[Congressional Record (Bound Edition), Volume 157 (2011), Part 8]
[House]
[Pages 11453-11457]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              {time}  2120
               TAX LOOPHOLES, EXEMPTIONS, AND DEDUCTIONS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 5, 2011, the gentleman from Arkansas (Mr. Griffin) is 
recognized for the remaining time until 10 p.m. as the designee of the 
majority leader.
  Mr. GRIFFIN of Arkansas. Mr. Speaker, I have been listening to some 
of the speeches here tonight, and I thought I would take a little time 
to address some of the arguments. But first I would like to just 
welcome my friend from Wisconsin, Representative Duffy, who joins me 
here on the floor tonight.
  I've been listening, first and foremost, to the discussion of tax 
loopholes, tax exemptions, deductions. Specifically, I heard a lot of 
talk about tax deductions for oil companies. Well, I'm glad that the 
gentleman from the other side raised that tonight because I was 
thinking, and before I got here in January, for the last 2 years, this 
House was controlled by Speaker Pelosi and the other side of the aisle. 
The Senate,

[[Page 11454]]

down the way here, is controlled by the same party, and the White 
House, President Obama. Now, if my math is correct, that means that 
Democrats were in control of the House; they were in control of the 
Senate; and they were in control of the White House.
  Now, Mr. Speaker, it puzzles me that they were in control of all of 
those parts of government, yet not once did they eliminate these 
subsidies that they're talking about. They had control of the last 
Congress, 2 years, and nothing was done. I guess they decided only this 
year that subsidies for U.S. businesses should be eliminated.
  Well, I'm not sure why they didn't do anything about that in the last 
Congress, but I will say that I am pleased that they understand the 
House budget that we passed because in our House budget that we passed 
a few months ago, that's exactly what we voted to do. We voted for a 
framework that eliminates tax deductions, tax exemptions, credits, 
loopholes, whatever you want to call them. That's what our budget does. 
And in doing so, we're following some of the proposals put forth by the 
President's own debt commission, a debt commission that he has yet to 
follow; but they recommended some similar proposals.
  What we do is we lower the top rate and eliminate a bunch of the 
deductions that, admittedly, upper income folks take. So we eliminate 
those. But at the same time, we lower the top rate so that we can be 
more competitive, and we can have a pro-growth, pro-jobs Tax Code. So 
what we end up with is a fairer, flatter Tax Code, one that encourages 
private sector job creation.
  You might ask, Mr. Speaker, Well, then, why do you disagree with the 
President on this particular issue? Well, like I said, we're happy that 
he's decided to come our way and that he sees the light on tax reform 
and closing loopholes.
  The reason the House leadership is opposed to the President's posture 
on this in the debt ceiling negotiations is because they want to have 
their cake and eat it too. The President wants to have his cake and eat 
it too on this issue. He wants to close all the loopholes, yes; and at 
the same time, he wants to raise taxes. So he wants to increase taxes 
two ways; whereas, his own debt commission and our House leadership 
want to reduce the top rate, close the loopholes so that we have a 
fairer, flatter, simpler, less complex tax system.
  So here's the contrast: we agree on closing the loopholes, although 
we can't figure out what happened last Congress when the Democrats 
controlled the House, Senate, and White House and did nothing about it. 
We did something about it. We approved a budget that addresses 
precisely this issue. So I just wanted to clarify our position on that.
  I see that my friend from Wisconsin would like to say a few words. 
Please join right in.
  Mr. DUFFY. I appreciate the gentleman from Arkansas yielding.
  I think you make very powerful arguments as to why our friends on the 
other side of the aisle were unwilling to get rid of these horrible tax 
loopholes, because when the two of us got to this House in January, 
they were here. They were here in a Democrat-controlled House, Senate, 
and with a Democratic President; and they did nothing to do away with 
these loopholes. When we got to this House, we said, No more crony 
capitalism, no more corporate welfare. Let's do away with all of these 
loopholes, all of these nooks and crannies where some big business will 
hide their money and not pay their fair share. And we'll restructure 
our Tax Code to make us more competitive in this global marketplace.
  And when we did that, the Democrats said, no, they didn't want to 
participate in reforming the Tax Code. But then they have no problem 
standing here today and making arguments that we're the ones that want 
to keep these loopholes in place. Absolutely false.
  I've had a chance to sit in and listen to the debate that's going on 
in this House. I continually hear my friends across the aisle talk 
about jobs that are getting shipped overseas. And I've got to tell you, 
that is a great concern for me. They missed the disconnect, however, 
between jobs leaving America and the regulation and tax rates that we 
have in America.
  You know, this isn't 1960. It's not 1980. It's not 1990. We are in a 
new global marketplace. In days gone by, America was the only place 
really to do business. But now our capital, it can go anywhere in the 
world. It can go to Thailand, India, Vietnam, Canada, Mexico. It can go 
anywhere. And when you start raising taxes on our job creators, and 
then you sit and scratch your head and wonder why they're leaving, it's 
pretty obvious.
  We see it on a smaller level in our States. When we see more 
regulation, more taxes in our States, like California, all of a sudden 
businesses pack up, and they go to another State that has better rules, 
regulations, and taxes. That happens on a broader scale right here in 
America. You raise the cost of doing business; you kill jobs in 
America. And you know what, in the end, does it hurt these businesses? 
No. The people that it hurts are our constituents, our families, our 
people in our districts that are yearning for opportunities, yearning 
for a job. It's those people that this hurts.
  Mr. GRIFFIN of Arkansas. I just want to ask the gentleman, what will 
it take for folks here to start wondering why businesses are leaving 
the country? It seems as if they always want to point the finger to 
someone else or some third party, some external cause. Maybe we should 
think about the fact that the policies adopted by the Federal 
Government have an impact. Businesses react to policies passed in this 
Congress, in the Senate, and particularly to regulations drafted, 
promulgated by the administration.

