Mr. President, I would like to comment on the positive aspects of the bill we are about to vote on. The most positive thing I can say about this is that working families and middle-income families across the Nation will be better off.…
Mr. President, I would like to comment on the positive aspects of the bill we are about to vote on.
The most positive thing I can say about this is that working families and middle-income families across the Nation will be better off. Families who over the last 8 years have not done well will begin to do better.
Now, we have already discussed some of the things that others have discussed. Let me just comment briefly:
We have doubled the standard deduction to make filing of income taxes simpler. For most Americans, that will be a tax cut by doubling that standard deduction.
We have provisions in there to stimulate the economy, to create competition for workers so workers will now have a choice of one job or another. When that happens, of course, their wages rise, and their benefits get better.
We incentivize companies that are, right now, moving overseas-- because the taxes are so much lower elsewhere--to stay in the United States, to create American jobs, and to pay more American taxes.
Those are all good things my colleagues have discussed. Let me discuss some other ways perhaps that this bill benefits working families and middle-class families.
I am from an energy State. Louisiana produces so much oil and gas. The thing about energy jobs is it creates jobs for good families. They may not have a college education, but they are good people. They care about their children. In these jobs, they can earn over $100,000 a year in certain aspects of it, and they employ Americans in a way that Americans have kind of forgotten that it can be that way.
It is meaningful to me. We were in Illinois when I was born. My family moved to Louisiana because someone called my father and said: You know, Jim, if you move to Louisiana, you can sell to the people working at Esso, and you can make a good living.
So even though my father didn't work in the energy industry, he was one of those who benefited and made a living, which allowed me to go to medical school. I was the first generation in our family to go to college and go to medical school, and now I am a U.S. Senator. What an incredible privilege, all created by energy jobs.
One thing this bill does is it opens up a little more of Alaska for energy development--2,000 acres. One of my colleagues said smaller than the airport in Fargo, ND. I have never been there, but 2,000 acres is not a whole lot of land, But on those 2,000 acres, there is a lot of oil beneath.
Why is that important? We as a country can make a decision to be energy secure or not. If we are going to be energy secure, it means we are going to produce our own energy. This is not to rule out renewables, but for the moment we are going to continue as a country to consume natural gas and oil. We can buy it from countries such as in the Middle East where environmental standards are not as strict as ours, but when we do that, not only are we sending our jobs and revenue overseas, but we are also, in effect, endorsing their lower environmental standards, and that overall pollutes the environment.
On the other hand, if we buy from ourselves--using American workers, creating American jobs, using American environmental standards--not only do we get the benefits to the family and the benefits to the environment, but we have the national security benefit of being able to be energy secure.
Now, this is powerful. I first became aware of it, I think, in middle or maybe elementary school. I went to St. Luke's Episcopal Church. There was a guy there named Thor. What a great name, Thor. Thor told me his father was a pipefitter and was at that moment in Alaska working on the Alaska Pipeline. That was 40 years ago, so maybe my memory is a little fuzzy on everything but Thor's name. The point is, a fellow from Louisiana was going to Alaska, making great money, being able to provide for his family back home. That is a good thing.
As we develop our energy resources on the North Slope of Alaska, using American environmental standards, creating American jobs, we are changing the life of families like my family and for perhaps the family of the man I remember going to middle school with long ago.
I mentioned Thor's father was a pipefitter. Now, it is not just on those 2,000 acres. There will be a way of transporting that oil that is produced elsewhere. In South Louisiana, we make boats--boats that actually work off rigs and can create jobs both in the boatyard and in the maritime industry.
Thor's father was a pipefitter. You pipe out your oil, and you create jobs in that way. That comes to mind because when I was first elected to the Senate, I was going to a committee hearing, and some union fellows from Ohio came up to me to ask that I endorse the construction of the Keystone XL Pipeline. Of course, I have always been in favor of it so they had my vote, but they made the point: We are union laborers. We work on the job. When we say there is $40,000 created in the building of a pipeline--sure, we may only be on the job for 6 weeks, but then we go to another job for 6 more weeks and another job for 6 more weeks.
