Mr. President, very soon the Senate is going to be voting on a budget resolution that essentially accomplishes five objectives, but at least four. And one is to prevent a $4 trillion tax increase on the American people at the end of the…
Mr. President, very soon the Senate is going to be voting on a budget resolution that essentially accomplishes five objectives, but at least four. And one is to prevent a $4 trillion tax increase on the American people at the end of the year, No. 1. No. 2, it rebuilds our military by investing in our military readiness in a way that will enable us to deal with and deter the threats that America deals with in a very dangerous world. It will restore energy dominance for our country, making energy more affordable to the American people-- something that we saw a huge runup on during the Biden inflation days. Part of that, in a big way, was the cost of energy. Obviously, securing the border, and there are resources in there to make sure, over the course of the next 4 years of this administration, that they have what they need to ensure that our border is secure and that the American people are safe. And, finally, reducing spending.
Now, I know that is a sort of a novel concept around here. We have heard a lot about, you know, massive tax cuts for billionaires. That has been a recurring theme that we have heard from the Democrats. But the one thing you don't hear a lot about is the runup in Federal spending.
So tax revenues, as a general rule, have stayed very static as a percentage of our entire economy, around 17.1 percent, thereabouts. Government spending, as a percentage of our economy, has gone up and gone up dramatically. So just take a look at this chart. Basically, in the last 5 years, the runup that we have seen in spending has been about 54 percent from 2019 to 2024--a 54-percent increase in spending.
Now, what is ironic about that is government revenue has also been going up, right? Everybody said: Well, you are going to cut taxes. You are going to run these big deficits.
Well, what happened?
In 2017, we cut taxes on the American people. We unleashed the American economy. We reduced rates and accelerated cost recovery so people could recover their capital investments more quickly. And what did they do? They invested, and it created more--not less--revenue, a trillion and a half dollars more than was projected at the time by the Joint Committee on Taxation and the CBO--a trillion and a half dollars more of revenue than what was projected. I think you can say they missed it by a long shot.
Well, this time around, we have seen estimates--and Senator Graham, Senator Crapo, who were down here earlier today--suggesting that the Council of Economic Advisers' prediction is that you will see revenue increase by about $4 trillion by making the 2017 tax law permanent.
So what we have, the reason we are running these big deficits, isn't because we tax too little. It is because we spend too much; that is the delta. Tax revenues have gone up and gone up consistently over time, particularly since 2017. What has gone up a lot faster, as I said, is government spending.
And so we have this deficit, and, you know, the way we are going to have to deal with that is to get more growth in the economy, generate more revenue, because when the economy is growing and expanding, people are creating jobs; people are working. They are taking realizations, and they are paying more taxes.
And that is what happens when you reduce taxes, and that is why it is so important that we extend and make permanent the 2017 tax law. This is what we are talking about here today. This is what this conversation, frankly, is all about.
Now, one of the things that has been interesting in this debate, because I heard lots of conversation from my colleagues on the other side about massive new tax cuts for billionaires--but let me tell you what, if you vote against this budget resolution, you will be voting for. You will be voting for a $4 trillion tax increase on our economy and on the American people.
Of that $4 trillion tax increase, $2.6 trillion will fall on people who make less than $400,000 a year--something that Joe Biden and, I think, pretty much every Senate Democrat pledged not to do.
Well, how does that happen? you ask. Well, here is what happens. In 2017, when we passed the Tax Cuts and Jobs Act, one of the things of the features of that bill was a doubling of the child tax credit from $1,000 to $2,000. It also had a near doubling of the standard deduction, and it had a lowering of rates. It had multiple ways in which working families in this country would benefit.
If we don't extend the tax relief before the end of the year, $2.6 trillion of that tax increase falls on people making less than $400,000 a year.
Now, I have heard some--the Democrats' own Presidential candidate said last year:
We cannot, and I will not, raise taxes on anyone making
less than $400,000 a year.
That was Vice President Harris, who was running for President. President Biden made the same promise, as did the current Democrat leader.
And when the Democrats were considering their so-called Inflation Reduction Act--which, perhaps, more aptly could have been entitled the ``Do Nothing About Inflation Act''--the Democrat leader repeatedly emphasized the Democrats would not be raising taxes on anyone making less than $400,000 a year.
