the last
13 years, 4,700 companies became foreign companies that would today be
U.S. companies if this tax bill had been in place. I mean, it is
happening. They are taking their jobs and investments with them when
they go overseas.
We have to fix that problem. It has been bipartisan. There has never
been a partisan issue about that. That is where a lot of that $4,000
comes from. It comes from the fact that you are going to have more
investment and therefore higher productivity, and workers are going to
have a chance to see higher wages.
The Congressional Budget Office did a study in which they showed that
70 percent of the benefit of lowering the business rate goes to workers
in terms of higher wages and higher benefits. Others say it is less
than that. Others say it is more than that. Kevin Hassett, who is the
Chairman of the Council of Economic Advisers, says that it is more than
that. But that is where the $4,000 comes from. I hope it is a lot more
than that, but it is on top of the middle-class tax cuts that are very
direct.

[[Page S7678]]

In other words, that is not just saying that we are going to have a
better economy, which I believe we will--and I strongly believe we can
improve a broken tax code, as I think everybody does, to make it better
for American workers--but beyond that, you have the immediate tax
relief, and that is what we have been talking about.
This is the doubling of the standard deduction, the doubling of the
child tax credit, the lowering of the tax rates.
My friend from Pennsylvania just talked about the fact that 20
percent of the people between $50,000 and $75,000--I am not sure where
his data was coming from, but let's take it as true--have a small tax
cut or a tax increase, and 17 percent between $75,000 and $100,000 are
in that category. That means 80 percent of the people in that category
have a big tax cut, in the one category, and 83 percent in the other
category have a big tax cut. So, yes, a small tax cut--I don't know how
many have a small tax cut and how many have a tax increase, but the
vast majority of middle-class families, according to what my colleague
from Pennsylvania just said, are going to get a big tax cut. I don't
know what is wrong with that. That is $2,375, on average, for a median-
income family in Ohio.
By the way, economists say that it not only creates the opportunity
for people to have a little better family budget through the direct tax
cuts but also, of course, more jobs.
Here is something interesting. Over the past couple of days, a letter
came in from 137 economists--many of them nationally known--who support
this legislation. This is what they say: Economic growth will
accelerate if this legislation passes, leading to more jobs, higher
wages, and a better standard of living for the American people. They
say that there will be significantly more resources coming into the
Federal Government because of this, because of the growth. They think
that there will be $1 trillion more revenue coming in because of this,
because of the growth. They also think that there will be additional
jobs--the Tax Foundation says 1 million new jobs.
So, yes, I do believe it will be $4,000 per family, but on top of
that, I believe that they are going to have a very direct benefit. I
know they will because the statistics are there--my colleague from
Pennsylvania just acknowledged it--that the vast majority of middle-
class families are going to see a substantial tax cut.
Let me give you a number. For a family with two kids, making $50,000
a year, it is a 36-percent tax cut, on average. That matters. That
helps people who are trying to make ends meet. It is real both in terms
of the direct tax cuts and in terms of the economic growth and the
higher wages that are going to come with that, and that is so important
to all of the families we represent.
We have had a good discussion here. I see that my colleague from
Connecticut is here and would like to speak, and others, I am sure, are
going to want to speak.
I would ask my colleague from Oregon if he would be willing to have
another unanimous consent that there be additional time equally
divided.
Mr. WYDEN. I think 30 minutes is what we have been talking about and
that it is appropriate.
Mr. PORTMAN. Mr. President, I ask unanimous consent that there now be
30 minutes, equally divided, for debate only, with no amendments or
motions in order and with the majority leader or his designee being
recognized at the conclusion of that time.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. PORTMAN. I yield the floor.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. MURPHY. Thank you very much, Mr. President.
I was paying attention to my social media feed, and I have seen that
Senators on the Republican side are starting to announce which way they
are voting. I saw that Corker is a no and Collins is a yes. I don't
know what they are a no or a yes on. How can you declare which way you
are going to vote on a bill that you haven't read, on a bill that your
constituents haven't seen?
Senator Wyden just piled up what looked to be about 6 inches' worth
of text in front of the Senate floor. There is no possible way that any
Member of this body has read all of that. There is no way that in the
time between when it is released to Senators and when we vote, anyone--
even from the very close States--is going to be able to get back to
their constituents and ask them what they think about this piece of
legislation. I guess I would say I have never seen anything like it,
but we just went through it earlier this year when we were given about
an hour to look at a complete reform of one-sixth of the American
economy, the healthcare system.
We are now being asked to vote this evening on a multitrillion-dollar
reform of our Tax Code, and not a single U.S. Senator will have read
it. There is no way you will have read it. I just saw how big it is.
Maybe Republicans have read it because they have seen it in these
secret negotiations, but I can guarantee you that Senate Democrats will
not have read this because we have been kept out of the loop on all of
these negotiations designed to get to 50 votes--not to 60 votes, not to
70 votes, not a consensus product that can get Republican and
Democratic support.
I got here in 2007 when Democrats took control of the House and the
Senate. I remember during those 2 years all sorts of consternation from
Republicans about how bills were being rushed through the process. In
reaction to that, when Republicans took back control of the House, they
instituted something called a 72-hour rule that said that we couldn't
vote on a piece of legislation unless Members have been able to see it
for 72 hours. We need a 72-minute rule. I don't think we are going to
be able to look at this legislation for more than 72 minutes--a
multitrillion-dollar reform of the U.S. Tax Code--before we are asked
to vote on it.
Senator Wyden and others have been waving around this list of
lobbyist asked-for amendments that fill up an entire page. We are not
going to get 72 minutes to look at this, never mind have a single
conversation with our constituents. It is dark out. The bill is going
to be introduced on a Friday night. We are going to vote on it
overnight. This is supposed to be the world's greatest deliberative
body. It is not supposed to work like this.
It is not a middle-class tax cut. I am not going to deny that there
are some people in the middle class who are going to get their taxes
lowered by this bill, but the middle-class tax cuts here are temporary
and they are very selective. They are selective in a way that very
peculiarly seems to discriminate against Democratic States. So the
States that are represented by Democrats don't get as big a tax cut out
of this because it has been crafted in a way that hurts States like
mine that utilize the State and local tax deductions more than other
States, those that happen to be represented by Republicans.
It is not a middle-class tax cut because the middle-class tax cuts
are temporary. They go away after 7 years. The corporate tax cuts, the
inheritance tax cuts for billionaires, are permanent. Those go through
the full 10-year timeframe. But middle-class families don't get
permanence. After 7 years, 6 out of 10 middle-class families will have
their taxes go up, not down.
That 7-year timeframe is an important one because by repealing the
individual mandate, premiums go up by 10 percent a year. Republicans
have been screaming about premiums going up, and they decided
intentionally to put a provision in this bill that will guarantee
premiums will continue to go up at 10 percent per year. Guess what
happens at year 7. Year 7 is when that 10 percent increase year-by-year
compounds such that premiums will double. So in year 7--this is a great
deal if you are a middle-class taxpayer--your tax cut to the extent it
exists in this bill disappears and your healthcare premium is doubled.
What it is, is a big tax cut for the wealthy. I am stealing Senator
Bennet's chart, but he did it very well. We have 572,000 taxpayers--the
richest 500,000 Americans--getting $34 billion in tax cuts, and then we
have 90 million taxpayers who are making under $50,000 a year getting
$14 billion in tax cuts.
I get it. If you are going to structure a tax cut that covers
everybody, naturally people who make more are going to get more. But
why does it make sense to borrow $34 billion to help the wealthiest
500,000 Americans? This

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doesn't even count the inheritance tax, which is going to help an even
smaller percentage of those people even more.
Come on, this idea that you could deficit-finance a tax cut for the
rich and it will just trickle down and magically result in economic
growth--that is just not true. It is fiction. We have decades of
economic experience to tell us that when we cut taxes for the rich, it
does not magically result in enough economic growth to make up for the
deficit, especially deficits that are going to be in the neighborhood
of $2 trillion. You might as well claim that unicorns are real. You
want to believe that Tupac is still alive, go for it--that is just as
plausible as deficit-financed tax cuts for the rich resulting in enough
economic growth to wipe out the deficit. It is fiction. It is a fantasy
from the beginning.
I think we should take our time, read the bill, and have a real
conversation about what we are about to do. If our goal is to provide a
middle-class tax cut, we could do a much better job if we worked
together. This is not a middle-class tax cut for everybody, and after 7
years, the majority of people in the middle class lose that tax cut.
There is no reason to borrow this much money for the richest 500,000
Americans. As a Senator with two young kids, I just don't know why you
would ask my kids and so many others to pay back the loans necessary to
deliver this tax cut, especially when it isn't going to magically
result in the kind of economic growth that trickle-down economists have
claimed for years and years.
It is not impossible to get a bipartisan tax bill. I know my
Republican friends claim, as they did on healthcare, that there is no
good will on the Democratic side to try to craft a bipartisan proposal.
The tragedy is that they didn't even try. There was no attempt to try
to find common ground here, just as there was no attempt to try to find
common ground on healthcare until the bill failed. I credit Senator
Alexander and Senator Murray for trying to find that common ground
after the healthcare bill failed, but the order switched--try to find
common ground first, and if that fails, do it in a partisan fashion,
instead of doing it in a partisan fashion, and when that fails, trying
to find common ground.
This is a really bad deal, a really bad piece of legislation for my
constituents--I think, because I will not have read it by the time I am
forced to vote on it, and neither will any of the other 99 Members of
this body.
I will yield the floor.
The PRESIDING OFFICER. The Senator from Oregon.
Mr. WYDEN. Mr. President, will my colleague yield for a question
before he yields?
Mr. MURPHY. I will.
Mr. WYDEN. I am just curious. I am heading home for townhall meetings
in Oregon over the weekend. I am the ranking Democrat on the committee,
the storied committee, as my colleagues know, that works in a
bipartisan way.
Bill Bradley tells this story about how he flew all over the country
to meet with Republicans to talk about how you could find common ground
to deal with tax reform. At this time, we haven't been able to get the
majority to even walk down the corridor in an effort to try to get a
bipartisan bill. As I told my colleagues, I have written two of them.
My question to my friend is, when you have your community meeting,
how do you think people in Connecticut are going to react to the idea
that we had maybe an hour or so to try to make our way through a bill
that is actually the biggest tax bill in 31 years? I know my colleague
tries very hard to be straightforward with his constituents, and he
will tell them: I got it with insufficient time to get into it. How
will they react to that?
Mr. MURPHY. I say to Senator Wyden, I don't want to be too heavy
about this, but everybody shouldn't assume that the way in which we run
our country just continues on forever. Democracy is unnatural. We don't
run other parts of our lives by democratic vote. We decided to run our
country in a way that allows everybody to participate. And, you know,
let's be honest--people have been asking some questions recently about
the health of our democracy, and maybe that was a big part of the
subtext of the 2016 election.
This doesn't help win people's faith back in the democratic
experiment when they see this casualness afforded to a debate that
affects millions of Americans. It hurts us all when a bill this big,
this important, gets rammed through under the cover of night. It starts
to atrophy people's faith in the entire way that we go about running
our government.
I understand that Congress is not that popular. It would be hard to
get less popular than we are today. If we ever want to start to climb
our way back to legitimacy, then we have to trust the people to be part
of the process of drafting and passing legislation rather than being
afraid of the people and burying a bill in the dead of the night, as is
happening now.
I yield back.
The PRESIDING OFFICER. Who yields time?
The Senator from Maryland.
Mr. CARDIN. Mr. President, I understand we now have a new bill. I am
looking at Senator Wyden hold up that new bill. I got a sheet that
looked as if it came from K Street that gave us a list of changes that
will be included in the managers' package. I looked at the list, and
somewhere around 50 or 60 new provisions were on that list. Many of
those were not bills that had been filed, so we had no idea what was
going to be included in it.
None of those issues--in fact, nothing in this bill has been subject
to an open hearing in the Finance Committee. Now we are going to be
asked, I understand, maybe later tonight to vote on those changes.
Quite frankly, I don't know what those changes are, and I am not going
to have an opportunity to go over those with my constituents. That is
wrong. That is not the process we use to change the Tax Code of this
country, a major tax reform bill. That is an outrageous process, to say
that we are going to vote on a new bill without an opportunity to
understand it, without any hearings, without an opportunity for
constituents to give their views on it, and I must state that I find
that very offensive.
I want to talk about one provision in particular, and I hope we will
have a chance to do something about it during the amendment process. As
I understand it, the revised provisions in regard to State and local
tax deduction still restrict what taxpayers can deduct on their Federal
tax returns in regard to State and local taxes that they pay. I admit,
this could have been modified, but what I understand is that the
modification is that taxpayers will be able to deduct up to $10,000 of
property taxes but will not be able to deduct any of their State taxes,
whether they are income taxes or sales taxes, in regard to the Federal
taxes.
In my State, we have county income taxes that will not be deductible,
if I understand correctly, under the proposal we will be voting on. If
that is, in fact, correct, that is absolutely wrong, and I want to tell
you why. Many of us spent years in the State legislature. Our
distinguished Presiding Officer was Governor of his State. We respect
State and local governments. It is the same taxpayers that pay the
taxes to the counties, to the State, and to the Federal Government.

We believe in federalism. Our Nation was founded on federalism. I was
proud of my record as speaker of the Maryland House of Delegates and of
working on a federalism task force set up by President Reagan to look
at the proper way to respect the rights of the States and local
governments. Now we are saying we are not going to respect their
ability to finance their operations. I say that because we are going to
tax the tax. We are not going to respect that the same taxpayer is
paying the State of Maryland's taxes or the State of Tennessee's taxes.
That is wrong. That is an affront, I believe, to the Constitution of
this country, but it has an impact.
It is going to be much, much more difficult for our States to be able
to raise the revenues they need to support our schools and for public
safety and health. All those services are going to be much more
difficult for our States to be able to finance because of this change
that is included in the Senate bill. It is going to be more difficult
for local governments. The cap on property taxes is real and will
affect local government's ability to raise property taxes. But in
Maryland and other

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States, our local governments have other sources, including income
taxes, that no longer are going to be deductible.
That is going to affect my State's ability to adequately fund public
services. Whether it is education, whether it is transportation,
whether it is healthcare, all of that is going to be negatively
impacted and it is wrong.
I will give you a number, because I know the number in Maryland.
Almost 50 percent of Maryland taxpayers deduct State and local taxes as
an itemized deduction. They are going to be disadvantaged by the
provision that is included in the Senate bill, and it is wrong. It also
has unintended consequences, but it is going to have other
consequences.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. CARDIN. Mr. President, later I will come back and speak on some
of these other issues, but I yield the floor.
The PRESIDING OFFICER. The Senator from Ohio.
Mr. PORTMAN. Mr. President, again, we have had some interesting
dialogue back and forth. Earlier, my colleague from Connecticut was
talking about how this isn't real middle-class tax relief, and then he
lamented the fact that because of the arcane budget rules we have
around here, after 10 years, all these great tax cuts expire. So you
kind of have it both ways there, and I don't think you can do that,
which is that there aren't real tax cuts but then, when they expire, it
is the greatest shame because they are great tax cuts.
Here is the reality. There are significant tax cuts here for the
middle class. This legislation doubles the standard deduction. Probably
about two-thirds of the people I am talking to tonight already take the
standard deduction. Now we will have about 95 percent of people who
will take it, and everyone who takes it will be able to, instead of
getting $12,000 a family, get $24,000 a family, greatly expanding that.
By the way, there is a zero tax bracket, meaning people who don't have
any income tax liability. That means a lot to people I represent who
are living paycheck to paycheck, having a tough time making ends meet.
Also, as a result of this, and the other tax relief, about 3 million
Americans who now pay income tax are going to fall off the tax rolls.
They are no longer going to have income tax liability. That is really
meaningful to people. It also doubles the child tax credit. We talked a
little bit about that today. It also increases the refundability a
little. But importantly, it helps to ensure that families have the
ability to help make ends meet when they are trying to raise kids--the
most important thing you can do--and it lowers tax rates. That
combination means that you have the kind of tax relief we are talking
about.
So a family who makes $50,000 a year and has two kids gets a 36-
percent tax cut. A family who makes $85,000 a year and has two kids
gets a 20-percent tax cut. If you make $165,000 a year and have two
kids, you get an 8-percent tax cut. So the benefit is focused more on
those who are at the lower end of the economic scale, and I think that
is appropriate.
So it is middle-class tax relief, but here is how it works. As to the
share of Federal taxes paid in 2019, which is a year after this is
implemented--it starts right away, by the way, so middle-class families
are going to get that relief right away--the current is in the red, and
then our proposal is in the blue.
So if you make zero to $20,000, it is very unlikely that you have
income tax liability, but some families do and the average is 0.1
percent. If you make $20,000 to $50,000 a year, your share of the
Federal taxes goes down in our bill from 4.3 percent to 4.1 percent. If
you make $50,000 to $100,000 a year, your share of the Federal taxes
goes from 16.9 percent to 16.7 percent. If you make $100,000 or above,
your share goes not down but up, from 78.7 percent to 78.9 percent. The
top percent of wage earners in this country, the top 10 percent, pay
approximately 70 percent of the income taxes right now. After our bill
is passed and implemented, they will pay more than 70 percent. So it is
a progressive tax cut in the sense that the benefit is focused more on
middle-class families who really need the help. That is what the
legislation does.
Then, in addition to that, in responding to my colleagues who were
talking whether there is any economic growth that comes from this, yes,
there is a lot of economic growth because the current code is so bad.
It is broken. My colleague from Oregon, who is the ranking member,
agrees with that. He has a different solution as to how you get there,
but he has been a leader on tax reform for that very reason. The
current code is actually putting our workers at a disadvantage, making
our families have to go through a great complicated process even to
file their taxes. More than half of taxpayers now have to use a tax
preparer. That is terrible.
So this legislation does also provide economic growth by taking that
Tax Code, which has this perverse effect of actually telling U.S.
companies that it is better that they have workers overseas and take
their investment overseas or even become a foreign company--the 4,700
companies that are foreign companies today became foreign companies
over the last 13 years because we didn't have this Tax Code in place.
That is based on an Ernst & Young study. I encourage folks to take a
look at it. It basically makes the point that because of a broken Tax
Code, it is advantageous for U.S. companies to take their jobs and
investment overseas. That makes no sense.
Foreign companies can pay a premium for U.S. companies because of our
Tax Code. We have the highest business tax rate in the industrialized
world, and we have an international system that encourages people to go
overseas and keep their money overseas. That is crazy. This proposal
changes all of that. It says: Let's get our rate down below the average
of the other industrialized countries, and then let's have an
international system that actually encourages them to bring the money
back and create more jobs here.
In fact, Mr. President, I will say something else. I know you are
interested in this. It also encourages foreign investment in this
country, because if you are a foreign auto company--and you have a
bunch in your State of Tennessee--and your decision is that am I going
to invest in Japan, where they might be headquartered, or am I going to
invest in China, where they might have a factory, or am I going to
invest in Germany, where they might a factory, or am I going to invest
in the United States of America and maybe in Tennessee, this bill will
make it more advantageous for them to make their investment here and to
create the jobs here because of the lower tax rate and because of the
expensing when they go out to buy new equipment and technology to make
their workers more productive.
So this is going to help American companies a lot to be able to
compete globally. It levels the playing field, which is very important.
It has been bipartisan up to now--very bipartisan. We had a working
group on this, among five bipartisan working groups that were
established 2 years ago, that studied this issue. We came up with the
solution that you have to get the rate below the average and you have
to go through the kind of system we are talking about. It was totally
bipartisan. Democrats and Republicans alike agreed to it because it
just makes so much sense for the American worker. They are the ones
getting the short end of the stick right now. They are the ones who are
told: You go out there and compete, but do it with one hand tied behind
your back.
We need to give them the tools to be able to succeed, and that is
what this legislation does. Yes, that is going to result in middle-
class families getting benefits well beyond, in my view, the direct tax
cuts we talked about earlier because it is going to enable them to be
able to get the higher wages and the better jobs, and that is why some
economists have said it is $4,000 a family. Some have said it is more.
Many Democrats think it is less. But there will be a benefit to these
families. Remember, these companies we are talking about, the C
corporations, they employ more than half of the American private
workforce. They are competing every day in these global marketplaces.
We want them to win. We want our workers to win because we want them to
be able to have those higher wages and better benefits.
We have spent 2 decades with relatively weak economic growth and,

