tv Senate 2018 Federal Budget - Part 2 CSPAN October 5, 2017 12:10am-12:51am EDT
>> the chair will bring the meeting back to order. we recognize the senator from georgia for his comments. we will begin. >> thank you to the committee for the opportunity to make these statements as we go into this important process here in the budget committee. first, i have to make these comments, calling this a budget is really a sham. it is not a real budget. that is because it is not really a law, it is a resolution. everything can be ignored.
there are no consequences. the only reason this process is necessary is to get tax reform. the entire budget process is broken. it is a fraud being perpetrated on the american people. i don't think anybody disagrees. it is only worked for times in 43 years. i am encouraged people on both sides of the aisle, some members of this committee, working behind the scenes to try to find a politically neutral platform in which to do our financial planning for the federal government. the budget today, under current law, is a political document. make no mistake, this broken budget process is one of the biggest factors in why we are $20 trillion in debt. the budget resolution is being done this year to get the tax. in the last eight years we have had the slowest rate economically of our history in
the united states. not a single year in the last eight years reached 3%. this has never happened since the founding of our republic. the reason why is that the previous administration instituted onerous regulation that sucked the life out of our free enterprise system. dear crest in d.c. hindered our energy sector, and this archaic tax system has caused our corporation to lose our competitive advantage. there is a silver lining to this process. american workers and corporations are being heard right our tax code today. our current tax structure overlie complex -- are overly complex, and our high corporate rate is exposing our
corporations to hostile takeovers. there are other industries vulnerable as well. the last time we reformed our tax code was 1986. we lowered our corporate tax rate to be the third lowest in the world. we saw what that did. the next 15 years was in an extended. of economic growth that is the past 70of years. today we have one of the highest corporate tax rates in the world. we are the only one that still has a repatriation tax. to $3 trillion being stuck overseas and on repatriated u.s. rockets. the solution is to allow corporations to compete by lowering the tax rate, getting rid of deductions that are not -- illuminate the repatriation tax.
we have grown historically at 3.3% in this country. the last eight years that rate was only 1.9%. if the changes we make to our code can increase gdp growth to only 2.3%, we can improve the economy but also reduce our debt. reducing debt is in my opinion, one of the prerequisites, is fixing this broken budget process. the primary reason for doing the budget this way is to get tax. the primary reason for doing tax is along with regulatory reform, energy reform, is to address this long term systemic problem of our 20 in dollar debt. $20 trillion debt. >> thank you mr. chairman. i look forward to working with
all of you to create a responsible budget that works for all americans. the budget is supposed to be a clear indication of american priorities and values. the government has three core functions and responsibilities, public health, public safety, and public education. this budget does not prioritize or value a single one of them. $473ts medicare by 57lion, a program affecting million seniors and the disabled. which ensuresid, basic access to health care for our most vulnerable population, children, no income working americans, americans with disabilities, and seniors by one trillion.llion -- $1
it would eliminate heating assistance for 700,000 seniors , people withmes disabilities, and families with children. the budget would also cut essential funding for safety grams like the crime victims fund. education byc slashing pell grant hunting by $100 billion. that is a 33% cut that makes college more affordable for more than 8 million students in this country. this budget does nothing to address the rising cost of education or ensure students do not fall prey to for-profit colleges that mislead and defraud their students. ofond these core functions public health, safety, and education, it lacks investment in jobs, affordable housing, reforming the criminal justice our nationsfixing failing infrastructure.