Well, that is it. That is what you are doing, because this tax increase is going to hit American families; $2.6 trillion of it is going to hit families making less than $400,000 a year.
So when you cut the child tax credit--let's say you have four kids in this country. Now, the child tax credit is a direct credit against tax liability, meaning it is a dollar-for-dollar reduction in tax liability if you have a tax liability that exceeds the amount of the credit. So let's say you have four kids, and today it is $2,000. Well, if we
don't move to extend this tax relief by the end of the year, that $1,000 is going to go from $8,000 down to $4,000; $2,000 per child down to $1,000 per child, and that family's taxes are going to go up by about $4,000.
Now, if they don't have that big of a tax liability, there is a refundability component, and we can have a conversation about the merits of that. But that means they are going to be getting a payment or not, and probably not, because cutting that child tax credit back to $1,000 is going to fall largely on people who have families in this country.
It is the same thing with the standard deduction. It will be cut nearly in half. Here is the thing about that. When we made that change back in 2017, fewer people started itemizing, and more people started taking the standard deduction because the standard deduction was about $30,000 a year. Well, what happens if we don't extend this tax relief, that $30,000 goes back down to $15,000 a year--again, hitting working families, coupled, again, with what I said is higher rates. The rates will go back up.
So forget about the idea that you are not going to raise taxes on people making less than $400,000 a year because you clearly are. That is just a fact. It is just simply a fact.
So what about small businesses? Well, businesses--small businesses-- would pay, if we don't extend the current tax policy, $600 billion more if these tax cuts expire, because pass-through businesses--and that is your LLCs, your subchapter S corporations, your sole proprietorships-- pay at the individual rate. The rates would go back up and--and--we put a future in that bill called 199A. It was a 20-percent deduction for pass-through businesses. That also goes away. So small businesses are going to pay $600 billion more throughout the course of this tax policy, if we don't do something to extend it.
So you lose 199A. You lose the lower rates that come with it if you are a small business, and you will see a lot less investment in our economy.
Now, as I mentioned, in 2017, two of the objectives in that, particularly on the business side, were to lower rates and to allow for faster cost recovery, and to grow the economy. And it did. It worked.
The economy, over the past 7 years, grew--if you can believe this-- 5.4 percent more than what CBO had projected in 2017, prior to the passage of the Tax Cuts and Job Act.
Well, what did that mean? It meant a 50-year low for unemployment, record-low poverty, high median household income, and a narrowing of the income disparity gap in this country.
(Ms. Murkowski assumed the Chair.)
So what about deficits? As I said before, by any objective metric, revenues dramatically exceeded what was predicted in 2017 about what the effect of the Tax Cuts and Jobs Act would be.
Revenues, as I mentioned--if you look at this chart again--on average are about 17 percent as a percentage of our economy. Unfortunately, spending as a percentage of our economy, which as recently as a decade ago was about 20 percent, is now 23 percent and growing to 24 to 25 percent. Part of that is all the new spending that was associated with things like, for example, the IRA, the so-called Inflation Reduction Act.
There were some provisions in there, some energy provisions, for example, that at the time were thought to cost about a little over $200 billion. Today, they are actually over a trillion dollars. So CBO missed that one by about 400 percent.
As I said earlier, the Council of Economic Advisers projects a $4.1 trillion increase in revenue from extending the 2017 law.
So could it be that the runup in deficits happened because of the last two Democrat reconciliation bills or perhaps some other things they have done along the way, like the $250 billion in SNAP increase, almost, as I said, without any approval from Congress--something that my colleagues on the other side have talked about, how this executive branch has ignored the will of Congress. Well, that was a $250 billion increase without approval from Congress.
Then you have the student loan forgiveness program. As you recall, student loans--that program was used as a pay-for back in a reconciliation bill the Democrats did back in 2010. When they did that, many of us predicted that they would go ahead and use it to forgive student loans. So now student loan forgiveness, which is subject to court action, resulted in several hundred billion dollars of additional spending not approved by the Congress. But that particular move got no pushback from anybody on this side of the aisle, not a peep--hundreds of billions of dollars of spending by use of Executive power.