[[Page S7681]]

therefore, relatively flat wages. In fact, on an inflation-adjusted
basis, if you look back over the last 15 years, there hasn't been any
wage growth. There have been higher expenses, especially healthcare,
and those healthcare costs and tuition costs for those who want to send
their kids to school, or other costs--food and energy--have all gone
up. Wages have been flat. That is a middle-class squeeze, and that is
what this middle-class tax relief helps to address. Importantly, that
is what this pro-growth part helps to address because you are going to
see higher wages, and you are going to see better benefits if you give
this kind of tax relief to the American worker because you are going to
see more investment, you are going to see more productivity that comes
from that, and you are going to see higher wages.
I believe that, but what I believe isn't as important as what others
believe. So 137 economists, many of these are nationally known
economists, have looked at the pro-growth parts of this legislation--
the parts I am talking about that make us competitive again--and they
have said that economic growth will accelerate if this legislation
passes, leading to more jobs, higher wages, and a better standard of
living for the American people. They say there will be a million new
jobs in this country just because of this. I think that is really
important, as important as the tax cuts are for the middle class--and
they are important. Again, those tax cuts primarily go to folks who are
in the middle class and that is appropriate. Equally important to me is
to get this economy moving in a way that people can have the
opportunity to get those higher wages and better benefits.
The Congressional Budget Office did a study. It showed that 70
percent of the benefit of getting that corporate tax rate down is going
to go to workers in terms of salaries and benefits. Some say it is less
than that. Some say it is more than that. Kevin Hassett, who is the
chairman of the Council of Economic Advisers, says it is more than
that. The point is that it is going to help these workers, and it is
about time that we help them.
There has been a lot of discussion about the process here tonight,
and I understand the frustration. As a Member of the Senate, sometimes
I feel that frustration as well. But I will say that this legislation,
H.R. 1, which is the vast majority of the papers that were held up a
moment ago--this is the legislation that came out of committee; it is
the vast majority of the pages--has been on this website called
budget.senate.gov and has been public since Saturday, November 26. So
it has been out there awhile for Members to look at.
Every single one of these amendments that are part of the manager's
amendment that was talked about tonight has been publicly filed, and I
think that is good. We required that Members have to file an amendment
and make it public. People can go on rpc.senate.gov and see all of
those amendments, and I think that is appropriate.
I would hope that, as we go through this process tonight and we talk
about this legislation, we can express our differences, which we will,
but that we can also stick to the facts, which is that this does
provide middle-class tax cuts. Again, as to those who have said earlier
that there are no real tax cuts, but then when it expires in 10 years
say: Well, gosh, these big tax cuts are gone, you can't have it both
ways. There are tax cuts. Maybe people think there should be different
kinds of tax cuts, but they are there.
Second, there is the economic growth element of this, which to me is
so important. We are not going to be able to have a growing economy and
have opportunity and, frankly, be in a position as a country to be able
to address some of our broader problems unless we have the growth and
the optimism that comes with that, and that is why I think the economic
growth parts of this are equally important. Again, that has been
bipartisan in the past, and I hope it can be bipartisan in the future.
I hope we will be able, as a Senate tonight, to pass this legislation
and then continue to work on these issues, not just in terms of tax
reform but making our economy and our workers more competitive because
that, in the end, is going to be the ability to give people the chance
for themselves and their kids and grandkids to have a better life.
I see my colleague from Pennsylvania is on the floor, and I know my
colleague from Oregon may have another speaker.
I yield the floor at this time.
The PRESIDING OFFICER. The Senator from Ohio.
Mr. PORTMAN. Mr. President, I see my colleague from Oregon has some
other speakers. I know he would like to speak, I am sure.
I ask unanimous consent that there now be 30 minutes, equally
divided, for debate only, with no amendments or motions in order, and
with the majority leader being recognized at the conclusion of that
time.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Oregon.
Mr. WYDEN. Mr. President, I am going to yield to my colleagues in a
minute.
I just think it is important to make sure that the public understands
exactly what some of the facts are behind the Republican proposals.
My colleague from Ohio just talked about how the Republican proposal
is going to create many more jobs in the United States and certainly
isn't going to keep the system that makes it attractive to do business
overseas. Yet my understanding is, all the previous versions--and we
are going through the 500-plus pages now--are based on territorial
taxation.
I don't imagine too many folks in coffee shops are up on what
territorial taxation is, but it is an express lane for shipping jobs
overseas. The fact is, a number of the proposals earlier from the other
side have made it more attractive to do business overseas than in the
United States.
Here are a couple of other points. My colleague said that 70 percent
of the corporate tax reduction would go to the workers. That is not
what Tom Barthold, the head of the Joint Committee on Taxation, said.
He said specifically that he didn't see anything resembling that kind
of benefit going directly to workers. He speaks a special language
known as economics, but he has made it clear he didn't envision
anything like that.
Two other points, and then I have a question for my colleague from
Maryland.
We still do not have an analysis in two areas: No. 1, the cost of the
bill, and No. 2, what is going to be the fate of middle-class families
with respect to this new proposal? What is it going to mean for their
taxes, and by what amounts?
If I can engage my colleague from Ohio on this--what can we be told
at this point we are going to get, if anything, with respect to an
analysis of this particular bill, the 500-plus pages? Will we be
getting anything tonight before we vote?
The PRESIDING OFFICER. The Senator from Ohio.
Mr. PORTMAN. Mr. President, first of all, I was referring
specifically to a CBO report earlier, and the Senator talked about the
Joint Committee on Taxation. We may have different views on that. It
wasn't my belief I was expressing; it was me talking about the
Congressional Budget Office's report. My understanding is that tonight
the entire bill will be online, No. 1.
Second, the analysis is necessary to ensure that it fits into the
reconciliation instructions.
Mr. WYDEN. What analysis would it be, for example, with respect to
what the new bill--the bill we are actually going to vote on--means for
middle-class families? We have millions of middle-class folks who are
trying to sort out what this means for them.
We have just gotten a brand new bill. We would like to know what the
new bill means with respect to the taxes paid by middle-class folks.
Are they going to get ahead or, as we have seen in so many of the
previous iterations, fall behind, particularly after 2027?
Will we get a new analysis on this new proposal that we will actually
vote on with respect to what it means for middle-class families?
Mr. PORTMAN. Will the Senator yield?
Mr. WYDEN. Of course.
Mr. PORTMAN. Good news--you will be glad to hear those tax cuts
continue. If your family is making $50,000, two kids, you will see a
36-percent tax cut. If you are making $165,000 a year, two

[[Page S7682]]

kids, you will get less of a percent--an 8-percent tax cut. That is all
included in the legislation.
The big change, as we talked about earlier--and I know you have it in
front of you--is that there is now this deduction for property taxes.
It is a $10,000 cap on that deduction. As you know, if you look at the
entire SALT, which are the State and local taxes and property taxes,
about 50 percent of that benefit goes to families making over $200,000
a year. In this one, the property taxes capped at $10,000 will be much
more targeted to the middle class.
I think it is fair to say to my colleague from Oregon that he will
see more middle-class tax relief from that, and that will be something
that will help middle-class families.
There is no change in terms of those tax cuts because those
brackets--the reduction of the tax rates, doubling of the standard
deduction, the doubling of the child credit--are all in the
legislation.
Mr. WYDEN. What I would say to my colleague is, we don't have any
evidence of that. My colleague has certainly made laudatory claims
about his bill, but we don't have any evidence of them. In fact, the
comment made by my colleague highlights my concern. What we have seen
thus far for middle-class families after 2027 is that upward of half of
them would pay more in taxes.
I think, rather than continue this, I will just ask my colleague to
see if his side can produce an actual document--even a summary--of what
this new bill is actually going to mean for middle-class families who
are concerned, based on the earlier versions, about seeing their taxes
go up, particularly after 2027.
I have one question for my colleague from Maryland because he has
been talking about the State and local deduction, which is enormously
important to folks in my State and in my colleague's as well.
My question is, when the first income tax was enacted in 1861, it was
to finance the cost of the Civil War. It included only one deduction at
that time for State and local taxes, and that was really composed to
respect the States' ability to make their own fiscal decisions. It was
the first deduction more than a century ago. So does that seem like a
special interest tax break compared to this list of more than 30 breaks
that we have managed to excavate from various corners of K Street?
Mr. CARDIN. If my colleague will yield----
Mr. WYDEN. I will.
The PRESIDING OFFICER. The Senator from Maryland.
Mr. CARDIN. In going over the history as to how the income tax came
about, it really was part of Federalism. They needed the consent of the
States to change the Constitution. It was a partnership with our
States, and that is why, from its inception, there has been respect for
State and local taxation as a deduction from the Federal income tax.
This is not a special interest; this is how we finance government. We
finance government at the Federal level, the State level, and the local
level. If this bill becomes law, we are violating it.
Mr. President, I will ask my colleague from Oregon to let me have a
minute more for two or three more points on this that I think are
important; that is, there are effects that are going to take place as a
result of the limitation of State and local taxes. We are going to see
effects on property values. The Realtors and real estate industries
have made that clear. It is going to affect the tax base of local
government.
This bill is going to affect charitable giving. Why do I say that
charitable giving is part of this? Because I was talking to the mayor
of Baltimore, Catherine Pugh, earlier today. She has serious problems
with law enforcement in Baltimore. She is depending upon private groups
and their generosity to help deal with the problems of Baltimore. It is
going to be much more difficult for private groups to be able to get
charitable contributions if this bill becomes law. So there will be
impact on this that will affect our State and local governments, in
addition to the elimination of the State and local tax deduction.
Here is one last point, if I might make it, in regard to middle-
income taxpayers. I respect greatly my colleagues on the other side of
the aisle and the charge that they show, but these charges don't
include the effect of the increase of the estate tax because that has
not been made part of the calculations. It does not take into
consideration 13 million people who no longer are going to have health
insurance. That has not been taken into consideration in the charge
they are showing.
It doesn't take into consideration, in the charge, that the
corporation profits they are going to make as a result of these tax
cuts are going to most likely go to stock buyouts, rather than helping
the workers. That is not reflected.
So when you take a look at all of it--and we do have some analysis
that has been done that is objective--middle-income taxpayers are at a
disadvantage under this tax bill.
I thank my friend from Oregon for yielding me that time.
The PRESIDING OFFICER. The Senator from Oregon.
Mr. WYDEN. Mr. President, I thank my friend, and I know the Senator
from West Virginia and the Senator from Connecticut have both been
patient. Why don't we yield time to the Senator from West Virginia now.
The PRESIDING OFFICER. The Senator from West Virginia.
Mr. MANCHIN. Mr. President, I thank my good friend, the Senator from
Oregon.
I want to put this in perspective. I don't think there is a person
more bipartisan than I am. I don't think there is a person who has
signed more bills in a bipartisan way with my Republican friends than I
have--who has voted on more Republican bills or more Republican
amendments than I have as a Democrat.
I am really so frustrated. I thought that we could make this place
work. That was my purpose in being here. I truly have done everything I
possibly could. I reached out. The White House was kind enough to reach
out to me. I sat down and I talked to all of the people who are in
charge of writing this legislation from the White House. I sat down
with my colleagues. I gave them some suggestions and ideas. We brought
people together, thinking we could find a bipartisan way.
I will tell you, as I see it unfold tonight, this has been designed
not to have even me, as one Democrat, on the bill, and I want to be. I
want to be part of a reform for the first time in 30 years. I look back
at Ronald Reagan. He was a hero to all of us. He had 97 votes; 97
Senators voted for the legislation that he crafted. There were
adjustments--a give-and-take. But every time, I would think, well, if I
have some ideas, shouldn't you at least listen to me; listen to what we
think?
Two days ago, we did a press conference. I invited all of my
colleagues. I thought: Well, I and Senator Heitkamp from North Dakota
and Senator Donnelly from Indiana--I knew the three of us would show
up. I had 14 other colleagues who were craving to be involved; they
wanted to be involved. I saw my good friend, Bob Corker, Senator Corker
from Tennessee. I asked him: Can we have a few more days to look at
this? That was denied.
I don't know what it is going to take. Maybe we have hit the
proverbial wall. This is the first time I know of, in the history of
the United States of America, that we have ever done this type of major
reform without having a bipartisan objective for it. There is not one
bipartisan vote on this piece of legislation, and I am looking; I have
been looking and trying.
People have called me today from my home, asking: What have you seen?
Do you like something? I said: I haven't seen that much. I am still
trying to find the bill. I promised them: I will see something before I
vote on it. I won't be able to read it, but I am going to see it. I
want to see something.
I would love for us to take the time to sit down and work on this and
see it. I think you would be surprised. I think not only could we get
to 60, we could get above 60 votes on this, and that is what it should
be.
In 2010, I thought my Democratic colleagues who voted for the
Affordable Care Act with not one Republican on it were wrong. I thought
that was wrong. I understand from the history--I wasn't here; I was a
Governor at that time--

