Madam President, I would recommend to this body something that is obvious to all of us. Our economy is stuck. We are in a bad spot of just treading water. Over the last 11 years, our gross domestic product--that is how much our economy is…
Madam President, I would recommend to this body something that is obvious to all of us. Our economy is stuck. We are in a bad spot of just treading water. Over the last 11 years, our gross domestic product--that is how much our economy is growing--has been 1.9 percent, and 1.9 percent is a tiny change.
Just to give you a perspective, over the last 100 years, there has not been a single decade when we have not had a year without at least 3 percent growth, until the last decade. Literally, our economy, is typically growing; that is, more jobs are being added, people are making more money, there is more happening, and we are selling more internationally. In America, over the last 100 years, it has just slowly grown and grown and grown until the last 10 years, and, then, it has flattened out. We are stuck.
Now, when I was younger, we had a record player in the house. Now, for all of you under 40, I would explain that a record player is kind of like a CD player, only it was larger and made of vinyl. But if I say that, then, all the under-20 crowd will say: What is a CD player?
Let me just say this. The big black pieces of vinyl that played music at my house occasionally would get stuck. The record needle would land in the same groove and play the same part of the song over and over. It was my job, as the youngest one in the house, to go over to the record and bump it and get it out of that. Our economy needs that.
We need to be able to get over to our economy, which is stuck in the same groove at 1.9 percent in this incredibly low-growth rate, and give it a bump. Now, that bump can come in a lot of ways: increasing international trade would be a great help, engaging more internationally, keeping our regulations common sense and as nonintrusive as possible so that small businesses and medium-sized businesses aren't panicked all the time of what the Federal Government is going to do to them with a new regulation. Just keep them common sense and simple.
How about making sure that there are fewer Federal forms and that the Federal forms that people have to fill out not only are simple to do but they don't duplicate over multiple different agencies. It would be good if people who worked in small, medium, and large businesses spent more time selling products than they did filling out a form for some Federal bureaucracy that is never going to read that form anyway.
The obvious way to be able to bump the record needle in our economy right now is tax reform. It is not the main thing that is going to do everything, but it is a pretty big element. If we can get tax reform done, it actually gives our economy a little bit of a boost. Now, I have folks that will say: How does that make a difference? When you do tax reform, why does that actually increase economic activity?
Well, quite frankly, people around the country and in my State of Oklahoma are struggling to be able to save money because their wages aren't growing at the same speed that everything else is going up in price. So people need to be able to save more money and to be able to have more money to be able to spend.
Also, we need to create more jobs and we need to get companies going again and actually developing more jobs. If people can actually get a job, if people can make more money at that job, and if people actually have more take-home pay, they spend a little more, they save a little more, and the company expands a little more. If each
place does that a little bit, it dramatically increases our economy around the country, and we know it because we feel it.
Making the Tax Code simpler for every person in every business means people don't have to pay as much to have their taxes done. Maybe you can do your own taxes because it would be simple enough to do it, and it wouldn't cost so much. Accountants who work for businesses could go back to working for their businesses to see how they can make their businesses more efficient rather than spending all of their time just on tax policy.
I think we should follow the lead of the President on this. The President made a very clear statement. He said: Let's help our companies compete, but to do that we have to also knock down barriers that stand in the way of their success. For example, the President said:
Over the years, a parade of lobbyists have rigged the tax
code to benefit particular companies and industries. Those
with accountants or lawyers to work the system can end up
paying no taxes at all. But all the rest are hit with one of
the highest corporate tax rates in the world. It makes no
sense, and it has to change.
So tonight, I'm asking Democrats and Republicans to
simplify the system. Get rid of the loopholes. Level the
playing field. And use the savings to lower the corporate tax
rate for the first time in 25 years.
Did I fail to mention that the President who said that is President Obama? President Obama did, right down the hallway, in 2011, in his State of the Union address. That is what he said we should do: simplify the system, lower the corporate tax rate, and be able to deal with all of the loopholes that are in the system.
This shouldn't be a partisan issue. Everyone sees this, Republicans and Democrats alike.
So my focus is this. How do we actually get this done and not make it into a partisan food fight here but actually do what is right for the American people and help bump the economy to be able to help get us going again?
In my State--whether you live in Valliant, Gotebo, Healton, Sayre, Muskogee, Tulsa, Oklahoma City, or Lawton--this matters because everyone unfortunately pays taxes. Everyone knows it is a necessary thing, but we want to have it as simple as possible and to have it as low as possible, and we want to make sure it is as fair as possible.