instead, this budget has a clear role, reducing taxes for the top 1%, and cutting the investments you working families and the middle class the opportunity to medically participate and share in the success of our economy. plan,udget proposed tax weight percent of households stand to receive 90% of the tax cuts. this proposed republican budget trillion dollar tax plan without paying for it. it will drive up our deficit by $1.5 trillion over the next decade. budgetans a republican that has made a choice to give a , while to the top 1% leaving the federal government $1.5 trillion of bills. that is not fiscally
responsible. it is not smart. it is not what the american people want or dessert. -- what american people the american people want or deserve. one area that has seen bipartisan compromise, and is not addressed in this budget, the issue of immigration. immigrants helped build this country. they are service members, business leaders, nobel winners, teachers, and neighbors. right now, 11 million people live in fear of deportation, even though they are consenting to our country's security and prosperity. paycumented immigrants state and local taxes. they contribute to our businesses, and they are workers in our industries, and the harvest our crops, and tend our farms. contributeents will
or hundred $60 billion in the gdp over the next decade. my eminent calls for the passage of immigration reform. this amendment would decrease the budget deficit by $200 billion over a 10 year. welcoming people to citizenship as presidents of both parties have done makes our country and our economy stronger. in our current climate, we are seeing young people threatened, who are american in every way except one. we are forcing them to leave the only home they have ever known. this amendment would acknowledge those people who are already our neighbors, so we can live up to our proud history as a nation of immigrants. his budget would address that. americans deserve a budget that a true to our history as
nation of immigrants. americans deserve a budget that fulfills governments essential functions like a public education, public safety, and public health. including immigrants who contribute to our society. americans deserve a budget that strengthens the middle class and opens more opportunities for the middle class and working people to succeed. they deserve a budget that increases training programs for workers so they can get the advanced skills they need to move up in their current roles, or retrain for new industries. the american public deserves a budget that improves the health care they have, creates more opportunity for a quality and affordable education, and provides for safer communities. americans deserve better than this budget. it puts america's future at risk , and i intend to fight hard against it. thank you. >> thank you.
senator toomey. >> thank you, mr. chairman. i want to respoo want to resp'e been hearing from my colleagues and elsewhere, including these shrill and wildly inaccurate charges about the tax reform that i hope we will accomplish. that tax reform is robin hood in reverse. taxe heard that it is reform for billionaires and millionaires and the 1%. we heard that 80% of the benefits are going to go to the top 1%. allegationsf these seems to be the tax poly -- tax policy center. that is described as a nonpartisan organization, but as we know it is a creature of the urban institute and the institution, to left of center organizations entitled to their point of view.
let's not kid ourselves about there is a point of view. unfortunate, we are quite have our differences. in the end when we produce a tax reform, my democratic colleagues may not like it. it has not been written yet. to identify absurd a precise percentage of benefit in a tax reform that is going to go to 1%, the net tax reform has not yet been written. i will give one of innumerable examples, the group of six, the framework that was released clearly did not, has not, there has been no agreement on what the brackets are. what the income thresholds to the various rates apply. how can anyone cap like was going to win, was going to lose if you don't know the income thresholds at which point the various rates kick in?
going to have our differences of opinion, but i wish we would agree to actually focus on factual matters rather than making up of whole cloth a tax reform that has not yet been written. the second point i would make, let's be honest with the american people, this budget resolution is not about spending. bring alike to see us budget into balance over 10 years. none of these provisions are binding. there is no recourse or mechanism in a budget resolution to ensure that we actually hit the spending targets is much as i would like to do that. what is it really about? it is about enabling tax reform. it is about creating the reconciliation instructions which, if we pass a budget on the senate floor, and ultimately the same on the house floor, and we write the instructions to the , thentees of jurisdiction
it will permit subsequent tax reform to pass the senate with a simple majority vote. that's what this is all about. there should not be any illusion about that. i think that is essential, because our economy has an underperforming for too long. before the of -- the for the obama administration took office, the average growth was 3.4%. people's incomes are rising. were numerous.es the economy was expanding at a fantastic pace. during the eighth obama years, we have not had a year of 3% growth. now the cbo projects for the next 10 years growth will average 1.9%. america'selieve that consigned to 2% or sub 2% growth. i think we are more capable of that. we need to reform tax code. many of my democratic colleagues
acknowledged this. barack obama acknowledged the international peace of our tax code is uncompetitive. want to fix that so it is no longer the case that the united states is the worst place in the world to headquarter a multinational corporation. to lower the corporate rate because it is the highest in the world. 20 years ago that was not the case. it is uncompetitive. american workers are at a his advantage to the competitors around the world. we want to fix that. we want to simplify and lower taxes for hard-working american families like the ones i represent in pennsylvania. we want a more competitive tax code. we want to relieve the burden on middle-class taxpayers. when the final product is written, there is going to be a lot of centerleft analyses that suggest this has a lot of merit.