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that at least they tried. They went through the markups. They went
through the hearings. They had an awful lot of input. I understand
that.
Still, I don't think any major legislation that affects every
American should go through without a bipartisan buy-in, without
bipartisan votes, without bipartisan support. If this is designed to be
a political ploy--to basically have one side, and one side only, not
wanting one Democratic vote--this will fail, and it is a shame for our
country and for my colleagues.
I have made it a point that what I thought was broken in this place--
I have never, ever campaigned against a sitting colleague. I have never
campaigned against a fellow Republican. I have never made a phone call
against a fellow Republican. I have never raised money to be spent to
try to defeat a fellow Republican, my friends, because I don't think I
could face them if I am trying to defeat them and then ask them to work
with me. I have never done that nor will I ever do that. That is not my
purpose for being here.
All I have asked for is to have the chance to work with my
colleagues. That is all I have wanted to do. I want to be part of this.
I ask, if there is any way possible, slow this down to allow me to be
involved. I would appreciate that.
I yield the floor.
The PRESIDING OFFICER. The Senator from Oregon.
Mr. WYDEN. Mr. President, before we go to Senator Blumenthal----
The PRESIDING OFFICER. There are 36 seconds left.
Mr. WYDEN. I thank my colleague from West Virginia. I believe we are
going to propound another 30-minute unanimous consent request.
The PRESIDING OFFICER. First, the other side has 15 minutes.
Mr. WYDEN. Oh, they have 15 minutes.
We will let Senator Toomey start the 15-minute time allotment for
Republicans. Then, when our turn is next, we will go to Senator
Blumenthal.
The PRESIDING OFFICER. The Senator from Pennsylvania.
Mr. TOOMEY. Mr. President, two points I would like to address, and
then we have other Republican colleagues who would like to use our time
as well.
One, I want to address the comments made by my friend--and he is a
friend of mine--the Senator from West Virginia. I have worked closely
with Senator Manchin on a variety of pieces of legislation, some
relatively ordinary and noncontroversial and others quite
controversial. We have been through some battles together, Senator
Manchin and I, and I enjoy working with him.
I hope he is going to support this product in the end. I am not sure
he will, but he might--I don't know--and he probably has some good
ideas he could bring to this.
Let me be very clear about the process we have used here. First of
all, this legislation has gone through the regular order. It has gone
through the committee. It was extensively debated in the committee. It
was marked up in the committee. There were many dozens of amendments
debated and voted on in the committee. The committee document, which is
very similar to the final document we are going to vote on tonight, has
been available for weeks.
Here is one of the problems we faced from the onset in this. Very
early on in this process, the vast majority of our Democratic
colleagues announced they wanted to leave the room with respect to a
tax reform discussion. Now, as it happens, Senator Manchin was not
among them, but 45 of the 48 Democratic Senators sent a public letter,
and they stipulated the terms under which they would be willing to work
with us on tax reform. One of the terms was that we had to use a
process that could allow them to kill it by a filibuster, if they
wanted to. That was one of their terms.
If they were going to participate in the process, they were demanding
that we would have to empower them to kill the final product by a
filibuster, if they wanted to.
Well, I just think that tax reform, tax relief for low- and middle-
income families like we provide in this bill and the pro-growth
policies through the reforms in this bill are too important to allow
the minority to kill it by filibuster. It would have been malpractice
on our part to allow that possibility, and so we didn't.
All that means is one thing. All it means is, the final passage on
this legislation is not 60 votes, but it is 51. That is all. Any
Democrat can offer any amendment. Any Democrat can join us in
supporting this legislation. That was also true in committee, and it
will be true right through the end of this process.
Our Democratic colleagues also had other stipulations in their
letter. They said there can be no savings in the tax reform package for
the people who pay 40 percent of all the taxes. It is actually really
hard to do pro-growth, meaningful tax reform if you say the people who
pay 40 percent of all the taxes must not be allowed to get any benefit
whatsoever.
Another feature in their letter was that there could be no savings
for the very substantial category of American businesses organized as
what we call passthroughs--these are partnerships and subchapter S
corporations--because under the stipulations in their public letter,
there couldn't be any benefit at all to anyone whose income was in the
top 1 percent. Well, there are a lot of passthroughs that have some
ownership on the part of people who are in that income category.
My point is, they were systematically taking themselves out of the
discussion from the very beginning. Despite that, we had an open
process. We had unlimited amendments, and they participated in that
process.
Now I would like to address the issue my colleague from Maryland
raised, which is the deductibility of State and local taxes. I just
want to say, for me, disallowing the deductibility of State and local
taxes and offsetting that with lower income tax rates for everyone--
which is what we do in our bill, among other things--it is a matter of
fairness. It is just a simple matter of fairness.
Under our current policy, which our Democratic colleagues would
prefer we keep, the current policy of allowing people to deduct their
State and local taxes and requiring higher Federal income taxes for all
Americans as a result, that amounts to a subsidy that is paid by people
in low-tax jurisdictions that gets sent to people in high-tax
jurisdictions.
For the life of me, I don't understand why my constituents in Dauphin
County, PA--a relatively lower tax place--should have to pay higher
Federal income taxes so a very wealthy guy who owns a penthouse on the
Upper West Side of Manhattan can deduct the very substantial taxes he
chooses to pay because he lives in a very high-tax jurisdiction.
How is that fair that a person of much more modest means should have
to subsidize a person of great means through the Tax Code? I don't
think that is fair, but it is also unfair not just from one State to
another but even within a State it is really not fair.
Let me illustrate my point with an example. Let's imagine you have
two families who have the same financial circumstances. They are
neighbors, but they happen to live on either side of a municipal
boundary. One family lives on the side of a town that provides a lot of
services and has high property taxes, which pays for the services.
Maybe they pick up the trash. Maybe the town picks up the leaves. They
provide lots of services. They have a nice community center. So the
family has higher property taxes to pay for all of that.
Then the other family on the other side, in a different township
right next door, they don't get their leaves picked up, they don't get
the trash hauled away, they don't have a nice community center, but
they have lower property taxes.
Now, the family who doesn't have all those services, they have to
privately contract for those services. They have to go hire a company
to take away their trash barrels. They have to hire a company to take
away their leaves. They have to pay to join a gym or a recreational
facility, and they don't get to deduct any of those expenses. They
don't get to deduct the cost of paying someone to take their trash away
or leaf removal or their membership at a local gym or facility like
that.
So how is it fair that one person gets all of those services and gets
to deduct the costs in the form of deducting the property taxes that
pay for it, and the

[[Page S7684]]

other person, otherwise identically situated, does not get to deduct
the cost? That just does not strike me as fair.
So all we are doing is saying: Let's be fair about this. Let's just
be fair. Let's disallow that deduction. For the most part, we do
preserve a portion of that, but the principle is to reduce the ability
to deduct these taxes because it is more fair, and then what we can do
as a result is we can lower the income tax rates paid by everyone.
I think that is a step in the direction of fairness, and it is one of
the things that I think is a good feature in the bill.
I see my colleague the Senator from Montana is here so I will yield
the floor to him.
The PRESIDING OFFICER (Mr. Heller). The Senator from Montana.
Mr. DAINES. Thank you, Mr. President. I am thankful for my colleague
from Pennsylvania, Senator Toomey, for his remarks and for his
leadership in getting us to this point tonight for this most historic
moment in the U.S. Senate.
I spent 28 years in the private sector before I came back to
Washington, DC. In fact, the last election I won before I won election
to serve in Congress was student body president in my high school.
I spent many years working in businesses, growing businesses,
creating jobs, sending a lot of money to Washington, DC, in taxes. You
are not going to find a single Republican here who says taxes are bad.
What we are saying here is that we are an overtaxed Nation.
In fact, if I were to ask you where are the most affluent counties in
the United States, where are they, you might guess, well, Beverly
Hills, perhaps Silicon Valley, New York City. The answer is, the most
affluent counties in America are suburbs of Washington, DC.
The American people have watched this city increase in power,
increase in wealth, and I think this city has forgotten something; that
the dollars that are sent here by hard-working Americans do not belong
to the government, they belong to the American people. It is their
money.
I will tell you what. I don't think we realize how much taxes we pay.
We are focused right now on Federal income taxes, Federal corporate
taxes. However, imagine you wake up in the morning--if you are like me,
my cell phone is now my alarm clock--and you grab your cell phone. You
reach for it. The first thing you do is maybe look at what inbound
emails you have, maybe you look at the Twitter feed, but you realize,
as you are grabbing the cell phone, on average, a U.S. wireless
consumer pays about 17 percent--of that bill you pay for your cell
phone, there are Federal, State, and local taxes for that cell phone.
That is how the day starts.
So then I go, and I get dressed. I think about how much sales tax was
paid, which most States have, for the clothes that you are wearing.
Well, then you might leave your home, walk across your driveway to get
in an automobile, perhaps, and you realize you are paying significant
property tax on that property you own--if you are a homeowner--and you
get in your automobile. Oh, by the way, you have paid a significant tax
on that car too. You have paid a sales tax, most likely. You may be
paying hundreds of dollars a year to put license plates on it. Then you
want to drive on to work, and you might want to stop at that coffee
shop. You might want to get that nice cup of coffee there to get you
going for the day. What do you do? Well, you pay a sales tax, most
likely, as you get your cup of coffee.
Perhaps on the way to work, you need to fill up your gas tank. Now,
in Montana, we drive pickups. I could tell you, when you fill up your
pickup, it costs you a chunk of change.
You are paying 18.4 cents per gallon just in federal taxes, and then
you pay your State taxes on top of that. That ranges from 12 cents a
gallon in Alaska to 58 cents a gallon in Pennsylvania, and then you go
to work.
I was just speaking with one of my young staffers here tonight. She
told me, when she got that first paycheck--I guess her first job out of
college--she called her dad, and she said: They have made a mistake.
They have screwed up my paycheck. And she talked him through the
difference between the gross pay and what you really put in the bank,
the dollars of your Federal, State, local taxes, Social Security,
Medicare.
Your day is finished. Perhaps you want to go home and grab something
to drink, whether it is a glass of wine, perhaps a beer, perhaps a
soda. Well, the government is there too. You have paid an excise tax
somewhere on those beverages. All I am saying here is it is time to
give some of that back. It is time to give some of that back to the
single mom in Kalispell, to give it back to that small business owner
in Helena, to give it back to the families, the businesses, working-
class Montanans. You know what, they need a pay raise.
So how do we start that? How about right here with this bill tonight.
Let's lower tax rates on middle income Americans. Let's allow them to
keep more of their hard-earned dollars. How about we increase the
standard deduction? Let's take it from $12,000 to $24,000. How about we
eliminate the poverty tax? That is eliminating ObamaCare's poverty tax.
As Justice Roberts said, it is a tax. It has cost the American people
so far over $5 billion, 42 percent of those making less than $25,000 a
year, 82 percent make less than $50,000 a year. That is a poverty tax.
We are going to repeal that as part of this bill that we are going to
pass tonight.
Families need a break. How about we double the child tax credit? We
are parents of four. How about that single mom with two children? I
think she needs a break. Let's give working moms, working dads with a
couple of kids an extra couple thousand dollars to help make ends meet
and reduce the tax burden on small businesses--not corporations. We
will talk about that in a minute. That is important to do, but these
small businesses that are not corporations are paying as much as 40
percent of their income in Federal income taxes. We are going to take
that down to less than 30 percent.
What does that do? It creates jobs. It puts pressure on wages, higher
wages, because we need to direct these tax cuts to those who provide
jobs.
By the way, those smaller businesses, 55 percent of the private
sector jobs in this country are from smaller businesses. Two-thirds of
the new jobs created since the recession of 2007, 2008 are from these
smaller businesses. We are targeting significant tax relief for those
small businesses. Who are these? These are farmers. These are ranchers.
These are locally owned Montana businesses. It could be our community
bankers. It could be a baking company. It could be a construction
company. I grew up in a construction company. My mom and dad were the
CEO and the COO of the family business. In Montana, that is 68 percent
of the jobs in my State. They are getting significant tax relief.
Working with my colleagues, we have had some great conversations, and
we have provided some additional tax relief for those smaller
businesses.

We have a historic, once-in-a-generation opportunity today. This only
comes every 20 or 30 years. It goes back to 1986, 31 years ago--the
same year my wife and I were married. We need to put more money back
into the hands of American workers. Let's cut their taxes. Let's open
the doors for the creation of more high-paying jobs. We start that by
transferring the wealth of this city back to the families and
businesses that sent us here in the first place and that keep our
country moving forward.
We have been hearing a lot of things about this bill. The Washington
Post even claimed four Pinocchios on some of these claims that somehow
this plan will raise taxes for most working-class families. Look at the
facts. That is not true.
Let me conclude by saying this, quoting a President:

It is a paradoxical truth that tax rates are too high today
and tax revenues are too low and the soundest way to raise
revenues in the long term is to cut the rates now. The
experience of a number of European countries and Japan have
borne this out. The purpose of cutting taxes now is not to
incur a budget deficit, but to achieve a more prosperous,
expanding economy which can bring a budget surplus.

That was John F. Kennedy in December of 1962.
Let's not miss this opportunity that we have now.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. DAINES. Mr. President, I ask unanimous consent that there now be

[[Page S7685]]

30 minutes, equally divided, for debate only, with no amendments or
motions in order, and that the majority leader be recognized at the
conclusion of that time.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Oregon.
Mr. WYDEN. Mr. President, to start our portion of the 30 minutes,
Senator Blumenthal has been very patient, so I wish to start with the
Senator from Connecticut.
The PRESIDING OFFICER. The Senator from Connecticut.
Mr. BLUMENTHAL. Mr. President, I am honored to be here tonight. Even
in moments of sadness and anger--and I feel both here--I am honored to
be a Member of this body. I am particularly honored to be a Member of
the U.S. Senate with Joe Manchin, whose bipartisanship and willingness
to listen and to compromise and be reasonable is almost legendary. All
of us, including Ranking Member Wyden of the Finance Committee, have
been more than eager to be reasonable and compromise and seek
bipartisan solutions. I truly want to thank Senator Wyden for his
leadership on this issue, as well as his insight and his great
commitment to the public interest.
We had a hearing earlier this week before the Armed Services
Committee about future threats to our Nation and national security,
with a panel of experts who testified that more than $1 trillion
dollars--maybe trillions--would be necessary for us to invest in the
future of our Nation's defense. So many of us asked them whether they
thought it would be possible to make that investment at the same time
that our Nation is about to incur an additional $1.5 trillion in debt
as a result of this misguided, maligned scam, this tax bill, and when
we asked that question, they shook their heads no.
The former Chairman of the Joint Chiefs of Staff, Mike Mullen, once
said--famously now--``The greatest threat to our national security is
our national debt.'' The reason our national debt is a threat to our
national security is very simply that it prevents us from the kind of
commitment and investment in our national defense that we on the Armed
Services Committee and we in this body and we the people of America
know we have to make to secure our national defense.
Our national defense is about more than just hardware and even the
great troops that we deploy--our service men and women who serve and
sacrifice with such incredible bravery and dedication and patriotism--
it is also about the quality of our society. It is about whether we are
equal, whether we give people the mobility to move and make of
themselves what their aspirations are and make the American dream real
in their lives and develop those skills through education and skill
training that are so necessary to us as a nation. We can't produce the
submarines and the F-35s and all of the extraordinary, complex hardware
that we do without that skilled training. We know that in Connecticut
because we produce submarines and jet engines and helicopters. We are
proud of that, but we need more people with those skills.
Yet this measure will enhance the divisions in our society. It will
divide us from each other as Americans. It will diminish the mobility--
social and economic mobility--in our great Nation, and it will increase
economic insecurity. It will not make Americans more sure about their
society, more confident in its equality and justice; it will create
more anxiety and anger because at its core, this measure is about
benefits to a tiny, minute fraction of America. Most of the benefits of
this measure go there. And it is about hitting the rest of Americans--
particularly middle-class families--with initial benefits that may even
look good at first but are a classic bait-and-switch because most of
those middle-class families will be worse off over the next 10 years.
Anybody earning between $50,000 and $75,000 will see their taxes
increase over those years.
For all the reasons that my colleagues have so powerfully and
compellingly outlined in this Chamber, with statistics that I don't
even have time to repeat here, this measure is essentially rotten at
the core in its claim to fairness.
Tax reform should be about making our Tax Code simpler and fairer.
This measure does just the opposite. My colleagues may say there were
hearings, but compared to the mid-1980s when the last major tax reform
was passed, there have been no hearings and there has been no real
markup.
We are now considering an amendment that was deposited on the floor
of this Chamber just minutes ago--barely an hour--and will receive no
serious scrutiny or oversight. It will harm our teachers and first
responders, our police and our firefighters, who will have less support
for their vital services. It will harm the job creators who need more
resources to invest in infrastructure. It will harm our educators and
the skilled trades. It will harm middle-class America.
It will hit Connecticut as hard or harder than any other State
because of the nondeductibility of State and local taxes and because of
the nondeductibility of casualty losses. The homeowners whose
foundations are crumbling will lose the ability to deduct the cost of
repairs that they must make. That is so fundamentally unfair that it
belies the promises that have been made even this day on this floor.
We are adopting this measure literally in the dark of night--a Friday
night when few Americans may be aware of what is happening here--
comparatively few.
On the passthrough provision that has been added to this bill,
unquestionably, some Americans will be aware, including the President
of the United States. He has more than 500 LLCs as part of his
organization that will benefit from this passthrough provision. So the
President may be celebrating, but most Americans will rue this day.
We will remember this day, all of us who are here, but we in this
Chamber will rue it as well. We will remember it because of the black
mark on our democracy that resulted from a guilty plea from a former
National Security Advisor--a guilty plea for lying to the FBI. It is a
black mark on our democracy, a sad day for our Nation, and a shadowy
moment for this administration, the Trump Presidency.
But we will remember it also as a self-inflicted wound for our
democracy when the actions of the U.S. Senate drove deeper divisions
within our society, created more insecurity, enlarged the anger and
angst and anxiety that people feel about themselves, and when we added
$1.5 trillion to the national debt that our children and our
grandchildren will pay and thereby when we diminished our national
security. The national debt may not be the greatest threat to our
national security, but it is one of the largest of the dangers to our
national security, and we have done nothing to alleviate it. On the
contrary, we are adding to it, and that is a shame and a disgrace.
I yield the floor.
The PRESIDING OFFICER. The Senator from Oregon.
Mr. MERKLEY. Mr. President, I thank my colleague from Oregon. I would
like him to know that I will only take about 5 minutes because I want
to make sure my colleagues can speak during this period.
I am rising now to ask the senior Senator from Texas to come and
explain his amendment that has been incorporated in the package. This,
I believe, earlier was his amendment No. 1715, and we are hearing that
1712 was included as well. This is something that might be
characterized as the Wall Street welfare amendment. We are not sure
exactly how it works. We are not sure exactly how much it costs. But
that is not the point. If you are going to stick something into the
underlying bill to benefit very powerful groups like Apollo and
Carlisle and Blackstone, you don't just airdrop it in at the last
second, this provision for the most powerful. Come to the floor, lay
out the details, and defend your amendment and why it should be
included in this bill.
Our basic understanding is that it enables publicly traded
partnerships to be able to have their funds pass through so there is no
corporate tax since they benefit from a lower rate for those
passthroughs. But we have only had a few seconds to look at it. What
does it really do? What does it really cost? I ask the Senator to come
to the floor and explain all of the details. The American people have a
right to know what you are sticking in this bill. Explain your Wall
Street welfare amendment and why we should support it or not.