                              {time}  2130

  At some point we have to say wait a minute. Businesses are leaving, 
taking their jobs elsewhere. Maybe, just maybe, they're doing it 
because we're running them off. We need to ask that question.
  Back in my district, in the Second District of Arkansas, in Little 
Rock and the surrounding area, I like to say, we've got big job 
creators and small job creators, but the common denominator is they're 
job creators.
  I don't ask that people like business or be in business or whatever. 
I just ask that they acknowledge that businesses create jobs. And if we 
run businesses off, if we adopt policies that curtail economic growth 
and chase businesses away to other countries, we're going to lose jobs. 
That's not hard to figure out.
  Mr. DUFFY. I would agree with the gentleman. And I think it's 
interesting, as a guy who's come here from central and northern 
Wisconsin, Wisconsin's Seventh Congressional District, I see that this 
is a House that will continually talk about political spin and 
political positioning instead of actual policies that are going to work 
for American families and American businesses.
  I think it's interesting the President likes to talk about corporate 
jet loopholes. For me, I think it's important that we're clear. The tax 
increases that the President and my friends across the aisle in the 
Democrat Party are talking about, these are tax increases on the small 
job creators in my district, the ones, the same ones that we are asking 
to expand and grow and create jobs and put our hardworking families of 
Wisconsin back to work. It's those people that they're asking to raise 
taxes on, and I think that's absolutely wrong.
  I always hear my friends across the aisle talk about the nineties and 
how great things were in the nineties. They were great. And they talk 
about the tax rates of the nineties.
  I think it's important to note that even Bill Clinton has said, 
listen, this isn't 1990 anymore. He has looked at our proposal and 
basically said, listen, let's make our top rates more competitive in 
this global marketplace. If we make it more competitive, in the end we 
are going to be more competitive.
  And I just think it's so important that we take a hard look at the 
regulations and the taxes that come from this town because, in the end, 
if we engage, if we have policies that allow our

[[Page 11455]]

