Nov 15, 2017
Republican Tax Plan Is an Insult to Middle-Class Families and Future Generations
All year, the majority has tried to jam through legislation to repeal the Affordable Care Act and replace it with proposals that, in effect, cut health care for millions of people to finance tax cuts for those who make millions in income. All year, the American people have made it perfectly clear that this was the opposite of what they wanted. Fortunately, those repeal efforts failed.
Now, instead of listening to the American people and learning from that failure, the majority has doubled down in their tax plan. Like health care, they have made no attempt to bring both sides together.
In the Senate, we only saw the bill last Thursday. Now, we are marking up the most consequential tax policy in 31 years, one affecting every single American and moving around trillions of dollars in our economy.
There is not a school board in Colorado that would accept this process. And for good reason — when you rush big things, when you don’t listen to different views, you get bad policy. And like their health care proposals, the majority’s tax plan is fundamentally flawed.
Over the course of the campaign, President Trump promised the American people “no cuts to Social Security, Medicare, and Medicaid.” He said “everybody’s got to be covered…. Everybody’s going to be taken care of much better than they’re taken care of now.” He promised the public, “you’re going to end up with great health care for a fraction of the price.”
Yesterday, Republicans added changes to their tax plan that, according to the Congressional Budget Office, would cause 13 million people to lose health coverage, increase premiums up to 10 percent on the individual market each year, and lead to a $25 billion cut in Medicare.
How does this proposal in any way square with the president’s promises during the campaign?
All year, we saw tax cuts masquerading as a health care plan. Now, we have health care cuts masquerading as a tax plan.
On top of that, this plan doubles down on the claim that tax cuts for businesses and the wealthiest people in America not only trickle down to everyone else, but also pay for themselves.
For decades, trickle-down economics has been Republicans’ only answer for what ails our economy. When our economy was up and our deficit was down, they cut taxes for the top 1 percent of Americans making an average of $2 million. When our economy was down and our deficit was up, they cut taxes again on the top 1 percent. Now, they have embraced the same approach in their tax plan.
The Senate bill overwhelmingly benefits people and businesses who have done extremely well in our economy. As a former businessperson, I have nothing against success; in fact, I embrace it. My issue is that trickledown economics as a theory for economic growth has been entirely discredited by our experiences. Which leaves me to wonder why this plan — or at least the version we debated yesterday — gives roughly $50,000 in tax cuts to those making over a million dollars. For Americans earning under $200,000, 19 million households would actually see a tax increase. Another 54 million households would see virtually no benefit at all.
I agree that America needs tax reform. That’s why I joined the Finance Committee. We should clean up the special interests carve outs. We should take steps to help our businesses compete, to unlock our energy economy, and to modernize the electric grid. We need comprehensive and bipartisan reform.
But in a break with the tradition of this body, there has been no attempt to bring both sides together. The result is a deeply flawed proposal completely at odds with what our economy needs.
If you accept the logic of the Republican plan, the problem with our economy is that the wealthiest institutions and individuals in the United States don’t have enough money to invest and create high-paying jobs for everyone else. Let’s examine that.
If that were true, we would see the middle class doing better as corporate income statements and balance sheets hit all-time highs.
If trickle-down economics worked, every American would do better as incomes at the top rose.
Instead, the top 10 percent — roughly 11 million taxpayers earning an average of $475,000 — now represent a larger share of America’s wealth than everyone else.
The challenge with our economy is not that the wealthiest individuals and businesses don’t have enough. It’s that incomes for everyone else haven’t kept pace with rising costs of housing, health care, higher education, and childcare.
Last year, I met a mom in Rifle, Colorado at an early childhood center. In the course of our conversation, she said to me, “I’ve got a job so I can have health insurance, and every single dollar I earn goes to pay for this early childhood center, so I can work.” Too many Americans face this cycle, living each day with impossible choices their parents and grandparents never had to make.
Erin Barnes is another one of my constituents. She lives in Thornton, Colorado with her husband and their two kids. Both Erin and her husband have college degrees and middle-class jobs. Erin works in marketing, and her husband runs an IT department. Earlier this month, she wrote to my office, describing how they “don’t have luxuries like cable television, haircuts, lattes, manicures, or even new clothes… My children all wear hand-me-downs from friends. And yet, we make $1,200 less per month than we spend…It’s not that we’re irresponsible: our monthly mortgage payment is only 25 percent of our income.
“How are the pieces not fitting together?”
In America, consumer spending drives 70 percent of our economy. When costs rise and middle-class wages stay flat, families like Erin’s cut back — foregoing books for their kids, birthday presents, even health care. Multiplied across millions of families, that slows our economy.