I was struck that these working families benefit not from the actual production of America's natural resources but from the transportation of America's natural resources. So the economic benefit to working and middle-income families doesn't just stop with those who are perhaps doing the drilling, but it continues downstream and, as I mentioned earlier, even extends to a family like mine.
Now, let me mention another aspect of this that brings benefits to our working families and to our middle-class families. One thing I was helpful with was the restoration of the historic tax credit. The historic tax credit is a Federal tax credit first made permanent by President Ronald Reagan that allows somebody to go to an older building in a community and to restore it, returning it to commerce. So instead of a portion of our architectural heritage being destroyed, it is refurbished and is there for future generations to enjoy. More than the kind of aesthetics of seeing an older building become beautiful once more, it creates jobs.
Now, let's go back to this legislation, creating better jobs for working and middle-income families. First, it affects everybody. More than 40 percent of the projects under the historic tax credit program in the last 15 years have been in towns of less than 25,000 people. In my State, since 2002, the historic tax credit has contributed to 782 projects being built, bringing $2.2 billion worth of investment into these cities and towns across my State.
Now, when you have that much money, you create lots of jobs. It is thought, nationwide, according to the study by the National Park Service, the historic tax credit has encouraged more than $131 billion in private investment, rehabbing 42,000 buildings, creating more than 2.4 million trade jobs, returning a net positive to the U.S. Treasury.
Since fiscal year 2002, in Louisiana alone, it has, again, fostered more than $2.5 billion in private investment, creating more than 38,000 jobs. These are jobs--construction jobs, rehabilitation jobs--that allow a family to live with a good living wage. That is part of this legislation.
I should mention one thing in particular very topical on the historic tax credit. The World Trade Center of New Orleans is currently being refurbished. It was built in the 1960s and is being transformed into a world-class hotel condominium complex. It brings the city of New Orleans $400 million in infrastructure spending, 1,600 jobs in construction trades, as well as more than 450 permanent, full-time jobs. Instead of a crumbling eyesore, you have a jewel, but more than a jewel, you have 1,600 jobs created and 450 permanent jobs.
Let me mention the last thing that benefits working and middle-class families. My friends on the other side of the aisle talked about supposed negative effects on Social Security and Medicare. I am a doctor. I have been working in the public hospital system of Louisiana for 25 years. I understand the importance of safety net programs, if you will, like Medicare that allow our senior citizens to have the healthcare they need.
The dirty little secret is that, according to the people who run Medicare and Social Security, those trust funds are going bankrupt-- bankrupt. Under the Obama administration, they tried to address it by raising taxes, so they put a higher income tax on people, and the trust funds are still going bankrupt. Under ObamaCare, there were different things to try to save money within the system, delivery system reforms, and some are, frankly, good ideas--although I opposed ObamaCare, in general, some of these were good ideas, and I continue to endorse them--and the trust funds are still going bankrupt. So it raised taxes, we are trying to save money, and the trust funds are still going bankrupt. What can we do to try and rescue these programs that are so significant, so important to senior citizens, to all of us in this country--Social Security and Medicare in particular.
What about economic growth? I did an analysis once with another man which shows that if we just return to the economic growth that is common in our country--about 3.5 percent GDP growth per year--we will fully fund our trust funds for Medicare and Social Security.
Keep in mind, although we are cutting rates for corporations, the rates for funding Medicare and Social Security are staying where they are. So if our economy is doing better year over year, there will be more money going into these trust funds, not because the rates are higher--the rates remain the same--but because there is more money to apply the rates to.
Is it reasonable to have that kind of growth? Absolutely. From 1946 to the beginning of President Obama's administration, through 10.5 recessions--including one-half of the great recession--we averaged over 3 percent growth as a country. Now, under President Obama's Presidency, it was about 2 percent growth, and 2 percent versus 3.5 is all the difference in the world because it compounds. It goes like this if it is 2 percent, it goes like this if it is 3.5 percent, and at the end of 10, 15, or 20 years, those differences are remarkable.