people to do what they do best, which is innovate and grow and expand 
and reap the benefits of their hard work, I think we're going to see 
America great again and create jobs. But if we stifle that, I think 
we're going to have a new America that I think none of us would 
recognize.
  Mr. GRIFFIN of Arkansas. I think ultimately the standard for me is: 
Am I doing things that make the United States more attractive to job 
creators or less attractive?
  We want to be a country where job creators around the world and here 
say, America is where I want to do business. America is where I want to 
innovate. America is where I want to create. America is where I want to 
pursue technological advancement and create jobs. America is the only 
place to do business. America is the only place to create jobs. That's 
the America that I want to help create. I don't want to create an 
America that punishes job creators in such a way that they flee the 
country. And that's exactly, on many fronts, what we're doing.
  I yield to the gentleman.
  Mr. DUFFY. Thank you. I appreciate the gentleman for yielding.
  When I talk to my job creators back in Wisconsin, never do they say, 
We're leaving because of the quality of workers we have in this area. 
Actually, they say we have the hardest working, most productive, 
smartest workers right here in Wisconsin, right here in America. We 
don't leave because of the work force. We leave because of the 
regulations that come from this town, the taxes that come from this 
town. And I think it's important, again, that we continue to look at 
that, because, in the end, this doesn't hurt businesses. It hurts 
families.
  We want to make sure we keep our families strong in America with 
plenty of opportunity. It makes me think to the conversation that 
happened earlier about Medicare, and we've heard a lot today, with our 
friends across the aisle demagoguing this Medicare issue, that the 
Republican Party wants to take away Medicare from our seniors. That's 
absolutely incorrect. We want to save Medicare. We want to make sure 
that we preserve it, that we make sure that our seniors, that they get 
everything that they bargained for, and that we make sure we have a 
Medicare plan that's in place for future generations. And when I hear 
my friends across the aisle talk about Medicare, I scratch my head 
because they're the only ones who ever cut it. In PPACA, the health 
care reform bill, ObamaCare, they take $500 billion out of Medicare.
  As I talk to seniors around my district, one of the things that makes 
them so angry is that their Social Security trust fund has been raided 
for decades, and now the President and the Democrats have raided the 
Medicare fund as well. I find that to be absolutely unacceptable.
  Then you add on top of that the IPAB board, the Independent Payment 
Advisory Board. This is a board that is going to look at Medicare 
reimbursement rates, and what they're going to do is lower 
reimbursements on certain procedures. And Medicare reimbursements are 
already so low, you reduce them even further, you are going to start to 
see doctors and hospitals stop providing those services to our seniors. 
And so, in the end, this IPAB board is going to impact access to care 
for our current seniors. That is absolutely unacceptable.
  We have to keep the promise to our current seniors but also make sure 
we reform it for future generations so it's saved.
  I mean, the President has come out and said we need to reform it. 
Well, okay, Mr. President, let's reform it, but let's make sure we do 
it in a way that preserves the benefits for our current retirees and 
those who are about to retire, and make sure those who might have a 
different program have enough time to plan their retirement around the 
new changes. That's exactly what we do.
  But they demagogue this issue and our party for trying to fix this 
great program. I struggle with that. I think it's misrepresenting to 
the American people about where we stand.
  Mr. GRIFFIN of Arkansas. I appreciate the gentleman raising the issue 
of Medicare. I'd like to take a few minutes to talk about some of the 
things I've heard here on the floor tonight.
  First of all, if you're just joining us, I can just tell you that a 
little earlier tonight here on the floor there was a poster being used 
and the poster showed a tombstone. It showed a tombstone, and it said, 
``Medicare.'' And the implication was that Medicare was going to be 
killed; Medicare was going to be eliminated. And nothing could be 
further from the truth if we take action to save Medicare. If we allow 
Medicare to continue as it currently is with no changes, it goes 
bankrupt in anywhere from 5 to 10 years, if we do nothing.
  Now, some of us have done something to save Medicare. What did we do? 
Well, we came up with a plan as part of our budget in the House to save 
Medicare for future generations.
  Now, what other plans are out there? Right now, none. The Senate 
doesn't have a budget. The Senate doesn't have a plan to save Medicare. 
The President's budget doubles the debt in 5 years, triples it in 10 
years, doesn't even deal with entitlements.

