Tax Expenditures Accountability Act

Mr. President, I wish to thank my colleague, the Senator from Wyoming, chairman of the Budget Committee, Mr. Enzi, for allowing me, as the vice chairman of the Joint Economic Committee, some time on the Senate floor to discuss the budget.

Our budget process is important, and it has long been in a period of neglect. It needs reform. That is what I am here to talk about today. There are so many areas that are affected by our budgeting process or, at least, that should be. In fact, it is difficult to conceive of any aspect of the Federal Government that couldn't be or shouldn't be addressed through the budgeting process.

When we look at the budget process, it is important for us to focus, to one degree or another, on the Budget Act of 1974. This is an old law. Forty-three years in statute has not exactly improved it. It hasn't matured into something better. In other words, rather than a piece of art that has appreciated in value over time, this is something more akin to the 8-track tape player that you might have purchased in 1974 to go inside your Ford Pinto, which would explode upon impact. This is something that didn't really improve in the 43 years since it was passed, especially not the way we have followed it or, better said, the way we have utterly failed to follow it.

One of the best ways to describe the budgeting process, prescribed by the Budget Act of 1974, is that it is nonbinding. It is less legislation than it is legislative fiction. It is aspirational in the sense that it aims for what could be and what should be, except no one actually aspires to it. In Congress, we don't get to the aspiration, basically, ever. It is reminiscent almost of the immortal words of St. Augustine. When he was undergoing his transition to Christianity, he famously said: ``Lord, grant me chastity . . . but not yet''--always wanting to restrain oneself later and not now, even though the need for restraint, the need for reform is present now, is calling out for reform right now. That is why it is important to remember that what comes next is

important, and next is now. We are discussing the budget this week, and it is important that we focus on these issues right now.

We do have a system that has to be kept carefully in balance. That balance depends on Congress keeping the national interest front and center. It depends on Congress being willing to restrain itself and follow the dictates of our constitutional structure. We have failed on these scores.

Congress collectively, actively, almost defiantly avoids the very type of accountability built into our constitutional structure--the type of accountability called for by article I of the Constitution. Article I, the very first clause of the first section of the first article of the Constitution, makes clear that if you are going to make policy within the Federal Government, if you are going to establish norms that will be enforceable as generally applicable laws within our Federal Government, you have to go through Congress.

``All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.'' Article I, section 1 tells us that.

Article I, section 7 tells us that in order to make a law in our Federal system, you first have to pass something through the House of Representatives and the Senate, and then you have to submit it to the White House. You cannot make law without going through that process. That process is also worked in for a budgeting process.

The way the Budget Act of 1974 is supposed to work, the way our budget process is supposed to operate is that we will pass a series of laws appropriating money in various aspects of the Federal Government. We have a budget that gets passed first, which is an aspirational statement not submitted to the President. It is a resolution passed jointly by both Houses of Congress that sets budgeting priorities. Then, following from those priorities, there are supposed to be 13 separate appropriations bills that spend money, that allocate the scarce resources of the Federal Government, understanding that they are finite to each of the major areas of government spending.

There will be one bill, for example, that funds National Defense. There is another bill that will fund our Justice Department or Federal court system. There is another bill that will fund, for example, our national parks, and so on and so forth. When you follow that formula, you avoid the kind of circumstance in which we push all spending decisions into one legislative package, setting up a potential for disaster.

A common analogy that I sometimes use to describe this is, imagine if you live in an outlying area, in an area where there is only one grocery store for 100, maybe 200 miles around. Upon moving there, suppose, on your way home from work, you receive a phone call from your significant other telling you to stop by the store: Don't come home without bread, milk, and eggs. You don't need everything else. Just get bread, milk, and eggs.

You go to the grocery store. You get your shopping cart, and you put in your bread, milk, and eggs. You get to the checkout counter. You put out your bread, milk, and eggs.

The cashier says to you: Excuse me, there is a problem. You can't buy just bread, milk, and eggs. This is a special kind of store where you can't buy bread, milk, and eggs unless you also buy a bucket of nails, one-half ton of iron ore, a Barry Manilow album, and a book about cowboy poetry. In fact, for that matter, this is the kind of store where you have to buy one of every item in order to buy anything else. That is kind of what it is like every time we pass a spending bill lately because, even though the Budget Act of 1974 contemplates 12 or 13 separate appropriations bills, each addressing one discreet aspect of the Federal Government's spending, we end up, more often than not-- in fact, basically every single time for the last 6 of \1/2\ years I have been serving here, and even longer than that, we end up passing either a continuing resolution, which basically is a reset button saying that we will continue to spend next year at the same rate we have been spending this year, subject to these minor exceptions or, alternatively, we might pass an omnibus spending bill, which can be 1,000, maybe 2,000 pages long, sometimes longer, and identify all the areas in which we will be spending but put into one unified bill.

The problem with these bills, the way we have tended to do continuing resolutions and omnibus spending bills, is that we tend to consider and pass them under a compacted time agreement in the final hours or minutes before a cliff. By ``cliff,'' I mean an arbitrary deadline, after which a spending measure already in place will expire. So if there is a spending bill that expires on September 30 of a particular year, it is not uncommon for us to address a spending bill on September 30, sometimes late in the day on September 30 or in the days leading up to it.

It is not uncommon for Members of Congress to be told at that moment: You have two choices. You can either pass this as is and have everything funded more or less as it has been or you can shut down the government.

Nobody really wants to cause a government shutdown. Certainly, nobody wants to be accused of shutting down the government.

Most Members tend to vote for it, and then the American people continue to get what they have been getting. They continue to operate a Federal Government that spends about $4 trillion a year, with little or no control, even by the people's own elected Representatives in Congress, whose job it is to do these things over their own government. This is wrong.

We shouldn't be governing this way. Yet there is a touch of irony in this in that we govern this way, I think, at least in part, because of a fear of public outcry against the process or criticism about the process in which we might engage. Yet, as we undertake this process, which undercuts that process altogether and sidesteps it, as we have avoided that studiously in order to avoid criticism, we have seen Congress's approval rating plummet. In fact, if you look at most opinion polls these days, it puts our approval rating as an institution right around 10 percent. The last time I checked, in the United States of America, that makes us less popular than Fidel Castro. It makes us only slightly more popular than the influenza virus, which is rapidly gaining on us.

If what we are wanting to do is avoid criticism, then the last thing we ought to do is continue to do what we have been doing, which is to consolidate all spending decisions into one legislative package to be addressed at the end of the fiscal year, telling Members they have to either vote for it or be blamed for a government shutdown. That is wrong. That shuts out the American people, and it makes their government unaccountable to them.

In the process, we avoid reforming a lot of programs that need reforming. Among other things, we avoid reforming entitlement spending. It is important when we think about entitlement spending and how it needs to be reformed to remember the immortal words of President John F. Kennedy, who said that ``to govern is to choose.'' But today, to budget is not to choose or to choose in advance not to choose, to avoid choosing altogether.

We are $20 trillion in debt, and we choose to ignore that. Twenty trillion dollars is an enormous amount of money, as is the interest we pay on that sum every single year, which is about $250 billion a year-- an enormous sum of money in and of itself. But that isn't the scary part. The scary part is that $250 billion, which is what we spend every year on interest on our national debt, is roughly the same interest payment we had about 20 years ago. I believe our national debt was one- sixth or one-seventh of its current size. The only reason it is even that low is because our Treasury yield rates--the interest rate at which the U.S. Government pays its creditors--is at an all-time historical low.

Laws of mathematics are such that what goes down must inevitably come back up. As soon as it does come back up, even if it comes up only to its historical average and doesn't rebound above that average, in a short period of time, within a few years after that, we will find ourselves going from about $250 billion a year in interest on debt to about $1 trillion a year in interest on debt, leaving ourselves with the uncomfortable, darned-near impossible

prospect of having to cover a $750 billion shortfall--this on top of our existing sprawling national deficit--without any clear means of doing so.

Congress, in many cases, fears reform, but reform remains necessary to make programs structurally reliable and fiscally sustainable. In other words, we are fearing the wrong thing. A lot of people in my home State of Utah fear snakes, understandably. We have rattlesnakes in parts of Utah. Rattlesnakes can do a lot of damage to you if they bite you. You don't want to mess with a rattlesnake. But sometimes we fear the wrong things, at least in the sense of, in addition to a lot of rattlesnakes, we also have a lot of deer. They should actually fear deer more than rattlesnakes. More people die in the United States every year as a result of deer causing automotive accidents than they do from rattlesnake bites altogether. Sometimes we fear the wrong things.

We fear making reform. But reform is not what we should fear; we should fear the consequences of failure to do that.

In some ways, the central unifying problem isn't just about the debt or dysfunction but the distrust. Congress has squandered the trust of the American people, and we as an institution have a responsibility to work hard to win back that trust. The only way to win back that trust is through real reform. We have to put the national interest ahead of our own interests, our own political interests and the special interests that are constantly moving here in Washington, DC. That work can begin with this very budget. It should begin with this budget. Budgets provide us with an opportunity to discuss our priorities. Those priorities always need to be all about reform.