[[Page S7686]]

We have $4 trillion going to the richest Americans. Four trillion? We
keep hearing about a $1.5 trillion deficit. Oh, yes, but there is lot
more here, so let's just see what it is.
There is the reduction in the corporate tax rate, which we all know
goes to the richest Americans who hold all the stocks. That is $1.3
trillion.
We have repeal of the alternative minimum tax. That is $770 billion.
We have the passthrough for high-end LLCs--not for low-end LLCs but
for high-end LLCs--$362 billion.
We have three provisions for multinationals, a deduction for foreign
dividends, a deduction for foreign intangibles, and the transfers for
intellectual properties, totaling $313 billion.
We have an elimination of the estate tax to benefit the richest 0.2
percent. Out of a total of 1,000 people in America, the richest two--
that is the equivalent. That 0.2 percent would get $83 billion.
Then we have a change in the tax brackets, which added another over
$1 trillion there. And probably most of that--we have been trying to
get a breakout. We can't even get a breakout of where this will go
because it is being rushed through.
If we take those provisions and add them up, it is $4 trillion. I am
just taking the big ones off the list of all of the details.
Little public exposure. Why is this being done in a few hours here,
just after the Thanksgiving holiday, before Christmas? Because my
Republican colleagues are sticking it to the American people, and they
don't want you to know.
So, again, an example--out of this list of 30 amendments that are
being stuffed in at the last second that no one has had the ability to
analyze--30 amendments--let's have the senior Senator from Texas come
to the floor and defend his Wall Street welfare amendment that he is
sticking in here for the most powerful publicly traded partnerships.
That is just one of 30.
So I am calling for transparency. I am calling this process for what
it is, and that is using the argument that you are doing something for
the middle class in order to cover up these trillions of dollars going
to the very richest. Let's see how misplaced this is.
In the next year, 9 million taxpayers together at the bottom would
get about 50 cents a day in tax relief--two quarters. That is what you
do for the 90 million taxpayers who are most in need in America, two
quarters a day. What does this bill do for those who earn more than $1
million? It gives them over $1,000 a week. So $1,000 a week for the
rich and mighty; two thin quarters a day for the folks at the bottom.
It even gets worse than that. By the end of the tax period, what are
those people earning less than $50,000 doing? They are paying $23
billion into the Federal Treasury, but what are those who are earning
more than $1 million doing? They are taking out $5 billion. So the poor
are paying in while the rich are taking out. You call this middle-class
tax relief? I call this a tax scam.
The PRESIDING OFFICER. The time has expired.
Mr. MERKLEY. It is outrageous and unacceptable.
The PRESIDING OFFICER. The Senator from Louisiana.
Mr. CASSIDY. Mr. President, I would like to comment on the positive
aspects of the bill we are about to vote on.
The most positive thing I can say about this is that working families
and middle-income families across the Nation will be better off.
Families who over the last 8 years have not done well will begin to do
better.
Now, we have already discussed some of the things that others have
discussed. Let me just comment briefly:
We have doubled the standard deduction to make filing of income taxes
simpler. For most Americans, that will be a tax cut by doubling that
standard deduction.
We have provisions in there to stimulate the economy, to create
competition for workers so workers will now have a choice of one job or
another. When that happens, of course, their wages rise, and their
benefits get better.
We incentivize companies that are, right now, moving overseas--
because the taxes are so much lower elsewhere--to stay in the United
States, to create American jobs, and to pay more American taxes.
Those are all good things my colleagues have discussed. Let me
discuss some other ways perhaps that this bill benefits working
families and middle-class families.
I am from an energy State. Louisiana produces so much oil and gas.
The thing about energy jobs is it creates jobs for good families. They
may not have a college education, but they are good people. They care
about their children. In these jobs, they can earn over $100,000 a year
in certain aspects of it, and they employ Americans in a way that
Americans have kind of forgotten that it can be that way.
It is meaningful to me. We were in Illinois when I was born. My
family moved to Louisiana because someone called my father and said:
You know, Jim, if you move to Louisiana, you can sell to the people
working at Esso, and you can make a good living.
So even though my father didn't work in the energy industry, he was
one of those who benefited and made a living, which allowed me to go to
medical school. I was the first generation in our family to go to
college and go to medical school, and now I am a U.S. Senator. What an
incredible privilege, all created by energy jobs.
One thing this bill does is it opens up a little more of Alaska for
energy development--2,000 acres. One of my colleagues said smaller than
the airport in Fargo, ND. I have never been there, but 2,000 acres is
not a whole lot of land, But on those 2,000 acres, there is a lot of
oil beneath.
Why is that important? We as a country can make a decision to be
energy secure or not. If we are going to be energy secure, it means we
are going to produce our own energy. This is not to rule out
renewables, but for the moment we are going to continue as a country to
consume natural gas and oil. We can buy it from countries such as in
the Middle East where environmental standards are not as strict as
ours, but when we do that, not only are we sending our jobs and revenue
overseas, but we are also, in effect, endorsing their lower
environmental standards, and that overall pollutes the environment.
On the other hand, if we buy from ourselves--using American workers,
creating American jobs, using American environmental standards--not
only do we get the benefits to the family and the benefits to the
environment, but we have the national security benefit of being able to
be energy secure.
Now, this is powerful. I first became aware of it, I think, in middle
or maybe elementary school. I went to St. Luke's Episcopal Church.
There was a guy there named Thor. What a great name, Thor. Thor told me
his father was a pipefitter and was at that moment in Alaska working on
the Alaska Pipeline. That was 40 years ago, so maybe my memory is a
little fuzzy on everything but Thor's name. The point is, a fellow from
Louisiana was going to Alaska, making great money, being able to
provide for his family back home. That is a good thing.
As we develop our energy resources on the North Slope of Alaska,
using American environmental standards, creating American jobs, we are
changing the life of families like my family and for perhaps the family
of the man I remember going to middle school with long ago.
I mentioned Thor's father was a pipefitter. Now, it is not just on
those 2,000 acres. There will be a way of transporting that oil that is
produced elsewhere. In South Louisiana, we make boats--boats that
actually work off rigs and can create jobs both in the boatyard and in
the maritime industry.
Thor's father was a pipefitter. You pipe out your oil, and you create
jobs in that way. That comes to mind because when I was first elected
to the Senate, I was going to a committee hearing, and some union
fellows from Ohio came up to me to ask that I endorse the construction
of the Keystone XL Pipeline. Of course, I have always been in favor of
it so they had my vote, but they made the point: We are union laborers.
We work on the job. When we say there is $40,000 created in the
building of a pipeline--sure, we may only be on the job for 6 weeks,
but then we go to another job for 6 more weeks and another job for 6
more weeks.

[[Page S7687]]

I was struck that these working families benefit not from the actual
production of America's natural resources but from the transportation
of America's natural resources. So the economic benefit to working and
middle-income families doesn't just stop with those who are perhaps
doing the drilling, but it continues downstream and, as I mentioned
earlier, even extends to a family like mine.
Now, let me mention another aspect of this that brings benefits to
our working families and to our middle-class families. One thing I was
helpful with was the restoration of the historic tax credit. The
historic tax credit is a Federal tax credit first made permanent by
President Ronald Reagan that allows somebody to go to an older building
in a community and to restore it, returning it to commerce. So instead
of a portion of our architectural heritage being destroyed, it is
refurbished and is there for future generations to enjoy. More than the
kind of aesthetics of seeing an older building become beautiful once
more, it creates jobs.
Now, let's go back to this legislation, creating better jobs for
working and middle-income families. First, it affects everybody. More
than 40 percent of the projects under the historic tax credit program
in the last 15 years have been in towns of less than 25,000 people. In
my State, since 2002, the historic tax credit has contributed to 782
projects being built, bringing $2.2 billion worth of investment into
these cities and towns across my State.
Now, when you have that much money, you create lots of jobs. It is
thought, nationwide, according to the study by the National Park
Service, the historic tax credit has encouraged more than $131 billion
in private investment, rehabbing 42,000 buildings, creating more than
2.4 million trade jobs, returning a net positive to the U.S. Treasury.
Since fiscal year 2002, in Louisiana alone, it has, again, fostered
more than $2.5 billion in private investment, creating more than 38,000
jobs. These are jobs--construction jobs, rehabilitation jobs--that
allow a family to live with a good living wage. That is part of this
legislation.
I should mention one thing in particular very topical on the historic
tax credit. The World Trade Center of New Orleans is currently being
refurbished. It was built in the 1960s and is being transformed into a
world-class hotel condominium complex. It brings the city of New
Orleans $400 million in infrastructure spending, 1,600 jobs in
construction trades, as well as more than 450 permanent, full-time
jobs. Instead of a crumbling eyesore, you have a jewel, but more than a
jewel, you have 1,600 jobs created and 450 permanent jobs.
Let me mention the last thing that benefits working and middle-class
families. My friends on the other side of the aisle talked about
supposed negative effects on Social Security and Medicare. I am a
doctor. I have been working in the public hospital system of Louisiana
for 25 years. I understand the importance of safety net programs, if
you will, like Medicare that allow our senior citizens to have the
healthcare they need.
The dirty little secret is that, according to the people who run
Medicare and Social Security, those trust funds are going bankrupt--
bankrupt. Under the Obama administration, they tried to address it by
raising taxes, so they put a higher income tax on people, and the trust
funds are still going bankrupt. Under ObamaCare, there were different
things to try to save money within the system, delivery system reforms,
and some are, frankly, good ideas--although I opposed ObamaCare, in
general, some of these were good ideas, and I continue to endorse
them--and the trust funds are still going bankrupt. So it raised taxes,
we are trying to save money, and the trust funds are still going
bankrupt. What can we do to try and rescue these programs that are so
significant, so important to senior citizens, to all of us in this
country--Social Security and Medicare in particular.
What about economic growth? I did an analysis once with another man
which shows that if we just return to the economic growth that is
common in our country--about 3.5 percent GDP growth per year--we will
fully fund our trust funds for Medicare and Social Security.
Keep in mind, although we are cutting rates for corporations, the
rates for funding Medicare and Social Security are staying where they
are. So if our economy is doing better year over year, there will be
more money going into these trust funds, not because the rates are
higher--the rates remain the same--but because there is more money to
apply the rates to.
Is it reasonable to have that kind of growth? Absolutely. From 1946
to the beginning of President Obama's administration, through 10.5
recessions--including one-half of the great recession--we averaged over
3 percent growth as a country. Now, under President Obama's Presidency,
it was about 2 percent growth, and 2 percent versus 3.5 is all the
difference in the world because it compounds. It goes like this if it
is 2 percent, it goes like this if it is 3.5 percent, and at the end of
10, 15, or 20 years, those differences are remarkable.
I will say, under President Trump, for the last two quarters we have
had over 3 percent GDP growth. Republicans take over, and the economy
begins to do better. In the next quarter, it is estimated that it will
be over 3 percent. With this legislation, increasing the amount of
money families have in their pockets, building out our energy resources
as we are in Alaska, creating jobs for Americans across the way, using
things like the historic tax credit, returning money to the Treasury,
but also creating American jobs will create that prosperity, that
economic growth, so that instead of the 2-percent growth that we have
had for the last 8 years, we have the 3.5-percent growth that we
historically have had. That is a promise of this legislation. That will
restore funding for Social Security and Medicare. That is the answer
that has eluded the other side.

Mr. President, before I yield back, I ask unanimous consent that
there now be 30 minutes, equally divided, for debate only, with no
amendments or motions in order, and with the majority leader being
recognized at the conclusion of that time.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. CASSIDY. I yield back.
The PRESIDING OFFICER. The Senator from Oregon.
Mr. WYDEN. Mr. President, for this tranche, I believe we will have
Senator Durbin lead off for us and then Senator Nelson and Senator
Bennet. Each is going to try to take around 5 minutes.
Senator Durbin.
The PRESIDING OFFICER. Senator Durbin.
Mr. DURBIN. Mr. President, what happens when you decide to write a
tax bill that changes the economy of the United States of America, you
don't have adequate hearings to gauge what is going to happen, you
don't bring in the experts to try to tell you what the impact will be
on individual families and businesses, and you stick around until 5
o'clock on a Friday night and you hand out the work product for all of
the Members of the Senate to take a look at before they vote on changes
in the Tax Code that will affect the people they represent?
This is what happens: 479 pages were handed to us. They tell us that
some of this has been around for a while, and some of it is new. They
don't tell us which part is new and which part is old. Lucky for us, on
K Street--and there is nothing wrong with lobbyists--where the Federal
lobbyists live, they are following this really closely, and they have
given us basically a cheat sheet, a scorecard, so we can figure out, at
least generally speaking, how many changes have been made in the 479
pages since the last time we saw this proposed bill.
I defy any Member of the Senate to stand here and take an oath that
they have read this and understand what in the world it means to
businesses, families, and individuals. If they want to take that oath,
and maybe some will, then I refer them, ladies and gentlemen of the
American jury, to exhibit A, page 257 out of the 479.
Why do I pick this page? Because they didn't have time to type it.
They wrote it out in longhand. We are not even teaching cursive in a
lot of schools anymore, but someone on the staff knew it enough to try.
The problem is, they wrote it in cursive along the margin here. It is
about subchapter

[[Page S7688]]