                              {time}  2140

  It got zero votes in the U.S. Senate and does nothing to save 
Medicare. In fact, it was so silent on Medicare and entitlements that 
the President had to come and give a Mulligan speech after we proposed 
our budget in the House. He gave a speech saying, Well, what I really 
meant was, and he laid out some ideas, not enough specifics--so few 
specifics, in fact, that the Congressional Budget Office said, We can't 
analyze that speech; we can't score that speech, not enough specifics.
  So the Senate doesn't have a plan to save it. The President doesn't 
have a plan to save Medicare. We have a plan to save Medicare.
  So what has happened? What has happened is the folks on the other 
side of the aisle made a conscious decision to attack our plan to save 
Medicare, and by doing so they engaged in a fiscal fantasy. What does 
that mean? Well, it means that they compare our reform with the way 
things are now with Medicare. They say, You're ending Medicare as we 
know it. Well, the problem with that is Medicare as we know it, on the 
path that it's currently on, goes bankrupt.
  It would be one thing if they were comparing their reform plan to 
save Medicare with our reform plan to save Medicare, but they're not 
because they don't have a plan. So they prefer to compare our plan with 
the way things are now, even though they know the way things are now is 
going away. In fact, I'd like to read just a couple of quick quotes 
here.
  President Obama has said: ``If you look at the numbers, Medicare in 
particular will run out of money and we will not be able to sustain 
that program no matter how much taxes go up. I mean, it's not an option 
for us to just sit by and do nothing.''
  Now, that's President Obama acknowledging that Medicare is going 
bankrupt, acknowledging that we must do something to save it, yet he 
hasn't proposed a plan to save it.
  And another quick quote, Senator Lieberman, former Vice Presidential 
candidate nominee for the Democrat Party, now an Independent, he said: 
``The truth is that we cannot save Medicare as we know it. We can save 
Medicare only if we change it.''
  That is the hard reality, and that is what we are trying to do is 
save Medicare. And that is precisely what we did in our budget that we 
adopted this year. If you're 55 or over, there's no change. If you're 
under 55, you would be in the new program, as Medicare would be 
constituted, what we call Premium Support. If you're 55 and over, as 
the gentleman said, there are no changes to you. We give folks time to 
transition to a new way of living under Medicare, a different kind of 
Medicare, but what we think would be more effective at reducing cost by 
putting in some market forces and saving Medicare for future 
generations.
  I yield to the gentleman.
  Mr. DUFFY. I appreciate the gentleman yielding, and I agree with most

[[Page 11456]]

everything that you have said here, and very well said.
  The one point I disagree with is the President has no other plan, no 
doubt. With the PPACA bill, the health care reform bill, he does deal 
with Medicare, make no mistake. That is the Independent Payment 
Advisory Board, the IPAB board, that is going to systematically reduce 
reimbursements for seniors.
  I think the gentleman said it very well when the President 
acknowledged that these programs can't sustain themselves on their 
current course, and so he has addressed it, and my friends across the 
aisle voted for it. And basically, this is a form of reducing 
reimbursement, which is a form of reducing access to care for current 
seniors to reduce the outlays of Medicare. It's a disingenuous, I 
think, way of basically coming around the corner and saying, You know 
what? We're going to ration care for our seniors. And I find that to be 
absolutely unacceptable.
  Mr. GRIFFIN of Arkansas. Just real quickly I wanted to point out, 
just to clarify, I totally agree that he has a plan. Unfortunately, he 
doesn't have a plan to save Medicare. He only has the plan that he 
passed in his health care law. And as you pointed out, with the cuts 
that were in the President's health care law, President Obama's health 
care law ended Medicare as we know it, because it took $500 billion out 
and introduced this unelected board, the IPAB that you so eloquently 
describe.
  So I just wanted to clarify, he has a plan. He doesn't have a plan to 
save Medicare.
  Mr. DUFFY. That's right. And there is but only one plan that saves 
Medicare, and that is ours. And I should have explained that better. I 
would agree with you.
  But just to reiterate, it's not just us and the President saying that 
Medicare is going broke. The CBO, the Congressional Budget Office, a 
nonpartisan group, has said that in 9 years the Medicare trust fund is 
going bankrupt. The Medicare trustees have come out and said the 
Medicare trust fund will be broke in 10 years.
  So make no mistake, we have to fix it. We have to address Medicare. 
Let's not sit in this House and demagogue this issue. Let's not throw 
stones at those who want to fix it. Actually engage in the debate or at 
least take responsibility for cutting $500 billion, taking money out of 
a program that people paid into, and using it for a whole different set 
of people who didn't pay into that program. We're robbing this fund, 
robbing Peter to pay Paul. Let's save Medicare. And you don't save it 
by robbing it. Let's not rob Medicare.
  You know, I think we got in this situation as Americans because all 
the time our politicians, they come back to their States and their 
districts and they make promises to their people. They tell them, 
Listen, I'm going to give you the Sun and the Moon and the stars. Don't 
worry, we can pay for it, not a big deal. I'm going to keep this 
promise to you.
  And that's how they get elected year after year by making promises. 
Well, the time has come to say these promises can't be kept. And you 
know what? I think this freshman class of Republicans have come in and 
said, We're not going to lie to you anymore. We're going to tell you 
the truth. The truth is we can't continue on this course. We're going 
to level with you and say we have to reform it to save it. We can't 
continue to borrow $1.5 trillion a year and not have substantial 
economic consequences for the next generation. We have to fix it. You 
might not want to hear it, but it's the truth. We're going to give you 
the truth. We're not going to lie to you anymore.
  And I think once we all know where we are at as a country, we can 
then come together and go as a country, How do we fix the problems that 
face us as a country? But when we have one party that doesn't want to 
acknowledge the problems that we face and they want to mislead the 
American people about those problems, it's hard to have an honest 
conversation.
  Well, I didn't come here to misrepresent to the American people. I've 
come here to be honest and to level with the American people and say, 
This is where we're at. Let's find solutions that work for the American 
people.
  There is a chart here that I know so many people have seen, Mr. 
Speaker; but if you look at it, this is a chart that shows gross 
domestic product in our years out and our debt to GDP, our debt to the 
size of our economy. In World War II, our debt was about 100 percent of 
the size of our economy in a year, but we were at war. It was World War 
II. That went down. But if you look out, look to our future.