This budget is far from perfect, but in understanding that it is not perfect, it is a vehicle to begin the real process of reform. Nowhere is this more important than with tax reform, and this will set in motion those events that can culminate in real, genuine, and much needed tax reform.

There are a couple of odd quirks within our Federal Tax Code. First of all, its sheer length and complexity are a problem. Arthur Brooks from the American Enterprise Institute said that complexity is itself a subsidy--a subsidy that disproportionately benefits the well connected, the wealthy, the well educated, the specialists who handle the complexity and profit from it. One hundred years ago, our Tax Code was only a few hundred pages long. Today, our Tax Code, depending on what you count, can fairly be described as much closer to 100,000 pages than to a few hundred.

Among the many problems we can find in the Tax Code is the marriage tax penalty, which many Americans are familiar with, whereby a hard- working American couple might pay higher taxes only because of the fact that they happen to be married. This is wrong, and it needs to be fixed.

There is a related point--a related flaw--that is much less well known than the Tax Code marriage penalty, and that is the Tax Code parent penalty. Let me explain what that is. Imagine two couples-- couple A and couple B. Imagine that couple A and couple B are identical in every respect but one. In other words, they both have the same income, they both have the same pattern of charitable contributions, mortgage interest, State and local taxes, and so forth. Everything that affects their taxes is the same except one thing: Couple A has three children and couple B chooses to remain childless. Because of the way our Tax Code interacts and intersects with our senior entitlement programs--namely, Social Security and Medicare--we end up penalizing parents, creating this parent tax penalty. Let me explain that a little bit.

Let's call couple A--the couple with three children--Jack and Julie. According to very modest assessments made by the U.S. Department of Agriculture, Jack and Julie, with their three children, will incur costs of about $700,000 as they raise their children. These are the costs of raising children. I believe it is a little faulty--there are a number of things it doesn't include--but it is an estimate produced by the U.S. Department of Agriculture. Jack and Julie, our hypothetical couple A, will spend $700,000 raising their three children to maturity. It doesn't take into account the non-economic costs associated with parenting or the myriad benefits that go along with that--but $700,000. That is the amount they will put into raising these three children. That cost doesn't benefit just Jack and Julie, it doesn't benefit just their three children--no, the way our system works, the way Social Security and Medicare work, it also goes to stabilize, to shore-up entitlement benefits for tomorrow's retirees, because Social Security and Medicare operate on a pay-as-you-go basis. Today's retiree benefits are paid by today's workers. Today's workers will be tomorrow's retirees. Today's children will be tomorrow's workers and will be paying the retirement benefits of today's workers, tomorrow's retirees.

Let's look at couple A, back to Jack and Julie. Jack and Julie operate solely with Julie's income. Jack is a stay-at-home father. Meanwhile, Julie has a good job that pays $75,000 a year. As you look at this chart, it shows how the pay stubs Julie receives twice a month might look.

I would imagine many Americans look at this the same way I do. People approach their pay stubs with a degree of trepidation. It is almost easier not to look at it when you see all the things the government does to your paycheck each time it goes through.

Jack and Julie look at Julie's pay stub when it comes out twice a month, and they see a few things, including the fact that, in addition to the $205 that is withheld from her Federal income tax twice a month, she also sees $41.84 withheld for Medicare, $178 withheld for Social Security, and $144 withheld for State income tax.

So when we look at Julie's pay stub, we see that what Julie is paying into Social Security and Medicare is roughly the same as what we will see from couple B, who chooses to remain childless. Couple B has every right not to have children. We don't want to penalize anybody regarding their decision on whether to have children. But the point here is that the investment Jack and Julie are making into the Social Security system comes twice--first as they pay their taxes, including their Social Security and Medicare taxes--and with Social Security taxes, by the way, that is also going to play a role in determining the Social Security benefits for which Jack and Julie will one day be eligible when they retire. Yet the Tax Code doesn't adequately take into account the $700,000 they are investing into their own children and that those children will make it possible for couple B to receive their Social Security and Medicare benefits when they retire. That is why we need to fix the parent tax penalty.

The parent tax penalty consists of this unique interaction between our tax system and our senior entitlement programs and doesn't take into account the intense investment in financial terms that America's moms and dads make in their children.

By increasing the child tax credit, we could offset this penalty. One of the proposals out there would involve raising it to, say, $2,000 per child. I think that would be great. I could even go higher than that, but $2,000 wouldn't cover the whole problem, it wouldn't undo the whole penalty, but it would go a long way toward offsetting that. I would welcome that. That would be a good development. There are people just like Jack and Julie Jones all over this country who would benefit from that, and the American people as a whole would benefit from it. Social Security and Medicare would be more stable and made more sustainable by this change.

The next step we need to make with tax reform involves making the Tax Code more pro-worker. A lot of people criticize the Tax Code for the fact that it has the highest corporate tax rate in the industrialized world at 35 percent. I believe that the best reform we could achieve would be substantial. There are a lot of people who are talking about reducing the corporate tax rate to maybe 15 percent or 20 percent. I hope we can get to something like that, and that would be a great first step. What I would really like to do is to bring that down not to 25 percent or 20 percent or 15 percent, I would like to see it brought down to zero. Let me explain why I believe that.

A corporation consists of and is animated by two things: capital and labor, investors and workers. Investors and workers join together and form partnerships to make profits. Both of them

pay a share of the corporate tax. In the United States, forces of globalization have benefited from this arrangement between workers and investors. The forces of globalization have benefited the investor class more than the workers. In this new global economic environment, we need to think about how to increase the returns to workers.

Globalization has helped the investors, and policy now needs to go out of its way to help the workers. One way to do that would be to eliminate the corporate tax altogether and tax investment income the same way we do regular income. That would shift the worker share of business tax to business owners. This would immediately do two things: It would give a raise to American workers, who really need it, and it would turn the United States into an irresistible magnet for foreign investment in the United States of America. In one stroke, the most profitable, favorable tax strategy in the global economy would be creating American jobs.

The current code gives preferential treatment to U.S. investors sending their money overseas. While this is their right to do, this is not something we should be incentivizing and pushing them into, which is exactly what the status quo does. Reform would give preferential treatment to international investors coming here, which is, after all, what we want. Let's level the national playing field between the working class and the investor class, while tilting the global playing field toward the United States rather than pushing it outward, away from our great country.

If these tax reforms could be set in motion through this budget or at least set in motion indirectly if not directly, the Tax Code would finally start working again for American families and finally start benefiting hard-working American mothers and fathers.

Another issue that we struggle with significantly in the Federal Government involves Federal regulations. This, too, is something we could start to address through the budgeting process. Our Federal regulatory system is economically damaging. This is something that strangles small business. It inherently--by its very nature, it inures disproportionately to the benefit of large, established, incumbent businesses, those that can afford an army of lawyers, accountants, lobbyists, and compliance specialists, that benefit from a heavy system of regulation, which is often made heavier still at the urging of the largest, wealthiest, most established companies because these Federal regulations provide a natural restriction on entry, a natural barrier that disincentivizes and in some ways disables would-be competitors from joining and entering into the marketplace. One thing we know about competition is that it brings down costs and it raises quality, and that is a good thing.

Federal regulations also create a sort of constitutional distrust. They themselves represent a harsh deviation from the natural constitutional order. I mentioned a few minutes ago the provisions of article I. Article I, section 1, and article I, section 7 require that Federal laws be passed by Congress. Federal regulations get around that.

Sometimes Congress chooses voluntarily to delegate to someone else the task that we, by operation of the Constitution, are supposed to perform and not to delegate to someone else. This administrative action makes things easier on occasion for Congress, but that is a bug, not a feature. The Constitution never was intended to make life easier for Members of Congress.

Let me explain how this happens and how it shows up here. It happens sometimes with good intentions. Congress wants to approach a particular issue, solve a particular problem without necessarily having to go into the difficult, painstaking, line-drawing process that inevitably is brought into question anytime we are trying to solve a problem through lawmaking. In other words, Congress will identify a problem and pass a law that says, for instance: We shall have a good law in area X, and we hereby delegate to agency Y the power to make and enforce rules carrying the force of generally applicable Federal law that will carry out the objectives we have outlined in our legislation.

In other words--let's get to something more approximating a real example. Congress, for instance, passes a law that says: We shall have clean air. We hereby delegate to the EPA the power to decide what clean air is, what pollution is, what acceptable limits on pollution might be, and what penalties will befall polluters. And then those same regulators, those same people at that same agency who made all the rules defining pollution and defining acceptable limits for pollution, prescribing penalties, they are the same people who also enforce them. You have the lawmakers who are also the law enforcers, and none of them are subject to an election.

Now, I don't mean to disparage the character or the capabilities of any of the fine people who work at the EPA or any of our other Federal bureaucracies. For the most part, these are well-intentioned, hard- working, well-educated, and highly specialized public figures or government employees, we might say, but there is a difference.

People in Congress are not magically empowered with any gifts for coming up with good legislation any more than any other American is, but there is a difference. We are elected, and we are subject to the people at regular intervals. You can fire your U.S. Senator every 6 years, you can fire your Representative every 2 years. You cannot fire a government bureaucrat. As Ronald Reagan said, the closest thing we see to eternal life on this Earth is a new government program. The closest thing you can find to a lifelong career is in government, in many government bureaucracies.