S corporations and how much tax they paid and what they don't pay. I
defy anybody to read it because the problem was, when they copied it,
they chopped off lines so there aren't full sentences here. They are
like little phrases and words.
This is your Senate at work. This is what happens when you push
through a bill late at night, desperate to pass it, without really
stopping to ask yourself: Will this make us a stronger nation? Will
this help legitimate businesses that want to expand and create jobs? Is
this good for American families?
The Joint Committee on Taxation told us yesterday--that is our
scorekeeper; they are the ones who we hired to be our scorekeeper; they
are nonpartisan--what they learned about this bill before we got the
new version, with the new amendments. Our friends on K Street were
happy to tell us what the listings were. They told us that this
starting bill will add $1 trillion to the national debt--so our kids
and grandkids can pay it off--to pay for the tax cuts. They also told
us that the predicted economic growth that is supposed to come out of
these pages of 4, 5 percent a year is 0.8 percent. Is it not? Am I
right?
Mr. WYDEN. Correct.
Mr. DURBIN. They also told us that the biggest beneficiaries under
this Tax Code--this Joint Committee on Taxation--happen to be the
wealthiest people in America--surprise--and the biggest corporations.
They told us that, at least in the second 10 years--maybe before--
regular middle-income families are going to pay higher taxes because of
this. They let us know, and we knew already, what is going to happen to
programs like Social Security, Medicare, and Medicaid. You see, when
you run up the national debt and you want to try to balance the books--
our Republican friends have been very open about this. They want to cut
the benefits under Social Security, Medicare, and Medicaid to try to
balance the books.
America, are you ready for this? Are you ready for senior citizens
who are counting on that Social Security check to get a cut in benefits
to pay for a tax cut, a tax giveaway to the wealthiest people in
America? Are you ready to see Medicare cut--that is, reimbursement for
seniors for medical expenses--in order to make sure that the biggest
corporations in America get a tax break? Are you ready to see Medicaid,
which has as its major expense taking care of seniors in nursing
homes--benefits cut in order to give an incentive for businesses to
move jobs overseas? That is what this is all about.
Here is the reality. As a percentage of gross domestic product,
American corporations have never been more profitable--never. As a
percentage of gross domestic product, American corporations have never
paid less in Federal taxes.
What is the Republican response to that? Cut corporate taxes. Why?
Shouldn't we be focused on doing what is necessary so that middle-
income families have a fighting chance to pay their bills and put some
money away for their kids and their future? Shouldn't we be working on
helping small and medium-sized corporations instead of the big boys?
That is what I think we should focus on. I don't know for sure that
this bill doesn't do that. In fact, nobody does. Nobody knows what is
in here--479 pages. If they tell you they do, then ask them to explain
page 257. Ask them to try to read this. I have tried. This is going to
change the tax law of America in ways that we can't even explain. We
have to get this done because the Senate has done little or nothing
this year, and so they are desperate to get something done before the
end of the year. Sadly, it is a tax bill that we have just been handed
1 hour and 50 minutes ago.
I yield the floor.
Mr. WYDEN. Mr. President, I want to thank my colleague from Illinois
for a very insightful analysis, and his skills as a handwriting expert
may be necessary as the Senate Finance Committee tries to divine what
that particular page actually means. I thank my colleague for trying to
unpack a byzantine area of subchapter S tax law.
Mr. DURBIN. If the Senator from Oregon would yield for just a moment,
I would like to ask consent that this infamous page 257 be made a part
of the Record after my speech, but I am really sorry for the members of
the staff who have to try to write this out--type it out.
Mr. WYDEN. Their eyes are being strained as we speak.
The PRESIDING OFFICER. Without objection.
Mr. WYDEN. I yield to the Senator from Florida.
Mr. NELSON. Mr. President, this is, in effect, a massive transfer of
wealth under the guise of tax reform and under repeating the statement:
It will help the middle class. You can repeat a statement, but that
doesn't mean it is true. You have to look at what the facts are. I
think you have heard a number of the speeches that will refute this--
that it is not middle-class tax relief. It certainly isn't when a lot
of those so-called tax cuts for the middle class will evaporate; they
will cease to exist after 7 or 8 years.
Let's take another part of this tax bill, the child tax credit. We
are going to have a couple of amendments out of here on the floor
tonight. We are going to have one that is going to increase the tax
credit substantially, like $3,000 per child. When you compare that to
the current existing Republican bill, they have a tax credit that, in
fact, if you have more than three children, if you have a large family,
you are going to be penalized. That is what the facts are.
Let's see how the votes come later this evening on two amendments.
One is a Democratic amendment, and one is a Republican amendment. As to
the child tax credit, let's see what the majority of our friends who
are trying to ram this through in the dead of night do. Let's see what
happens, because, clearly, their tax bill does not do enough.
This Senator has long supported increasing the child tax credit,
including cosponsoring Senator Brown's amendment to increase the credit
and make it easier for those who are in a low-income situation to claim
that credit. I am going to continue to support increases for this tax
credit for the middle class, as long as it is done in a fiscally
responsible and thoughtful way. It doesn't make any difference who is
proposing it. Let's see how the votes come out here on these two
amendments.
Unfortunately, the bill that is before us does it backward because it
actually increases those who have a number of children. We should be
doing the opposite. I hope that we will find a way to drastically
change this bill. Instead of limiting the child tax credit, let's go in
and make the corporate income tax not at 20 percent but at 22 percent
or 25 percent in order to fund the child tax credit to help those on
the bottom line of the economic ladder.
We should be coming together in a bipartisan manner to flip the
priorities in this bill and to significantly increase the child tax
credit. Obviously, that is what the American people want, but that is
not the bill of goods that you are getting sold here tonight. By saying
something is something, that doesn't make it so. It is what the facts
are.
I yield the floor.
Mr. WYDEN. Mr. President, my colleague has a parliamentary inquiry,
and then we will go to Senator Bennet.
Mr. DURBIN. Mr. President, parliamentary inquiry.
The PRESIDING OFFICER. The Democratic whip.
Mr. DURBIN. I submitted page 257 of the amendment to be placed in the
Record and you gave unanimous consent for that to happen. I have now
been instructed that the personnel at the Senate cannot read this page
the way it is currently written. Could I have this entered in the
Record just as written with the handwritten notations on the side?
Could I enter it as a graphic or artwork or something like that?
I ask the Presiding Officer, does that mean if the amendment has this
page in it, that the amendment cannot be filed?
The PRESIDING OFFICER. The amendment can be filed with handwritten
changes, but the staff will have to change those later or correct them.
Mr. DURBIN. I would like to ask a further parliamentary inquiry. Why
didn't they accept page 257 after I received consent to put it in the
Record?
The PRESIDING OFFICER. The amendment has not been filed yet. Consent
was accidentally----
Mr. DURBIN. Parliamentary inquiry. This page, which is part of the
tax bill,

[[Page S7689]]

257, as written, cannot be filed in the Senate because no one can read
it; is that correct?
The PRESIDING OFFICER. The amendment has not yet been filed. It can
be filed in that form.
Mr. DURBIN. Parliamentary inquiry. Why can't this page be filed in
that form?
The PRESIDING OFFICER. The amendment as shown with the handwritten
text cannot be printed in that graphic form.
Mr. WYDEN. Mr. President, parliamentary inquiry.
The PRESIDING OFFICER. The Senator from Oregon.
Mr. WYDEN. When this is filed, we want the American people to know
what has actually been written on the side.
Will it be possible, as part of Senator Durbin's statement, to add
this ``written on the side'' portion as part of his statement so that
the American people will actually know how outrageous this process is
and that it at least states, as part of his speech, what is written in
the margin? Can that be stated as part of his statement?
Would the Chair answer the question?
My question is, when the amendment is filed, I would like to ensure
that the important point my colleague has made about what is written in
the margin could be included as part of his written statement that will
be entered into the Record so that the American people can get some
sense of what kind of flimflam is actually taking place here.
The PRESIDING OFFICER. When the amendment is filed----
Mr. WYDEN. Thank you.
The PRESIDING OFFICER. The text will appear in linear format with any
errors that may be in it.
Mr. DURBIN. Mr. President, I have the greatest respect for the Senate
staff, and I am not trying to say anything negative about them. I was
hoping that this could be entered into the Record, and I asked for
unanimous consent to enter it, believing that the handwritten portion
would show up in the Record. I have since been advised that there will
have to be translators and interpreters who will have to decide exactly
what this says before it is actually part of the Congressional Record.
I think that I have made my point as to where we stand in preparation
of tax reform for America.
Thank you.
Mr. WYDEN. Mr. President, I yield to the Senator from Colorado.
Mr. BENNET. Mr. President, talk about the swamp. All of the folks who
voted in this election do not have the swamp in Washington, DC--they
are watching this happen right in front of their eyes tonight. We have
a bunch of amendments that were dropped in by lobbyists here last night
that we haven't seen, except that we received a list from them, and we
have illegible amendments now at the desk that, even if we could read
them, we wouldn't be able to. It just doesn't make any sense.
I will tell you something else that doesn't make any sense. It
doesn't make any sense that, in our economy, 90 percent of our folks--
the bottom 90 percent--earned the same amount of income as the top 10
percent. The top 10 percent earned 50 percent of the income in this
country, and the bottom 90 percent earned the other 50 percent. You can
see the direction that these lines have headed over a number of years.
That is the issue that we confront in our economy. That is what we
all should be working on in a bipartisan way to try to address.
Unfortunately, instead of improving the circumstances for people in the
bottom 90 percent of earners, the decision has been made, because of an
economic philosophy that has to do with trickle-down economics, to give
the benefits to the people who are doing pretty well--and not just
pretty well but better than they have done since 1928, and we stated
earlier today on this floor what a miracle the tax policies were in the
early 1920s.
The PRESIDING OFFICER (Mr. Perdue). The Democrats' time has expired.
Mr. BENNET. Mr. President, I ask unanimous consent for an additional
2 minutes.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Mr. BENNET. I thank my colleague from Pennsylvania.
In addition, we cannot afford to do this. Right now, we are
collecting, before this tax cut goes into effect, 18 percent of our
gross domestic product in taxes and revenue. We are spending 21 percent
of our gross domestic product, and that leaves us with a deficit.
Because this place lacks the courage to deal with the issues that we
must confront, unlike our parents and grandparents, we have hollowed
out discretionary spending. We are spending 35 percent less than we
were in 1980 as a percentage of our GDP.
Yesterday, we had testimony in the Armed Services Committee that we
need a trillion additional dollars to modernize our defense. We know
how dangerous this world is with what is happening on the Korean
Peninsula and with what is happening in the Middle East.
Why was it OK for our parents and grandparents to invest in us, but
we are unwilling to invest in the next generation of Americans? Not
only are we unwilling to invest in them, but we are saddling them with
the debt that has arisen from our inability to make proper decisions.
We are doing it now in plain sight of budget projections that show that
the money is just not here.
I think we have a decision to make as to whether we want to live up
to the example our parents and grandparents set for us and whether we
are willing to make the kinds of investments in the next generation
that they were willing to make in us.
I yield the floor.
Mr. WYDEN. Mr. President, just before we wrap up, I have heard
Republicans talk constantly about how this process is being conducted
by regular order. I have never seen in my time in public service, when
talking about $10 trillion worth of tax policy changes and the biggest
tax bill in three decades, something along the lines of the flimflam
that we have been talking about, with handwritten changes in the
margins about something that conceivably will affect vast sums of
taxpayer money.
I yield the floor.
The PRESIDING OFFICER. Who yields time?
The Senator from Florida.
Mr. RUBIO. Mr. President, as most of my colleagues know by now, we
have been working for I believe about a year and a half--certainly
throughout this tax reform process--to address the issue of the child
tax credit in an effort to increase it. I am grateful that in this
process, we have been able to increase the child tax credit to $2,000.
That will help a lot of people.
I have been asked by some people: Why isn't that enough? Why aren't
you happy with that? The answer is that the people we most want to help
are not going to be able to fully use it, and here is why. For them,
for people who are making $30,000 or $40,000 or $50,000--you are a
construction worker; you are a teacher; you are a firefighter; you are
a welder; you are a bus driver--the backbone of America's workers--
their main tax liability is their payroll tax. Unless you allow the tax
credit to apply fully not just to their income tax--many of whom don't
have a high income tax liability but a payroll tax--they are not going
to enjoy the full benefit. The result is kind of absurd if you do one
without the other. The result is, if you make $500,000 a year and you
have enough kids, you can use the whole credit, but if you don't make
that much money--if you make, say, $25,000 a year--you won't get nearly
as much of the credit even though you have paid the taxes. It kind of
doesn't make any sense, right?
We are trying to help people with the cost of raising children by
allowing them to keep more of their own money. It is the people who
make less who need it the most, and when you only do half of it, which
is the $2,000 increase, you only get it half right. So it is good, and
there are people who are going to be helped by that, but we could have
helped so much more.
The bill we have today, which is before us here and will be before us
in a few minutes when there is a substitute provided, cuts the
corporate tax rate from 35 percent to 20 percent. A reduction in the
corporate tax rate is something that I strongly support because I think
it makes America more competitive and, in the process, is going to help
a lot of these same people whom

[[Page S7690]]

we are trying to help. I know that sounds countercyclical, but it does
because when these corporations are able to save money in taxes, many
of them will use some of that money to create new jobs and hire more
people. That money--some of it will be reinvested and perhaps even flow
toward workers in the form of higher wages over time.
These are positive things, so I am not against a reduction of the
corporate tax rate. In fact, I ran for President, for the Senate, and
for reelection to the Senate on the promise of reducing the corporate
tax rate to 25 percent. So 20 percent goes well beyond that. However,
in order to be able to pass something that pays for it, because you
have to--and people don't know this back home, so I will just kind of
explain it--this bill allows us roughly about $1.5 trillion over the
next 10 years of spending over revenue. Now, we think that the growth
in the economy is going to more than offset that, but for purposes of
the rules of the Senate, it has to be within those parameters.
In order for us to offer an amendment that provides an increase in
the child tax credit at a rate that we want to do it--about $86.9
billion--we have to find $86.9 billion somewhere in order to be able to
do it. Initially, instead of cutting the corporate tax rate from 35 to
20, we proposed cutting it from 35 to 22. It is still a massive cut. It
is still well below the international average of 23. It still puts us
in third place among the seven largest economies in the world. But that
was met with significant resistance.
We have always said that we would be open to an additional way or a
different way of doing it, so today when the substitute amendment is
offered, we are going to offer an amendment, Senator Lee and I. Instead
of 22 percent, it is going to propose that we reduce the corporate tax
from 35 to 20.94 percent. Basically, instead of a 15-percent reduction,
it will be a 14.06-percent reduction, OK? The difference between what
is in the bill and what we are proposing is less than 1 percentage
point of reduction in the corporate tax rate--0.94 percent. With less
than that 1 percent difference, we can make a huge difference in the
lives of millions of Americans making between $20,000 and $50,000, as
an example. That would generate about $87.4 billion, and we could use
$86.9 billion of it to allow working families with children to keep
more of their own money to pay for the costs of raising their children.
I will remind you of who these people are. These are teachers,
firefighters, welders, construction workers, truck drivers--the working
class.
We didn't even have to do that, to be frank. From last night to
today, the leadership and those working on this--and they have worked
very hard--found an additional approximately $260 billion to cut even
more taxes for businesses. I have no problem with that. I want America
to be super competitive. But somehow, through some political jiujitsu
or some sort of magical formula, $260 billion appeared to provide even
further cuts, and that is fine. I just wish that some of that jiujitsu
and political magic had been employed on behalf of the millions of
Americans making between $20,000, $50,000, and $60,000 a year because
they need our help.
What has been the opposition to this? Frankly, some of it is untrue.
Some of it is offensive. Some of the opposition I have heard is that
the people who would benefit from this tax cut don't pay taxes. They
don't pay income tax or a lot of income tax, but they pay tax. If at 5
o'clock today you left your job as a construction worker and you
received your paycheck, they took money out of your paycheck. When they
take $200 out of your paycheck, it doesn't matter if it says FICA or if
it says income tax withholding; it is $200. It is the same money, and
you have $200 less of it. That is a tax. Anytime the government takes
your money, it is a tax.
I have had people tell me, including people in the administration,
that they don't pay taxes. I have had people say that they don't
generate economic growth, which is, in my mind, No. 1, not true, and
No. 2, the wrong way to think about it. You see, our economy should be
working for our people, not our people for our economy, and when you
talk that way, you have it wrong.
I also disagree that they don't generate growth because when you make
$50,000, you spend every penny that you make. I know these people. I
live in West Miami, FL, and West Miami is a small, little city. It is
three-quarters of a square mile. I have lived there since 1985. The
average income is $38,000 a year. If you make $38,000 a year, you spend
every penny, especially if you are raising children.
I do not care how much people tell you to put some money aside and
save it for the future; you cannot because everything costs more and
there are unexpected costs. You bought brandnew shoes in September for
school, and by November they either have a hole or they no longer fit.
You bought them a backpack in August for back-to-school, and by
November or December, it has a hole in it or something broken and you
have to pay for it. Costs constantly come up that you haven't
anticipated.
Where do they spend this money? In our economy. So, yes, maybe they
don't generate as much growth as a Fortune 500 company, but they have
to spend every penny of it, so they do generate growth.
I have even heard terms used like ``It is a black hole'' and ``It is
welfare.'' It is not welfare; it is their money. I heard one newspaper
editorial say that it is anti-work. How could a tax credit that you
can't get unless you are working be anti-work? I will tell you what is
anti-work: a package of benefits from the government that you get--
which is worth more than this tax credit--that you are eligible for if
you don't work.