i hope they will come on board. process,the word about i would love to have a big bipartisan project. we will go through regular order if we are able to pass this budget through the house and the senate. despite the reconciliation instructions which establish a 51 vote rush holt on the senate floor, that does not preclude complete democrat participation and votes. i hope we will get there. i don't want to be held hostage and put in a position where is our democratic colleagues decide they want to block anything they can call a trump tax reform, that we are unable to do it. mr. chairman, i would to commend you to get us here, we have a lot of work to do. this is all about tax reform that will drive stronger economic growth, and elevate the standard of living for the hard-working families that we all represent. i am very pleased that we have
been able to get to this point. >> thank you. senator king. king: i want to start with process as well. this is something we can do together. there is general agreement there are places in the tax code that are cumbersome, inefficient, misallocated capital, and the tax code could be improved. there are places that definitely need to have cuts. the questions are how do we get there. senatorturbs me is toomey articulated without apology that this whole exercise is all about enabling tax cuts by 51 votes. need means, there is no for one party to be considered
in that process. amendments,n offer can certainly vote, but there is no need for any bipartisan work. having just watched the health care discussion unfold, it seems to me we would be in a better place if we started from a premise of trying to work on this on a bipartisan basis, rather than a premise that bipartisanship is not necessary. let me get to the substance. again, as everybody understands and concedes, this is all about taxes. i'm not quite to talk about who is going to pay what part, who's going to get what breaks, we will determine that. there have been preliminary analyses, we will see more as this unfolds. i hope we have a thorough congressional office analysis before we come to the floor and have to make decisions. data towill have a more
make our decision. here's what bothers me. 2003, during the time of the passage of major tax cuts during the bush administration, i happen to be in a hardware store. to make conversation on a saturday morning, i said to the to make conversation on a saturday morning, i said to the clerk, what you think of the bush tax cuts? the fellow said, there have not been any bush tax cuts. i said they were on the news every night. he said, you don't understand. there are no bush tax cuts. he said, if you are in a deficit situation, and you cut taxes and therefore make the deficit deeper and have to borrow more money, that money is going to have to be paid back by our children or grandchildren. that is not a tax cut, that is a tax shift. that is exactly what we are talking about here.
if we were talking about a revenue neutral tax cut, true tax reform such as what was done in 1986, we would have a more fruitful discussion. , to build intout a budget that we will put on the floor that says we will add $1.5 trillion to the deficit through an unfunded tax cut, i just can't accept that on behalf of of my constituents, some of whom are young people. if i've euros new what we are lds knew if five year-o what we were doing, we would be out of office. you are shipping the cost to the next generation of americans. i don't think that is accurate. there have been a lot of discussions that tax cuts pay for themselves. strategically targeted
tax cuts in certain situations can generate additional revenue. as a general principle that tax cuts on a broad basis will pay for themselves is not demonstrated by history. it did not happen during the tax cuts. it did not happen in the state of kansas. there is no economic evidence that changes in marginal tax rates are going to significantly stimulate the economy. if during president kennedy when you took the marginal rate down to 40%, that will make a difference. that the kind of changes we are talking about, to argue they will pay for themselves is just to me fiscal irresponsibility and wishful thinking. i don't want to mortgage the future of our young people. on wishful budgetary thinking.
final point, the deficit is important. we have all heard about puerto rico in the last few days and the tragedy they have gone through, and the fact they have a serious budget problem. their debt as a percentage of their gdp is slightly below ours. we are at 77% of gdp. i heard this morning they are at 76%. we are talking about flirting with dangerous levels of debt. i think about it in terms of interest rates. $20 trillion in debt. it is easy to make the calculation. everyone percent that interest rates go up is $200 billion per year payment off the top. 5% equals a trillion dollars a year, which happens to be the entire discretionary budget of the united states, defense and not defense.