What I concluded from all of this is that my colleagues on the other side talk a lot about misuse or abuse, if you will, of Executive power, but that is not the issue. It is how the Executive power is used.
If it is used in a way that you agree with, which it was in both of those examples I just mentioned, then you are fine with use of Executive power. As I said, I didn't hear a peep from people over here when that was done.
My colleagues--both Senator Graham and Senator Crapo--talked about the use of a current policy baseline. In 2012, the Obama White House came up with something called the alternative fiscal scenario when it came time to extend the Bush tax cuts. That was about a $4 trillion use of the alternative fiscal scenario--translation: current policy baseline. There are 18 Democrats still here in the Senate today who voted for that, for use of that baseline.
I would simply say that when it comes to extending tax relief, there is always a reluctance by my colleagues on the other side of the aisle. When it comes to new spending, they embrace that idea. We have a different view. We have different views of government.
The use of reconciliation--which is what this is about; the budget resolution opens the door to reconciliation--is in many respects a great example of the contrast in how we view this.
The Democrats view reconciliation as a way to grow government, increase spending, new programs. The ARPA bill was about $2 trillion in spending. The IRA was about a trillion dollars in spending. Both were used by the Democrats through a budget resolution and reconciliation to increase spending.
Republicans, a lot of times--and we did in 2017--used it to reduce taxes and to reform the Tax Code, which was desperately needed, but as a consequence of that, as I said, we got not less revenue but more-- $1.5 trillion more than was predicted at the time.
On the other side of the equation, when it comes to spending, the estimators--the so-called referees--tend to underestimate how much things are going to cost; for example, the so-called Inflation Reduction Act.
But the bottom line in all this is that we need to address a lot of concerns in this country, many of which are dealt with in this budget resolution and ultimately the budget reconciliation bill. But one of the most important ones is this number right here. The deficit will continue to grow over time as a result not of too little revenue, which continues to increase over time, but of dramatically increased spending. That is the issue.
My colleagues here on this side of the aisle believe that you get at that by bending the curve down on the spending side, and on the tax, regulatory, energy side, pro-growth policies--particularly making permanent the tax policy that was passed in 2017--will unleash investment in America, which will lead ultimately not only to better paying jobs, lower unemployment, hopefully a narrowing of the income disparity that we have in this country, but also, interestingly enough, to higher government revenues.
That is what this is all about--whether you want to vote for extending the tax policy and avoiding a $4 trillion tax increase or whether you want to vote in favor of this resolution and make sure that the 2017 tax policy that was passed is extended permanently and that it unleashes the American economy in a way that will continue not only to create those better paying jobs but also make this deficit picture look a lot smaller by comparison, coupled with significant reductions in spending.
That is what we have to do. That is what this is about. I hope that all of our colleagues on this side of the aisle will vote yes tonight.
We are going to have a number of amendment votes, which always happens during a budget resolution--vote-
arama--and we look forward to getting that process underway. So let's let the voting begin.
Order of Procedure
Madam President, I would now ask unanimous consent that the following amendments be in order; that the amendments be reported by number, with no amendments in order prior to a vote in relation to the amendments: No. 1, Sullivan No. 2035; No. 2, Merkley No. 1758; No. 3, Reed No. 1645; No. 4, Lujan No. 1726; No. 5, Warner No. 1310; No. 6, Alsobrooks No. 1466; No. 7, Kelly No. 1737; No. 8, Murphy No. 1977; No. 9, King No. 1773; No. 10, Warren No. 1647; No. 11, Schumer No. 1884; No. 12, Padilla No. 1774; No. 13, Bennet No. 1646; and No. 14, Paul No. 1760.
I yield back all time on the budget resolution.
Madam President, I would ask that moving forward for the duration of this bunch of votes be 10 minutes in duration and that Members would get in their seats.
If Members would get in their seats, we could start.
I ask unanimous consent that the following amendments be in order, that the amendments be reported by number, with no amendments in order prior to a vote in relation to the amendments: No. 1, number 2186, Ossoff; No. 2, number 2107, Hickenlooper; No. 3, number 1441, Booker; No. 4, number 2180, Hirono; No.
5, 1644, Kim; and No. 6, number 2126, Sanders.