Mr. President, we stand today on the precipice of the most sweeping change to our Nation's tax system in over 30 years. This is a historic moment, as this distinguished body begins final consideration of the Tax Cuts and Jobs Act--tax…
Mr. President, we stand today on the precipice of the most sweeping change to our Nation's tax system in over 30 years. This is a historic moment, as this distinguished body begins final consideration of the Tax Cuts and Jobs Act--tax reform that will help boost America's economy, create more jobs, and leave more money in people's paychecks.
The last time we considered tax reform similar to this magnitude was 1986. To help remind us how much our country, its economy, and the people have changed since that time, let's review some of the events of that year.
In 1986, the Dow Jones Industrial Average closed at 1,895--sure that 20,000 would never be broken, and it wasn't until after the last election. It now stands at over 24,000.
A gallon of gas cost just 89 cents. Today it is close to $2.50. We still used land lines to phone our loved ones. Iconic movies such as ``Top Gun'' and ``Aliens'' opened. Americans were watching TV shows like ``Dynasty'' and ``Hill Street Blues.'' The Associated Press chose NBA star Larry Bird as one of the Athletes of the Year.
President Ronald Reagan signed into law the Tax Reform Act of 1986, which ushered in deep tax rate cuts for American families and an overhaul of our complicated Tax Code. When he signed the bill, Reagan commented on the length of the journey and noted that some people thought it would never happen.
Today, too, some have asserted that tax reform either cannot or should not happen, but as our strongly optimistic President said in 1986--and as I continue to believe--the American people ``haven't made this the freest country and the mightiest economic force on this planet by shrinking from challenges.'' Reagan noted:
This country was founded on faith in the individual, not
groups or classes, but faith in resources and bounty of each
and every separate human soul. Our Founding Fathers designed
a Democratic form of government to enlist the individual's
energies.
For that reason, I want to remind my colleagues about the hard work that brought us here. It is a journey that has been years in the making under the leadership of both sides of the aisle. It is one we started and will finish for the benefit of the American people and the health of the U.S. economy.
I am proud of the work of the Finance and Budget Committees, and I have had the honor to play a role with both. The Finance Committee held more than 70 hearings on how the Tax Code can be improved and streamlined to work better for all Americans.
Almost 3 years ago, Finance Chairman Hatch and Ranking Member Wyden convened bipartisan tax reform working groups to analyze challenges of our outdated Tax Code and develop policy recommendations for comprehensive tax reform. The conclusions reached by these groups helped identify the issues for reform and shape the contours of the legislation we are considering now. It is worth noting that the entire fiscal year 2018 budget reconciliation process has been open, transparent, and subject to regular order, starting with the passage of the Senate budget resolution.
The Senate Budget Committee marked up the bill over 2 days and accepted amendments from both sides of the aisle to make the resolution stronger. In fact, for the first time ever, the minority received a copy of the chairman's budget document 5 days prior to the start of the markup. According to many of my colleagues, it was one of the most transparent budget resolution markups in history.
The budget resolution--complete with the document reconciliation instructions--was then debated on the floor. This was an open floor process that allowed every Senator the opportunity to offer and vote on amendments to improve the resolution before its final passage.
Last month, the Senate Finance Committee held a 4-day markup before approving tax reform legislation designed to modernize our Tax Code. The markup lasted 23 hours and 34 minutes over the course of those 4 days. Of the more than 350 amendments filed, 69 were considered in committee. Amendments offered by both Democrats and Republicans were adopted.
Since then, both Chambers of Congress have passed similar versions of the Tax Cuts and Jobs Act, and over the past 2 weeks, conferees worked tirelessly to resolve and bridge the differences between the two bills and
come to an agreement on a final piece of legislation.
In this Chamber, the legislation reflects the outstanding work and leadership of Finance Chairman Hatch and Energy Committee Chairman Murkowski in developing legislative recommendations that adhere to the budget resolution's reconciliation instructions, and I thank them for their efforts.
I also thank my Senate colleagues who earlier this month supported the Senate passage of the Tax Cuts and Job Act and whose advice and consent during the conference has shaped the final bill. The legislation is truly a reflection of the broad range and consensus of Members who engaged with this process.
Throughout my work on this bill, I have carried with me the many lessons I have learned from when I owned and operated a small business or when I worked as an accountant. I have been led by one singular purpose, to help improve the lives of millions of hard-working American families, especially the residents of my own State of Wyoming.
I am pleased with the outcome of our work because I believe it includes meaningful changes that will help individuals and families struggling to move up the economic ladder. The tax plan includes reforms that will help grow the economy, that will create more jobs, and that will simplify taxes. It provides American workers and families with an across-the-board tax cut and puts more money in people's pockets. It lets Americans have a greater say as to how to use their hard-earned money. The changes will help small businesses in our communities thrive and encourage the largest multinational companies to remain in the United States, investing profits here instead of overseas--not a bad wish list for Santa.
