Mr. Speaker, I came here to talk about tax policy, and I will; however, having listened for the last 60 minutes to the most remarkable admission that Russia is meddling in America in many, many ways, even an admission that Russia somehow…
Mr. Speaker, I came here to talk about tax policy, and I will; however, having listened for the last 60 minutes to the most remarkable admission that Russia is meddling in America in many, many ways, even an admission that Russia somehow wants to influence America's elections--in this case, America's elections for the last year--I am pleased that my Republican colleagues are so adamant in pursuing Russian influence and, perhaps, controversial influence in the United States. I am pleased that they are doing that.
I am also pleased that Mr. Mueller is continuing his investigations. I will note that there have been two indictments and one guilty plea that have already come forth from his investigation having to do with people that are very, very close to President Trump's administration.
More will come of that, and I certainly hope our Republican friends will continue to focus on the fact that Russia is playing very serious and, quite possibly, illegal games or activities here in the United States.
We will carry on. I firmly believe that Mr. Mueller is not about to resign or be fired. If he were to be fired, I would suspect that there would be far more serious consequences than the kind of yapping we just heard for the last hour here on the floor.
Let me go back to my original point, which has to do with tax policy. As interesting as Russia might be, tax policy is going to be far, far more consequential in the long term. Whatever comes of the Russian situation in the election and conspiracies or other kinds of conflicts will bear themselves out over the next several years or months. Tax policy, however, is something that America is going to live with for a long, long time, were it to pass.
There are many things we could say about it. One is that, yes, the top 1 percent of America's wealthiest people--you take 360 million of us Americans and take the top 1 percent--are going to get 50 percent of all of the tax cuts that are in this multitrillion-dollar tax cut legislation.
So a trillion and a half dollars over the next 10 years to the top 1 percent ought to really drive up that problem that we call income disparity in the United States, you know, what we used to talk about: the rich get richer and the poor get poorer, or that America has a real problem with the superwealthy controlling most of the wealth and the rest of Americans really left behind.
So this tax bill is going to make it even worse. Now, that is really good. How does it do that?
Well, let's see. By eliminating the estate tax. Yes, five members of President Trump's Cabinet, including the President, would benefit in the billions. You see, the estate tax would be eliminated in just 4 years, about the same time they would be leaving the administration.
What does that mean?
Well, if you have a billion-dollar estate and there is a tax on that, you can eliminate the first $10 million, $11 million of that, but you have a 40 percent tax on the remainder. Well, that is about $400 million in estate tax.
Who would have a billion-dollar estate?
The President, Mr. Ross, the Treasury Secretary, maybe the Education Secretary, maybe others.
So who is going to benefit from this?
The superwealthy, to the tune of millions upon millions or hundreds of millions of dollars of the estate tax itself.
There is much more to that. American corporations would see their top rating from 39 down to 20. Who is going to benefit from that?
Well, we heard the Treasury Secretary say the American workers will.
Where is the evidence for that?
There is no evidence for that, none at all; in fact, quite the contrary. The Treasury Department's own tax analysis section says that 70 percent of the after-profit taxes now go to, guess who. Stockholders and executives, not to the workers.
It used to be that way back in the sixties and seventies. Maybe 70 percent went to the workers, went to increasing plants and equipment, investments in the United States. It is not that way anymore. Quite the contrary. The American workers will be left behind once again by those tax reductions.
That is not to say we shouldn't reduce the nominal tax rate for corporations. Yes, we should, but we should do it in a way that actually helps American workers. It keeps investments in the United States. But, no, not this tax proposal. This one actually creates what is called territorial accounting for international corporations.
Let's suppose that you have an international corporation located in Silicon Valley. We have some really big ones there. Territorial taxes would be that all of the earnings that that corporation has outside of the United States would be beyond being taxed by the United States, even though it is an American corporation that can manipulate the price of its goods and services to actually push, overseas, its profits. Brilliant.
You want to bring jobs back to America? Don't do territorial tax reform. It doesn't work for the American worker. It works for the stockholders. Their stocks and stock prices will go up. They will be able to receive even more benefits.
That is only $3 trillion over 10 years of reduction for corporation taxes.
Who benefits?
Wall Street corporate executives.
Who loses?
The American worker loses.
One more thing that is on my mind is that I used to hear last year, the year before last, the year before that--in fact, for the last two decades--a lot of talk from about more than half of the Members of this House of Representatives who would talk about the horrible impact of the American deficit and that it would lead to ruin for the American economy, our grandchildren would be left to pay it off, and all the horrible things that the deficit would bring to the United States, ultimately leading to the collapse of the American economy.
Well, there is some truth in that. The hyperbole was a little bit more than necessary, but, indeed, it is a problem to see our deficit ever increasing.
Every now and then, we come up against the debt limit, and, oh, my goodness, the debate that took place here: We have got to stop it. We have got to stop deficit financing. We have got to bring our budget back into balance.
Not a bad idea. In fact, it is the right thing to do. And, by the way, it was actually done during the Clinton administration.
