[Congressional Record (Bound Edition), Volume 163 (2017), Part 14]
[Senate]
[Pages 20578-20579]
[From the U.S. Government Publishing Office, www.gpo.gov]




                          REPUBLICAN TAX BILL

  Mr. REED. Mr. President, yesterday, we saw a very unusual celebration 
at the White House as Members of Congress took turns exalting the 
President and speaking in glowing terms about the tax bill they had 
passed. There appeared to be quite a contrast between the celebration 
at the White House and the reaction by working Americans.
  Why weren't working middle-class Americans celebrating so vigorously? 
Why does poll after poll find that this is the most unpopular tax bill 
since the 1980s, in fact, including tax hikes by Presidents George 
Herbert Walker Bush and President Bill Clinton? This bill is even less 
popular than those tax increases.
  Speaker Ryan seems to think the Republican tax bill is unpopular 
because Americans don't know what is in it. He is wrong. The American 
people are smart. They get it. They don't like this tax bill because 
they do know what is in it: lots of goodies for President Trump and his 
family and very little for theirs.
  This tax bill isn't popular with working people because they know 
that if Republicans really wanted to give them a tax break, Republicans 
would have given it to them directly and not to corporate executives. 
Middle-class Americans remember the corporate excesses that led us to 
the terrible losses of the great recession. They sacrificed and worked 
hard to help the economy recover. They remember the tough choices we 
had to make in order to get our economy working again, and they don't 
want to see that progress turned back. But the recovered economy 
President Trump inherited from President Obama is in danger of 
backsliding under this trickle-down approach, with Republicans once 
again breaking the Federal bank to give huge tax breaks to the wealthy.
  Middle-class Americans weren't popping champagne bottles yesterday 
because they know that they will be on the hook again when reality sets 
in on the massive deficits and irresponsible excesses of the Trump 
economy. The real economy isn't a chart or a graph to them; it is their 
ability to put food on the table, send their children to college, and 
plan for retirement. Republican economics have not historically worked 
out well for them. The economy created over 11 times as many jobs under 
President Clinton as it did under President George Herbert Walker Bush. 
It created over 10 times as many jobs under President Obama as 
President George W. Bush. Today, U.S. job openings are nearing all-time 
highs and 15 million Americans have gained employment since 2010.
  We have much, much more work to do to address issues like 
underemployment, labor force participation, and wage growth, but the 
economy Republicans are gambling with today is one that middle-class 
families worked hard and sacrificed to create. Moreover, middle-class 
Americans are not easily fooled when it comes to their bottom line. It 
will take more than focus groups and political publicity stunts to 
convince them that this Republican bill was written with their 
interests in mind.
  Many Americans opened their paper this morning to read that major 
corporations like Wells Fargo and others were boosting U.S. investment 
or providing bonuses in the wake of the huge tax breaks provided to 
them by the Republican legislation. It is certainly a good thing that 
many of these companies are considering greater investments in their 
American workforce, but the relationship between these tax breaks and 
higher pay or bonuses seems to fall apart under scrutiny. Some 
companies, like Wells Fargo, have already admitted that these pay 
raises were preplanned and not the direct result of the tax bill. 
Indeed, this coordinated announcement appears more intended to appeal 
to the Trump administration than to prove anything about the 
effectiveness of the Republican tax bill for American workers.
  Moreover, it appears the real problem many Americans have with the 
Republican bill is that they believe it will balloon the public debt in 
order to disproportionately benefit the rich. Based on every credible 
analysis of the bill to date, they are very likely correct. So, rather 
than watch for publicity stunts, Americans should, in the coming weeks, 
watch how much corporate executives take in bonuses. They should look 
at the more than $70 billion in share buybacks that major corporations 
have announced since the Senate passed the Republican tax bill. Once 
corporations got the clear signal that this legislation would likely 
pass, their reaction was not to raise wages, not to stabilize the 
pension funds, but to buy back their shares, which is a double benefit 
for the managers of these companies and for the shareholders.
  First, it typically raises the price of the stock on the market, 
which makes the value go up and gives direct benefits to shareholders. 
For the managers, most or much of their pay is related to their 
shareholdings. By the way, they are usually incentivized to increase 
share price, so their other pay is increased. So it is no surprise that 
this is the reaction of most corporations. It is quite telling that 
some company executives have made it clear that their plan for the 
funds released by this tax bill will be devoted to share buybacks. It 
is, in fact, ironic because many of these companies were having to pay 
an effective tax rate of less than 10 percent, much less than the new 
statutory rate. Does that mean they are going to give even higher 
wages? If a company was paying an effective tax rate of 8 percent and 
wasn't significantly raising the wages of their workforce, what does 
the new statutory rate of 21 percent do to their incentive? Nothing at 
all.
  Americans can and will also consider the fact that 35 percent of 
American company stock is owned by foreign nationals, who are projected 
to pocket a $48 billion windfall by 2019 as a result of corporate tax 
breaks. Yes, this tax bill will incentivize corporations to buy back 
stock, a significant amount of which is owned by foreign entities, 
individuals, and corporations. So $48 billion of these funds will go 
overseas; it won't be devoted to salary increases, wage increases, R&D 
it won't even be devoted in some sense to the United States because it 
will flow overseas.
  They should ask: In light of these historically huge gains for the 
corporate investor class, how many of these corporations will make sure 
their pension funds, for example, are fully funded? There is no 
requirement that would prevent a company from buying back stock even 
while its pension fund is not actuarially sound. That has happened in 
the past. That is likely to happen in the future. So you have to ask 
yourself, as working families are: If I have a company that is giving 
its shareholders and management huge