Under the plan, Americans will reap tax savings from reduced tax rates, tax savings from a higher standard deduction, which creates a larger zero tax bracket for low-income individuals and increases many people's tax refunds. It also includes a child tax credit that doubles in size to $2,000 to help struggling families and all this while preserving important deductions for medical expenses, charities, homeowners, and State and local taxes. Our farmers and ranchers will receive stronger protections from the reach of the death tax to help them more easily pass on their businesses to future generations-- eliminating a double taxation.
Businesses small and large will benefit from a range of tax breaks, including lower tax rates, expanded opportunities to expense the purchase of capital assets, a new 20-percent deduction for many unincorporated businesses, and international tax reforms to give the U.S.-headquartered global companies a strong competitive footing in the global marketplace. These are changes you can take to the bank.
Now it is time for us to act. It is time for us to modernize our outdated Tax Code so our Nation can remain competitive in the 21st century economy. The code, as it now stands, hurts American workers and hampers economic growth.
Along with reforms to the code, this bill will also promote economic growth. For too long, some have accepted the presumption of a U.S. economy that will not grow as strongly as it has in the past. As a supporter of this bill, I reject that false narrative.
Better tax policy will boost the value of everything we produce, and this will mean more revenue for the Federal Government. I am tired of the accusations that Republican budget hawks--and that definitely includes me--are willing to throw in the towel and accept a $1.5 trillion deficit over the next 10 years. I am still a deficit hawk. Here is why. Claims to the contrary that this bill will go unpaid for are based on an incomplete analysis of the tax bill.
We have a Congressional Budget Office tasked with impartially evaluating any legislation we do. Unfortunately, its evaluations are tied to static scoring. That means it is evaluated without considering the underlying economic effects of these changes. Let me repeat that. The Congressional Budget Office is tied to static scoring. That means it is evaluated without considering the underlying economic effects of these changes.
The problem really isn't how much revenue we will have under the new bill. I believe it will increase revenue as the tax cut did in the 1980s. The problem is spending. We never make budget cuts. In Washington, a cut in the budget brings screams if an agency or program doesn't get as much as it requested, even if it gets more than it ever had before. That is not a budget cut, but that is how it works in Washington. If we continue this way, we will not ever get our spending in line.
For years, I have tried to institute the Penny Plan, where we just cut one penny in real cuts from where we have been. It gets lip service but not votes. It is a lot easier to give away money than it is to take away money, even pennies. So we need a new approach. We need to grow the economy. We need businesses to do well so more tax money will come in. We need individuals to make more so more tax money will come in. That has been done before with tax cuts. Unfortunately, when the tax cuts performed to provide more revenue, we spent twice what we brought in.
So here is what I have done as Budget chairman. A good economy brings in more tax money. Our economy has been limping along. Last year, it grew at a mere 1.6 percent GDP--which is private sector growth, not government growth. The norm for the United States is 3.2 percent private sector growth--not like we saw during the past 8 years when this growth remained below 3 percent. In fact, since this President got elected, the growth has been 3.2 percent already. In the fourth quarter of 2017, we may almost hit 4 percent. There is a lot of hope in America. Every tenth-of-a-percent increase in GDP brings in $273 billion in taxes over 10 years. If we could raise that anemic 1.9 percent to a mere 2.4 percent GDP, we can recover the deficit effect of the tax cuts. If we can bring up the productivity in the private sector--the GDP--to its norm of 3.2 percent, we will pay down significant debt over the 10-year window.
The Council of Economic Advisers and some 130 economists have agreed with me. They say the balancing point of 2.4 percent is way too low, and 3.2 percent GDP is much more reasonable. Some even predict 4 percent growth to our economy. That is how you can be a deficit hawk and cut taxes. You just have to bet America can do better. Actually, we are just betting that we can be as good as we used to be. Our American spirit should say: ``We can do a lot better than that.''
The Tax Cuts and Jobs Act will help our economy expand. It will provide tax relief to hard-working Americans and make changes to our Tax Code that businesses large and small need to boost the economy and create jobs.
Ultimately, we know increased revenues alone are not going to solve our long-term budget and debt problems because Washington's real problem isn't revenue; Washington has a spending problem.
I urge my colleagues today to finish the task before us. Let's pass this bill to make critical and long overdue changes to our Tax Code that will jump-start our economy. Our country needs it, hard-working American families need it, and they deserve to have the opportunity to make more choices about how their hard-earned money should be used.
In closing, I again remind my colleagues of the words of President Reagan:
Let's not let this magnificent moment slip away. Tax relief
is in sight. Let's make it a reality. . . . We can do it. And
if you help, we will do it this year.
Thank you, Mr. President.
I yield the floor.
Mr. President, pursuant to section 904 of the Congressional Budget Act of 1974 and the waiver provisions of applicable budget resolutions, I move to waive all applicable sections of that act and applicable budget resolutions for purposes of the conference report to accompany H.R. 1, and I ask for the yeas and nays.
Mr. President, I yield back all remaining time for the majority.