For 2 years, almost 3 years, the American Federal Government ran a surplus, and it was estimated that in the 2000 to 2010 period, if that surplus were to continue, it might lead to a significant and troublesome reduction in the American debt. That is a complex question as to why that would be troublesome, but, nonetheless, it was said.
So what happened?
George W. Bush came in, cut taxes, decided we would go to war, first war ever in America's history that was not financed by taxes but by borrowing, mostly from China, and the deficit began to explode. And then there was the great collapse in 2008, and the deficit went right through the roof.
So we have been living, since that time of the George W. Bush tax cuts with a deficit, a structural deficit that has not been solved despite all the rhetoric from the deficit hawks.
Now, I guess the deficit hawks, like the Canadian geese, have somehow migrated to the far south of Washington, D.C., because I don't hear any around here today. They have migrated somewhere far away from Washington. But what I hear from those previous folks that called themselves deficit hawks is that they want to drive up the American deficit, that they have a proposal to actually increase the American deficit.
Oh, wonderful, they say, not to worry. We can increase the deficit by well over $1.5 trillion in the next decade and it will be lovely. We will create more jobs.
I am going: Excuse me. I must have missed something in this debate. You just said a year ago that those deficits would somehow create a calamity for the American economy, that we would lose jobs, we would lose our competitiveness, that we would come to ruin, and now you are telling me I shouldn't worry about a $1.5 trillion increase in the deficit over the next decade?
Wow, how does that work? How does that happen?
I want to share something with you. I became--trying to understand what this was all about, how could it be 6 months ago or a year ago they were deficit hawks and they had to do away with the deficit and now they want to increase the deficit? What is this all about?
So I asked my staff: Give me some numbers. Don't we have what we know as a structural deficit built into the budget of the United States tax revenues significantly lower than the expenditures, and therefore we have this structural deficit? Show me what those numbers are.
So they did, and here they are.
Structural deficit, 2018, the structural deficit is $567 billion. That is half a trillion. That is the structural deficit that exists today without any of this discussion about tax cuts.
Next year, 2019, it is expected to be $689 billion, two-thirds of $1 trillion in 1 year--in 1 year.
And it goes on.
The structural deficit in 2020, $775 billion. That is the ongoing structural deficit in the Federal budget: revenue received, expenditures--expenditures $775 billion more than the revenue in 2020.
This isn't talking about the new tax cuts that are being discussed now here in Congress.
And so it goes.
In 2022, it is $1 trillion annual structural deficit.
So what does this tax cut mean?
Oh, it is only $1.4 trillion or $1.5 trillion over a 10-year period, but that is on top of the existing structural deficit.
So here you have it. This year, the existing structural deficit before any tax cuts, we are talking about $563 billion. Added to that, as a result of the Republican Ryan-McConnell-Trump tax cuts, we are adding $114 billion on top of $563 billion so that the structural deficit, should this new tax cut ever come into place, will be $677 billion--not millions, billions.
Over the next 10 years, by the end of the 10-year period, as that tax cut, this new tax cut goes into effect, with the addition adding to the existing structural deficit, in the year 2027, 10 years from now, you can expect a $1.6 trillion structural deficit.
This is a problem. It is a problem that is made even worse--even worse--by the fact that the benefit of the tax cut does not go to economic growth, but quite the contrary. It does not go to the working men and women, the middle class of America who really do need to have a better way, better wages, more money in their pockets, a better living, a better ability to take care of their family and their children, a better education, a better opportunity, and a better infrastructure. No. No. None of that will happen. Instead, what will happen as a result of the Republican tax cut is that the wealthy will get wealthier.
Remember this: 50 percent of all of the tax cut benefits--and we are talking trillions here, as much as $3 trillion over a 10-year period. Fifty percent of that will go to the top 1 percent of Americans. We are talking the superwealthy here.
That is not a better way. That is an awful way to run a government. That is an awful thing for an economy when you continue to skew the American economy to the superwealthy and leave behind the American worker, the American family struggling to do better, struggling to have a better opportunity for their children in school, a better road or a better bus or a better train on which to travel, a better transportation system.
So here we are. Here we are in the House of Representatives debating in committee today how to make the deficit worse, how to increase the structural deficit over the next 10 years, how to literally run this country into bankruptcy.
No, we are not going to go bankrupt, but what we will do, we will terminate key programs as we struggle to find ways of balancing the budget with so little Federal revenue available to us as a result of these tax cuts. I could probably go on for an hour and just work myself into a rage about the lost opportunity.
We Democrats have proposed a better solution, a better way to deal with the tax policies, one that actually provides benefits to the working families of America, who, as our Republican friends like to say, sit around the kitchen table and worry about their debts. Yes, indeed, they do. They worry about it. We have a better way of providing for the infrastructure, a better way of providing for our national security, our education, and on and on.
The architect of those programs that lay out a better way for the American economy and the American worker and the American family is with us here tonight, our minority leader, Ms. Pelosi.
Mr. Speaker, I yield to the gentlewoman from California (Ms. Pelosi).