I want you to tell the worker at a Head Start facility--think about
this. You are a teacher at a Head Start pre-K, and you make too much
money for your children to go to Head Start, but you don't make enough
to be able to afford child care for your own kids. That is happening
all over this country, and somehow there are black holes that we can't
even find $86.9 billion to help them just a little bit more.
The second argument we have heard is that we can't cut the corporate
tax rate because it is going to hurt growth. OK. You are telling me
that if we have a corporate tax rate that goes from 35 percent to 20.94
percent, that is going to hurt growth. Twenty percent is the most
phenomenal thing we have ever done for growth, but if you add 0.94
percent to that, it is a catastrophe. We are going to lose thousands of
jobs. Come on--especially when you add that to the fact that they are
going to be able to immediately expense their investments, when you add
that to the fact that they are going to repatriate money abroad to the
United States with the lower tax rates. When you add all the things
that we have done, argue all you want, but don't please don't tell me
that 0.94 percent is going to somehow lead to less economic growth
because it is just not true.
We are going to have a vote later today. I don't know how many votes
they are going to make us have in order to pass this; there are all
kinds of procedural things that happen here. But I can tell you that
this is about a lot more than just tax reform. We have a big problem
that perhaps this tax reform debate has revealed; that is, the only way
forward in this country is one that is pro-worker and pro-growth, and
you cannot have one without the other. I can tell you that in this
country today, there are millions and millions of people who have been
hurt by the new economy. The new economy is great. There is nothing we
can do to turn it back. The future is here, and you cannot go back to
the past.
We should embrace the new economy. It has created extraordinary
wealth for people who are innovators or people who have the right
careers or right jobs. I don't begrudge it. I am glad that it is
happening. But when you have a new economy, just as when we had the
Industrial Revolution, there are some people who are going to be hurt
and we have to help them in that transition because if we don't help
them, we are going to break the social compact that holds our Nation
together. I am not claiming that the child tax credit will solve that
problem by itself. I am telling you that if we aren't even willing to
do another $86 billion of allowing people to keep their own money--not
even willing to do something as small as this--we are not willing to do
anything for working people in this country, and that is a big problem.
That is

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an enormous challenge for our Nation. These people have felt neglected
and disrespected for a long time.
I want to be very careful, but I want to be clear about what I am
saying. The political debate in America today is either all about
helping the very poor--and I support the safety net. I don't think free
enterprise works without a safety net. It should be there to help
people who cannot help themselves, to help people stand back up on
their feet and try again. The political debate is also all about
helping the business community, and I support that because we need
vibrant economic growth to create jobs and opportunity.
But what about everyone else? What about the people who make $50,000
a year? They make too much money for CHIP, for pre-K paid for them by
the government through Head Start, for ObamaCare subsidies, too much
for government benefits, but they don't make nearly enough to afford
the cost of living. What about them? What is in it for them?
Yes, there is going to be economic growth and there are going to be
wage increases, but not for everyone, not in this new economy in which
the haves and have-nots are largely divided between those who have the
right skills and right degrees and those who do not, and that has gone
unaddressed for a very long time. I am telling you, if we do not
address it, we leave our Nation vulnerable to two dangerous political
extremes--radical socialism on the left and ethnic nationalism on the
right--and neither of them are true to the American principles that
created the greatest Nation on Earth.
Again, I am not here to tell you that the child tax credit solves
that problem. I am here to tell you that if we can't even do that, it
is evidence of our unwillingness to do beyond it the tasks that need to
be done. We have a major challenge in this Nation. All we are asking
for and all I implore my colleagues to vote for--I know that for people
on the other side of the aisle, this doesn't go far enough. I
understand it; I do. I know you want to get to a higher number; I know
you want it to apply to more people. I promise you, I did too. I wanted
it to be $2,500. I am trying to figure out in this constitutional
Republic, which cannot be a zero-sum game, how we can make things
better if we do not make them perfect.
And on the other side of the aisle, I implore my colleagues to
believe that this is not a black hole, and this is not welfare. These
are the teachers, firefighters, neighbors, and friends who are
struggling because everything costs so much more. Why can't we just
help them keep a little bit more of their own money? Really, is a 20.94
percent corporate tax rate going to hurt growth, especially if it will
help us provide a little bit more assistance for the people who, today,
desperately need our help?
I hope I can earn the support of as many of my colleagues as
possible. It won't make this bill perfect. It doesn't go far enough for
some, but it will make it better.
I yield the floor.
The PRESIDING OFFICER. The Senator from Pennsylvania.
Mr. TOOMEY. Mr. President, I ask unanimous consent that there now be
30 minutes, equally divided, for debate only, with no amendments or
motions in order, and the majority leader be recognized at the
conclusion of that time.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
The Senator from Oregon.
Mr. WYDEN. Mr. President, we are going to have several of our
colleagues on our side, and we will start with Senator Sanders.
Mr. SANDERS. Mr. President, as I think about what is going on here
today, I think this is in many ways a historic day, a day that
historians will look back on--December 1, 2017--and they will conclude
that today is the day of one of the great robberies, of criminal
activities, if you like, in the modern history of this country. The
Federal Treasury is being looted tonight. As we speak, there are
lobbyists all over Capitol Hill, writing down in handwriting,
amendments to this bill to give hundreds of millions, if not billions,
of dollars in tax breaks to large corporations. As we speak, they are
probably still writing those amendments.
Meanwhile, this Senate, this Republican-led Senate has been unable to
reauthorize the CHIP program, the health insurance program for low-
income children. They didn't have enough time to do that. We have been
unable to reauthorize the Community Health Center Program, providing 27
million people with health insurance. We don't have the time to do
that. But tonight we are presumably going to pass legislation when, at
a time of massive income and wealth inequality, 62 percent of the tax
benefits go to the top 1 percent, and 10 years from now, millions and
millions of middle-class Americans will be paying more in taxes.
I have not the slightest doubt, as I have said before, that after the
Republicans pass this huge tax giveaway to the wealthy and large
corporations, they will be back on the floor of the Senate, and when
they come back, they will say: Oh, my goodness, the deficit is too
high. We have to cut Social Security, Medicare, Medicaid, education,
and nutritional programs. In other words, in order to give tax breaks
to billionaires and to launch profitable corporations, they are going
to cut programs for the elderly, the children, the working families of
this country, and the poor. This legislation will go down in history as
one of the worst, most unfair pieces of legislation ever passed.
I say to my Republican colleagues, as you saw on November 7, the
American people are catching on. They are demanding a government that
does not simply work for corporate lobbyists but works for the middle
class. They are demanding a tax system that says to the wealthy and
large corporations: You are going to start paying your fair share of
taxes, and, no, we are not going to cut Social Security; we are going
to expand Social Security. We are not going to cut Medicare; we are
going to move to a ``Medicare for all'' healthcare system. The American
people are catching on.
While Republicans may get away with this act of looting tonight,
history is not on their side. The day will come, and it will come
sooner rather than later, when we are going to have a government here
that represents all of us, not just the Koch brothers, not just the
billionaire class, not just wealthy campaign contributors.
I yield.
The PRESIDING OFFICER. The Senator from Pennsylvania.
Mr. TOOMEY. Mr. President, I want to talk about one of the truly pro-
growth features in this tax reform that is going to encourage
investment in the United States, new business creation, startup,
expansion, and hiring that will be associated with that. That means new
jobs, more demand for workers, and higher wages.
What am I referring to? I am referring to one of the things we do on
the business side of this tax reform. The way I think about it, there
are several big features that are going to drive economic growth on the
business side of the Tax Code. One is certainly lowering the top rate
from the 35 percent that makes us uncompetitive in the global economy
to 20 percent, which puts us pretty close to dead even among our
competitors. That is one. That is an important part.
The second one that I think is even more powerful is simply allowing
businesses to recognize, for tax purposes, expenses when they actually
occur. Allow businesses, when they buy equipment and put that equipment
to work in a factory or when buying earth-moving equipment or new
machinery, to recognize that cost when it occurs. By allowing them to
recognize that cost when it occurs, they can afford to purchase more of
that equipment.
Why is that important?
That is important because that is the source of enhanced worker
productivity. Workers are more productive when they have machinery and
equipment to work with. This is why capital drives productivity growth.
It is the investment in that new equipment that creates demand for
workers but also makes the worker more productive. The example I like
to use that I think illustrates it reasonably well is this: If you go
to a construction site and you have two guys working on that site and
one of them is operating a backhoe and the other is using a shovel,
they are both digging a hole; they are both moving dirt. Which one do
you think gets paid more? It is not a close call. The

[[Page S7692]]

guy who is operating the backhoe is getting paid more on every such job
site in America, not because there is a law that requires it but
because he is a more productive worker. He has a skill set, and he is
using major equipment that allows him to be much, much more productive
than any human being can be with a simple hand tool. That is an
illustration of how it is that when a company is able to put that
equipment to work, the worker benefits.
That worker operator is not the only one who benefits, because
somebody has to make the backhoe. Someone has to work at the factory
that builds the backhoe that was bought. So what we are doing when we
allow this expensing to occur--when we allow businesses, for tax
purposes, to recognize the expense when it occurs rather than gradually
over time, we simply make it more affordable for business to put
capital to work, to buy the kind of equipment to help them grow and
help them help their workers become more productive. That is why this
is a very constructive, pro-growth feature in our tax reform that is
going to be very, very helpful to workers.
But there is a third feature in our business tax reform that is also
going to be great for America, and that is going to be our change from
the current global tax system that we apply on the subsidiaries and
affiliates of multinational companies--the change away from a global
system to a territorial system. So what does that mean? So a global
system is the system we have today, and America is unfortunately almost
unique in the world in having this very counterproductive system.
Here is how it works. If a subsidiary of an American company goes
overseas--say they go to England--and they open a business there
because they want to serve the English population and they want to sell
a product in England. So they go to England, they open their business,
they make a profit, and they have to pay a tax to the English
Government. That is normal. That is what any company operating there
has to do.
What America does, what we do in our Tax Code that almost no one else
does is, we say: After you have paid that tax to the English
Government, if you would like to dividend that money back to your
parent company so it can be invested back home in America, we are going
to charge you another layer of tax. We are going to make sure the
combination of what you pay there and what you bring back home hits 35
percent, which is our current rate. It is completely uncompetitive.
So, if you think about it, the rest of the world has a different
system. They have the system which we know as a territorial system, and
the idea there is the subsidiary in England pays its tax to the English
Government and then whatever aftertax profit they choose to send home
to their parent, if it is a French company or German company or a
company somewhere else in the world, there is no additional tax layer.
So which country do you think has a competitive advantage doing
business in England? Anyone other than the United States. This has been
the very reason that you have seen these inversions, these American
companies getting acquired by other companies. In many cases, it is not
about the economics, it is not about synergies, it is because there is
a tax advantage to having a multinational headquartered almost anywhere
other than the United States. There are a lot of good jobs at a
corporate headquarters. There is management and sales and finance and
planning and all kinds of really good jobs. We are losing these
systematically because we have this system that nobody else in the
world has--almost nobody else has--that punishes companies when they
bring that money back home.
So what are we going to do? We are going to change our system from
one of the worst in the world to what I think is going to be one of the
best. What we are going to do is we are going to say: Well, a company
operating overseas has to pay that local tax, but we are not going to
punish that company with another layer of tax when they bring that
money back home to America and invest here. Most estimates of how much
money--I should point out, you only get hit with that tax penalty if
you bring that money home and reinvest it in America. That is how crazy
this is. It is called the deferral system.
The common popular estimates by the economists who looked at this is
that there are somewhere between $2 trillion, maybe even more than $3
trillion of earnings by the subsidiaries of American-based
multinationals, where they have paid the tax overseas, as they must,
but they refuse to bring the money back home because they don't want to
get hit with this huge tax. So think about all this money that is
overseas somewhere else and not being invested in America.
I have had conversations with CEOs who have told me they want to
invest in the United States, but the tax makes it prohibitively
expensive to bring it home, and therefore they are looking for
opportunities overseas where they will not have this tax.
We have to end this and we are going to end this in this bill and
that is going to put an end to the tax incentive for these inversions--
the movement overseas of corporate headquarters. It is going to make
America a great place to invest and to headquarter a multinational
company, and it is going to encourage that kind of growth. It is one of
the central pillars of our business tax reform that is very
constructive and very important.
I see my colleague from South Dakota is with us, and I will yield the
floor now to him.
The PRESIDING OFFICER. The Senator from South Dakota.
Mr. THUNE. Mr. President, I thank the Senator from Pennsylvania for
outlining and highlighting what are, I should say, some of the many
reforms that are included in this legislation. Now, what he talked
about is critically important.
If America is going to be competitive in the global marketplace, we
have to change our Tax Code because it is completely outdated,
completely antiquated relative to any of the countries with whom we
compete. So, as the Senator from Pennsylvania pointed out, the reforms
we make in this bill allow American companies to compete and win
against those other countries around the world--the Chinas of the
world, the Russias of the world. Those countries in which America has
to compete on a daily basis have a huge advantage over American
companies today simply because we have a tax code that doesn't
recognize and reflect what is happening in the global economy, and that
is why modernizing and updating our tax code was such a critical part
of our tax reform effort.
I was listening to my colleague from Vermont, and I think this is a
really great day in the U.S. Senate. We are getting close to the finish
line on this tax bill. Over the past 24 hours, I think we have made a
really great bill even better with more middle-class tax relief and
more relief for small businesses. We have moved our bill closer to the
House's bill in key areas, which I think will help us get this bill to
the President's desk in the very near future. I am excited about what
this tax bill is going to do for the American people.
America has always been about opportunity, a place where you could
start from nothing and become anything. Generations of people have come
to this country to build a better life for themselves and an even
better one for their children. My grandparents were those people. They
came here from Norway back in 1906, started a small merchandising
company after they had learned the language and worked for a while on
the railroads that were being built across this country. It later
became a hardware store, and to this day in Mitchell, SD, there is
still a store that goes by the name of Thune Hardware. The family is
not associated with it, but it is an example of the millions of
Americans or millions of people who came to this country, came to
America in search of opportunity.
Unfortunately, in recent years, those vast horizons that so many
people came to this country for seemed to shrink. The American dream
has grown dim. Getting ahead has been replaced by getting by. We have
watched idly as our jobs get shipped overseas, as other countries drop
their business tax rates to better compete in the global marketplace,
as emerging economies and developed nations grow faster than the United
States. Americans now frequently spend more time worrying about their
future than looking forward to it.

[[Page S7693]]

We are turning that around starting today with this tax bill. I am
reminded of Ronald Reagan's Presidential ad noting that ``It's morning
again in America.'' Well, it may not be morning yet, but the dawn is
peeking over the horizon.
The tax bill before us today is going to provide immediate relief to
hard-working Americans. It is going to immediately lower their tax
bills. It is going to immediately mean more money in their pockets, but
this bill is about much more than that. This bill isn't just about
helping Americans today, although it is most certainly going to do
that. This bill is about helping Americans for the long term. It is
about restoring the American dream. It is about giving Americans access
to the kinds of wages, jobs, and opportunities that will set them up
for a secure and more prosperous future, and it is about sending a
message to the world that America is finally serious about competing
for 21st century jobs and innovation.
For years, our tax laws have kept American businesses at a
disadvantage in the global economy. As other nations have changed their
Tax Codes to strengthen their businesses, our Tax Code has kept
American businesses struggling, but that ends now. This legislation
makes a tremendous investment in American businesses and American
workers. Under this bill, American businesses will no longer face the
double taxation that has kept them at a disadvantage next to their
foreign counterparts and has pushed them to keep jobs and investment
overseas. They will no longer face the highest corporate tax rate in
the industrialized world. They will no longer be playing catchup with
their foreign competitors. Instead, American business will have money
to invest in American workers. They will be able to expand their
domestic operations, and they will be able to compete with and beat
their competitors around the globe. What is the result of that? It
means more growth here at home, more jobs, more opportunities, higher
wages, and an America that can lead the world in innovation, job
creation, and economic growth.
America may have been through a rough patch lately, but she is coming
back stronger than ever. America led the world in the 20th century, and
this tax bill makes it clear that she is going to do the same in the
21st century.
I hope our colleagues, when it comes time to vote on this tonight,
will vote in favor of tax relief for middle-income families, vote for a
stronger, growing, vibrant, robust economy that is creating better
paying jobs, raising wages for American workers and American families,
and a brighter, better, and more prosperous future for future
generations of Americans.
I yield the floor.
The PRESIDING OFFICER. The Senator from Oregon.
Mr. WYDEN. Mr. President, I would just like to set the record
straight on a couple of points. I have a response to my colleagues who
continually say this corporate tax cut is going to raise workers' wages
by $4,000.
Now, I asked the head of the Joint Committee on Taxation whether that
was the case. He essentially said, no, he did not believe it was the
case and referred us to tables that document it.
Perhaps even more egregious is tonight we heard our colleague from
Ohio say that a Congressional Budget Office report claims that workers
are going to get 70 percent of the benefits from a corporate tax cut so
it was raised even higher.
Mr. President, I ask unanimous consent to have printed in the Record
a portion of the report from the Congressional Budget Office, making it
clear on the cover where it says the analysis and conclusions expressed
there should not be interpreted as those of the Congressional Budget
Office. It directly contradicts the comments made by the Senator from
Ohio on wages and corporate tax cuts.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Working Paper Series, Congressional Budget Office, Washington, D.C.

International Burdens of the Corporate Income Tax

William C. Randolph, Congressional Budget Office, Washington, D.C.,
August, 2006, 2006-09

Working papers in this series are preliminary and are
circulated to stimulate discussion and critical comment.
These papers are not subject to CBO's formal review and
editing processes. The analysis and conclusions expressed in
them are those of the authors and should not be interpreted
as those of the Congressional Budget Office. References in
publications should be cleared with the authors. Papers in
this series can be obtained at www.cbo.gov (select
Publications and then Working Papers).

Abstract

This study applies a simple two-country, five-sector,
general equilibrium model based on Harberger (1995, 2006) to
examine the long-run incidence of a corporate income tax in
an open economy. In equilibrium, capital is assumed to be
perfectly mobile internationally in the sense that the
country in which a real investment is located does not matter
to the marginal investor. In addition, each country is
assumed to produce at least some tradable corporate goods for
which the country cannot affect world output prices. Like the
original Harberger (1962) model, the worldwide stock of
capital and the supply of labor in each country are fixed.
Under those assumptions, the model provides closed form
solutions and easily understood predictions about its
comparative static equilibria. As with any simplified model,
the analysis is silent about some potentially important
issues--such as the effect of the corporate tax on savings,
growth and other dynamics--that may also have important
effects on corporate tax incidence.
The analysis shows how the domestic owners of capital can
escape most of the corporate income tax burden when capital
is reallocated abroad in response to the tax. But, as in
Bradford (1978), capital owners worldwide cannot escape the
tax. Reallocation of capital abroad drives down the personal
return to investment so that capital owners worldwide bear
approximately the full burden of the domestic corporate
income tax. Foreign workers benefit because an increased
foreign stock of capital raises their productivity and their
wages. Domestic workers lose because their productivity falls
and they cannot emigrate to take advantage of higher foreign
wages. Under basic assumptions of the numerical application,
the outcome is also similar to the implications of the
simpler model of Bradford in that the full worldwide burden
falls on domestic owners of productive inputs. That outcome
changes, however, under alternative assumptions.
Burdens are measured in a numerical example by substituting
factor shares and output shares that are reasonable for the
U.S. economy. Given those values, domestic labor bears
slightly more than 70 percent of the burden of the corporate
income tax. The domestic owners of capital bear slightly more
than 30 percent of the burden. Domestic landowners receive a
small benefit. At the same time, the foreign owners of
capital bear slightly more than 70 percent of the burden, but
their burden is exactly offset by the benefits received by
foreign workers and landowners. To the extent that capital is
less mobile internationally, domestic labor's burden would be
lower and domestic capital's burden would be higher. Burdens
can also be affected by the domestic country's ability to
influence the world prices of some traded corporate outputs.
But the signs and magnitudes of those effects on burden
depend upon the relative capital intensities of production in
the corporate sectors that produce internationally tradable
goods.