                              {time}  2150

  This is a sea of red. This is a sea of debt that we are going to 
leave to the next generation. Our economy will collapse well before we 
get to the crest of that wave. But that is our future, make no mistake, 
unless we change course.
  I think it is important to note where does this debt come from. Who 
is financing this debt, because in World War II, American citizens 
bought war bonds and paid for this debt. Not today, because in 1970, 5 
percent of the debt was held by foreign entities. In 1990, 19 percent 
of our debt was held by foreign entities. And today, 47 percent of our 
debt is held by foreign entities. And guess what country owns the 
largest share of that foreign debt? That's right, China. China owns 
about 30 percent of that foreign debt. We are mortgaging our children's 
future. We are giving the Chinese Government an economic nuclear bomb 
because we can't get our fiscal house in order in this House.
  It is time that we come together and fix the problems that face this 
country. Let's not kick the can down the road. Let's not let this be 
the future that our children inherit. But to prevent it, we have to 
act. And we are here to act.
  Mr. GRIFFIN of Arkansas. When I look at those charts, I ask myself: 
How big does our debt have to get before the other side of the aisle 
joins us in getting our fiscal house in order? How big? It is $14 
trillion now--$16 trillion, $20 trillion, $50 trillion? How big does it 
have to get before the other side of the aisle admits that we are 
spending too much money?
  I will tell you, I have been studying some of the details of our 
budget and how we got into this mess. I would be remiss if I did not 
comment on something I heard earlier today. Someone said: Well, the 
Bush tax cuts created our debt. That's how we got into debt.
  Completely untrue. I took a chart that showed our revenue year by 
year as a percentage of the economy. And after 9/11, certainly the 
economy slowed down and our revenues, our tax receipts decreased 
significantly. But I can tell you that by 2007, our tax receipts were 
back up to about 18.5 percent of GDP. In 2007, and that was before the 
meltdown of the housing market in 2008, but that was while we had the 
Bush tax cuts in place--18.5 percent.
  Now, what is interesting, if you go back and look at the mid-1990s, 
there were some years that had a higher percentage of GDP for revenue, 
but there are several years that are below that. My point is whatever 
contribution tax rates have had on revenue, the primary driver of how 
much revenue we get a particular year is whether we are having economic 
growth. That is the primary driver. That is the primary determining 
factor of how much money comes into the coffers of the United States 
Government.
  The idea that we got in this mess because we are somehow as Americans 
not taxed enough is ludicrous. All you have to do is look at the 
spending pattern and the trajectory of the debt that you just put up 
there. It follows the same path, revenue relatively steady over the 
decade at an average of 18 percent of GDP. And expenditures--spending--
off the charts, particularly in the last few years.
  I just want to be real clear here, both parties are to blame. The 
Congress is to blame. The House is to blame, the Senate, the White 
House. There is plenty of blame to go around. There is plenty of blame 
to go around. That's not the issue. The issue is how we fix it. And we 
first have to recognize that we have a spending problem.
  Mr. DUFFY. Well said to the gentleman from Arkansas.

