[Congressional Record Volume 163, Number 206 (Monday, December 18, 2017)]
[Pages S8054-S8064]
From the Congressional Record Online through GPO
EXECUTIVE SESSION
______
EXECUTIVE CALENDAR
The PRESIDING OFFICER. Under the previous order, the Senate will
proceed to executive session to consider the following nominations en
bloc, which the clerk will report.
The legislative clerk read the nominations of J. Paul Compton, Jr.,
of Alabama, to be General Counsel of the Department of Housing and
Urban Development; and Owen West, of Connecticut, to be an Assistant
Secretary of Defense.
The PRESIDING OFFICER. Under the previous order, the time until 5:30
p.m. will be equally divided in the usual form.
The Senator from Texas.
Tax Cuts and Jobs Bill
Mr. CORNYN. Mr. President, listening to my friend, the Democratic
leader, leads me to conclude that he and his party have given up on the
American dream. They want to settle for the status quo, which is
stagnant growth of our economy and jobs where people haven't seen an
increase in their wages for years. They even seem to be rooting for
failure. That seems to be the attitude of our missing-in-action
congressional Democrats on the Tax Cuts and Jobs Act.
We, on the other hand, think American families need more take-home
pay, higher wages, more jobs, and a competitive economy, and we believe
they shouldn't have to settle for less. I will come back to that in a
moment.
I do want to talk about tax reform and make the perhaps obvious
statement that tax reform is hard. That is the reason it hasn't been
done since 1986. It is even harder when we have a political party that
is determined to fight against every single proposal we have made in
our tax cut and tax reform bill, including ones they themselves have
championed in the past.
I have heard the ranking member of the Senate Finance Committee,
Senator Wyden, talk about corporate giveaways, and the Democratic
leader just alluded to the same thing. Yet we are embracing the same
sort of approach they took in previous proposals and that President
Obama advocated for in his State of the Union Address in 2011, when he
asked Republicans and Democrats alike to work together to lower the
highest corporate tax rate in the industrialized world because he knew
it was chasing jobs overseas, and he knew it was important to bring
that investment and those jobs back to the United States. That is
exactly what our bill does.
My friend Kevin Brady, the chairman of the House Ways and Means
Committee, called tax reform a Rubik's Cube. He is right, but now,
thankfully, we have figured out how to solve that Rubik's Cube.
We confess that this legislation is not perfect, but it is good, and
it is much better than the status quo, which our Democratic colleagues
seem to have settled for. Last week, the conference committee met
between the House and the Senate, and members, including myself, had
many difficult conversations about how to reconcile the differences
between the two bills. Those discussions were necessary, they were
prudent, and they were productive. We now have a consensus about how to
get this bill across the finish line and to the President's desk before
Christmas.
We will vote on this final bill after the House does tomorrow--
hopefully by tomorrow night. Perhaps it will carry over into Wednesday
morning, but we will get it on the President's desk for him to sign
into law before Christmas, as we pledged.
I want to talk for just a few moments about why I am so excited at
the prospect--and so are so many other people across the country--
because oftentimes their words get lost in the chatter, some of which
is designed to mislead and presents an inaccurate picture of just how
consequential this tax reform will be. Their voices--those who believe
this good bill will help them--deserve to be heard.
Let me first talk about manufacturing. There was a survey released
last week that showed historically high optimism among 14,000 small and
large employers in the manufacturing sector. How long have we heard
that we need to bring manufacturing back to the United States rather
than outsourcing it to Mexico or China or other places around the
world? Well, we tried to address that, and I think we met with some
success because more than 94 percent of manufacturers are now positive
about their company's outlook. Nearly 64 percent said that tax reform
would encourage their company to increase capital spending. Capital
spending is what goes into infrastructure, equipment, and things that
allow them to become more productive and to create more jobs. A
majority of these manufacturers said that they would indeed expand
their businesses and they would hire more workers after this bill is
signed into law by the President. In fact, manufacturers predict that
the number of jobs could surge to 2 million by the year 2025. Now there
are roughly 350,000 American manufacturing jobs, so a leap to 2 million
is almost fantastic--hard to contemplate--but very exciting if true.
The second group I want to mention that is very excited about the Tax
Cuts and Jobs Act is small businesses. We know small businesses are the
economic engine of the country. Indeed, 70 percent of new jobs are
created not by Fortune 500 company businesses but by small businesses.
As one piece in the Houston Chronicle recently pointed out, the 2.6
million small businesses that call Texas home are enthusiastic because
tax reform will provide them much needed relief.
Small businesses, of course, all have to pay taxes, which is
burdensome enough, but they also have to spend hours and money to
comply with our unnecessarily complex tax laws. According to a 2017
survey by the National Small Business Association, 58 percent of small
businesses reported that the administrative burden of Federal taxes
posed a greater challenge than the cost of the taxes themselves. The
burden of compliance was worse than the check they had to write to the
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Federal Government. The Houston op-ed put the matter succinctly. It
said:
For large corporations that can afford a small army of
lawyers and accountants, the tax laws are a nuisance. For
small businesses, they are a nightmare.
Now that situation will change. Our bill will simplify the Tax Code
by eliminating many special deductions and credits while broadening the
base and bringing down rates.
To those cynics here inside the beltway who roll their eyes, who
think that changes to the business provisions of the code don't matter,
I would point out two more important pieces of news. First, the Federal
Reserve, an independent government institution, recently said that this
tax package is one of the factors that led them to increase their
projections for growth next year. That is welcome, to say the least.
Tax reform, said Federal Reserve Chair Janet Yellen, last appointed by
President Obama, will boost spending and could do the same for
productivity. So the Federal Reserve has raised its growth projections
for next year, particularly in response to what we are doing.
For those who worry about deficits--that we are cutting taxes too
much--and who don't believe the economy will grow to compensate for
those cuts in taxes, all they need to do is look at the projection of
the Federal Reserve. They currently project the economy to grow at 2.1
percent, but she said that next year it could go to 2.5 percent. So
even if you believe that very conservative estimate, that is enough
growth to compensate for the cut in taxes and the loss of revenue next
year, but we expect that will continue and will grow over the next 10
years.
It is another thing to note how the rest of the world is reacting to
what we are doing here. To name but one example, China is worried,
which should tell us something. According to a Wall Street Journal
story printed last week, China sees these tax plans as making the
United States a much more attractive place to invest, which means less
investment will occur in China. One official in Beijing has called our
tax plan a huge and imminent danger that can't be ignored. China is
worried that job creators will relocate here in America, which is a
well-founded concern and one of the goals of this tax bill. That is
exactly what they will do when we lower the corporate rate and go to a
territorial system. Rather than taxing these businesses twice and
encouraging them to keep the money they earn and the jobs they create
overseas, we encourage them to bring them back to America by making our
businesses more internationally competitive.
So to summarize what we are seeing already, and we haven't even
passed the bill yet--the conference report, at least--we have passed
the Senate bill, the House bill, and now the conference report, which
is the reconciled version between the House and the Senate versions,
was released Friday.
To summarize what we have seen already, nationally, manufacturers are
raving about the tax plan. In places like Texas, small businesses
desperately need the relief this bill offers. The Federal Reserve, an
independent financial body of the Federal Government, has increased
their growth estimates, in part, based upon the tax relief provided in
this bill. And our chief competitor in the global economy is startled
by what we are doing and afraid of what it might mean in terms of
America's competitiveness globally.
Put all this together and what do you have? A brief snapshot of the
huge economic impact of the tax overhaul that will be signed by the
President in the next few days. Signs of that impact are all around us,
almost everywhere I look.
I know of at least one major airline--Southwest Airlines--that has
already announced big plans as to what they plan to do with their tax
savings. With the benefits afforded by this tax reform, they said that
they will purchase new aircraft. Well, this means more jobs for the
people who build those aircraft. It means more jobs for the pilots and
the flight attendants who travel on them. It means better customer
experiences, and it may even mean lower fares for consumers.
Let's talk about what this bill does for Americans who get up and go
to work every day and just try to eke out a living, providing for their
families. Well, I will tell you, for those worried about how tax reform
will affect real people's actual lives, let me give you a couple of
concrete examples. Let's take a single teacher making $50,000 a year.
She will see a significant reduction in her tax burden--between 17 and
20 percent--less taxes that she will have to pay. This comes from a
lower marginal rate and a higher standard deduction. How about a
married couple with three children and with median earnings of $75,000
a year? Well, their tax bill will decrease, as well, by as much as
$2,000 from a lower rate and a higher child tax credit.
As I have said before, maybe some of our Democratic friends don't
believe this is a big deal; maybe they don't care about those American
families living paycheck to paycheck, who would welcome an additional
$2,000 each year. Their actions make me think they are OK with the
status quo because they have refused to even participate in the
process, and they have been rooting for failure every step along the
way.
Well, we saw the latest example of this over the weekend when a
leftwing website, masquerading as a legitimate news outlet, led by a
former staffer of the junior Senator from Vermont, published what it
advertised as a breaking news story about the final bill. This story
breathlessly claimed, without a shred of evidence, that a provision had
been airdropped into the final draft in secret in order to secure the
vote of a Member who would supposedly personally benefit from it. This
is a salacious tale from beginning to end. It was also completely false
and invented.
As a member of the Senate Intelligence Committee, I have joined with
my colleagues over the last year to investigate the efforts of Russian
intelligence operatives to undermine public confidence in our last
elections. Well, the way this phony news story broke and was picked up
on social media and in the mainstream media would make a Russian
intelligence officer proud. The whole purpose of this exercise--this
false and invented story--was to undermine public confidence in this
tax reform package that we will pass, perhaps as early as tomorrow, to
be signed by the President, perhaps before Christmas.
Some of our friends on the other side of the aisle and their allies
in the so-called mainstream media ran with it in a dishonest attempt to
derail us from passing the bill and undermine the reputation or
integrity of one of our fellow Senators--all from a made-up story.
Again, the Russian intelligence officials--it is well-documented by
now--through a combination of cyber theft, propaganda, creative use of
social media, and a gullible mainstream media, undermined American
confidence in our most basic obligation, an institution of our
government, which is our election system. But what we saw happen this
weekend, as I said, would have made a Russian intelligence officer
proud.
As a letter from Chairman Hatch, who is chairman of the Senate
Finance Committee, makes clear today, this website, which, by the way,
also posted a false report about an amendment I had introduced several
weeks ago and later had to correct it, spread a false story
irresponsibly and dishonestly. In his letter, Chairman Hatch writes:
It takes a great deal of imagination--and likely no small
amount of partisanship--to argue that a provision that has
been public for over a month, debated on the floor of the
House of Representatives, included in a House-passed bill,
and identified by [the Joint Committee on Taxation] as an
issue requiring compromise between conferees is somehow a
covert and last-minute addition to the conference report.
It reminds me of another quote sometimes attributed to Mark Twain,
perhaps apocryphally, who supposedly said: A lie can travel halfway
around the world while the truth is still putting on its shoes. Well, a
lie can travel even faster than that today because of social media.
Shame on those who would perpetuate lies in an effort to deny the
American people a much needed tax cut and tax relief. Thank goodness
that attitude isn't shared by most Americans and by the Texans I
represent who want and deserve much better than the same old same old.
They don't believe we have to settle for the status quo. We are going
to give them something better. We are going to keep our promise, and I
can't wait until this bill gets on the President's desk.
Let me just close by saying that I am a proud son of a World War II
veteran.
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My dad was in the Army Air Corps, flew B-17s out of Molesworth Air
Force Base in England over Nazi Germany during the end of World War II.
He was a member of the 8th Air Force, 303rd Bomb Group. On his 26th
mission, he was shot down and captured as a prisoner of war. Thank
goodness he survived, came home, met my mom, married, raised a family,
and became a productive member of civilian society after his military
service. But I remember, as if it were yesterday, what my parents said
they wanted for me, my brother, and my sister. It is what parents of
that entire generation wanted for their children and grandchildren.
They wanted to know that their sacrifice, their willingness to fight
and win America's wars against terrible tyrants, such as Adolph
Hitler--that the consequence of their sacrifice and their service would
be a better standard of living, a safer world, and a better quality of
life. In short, what they wanted for us and what I want for my children
and what I believe every American parent wants for their child or their
children is exactly what my parents wanted for me and my sister and my
brother. We sometimes call that the American dream.
Some of us believe that the American dream is still alive, that we
don't have to settle for second place. We don't have to settle for the
status quo. We don't have to settle for flat wages and fewer jobs. We
can do better. We believe we have done better in this piece of
legislation, which will help reawaken the slumbering giant of the
American economy. It will put Americans back to work. It will mean more
take-home pay. It will mean a better standard of living, but,
surprisingly--and disappointingly--our colleagues across the aisle want
no part of it. I hope they haven't given up on that American dream. I
haven't given up, and I don't believe Americans have given up on that
dream.
I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER (Mrs. Ernst). The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. CORNYN. Madam President, I ask unanimous that the order for the
quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. CORNYN. Madam President, I ask unanimous consent that the letter
from Chairman Hatch be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
U.S. Senate,
Committee on Finance,
Washington, DC, December 18, 2017.
Hon. Bob Corker,
Washington, DC.
Dear Chairman Corker: Thank you for your letter dated
yesterday.
I am disgusted by press reports that have distorted one
particular aspect of the conference agreement on H.R. 1, the
Tax Cuts and Jobs Act. The reports have focused on the final
version of the 20 percent pass-through deduction, the
proposed new Section 199A. As the author of this provision
and the vice chairman of the conference committee, I can
speak with authority about the process by which the
conference committee reached its final position.
There are two false assertions contained in these reports,
and I would like to correct the record on both.
First, some have asserted that a new provision was crafted
for real estate developers and was “airdropped” into the
conference agreement. Second, reports have implied that you
had some role in advocating for or negotiating the inclusion
of this provision.
Both assertions are categorically false. With respect to
the second, I am unaware of any attempt by you or your staff
to contact anyone on the conference committee regarding this
provision or any related policy matter. To the contrary,
virtually all the concerns you had raised in the past about
the treatment of pass-through businesses in tax reform were
to voice skepticism about the generosity of various proposals
under consideration.
The first claim--that a new pass-through proposal was
created out of whole cloth and inserted into the conference
report--is an irresponsible and partisan assertion that is
belied by the facts. For more than a year, tax-writers in the
House and Senate have worked to craft legislation that not
only provided relief for “C” corporations, but also
delivered equitable treatment for pass-through businesses.
Though the two chambers came at this issue from different
angles, our goal was the same: To provide tax relief to pass-
through businesses at a level similar to that provided to
regular “C” corporations. This policy goal was confirmed in
the Unified Framework for Fixing Our Broken Tax Code, which
provided in part:
“TAX RATE STRUCTURE FOR SMALL BUSINESSES The framework
limits the maximum tax rate applied to the business income of
small and family owned businesses conducted as sole
proprietorships, partnerships and S corporations to 25%. The
framework contemplates that the committees will adopt
measures to prevent the re-characterization of personal
income into business income to prevent wealthy individuals
from avoiding the top personal tax rate.”
The House Ways Means Committee and the Senate Finance
Committee achieved this mutual goal by different means.
Section 1004 of the House bill provided a special tax rate
for pass-through income and included a “prove-out” option
for capital-intensive businesses. Chairman Brady unveiled
this approach on November 2nd, more than six weeks ago.
The Senate took a different approach, achieving the
intended rate relief through a deduction patterned after
current law Section 199. We also included measures to ensure
that compensation could not be easily gamed into business
income in order to qualify for the deduction. Similar to
Section 199, the deduction in the Senate bill excluded
compensation and guarantee payments to owners and was limited
to 50 percent of compensation paid to employees, with an
exception for small pass-through businesses, including
service providers. The Senate bill did not include a prove-
out option for capital-intensive businesses like the one
contained in the House bill.
The Joint Committee on Taxation (“JCT”), the non-partisan
congressional scorekeeper for tax legislation, released a
side-by-side summary of the two bills for conferees. That
summary, dated December 7, 2017 and available on JCT's
website (JCX 64-17), described the House position in part:
“In the case of a capital-intensive business, a taxpayer
may “prove out” a capital percentage by electing the
application of an increased percentage for the taxable year
it is made and each of the next four taxable years. The
applicable percentage is determined by dividing (1) the
specified return on capital for the activity for the taxable
year, by (2) the taxpayer's net business income derived from
that activity for that taxable year.”
It takes a great deal of imagination--and likely no small
amount of partisanship--to argue that a provision that has
been public for over a month, debated on the floor of the
House of Representatives, included in a House-passed bill,
and identified by JCT as an issue requiring a compromise
between conferees is somehow a covert and last-minute
addition to the conference report.
I have sat on a number conference committees, too numerous
to remember. In each case, conferees have come into the
conference expecting to achieve their chamber's position or
negotiate a reasonable compromise. This conference committee
was no exception. The House entered the conference with an
interest in preserving, in some form, the prove-out
alternative as an option for capital-intensive taxpayers.
Through several rounds of negotiations, the House secured a
version of their proposal that was consistent with the
overall structure of the compromise.
The prove-out alternative included in the conference report
was derived from the House provision and is the product of a
negotiation between the House and Senate tax-writing
committees. It is that simple.
If you have any further questions, please feel free to
contact me.
Very Truly Yours,
Orrin G. Hatch,
Chairman, Senate Finance Committee.
Mr. CORNYN. Madam President, I yield the floor.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. KING. Madam President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Deadlines
Mr. KING. Madam President, I rise today to talk not about legislation
or about the tax bill--well, I may talk about the tax bill a little--
but I do wish to talk about deadlines and how we all do our work,
whether it is in the Senate, in our businesses, or in our personal
lives. I wish to talk about deadlines missed and deadlines that don't
exist.
One of the realities of this place that I think is very unfortunate
is that we rarely make our deadlines. These are self-imposed deadlines.
These are deadlines that we create. We pass a law that says something
has to happen by September 30. We set the deadline, and then we don't
make it.
Most notoriously, it happens with budgets. I don't know the last time
we had a budget on time. I think it is about 17 years ago. I suspect
there are probably less than a dozen Senators in this Chamber who were
here when we last passed a budget on time. There is
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no excuse for that. The problem is that when we put it off, we don't
know anything more than we did at the time of the deadline. We could
have done it, and yet, because we are able to, we put it off. That is
human nature, unfortunately. Who among us would not have put off the
deadline for a book report if we could have said to the teacher: Gee, I
don't think I can make that Monday morning deadline. I will just do my
book report on Tuesday.
Life doesn't work that way. In the real world, there are deadlines.
There are consequences if you don't get your work done on time. Things
happen, and if you don't get your work done on time, usually, those
things that happen are bad. I don't know where else, other than in this
body, where deadlines, which have enormous implications and enormous
importance, are simply ignored.
I just sat down in the last day or so and put together real deadlines
that we have in the law right now. What are they? Well, the Children's
Health Insurance Program's deadline is September 30, 2017. That is
gone. That has passed. I can give you 23,000 reasons that we should
have met that deadline. That is the number of young people in Maine who
are covered by the Children's Health Insurance Program, and there are 9
million nationwide. But we missed the deadline. Why? I can't find any
reason. We don't know anything now that we didn't know in the middle of
September or in August when we could have passed this program, but we
just blew right by it. Maybe it is because none of our kids are in this
program. I venture to say that if the children of the Members of the
Senate were in the CHIP program, we would have met that deadline, but
we didn't.
What is another one? Community health centers had another deadline of
September 30, which was missed. I will give you 200,000 reasons that we
should have met that deadline. That is the number of people in my State
of Maine who are served by federally qualified health centers. I was at
one just on Friday. They serve people who otherwise wouldn't get care.
They fill an enormous gap, particularly in a rural State, to provide
healthcare to people who need it, but we didn't make the deadline.
There was no particular reason not to make this deadline. We just blew
right by it. It was not all that important. I venture to say that if
our families were covered under this program, we would have gotten it
done. No Senators' families are covered by federally qualified health
centers. If they had been, we would have gotten it done.
Of course, the granddaddy of all of deadlines mentioned is the
budget: October 1, 2017. We missed it--no deadline. We just went right
by it. Nothing happened. Well, what we did was to pass a continuing
resolution. A continuing resolution really should be called a “cop-out
resolution.” It is basically saying that we are not going to make the
hard decisions in a budget. We are just going to push them forward for
a month or two. But the problem is that the month or two comes. In
fact, it is coming this Friday, and now we are talking about another
continuing resolution to go into January or February. No business would
do this. Families can't even do this.
Some time ago, I was the Governor of Maine. I remember vividly. I can
practically tell you where I was standing in my office. We have a
deadline in Maine of July 1 for our budget. We always make it. Members
of the legislature of one of the parties came to me. They were having a
hard time getting a budget. It was very contentious, as it is every
year. He said: Governor, let's just do a continuing resolution like
they do in Washington, and we can solve this problem in the next 2
weeks. I said: Not on your life, because if we do, once we open the
Pandora's box of continuing resolutions in Maine or in Iowa or in
Mississippi or Florida, then we are stuck. We will never get a budget
on time again because it is too easy to put off the hard decisions.
What do we know now about the budget that we didn't know in August?
What will we know in January that we don't know now?
By the way, a continuing resolution for the entire budget is bad for
the government and disastrous for national security. I serve on the
Armed Services Committee. We have hearings both from our civilian
leadership and our military leadership, and they have told us
repeatedly: Please get us a budget. The continuing resolution doesn't
allow us to plan. It locks us into last year's priorities. It doesn't
allow us to look forward and make commitments that will save the
taxpayers money if we have the authority. It is a disaster for national
security, but a deadline was missed on September 30. It looks like we
are going to miss another deadline on December 22, and we will be here
talking about funding the government, doing the budget, sometime in
January or maybe in February. There is no reason for it. There is no
reason for it except that we are simply avoiding making difficult
decisions.
The next one is DACA, or Deferred Action for Childhood Arrivals. The
real deadline started on October 6. That is when people started to lose
the ability to re-up their qualifications for DACA. Over 100 people a
day are losing their DACA status. In the last week it has been, I
think, something like 1,700--in the last week or 10 days. These are
people who are going to go into the holidays unsure about whether they
are going to be able to continue to live in this country. These are
young people, as we all know. This is the only country they know. They
were brought here as little kids. They weren't illegal immigrants. They
were brought here as children, and they are contributing to our
society, and they are working and paying taxes. But we missed the
deadline starting in October.
Now, even the President said we should fix this program, and he gave
us 6 months. He said: I am going to disallow the program, but not until
March 5, 2018. I don't know whether it is legal to bet in the District
of Columbia, but I would be willing to bet that we are still struggling
with this question on March 4, 2018. I deeply hope not because lives
are being toyed with here unnecessarily. We could make the decisions
now. We could decide to reach a compromise agreement on this program,
which Members of both sides of the aisle think needs to be done,
including the President. Let's get it done. But it is one more missed
deadline.
Next is the National Flood Insurance Program, with a deadline of
December 22, which is 4 days from now. I don't think we are going to
make it. If ever there was a time of importance for the National Flood
Insurance Program, it is now. We have had enormous flooding issues with
the hurricanes in Texas, Florida, Puerto Rico, and the Virgin Islands.
Yet the flood insurance program expires on December 22. Why don't we
get it done? Because it is not our houses. It is not our houses that
are at risk to get the flood insurance. I suspect if we had the houses
that were part of this problem, it would be solved.
Medicare extenders expire on December 31 of this year. Are we going
to get those done? I deeply hope so, but I am not so sure.
FISA section 702, one of the most important national intelligence
provisions that we have, also expires at the end of the year. Are we
going to get that done? I deeply hope so, but I am not optimistic.
Next, we have the wildfires and FEMA disaster aid for Harvey, Irma,
Maria, and the wildfires. These are huge disasters. We have partially
funded them, but certainly not to the point that is going to be
required. Those deadlines were all this fall.
At the bottom of my chart of priorities is tax reform. Boy, are we
going to make that deadline. The only problem is that it doesn't exist.
There is no deadline for that. There was no deadline. It is not
December 22. It is not Christmas. It is not New Year's. It is a self-
imposed deadline that is not in law anywhere.
I agree that we need to do tax reform, but we have been doing it on
an unprecedented scale and speed that is unnecessary. We have missed
and ignored all these real deadlines in exchange for focusing all of
our attention on a fake deadline. Sure, it would be nice to get it
done, and we could have gotten it done. It could have been done on a
bipartisan basis. We could have started last summer, and we would have
had a bill just like the bill that emerged from the HELP Committee with
regard to healthcare, on a bipartisan basis. But instead it was a
closed process, done with unprecedented speed, with virtually no
hearings--well,
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no hearings, no real hearings on the bill, no serious outside experts,
no analysis of what is in it. We have been given a 500-page bill that
we are going to vote on in probably a day or so. Yet we are racing to
meet a deadline that didn't exist.
It is boring to talk about process, but that is what I am really
talking about today. I just don't understand an institution that
doesn't make its real deadlines and yet races and throws everything
aside to try to make a deadline that just came out of the air. It is
not in any law, any rule, any expectation--let's do it by Christmas or
by the end of the year. It is no way to run a business, and it is
certainly no way to run the government on behalf of the American
people.
I have never been in an institution or in a group of people who are
as capable as the people who are here, and I find it genuinely puzzling
as to why we perform so poorly and why the public opinion of us is so
low. These are good people on both sides of the aisle. Yet something
about the way this institution works keeps us from meeting the rules
and expectations that the rest of society takes for granted, such as
making deadlines, doing your job, doing what you are paid to do.
One of the most fundamental responsibilities is to pass a budget. We
have members of our Appropriations Committee who have been working for
a year to put the budget together. It is done, and we could do this,
but instead we are putting it off and putting it off and putting it
off. I wouldn't be surprised if, come January or February--assuming we
don't make it by this Friday--there are going to be people who say:
Let's just do a continuing resolution for the rest of the year--a cop-
out resolution, a nonresolution, a nondecision on behalf of the people
of this country.
I think we can do better. I think we can begin to regain the trust of
the American people by going back and doing things the way we are
supposed to according to the old norms, with hearings and
considerations and making deadlines and meeting our obligations to our
citizens and to our country.
I deeply hope that as the year turns, we also make a turn and that we
make a turn to do this place better, to do our work that the American
people hired us to do, to do it on a timely basis, and to meet our
responsibilities. I believe we can do it. I believe we can do it
better, and I deeply hope that we do so.
Thank you, Madam President.
I yield the floor.
The PRESIDING OFFICER. The Senator from Maine.
Tax Cuts and Jobs Bill
Ms. COLLINS. Madam President, I rise to express my support for the
conference agreement on the Tax Cuts and Job Act, the first major
overhaul of our Tax Code since 1986. This legislation will provide tax
relief to working families, encourage the creation of jobs right here
in America, and spur economic growth that will benefit all Americans.
Let me start by discussing the effects of this bill on individuals
and families. Throughout this debate, I have emphasized that reforms to
our outdated Tax Code must help working families. I, therefore,
authored three key amendments that were retained in the final package.
My amendments allow families to deduct up to $10,000 in State and
local taxes, increase the deduction for medical expenses, and protect
tax-free contributions for retirement savings.
The original Senate bill would have eliminated the deduction known as
SALT that allows taxpayers to avoid paying a Federal tax on State and
local taxes that they have already paid. This provision has been in the
Tax Code since 1913, when the income tax was first established. It is
intended to prevent double taxation. My amendment, which was adopted by
the Senate, restored the deduction for property taxes up to $10,000. I
am pleased that the final bill goes a step further by allowing the
deduction of property and income or sales taxes up to this level, which
will assist even more Americans.
My work to restore this deduction is especially important to families
living in high-tax States like Maine, which has one of our Nation's
highest tax burdens; yet Maine's per capita income ranks only 31st,
which is nearly $5,200 below the U.S. average. Maintaining this
deduction therefore provides important tax relief for those Mainers who
itemize.
My second amendment included in the conference agreement is a very
important one. It is aimed at helping Americans struggling with high,
unreimbursed healthcare costs, including seniors paying for long-term
care for a loved one and those with expensive chronic healthcare
conditions. My amendment lowers the threshold for claiming this
deduction for these unreimbursed expenses from 10 percent to 7.5
percent of income for 2017 and 2018.
The House bill would have eliminated this longstanding deduction used
by approximately 8.8 million Americans annually, nearly half of whom
make less than $50,000 per year. Retaining this important deduction and
lowering the threshold will provide relief for those experiencing
particularly high healthcare costs. That is why AARP and 44 other
consumer groups strongly endorsed my amendments, stating: “It provides
important tax relief which helps offset the costs of acute and chronic
medical conditions for older Americans, children, pregnant women,
disabled individuals and other adults, as well as the costs associated
with long-term care and assisted living.”
At a time when we need to be encouraging Americans to save more for
their retirement, I am encouraged that the final agreement preserves
the pretax contribution limits for retirement savings plans. We are in
the midst of a silent but looming retirement security crisis in this
country. According to the nonpartisan Center for Retirement Research,
there is a $7.7 trillion gap between the savings that American
households need to maintain their standard of living in retirement and
what they actually have saved.
We should be doing everything we can to encourage more saving, not
less. For this reason, I am pleased that the final bill will include my
third amendment, which struck the original Senate language eliminating
the ability of public employees, such as firefighters, schoolteachers,
and police officers, as well as clergy and those employed by charities
and nonprofit organizations, to make what are called catch-up
contributions to their retirement accounts. These employees are
generally paid less than their counterparts employed by for-profit
companies and thus are less able to save for their retirement. My
provision would allow them to continue making these important extra
investments toward a secure retirement.
The conference agreement benefits lower and middle-income taxpayers
significantly, while simplifying the tasks that no one relishes of
completing their tax returns.
Significantly, this bill nearly doubles the standard deduction to
$12,000 for single filers and $24,000 for those filing jointly. The
child tax credit will be doubled from $1,000 to $2,000. Thanks to
Senator Rubio's efforts, which I strongly supported, up to $1,400 of
that tax credit will be refundable in order to benefit low-income
families.
Let's be more concrete. What do these reforms mean to families across
our country? The 72 percent of Mainers who already use the standard
deduction will have their taxes reduced. A family with $24,000 in
income will pay no Federal income tax. A single mom earning $35,000 a
year with one child will see her taxes drop by nearly 4,000 percent.
Instead of paying money back to Washington, she will be getting back
nearly $1,100 to help her make ends meet. A couple with no children
earning $60,000 will see their taxes fall by more than $900. A couple
with two children earning $60,000 will get a tax cut of about $1,700.
That is a reduction of more than 100 percent. The bottom line is that
most Maine households will see their taxes go down.
I was very concerned about a number of important deductions for
individuals that would have been eliminated under the House bill.
Having worked at Husson University in Bangor before my election to
the Senate, I am well aware of how critical education deductions and
credits are to our students and their families; therefore, I had
several fruitful discussions with a key conferee, Senator Rob Portman,
about preserving those deductions that help students afford higher
education. I appreciate his strong advocacy for these provisions that I
care so much about as a result of
[[Page S8059]]
my direct experience working with college students. In fact, one of the
very first bills that I introduced in the Senate as a new Senator in
1997 was to provide a deduction for interest paid on student loans. The
conference agreement maintains that deductibility of interest on
student loans, as well as the tax exemption for employer-provided
tuition assistance and for graduate student tuition waivers. All of
those important deductions are maintained in this bill and will help
Americans improve their earnings because of the increased education
they will have.
The bill also maintains a $250 deduction--a provision I authored some
15 years ago--that allows teachers to deduct the costs of classroom
supplies they purchase with their own money. Having visited more than
200 schools in the State of Maine, I know firsthand how dedicated
teachers dig deep into their own pockets to buy supplies to enhance the
education of their students.
In addition, this bill would modernize the ABLE accounts, which are
tax-preferred savings accounts essential for providing long-term
support for individuals with disabilities and their families.
The bill also continues the tax credit to encourage adoptions.
The final agreement also preserves a number of deductions and credits
that are so important to our communities. I worked hard to preserve the
historic tax credit so businesses rehabilitating older buildings in
communities like Lewiston, ME, will continue to do so.
I am also pleased that private activity bonds, which are vital to
many hospitals and institutions of higher education, are continued, as
are the affordable housing and new markets tax credits. We have found
proven ways to encourage public-private partnerships, and we ought to
continue to incentivize these important partnerships.
How this legislation treats employers has also been the subject of
much debate, but the reality is the United States cannot continue to
have the highest corporate tax rate in the developed world at 35
percent. We are losing jobs as businesses make the calculation to
invest overseas.
I have talked to the executives of General Dynamics, which owns Bath
Iron Works in Maine and employs more than 5,000 Mainers; to United
Technology, which employs more than 1,900 people in North Berwick at
its Pratt & Whitney plant; to General Electric, which has a major plant
in Bangor; to Proctor & Gamble, which employs 400 workers in Auburn;
and to Idexx, which is such an important high-tech employer in
Westbrook, about the positive difference this legislation will make in
their ability to create jobs in America.
New Balance, which has about 900 workers in Maine manufacturing
footwear, describes the tax reforms as follows: “New Balance will be
more competitive and manufacture more footwear in Maine that we can
export across the globe.”
This significant Maine employer went on to say: “Companies like New
Balance, which already has a strong domestic manufacturing presence,
will be able to increase investments in their facilities and be more
globally competitive while remaining a U.S. company hiring U.S.
workers.”
These words are echoed by the manager of the Pratt & Whitney plant
who wrote to me: “The reforms . . . will allow companies like ours to
bring home earnings from abroad to invest in research and development,
advanced manufacturing, energy efficiency, and workforce initiatives. .
. . Pratt & Whitney plans to hire thousands of people over the next
several years across our U.S. operations, and this tax reform will
further support our efforts.”
Isn't that what we seek? Isn't that what tax reform should bring
about--more jobs, right here in America?
The bill also includes changes important for our small businesses
which employ nearly half of all workers and generate two out of three
net new jobs in our country. They are the true engine of our economy,
especially in the great State of Maine. The bill would provide tax
relief that enables them to create more jobs, increase paychecks, and
grow our economy.
As the president of the Retail Association of Maine recently
commented about this tax reform bill, “For Maine and its nearly 9,000
retail establishments and the more than 80,000 retail jobs, this is
welcome relief for small businesses.”
According to the National Federation of Independent Business, Maine
ranks fifth in the Nation for the share of workers employed by
passthrough businesses, as most small employers are structured. The
NFIB, our Nation's small business advocacy group, has strongly endorsed
this final bill.
Small businesses make an outsized contribution to our Nation's
economy; yet they face a tax burden that can reach nearly 40 percent at
the Federal level and can be significantly higher than the corporate
tax rates paid by larger firms. Small businesses are forced to devote
more resources to tax payments and fewer resources to creating good
jobs and investing in their communities. This bill provides important
tax relief to small businesses that are the backbone of our economy.
Let's listen to the words of some of the small businesses from Maine
that have written or talked to me. The owner of Windham Millwork, an
architectural woodworking company, described the relief for small
businesses and how it will help manufacturing workers and families this
way: “Most importantly, it means Windham Millwork will have more money
to spend on what matters--our workers and community. With the money
we'll save, we can create new jobs or offer better pay to our workforce
. . . which helps everyone in our community and contributes to a
growing Maine economy.”
The innkeeper of the Nonantum Resort in Kennebunkport noted: “This
tax reform bill helps level the playing field for small businesses not
only in the hotel industry, but across the economy. With a lower tax
burden, small businesses in all industries can continue to grow,
creating more jobs.”
Moreover, a family-owned business in southern Maine described for me
how the bill would benefit Maine companies and the people who work for
them: “When [companies] become more profitable, they reinvest faster,
grow faster, and increase profit-sharing. Employees benefit when
companies grow. There are more jobs, more opportunities, more security,
more mobility, more innovation.”
Tax reform should spur this kind of economic growth. The weak growth
and stagnant wages we have seen in recent years cannot be accepted as
the new normal for our country. It is clear where the current path
would lead if we do not act. CBO projects the current slow growth of
just 1.9 percent per year will continue throughout the next decade--far
below the historic average of 3 percent. This would result in our
public debt exceeding 90 percent of GDP by 2027, just as our
obligations to the baby boom generation begin to crest.
Surely, we can do better. Tax relief and reform will lift our
economy, leading to higher wages for workers and more revenue for
government. Extrapolating from a CBO estimate, an increase of just
four-tenths of 1 percent in economic growth could produce revenues that
are in excess of $1 trillion over the next 10 years.
If we remain on our present trajectory, however, growth will remain
stagnant. Continued slow growth will crowd out many funding priorities,
harm our national security, place significant strain on Federal
programs, and impose a burden on our children and our grandchildren. We
must act now to reignite the engine of growth, to provide for the next
generation the same promise of a brighter future we received from those
who came before us.
Finally, let me discuss the critical issue of healthcare. It has been
deeply disturbing to see seniors frightened about the possibility that
this tax bill could trigger an automatic 4-percent cut in the vital
Medicare Program. Although I knew that the law that could cause this
reduction has been waived 16 times, I felt it was essential that our
leaders publicly commit that Medicare reductions would not be triggered
by this legislation. I don't know of any Senator on either side of the
aisle who is seeking to have an automatic 4-percent cut in Medicare go
into effect.
I ask unanimous consent that my exchange of correspondence with the
Senate majority leader be printed in the Record at the conclusion of my
statement.
[[Page S8060]]
This pledge is ironclad and, I hope, reassuring to our seniors.
I am also concerned about the inclusion of the repeal of the
individual mandate of the Affordable Care Act as part of this tax bill.
I don't think the two issues should have been combined, but let me be
very clear: I have never supported the individual mandate. There is a
big difference between fining people who choose to go without health
insurance versus the bills considered last summer and fall that would
have taken away insurance coverage from people who have it and want it.
Those bills also would have made sweeping cuts in the Medicaid Program.
The financial penalty under the individual mandate for failing to
comply with it falls disproportionately on lower-income Americans.
Eighty percent of those who pay the fine make under $50,000 a year. For
many of these individuals, the cost of insurance under the ACA is
simply unaffordable. Individuals making 250 percent of the Federal
poverty level--that is just over $30,000--are not eligible for the
subsidies to reduce deductibles and other out-of-pocket costs that are
known as the cost-sharing reductions. So, essentially, the insurance
they are being fined for, if they don't buy, is virtually useless to
them because the deductibles and the copays are so high, and if they
make over 250 percent of the poverty level--over $30,000 a year--they
cannot afford it.
I want to make an important point that has been overlooked in this
debate. Any Senator, Democratic or Republican, could have offered an
amendment on the Senate floor to strike the repeal of the individual
mandate. None--not one--chose to do so. That is telling, indeed, and
reflects both how unpopular the mandate is and how burdensome its
impact is.
Nevertheless, repealing the individual mandate without other
healthcare reforms will almost certainly lead to further increases in
the costs of health insurance premiums that are already too expensive
under the ACA.
For these reasons, I have made it a priority to secure passage of two
bipartisan bills that will help make health insurance more affordable.
Shouldn't that be a goal that all of us can embrace? Both of these
bills have the support of the President, the Vice President, and the
Senate Republican leaders. In fact, Majority Leader McConnell and I
engaged in a colloquy affirming that commitment.
The first bill, the Bipartisan Healthcare Stabilization Act,
sponsored by Senators Alexander and Murray, will provide vital funding
to help low-income families pay their out-of-pocket costs, including
deductibles and copays associated with certain ACA health insurance. I
am proud to be one of the 22 cosponsors of the bipartisan Alexander-
Murray bill.
The second is a bipartisan bill that I introduced with my friend and
colleague Senator Bill Nelson. It would protect people with preexisting
conditions while lowering the cost of health insurance through the use
of high-risk pools. This plan will provide $5 billion annually for 2
years in seed money for States to establish invisible high-risk pools
or traditional reinsurance programs.
We don't have to guess about the impact. I am going to quote some
actuarial studies shortly. The fact is that we know from experience in
States like Maine and Alaska that high-risk pools can help to lower
premiums substantially, by an average of 20 percent.
Analyses show that enactment of these two bills together will reduce
the cost of health insurance, thus making it more affordable. According
to analysis by experts at Oliver Wyman, the passage of these bills will
more than offset the premium increases caused by the repeal of the
individual mandate. In fact, Oliver Wyman suggests in its estimate that
the $5 billion in funding would be sufficient to allow States to
leverage more than $15 billion in reinsurance coverage, and it would
result in premiums that were more than 20 percent lower than if the
individual mandate were repealed and the package of provisions were not
implemented.
Furthermore, analysis by experts at Avalere project that “in
combination, CSR funding and $5B in annual reinsurance could lower 2019
premiums by 18% and increase enrollment by 1.3M people.”
The National Association of Insurance Commissioners wrote that these
two bills would significantly reduce health insurance premiums and help
promote more stability in insurance markets. The NAIC said: “Providing
reliable federal funding to reimburse health insurance carriers for the
Cost-Sharing Reduction (CSR) program assistance they give to low-income
consumers and grants for states to establish invisible high risk pools
or reinsurance programs would reduce premium increases as much as 20
percent and could encourage some carriers to stay in the market.”
In evaluating this bill, the question we should ask is not, Does this
tax cut make Washington better off? The right question to ask is, Does
this tax cut make the American people better off? The answer to that
question is yes.
The bill puts money back into the pockets of American taxpayers with
tax cuts beginning January 1. As soon as the IRS updates withholding
tables this winter, taxpayers will see the benefit of this bill in
their paychecks. Over time, Americans will also see more benefit from
this legislation in the form of higher wages. Businesses, small and
large, will make the investments that will create more jobs.
The PRESIDING OFFICER. The Senator's time has expired.
Ms. COLLINS. Madam President, I will cast my vote in support of the
conference agreement on the Tax Cuts and Jobs Act. While it is by no
means perfect, on balance, this reform bill will provide much needed
tax relief. It will benefit lower and middle-income families, while
spurring the creation of good jobs and greater economic growth.
There being no objection, the material was ordered to be printed in
the Record, as follows:
U.S. Senate,
Washington, DC, November 28, 2017.
Hon. Mitch McConnell,
Majority Leader, U.S. Senate, Washington, DC.
Dear Majority Leader McConnell: I write to express my deep
concerns with the Congressional Budget Office's determination
that an automatic four percent cut to Medicare, estimated to
be roughly $25 billion for fiscal year 2018, could be
triggered by the passage of tax reform legislation as a
result of the Pay-As-You-Go Act of 2010 (PAYGO) even though
there is no intention for such a reduction to occur.
Since I do not believe it is anyone's intention to allow
automatic cuts to Medicare to occur, I urge swift action to
waive the PAYGO requirements. Medicare provides essential
benefits to our nation's seniors, and we must remove
immediately the threat that an automatic reduction in the
program's funding could occur.
Since PAYGO was enacted, sixteen laws that would have
otherwise triggered PAYGO's automatic spending cuts have
included provisions to exclude all or part of the law's
budgetary impact, including the American Taxpayer Relief Act
of 2012 that was enacted under the previous Administration.
I look forward to working with you to ensure that no
Medicare cuts are triggered under PAYGO, a goal I believe is
supported by members on both sides of the aisle. Thank you
for your attention to this critical issue.
Sincerely,
Susan M. Collins,
United States Senator.
____
U.S. Senate, Majority Leader,
Washington, DC, December 1, 2017.
Hon. Susan Collins,
Washington, DC.
Dear Senator Collins: Thank you for your letter expressing
concern about the across-the-board spending cuts. You will be
pleased to know that Speaker Paul Ryan and I issued the
following joint statement earlier today:
“Critics of tax reform are claiming the legislation would
lead to massive, across-the-board spending cuts in vital
programs--including a 4-percent reduction in Medicare--due to
the Pay-Go law enacted in 2010. This will not happen.
Congress has readily available methods to waive this law,
which has never been enforced since its enactment. There is
no reason to believe that Congress would not act again to
prevent a sequester, and we will work to ensure these
spending cuts are prevented.”
Again, thank you.
Sincerely,
Mitch McConnell,
Majority Leader.
The PRESIDING OFFICER. The Senator from Florida.
Mr. NELSON. Madam President, does the Senator from Maine need some
more time?
Ms. COLLINS. Madam President, I thank Senator Nelson. I say, through
the Chair, that is very gracious of the Senator. I have completed my
statement. Thank you.
[[Page S8061]]
The PRESIDING OFFICER. The Senator from Florida.
Mr. NELSON. Madam President, while the Senator from Maine is still
here, let me just say what a great Senator she is and what a pleasure
it is to do business in a bipartisan way, as the two of us have now
done for several years here in the Senate, including the legislation
the Senator from Maine just talked about.
I just want to say to the Senator from Maine that it is my hope,
regarding the statements that have been made to the Senator, that these
two pieces of legislation she referenced will be passed. I do believe
the majority leader, Senator McConnell, will honor that with regard to
the Senate. It is this Senator's concern that at the other end of the
hall, in the House of Representatives, they may not honor that. I
certainly hope the Senator feels like she has the statements of
commitment by the leadership in the House of Representatives that they
will do as Senator McConnell has indicated.
Madam President, I wish to talk about the tax bill. Needless to say,
you are going to hear a different version from me than my good friend
and the very distinguished Senator from Maine, because last Friday
night we got the conference agreement on the tax bill. You can wonder
why it was held until late Friday night, when nobody was paying
attention to the details of the bill.
What is becoming increasingly clear is that this tax bill is not for
ordinary folks. It is going to give a few nuggets to the middle class,
but that is to mask the true intent. The real purpose of the bill is to
give huge tax cuts to multinational corporations and to make it easier
for them to shift jobs overseas. That is the bottom line.
Right now, under current law, corporations that send jobs overseas
have to pay taxes on the money they bring back into the United States,
but now, what this new GOP tax bill says is that corporations that send
jobs overseas can bring that money back to United States tax-free. Once
this bill passes, companies will come under increasing pressure to take
advantage of the tax savings in the bill by sending their jobs overseas
to low-wage countries--particularly those jobs that can't already be
automated.
This is the exact opposite of what we should be doing. Instead of
passing this version of the tax bill that will inevitably send American
jobs overseas, we should be working on a bill that cuts taxes
permanently for hard-working middle-class families.
Supporters of the bill will argue that a lower corporate rate will
encourage companies to keep jobs here. They will argue that, rather
than going to a country with a higher corporate rate, America's
corporate rate will be lower. But that is ignoring the attraction that
companies have to send jobs overseas, because of cheaper wages and
lower environmental standards.
Take China. China has a corporate rate of 25 percent, except that
they make exceptions for certain companies at 15 percent. So the 21
percent in this tax bill for corporations on income earned in the
United States may still be higher than in China, and the pressure on
corporations is to take it to a country that has lower environmental
standards and lower wages.
I think our friends on the other side of the aisle know this is a
head fake. We are not fooled by this. We know what you are trying to do
with this bill. The more people learn about it, the worse it looks.
That is why they waited until Friday night to let the spotlight shine
on it--so that over the weekend people weren't paying a lot of
attention.
There is a reason why my friends on the other side of the aisle are
in such a rush to get this passed. It is because they want to get it
enacted before all of the new loopholes and sweetheart deals for the
special interests and the bottom line of encouraging jobs to go
overseas are discovered. And, starting right now, it is going to be
discovered.
It would be nice if our colleagues showed as much urgency for some of
the other things we should be doing in the Senate, such as providing
millions of kids with health insurance through the CHIP program or
helping folks recover from the massive hurricanes this year, including
the millions of people in Puerto Rico who are still without reliable
electricity or drinking water. What about the hundreds of thousands of
Dreamers in the United States who are here in a deportable status? That
is what we ought to be worrying about.
It has been over 3 months, going on 4 months, since Hurricanes Irma
and Maria devastated the Puerto Rican island. It has been months since
Harvey and Irma devastated farmers in Texas, Florida, and Puerto Rico.
While the Congress has passed two disaster supplemental funding
packages, neither of them has included any relief for Florida's
agricultural community. They are hanging on by a thread. They can
hardly make payroll. They are having to lay off people. They
desperately need our help, which I hope we are going to address in this
next disaster aid funding package.
Instead of spending all of our energy on cutting corporate taxes and
making it easier to send American jobs overseas, we should be focused
on reauthorizing the Children's Health Insurance Program, CHIP, so that
9 million children across the country, including nearly 400,000 in
Florida, can continue to have access to the health coverage they
desperately need. Or we should be negotiating permanent protections for
the Dreamers before they are kicked out of the only country they have
ever known. Unfortunately, the only thing this Republican-led Senate
seems to care about is helping out large multinational corporations.
The truth is, these multinational corporations are doing just fine.
We shouldn't be moving Heaven and Earth--adding $1.5 trillion to the
national debt or upending our Nation's healthcare system--just to make
it easier for them to send American jobs overseas. That is not right.
That is not fair. The American people deserve better.
I yield the floor.
The PRESIDING OFFICER (Mr. Moran). The Senator from Maryland.
Mr. CARDIN. Mr. President, first, I want to thank my friend Senator
Nelson for his comments from the floor in regard to the tax bill that
we will be voting on later this week. The experience I had this morning
underscores the issues that Senator Nelson has brought to the floor. I
had a meeting with the Greater Baltimore Committee. We had business
leaders, labor leaders; we had advocates from different segments of our
community; and we had graduate students there. They all expressed
concern about our voting this week on a tax bill that we first saw on
Friday evening--the latest version.
It is still fundamentally flawed, as Senator Nelson has pointed out.
I say that it is fundamentally flawed because it gives significant, big
tax cuts to corporations and high-income taxpayers and leaves middle-
income taxpayers footing the bill.
The conference report makes it worse because they lower the highest
tax rate from 39.6 percent to 37 percent--another advantage for high-
income taxpayers. In addition, the estate tax is doubled, which affects
0.2 percent of the wealthiest people in this country. Corporations not
only get the lower tax rates cut from 35 percent to 21 percent, but
they also get relief from the alternative minimum tax. To make matters
even worse, the tax relief for middle-income families is temporary,
whereas the tax relief for businesses is made permanent.
It is definitely a tax bill that is going to hurt middle-income
taxpayers. In my own State, independent analysis shows that 800,000
Marylanders will end up paying more in taxes. Guess who is going to
foot the bill, who is going to pay for the big deficit.
If you look at the corporate tax cut alone, that is somewhere close
to the $1.15 trillion we have been talking about, which is baked into
the bill to increase the national debt by $1.5 trillion. I think that
is unconscionable; I think it is unconscionable to say that we can
afford tax cuts when we already have these large deficits that are
going to make us borrow more money and make our economy more dependent.
The truth is, even the Republicans are telling us, even with dynamic
scoring, we are going to have a $1 trillion tax gap in the deficit. In
reality, the $1.5 trillion is conservative. When you look at the
individual tax relief, it is temporary; it expires. Some expire in 2
years.
Most of my Republican friends have said: Just extend it. If you
extend it,
[[Page S8062]]
there will be even a deeper hole in the deficit--closer to $2 trillion.
Who is going to pay for that? Middle-income families are going to pay
for it. They are not just being left out as far as tax relief is
concerned; they are being asked to foot the bill for the tax cuts for
corporations and high-income taxpayers.
In addition, it will affect other elements that middle-income
taxpayers depend upon. This is a direct attack on Medicaid and
Medicare. We see that. We saw that in the budget instructions, where we
had to cut Medicare and Medicaid. We see that in the pay-go rules. We
see that the next chapter of this tax reform bill will be, well, now we
have these deficits, and we have to pay for it. Who is going to be held
responsible for paying for it?
We know that it is going to affect our own budgets. I am now hearing
that we are going to take it out on our own Federal workforce, deny
them a pay raise for next year or have fewer Federal workers to carry
out their mission or make them pay more for benefits. We know that is
going to come. The argument is going to be that we have these large
deficits now, and we have to do this.
How are we going to respond to the issues Senator Nelson talked about
on disaster relief when we have these large deficits? We know that we
are going to be asking middle-income families not only to make a
sacrifice on the tax cut, not only to pay for the deficit created
directly by this but, also, in the future, to pay with cuts in
government spending.
In addition to that, we have 13 million Americans who will lose their
health coverage under this bill because of the elimination of the
individual mandate--13 million. That is going to affect 13 million
families. It is going to affect more than that. Guess what these
families do. They use emergency rooms rather than going to their family
doctors. They enter the healthcare system in a more expensive way. They
don't have the money to pay for the visits, and it becomes part of
uncompensated care. All of us pay higher premiums, and our healthcare
system becomes more expensive.
That has been one of the bright spots of the Affordable Care Act--
reducing the number of uninsured. Now we are going to be moving in the
opposite direction. The Affordable Care Act has worked. The Republicans
tried to dismantle it, and they couldn't succeed. The worst part is,
you are counting the loss of insurance of 13 million as a revenue gain
for the Treasury and then spending that money. That is unconscionable.
In Maryland, we have particular problems with this bill. Not only
will we see a problem for the Federal workforce--a large number who
live in Maryland--but also the State and local tax deductions. Maryland
has the largest number of taxpayers who take advantage of State and
local tax deductions on their Federal tax returns. In other words, you
don't have to pay a tax on a tax. That makes sense. It has been in our
Tax Code since its beginning because we recognize federalism, and it is
morally wrong to pay tax on tax.
Maryland has the most taxpayers who take advantage of State and local
tax deductions, close to 50 percent. The average for Maryland--this is
the average--is $12,900 that they deduct for State and local taxes.
Under the conference report, that is going to be limited to $10,000.
That means the average Maryland taxpayer will have to pay taxes on
$2,900 more, but think about all those who have a lot more in State and
local taxes who are going to be denied that help.
I was talking to some of our local government officials over the
weekend. They are going to be disadvantaged by it. It was an
interesting analysis. We don't think about what this bill is going to
do and all the consequences, but if you are in a State that has its own
itemized deductions, like Maryland--we have itemized deductions on our
State income tax return, and our standard deduction will be
significantly lower than the standard deduction under this conference
report.
You are going to have Marylanders who are not going to be able to
take their State deductions because you can't take State deductions
unless you use the Federal itemized deductions. It is estimated that
nationwide only 5 percent of the taxpayers will be using itemized
deductions. Guess what. If you don't use the itemized deduction at the
Federal level, you can't take the State itemized deductions. This is
going to have a direct impact on our State and local governments. Yet
that hasn't been considered.
Quite frankly, the consequences of this bill haven't been debated. We
haven't gone through public hearings because of the process that was
used--the partisan process, called reconciliation. We haven't seen
daylight. We haven't had a chance to know what the impact will be. What
impact will it have on property values? We now limit property tax
deductions, and we have a further limit on interest deductions on
mortgages. What impact does it have on property values? What impact
does the reduction of property values have on our economy, have on the
individual values for people who have loans on their homes? Are we
going to be creating a problem? We don't know because we haven't had
any hearings on it.
On Friday, I was with a group of nonprofits that do very valuable
work. They are worried about what impact this tax bill will have on
charitable giving. When only 5 percent of the taxpayers in this country
use itemized deductions, it means a great number of people who were
able to take advantage of charitable deductions on their tax returns no
longer will have that ability. Does that change their charitable
giving? If it changes their charitable giving pattern, what does it do
for nonprofits? If our nonprofits can't do that, there is additional
pressure on governmental services. Have we thought that out? I doubt we
know the consequences. Yet we are not prepared to have hearings on
this.
One of the major issues that has had very little discussion is the
passthrough. You have heard a lot about it. The reason for this is that
95 percent of American businesses don't use corporate tax returns. They
use passthroughs, S corporations, individual proprietorships,
partnerships, et cetera. This bill provides a lower tax rate for their
passthrough business income at 20 percent. Here is the problem. In an
effort to make sure that this isn't a way of getting around paying
taxes on salaries, there are certain guardrails that have been put into
this bill based upon a person's income, based upon the type of business
they are in, based upon the assets of the business, based upon the
amount of salaries that are paid in the business. And you are trying to
tell me that can't be manipulated in order to shelter income? We are
creating a whole new industry in sheltering income under this bill.
I have heard so many of my colleagues talk about the fact that we
don't want to outsource jobs. None of us want to outsource jobs. Having
competitive rates helps us in that regard, but moving toward a
territorial tax structure rewards companies for doing their business
offshore. Even if tax rates might be the same, they can use labor
costs, or some other costs, to outsource jobs.
Have we thought about that under a territorial tax? No. Do we know
what impact it will have? No. There are a lot of issues we don't fully
understand. We do know there are individual provisions put in here--for
example, drilling in the Arctic. That, to me, should not be part of
this bill. I worry about that being expanded to the Atlantic coast and
other areas. I think we all should be concerned about it.
The bottom line is this. When you do tax reform, you would hope you
would simplify the Tax Code and make it predictable. That is what I
hear the most: Let's simplify the Tax Code, and let's make it
predictable. Neither will be accomplished with this conference report.
With all these temporary tax provisions, you know that we are going to
have to deal with extenders. You are not going to be able to plan as to
whether this Tax Code will stand the test of time. If you think this is
simplification, try to figure out whether you are eligible for the
passthrough 20 percent on your business taxes. It is anything but
simple.
This bill fails in its principle test of helping middle-income
families, which it does not do. It is for corporations, big
corporations, and high-income people. It is fiscally irresponsible to
add to the debt. It makes our Tax Code more
[[Page S8063]]
complicated and doesn't give us the predictability we need in the Tax
Code, and it should be rejected.
I yield the floor.
The PRESIDING OFFICER. The Senator from Ohio.
Compton Nomination
Mr. BROWN. Mr. President, I rise to oppose the nomination of Paul
Compton, which came out of the Banking, Housing, and Urban Affairs
Committee. I might add that he is President Trump's nominee to serve as
general counsel of the Department of Housing and Urban Development.
Mr. Compton is a longtime affordable housing and financial services
attorney in the State of Alabama. Mr. Compton, if confirmed, would
bring a deep familiarity with affordable housing to the Office of
General Counsel. That part I like. With 11 million families paying over
half their income for rent and with homelessness on the rise for the
first time in years, a nominee who appreciates the importance of
affordable housing could be a positive addition at HUD. Think about
that. There are 11 million families who pay more than half their income
on rent.
In a book written by Matthew Desmond called “Evicted: Poverty and
Profit in the American City,” the author said of the people at that
income level: When your paycheck comes, the rent eats first. Everything
depends on being able to stay in your home and not being foreclosed on.
When 11 million people pay over half their income on rent, homelessness
is going to be on the rise.
I appreciate Mr. Compton's commitment to me during our Banking,
Housing, and Urban Affairs Committee hearing that he would look out for
the interests of renters and homeowners if confirmed, but I am voting
against him because I am concerned about the administration's approach
to fair housing protections and the role that he will likely play in
helping to carry that out.
I was troubled to learn that Secretary Carson had said that he plans
to “reinterpret” HUD's affirmatively furthering fair housing--or
AFFH--rule. Since 1968, the Fair Housing Act has required HUD and its
grantees to affirmatively further fair housing. Unfortunately, in the
50 years since our country passed the Fair Housing Act, HUD has not
provided enough direction to help communities meet this goal.
A 2010 General Accountability Office report recommended that HUD
improve its processes for meeting its obligations to affirmatively
further fair housing. In response, HUD developed a revised rule to
finally help local governments across the country support and foster
fair housing policies throughout their communities.
The rule gives clearer guidance to communities to help them think in
new ways about how to create housing opportunities for all of their
residents regardless of race or religion or disability or the size of
their family. The rule helps them to assess their own fair housing
needs, and it provides them publicly available data with which to
inform their decisions while they set their own goals and timelines.
Since its adoption 2-plus years ago, HUD has been working with
communities to implement the new guidelines. That is the good news. The
bad news is that the Secretary has said that he wants to reinterpret,
but he is not elaborating on what he meant by his plan to reinterpret
the rule. If the Secretary intends to reinterpret the rule in a way
that undermines HUD's efforts to help communities fulfill their
longstanding obligations under this 50-year-old law, Mr. Compton will
be called upon to carry out this vision.
I voted against his nomination in committee because of my concern
that he could help guide administration efforts to reverse progress on
this fair housing rule. More recent activities by administration
officials have only heightened the concerns that many of us have about
their approaches to fair housing.
In 2013, HUD issued its discriminatory effects rule. This rule
formalized HUD's longstanding prohibition against practices with
discriminatory effects under the Fair Housing Act and provided uniform
guidance for applying standards across the country.
Because homeowners' insurance is central to the ability to obtain
housing, HUD and the courts have held for decades that the Fair Housing
Act applies to discriminatory practices in insurance--a very easy-to-
understand, logical step. Nevertheless, insurance industry
representatives sued to block HUD's application of the discriminatory
effects rule--also known as disparate impact--to their industry. HUD
and the Department of Justice have been fighting this suit ever since.