[[Page 20579]]

benefits, and my pension is questionable--it is not fully funded--is 
that right? I think the answer is, honestly: No, that is wrong.
  How many companies will ship jobs overseas because they will see a 
financial advantage? In fact, corporate executives will feel a 
fiduciary duty to the shareholders to do that. How many companies will 
continue to replace their workers with contractors who may have no 
healthcare from the company and no pension benefits? Jobs that could be 
filled and were filled in the past by real employees with real benefits 
will now be shipped away from the company to contractors.
  I supported efforts by several of my Democratic colleagues to place 
conditions on these massive corporate tax breaks so that there would be 
at least some requirement that American workers share in this 
multitrillion dollar giveaway, but all of these proposals were rejected 
by our Republican colleagues. I believe they will have to explain to 
the working men and women of America why shareholders are getting huge 
benefits and they don't have a fully sound pension fund. Why are 
additional Americans being laid off by these corporations at the same 
time they are providing huge buybacks of their stocks to their 
shareholders? These are a series of questions I think American working 
families and the middle-class will continue to ask.
  They are already aware this bill was not designed for them. It was 
designed for the wealthiest corporations and the wealthiest individuals 
in America and, indeed, globally. When the evidence mounts, it will 
further confirm those views. I think they are very, very accurate.
  I know Americans will continue to work hard. They will continue to 
try to build this economy. But with the passage of this bill, this is 
clearly now President Trump's economy. All of the sacrifice and effort 
to build jobs under President Obama, which cut the unemployment rate 
from double digits down to 4.5 and 5 percent--all those could be 
jeopardized by what has transpired here, and the President owns it.
  As we go forward, I think we have to realize this legislation is not 
going to help working families.
  I have heard my colleagues, very sincerely and very eloquently, talk 
about some of the challenges we face, like job training. We are facing 
a situation in which many experts predict that within the next 12 
years--by 2030--we will lose one-third of the jobs in the United 
States. They will go away because of technology and because of 
artificial intelligence. What is going to happen to the 30- or 40-year-
old working man or woman? What does one do when a job he or she has 
prepared well for, and done very well, is suddenly taken over by a 
machine? Will one turn to private corporations and ask, please, help 
me?
  I know what the answer will be: Not our responsibility. We only have 
an obligation to our shareholders--to enrich them. That is all we do. 
Thank you very much.
  They will turn to the government. What will we do? We will say: We 
are sorry. We are already $1.5 trillion in the hole. Because of the tax 
bill, we can't afford any job training, career transition, long-term 
unemployment sustainment, which we will need to allow people to make 
this transition. Oh, by the way, as to those retirement benefits that 
are under huge pressure, we cannot help you. We have the Pension 
Benefit Guaranty Corporation, but that is so underwater. Sorry.
  By the way, with natural phenomena--the floods that are coming--we 
are currently talking about a disaster relief bill. In this Chamber, we 
are all aware that our National Flood Insurance Program is in a deep 
hole. It is--no pun intended--underwater. Where are we going to get 
this money to pay for the obligations we have already put on our books 
for the National Flood Insurance Program? What are the cities and 
communities going to do when we say we don't have it anymore, that we 
gave the money away?
  We are now facing very difficult situations--we know they are 
coming--with unavoidable costs. There is our national defense. We have 
to rebuild our nuclear triad, our submarines, our bomber fleets, our 
land-based systems. Over several years, that will be hundreds and 
hundreds of billions of dollars. We know we have to do it.
  Instead of doing that, yesterday, we decided to give $1.5 trillion or 
more in deficit spending to the wealthiest Americans and the wealthiest 
corporations. I don't think it makes good sense. I think working 
Americans and middle-class Americans understand that very well--in 
fact, better than we do, collectively. What they have done, 
essentially, and what they are saying to anyone who would ask is, this 
is a terrible piece of legislation. Why did Congress pass it?
  That is a question that will reverberate throughout this year and 
next year and, unfortunately, I think, for a long time because it will 
take us time and effort and sacrifice and tough votes, as we had in the 
nineties and again in 2009 and beyond, to get back on track for working 
families.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Blunt). The Senator from South Dakota.

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