[[Page 11457]]

  You know, jobs have been a key component of the debates here in this 
House because there is a 9.2 percent unemployment rate, and the 
effective rate is far higher--those who have stopped looking for work 
or those who are underemployed. People are suffering in our States and 
districts. We have seen what proposals have come out from the other 
side of the aisle. Let's take a walk down memory lane.
  They told us that ObamaCare was going to create jobs. Well, all it 
did was give us a health care reform bill that is not going to get the 
job done, and it is going to cost us an extra trillion dollars over the 
next 10 years. They gave us a trillion-dollar stimulus bill, and we 
weren't supposed to see unemployment over 8 percent if that passed. We 
just found out for every job created or saved, it cost the taxpayer 
over $250,000 per job. That is not a job-creating bill.
  And now what has happened is they have come into this House and they 
want to tell the American people that we can create jobs in America if 
we raise taxes on the job creators. You ask any economist, or you just 
use common sense, to raise taxes on job creators, to take money away 
from them, and to think they are going to create jobs when they have 
less money doesn't make any economic sense.
  You raise taxes on your job creators, you have less jobs. And if you 
have less jobs, then you have less people paying taxes. And if you have 
less people paying taxes, you have less money coming into the Federal 
coffers. Let's put America back to work. When America works, they get 
off the unemployment track and start getting paychecks. I want to see 
Americans and Wisconsinites getting paychecks.
  But a lot of the circles around this debt that we face in this 
country, and I know in my own district, there are people who need help 
from the government. I want to make sure we have a safety net in place 
to help those people. I see them all the time, and they need help from 
the government. I want to make sure that we're there to provide that 
assistance that they need. Or for those who fall on hard times, I want 
to make sure that we have a safety net in place to help them.
  But let me tell you what, if we continue to borrow and spend this 
way, there isn't going to be money for those who need the most help. 
Look to Greece. If you want to see America's future, if we stay on this 
current course, look to Greece. Look at the protests. When you make 
promises to people that you can't keep, what happens? They take to the 
streets and they riot. Let's not lie to the American people. Let's tell 
them the truth. Let's not Greece be America's future. Let's make sure 
we have a great and prosperous country, the same that our Forefathers 
passed to us.
  But to have that, we have to fight for it because the status quo is 
this: massive debt. And with that massive debt, you have Greece-like 
riots in the streets. That is unacceptable. Let's face this challenge 
head on and make sure that we leave an America that is prosperous, 
bright, and full of hope for the next generation.
  Mr. GRIFFIN of Arkansas. I just want to close by mentioning the 
discussion of the debt ceiling. What I would say to the President 
tonight is that this House has put forth a plan. We have a plan in the 
form of our budget. But we also have a plan in the form of our Cut, 
Cap, and Balance where we cut spending and we cap spending in the 
future and we move toward a balanced budget. We passed that here in the 
House the tonight. That's a plan. That's a plan that we can debate. We 
can discuss. The President can criticize. But what we haven't seen from 
the President is a plan. A plan of his that we can look at and study 
and that the American people can consider.
  I would just ask the President to put his ideas out there. Come out 
of those rooms and put his ideas in public and let us analyze them and 
discuss them and let the American people examine for themselves.
  Mr. DUFFY. One point, we don't want to do a cabernet dance here. 
There is no doubt that the proposal that came out the House and passed, 
it is now going to go to the President. Most Americans know when you 
buy a house or a car, you make an offer. When you make an offer, the 
seller makes a counteroffer. We'll wait for the President's 
counterproposal, if he is going to lead, the leader of the free world. 
Let's see him put his ideas on paper. Let him show the American people 
what his ideas are, just as we have shown the American people what our 
ideas are. I encourage him to do that.
  I thank the gentleman from Arkansas for hosting tonight's 
conversation.
  Mr. GRIFFIN of Arkansas. Thank you, and I appreciate the gentleman 
joining me.

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