Madam Leader, if I might, you said SALT. It is like really pouring salt on a wound. But SALT is State and local taxes.
So for California, New Jersey, New York, Illinois, and other States that have big populations, they collect this revenue, and it cannot be deducted. The numbers you have, I understand those came from the Department of the Treasury and the IRS.
Madam Leader, you raised a very important point early on here about the way in which--I just heard you ask to reach out to Republicans to sit down and talk about how to structure a decent tax reform, not just a tax cut for the wealthy.
My understanding is the Republicans have not even offered a moment--a second--to discuss these tax bills with any of us, nor have they had even one hearing on the most consequential economic policy that this Nation could put forward. Not a hearing at all, but rushing out secretly. Today, I understand they had a markup, but no witnesses, other than someone to answer questions as to the impact.
And there has been discussion about the past major tax cut of Ronald Reagan's in 1986, in which we heard that there were 2 years of hearings all around the Nation and, I guess, more than 30 hearings in Congress before that major tax bill passed in 1986. But now here we are rushing this huge monumental and very detrimental tax bill through.
Now, that is what I have heard, and I am not in the leadership, but, as far as I know, they haven't talked to you.
You said it. I was astounded that, during the first Special Order hour, there were about 12 members of the Republican Party who came down here on some weird conspiracy theory, and I am going: Wait a minute, guys, why don't you talk about your tax bill; why don't you sit up here and brag about all of the good things you are doing on the tax bill?
Apparently they want to hide.
That is middle-income.
You were laying out, Madam Leader, our Republican colleagues from California who seem to ignore or want to not even think about the State and local tax deduction, and also the mortgage interest deduction. Trying to find a house in California that is for less than $500,000 or $700,000 is virtually impossible. Certainly in the bay area, much of southern California, and in the Sacramento region, it is almost impossible.
So by reducing that mortgage interest deduction, together with State and local taxes, you are seriously increasing the tax burden on homeowners and on working men and women in California.
You laid it out so very well. In the district directly to my south-- Mr. Denham's district--101,000 of his constituents currently have a $7,982 average deduction for State and local taxes, and for the mortgage interest. They will lose that, and they will wind up paying somewhere between 25 to 30 percent on that lost deduction. So let's say 25 percent of $8,000 is what, $2,000? New taxes right there.
Mr. Speaker, I thank Madam Leader for joining us tonight.
I remember here on the floor, when the debate occurred over the budget that did pass the House of Representatives a couple of weeks ago, you spoke eloquently on the floor about what this budget would mean, that it would open the door to some very bad public policies, in fact, public policies that would harm individual Americans as well as the American economy, and you were very passionate about it. You said that about the budget, which passed the House only on Republican votes, no Democrat votes.
Yes. Jeff Denham, Mr. McClintock, and the other Republicans from California included.
You laid it out. You made it very, very clear that it would lead to a tax bill that would be harmful. We had some ideas then what it would be, but we had no idea that it would be such a horrendous problem for the American economy and particularly for the American workers and middle class. You laid that out very well.
You also laid out very, very clearly that in that budget was the blueprint for the evisceration of programs that Americans depend upon. You talked about Medicare and you talked about Medicaid, of which 60 percent of Medicaid goes to seniors in nursing homes across this Nation, and the potential cut that would come to Medicare.
You also talked about how it would, as you just did, go after the education system, after research that we need for medical research, and economics, and all of the sciences. You talked about the infrastructure.
You laid out that that budget bill was the template. We are now seeing that template come to reality on the floor of the House first with this tax cut. Probably within months, should this tax bill pass, we are going to see the rest of what you told us to watch out for. Watch out for the cuts coming to Medicare, watch out for the cuts coming to Medicaid, to education, to infrastructure, to the things that Americans depend upon in their daily lives, the Meals on Wheels program, and then the supplemental nutrition programs.
Standing right here, I remember I was in the back of the room here, and I heard you speak about what would happen if that budget bill passed the House. It did. Now we are seeing the first step. There will be another step. They will come back after the Affordable Care Act and medical care and all of that. I wish you were wrong.
What you did standing here warning us, I wish you were wrong, but you are not. You are absolutely correct. Now we are seeing it play out here in secret without public hearings.
We are going to talk about this, and I hope the American people will hold those accountable who vote for such a horrendous economic policy, one that actually creates a structural deficit that will be virtually impossible for America to get out of, and all of the harm that will come by shifting enormous wealth to the men and women who already are the wealthiest ever in the last 400 years. The wealthy in America have accumulated more wealth in a smaller group than at any time in the last 4 centuries dating back to the Spanish Crown in 1500 and 1600. That is bad economics, bad social policy. That is what they are doing.
Thank you so very much for joining us tonight.
We are going to drive this and make sure the American public knows what is coming down.
I thank you, Madam Leader.
As I close, I will just say that this is not the last of this debate. We are going to make sure that the American public knows what is happening to them and what this Republican Congress is doing to the American public.
Mr. Speaker, I yield back the balance of my time.