What this has produced is a profound proliferation of Federal law. We have been able to make more things Federal, and we have been able to make more Federal laws as a result of the fact that Congress now delegates away far more of its legislative power than it actually exercises. Let me explain what I mean.

I keep in my office two sets of documents. I welcome any of you to come by. In my office, we serve Jell-O every Wednesday at 3:30. For reasons I don't entirely understand, Utah consumes more Jell-O than any other State in the Union on a per capita basis. The Utah Legislature has actually designated Jell-O as Utah's official State snack. Now, I will be clear that these are not Jell-O shots. They are not tainted with alcohol or anything like that, but we serve Jell-O every Wednesday at 3:30. You are all invited to join us any time you would like. If the Senate is in session and if it is Wednesday at 3:30, it is time for Jell-O.

When you come by my office for Jell-O Wednesday, you will see two stacks of documents that I have represented in this graph. One stack of documents is a few inches tall, it is about 3,000 pages long, and it consists of the laws passed by Congress last year. The other stack is 13 feet tall, it is about 96,000 pages long, and it consists of last year's Federal Register.

For those of you who are fortunate enough not to know what the Federal Register is--and I really do envy you--it is the annual index, the compilation of Federal regulations. First is their release for public notice and comment, and then later is their finalized Federal Register.

These are laws. These are not just rules exclusively deciding what time the lights will go on and off at the Commerce Department or what times the gates will be staffed at this or that Embassy. No. Many of these are regulations that impose affirmative obligations on the American people, sometimes with criminal penalties, often with substantial civil penalties attached to them, and yet they are not passed by anyone who is elected. In many cases, they are not even written by people who are accountable to anyone who is, in turn, elected. This is a problem.

During 2016, Congress enacted 214 laws; whereas, the agencies issued 3,853 rules. Those are 18 rules that were put in place by Federal agencies for every 1 law that was enacted by Congress. This is not without consequence. This is not just an abstract constitutional violation.

This costs the American people a lot of money, and it costs them money in a way that is kind of invisible. You have the Tax Code. You have your pay stub. I showed you that chart earlier from Julie's pay stub showing how much the government takes out of each paycheck. That is visible. That is tangible. That is something she can see each week. There is another bite that

gets taken out of each and every one of her paychecks that is invisible, and that bite is taken out by these Federal regulations, meaning everything that Jack and Julie, everything that every one of you, everything that every American purchases, every good or every service is made more expensive by these Federal regulations. In fact, it is fair to say really that the costs of compliance with these Federal regulations are passed on disproportionately to America's poor and middle class who pay for those regulations through higher prices on goods and services, diminished wages, unemployment, and underemployment, and it is not insignificant.

Twenty years ago, when I first started studying this problem, I was shocked to learn that this backdoor, invisible, highly regressive form of tax--that is the cost of compliance with Federal regulations--stood at $300 billion a year. That was astounding to me, stunning. Today that number stands at about $2 trillion a year. In 20 years, we have seen the cost of complying with Federal regulations multiply nearly sevenfold. That is troubling.

If the cost of complying with U.S. Federal regulations were a country, if it were the GDP, the $2 trillion in compliance costs, that is roughly the same as the gross domestic product of India and Italy. The cost of complying with Federal regulations is slightly less than the GDP of India and slightly more than the GDP of Italy. That is sad, that is stunning, that is a constitutional problem, and it is a public policy problem. The 2016 Federal Register contains 95,894 pages--the highest level in its history and 19 percent higher than the previous year of 2015, which contained 80,260 pages.

In the absence of trust, we need an abundance of transparency, and that is what constitutional lawmaking is all about. We need to restore that constitutional order by passing reforms like the REINS Act, which would require congressional assent before major rules are put into place. It would require Congress to affirmatively enact a regulation into law before an economically significant regulation could take effect.

There are some other areas where we need transparency--in higher education and healthcare. These things appear to have little in common at the outset, and yet, in many ways, they have a lot in common in that they are two areas where there has been a lot of Federal involvement where there probably shouldn't be and where that Federal involvement has made things more opaque and less transparent and resulted in higher costs.

In higher education, I highlighted the need in the last Congress for reforms through my introduction of the Higher Education Reform and Opportunity Act, which would have opened up the accreditation process. Currently, the higher education system in America has been commandeered by the iron triangle, consisting of the U.S. Department of Education, Federal accreditation bodies, and institutions of higher education in this country. Unless you are part of that iron triangle, you can't really break into the higher education market because you can't get Federal higher education assistance.

As a result, things like apprenticeships, distance learning, massive open online courses--or MOOCs, as they are sometimes described--suffer. They get left out. The upshot is, if we reformed this area, we would have more opportunities to get postsecondary skills and training, we would lower the cost of higher education, we would save money for both borrowers and taxpayers alike, and we would have more people able to pursue their chosen vocation.

With healthcare, as in higher education, Federal influence is driving up prices while outcomes are flatlined. In 2009, Congress doubled down on what wasn't working when they passed ObamaCare. The results were instability, lost coverage, new plans, higher premiums, and higher deductibles at the same time.

Meanwhile, you had a whole lot of concentration of market power in a few companies. The top 10 health insurance companies in 2008--the year President Obama was elected President--had combined profits of about $8 billion a year. Last year, that number skyrocketed to $15 billion a year. The difference was ObamaCare.

ObamaCare made it easier for those companies to see their profits skyrocket, but they did so on the backs of America's poor and middle class. With ObamaCare, we also had the unsustainable expansion of Medicaid, a failed program we should be trying to rescue people from, not trap them in. We need to repeal and replace ObamaCare.

As we look toward reform, a guiding principle should always be restoring the constitutional principal of federalism or some might call it localism or the principle of subsidiarity. The idea is that you should govern locally, as locally as possible. There is a reason for this. The Constitution requires it, but it is also the case that we all benefit when we follow that constitutional system. It allows more Americans to get more of the kind of government they want and less of the kind of government they don't want. Bad things happen when we ignore federalism, as we have over the last 80 years and increasingly so over the last decade. There are some examples of that.

One involves transportation. Our Interstate Highway System was created by the Federal Government in the 1950s under the leadership of President Eisenhower. He acknowledged that for national security and interstate commerce reasons, it would be a good idea to have an interstate highway system. So we proposed--and Congress passed into law--a gasoline tax that would fund the establishment, the creation of an interstate highway system. The idea was always to hand that interstate highway system back over to the States after the project was completed, which it has been now since the 1980s. Yet we are still collecting a Federal gasoline tax--18.4 cents per gallon, to be precise. Yet that 18.4 cents per gallon still doesn't ever seem to be sufficient, even though the Interstate Highway System has been completed since the 1980s and even though, stunningly, you could maintain the existing Interstate Highway System for about 4 cents per gallon. So where is the rest of it going? Well, it is going to purely local projects: surface roads, bike paths, all sorts of other things, many of which might well be worthy but aren't necessarily Federal in nature.

Another example involves public land. A lot of people were surprised to learn this--especially people from the East--but the Federal Government owns and controls about 30 percent of the land in the United States. A lot of people in the East aren't aware of this because, in every State east of Colorado, the Federal Government owns less than 15 percent of the land. In no State west of Colorado does the Federal Government own less than 15 percent and, in many States like my own, that number is much larger. In fact, in my State, the State of Utah, the Federal Government owns 67 percent of the land.

Let's set aside the question, for a minute, of why the Federal Government needs to own that much land at all and why it needs to own 30 percent of the landmass in the United States. If it is going to own that much, why does it disproportionately own so much land in States like mine, especially when that harms people in States like mine?

You see, in Utah--this map shows Federal land. Anyplace you see white, that is non-Federal land. If you see any of these colors represented here, that is one type of Federal land ownership or another. Where you see color on this chart, that is where the Federal land is owned and controlled by the Federal Government and the local taxing authorities can't tax it. As a result, people have to go to the Federal Government for a ``Mother May I'' in order to even cross the property or utilize the property for some legitimate business or personal need, and the local taxing authorities can't tax it. This harms westerners disproportionately, and it is wrong. We need reform in this area.

We also need to get the Federal Government out of the business of thinking it needs to own this much land and into the business of thinking, if it is going to own that much, then it needs to allow taxing authorities to collect at least a rough equivalent of property tax.

Also, in the area of primary and secondary education, because public education is so important, the Federal Government needs to stay out of the K-12 education arena. In other words, what is taught in the K-12 classroom

needs to be decisions made by teachers in consultation with parents, principals, local school officials and, in some cases, State officials, not from Washington, DC. That is not an appropriate decision to make from Washington, DC, unless you are talking about educational experiences perhaps in the District of Columbia or a U.S. territory or on a military base or something like that.

The Federal Government should have no role in K-12 public education. That is not our job. We have to remember the text of the 10th Amendment echoing the structure of the original Constitution: that powers not granted to Congress and not prohibited to the States are reserved to the States respectively or the people. That has to mean something. In order for it to mean something, there has to be some limit to what powers are, in fact, granted to the Federal Government.