So the framework has been presented this past week. It is a simple framework for how we deal with tax policy. It talks about consolidating our rates. We have seven rates now. We would drop that down to four rates. There would be a 0-percent rate, a 12-percent, a 25-percent, and a 35-percent rate.
Now, some folks have asked me about the 0-percent rate, because a lot of Americans say one simple thing: Every American is an American, and every American should pay a little bit in taxes. I would agree, by the way. But every American is paying some taxes. For those folks at the lowest end of the scale, I would propose dropping the rate to zero for them on income taxes, but they are paying their fair share in property tax, in gas tax, and in sales tax. They are helping their local fire department and their local police department. They are paying for the roads that are federally subsidized, based on their gas tax. They are paying taxes, but if they are not at a rate and at an income high enough to be able to survive at that rate, then let's drop theirs to 0 percent for income tax. They will keep some of the other taxes so they can still contribute to society and still be a part of this great Nation.
Dropping those rates down to the lowest bracket being 0 percent for income tax, then 12 percent, 25 percent, and 35 percent is a pretty standard rate. Quite frankly, this is something that was proposed in the Simpson-Bowles proposal before, which was a bipartisan proposal, for it to be able to come out, on how we can reform the system.
Eliminating the alternative minimum tax--do you want to talk about a complicated tax code? Basically, we have two Tax Codes. We have the standard Tax Code, and then we have the alternative minimum tax. Everyone who does their taxes has to do them twice to be able to evaluate which one of the codes they actually fit into. Now, if are using an electronic system, you lose track of it because the electronic system on the computer is doing that for you. But the AMT dramatically increases the complexity of the code. We should do away with that.
If we want to be able to protect the folks who are in the lowest bracket, then let's double what is the standard deduction. Right now the standard deduction is about $12,000. Let's double that to about $24,000. That $24,000 amount for families would mean that the first $24,000 of income that you would make as a family would fall into that 0-percent bracket. So you are paying zero income tax to the Federal Government until you make more than $24,000. That protects a lot of families in the lowest end of the bracket to make sure they are not falling into this.
Quite frankly, in Oklahoma, most Oklahomans just use the standard deduction. They don't itemize. Doubling the standard deduction would mean that for a lot of those specialized deductions that everyone else gets, it actually flattens that out. It makes it fair. The No. 1 thing I hear from people when they fill out their taxes is not only that they filled them out and turned them in, but they say: I have no idea whether I did them right. It was so complicated, and I don't know if it is right. Then, the second thing they say, though, right behind that, is this: Why is it that, when I read through the hundred pages of instructions on the 1040 form, every deduction seems to be for someone else?
So let's increase the standard deduction so everybody gets a flatter, simpler, and fairer system, and let's keep the biggest of the deductions that most Americans use, like the charitable deduction or the mortgage interest deduction. If there are any two deductions that most people use, it is those two. So let's protect those two in the system.
As for reducing the corporate tax rate, I have folks say that it only benefits the biggest businesses. I always smile and say: Those are actually people who employ people. If you reduce the corporate rate, that means they are more competitive internationally and that means they are not having to move their corporate headquarters overseas.
For years, as a nation we have used the carrot-and-stick approach on trying to keep businesses here in the United States; that is, if they go overseas, beat them with a stick and try to punish them for trying to move. Why don't we use the carrot approach? Why don't we find out why they are moving overseas and fix that? Many of these companies are moving overseas because of the very high corporate tax rate here in the United States. Let's fix that. Over the decades, many of our competing nations have done that. We should fix that. That increases the number of jobs, that increases economic activity, and that keeps American jobs in America.
We should deal with the child tax credit and continue to be able to protect that for families.
We can deal with how we do expensing. Now, if you don't run a business, that doesn't matter much to you. But if you are the one who owns the small business, you understand how expensing works. If you have a cost to your business this year and if you can't write it off in this year, you have to expand that out, and you know that slows you down.
Here are the basics. If you are running a small business and you need to buy a new pickup for your business, if it takes you years to be able to depreciate that out, you are slower to do it. But if you know you can depreciate it out this year in your business, you are more likely to buy that. So that business buys a new truck this year. Well, that not only benefits that business in having new equipment, but it also benefits the Ford dealership down the street that actually sold them the truck, and it benefits all of the people in the area who helped supply that vehicle. So it trickles down through the rest of the economy.
There are ways to be able to accomplish all of these things and to be able to be as simple as we possibly can be.