I will say, under President Trump, for the last two quarters we have had over 3 percent GDP growth. Republicans take over, and the economy begins to do better. In the next quarter, it is estimated that it will be over 3 percent. With this legislation, increasing the amount of money families have in their pockets, building out our energy resources as we are in Alaska, creating jobs for Americans across the way, using things like the historic tax credit, returning money to the Treasury, but also creating American jobs will create that prosperity, that economic growth, so that instead of the 2-percent growth that we have had for the last 8 years, we have the 3.5-percent growth that we historically have had. That is a promise of this legislation. That will restore funding for Social Security and Medicare. That is the answer that has eluded the other side.
Mr. President, before I yield back, I ask unanimous consent that there now be 30 minutes, equally divided, for debate only, with no amendments or motions in order, and with the majority leader being recognized at the conclusion of that time.
I yield back.
Mr. President, today I wish to discuss the historic rehabilitation tax credit. During the Finance Committee markup of the Tax Cuts and Jobs Act, the committee adopted my amendment to return the historic rehabilitation tax credit to the 20 percent level, with the credit now claimed over 5 years, as well as a transition rule to grandfather approved and underway projects under the prior law and regulations.
The historic rehabilitation tax credit program provides jobs and investment in communities across the country. More than 40 percent of projects over the past 15 years have been located in communities with populations less than 25,000 people. Since 2002, the historic rehabilitation tax credit has facilitated 782 projects in Louisiana, bringing more than $2.2 billion of investment into cities and towns across the State. I am pleased this important provision will be preserved in tax reform.
For purposes of the transition rule in my amendment, ``taxpayer'' refers to the person who undertakes the rehabilitation of a building. In the case where a person makes an election under section 48(d), the term ``taxpayer'' means the lessor, since the lessor is the person who undertook the rehabilitation. It is intended that the historic rehabilitation tax credits be available during the transition period only to the extent such credits would have been available under the prior law and regulations.
Mr. President, I am proud of the work we have done in the Senate to develop a bill that delivers tax cuts to working families and significantly improves the competitiveness of our Tax Code. This will lead to greater investment, more jobs and opportunity, and an increase in economic growth.
I would like to take a moment to highlight an important, unresolved issue that we should consider as we work toward putting a bill on the President's desk.
Families in Louisiana are particularly prone to the negative impacts of natural disasters. From Hurricane Katrina in 2005 to historic flooding in multiple parts of the state during 2016, we have unfortunately seen some significant losses in our State; yet as we saw once again with the recent Hurricanes Harvey and Irma, Louisianans are resilient and watchful of neighbors through the tragedy and the recovery.
One aspect of recovery that many people don't see is the enormous amount of capital that flows into the storm zone from the reinsurance industry. In simple terms, reinsurance is insurance for insurance companies, and it helps Louisianans rebuild their homes, their businesses, and their lives.
Reinsurance transfers risk from the balance sheets of property and casualty insurance carriers so those companies can provide cost- effective solutions to consumers and businesses. A robust reinsurance market helps ensure that policyholders are getting the best rates possible on insurance for their homes and businesses. Many of the largest reinsurers in the world were founded in Europe 100 years ago or more, and a number of them do business in the United States through U.S. subsidiaries.
My concern is the potential impact of the bill's base erosion provision on the reinsurance market and policyholders along the gulf coast. The base erosion provision has the rightful intent of targeting bad actors who implement strategies to avoid U.S. taxes; yet the provision may have an unintended consequence of negatively impacting cross-border reinsurers conducting normal transactions, which could affect the market and premiums.
Reinsurance is critical to families and businesses in Louisiana, particularly after a natural disaster, and I hope to work with my Senate and House colleagues on this matter as we work to get the bill to the President's desk.