Over the last 80 years, we gradually drifted away from this idea. We concluded that every problem in society is a government problem and that every government problem is a Federal problem. That is wrong. That has harmed the American people.

We need to restore federalism, localism, and subsidiary. This will free the people of the tyranny they feel as the result of a lost election. At any given moment in America, there are people who are disappointed about the last election, especially so with House elections, Senate elections, and the occupant of the White House. At any given moment, the people who feel as if they are not well represented in Washington--either at the U.S. Capitol or at the White House or both--can be counted in the tens, if not hundreds of millions. We will end this tyranny if we return a lot of that power.

In other words, let's say someone living in Connecticut might not quite be on the bandwagon of ``make America great again.'' If they don't want to make America great again, they can want to make Connecticut great again. In other words, federalism allows more people in America to get more of the kind of government they want and less of the kind of government they don't want. It allows more people to have more of a say because local governments, while not perfect, are more responsive to their local constituencies. It better protects both the minorities and majorities. It lowers the temperature of our national politics. One of the reasons national politics have become so contentious is because everything has been centered in Washington, DC. There is no reason it has to be that way. In fact, the Constitution says it should never be that way.

Finally, with regard to federalism, there are a few things that only the Federal Government can do. Those things include national defense, establishing a uniform system of weights and measures, coming up with a uniform system of laws governing immigration and naturalization and a uniform system of laws governing interstate and foreign trade or commerce. Those things that can be done only by Congress must be done well. When we are so busy doing the things we are not supposed to do, we fail to do those things that only we can do. That is yet another reason to restore federalism.

Then, whatever is left over, whatever remains, whatever we can't bring back, needs to be fixed. It needs to be made to work. Whatever we don't return to the States can be made more effective and more efficient, and we should do that.

The 1974 Budget Act, as I explained at the outset of my address today, is outdated. We have to reform it. The Congressional Budget Office and the Joint Committee on Taxation use formulas that are opaque and unknown, that are effectively a black box. This is wrong, and we have to get rid of those.

That is one of the reasons I introduced the CBO Show Your Work Act, so they can't just tell us anymore: You can't know why we reached the conclusions we reached that have stunning implications for law and public policy.

From budget, to taxing, to spending policy and policymaking, the constant theme is inertia. One could argue that the consistent theme is nostalgia. We are stuck in that era of the Ford Pinto and the eight- track cassette player. Americans are being held back, not only by outdated policies but by a process that is out of date too.

We met the challenges of the 20th century with policies that met the moment, but we have to be constantly updating, constantly overseeing and tweaking and improving. Government may well move at the pace of a turtle, but it can move, nonetheless, and move it must because the only way to get to next is to focus on now.

In our increasingly personalized, customizable society and economy, government's obsession with centralization is making these things worse, not better. We need to govern locally and not nationally in every single instance. We need to empower individuals and local communities.

In Washington, we have to embrace accountability, especially the kind of accountability prescribed by the Constitution. We can do better, but we have to first recognize the need to do so.

The budget is indicative of all the problems we face in Washington. It is also indicative of Congress's authority and its ability to create solutions. We can do this. We can. We must. And together, we will.

Thank you, Mr. President.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, before I read from my remarks, I would like to make the point that I get the impression that what some Members of the other political party--but more often editorials and think tanks--believe and want the public to believe is that there is actually a tax bill produced by the tax-writing committees of the Congress, something that is very definitive in what it does to the tax policy. I want to make clear that there is no such document. All we have so far is what is called a framework agreed to by the leaders of the two tax- writing committees and the Treasury Department and the leaders of the House and the Senate. You cannot draw conclusions about who is going to pay what taxes just from the framework.

I will get into real detail on this, but the other thing I would like to make clear is the fact that there are a lot of people drawing conclusions about who is going to get tax benefits and who is going to be hurt as a result of all this information that is out there, from which no one can draw conclusions because there isn't any bill before the Congress at this point. There will be in a matter of weeks.

The budget that we are debating this week paves the way for fundamental tax reform. For more than a decade, both sides of the aisle have talked about the need for tax reform that provides tax simplification, tax fairness, and gives us the ability to increase our economic competitiveness so that we can grow the economy.

Under President George W. Bush, we had a bipartisan tax reform panel. Under President Obama, we had the bipartisan Simpson-Bowles Commission. We have had individual Members also authoring tax plans, including a bipartisan bill authored by Finance Committee Ranking Member Wyden, the Senator from Oregon, and former Senator Coats, then representing the State of Indiana.

In addition to these high-profile plans that have been out there over the years, the Senate Finance Committee has also had countless tax reform hearings over this extended period. The

committee also held a series of bipartisan options papers discussions under then-Chairman Baucus. Additionally, under Chairman Hatch, we had bipartisan tax reform working groups. All of this work over the years has laid the foundation and informed the unified framework released by the Big 6. That is the framework I previously referred to.

The influence of these prior discussions and proposals on the Big 6 framework is evident. In other words, all of that work that has gone on over the years in different environs is bearing fruit now in getting a consensus of what we ought to do in a broad way of moving forward on tax simplification, tax reform, and tax cuts.

The framework is nothing but a framework and will be filled in with details by the tax-writing committees. It is at that point that any think tank, any Member of the other political party, any Member of our political party, any college professors, any economists anyplace can make some sound judgments as to the extent to which certain people benefit or don't benefit from the legislation before us.

I think they ought to take into consideration that you have to think about the country as a whole, which hasn't grown by more than 1.6 percent in each of the 8 years of the previous administration. If you are going to have jobs created, you have to grow at about twice that amount, at 3 percent or more. That is some of the thinking behind this budget that is before the Senate right now and the thinking behind the tax reform measures that will follow our adoption of the budget.

I will be repeating myself to some extent here, but for illustration, I have a chart here comparing the Big 6 framework, the Wyden-Coats bill, and the Simpson-Bowles plan to which I have already referred. You can see here the main point about putting these three plans together is to show similarity. All proposals would consolidate the current tax brackets down to three. That is one point the chart makes.

Two plans provide for a top rate of 35 percent, while one provides for a top rate of 28 percent. Yet the Big 6 framework, the framework that will evolve into a piece of legislation called tax simplification, tax reform, and tax cuts, is being criticized for having a 35-percent top rate that somehow is a giveaway to the wealthy, whereas you can see from this chart that plans that have been bipartisan in the past have had the 35-percent top rate or less. Of course, the 35-percent tax rate that is said to be a giveaway to the wealthy is not even the one that proposes a lower 28-percent rate. The 28-percent rate is reserved for the Simpson-Bowles plan. That Simpson-Bowles group was put together by none other than a Democratic President.

Let me ask: Were Democratic members of the Simpson-Bowles Commission, which voted for that plan, voting to give huge tax cuts to the wealthy? Do our Democratic colleagues expect us to believe that a 35-percent top rate is a sensible bipartisan compromise when offered by Democrats but a giveaway to the rich once it is associated with this administration or with Republican Members of Congress?

Well, another thing is the same: All three plans would repeal the alternative minimum tax. This is very surprising. From listening to my Democratic colleagues, I thought repealing the alternative minimum tax was some nefarious plot to benefit President Trump, but that just doesn't square with the reality and what has gone on in the Congress over the last decade and a half with regard to tax reform. Repealing the alternative minimum tax has had strong bipartisan support.

While serving as either chairman or the ranking member of the Finance Committee, Senator Baucus and I introduced bipartisan, stand-alone legislation to repeal the alternative minimum tax. We did that across several Congresses. Of course, we were not successful. I hope this Congress will be successful in doing that.

Our legislation eliminating the alternative minimum tax garnered bipartisan support from across the political spectrum. The current ranking member of the Finance Committee and the current minority leader of the entire U.S. Senate even joined Senator Baucus and me at that time in these efforts as cosponsors of that legislation.

At the time, a few years ago, the current ranking member even went so far as to say that ``the alternative minimum tax should be Congress' number-one priority for tax reform.'' I agree with what the current ranking member of the Senate Finance Committee said a few years ago, which I just quoted. The alternative minimum tax repeal should be a top priority, and it seems as though it is going to be a top priority this year because the alternative minimum tax adds needless complexity to the Tax Code and often hits middle-income taxpayers rather than the wealthy, as originally intended.

Let me give a history of the alternative minimum tax. I think it was passed in 1969. Studies of wealthy people showed that about 150 people who were very wealthy paid no income tax, and there was a feeling that everyone ought to pay some tax. The alternative minimum tax was set up to hit those 150 and some other people, but it wasn't ever indexed. Now it hits millions of middle-income taxpayers. To help those middle- income taxpayers who should have never been hit by the alternative minimum tax--that is the rationale for doing away with it.

We even have the Internal Revenue Service's Taxpayer Advocate Service repeatedly calling for the repeal of the alternative minimum tax, noting that it ``does not achieve its original goal'' and ``stealthily increases marginal rates for middle-income taxpayers.''

I want to move now to the corporate tax part of the framework. I am back at the chart now. Similarity between these plans exists for reform of corporate taxes. For instance, each one of these three plans seeks to significantly lower our corporate tax rate.