Mr. WYDEN. Mr. President, if I could have the attention of my
colleague from Pennsylvania, I would like to pose a question to him on
a matter. We, as we have indicated, have been digging through the
amendments. As far as I can tell, what we have is the earlier language
that imposes a new excise tax on the investment income of large
university endowments. That has been in the bill, so be it.
Now, there seems to be a new exception on page 289. The bill says
that the new tax does not apply to a university otherwise subject to
the tax if it is described in the first section, which is 511(a)(2)(B),
and which does not receive Federal funds.
This is new, and I am trying to figure out why there is this special
exemption. I can't seem to find other people who are getting it or whom
it benefits. I thought perhaps my colleague from Pennsylvania could
enlighten me on this.
The PRESIDING OFFICER. The Senator from Pennsylvania.
Mr. TOOMEY. Mr. President, I would be happy to enlighten the Senator
from Oregon. What my provision does is it applies to any college that
chooses not to receive Federal funds under title IV, which is a very
big category of funding for higher education. It is the provision that
authorizes Federal financial student loan programs, for instance.
So the theory is, which you may or may not agree with, but the view
is, if a college chooses to forgo Federal money and the students that
attend have to find their own way to get there, it is diminishing the
burden that college would otherwise impose on the

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taxpayers, and so it is perfectly reasonable, in my view, to exempt
such a college from the tax on endowments that we are applying
generally. That is the answer to your question.
Mr. WYDEN. Mr. President, if my colleague would yield further, what
is your analysis of how many colleges would benefit from this? The
reason I ask is, in my view, there are a lot of deserving Oregon
schools--and I seem to remember quite a few colleges in Pennsylvania--
that also are very deserving, they would not benefit from this, and I
would like my colleague's assessment of how many colleges would benefit
from this particular provision.
Mr. TOOMEY. Mr. President, I think there are very few probably who
choose now to forgo all of this taxpayer money, but any college in
America that wanted to could do so. So any college that decided to
adopt the policy I am alluding to here would choose to forgo the
taxpayer money subsidizing their students and, if they choose to do
that, then they wouldn't have to pay tax on their endowment. It would
apply to any college that made the choice.
Mr. WYDEN. So is this Hillsdale College--because that is what I have
been led to believe--and I would like my colleague's analysis of
whether they would benefit.
Mr. TOOMEY. I believe that Hillsdale College would qualify for this,
as would any other college that chooses to forgo title IV funding.
Mr. WYDEN. I am just not aware of any.
Mr. TOOMEY. There are other colleges that choose to forgo the
funding. I am not sure how many of them also have an endowment large
enough at the moment that it would have an impact on them. I have no
idea how long it might take them to develop an endowment. But the point
is, anybody who is in this category would have this same treatment.
Mrs. McCASKILL. Mr. President, would the Senator answer a question
about this provision?
Do you know who the biggest donor was to the Hillsdale College
endowment?
Mr. TOOMEY. I do not.
Mrs. McCASKILL. Would that be the DeVos family, by any chance?
Mr. TOOMEY. The answer to your question is, I have no idea, and it
doesn't matter.
Mrs. McCASKILL. Do you know who added this provision in here?
Mr. TOOMEY. I advocated this provision.
Mrs. McCASKILL. What does it have to do with taking title IV money as
to whether or not your endowment will be taxed? How is that apples and
apples? It sounds like apples and oranges. What in the world do those
two have in relation to each other?
Mr. TOOMEY. Are you finished with your question?
Mrs. McCASKILL. Yes.
Mr. TOOMEY. I will answer it again. You may choose to disagree, and
that is fine. We can have our different opinions on this. But my view
is, a college that chooses to say ``We don't want to take any Federal
taxpayer dollars'' and therefore saves the taxpayer I don't know how
many millions altogether--usually thousands per student--I think it is
quite reasonable that a college that chooses to not put that imposition
on the Federal taxpayers ought to be able to be exempt from this tax.
It would be available to any college that made that choice. Several
colleges in America make this choice, and any others that choose to
would be able to participate.
Mrs. McCASKILL. So the rationale is, if you choose not to take
Federal money, then your endowment is no longer subject to any tax even
though the endowment money comes from people who get a deduction for
the money they give, correct? The endowment comes from donors. I
thought the reason we were taxing the endowments is because the people
who were giving the money were getting a tax deduction when they put it
there.
Mr. TOOMEY. The point is, the college that is qualifying for this is
choosing not to impose a tax burden on the American taxpayer. They are
not allowing their students to take the Federal taxpayer benefits that
are available to them. They choose not to. They save taxpayers a
tremendous amount of money when they make that choice. I think it is
reasonable to allow them not to also have to pay this tax on their
endowment.
Mrs. McCASKILL. Are the people who are giving to the endowment still
allowed to take a tax deduction?
Mr. TOOMEY. I think people who give to the endowments are treated the
same as people who give to any other endowment.
Mrs. McCASKILL. So it doesn't matter, in terms of the people giving
to the endowments, whether they get a tax deduction, just whether the
school takes money from the Federal government?
Mr. TOOMEY. The criteria is, if the school chooses to save Federal
taxpayers very substantial amounts of money by forgoing the title IV
funds, then the school would not have to pay the tax.
Mrs. McCASKILL. My point, Senator, is that the people who are giving
to the endowment get the exact same tax benefit as people who give to
any endowment in the country.
Mr. TOOMEY. And it is a completely irrelevant point. The fact is, the
school is choosing to save the taxpayers a lot of money by forgoing
money that would be available to its students. So it is very reasonable
to have this modest savings that is available to a school that makes
that choice and saves the taxpayers this money.
Mrs. McCASKILL. It doesn't feel that way to us. It feels as if this
is a very limited provision written for a very special person.
Mr. TOOMEY. It is a universal provision available to any school that
chooses to take it.
Mr. MERKLEY. Will my colleague from Pennsylvania yield for a
question?
Mr. TOOMEY. Yes.
Mr. MERKLEY. Is this Hillsdale College the same one that was sued for
discrimination in the 1980s?
Mr. TOOMEY. I don't know the history of litigation against most
colleges, including Hillsdale.
Mr. MERKLEY. You said you introduced this provision, and so I assumed
you probably researched this. Isn't the reason this college has not
taken Federal funds is because it was sued for discrimination?
Mr. TOOMEY. This is not my understanding. I do understand that my
colleagues on the far left do not have a fond opinion of Hillsdale, but
I do. I actually think it is a wonderful institution, and I commend
them for their choice, as other colleges, of forgoing taxpayer money
that they could be taking, the burden they could be imposing on
taxpayers, but they choose not to. I think any college in that
category, whether it is Hillsdale or any other college, ought not to
have to pay the tax on the endowment.
Mr. MERKLEY. You make the point that your colleagues on the left
don't have a fond opinion of this particular college, but my point is,
we don't have a fond opinion of discrimination and of giving a tax
provision for just one college that happens to be funded by one of the
wealthiest families in America because they happen to be a Republican
donor. Why would that be a good provision in terms of the United States
of America, to subsidize a college that quit taking Federal funds
because of discrimination?
Mr. TOOMEY. Why would you choose to mischaracterize this provision
the way you just did? You said it is for one college, and you know that
is not true. This is criteria available to any college in America, and
any college that takes it will get that benefit.
Mr. MERKLEY. Would my colleague provide a list of all the colleges
that qualify, because our understanding is that only one--this was
written for one to qualify. And that is why this shouldn't be done at
the last minute and just stuffed into a tax bill.
Mr. TOOMEY. If my colleague doesn't like that provision, he can offer
an amendment to strike it. This is a wide-open process.
Mr. WYDEN. I am reclaiming my time.
The PRESIDING OFFICER. The Democratic time has expired.
Mr. WYDEN. I ask unanimous consent for 3 additional minutes to
complete this one question.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. WYDEN. I thank the Chair.
I was concerned at the beginning because there are so many deserving
schools in Oregon and Pennsylvania

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and elsewhere that don't get this special treatment, and obviously you
have heard my colleagues express their concern, and I think it
transcends somebody's politics.
So my question now would be--the perfecting amendment has not yet
been filed. Would my colleague be willing to take his provision out of
the perfecting amendment and offer it as a separate amendment so we can
actually have an up-or-down vote? And perhaps by that time, we will
know how many colleges, if any other than this one, benefit.
Mr. TOOMEY. Mr. President, the Senator from Oregon referred to many
other deserving schools. I don't know which of them choose to forgo
this taxpayer money, and if any of them do, then they qualify.
If you do not like the provision, you are free to offer an amendment
to strike the provision. That would be my recommendation.
Mr. WYDEN. The answer is no.
Mr. TOOMEY. I made my recommendation. If you dislike the provision,
you can offer an amendment.
Mr. WYDEN. Let the record show that my colleague has said no. And I
can't find anybody else in America who benefits from this particular
provision, and that doesn't strike me as right, to have it airdropped
at the last minute into a bill.
Mr. President, I believe I am out of time on my consent request.
The PRESIDING OFFICER. The Senator from Pennsylvania.
Mr. TOOMEY. Mr. President, I ask unanimous consent that there now be
30 minutes, equally divided, for debate only, with no amendments or
motions in order, and that the majority leader be recognized at the
conclusion of that time.
The PRESIDING OFFICER. Without objection, it is so ordered.
Who yields time?
If no one yields time, time will be equally charged to each side.
The Senator from Utah.
Mr. LEE. Mr. President, I stand in support of the child tax credit.
It is something that this bill goes a long way toward promoting.
This is a great day in the sense that the Senate is moving forward
with promoting the interests of the American family, doing something to
weaken, to soften the impact of a little known feature called the
parent tax penalty.
A lot of people are familiar with the marriage tax penalty in the Tax
Code. It is a pernicious feature, one that punishes people for getting
married, one that can produce a series of adverse effects simply by
saying ``I do.'' That is wrong. Most Americans acknowledge that it is
wrong. This bill goes a long way toward undoing that.
There is a different thing called the parent tax penalty that, like I
say, is less understood, less frequently discussed than it should be.
Here is how the parent tax penalty works. It is a basic function of
the interaction between the Federal income tax system on the one hand
and our Federal senior entitlement programs, on the other--Social
Security and Medicare.
Here is how it works. Imagine two hypothetical couples, couple A and
couple B. Couple A and couple B are identical in every respect but one,
and that is that they are identical in their income patterns,
charitable contributions, mortgage interests, so on and so forth,
except for one characteristic. Couple A has four children, and couple B
chooses to remain childless.
Over the course of their lifetimes and while raising their children,
couple A will, on average--according to what some have described as
lowball estimates produced by the U.S. Department of Agriculture--incur
around $1 million in childrearing expenses, just the cost of raising
their children. Couple B, of course, being childless, will not incur
those same expenses. At the same time, they are paying more or less at
the same tax rate. There are a few differences in the existing Tax
Code, but nothing to offset the disparity between the two couples in
the sense that couple A, while incurring this $1 million in
childrearing expenses while they are raising their children, is also
paying into Social Security and Medicare. They are also paying taxes,
and they are not having their contributions to this solvency of Social
Security and Medicare adequately taken into account.
In other words, because Social Security and Medicare are funded on a
pay-as-you-go basis, we have to remember that it is today's workers who
are paying the retirement benefits of today's retirees. It is today's
children who will be tomorrow's workers who will be funding the
requirement benefits under Social Security and Medicare of today's
workers and tomorrow's retirees.
This is what the parent tax penalty is all about. You see, the
Federal Tax Code doesn't adequately take into account the enormous
contribution of working parents and contributing toward the solvency
and sustainability of Social Security and Medicare.
This is why a little over 4 years ago, back in 2013, I started
pushing this idea of the need to increase the child tax credit to help
soften the impact of the parent tax penalty. This is not, to be sure,
something that is intended to incentivize or compel parenthood. That is
not our purpose at all. This is not social engineering.
It is one thing for the government to tell people they have to do
something or to incentivize them to do another. It is quite another
thing to simply tell people: We are going to punish you less for
bringing about the possibility of sustaining Medicare and Social
Security, for bringing children into this world, and raising tomorrow's
generation of workers who will pay for the Social Security and Medicare
benefits of today's workers and tomorrow's retirees.
This is important, and this is something that I am thrilled to see as
part of this tax reform package. This tax reform package does, in fact,
increase the child tax credit to $2,000 per child.
What I would like to see, and what I have been working on with
Senator Rubio, is also to increase the refundability of the child tax
credit, to move that refundability all the way up to $2,000 per child
and make it refundable up to the amount of taxes paid, including
payroll taxes--in other words, up to 15.3 percent of earnings.
What this would do is it would result in an effective cut in the
payroll tax liability of middle-class, hard-working American moms and
dads, some of whom might see their payroll tax liability exceed their
income tax liability. They are still paying taxes.
Tell a construction worker or a secretary or a police officer that he
or she is not paying Federal taxes simply because their biggest tax
liability is found in the payroll tax. In this circumstance, this
amendment is needed in order to give these people significant tax
benefits under this bill.
It is important to remember that some 70 percent of the benefits
under this bill go to America's corporations and 30 percent to
individuals. It is our desire to help spread out some of the benefits
of this and to help spread it out, in particular, to America's hard-
working middle-class moms and dads.
Now, the Rubio-Lee amendment, in its current formulation, would
involve a very slight adjustment to the corporate tax rate, taking it
from 20 percent to 20.94 percent. This is not an enormous difference.
This reminds me a little bit of a story that I first heard told by
Emo Philips. Emo Philips described himself as walking across the Golden
Gate Bridge one night very late. He was alone on the bridge, or so he
thought, until he got to about halfway across the bridge when he
discovered he was not alone. He found somebody else standing on the
outside of the guardrail of the Golden Gate Bridge.
Emo said: I could tell right away that this man was in trouble, and
the thought occurred to me that maybe this man is thinking about taking
the unfortunate step of ending his life by jumping off the bridge.
Emo said: I stopped and asked the man the first thing that came to
mind: Do you believe in God?
The man said: Yes.
Emo said: Me too. Are you a Christian?
The man said: Yes.
Emo said: Me too. What denomination are you?
The man said: I am a Baptist.
Emo said: Me too. Are you a northern Baptist or a southern Baptist?
The man said: I am a northern Baptist.
Emo said: Me too. Are you a northern fundamentalist Baptist or a
northern reformed Baptist?
The man said: I am a northern fundamentalist Baptist.
Emo said: Me too. Are you a northern fundamentalist Baptist,
conference of

[[Page S7696]]

1857 or a northern fundamentalist Baptist, conference of 1812?
The man said: Northern fundamentalist conference of 1857.
Emo said: Die, you heretic. And he pushed him off the bridge.
The point here is that sometimes we have to acknowledge that very
minor differences between us do not make us heretics.
There is a very minor difference between a corporate tax rate of 20
percent and a corporate tax rate of 20.94 percent. But that minor
difference would make all the difference in the world to America's
hard-working moms and dads, many of whom are on the very cusp of where
many parents find themselves, especially while their children are
young.
Imagine the construction worker, police officer, or school teacher
who are just making ends meet and who realize that if they were to take
themselves out of the workforce, they might be able to receive
government benefits that they are currently not receiving. They might,
in some ways, find their quality of life going up, at least in the
sense that they wouldn't have to go to work. We don't want them to have
to do that, you see, because when they get into that circumstance, they
might forgo other career opportunities.
Without that job, there will not be the next job, the next promotion,
and the next promotion after that. They might find themselves trapped
in a web of poverty, held down by the very government programs that are
there to help them.
That, in turn, might contribute to this growing expanse of the
Federal Government and might inhibit economic growth.
You see, sometimes we have to remember that America's ultimate and
most important investor class is not necessarily just those people
gathered around the boardroom. They are often in maternity wards or at
the altar in a church saying ``I do.'' Sometimes the most important
investments we make are in those children whom we rock to sleep at
night, whom we raise to be the next generation of taxpayers, the next
generation of contributors to our great society.
This is why making sure that the child tax credit is there for them,
is available to them, and is refundable up to the amount of taxes paid
is so important.
These are not freeloaders. These are not people who would be seeking
a welfare benefit, because the only benefit available to them under
this child tax credit would be there for them only to the extent that
they have been working and paying taxes, paying into the system. This
is an imminently reasonable request.
In any event, this is a great moment in the very sense that we are
having this conversation, in the very sense that we are poised right
now to increase the child tax credit to $2,000 per child. This would go
a significant way toward offsetting the parent tax penalty.
It is my hope and my humble request that my colleagues will heed this
call to make it even more meaningful by making the child tax credit
refundable up to the amount of taxes paid, including payroll taxes.
Thank you, Mr. President.
I yield the floor.
Mr. WYDEN. Mr. President, how much time remains on our side in the
tranche?
The PRESIDING OFFICER. Eleven minutes.
Mr. WYDEN. I would like to yield 5 minutes of my time to the Senator
from Ohio, Mr. Brown.
Mr. BROWN. Mr. President, I thank Senator Wyden.
Mr. President, if we want to cut taxes for the middle class, as my
colleagues keep saying, then let's cut taxes for the middle class.
Instead of giving the money to the corporations and hoping it trickles
down, let's cut out the middleman. Let's put the money directly in the
pockets of working families.
I will say that again. Instead of giving the money to corporations
and hoping it trickles down, cut out the middleman and put the money
directly in the pockets of working families. I will keep saying this,
because tax reform should be that simple.
I spent the last 2 weeks, and in particular the past 2 days, working
with Senators Rubio and Lee on a good-faith effort to bring the child
tax credit into this conversation.
I don't believe their proposal goes far enough because it fails to
index the CTC for inflation. For inflation, it is temporary. Remember,
the tax cuts for individuals are temporary; the tax cuts for
corporations are permanent. It continues to be tied only to payroll
taxes. It ignores the burdens we place on working families.