to be flirting with these kinds of major tax cuts to only add to when weber at a time are already struggling to pay our bills, and are already in the hole, i don't think is justified. if we want to talk about tax reform that is revenue neutral, i'm ready to sit at the table. if we are talking about tax cuts that add to the deficit and borrow from our children, that is not the game i want to play. i appreciate the work the chairman has given. i know how serious he is about this. i look forward to working with him. but through all the budget points of order in the last five years, to turn a blind eye to $1.5 trillion of tax cuts, i cannot do it. thank you mr. chairman. >> thank you. >> thank you, mr. chairman. are along the lines of my colleague, senator king.
i appreciate your statement. i would point out that the solution for the fiscal year 2018, we are three days into fiscal year 18 which began october 1. this has nothing to do with setting up our overall budget. i wasscal year 2018, pleased to hear senator toomey and senator corker recognized and admitted this is all about setting up a fast-track process for a tax plan, and ability to ram through a tax plan with 51 votes, which is very disappointing given all the talk in recent weeks from folks on both sides about getting back to regular order, about having a transparent process. i also would argue strongly that process is going to impact the substance of this. if you are owing to have a bipartisan process, it will take a different shape.
1986 was the last time we saw truly bipartisan successful tax reform, and i was done with both parties at the table. out,nator corker pointed having attended year plan that you pass under reconciliation but cannot have it durable for the long-term because it increases the deficit, does not provide anybody with the kind of stability and certainty that we really need. it is disappointing that we are starting off with an effort to jim something through. jam something through. directs $1.5and trillion to our debt. i had the honor of serving as the senior democrat on the budgetary committee for a number of years. house speaker paul ryan was chairman at the time.
starting in 2011, he put out a plan called path to prosperity. the last was 59 pages. he referred to the crushing of debt no less than 12 times in his budget manifestoes. we can quote members on both sides in the senate and house who talked about the debt burden. out thattax plan, green lights an additional $1.5 trillion to the debt after all we have heard from our republican colleagues, it is frankly astounding and incredibly disappointing as to the direction that they are headed. then you have to ask yourself, $1.5 trillion in additional debt for what? is, this plan is not totally fleshed out, you can look at the direction this plan is headed in.
senator toomey said there is not enough information to show it is going to disproportionately benefit the wealthy at the everyonef just about else. i woodrow my colleagues attention to the estate tax. draw my colleagues attention to the estate tax. of americans pay no estate tax. the exemption is around 5.5 million, and couples around $11 million. that is clearly part of this plan. there is no secret about it. tois a whopping tax benefit dynasties in america. this is an effort to allow those folks who have already done very well to maintain their dynasties. teddy roosevelt, a great republican president would be crawling in his grave to see his party proposing that we get rid
of this estate tax and have in america where we move in the direction of an aristocracy were america -- where families pass well along to family members, rather than work hard and earn it. senator toomey is aware of that provision. you look at the facts of this bill, you find out seniors, lower income seniors will pay more. it does increase the standard deduction, but then of the- it gets rid standard deduction. if you are a low income senior around the 10% tax break, you will pay more because you are rate went from 10% to 12%. . we know a lot of people out there who will see an increase in the tax burden.
trying tolk about empower folks in the middle and working their way up to the middle is clearly contradicted even by the facts that we see in the plan as it is. what do we do about that? i would point out that senator mcconnell said because of the debt he wanted a revenue neutral package. obviously it is not revenue neutral now. it is was to add 1.5 chilean addars to the budget -- $1.5 trillion to the deficit. you cut medicaid by a trillion. by $437medicare billion. you add those two together, the cut to medicare and medicaid, it .s $1.5 trillion
if current estimates are right leave a $1.5ou can trillion debt even after you cut the trillion dollars for medicaid, and close to half a chilean dollars for medicare. i don't think that's what the american people bargain for. i hope we will sit down together taxork out an endurable plan that helps people in the middle. we do need reform in our tax plan. this is headed in the wrong direction. senator warner. warner: thank you mr. chairman. it looks like i may be the last. let me echo a lot of comments that were made.
and how disappointed i am in this approach. 2008 there here in has been no issue i have spent more time on them looking at our nations allen's sheet. balance sheet. members of have made very upset in terms of what i would look at get our balance sheet in order. the trouble is we have not done a lot of that. the state of our countries balance sheet is pretty bleak. $20 trillion in debt accumulated by both parties. framework, under the , there isax reform very little reform. i see a lot of tax cuts.
this notion of a budget that would be a framework, a prescription for what our country would be, is one i find extraordinarily disturbing on many, many levels. i'm sure there are many who have , every othert , at leastax reform let's start with revenue neutral. this starts with the presumption that we are going to have a holeion and-a-half hold -- of tax cuts. i believe 1.5 trillion is low. other nonpartisan groups would say this plan would add to the
debt and a greater level. i would add with this aggregate debt if you add another 1.5 trillion 2 trillion, 3 , the chairman has background as an accountant, you add a hundred basis points, and you're talking about $180 billion in debt service. clearly, i do not believe is sustainable. will mean that our total debt will equal the size of our economy by 2028, and i believe earlier than that. history is replete countries that allow their debt to surpass their economy. i have heard so many colleagues
on the other side of the i'll talk about fiscal discipline for so long, yet this legit proposal strips away so many of the thatl guardrails and rules this committee has kept in place year after year whether it was a democrat or republican in charge. this resolution exempts a tax established toe prevent legislation that increases the deficit. this resolution illuminates a rule that prohibits the senate from voting on a bill until it is received a score from the cbo. this resolution has said a tax bill can increase the deficit in the short run. legislators, and the eight years i have been here, we discrete on policy, and we may disagree on outcomes, but we always agreed
there ought to be a common barrel rules -- common federal rules. the severe will tell us how much legislation costs. we said we up to keep that jurisdiction. i hope as we get into the amendment process, we will restore those basic fiscal guardrails that have served democraticp -- congresses and republican congresses. here's what i hope we look at. a series of ideas about tax reform. i won't go through them today. we should take into budget resolutions overly rosy assumptions. cbo says growth rates will be at
1.8% a year for the coming years. the president assumed pre-percent for the next seven years. i would love to see 3% for the next seven years. but note responsible business would predict those growth rates and make them into the resolution. the administration and congress should not try to claim that tax reform will pay for itself. term sugarthey short high that may result from attacks cut ends up long-term our debt, we have seen in the examples, the early 80's with president reagan, he had to come back and raise taxes in 1982 and 1984. went fromax cuts we surplus to enormous deficits, that just does not work.
paying for tax cuts to death -- deficit spending, it is a really bad idea. i would challenge any of my colleagues to show me an example where a substantial tax that paid for with borrowed money ends up resulting in a stronger economy. i had more comments. you have been generous listening to everyone. my hope is, mr. chairman, that we can approach a fiscally responsible budget. i you -- i know you have had that as a hallmark of your career. there will be a minutes to put those guardrails back. if there was a willingness to meet in the middle, sign me up. the tax reform ought to be tax reform that is progrowth, not that is massive tax cut going to leave our kids and
grandkids with the even weaker balance sheet going forward. thank you. thank you. i appreciate everybody staying close to their time limits. is there anyone who seeks recognition? seeing none, i will mention that tomorrow morning we will start 10 minutes after the third vote 11:00.ed, which is about we will work to the amendments and the process i mentioned earlier. again anything in this budget actually requires additional action by either appropriators or authorizes before they can be done. even tomorrow is not the last shot. even the time we take it to the floor is not the last shot. there has to be a lot of other things done. i think everybody for their comments.
chairay's senate finance orrin hatch went to the senate floor to talk about the republicans tax reform proposal, and the 2018 budget resolution. intalks about the next steps congress for tax reform. this is 20 minutes. this is a big step in the ongoing effort to overhaul our nations miserable tax code.