The Wyden-Coats bill calls for an 11-percent reduction in the corporate rate, bringing that rate down from 35 to 24 percent. The Big 6 framework aims for 20 percent as the highest corporate tax rate. Yet, according to the ranking member of the Senate Finance Committee, the corporate rate reduction in the Big 6 framework is ``a massive corporate tax cut that overwhelmingly benefits shareholders.''

The last time I checked, the distribution of the benefit from a corporate rate reduction is the same no matter what party or what President proposed it. This chart shows that similarity between the bipartisan plans and the Big 6 framework. I don't think the Senate Finance Committee ranking member proposed a 24-percent corporate rate when that Wyden-Coats plan was developed because he wanted to provide a massive benefit to the shareholders he now talks about. I also know for certain that isn't why the Big 6 framework aims for 20 percent.

The truth is, there has been a really big, growing, bipartisan consensus that our corporate tax rate is out of step with other major trading partners. Now, at 35 percent--and it has been at 35 percent for decades--our corporate tax rate is the highest among developed countries. While we have been at 35 percent, our major trading partners have been lowering their rates. On average, their rates are more than 10 percent lower than ours, so averaging maybe about 24 percent.

Now, that obviously has a great impact on jobs in America because it puts American companies at a competitive disadvantage globally, costing American jobs. It has also strained our corporate tax system to its breaking point as we have battled corporate inversions and foreign takeovers. Now, how much in the last several years have we heard Members of this body complaining about foreign takeovers and inversions to skip the country, to save taxes? Well, that is one of the reasons for reducing the corporate tax rate so that doesn't happen.

Moreover, a growing body of economic literature is showing that a significant portion of the corporate tax does indeed fall on workers in the form of lower wages. The nonpartisan Joint Committee on Taxation as well as the Congressional Budget Office assumes 25 percent of corporate tax falls on workers. So if you reduce the corporate tax rate, according to congressional researchers here who work for us, one would assume that workers are going to get 25 percent of that benefit to their wages. We even have other studies--many--finding that workers could bear more than 70 percent of the burden of a high corporate tax rate.

While the exact burden borne by workers may be debated, the economic

research is very clear. A corporate rate reduction means a significant wage increase for workers. In fact, the Council of Economic Advisers very conservatively estimates that workers could see their wages increase by more than $4,000 due to lowering the corporate rate to 20 percent.

In reality, there is very little in this tax framework that has not had bipartisan support in the past or is not well within the mainstream of bipartisan proposals before us. Once again, that statement I just made is the purpose of this chart, to show that this bipartisan agreement and what we have before the Congress coming up--the Big 6 framework--have so many likenesses in it that there is absolutely no rationale for the partisanship we are having in the news media and on the Senate floor talking about this framework. This is why the accusations that the Big 6 tax framework is nothing more than a giveaway to the rich--why that statement we hear so often is so dumbfounding.

I want to move on to another issue about whether these are tax cuts for the rich, and I want to show how one of the proposals before the Congress will help the rich. More perplexing is that those who are screaming ``tax cuts for the rich'' and saying it the loudest have also been the most ardent supporters of maintaining one of the largest loopholes for the wealthy; namely, the State and local tax deduction.

I know the minority leader was on the floor last week, I think, citing IRS statistics to claim that the deduction was really a middle- class benefit, but the minority leader told only part of that story. I would like to look at some estimates by the liberal Tax Policy Center that my Democratic colleagues like to cite so often. According to the Tax Policy Center, 90 percent of the tax increase from eliminating the deduction would fall on taxpayers with incomes exceeding $100,000, and 40 percent of the total would be paid just by taxpayers with incomes exceeding $500,000 a year.

Think of it this way. Those with incomes exceeding $500,000 make up less than 1 percent of all tax filers, yet receive 40 percent of the deduction benefit of claiming the State and local tax deduction.

I would like to illustrate it a better way. I have a chart based on IRS data that looks at the benefit of the deduction by adjusted gross income. Prior to going to the chart, I think it is important to point out that only about 30 percent of the taxpayers even itemize and have the State and local tax deduction available to them because you have to itemize to get that. This chart is going to focus on that 30 percent.

The first group I have highlighted on this chart are taxpayers with incomes below $50,000. As we can see on the chart, only about 12 percent of the tax filers in this group claim the deduction. In other words, 88 percent of the taxpayers in this category receive no benefit from the State and local tax deduction. That 12 percent does get a fairly nice benefit from it. They are deducting an average of a little over $3,000 in State taxes for a State benefit of just under $500, assuming they are in today's 15 percent bracket.

From further down the chart, we can see that the benefits afforded to low- to middle-income taxpayers are very much dwarfed by the benefits afforded to the wealthy or, as some of my Democratic colleagues might have become accustomed to referring to them, the millionaires and billionaires. Where only 12 percent of taxpayers with incomes under $50,000 have any benefit from the State and local tax deduction, over 90 percent of filers with incomes exceeding $500,000 claim the deduction. Tax filers in the $500,000 to $1 million range are, on average, deducting more in State and local taxes--$53,000--than the incomes of the taxpayers in the first group.

If we assume taxpayers in this second group are, under the current law, in the 39.6-percent tax bracket, that translates into a tax benefit of nearly $21,000. For those with incomes exceeding $1 million, there is an average tax benefit of about $100,000.

So if you are truly interested in eliminating tax loopholes for the rich, look no further than the elimination of the State and local tax deduction. This elimination provides an opportunity to better target more tax relief where we want to target it--to the middle class--making up for any benefit the middle class may lose from deductions and then some. In other words, the income tax would remain much more progressive.

The Big 6 framework provides the tools to do a middle-income tax reduction, including nearly doubling the standard deduction, reducing the current 15-percent rate to 12 percent, and significantly increasing the child tax credit. The framework also grants significant leeway to the Finance Committee and the Ways and Means Committee to explore additional options to ensuring middle-income tax relief.

In addition to being a benefit that overwhelmingly goes to the wealthy, the State and local tax deduction also has the effect of disproportionately benefiting States with high State and local taxes. Essentially, the deduction allows wealthy individuals in high-tax States to then offload some of their State and local tax burdens onto taxpayers in other States.

This new chart lists the top 10 States that benefit the most from the State and local tax deduction. The States are listed, and we can see the extent to which they benefit from it. We see we have New York at the top, a little lower is California, and a little bit below that is Massachusetts. It would seem to me that our Democratic colleagues like to talk a big game about eliminating loopholes for the wealthy, but when it comes down to actually doing it, they are more interested in holding on to a tax subsidy that favors the tax-and-spend policies of overwhelmingly blue States.

I yield the floor.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I ask unanimous consent to speak as in morning business.

Mr. President, I come to the floor to discuss the Republican tax reform plan and what impact it will have on the fiscal health of our Nation but especially the impact it will have on working families across the United States and in my home State of Illinois.

I have represented Illinois in Congress both as a House Member and as a Senator for a number of years. I am proud to say that during my career, I have not shied away from tackling big issues.

Maybe one of the toughest assignments I have ever had was in 2010, when President Obama created the National Commission on Fiscal Responsibility and Reform. It was known as the Simpson-Bowles Commission. I was one of 18 Republicans and Democrats given the responsibility of trying to find a way to balance America's budget and reform our country's largest spending programs and our Tax Code.

This was no small task, but it was an important one. We spent month after month in bipartisan meetings working at it. Nearly a year after the Commission was created, we were asked to vote on the final report.

Simpson-Bowles was not a perfect plan, but I decided to vote in favor of the report, and I knew it would be controversial, but I believed then, as I do now, that there is only one honest way to reduce debt: cut spending, raise revenues, do not ignore the Tax Code. Bowles- Simpson did just that. It raised revenue by eliminating a lot of the exclusions and deductions and efforts of the Tax Code to reward certain companies and special interests, and it cut spending for both defense and nondefense. To say nothing of the months-long bipartisan process--a far cry from the current reconciliation that we have been going through this year on the healthcare issue--there simply is no comparison between the Simpson-Bowles deficit reduction plan and what the Republicans want to bring to the floor of the U.S. Senate and House this year in the name of tax reform.

Simpson-Bowles was about balancing our budget responsibly. It raised nearly $88 billion in revenue over the first decade, and unlike the Republican tax plan, it boosted the standard deduction and still retained the personal exemptions families claim on their taxes. It protected middle-income families from backdoor cuts, and--and I underline this--it ensured that the wealthy in America paid their fair share of taxes.

If there is one thing I can never understand, it is why the Republicans, in the name of budget deficits or in the name of tax reform, always end up in the same place--always cutting taxes on the wealthiest people in America. Where in the world is that coming from? I have met a lot of wealthy people in the course of my life; not one of them, with a straight face, has said to me: Senator, I desperately need a tax cut. They don't. Yet that is the fallback default position on every Republican plan.

Importantly, the Simpson-Bowles plan provided details of the hard choices necessary to reach our goal. There is simply no comparison between that comprehensive, bipartisan plan to balance the budget and the highly fiscally irresponsible Republican tax reform plan before us now that will literally add $2.4 trillion to the national debt.

How many times have Members on the Republican side of the aisle come to the floor to pose for holy pictures and to preach to us about the deficit? Now that they are in the majority and they have a President of their party, what is the first thing they do? They propose adding $2.4 trillion to the national debt.

Where are my colleagues across the aisle who have been the first to speak out and admonish the Democrats about their failure to recognize the Federal debt? Where is my colleague the majority leader of the Senate who was so quick to rail on the ``alarming level'' of our national debt during the Obama years? He is silent now.

Even the most stalwart of self-proclaimed fiscal hawks on the right are falling in line behind this phony plan, which would allow for $1.5 trillion in unpaid-for tax cuts--clinging on to economic growth projections no responsible economist would dream of using. They used to call this economic theory of cutting taxes on the rich and economic growth the Laffer curve. I have never heard a better named description of an economic theory. It is a laugher. And this Laffer curve inspired the Governor of Kansas to bring that State to near fiscal ruin, trying to apply that great theory and watching his State crumble in the process.

History has proven that tax cuts simply do not yield economic growth. The economic growth promises of the Bush tax cuts turned out to be completely false. Those tax cuts for the wealthy ballooned our deficits and our debt and contributed to a scandalous rise in income inequality in the United States of America.

Tax cuts don't pay for themselves, and I know my Republican colleagues know that.

When Republicans' rosy estimates of economic growth do, in fact, fail and the deficit is sky-rocketing, the Republican budget spells out exactly how they plan to pay for the tax cuts on the backs of hard- working Americans. Listen to this. To pay for the tax cuts for the wealthiest people in America, the Republican tax reform plan--now, get this--uses $1 trillion in cuts from Medicaid and more than $470 billion in cuts from Medicare.

Think about it. Health insurance for the elderly in America will take a $470 billion cut under the Republican tax reform plan--for what? To give tax cuts to the wealthiest people in our country--go figure--and then $1 trillion in cuts in Medicaid.

What is Medicaid for? Isn't it just health insurance for the poor? Well, in some respects, that is a good general description, but it is so much more. The Medicaid Program, which the Republicans return to time and time again to cut, is critically important for parts of America. Half of the children born in the State of Illinois are taken care of by Medicaid. Their mothers are taken care of before the baby is delivered and after. Plus, it is the No. 1 source of health insurance for the disabled across America. They want to cut $1 trillion out of it. I haven't even gotten close to the most expensive part of Medicaid. Two-thirds of seniors in America in nursing homes count on Medicaid to pay for their medical bills.

The Republicans want to cut $1 trillion out of Medicaid to give tax cuts to the wealthiest people in America. What is going to happen to those folks in nursing homes? What is going to happen to the disabled who count on Medicaid? What is going to happen to those mothers and their babies? That is a legitimate question to ask.

Make no mistake, the real answer for who pays for these cuts doesn't involve fake economics; it involves real families across America.

Let's look at the plan for what it is. While claiming to fix our broken Tax Code, this Republican tax reform plan would instead provide nothing short of a windfall for the wealthiest in our country and stick hard-working families in Illinois and across the country with the bill.

Under the Republican plan, no less than 80 percent of the benefits go to the top 1 percent of wealthiest Americans. Eighty percent of the benefits go to the wealthiest people in this country. That is more than three-quarters of all tax breaks going to people who make more than $730,000 a year. Is that why Members of the Senate were elected--to take care of people making more than $730,000 a year? Not in my State.

What about the middle-income Americans this plan is supposed to help? The Republican plan would raise taxes on nearly one-third of Americans who make between $50,000 and $150,000 a year. One-third of them will pay higher taxes. That is not tax relief for working families. In fact, the Republican plan would eliminate the State and local tax deduction-- a deduction used by one-third of all taxpayers to reduce their tax bill. That has been part of our Tax Code from the beginning, and here is the theory: We believe, in the current Federal Tax Code, you shouldn't pay a tax on a tax. It is basic. If you are paying $1,000 in property taxes where you live right now, should you be taxed on that $1,000? Under the current Tax Code, no. You are able to deduct State and local taxes. The Republicans eliminate that deduction. If they have their way, families with homes, families who pay sales taxes will pay a Federal tax on the State and local taxes they pay. This deduction currently allows families who pay State and local income or sales taxes to deduct those taxes from their Federal income tax. In other words, this deduction prevents families from double taxation--once by the Federal Government and again by the State. Yet the Republicans eliminate this deduction.

In Illinois, we rank fifth in the Nation for people who are helped by the State and local tax deduction. The taxpayers I represent will be hit especially hard. Nearly 2 million Illinoisans--roughly a third of the taxpayers of my State--claimed more than $24 billion in

State and local tax deductions in 2015. If Republicans have their way, almost 2 million people in Illinois would be double-taxed on an average $12,500 of earnings. That is just plain wrong.

Republicans would have you believe that State and local tax deduction only helps the wealthy, but most people who take this deduction make less than $200,000 a year.

Even families who do not claim the State and local deduction will see their taxes increase under the Republicans' so-called tax reform plan. The Republican plan eliminates the personal exemption worth $4,050 a person. A family of four making $50,000 a year in my State will pay $887 more under this part of the Republican tax reform plan. Getting hit by losing the State and local tax deduction and then turning around and losing a personal exemption, a family of four in Illinois making $50,000 will pay $887 more a year, just on that provision, in Federal taxes.

What are the Republicans raising taxes on my middle class for? They are raising taxes on middle-income families to provide massive tax cuts for corporations to the tune of $2.6 trillion over the first 10 years, and--Mr. and Mrs. America, sleep well tonight--we are going to take care of that with economic growth. Here is the reality: Corporate profits are soaring in America. Today, corporate profits in the United States of America as a share of gross domestic product are at record highs; corporate taxes paid to the Federal Government as a share of GDP, record lows. What is the Republican approach to those two facts? To cut more corporate taxes.

Wouldn't it be good to have someone come to the floor and say: Instead of just looking at corporate taxes, why don't we look at corporate employees? How are they doing? We know how they are doing. They are falling behind. They are more productive than ever. The corporations are more profitable than ever. Yet the disparity in income in America gets worse. We have the best workers in the world--no apologies. They do great work. They don't get paid enough. The answer on the Republican side is to give the corporations more tax breaks. I say the answer should be something else.

Why don't we address the fact that CEOs in America make 271 times the average wage of their employees? Two hundred seventy-one? Come on. If they are going to head up these corporations, of course they are entitled to be paid more--their profitability, their entrepreneurial spirit, their talent, and all the rest--but 271 times? American workers are still waiting for their pay raise, and they won't get it with this Republican tax reform plan.

While American workers and their families continue to wait for their turn, the Republicans seemed determined to provide tax cuts to corporations and the wealthy rather than make the Tax Code work for working families. This has to stop. It is time we look at tax reform and economic growth in terms of the family room, not the boardroom.

The very successful Warren Buffett said:

My friends and I have been coddled long enough by a

billionaire-friendly Congress. It's time for our government

to get serious about shared sacrifice.

Thank you, Warren Buffett. I agree.

If Republicans want to get serious about fixing the faulty incentives in our Tax Code and provide working families some relief, it is time they stop clinging to the Laffer curve and this failed trickle-down policy that giving a tax break to the wealthiest person in America can only help the poorest person in America.

I know these are difficult and complex issues. It is no secret in Washington how difficult tax reform can be. But these are issues that deserve robust, bipartisan debate. Now is not the time to abandon any semblance of fiscal responsibility and rush through this deficit- exploding plan that has no prayer of paying for itself with growth.

I hope my Republican colleagues will look beyond the boardroom and seize this opportunity to reward and incentivize businesses to make real investments in the United States and its workers. Look at this Tax Code. If you own a big business in my State of Illinois and want to move your business out of Illinois--to Mexico or China or you name it-- we are going to give you a helping hand. Our Tax Code says that the cost of the moving expenses are deductible. You don't have to pay taxes on those; we are going to give you a break to move your business. What are we thinking?

For goodness' sake, why don't we have what Senator Sherrod Brown and I are submitting as an amendment--a patriot employers tax break, a patriot corporation tax break. You keep your business in Illinois. You keep your business in Ohio. When your workforce grows, it is American workers who get the jobs, and the wages you pay for 90 percent of them have to be at least $15 an hour. You have to provide health insurance and a basic retirement plan that is fair. Give a veterans preference, please, to the men and women who served our country. And then we will give you a tax break. We won't give it to the company that is ready to move overseas; we will give it to the company that is ready to invest in the United States and U.S. workers. I think that is a tax policy most Americans would say makes sense. Why aren't we talking about that kind of approach instead of finding a way to give a tax break to the wealthiest?

American workers and families are watching this debate, and they are still waiting for a better deal.

Mr. President, I yield the floor.

I suggest the absence of a quorum.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I rise to oppose this deeply flawed budget that is terrible for America and particularly harmful to working families.

The Republican plan that we face today is a budget-busting first step toward issuing massive tax breaks to special interests and to wealthy individuals. This proposed budget fails to improve economic growth or to drive up wages. It should look awfully familiar to all of us because it is a retread of the failed trickle-down economics which exploded budget deficits in the 1980s and squandered the budget surplus we had briefly in the early 2000s. That trickle-down theory ruined our budget and failed to grow the economy then, and we cannot afford to relive those failed policies now.

Our Nation faces significant economic challenges today that need to be addressed directly. Wages have barely improved in the past 20 years; the costs of education, childcare, and other essential living expenses continue to climb.

Job creation is slowing. From February through September of this year, the economy added the lowest number of jobs in 7 years. Wages are also falling this year. Since the Trump administration took over, 39 States and the District of Columbia have seen workers' wages decline, after adjusting for inflation. Nearly 4 in 10 rural families don't have access to high-speed internet and the opportunities it affords.

We all know many of the communities we represent, in both rural and urban areas, still have not fully recovered from the great recession. Yet this budget only makes life harder for working families by cutting vital programs and critical services that invest directly in those communities. The Republican budget ignores our current reality and makes it tougher for American families to afford a college education or access quality healthcare coverage. As we saw through last week's executive actions, the Trump administration remains singularly focused on taking away healthcare from 20 million Americans and sabotaging the system for those left. This proposed budget would take us deeper down that destructive path.

The Republican 2018 budget cuts more than $5 trillion over the next decade in healthcare, education, transportation, medical research, and other critical investments. It slashes Medicaid by $1 trillion and Medicare by more than $470 billion. When they are done, these budget- busting tax giveaways will leave other Federal efforts with a gaping $660 billion hole, bringing our domestic Federal investments as a share of our Nation's GDP to the lowest levels since the Hoover administration.

If you are at home listening, all of that sounds pretty unbelievable. Washington Republicans wouldn't really jeopardize our Nation's healthcare, our educational system, our rural communities, and bust the budget all at the same time, right? Unfortunately, all of that is true when we look at the details of this failing budget. Again, this is all based on a brazen theory that led to the failed and harmful tax policies of the past.

The real question we should be asking now is, How do we improve our communities, grow our economy, and drive up wages for hard-working families? That is what I am focused on when I look at the budget.

Republicans believe step one should be to take funds out of Medicare, out of education, out of infrastructure, and pull healthcare away from the working poor. Then step two of their plan is to give all that money to wealthy political interests under the ruse that regular people, someday, will be better off because America's elite investing class will have done something spectacular with the money we just sucked out of our communities.

It is truly amazing that this idea continues to resurface because the promise of wild economic growth and trickle-down benefits has failed to materialize time and time again. What we have found is, working families, rural communities, and others who are robbed to finance this type of plan are the ones who suffer, all to put money into other people's pockets.

Who exactly loses in this budget? For starters, senior citizens, who will see Medicare cut $470 billion, to be exact. Let me say that again. This Republican budget cuts Medicare to the tune of nearly half a trillion dollars.

Children, working families, and people in need of opioid treatment will be pounded by Medicaid cuts of more than $1 trillion. Medicaid cuts will lead to millions losing their coverage. They will unravel the progress we have made fighting the opioid epidemic, jeopardize mental health coverage, and force many rural hospitals to close.

The hit will be especially hard in rural areas, where more than 12 percent of rural hospital revenue comes from Medicaid. In New Mexico, Medicaid actually accounts for more than 20 percent of hospital revenue in rural areas.

For seniors, the Medicare and Medicaid cuts together will have devastating consequences. Let's look at one example, Alzheimer's disease. Medicare and Medicaid together pay for nearly 70 percent of care for those 65 and older with Alzheimer's. These deep cuts will force families to make a terrible choice between working and caring for their family members. Already, 15 percent of caregivers to someone with Alzheimer's have left their jobs or retired early in the past year due to their caregiving responsibilities. Cutting Medicare and Medicaid, when Alzheimer's costs are getting higher and no cure is in sight, will saddle individuals and their families with massive costs and hardship.

The devastation this budget will create does not stop there. More than 8 million students will see their Pell grants cut by one-third. That is right. Republicans want to cut investments in education so they can give special interests a tax break. These are Americans who are striving for a college degree, who just want a fair shot at opportunity without being crushed by debt. Pell grants are the primary form of financial aid for so many students, giving them access to an education that might otherwise be out of reach.

This chart pretty much sums up what I have been saying about the priorities reflected in this budget: tax cuts over investments in things like Medicare, Medicaid, education. The picture is pretty clear. They are taking direct investments away from our people and our communities and instead giving those dollars away as part of a convoluted plan that leaves the wealthy better off.

What is more amazing about this plan is that Republicans have changed budget rules to allow them to add $1.5 trillion to the debt while doing it. For many years, the Conrad rule in the Senate specifically prohibited reconciliation legislation from increasing the deficit in the first 10 years. It was what reconciliation bills were designed to do--reduce the deficit. Then, Republicans repealed that rule in 2015 and

threw any illusion of fiscal responsibility out the window.

Remember when Republicans believed in fiscal responsibility and balanced budgets? Under President Trump, Republicans barely give these values lip service--and this year's budget goes even further than before to reject fiscal reason. It removes a Senate requirement for the CBO--the Congressional Budget Office--to issue a cost estimate a day ahead of votes on the Senate floor, the so-called 28-hour rule. Why? Because they want to hide how fiscally irresponsible these votes are from their constituents and the American people.

Finally, the Republican budget assumes far faster growth than the CBO could possibly justify under even the rosiest assumptions. This backward math says that their budget magically delivers $1.24 trillion in deficit reduction. According to the Tax Policy Center, the Republican tax plan will reduce revenues by $2.4 trillion over the first 10 years and another $3.2 trillion over the next 10 years. The actual cost far exceeds the Republican estimates.

Where do all the tax cuts go? Most of them go to wealthy folks who are doing just fine without them. We don't need to be doling out tax breaks to wealthy trust-funders when families in Las Cruces, Gallup, and Santa Rosa are struggling to make ends meet, don't have high-speed internet, and haven't gotten a raise in years, in some cases.

Under this Republican plan, the top 0.1 percent will receive a tax cut of more than $700,000 a year. It would take a typical household in my State nearly 15 years--15 years of work and earning--just to match the giveaway being provided to a single wealthy investor under this budget. That is not just wrong, it is downright sickening.

Part of this massive benefit to the rich comes from the creation of a special rate for passthrough income of 25 percent. This plan is designed to help large law firms and hedge funds that, in my mind, don't need a special tax break to further enrich themselves. Millions of working families will actually face higher taxes as a result. Under the Republican tax plan, nearly 8 million working households will actually see an average tax hike of $794. Now, $800 may not seem like a lot if you are working on Wall Street, but $800 is a lot for people working hard on relatively modest incomes in New Mexico.

Unfortunately, as I said earlier, we have seen this movie before. We don't need another bad sequel.

This Republican plan delivers higher deficits and fewer community investments. Tax cuts in 1981 and the early 2000s led to less revenue as a share of GDP and higher deficits. The national debt nearly tripled under President Reagan and nearly doubled under President George W. Bush.

We have also seen the dangers of reckless tax cuts for the wealthy at the State level. In Kansas, Republicans slashed individual rates by more than 20 percent and abolished taxes on passthrough income. Sound familiar? Since the tax cuts were enacted in 2012, the State's revenue plummeted, and Kansas has buckled under an economy that has trailed the United States in job, wage, and economic growth.

A recent study found that for tax cuts to pay for themselves, the economy would have to grow $5 to $6 for every single dollar of cuts. Yet the nonpartisan Joint Committee on Taxation found that tax cuts generate nowhere near that amount. According to them, each dollar of tax cuts would lead to only 4 cents to, at best, $1.25 in new economic activity.

The evidence is clear. Large tax cuts for special interests and for the rich simply don't pay for themselves. As we have seen, time and time again, trickle down only works in fake, so-called think tank models, not in real life.

Rather than rely on disproven theories, we should be investing in what we know actually works in increasing wages and accelerating economic growth. Expanding the earned-income tax credit, for example, has proven to be effective at increasing the living standards of working families. It effectively raises their wages. Let's strengthen and make fully refundable the child tax credit.

Instead of slashing infrastructure spending, as this budget does, we should be investing to prepare our Nation to compete. Investing in infrastructure is proven to create good-paying jobs and stimulate our overall economy. President Trump talked about infrastructure investment incessantly on the campaign trail. Where is that rhetoric today? Where is that commitment today? Sending kids to high-quality pre-K is shown to improve both theirs and, for that matter, their parents' economic outcomes.

We need to invest in clean energy because it is cheaper, because it is good for the economy, and because all of our future livelihoods depend on addressing climate change. The renewable energy sector is a place where jobs are growing rapidly in New Mexico--and not just in urban metro areas but especially in rural communities.

We need to invest in Federal research and development that has led to the internet, to the GPS, to the laser, and to lifesaving medical breakthroughs. We must ensure that startups can access the capital they need to launch and grow their businesses, whether they are in rural New Mexico or downtown Detroit. We need to close the digital divide so that every person in America, regardless of ZIP Code, has access to high- speed internet that connects people and communities to financial and educational opportunities.