We can find trillions--trillions--for corporations. This is all we
can do for working families?
Unfortunately, while Senators Lee and Rubio were making a real effort
at middle-class tax cuts, and I thought we were close to a bipartisan
bill that could save this bill, it didn't happen. Republican
leadership--coming down the hall from Senator McConnell's office--
swooped in and made it clear that this bill is being written to benefit
one class of people: corporations that shift jobs overseas and their
CEOs.
While Senators' sons and daughters will do just fine under this
proposal--they will get the full tax cut for their children--working
families will pay the price.
What we should do--frankly, what we must do--is vote this bill down
and start over.
Senators Rubio and Lee and I could work together, along with our
colleague, Senator Bennet, to pass real middle-class tax cuts built
around a compromise that begins with our shared goals on the child tax
credit. That is where we start because, right now, this bill is not a
tax cut for working families. Everybody on this side of the aisle knows
it. Every single person knows it. Whether they were personally a CEO,
whether they were an accountant, whether they were a lawyer in a small
town, they all know this is not a cut for middle-class families.
Right now this bill is a massive giveaway to multinational
corporations that outsource American jobs. We know the companies shut
down in Mansfield, OH, in Zanesville, in Lima, and in Chillicothe, they
get a tax break, they move overseas, build a new factory, and sell
those products back into the United States. We know that is what has
been happening. We choose not to fix that and instead we do more of the
same.
Even before we take into account the loss of healthcare coverage for
tens of millions of Americans, a full 62 percent of these tax cuts will
go to the top 1 percent of households by the end of the decade. Sixty-
two percent of these tax cuts go to the top 1 percent of households.
Even with the Bush tax cuts, which were clearly weighted way too much
to the wealthiest people in our country--the most privileged--that was
only 27 percent of those tax cuts, those benefits that went to the
wealthiest 1 percent.
So let's end the charade that this bill is a tax cut for ordinary
Americans. It is simply not.
Their CEO pals have let the cat out of the bag. Bloomberg said this
morning: ``Instead of hiring more workers. . . .'' My friends on the
other side of the aisle say, if we cut taxes on corporations, it will
raise wages, and they will hire more workers.
Bloomberg said: ``Instead of hiring more workers or raising their
pay, companies say they will first increase dividends or buy back their
own shares.''
That is what they always do. They take the money for themselves. They
take the money for stockholders and stock buybacks and more executive
compensation. The corporate CEOs couldn't be clearer: They are keeping
the money for themselves. It is not going into the pockets of workers.
Again, take out the middleman. If you want to do tax cuts for the
middle class, then do tax cuts for the middle class. If my colleagues
mean what they say--if they want to cut taxes for the middle class--
work with us bipartisanly on a good child tax credit that will really
work for working families and cut taxes directly for the middle class.
I yield the floor.
Mr. ENZI. Mr. President, today I wish to speak about the important
legislation we are now considering.
Earlier this week, I explained some of the reasons the Senate needs
to consider tax reform legislation and gave a general overview of the
bill. Today I want to talk about some of the specific provisions of the
bill.

[[Page S7697]]

First, I want to talk about the relief this bill provides to hard-
working Americans. The Tax Cuts and Jobs Act reduces tax rates for
individuals, almost doubles the standard deduction, and doubles the
child tax credit. This will allow families to keep more of the money
they earn in their pockets. The independent Tax Foundation estimates
that this will amount to about $2,500 more in after-tax income for a
middle-income family in Wyoming.
This bill also will provide relief to small, family-owned businesses
that currently employ the majority of the private sector in Wyoming.
The bill cuts taxes for these businesses while enhancing deductions
that are important to them, like the section 179 deduction that
promotes business investment. The Tax Foundation believes changes like
this will add more than 1,700 full time jobs in my home State.
While these individual Tax Code provisions are important to so many
Wyomingites and small businesses in my home State, I am also especially
proud of the international tax provisions in this bill, which I worked
on with Senator Portman and Chairman Hatch.
Right now, our tax rules are written so that many businesses could be
better off if they are headquartered outside of the United States.
Those rules, which were written in the 1960s, are completely outdated.
Many of the U.S. major trading partners, including Canada, Japan, and
the U.K., have moved to what are called ``territorial'' tax systems.
Those systems tax the income generated within their borders and exempt
foreign earnings from tax.
The United States, on the other hand, taxes the worldwide income of
U.S. companies and provides deferral of U.S. tax until the foreign
earnings are brought home. Deferring the tax incentivizes companies to
leave their money abroad and invest it there. That is certainly not a
recipe for U.S. growth and U.S. job creation.
The dominance of U.S.-headquartered companies in the global
marketplace is waning. In 2000, 36 percent of the Fortune Global 500
companies were headquartered in the United States. In 2009, that number
dropped to 28 percent. In 2017, we are down to 26 percent. Clearly,
America is losing ground, and our international tax rules are part of
the problem.
I have been working to change that since the 112th Congress, when I
introduced the United States Job Creation and International Tax Reform
Act. My goal then was to incentivize American companies to create jobs
in the United States while leveling the playing field for U.S.
companies in the global marketplace. I believe the Tax Cuts and Jobs
Act achieves that goal.
This bill would reform and modernize the rules for taxing the global
operations of American companies. These reforms, along with reducing
our corporate tax rate, would help make America a more attractive
location to base a business that serves customers around the world.
With these provisions in law, families would hear fewer stories about
how U.S. companies are moving their profits to tax haven countries and
avoiding U.S. tax on those earnings. Families would hear fewer stories
about how U.S. multinational companies set up post office boxes in the
Cayman Islands and Switzerland without an employee or officer of the
company anywhere in sight and attribute a significant portion of their
foreign earnings to these jurisdictions. Instead, families would hear
more stories about how U.S. companies are generating the ideas and
inventions of tomorrow right here in America.
The international tax rules are not easy or simple, and a lot of work
went into these provisions. I want to again thank Senator Portman and
Chairman Hatch for their work with me in this area. I look forward to
continuing to work with them and the rest of my colleagues to pass this
bill that our country desperately needs.
Thank you.
Mr. PORTMAN. Mr. President, I rise today to engage in a colloquy with
the distinguished chairman of the Senate Finance Committee, Senator
Hatch.
Mr. Chairman, I would like to clarify a point in connection with the
application of the base erosion anti-abuse tax in the Tax Cuts and Jobs
act to services companies. The act provides an exception from the base
erosion anti-abuse tax for services. The act limits the exception to
the ``total services cost with no markup.'' As a practical matter,
companies account for amounts paid or accrued for services in a variety
of ways. I would like to clarify that, if in a transaction a company
used one account for services cost with no markup and another account
for any additional amounts paid or accrued, that the first account
would be subject to the exception under the bill.
The act also excludes an amount paid or incurred for services if
those services meet the requirements for the services cost method under
Internal Revenue Code section 482, excluding the requirement that the
services not contribute significantly to fundamental risks of business
success or failure.
Is it the intent that, for this purpose, that the business judgment
rule under current law and regulations will not prevent an amount from
being excluded under the act?
Mr. HATCH. The Senator is correct. The intent of the provision is to
exclude all amounts paid or accrued for services costs with no markup.
Thus amounts paid or accrued in that account would be excluded from the
base erosion anti-abuse tax. Other accounts related to the same
transaction may or may not be excepted from this tax.
Similarly, it is the intent that for purposes of the base erosion
anti-abuse tax that the business judgment rule will not prevent an
amount from being excluded under the act.
I would like to thank my friend from Ohio for his leadership on
international tax issues, especially since he joined this committee. I
look forward to continuing to work with him on these important issues.
Mr. PORTMAN. I thank the chairman for that clarification and
appreciate his outstanding leadership and work on this historic tax
reform measure.
Mr. CARPER. Mr. President, I wanted to take an opportunity to clarify
the implications of title II in the reconciliation bill before us
pertaining to the development of oil and gas resources along the
coastal plain of the Arctic National Wildlife Refuge.
As our colleagues recall, the Senate instructed the Energy and
Natural Resources Committee to report legislation that reduces the
deficit by $1 billion between 2018 and 2027. In response to those
instructions, the committee reported recommendations to open the
refuge's coastal plain, otherwise known as the 1002 Area, to oil and
gas development.
In the process of considering and ultimately reporting this
legislation, the chair of the Energy and Natural Resources Committee,
the senior Senator from Alaska, Ms. Murkowski, assured members of the
committee that, if the legislation became law, it would require such
development be subject to the full scope of environmental review
required by the National Environmental Policy Act, or NEPA, as well as
other environmental laws.
Indeed, earlier in this floor debate, the Senator from Alaska
reiterated an assurance that the environment and local wildlife will
always be a concern and a priority and that this legislation does not
waive NEPA or any other environmental laws. I take my colleague at her
word and thank her for her commitment.
After the Energy Committee reported its recommendations to the Senate
Budget Committee, the Parliamentarian advised that the committee-
reported language directing the Secretary of the Interior to manage the
oil and gas program on the coastal plain ``in accordance with'' the
Naval Petroleum Reserves Production Act of 1976 and its supporting
regulations set up a clear conflict of law with NEPA, which is the
jurisdiction of the EPW Committee. Because any changes to NEPA
applicability, scope, and the content of environmental reviews
conducted under the law, especially those within a National Wildlife
Refuge, lie exclusively within the jurisdiction of the Environment and
Public Works Committee, the language in section 20001(b)(3) was found
to be extraneous under the definition in section 313(b)(1)(C) of the
Congressional Budget Act.
It appears that this effect may have been inadvertent, given the
assurance we have received from the Senator from Alaska, chair of the
Energy Committee, that ``we did not waive NEPA or any other
environmental law.'' In any event, as a result, the substitute

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amendment if adopted, would modify section 20001(b)(3) in an effort to
eliminate extraneous language. It does this by directing the Secretary
of the Interior to manage the oil and gas operations in the coastal
plain in a manner ``similar'' to the requirements of the Naval
Petroleum Reserves Product Act of 1976. This modification, while it
might appear to be small, is a significant change.
The Parliamentarian has advised that the language in the substitute
is in order, meaning that it no longer runs afoul of section
313(b)(1)(C) of the Congressional Budget Act. The new language appears
to achieve the stated intent of the chair of the Energy Committee to
not repeal, modify or otherwise limit in any way the application of
NEPA, the Endangered Species Act, the Marine Mammal Protection Act, the
Alaska National Interest Lands Conservation Act, or any other
environmental or land management statute. Importantly, the requirement
that oil and gas activities must be determined to be ``compatible with
the major purposes for which such areas are established,'' as required
by 16 U.S.C. 668dd(d)(1)(A), still applies.
The Senate should be fully aware of the substantive difference
produced by the perfecting amendment offered by the majority leader,
Mr. McConnell. The change in the management regime as required by this
amendment significantly reduces the receipts generated by lease sales
that are mandated on the coastal plain, as shown in the amendment's
score produced by the Congressional Budget Office.
While the Energy and Natural Resources Committee rightly exercises
prime responsibility to determine the scope and nature of oil and gas
leasing activities broadly, these activities are subject to a variety
of aforementioned environmental and natural resource statutes and
associated regulations that fall within the Environment and Public
Works Committee's jurisdiction. That is particularly true of activities
in National Wildlife Refuges and most certainly true of the refuge's
coastal plain.
Indeed, NEPA assessments for Federal oil and gas activities in
Alaska's Kenai National Wildlife Refuge are conducted in accordance
with the same standards applied to oil and gas leasing in all other
refuges. The Bureau of Land Management, in coordination with the Fish
and Wildlife Service, will continue to apply the provisions of the
Mineral Leasing Act and the associated regulations, memorialized in 43
CFR part 3100, which specify that leases shall be issued subject to
stipulations prescribed by the Fish and Wildlife Service.
In summary, I would just say that my colleague from Alaska, as chair
of the Energy Committee, and I, serving as the ranking member of the
Environment and Public Works Committee, share a common understanding
that NEPA and other seminal environmental laws will apply to potential
leasing activities and related exploration and development on the
coastal plain of the Arctic Refuge.
Mr. CASSIDY. Mr. President, today I wish to discuss the historic
rehabilitation tax credit. During the Finance Committee markup of the
Tax Cuts and Jobs Act, the committee adopted my amendment to return the
historic rehabilitation tax credit to the 20 percent level, with the
credit now claimed over 5 years, as well as a transition rule to
grandfather approved and underway projects under the prior law and
regulations.
The historic rehabilitation tax credit program provides jobs and
investment in communities across the country. More than 40 percent of
projects over the past 15 years have been located in communities with
populations less than 25,000 people. Since 2002, the historic
rehabilitation tax credit has facilitated 782 projects in Louisiana,
bringing more than $2.2 billion of investment into cities and towns
across the State. I am pleased this important provision will be
preserved in tax reform.
For purposes of the transition rule in my amendment, ``taxpayer''
refers to the person who undertakes the rehabilitation of a building.
In the case where a person makes an election under section 48(d), the
term ``taxpayer'' means the lessor, since the lessor is the person who
undertook the rehabilitation. It is intended that the historic
rehabilitation tax credits be available during the transition period
only to the extent such credits would have been available under the
prior law and regulations.
Mr. President, I am proud of the work we have done in the Senate to
develop a bill that delivers tax cuts to working families and
significantly improves the competitiveness of our Tax Code. This will
lead to greater investment, more jobs and opportunity, and an increase
in economic growth.
I would like to take a moment to highlight an important, unresolved
issue that we should consider as we work toward putting a bill on the
President's desk.
Families in Louisiana are particularly prone to the negative impacts
of natural disasters. From Hurricane Katrina in 2005 to historic
flooding in multiple parts of the state during 2016, we have
unfortunately seen some significant losses in our State; yet as we saw
once again with the recent Hurricanes Harvey and Irma, Louisianans are
resilient and watchful of neighbors through the tragedy and the
recovery.
One aspect of recovery that many people don't see is the enormous
amount of capital that flows into the storm zone from the reinsurance
industry. In simple terms, reinsurance is insurance for insurance
companies, and it helps Louisianans rebuild their homes, their
businesses, and their lives.
Reinsurance transfers risk from the balance sheets of property and
casualty insurance carriers so those companies can provide cost-
effective solutions to consumers and businesses. A robust reinsurance
market helps ensure that policyholders are getting the best rates
possible on insurance for their homes and businesses. Many of the
largest reinsurers in the world were founded in Europe 100 years ago or
more, and a number of them do business in the United States through
U.S. subsidiaries.
My concern is the potential impact of the bill's base erosion
provision on the reinsurance market and policyholders along the gulf
coast. The base erosion provision has the rightful intent of targeting
bad actors who implement strategies to avoid U.S. taxes; yet the
provision may have an unintended consequence of negatively impacting
cross-border reinsurers conducting normal transactions, which could
affect the market and premiums.
Reinsurance is critical to families and businesses in Louisiana,
particularly after a natural disaster, and I hope to work with my
Senate and House colleagues on this matter as we work to get the bill
to the President's desk.
Mr. KENNEDY. Mr. President, today I rise to discuss the historic
rehabilitation tax credit. The historic rehabilitation tax credit is a
vital component of pro-growth tax reform and a shot in the arm for
communities across the country. For instance, in my State of Louisiana,
the credit has encouraged 782 restoration projects since 2002. This
amounts to more than $2.2 billion in investment into cities and towns
across the State. Many of these private investment dollars are flowing
into small and rural communities with populations less than 25,000
people.
I am pleased that the Finance Committee restored the historic
rehabilitation tax credit to the 20-percent level and ensured a smooth
transition for approved and underway projects by grandfathering them in
under the prior law and regulations.
For purposes of the historic rehabilitation tax credit's transition
rule, ``taxpayer'' refers to the person who undertakes the
rehabilitation of a building. In the case where a person makes an
election under section 48(d), the term ``taxpayer'' means the lessor,
since the lessor is the person who undertook the rehabilitation. It is
intended that the historic rehabilitation tax credits be available
during the transition period only to the extent such credits would have
been available under the prior law and regulations.
Mr. WYDEN. Mr. President, I ask unanimous consent that my motions to
commit be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows: