Mr. President, I appreciate the remarks that have just been given by my colleague from Kentucky. I think the main message we need to hear there, and what I am going to talk about, is that the problem we have in America is not that our…
Mr. President, I appreciate the remarks that have just been given by my colleague from Kentucky. I think the main message we need to hear there, and what I am going to talk about, is that the problem we have in America is not that our taxes are too high or too low, but that our spending is too high.
And Republicans, today, I am confident, will be unified in delivering, as President Trump calls it, ``one big beautiful bill'' for the American people.
What does this bill include? The fiscal year 2025 budget resolution fulfills promises to secure America's borders, increase our national defense, unleash our energy potential, and finally start to get our house in order.
I agree completely with my colleague: We have got to reduce our spending. And this bill contains a target with a minimum floor of $2 trillion in spending reduction in our Federal budget.
Importantly, it also lays the groundwork to make permanent and build on the 2017 Trump tax cuts so that American families can keep more of their hard-earned money to stop financing Washington's spending problem.
Our conference is united in preventing an over $4 trillion tax hike on American families and businesses and delivering additional tax relief to those who have suffered for 4 years now under inflation.
We are united in making this proven tax policy permanent to provide the certainty that businesses need to make long-term investments that drive growth and stability for our families as they save and plan for the future.
We are also unified in our resolve to restore fiscal sanity and know that the best way to do so isn't to tax hard-working Americans more. It is to spend less.
While many tend to focus on the policy disagreements that occur--as they should in these Halls--the reality is that Republicans are completely unified in delivering on President Trump's agenda, a major portion of which is to restore the economic prosperity experienced under his Presidency.
Let's just look back for a minute about the bill that we are trying to extend and make permanent now.
Most Americans don't pay attention to the minutia of tax policy, but if you
ask them, the majority will tell you that they would rather keep more of their money than let the government spend it. And that is exactly what the 2017 tax cuts did.
Those Trump tax cuts lowered tax rates for the overwhelming majority of Americans, simplified the Tax Code, and encouraged companies to do business in the United States instead of abroad.
In addition to lowering rates across the board, it provided targeted tax relief to the middle-class working families by doubling the standard deduction and the child tax credit, and to small businesses by providing a new 20-percent deduction, enabling America's entrepreneurs to create new jobs, increase workers' wages, and reinvest in their business.
The majority of the benefits from the Trump tax cuts, contrary to what you have heard all day from the other side, flow to working middle-class families, the bottom 50 percent of earners receiving the largest reduction in average tax rates at 17.3 percent.
Contrary to the claims that you have heard all day on the floor today that benefits were only for billionaires and corporations, the Trump tax cuts actually made the Tax Code even more progressive, meaning that the highest income earners today pay a greater share of all taxes than they did before. And if we can extend this tax cut, that will continue to be the case.
The generational reforms we made in 2017 were designed to strengthen investment, boost economic growth, increase take-home pay, reduce poverty, and make America strong. And they worked. Not only did taxpayers keep more of their hard-earned money, but a growing economy powered median household income to an all-time high. The labor market improved, workers saw record wage growth, and the unemployment rate fell dramatically to 3.5 percent, the lowest in 50 years. The lowest income workers experienced the largest wage growth. There was a capital formation explosion in the United States and corporation inversions-- corporations leaving America--stopped and became a thing of the past, as companies came back home to America and became the place to form capital and do business again.
All Americans reap the benefits of a booming economy. Extending this current, proven tax policy and building on it is the best way to restore economic prosperity and opportunity for working families, many of whom are struggling to recover from the historic inflation of the last 4 years.
Tonight, I expect we will hear once again the politics of fear, as my Democrat colleagues claim all sorts of dire things that will happen, including that we are just going to cut taxes for the wealthy so that we can do our own projects and benefit the wealthy and corporations.
This attack has been used for nearly a decade, and it is just as false now as it has been in the past. Americans should not be scared by these falsehoods. What they should be alarmed by is what my colleagues and I committed to preventing: the largest tax hike in history that will occur if we do not extend the current Trump tax cuts.
This chart shows, of all these dollars of tax relief that we are talking about, contrary to the argument that they go to the wealthy, $2.6 trillion of this tax hike goes to people in households making less than $400,000 a year. And the vast majority of that goes to people making in the middle, lower, and upper middle-income categories.
Families of four making $80,000 will see a $1,700 tax hike if we don't extend this tax relief. And 20 million small businesses will see their rates go up to 43.4 percent. The child tax credit will be cut in half. The standard deduction will be cut in half. The lowest income earners in America are the ones who are benefitting the most from this legislation today.
Republicans are united in our efforts to make this work. Now, one of the things we are focusing on is making the tax cuts permanent. Not only are we focused on extending these policies, but we are committing to make this growth in our economy permanent so we don't have to face these dire consequences in the future.
Permanent tax policies promote stability and lead to more pronounced economic effects than temporary ones. Making these tax cuts permanent will provide businesses with the certainty and the stability they need to make the long-term investments that drive growth, accelerate productivity, and increase prosperity across all segments of our economy.
Studies find that a permanent extension of the TCJA would increase long-run GDP by 1.1 percent and increase after-tax income for all Americans of all income levels.
Making the small business deduction alone permanent is estimated to create 1.2 million jobs annually over the first 10 years, increasing to 2.4 million jobs in the long run.
The President's Council of Economic Advisers just released an analysis that says extending the Trump tax cuts, combined with other pro-growth economic policies that we are pursuing now, would boost the level of short-run GDP growth by 3.3 to 3.8 percent and long-run real GDP growth by 2.6 to 3.6 percent.
Now what does that mean?
It means we are going to see that it will raise annual real wages by $2,100 to $3,300 per worker, increase real annual take-home pay for median-income households with two children by roughly $4,000 to $5,000, save over 4 million full-time equivalent jobs from being destroyed, and facilitate $100 billion of investment in distressed communities.
The analysis also projects that extending these tax cuts, ``together with full suite of the Trump Administration policies--such as deregulation, which the CEA previously estimated would add 0.1 to 0.2 percentage points to real GDP growth over a decade--is expected to result in 3.0 percent annual real GDP growth rates over the next 10 years.''
Now, what does that mean? According to CEA, that 3.0 percent growth in our GDP will result in $4.1 trillion of additional revenue to the Treasury to help deal with our national debt--$4.1 trillion.
To unleash that growth, the best way to make these tax cuts permanent is by using a current policy baseline. This is the scoring method that more accurately reflects reality.
The average American easily understands that there is a difference between a tax increase and a spending cut. However, there is an inherent bias in Congress's scoring process, where tax policy is treated differently than spending policy.
If tax rates are scheduled to increase, like they are right now if we don't act, preventing that tax hike is counted as a ``cost'' in uncollected future revenue. But many spending programs are assumed to be extended beyond their expiration. So the spending just continues and continues unabated, which the budget rules say don't have any ``cost.''
That is what we are trying to fix today in this bill. In fact, there is $2.5 trillion in spending that is automatically extended by our budget rules over the next 10 years, under a current policy baseline, that they currently use.
Even the Obama White House has used a current policy baseline for tax policy. They recognized that there is a difference between increasing taxes and cutting spending. In 2013, the Obama White House stated that a ``current policy baseline is the appropriate reference point since it measures changes relative to the status quo, rather than the mix of expiring provisions and policy changes that would likely never be implemented.''
Interpreted, what they said was exactly what I have been saying. President Obama and his team said: You can't say that just keeping the tax rates where they are and not raising them is the same as spending more money.
We need to level the playing field and sever the connection that creates a tax-and-spend budgeting process in Congress, and that is another thing we are going to do today.
Critics who have been strangely silent over the years as trillions of dollars in spending has been automatically extended under a current policy baseline now take offense to correcting that bias toward forcing Federal spending.
As applied to only the tax policy, those critics assert that we will be increasing the deficit by using a current policy baseline or we are using this baseline to hide the cost.
Let me be very clear: We are not hiding the score that JCT and CBO would
assign to the bill under a current law baseline. In fact, I like to see that score. It shows the amount of tax increase that my colleagues on the other side are trying to push onto the American people.
But let's be fully transparent: Both an estimate based on the current policy and one based on the current law will be released when we consider this bill on the Senate floor, and then Americans can see what kind of savings have been given to them by not raising their taxes.
Under our current existing tax regime, the revenue to the GDP ratio this year will be about 17.1 percent, meaning we will raise taxes for the Federal Treasury under our current tax policy of about 17.1 percent of GDP on a current policy baseline. It will also be about the same next year if we don't let the taxes go up, meaning that the revenue will not appreciably change.
Yet my colleagues on the other side say it is going to spike a hole in the deficit because--why? Because they won't get their hands on that $4 trillion of new tax revenue out of the American people. This would not increase debt relative to GDP; it would simply prevent a tax increase.
And we need to be honest about what those tax increases would and would not do. Those who say we should let taxes go back up say: Wow. Then we can use it to pay down the national debt some more. Every tax increase that Congress has adopted for as long as I can remember was not used to pay down the national debt. It was used by Congress to spend more money.
We have to take that pressure off of spending as well. Congress does not have a revenue problem; it has a spending problem. Senate Republicans are united in our desire to take concrete steps to address our deficit and get our fiscal house in order.
Because the bill we are debating today is within the confines of reconciliation, the scores and numbers that will be discussing don't reflect that full fiscal picture. In order to have an honest discussion of what needs to be done, there is an acknowledgement that needs to be made that other factors are also at play that can generate economic growth and reductions in spending.
What am I talking about? Economic growth. As I indicated in one of the charts we just had up, the estimates from the CEA are, if we make the tax cuts policy permanent, the confidence it will give our economy and the boost that it will give our economy in tax incentive policy will grow the economy by as much as $4 trillion of new revenue to the Federal Treasury.
The President is also directing impacts in the government through his efforts and the Department of Government Efficiency to aggressively cut waste, fraud, and abuse from our government programs. Spending on Federal Government programs has ballooned in recent years. We have a responsibility to evaluate these spending increases and ensure that these programs work effectively and efficiently for everyone.
The President has also undertaken and will likely pursue more deregulation. Deregulation has had as big an impact on revenues as economic growth as tax policy has in the past, and we should recognize that.
The bottom line is that in addition to the action that Congress can take, there are activities that the President is currently engaged in that will impact our fiscal policy by either reducing spending or increasing revenue, and we should also take those into consideration.
Congress must begin the process of restoring fiscal sanity by achieving deficit reduction and spending reforms as the best way to achieve that goal. In contrast, imposing the largest tax increase in our country's history would be counterproductive by easing the gliding path and making it easier for more spending.
We will have a very robust debate in the weeks ahead about the best way to deliver on President Trump's agenda, and I look forward to those discussions. The budget resolution unlocks the process for us to strengthen our national security, secure our borders, permanently extend the Trump tax cuts, and provide additional middle-class tax relief.
I yield the floor.
Mr. President, the Democrats claim that the Republicans are gearing up for a so-called class war and that extending the 2017 tax cuts is a handout for the wealthy. We have heard this so many times. It is no more true now than it has been the last umpteen times.
The Trump tax cuts reduce taxes for an overwhelming majority of Americans, and middle-class households receive the largest proportional benefits of the cuts. Those tax cuts also made our Tax Code more progressive. The highest income earners paid a greater share of taxes than they did before 2017. On top of lower tax rates across the board, those tax cuts provided targeted middle-class tax relief by doubling both the standard deduction and the child tax credit.
If those cuts expire this year, the middle-class families will be hit the hardest. The average family of four making $80,000 will see their taxes increase by $1,700. In fact, more than $2.6 trillion of the tax hike, which would result from failing to extend these cuts, would fall on households making less than $400,000 and, primarily, lower and middle-income families.
While Democrats attempt to distract from these claims by saying they are tax cuts for the wealthy, the Republicans remain focused on preventing tax hikes on working families and investing in American jobs.
I encourage a ``no'' vote, and I would be glad to voice vote it if we could agree on that.
Vote on Amendment No. 1737
Mr. President, I could just say what I said the last time, but I want to give a few more statistics.
Just last year, the Joint Committee on Taxation reported that the top 0.01 percent of taxpayers paid an average Federal income tax rate of 30.6 percent in 2019, compared to 5.3 percent for those in the 50th and 90th percentiles and a negative 2.2 percent for those in the bottom 50 percent. It is indisputable that most of the Federal tax burden is paid by the high earners. The top 10 percent of filers paid 72 percent of Federal income taxes. The top 1 percent paid more in Federal income taxes
than the bottom 90 percent combined. In addition, the voluntary tax compliance remains high.
In other words, as I said before, the Trump tax cuts made the Tax Code more progressive, not less. The American people deserve more than empty platitudes about billionaires and tax hike proposals that even a complete Democrat Congress could not pass under President Biden.
I urge a ``no'' vote.
Vote on Amendment No. 1977
Mr. President, I think it is pretty clear that, no matter what the taxes are on the upper income brackets, it would be claimed that they aren't high enough. But let me just give a few more statistics.
Most of the Federal tax burden is paid by higher earners. Indeed, the top 1 percent of taxpayers pays more Federal income taxes than the bottom 90 percent combined. The tax cuts that we are talking about make the code more progressive, as I have said, and the highest income earners pay a greater share of taxes than they did before 2017. Federal tax collections have been near all-time highs since the Trump taxes were enacted, and the voluntary compliance rate remains high and stable. Higher taxes serve as disincentives to work and save and invest.
The American people deserve better. We are committed to helping all hard-working taxpayers get ahead, and I will work with anybody who is ready to focus on helping protect our families in America.
I urge a ``no'' vote.
Mr. President, again, my colleagues continue to argue that our now-wealthy companies are showered with an ever-increasing tax break and need to pay their fair share. I would point out that the TCJA that we are talking about in this legislation doesn't even touch the tax rates either way with regard to corporations.
Leaving that aside, before these tax cuts back in 2017, the United States had a 35-percent corporate tax rate--one of the highest in the world. Companies were fleeing America to do their capital formation in different parts of the world. After we did what everyone in those days agreed was an important reform of our business tax system, we had an end to corporate inversions, and capital started flowing back into the United States with the investments from companies around the world. We saw the greatest and strongest economy that we have seen in our lifetimes develop with the growth in jobs, wages, benefits, and a reduction in unemployment, and the wealth of the average family in America reached all-time highs.
Mr. President, I guess I have to say that this legislation doesn't deal with tariffs. But I am interested that the minority leader wants to turn the discussion to tariffs because they don't like the way the discussion on taxes is going.
Some would want to distract us from these important issues that we are dealing with and try to shift this decision, but most importantly, none of President Trump's tariffs rely on any authorities made from any--either this or prior--reconciliation bill, nor are they contingent on anything happening in the one we are considering.
It also bears noting that any enforcement effort to open foreign markets for our farmers, workers, and businesses is backed by tariffs.
What President Trump has said is that the existing tariff efforts to open markets for our Americans are not moving fast enough, and he is seeking to create opportunities.
Under President Biden, there was literally no enforcement, in fact, no negotiations to open trade across this globe. We can and should have a debate about how we should engage in effective trade, but that is not this bill.
I encourage a ``no'' vote.