There has been a lot of conversation about worldwide taxation as well. People seem to get confused on that area because most people don't live in that world. Here are the basics of it: Right now, if you are an American company and you are selling things overseas and
doing business overseas, when you make a profit overseas and you try to bring that money back, you get taxed overseas at their tax rate, which you should, in that country you are making the product and selling it, but you get taxed again when you bring it back to the United States. We are the only country that does it that way.
If we will just simplify the system, it will actually encourage companies to be able to stay in America and then do business all over the world rather than moving their company out of America. It is a simple way to be able to do it, and it is a way that we can do and should do. You will hear the term ``repatriation,'' and that is really what it is about. It is Americans being able to move their money from overseas accounts back to the United States and get that money moving.
There was a lot of conversation about the stimulus plan back in 2009 trying to get almost a trillion dollars of government money--that is money from you and me--and to be able to move that around in a stimulus package. Let me give you the figure. Right now, it is estimated that American companies have about $2.5 trillion of private money parked overseas that they are not going to bring back to our economy because of the high cost of the tax coming back. If we were able to change that system, $2.5 trillion of private money would move from overseas back into the United States. What effect would that have on our economy? I would stipulate that it would be a pretty dramatic effect that it would have on our economy.
We can fix this. We can resolve this. This shouldn't be as hard as we are making it, and it can be a bipartisan approach to be able to address some basic things--taking care of our families, making sure we are watching out for those who are in poverty, simplifying the code, making sure deductions aren't for a few but that they are spread out across the way that we handle it, protecting things like charitable giving and the mortgage interest deduction and things that most Americans use. These are the parameters we are trying to be able to work through over the next couple of weeks.
Hopefully in the coming months, as we work through all the details in the committee process with amendments and coming to the floor and being able fight our way through the process, we will be able to actually get to a decision that will help us long term as a nation. This is something that can and should be resolved. It is one of the issues I have to raise to this body again.
This body has had a hard time actually moving on the biggest issues we face as a nation because the rules of this body prohibit us from debating them. The rules haven't changed over the past multiple decades, but the way we operate has. The American people are ticked about it, and rightfully so. The Senators in this body are frustrated with it. May I remind us that the rules of the Senate are set by the Senate? So if we are frustrated with the rules, we should address them.
Many of you have heard me speak about this in the past.
There are three basic rule changes that I think will change dramatically how business gets done in the Senate. The biggest one is the filibuster rule. We have two filibusters for every single bill that comes up. There is one at the beginning. You have to get 60 votes to start debate; you have to get 60 votes to stop debate; then the bill passes with 51. That needs to change. We should take away the first 60 votes at the beginning. We should be able to get onto a bill. Regardless of whether it is Republicans or Democrats in the majority, the majority party should be able to bring up a bill and debate it without being stopped. Let's bring up any issue and actually debate it. Let's not inhibit debate in this body. If we can't find agreement, keep the 60 votes at the end of it so we can keep the debate going until it gets resolved, but we should be able to debate the issues.
The second big issue is that we have to deal with nominations in an appropriate time period. Currently, my Democratic colleagues are forcing the long periods of time in debate for every single nominee who comes up. I had folks say that is what Republicans did in the past. That is actually not true. This is the first time it has happened like this.
This week, we are going to move four nominees for the President in 1 week--four. Under the current structure, it will take 11 years for President Trump to get his staff. Let me give you a barometer of where things have been in the past. As of yesterday, President Trump had 153 confirmations. At this same point, President Obama had 337 total. President Bush had 358 total at this same point. President Trump is not getting his nominees heard, and they are being slow-walked through the process.
We have to fix that. A simple way to fix it is to allow only 2, 4, or 8 hours of debate, not this protracted 30 hours of debate per nominee. It is already a resolved issue. Everybody knows it. These individuals have already gone through committee. They were already voted on in committee. By the time they get to the floor, it is resolved. The 30 hours of debate time is purely delay tactics. We should be able to resolve that within 2, 4, or 8 hours total.
Here is a radical idea: If we want to get the Senate going again, we can agree to a rule change that would allow for what is called dual- tracking. We would do nominations in the morning and legislation in the afternoon. Right now, we can only do one thing at a time in the Senate, so while we are waiting on a nomination vote, everything waits until that is done. It slows down the process. Why can't we do nominations in the morning and legislation in the afternoon?
There are basic rule changes that will help that are not partisan issues. They are designed to get the Senate moving regardless of who is in the majority. We have to resolve this long term. If we don't, the American people will continue to be frustrated, and we as Senators will continue to be frustrated.