As general counsel, Mr. Compton would guide HUD's enforcement and
litigation strategy.
In response to a written question, Mr. Compton declined to provide
his views on the discriminatory effects rule and whether it should
apply to the insurance industry. He noted that “it would be
inappropriate” for him to comment on the matter given the pending
litigation.
The administration, it seems, does not share his reluctance to
comment on pending litigation. A month and a half ago, the Treasury
Department issued a report entitled “A Financial System that Creates
Economic Opportunities--Asset Management and Insurance.” In this
report, Treasury recommends that HUD reconsider the use of the
disparate impact rule.
It is not that this administration decides to support the side of big
insurance companies every time--maybe it doesn't every time--but it
seems like it almost always does. It did it in this case. Yet Mr.
Compton thinks that he shouldn't comment when other already confirmed
Trump appointees have. The Treasury's report sides with arguments that
have been made by the insurance industry despite the fact that
litigation is pending, and HUD and the Department of Justice, at least
until now, have been defending the rule. The next court date for the
suit is scheduled for later this week.
If the administration continues its drive to reconsider fair housing
protections that are opposed to by industry, Mr. Compton will likely be
called upon to help the administration in its efforts. Because he
declined to answer my question, we don't know what his thinking will
be.
While I might be inclined to give Mr. Compton the benefit of the
doubt, we have seen too many officials in this administration who are
working against the missions of the agencies to which they have been
appointed. Financial regulators so often come from Wall Street.
Environmental regulators so often come from the chemical industry and
the oil industry. We have seen it time and again.
This is happening at a time when we see the administration taking
steps to remove protections for average Americans and consumers in
order to carry out the bidding of its supporters on Wall Street. These
include sending in Mick Mulvaney, who once called the Consumer
Financial Protection Bureau a “sick, sad joke.” He is now serving as
its Director. It is his moonlighting job, as he is also the Director of
the Office of Management and Budget. His first act as Director of the
CFPB was to block the payments of funds that were owed to consumers--
consumers who were cheated or wronged by Wells Fargo and other big
banks or big financial institutions. The consumers, in many cases, were
servicemembers who had been cheated by these financial institutions. On
Mulvaney's first day on the job, he said: No, we are not going to move
forward in collecting those penalties and in paying those consumers and
those servicemembers and those seniors and those families.
I am concerned about this emerging effort to roll back protections
for consumers. I hope that Mr. Compton proves me wrong. I hope that he
is a strong advocate within the agency and the administration for fair
housing, for consumer protection, and for affordable housing. When
given the chance to demonstrate his commitment to fair housing, he took
a pass. These matters are too important to far too many Americans for
us to leave their futures to chance. I urge my colleagues to join me in
opposing Mr. Compton's nomination.
I yield the floor.
The PRESIDING OFFICER. The Senator from Idaho.
Mr. CRAPO. Mr. President, I ask unanimous consent to speak on behalf
of Mr. Compton and to conclude my remarks before the vote.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. CRAPO. Mr. President, I rise in support of Paul Compton to serve
as HUD's next general counsel.
[[Page S8064]]
Mr. Compton has dedicated his entire legal career to affordable
housing and community development and for many years has headed the
affordable housing practice of a prominent Alabama law firm. Over his
distinguished career, Mr. Compton has played a direct role in over 70
transactions that have led to the creation of more than 5,000 units of
affordable housing throughout the Southeastern United States. Among
peers, he has come to be recognized as an industry-leading expert on
the low-income housing tax credit, the new markets tax credit, public-
private partnerships, and the regulatory environment surrounding
housing production.
Mr. Compton's extensive track record, his experience, and his
intimate familiarity with HUD programs make him an ideal fit to join
the leadership team at HUD. As general counsel, Mr. Compton will not
only serve as the principal legal adviser to Secretary Carson, but he
will have a hand in nearly every departmental initiative. Once
confirmed, I look forward to working with Mr. Compton to find solutions
to our Nation's housing challenges, to eliminate barriers to safe and
affordable housing, and to reform our housing finance system.
This confirmation vote is long overdue and is sorely needed.
Following the storms that ravaged through Houston, Florida, Puerto
Rico, the Virgin Islands, and elsewhere, HUD has been deployed on the
frontlines, alongside FEMA and other agencies, and has worked to
provide emergency and transitional housing to the thousands of families
who have been displaced. This work is far from over, and I urge this
body to confirm Mr. Compton today, as well as to confirm the various
other HUD nominees who are awaiting votes so that they can get to work
for the American people.
Thank you.
The PRESIDING OFFICER. All time has expired.
The question is, Will the Senate advise and consent to the Compton
nomination?
Mr. WICKER. 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 assistant bill clerk called the roll.
Mr. CORNYN. The following Senators are necessarily absent: the
Senator from West Virginia (Mrs. Capito) and the Senator from Arizona
(Mr. McCain).
Further, if present and voting the Senator from West Virginia (Mrs.
Capito) would have voted “yea.”
Mr. DURBIN. I announce that the Senator from Wisconsin (Ms. Baldwin)
and the Senator from Illinois (Ms. Duckworth) are necessarily absent.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 62, nays 34, as follows:
[Rollcall Vote No. 318 Ex.]
YEAS--62
Alexander
Barrasso
Bennet
Blunt
Boozman
Burr
Carper
Cassidy
Cochran
Collins
Coons
Corker
Cornyn
Cotton
Crapo
Cruz
Daines
Donnelly
Enzi
Ernst
Fischer
Flake
Gardner
Graham
Grassley
Hatch
Heitkamp
Heller
Hoeven
Inhofe
Isakson
Johnson
Kennedy
King
Lankford
Lee
Manchin
McCaskill
McConnell
Moran
Murkowski
Murphy
Nelson
Paul
Perdue
Portman
Risch
Roberts
Rounds
Rubio
Sasse
Scott
Shaheen
Shelby
Strange
Sullivan
Tester
Thune
Tillis
Toomey
Wicker
Young
NAYS--34
Blumenthal
Booker
Brown
Cantwell
Cardin
Casey
Cortez Masto
Durbin
Feinstein
Franken
Gillibrand
Harris
Hassan
Heinrich
Hirono
Kaine
Klobuchar
Leahy
Markey
Menendez
Merkley
Murray
Peters
Reed
Sanders
Schatz
Schumer
Stabenow
Udall
Van Hollen
Warner
Warren
Whitehouse
Wyden
NOT VOTING--4
Baldwin
Capito
Duckworth
McCain
The nomination was confirmed.
Vote on West Nomination
The PRESIDING OFFICER. The question is, Will the Senate advise and
consent to the West nomination?
Mr. BLUNT. Mr. 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.
Mr. CORNYN. The following Senator is necessarily absent: the Senator
from Arizona (Mr. McCain).
Mr. DURBIN. I announce that the Senator from Wisconsin (Ms. Baldwin)
and the Senator from Illinois (Ms. Duckworth) are necessarily absent.
The PRESIDING OFFICER (Mr. Lankford). Are there any other Senators in
the Chamber desiring to vote?
The result was announced--yeas 74, nays 23, as follows:
The result was announced--- yeas 74, nays 23, as follows:
[Rollcall Vote No. 319 Ex.]
YEAS--74
Alexander
Barrasso
Bennet
Blumenthal
Blunt
Boozman
Burr
Cantwell
Capito
Cardin
Carper
Cassidy
Cochran
Collins
Coons
Corker
Cornyn
Cotton
Crapo
Cruz
Daines
Donnelly
Enzi
Ernst
Feinstein
Fischer
Flake
Gardner
Graham
Grassley
Hassan
Hatch
Heinrich
Heitkamp
Heller
Hoeven
Inhofe
Isakson
Johnson
Kaine
Kennedy
King
Lankford
Lee
Manchin
McCaskill
McConnell
Moran
Murkowski
Murphy
Nelson
Paul
Perdue
Portman
Reed
Risch
Roberts
Rounds
Rubio
Sasse
Scott
Shaheen
Shelby
Strange
Sullivan
Tester
Thune
Tillis
Toomey
Udall
Warner
Whitehouse
Wicker
Young
NAYS--23
Booker
Brown
Casey
Cortez Masto
Durbin
Franken
Gillibrand
Harris
Hirono
Klobuchar
Leahy
Markey
Menendez
Merkley
Murray
Peters
Sanders
Schatz
Schumer
Stabenow
Van Hollen
Warren
Wyden
NOT VOTING--3
Baldwin
Duckworth
McCain
The nomination was confirmed.
The PRESIDING OFFICER. Under the previous order, the motions to
reconsider are considered made and laid upon the table and the
President will be immediately notified of the Senate's action.
The Senator from West Virginia.
____________________