Democrats have a plan to grow the economy, to increase wages, and to improve the lives of folks who work on Main Streets across this country. Our plan connects people with the opportunities that will exist tomorrow.

The Republican plan is very different. It is written by the lobbyists on K Street, with much of the benefit flowing to the investment bankers on Wall Street. Regrettably, Republicans are pursuing the same partisan process with the budget and with tax reform that failed when they tried to repeal the Affordable Care Act.

The cost of Republican chaos and backward thinking is growing by the day, and this budget will continue that process. We need bipartisan, pragmatic solutions to the challenges that our country faces.

To all of my colleagues, we are asking simply to do what we know works. Let's work across the aisle through regular order to get things done for our constituents.

Mr. President, I yield back.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I ask unanimous consent to speak for up to 10 minutes, followed by the Senator from Washington, Mrs. Murray, to speak for up to 10 minutes

Mr. President, later this week, Senator Murray and I, with other Senators, will introduce bipartisan legislation to give States additional flexibility to create more choices of health insurance policies in the individual market and to extend cost-sharing reduction subsidies during 2018 and 2019. These subsidies pay for copays and deductibles for millions of low-income Americans who buy health insurance on the Affordable Care Act exchanges. Our goal is to stabilize and then lower the cost of premiums and to enable all Americans to have access to health insurance.

Our legislation will be based on the four hearings and other meetings that the Senate's Health, Education, Labor, and Pension Committee held last month. I am chairman of that committee, and Senator Murray is the ranking Democratic member. These hearings and meetings were bipartisan. They were lengthy. They were remarkable in this sense: They engaged nearly 60 Senators from both political parties in extensive discussions. We not only had the four hearings, which involved the 23 members of our HELP Committee, but we invited any other Senator who wished to come to a committee meeting ahead of time to meet the Governors and the State insurance commissioners and others who were testifying, and 37 did. So we have had extensive participation by 60 Members of the U.S. Senate through four hearings and a variety of committee meetings in the process that developed this legislative proposal that Senator Murray and I have agreed upon.

According to witnesses at our hearings, according to the Congressional Budget Office and Congress's Joint Tax Committee, without these cost-sharing payment reductions, premiums will rise, the Federal debt will increase to pay for the higher subsidies by $194 billion over 10 years, and up to 16 million Americans may find themselves living in counties where no company sells insurance in the individual market.

Imagine yourself as a 45-year-old songwriter in Tennessee who loses her job, has three kids, goes to the individual market, and finds that she can't buy health insurance; no company is offering it because we did not act. Those are the consequences we are talking about.

Witnesses also testified that one way to lower costs for consumers is to give States more flexibility than the Affordable Care Act now allows to design health insurance plans that give consumers more choices.

We have purposefully limited our proposal to two themes: first, 2 years of temporary cost-sharing payments and, second, amendments that would give States meaningful flexibility in using the section 1332 innovation waiver, which is already a part of the Affordable Care Act.

The problem with the waiver is that while it was designed to give States the opportunity for innovation, it has been very restrictive. It limited the number of opportunities States could use. It would be like saying to someone: You can drive anywhere you want to in the United States as long as you end up in New York or in Nashville or in Birmingham, AL. Our goal is still to protect patients but to give States more flexibility in offering more choices.

There are, of course, many other good and useful ideas that would improve Federal laws regulating health insurance. There are many on the Republican side, and there are many on the Democratic side. There are probably even ideas that both of us would agree on, but Congress has been stuck for 7 years in a partisan stalemate over the Affordable Care Act. Most of that stalemate is about the individual insurance market.

Most people get their insurance from the government, Medicare, or Medicaid. Most of the rest of the people get their insurance from their employer on the job; that is 50 or 60 percent of Americans. Only 6 percent of Americans get their insurance in the so-called individual market. It is about 350,000 people in Tennessee. Every single one of them is very important, and every single one of them is terrified by the skyrocketing premiums in that market and by the possibility that they might not be able to buy insurance at all in that market if we don't act.

We concluded that the best course would be to take this limited, bipartisan first step, which would avoid the chaos that could occur during 2018 and 2019 if premiums continue to skyrocket and millions of Americans find themselves without a way to purchase health insurance. Once we complete this limited first step, then we can take the second and the third steps.

I want to undersell this proposal rather than oversell it. It has significant advantages in terms of cost-sharing reductions, which make it more likely that premiums will stabilize in 2018 and actually go down in 2019. It has significant advantages in changing the law so that States will have more flexibility in offering choices, which is another way to lower costs, but it is only a limited first step.

Senator Murray and I hope that by the end of the week we can present Senate leadership--Senator McConnell and Senator Schumer--with the support of a significant number of Republican and Democratic Senators. We then hope the Senate will pass the legislation, the House will agree to it, and the President will sign it.

During the last several days, I have had encouraging discussions with President Trump, who called me on two different occasions, encouraging me to work with Senator Murray to come to a bipartisan agreement. I am grateful to him for that encouragement, and I am grateful to her for her patience and for working on this so diligently for such a long period of time. I see she has just come to the floor.

I think one other thing Senator Murray and I can agree on is that we hope our next legislative assignment is easier than this one. I think we both also agree that the sooner we act, the better, so Americans will have the benefit of lower premium costs and the peace of mind of knowing that they will be able to buy insurance for themselves and their families.

I would like to say through the Chair to Senator Murray that I asked for 10 minutes to speak, and then I asked for 10 minutes for her to follow me. I am about finished, and when I am through, then she has the floor, according to my request.

I ask unanimous consent to have printed in the Record a brief summary of the agreement that Senator Murray and I have.

Mr. President, I have said repeatedly over the last several weeks that while it is important that the two of us, as the chairman and the ranking member of the HELP Committee, come to an agreement, that is not nearly enough because our real job was and is to see if we can find, among a significant number of Republicans and a significant number of Democratic Senators, a consensus that will cause this to be enacted, will cause the Senate to pass it and the House to pass it and the President to sign it. In my opinion, we wouldn't have come to an agreement ourselves unless we thought that was likely.

I will not go into the specific provisions that are in this, except to briefly summarize them. The first group of them makes the section 1332 innovation waivers work by giving more flexibility. In New Hampshire, for example, the State would like to use Medicaid savings to help pay for the cost of its Affordable Care Act waiver, and this would allow that. In Maine, for example, the State has applied for a waiver. The waiver has been approved, but the use of the funding has not been approved. This would allow that. Alaska, Oklahoma, Iowa, for example, all have waivers in line that they would like to submit to give a greater variety of choices in their States and hopefully lower premium costs, but it is too restrictive under the current conditions.

About the only sort of waiver that the current Director of the Centers for Medicare and Medicaid Services can approve is the Alaska- type waiver, which is a good idea. Alaska created a reinsurance fund, which helped the very sick Alaskans, immediately lowered premiums 20 percent for all other Alaskans, and then used the savings from the lower subsidies as a result of the lower premiums to pay for 85 percent of the cost of the fund. Minnesota has tried a similar thing. Maine did that on its own a few years ago. We have streamlined the approval process for those waivers, so that can be done more easily.

I would emphasize that a number of these, while they are limited proposals, could not be done in a budget reconciliation process. They had have to be done with 60 votes.

The proposal also includes what we call a new copper plan, catastrophic insurance for all ages. We still keep the patient protections; that is, preexisting conditions, et cetera. We still keep the essential health benefits, but we allow someone who is healthy and young, for example, to pay a higher deductible and a lower premium if that is what they choose to do. We direct the Department of Health and Human Services to go ahead and write regulations to encourage interstate health insurance compacts. We compromised on the outreach funding and agreed that we will spend about twice as much as or more than President Trump wanted to expend, but we will do most of that by grants to the States. And of course we agree on 2 years of funding for the cost payments.

Finally, I would say that if we do not do this, according to the Congressional Budget Office, the Joint Tax Committee, and CMS, premiums next year will increase 20 percent, there will be a $194 billion increase in the Federal debt over 10 years, and up to 16 million Americans might find themselves unable to buy insurance through the individual market. In my view, this agreement avoids chaos, and I don't know a Democrat or a Republican who benefits from chaos.

I thank President Trump for his encouragement to me and to Senator Murray to try to succeed on this. I thank Senator Schumer, the Democratic leader, for creating an environment in which we could get to this point. I thank the majority leader, Senator McConnell--despite his focus on tax reform--for allowing us to work together and try to do this. I especially thank Senator Murray, who, whenever she sets about to get a result, I have found, she usually gets one. I could not have a better partner to work with on difficult issues in the Senate. In fact, the one thing we probably most agree on, we found the most difficult to solve; that is, in 2018, we want to make sure that the cost-sharing payments go to the benefit of consumers, not the insurance companies. I want that. Senator Murray wants that. The President wants that. My Republican colleagues want that. And I know Democrats want it. We believe we have strong language in our proposed agreement to do that, but we are going to make sure that it is the strongest possible language.

I thank the Presiding Officer. I look forward to working with Senator Murray over the next few days to see if we can find a consensus among Republicans and Democrats to present to the Senate leadership. I hope that we can then pass it, the House will pass it, and the President will sign it.

Mr. President, I yield the floor.