That is the problem we need to solve. That should be our focus — not the individuals who’ve done extremely well in our economy.
One way to help families like Erin’s is the American Family Act I wrote with Senator Sherrod Brown, which triples the child tax credit. Under our plan, Erin’s family would gain $300 per child each month.
Not only does the Republican plan largely ignore families like Erin’s, it burdens her children with another $1.5 trillion in debt. Republicans claim that tax cuts pay for themselves — we heard that in the committee earlier this week. But the record suggests otherwise.
In 1981, Ronald Reagan signed major tax cuts and claimed they would pay for themselves. By the end of his term, our national debt had risen 62 percent.
In the 1990s, President Clinton raised taxes at the top and cut spending to balance the budget. The economy boomed, and by 1999, the U.S. Senate held hearings about what to do with a $5.6 trillion projected surplus.
Then George W. Bush was elected president. He passed two tax cuts, prosecuted two wars, and signed a $400 billion prescription drug benefit without paying for any of them.
When President Obama assumed office, he inherited a $1.2 trillion annual deficit and an economy in freefall. We were losing 800,000 jobs a month, and unemployment was climbing to 10 percent.
And then — during the worst downturn since the Great Depression — Republican leaders all of a sudden remembered their fiscal conservatism. Citing the debt, nearly every Republican opposed President Obama’s recovery package to stabilize our economy. And now, after inheriting a booming stock market and 4 percent unemployment, Republicans propose to add $1.5 trillion to our debt to finance roughly $50,000 in tax cuts to those making over $1 million.
Today, America’s debt is over $20 trillion. We may face another economic downturn, or an armed conflict with North Korea. The debt suffocates our ability to respond.
If my colleagues vote for this plan, they forfeit any right to claim that they are fiscal conservatives.
I am sad to say this, but I have learned over the past nine years that the only time they seem to care about fiscal responsibility is when they are not actually responsible for it. In a sense, it’s a devastatingly brilliant political strategy. You come to Washington arguing that government is incompetent. Then you vote to explode the debt. Then you point to the debt as evidence of Washington’s incompetence.
And, in 2016, you elect a President who promised that he would eliminate our debt “over a period of eight years;” deliver “a giant, beautiful, massive” tax cut;” pass “one of the largest increases in national defense spending in American history;” while saying “I’m not going to cut Social Security…and I’m not going to cut Medicare or Medicaid.”
Why not — he told the American people — since our national debt can be solved by “eliminating waste, fraud, and abuse in the federal government;” “ending redundant government programs;” “growing the economy;” and “renegotiating all of our deals.”
Here is the real problem.
Last year, two-thirds of the federal budget went to Medicare, Medicaid, Social Security, and other mandatory spending. Of the remaining third, half goes to national defense. After interest on the debt, that leaves just 10 percent for all our investments in our future: infrastructure, research, innovation, education. Over the years, Washington has slashed that part of the budget by 35 percent.
This should seem deeply unfair to Americans in their twenties and younger, to know that we are investing less in them than our parents and grandparents invested in us. And then we have the nerve to say, you need to pay back the debt that we accrued investing in ourselves.
When I served as Superintendent of the Denver Public Schools, we had to make hard choices. To close schools. To modernize the curriculum. To fix unfunded pensions. We had intense fights. Like here, people had strong and principled disagreements. But unlike here, in Denver, the next generation was cause enough for us to set aside our differences and move forward.
We understood that our children had no voice in our town halls. Their future had no votes in our school board meetings. They only had us.
We have forgotten that here in Washington. In the marble halls and carpeted floors of the Senate and the House, we have abdicated our duty to the next generation. Instead, we impose on them all the hard questions we fail to answer in our time.
Mr. President, we are burdening the future with our debts. We are burdening them with the hard choices we avoid. With the easy path we follow. With the baseless claims we accept that tax cuts at the top somehow trickle down and pay for themselves.
If this plan passes, Washington will once again encroach on the rights of our children and grandchildren to enjoy the same freedom and opportunity that our parents and grandparents handed us.
What a shameful legacy that would be. What a surrender of our responsibility as Americans.
Mr. President, we have to set aside this flawed proposal and this broken process. Instead, let’s have an honest, bipartisan effort that contends forthrightly with the substantive challenges of our fiscal condition and the political difficulties attendant to solving them.
I may be wrong, but I suspect no meaningful solution can be found by one party alone.
I yield the floor.
Remarks as prepared for delivery on the Senate floor, November 15, 2017.
