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GOP Reveals Tax Plan. Aired 11:30-12p ET
Aired November 2, 2017 - 11:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[11:30:00] REP. PAUL RYAN, (R-WI), SPEAKER OF THE HOUSE: I want to turn it over to the chairman of the Ways and Means Committee. And I want to thank all of the members of the Ways and Means Committee for bringing us to where we are, for getting us to this point.
And ladies and gentlemen, the leader of this moment, Kevin Brady, chairman of the Ways and Means Committee.
REP. KEVIN BRADY, (R-TX), CHAIRMAN, WAYS AND MEANS COMMITTEE: Thank you, Mr. Speaker.
Thank you, the American families standing with us today. And thank you as well the Ways and Means Committee members who have been listening and traveling across this country for this historic day. This is an exciting day and I can -- think we all feel the excitement here in this room and here in this country. I know the American people have got to be excited as well. Real relief from today's complex, costly and unfair tax code is on the way. With this bill, there's relief for real American families. There's relief for American workers and there's tax relief for hard-working job creators of all sizes. And with this bill, we will grow our economy by delivering more jobs, fair taxes and bigger paychecks to Americans of all walks of life. That's especially true for low and middle-income Americans who are just sick of today's broken tax code, its impact on their jobs, their lives and their paychecks.
Under the Tax Cuts and Jobs Act that's going to change, and it's going to change right now. For a middle-income family of four making $59,000 a year, as the speaker said, this bill delivers tax cut of nearly $1200. For that Main Street business making $62,000 a year, working day and night and weekends, that tax cut of over $3,000 for that Main Street business. That's your money. You earned it. You deserve to keep it. And you should be able to use it for whatever you want. That's exactly what this bill will do and that's why the tax cut and Jobs Act has President Trump's full support. This is it, America. This is our opportunity to make tax reform a reality and deliver the most transformational tax cuts in a generation. So let's not let Washington special interests, the TV pundits or the pessimists fool you. None of them thought we would even get this far with tax reform and they're wrong. Now working together with President Trump, our colleagues in the House and Senate, and you, the American people, we're going to prove them wrong once and for all by getting pro-growth tax reform to the president's desk this year.
REP. CATHY MCMORRIS RODGERS, (R), WASHINGTON: All right. Thank you, Chairman Brady, for your tremendous leadership, all the members of the Ways and Means Committee.
The speaker said that this is a special moment. We are going to make our economy boom for the average family of four, that median income earner in America, making $59,000, we're talking about $1182 in your pocket. You think about the holidays right around the corner, what that means in your life. You know, as I travel around eastern Washington and visit towns and communities, and just recently I was down in North Carolina and in Michigan, you think about $1182 for someone who's living paycheck to paycheck, someone in Kettle Fall, that's making a big difference. Or families like the Cooks from Sterling Heights, Michigan, maybe they can put a little more money towards their mortgage. Or Victor, a restaurant owner in Michigan, and he says, quote, "We pay our taxes first, we pay our people second, we pay our bills third, and then if anything is left over we get paid." Our plan is going to help people like Victor. Our plan also means more peace of mind. To spend more time with your kids or maybe your ageing parents or maybe just hang out with your friends. Our plan is pro-family and its pro-economic growth because we value hard work and family.
So if we're going to have a tax code that puts families first, we also need to recognize that today's working American family has really changed since our tax code was last reformed. With that, comes big change for the realities that our families face every day. For one, women today are making history in the work force. Two out of three businesses are being started by women. This means a lot of things. It includes an increase of working moms, like some that are represented here today. We, too, are the faces of tax reform. That's why I'm pleased that our plan includes an expansion of the child tax credit, a family credit. It's going to help families have more money in their pocketbooks. Pro-family, pro-growth, that's what this plan is all about. It's so that you can plan for your future, realize your fullest potential, and empower American families to start dreaming again. And to see how tax reform text to 50589.
[11:35:28] REP. KEVIN MCCARTHY, (R-CA), HOUSE MAJORITY WHIP: This is an important day and I hope you understand the significance of it. For every member, this could really become the most significant bill they ever make a decision in their term in Congress. More than three decades for the last time we had tax reform this size. The American public has been asking for it. I think it's a little ironic that today is the seventh anniversary of Republicans being elected to the majority in the House and then moving to the Senate, and now we have a president who has pushed to make sure hard-working Americans get to keep more of what they earn.
Three major points I want to make. When I was 20 years old, I started my first small business. Small business creates more jobs than any other thing in America. In this bill, they'll get lower taxes, go to 25 percent, the lowest it's been in 40 years. More small businesses, more jobs. Second, every single American is going to keep more of what they earn. The single American when you talk about a standard deduction, instead of the first $6,000 you earn tax-free, it's 12. For these families and couples, the first $24,000 you earn it's free, you keep it and determine what's best. We're going to bring the money that's sitting overseas back to invest in American businesses. Even before this bill goes into effect, I believe you're going to hear from businesses saying they want to come back to America. The cornerstone of what Ways and Means, of what President Trump has worked so hard about, at the end of the day, is that middle-class family able to get more. As you heard from every other speaker up here, almost $1200 in your pocket. That's the difference. This is about tax cuts, this is about America first and this is about the future. Not only will America grow, we'll show the rest of the world how to lead.
And I want to introduce one of the individuals who got elected seven years ago, who became a leader on Ways and Means and shown the direction of so much in this bill, Kristi Noem.
REP. KRISTI NOEM, (R), SOUTH DAKOTA: Thank you, Mr. Leader.
Some time ago, I was grocery shopping about 11:00 at night in South Dakota and a woman came down the aisle towards me and she had her hand full of coupons and her cart full of generic food and she said, Kristi, when is going to get better. Health care costs have gone up, electricity has gone up, I had to carpool into town to go to work and waiting for my friend to give me a ride home, I missed my son's basketball game and daughter's doctor's appointment. Today this bill, I know, is going to bring relief to her and help things get better. She was in the forefront of my mind while working on the details of this package. The lower rates for everybody, the simplicity, the mortgage interest rate deduction, the family tax credit.
I hope you understand how much it's been expanded to not just take into account a child tax credit but add benefits for elderly dependents in the home, children living in the home going to college and really provide relief for those families that are struggling and then also starting January, their paychecks will be bigger.
I became passionate about tax reform years ago. And it was because when I was going to college, my dad was killed in an accident on our family farm. He was 49 years old. He was my hero and my entire life all I had wanted to do was grow up and farm with him. When he was killed, about a month later, we got a bill in the mail from the IRS that said we owed death taxes. We had land, we had cattle, we had machinery, but we didn't have any money in the bank. I could not believe that the federal government would come to a family that had already paid taxes on all that income and say because you had a tragedy, now you have to pay again. We took out a loan, but it took us 10 years to pay off that loan. It was very difficult for us to keep our family operation. If we had a gas station or a grocery store, the only option that would have been available to us with who have been to sell that family business to pay those taxes.
So I ran for the state legislature, I ran for Congress on a lot of issues, but repealing the death tax is incredibly important to me. Because it's the most unfair tax in our tax code. It's a double tax. And if we're going to really get back to a tax code that helps people and doesn't harm them, that's fair, that doesn't have special provisions or penalties, by us picking winners and losers we have to repeal the death tax.
I'm excited about the provisions in this bill and what it does for people in all walks of life, but its focus on bringing relief to low and middle-income individuals. And focusing on interest deductibility for farms and ranches across the state and owe provisions that will allow them to expense and bring down their rates while being successful in helping our economy grow again. This is a unique opportunity for me, unique opportunity for you, and it's a wonderful opportunity for our country and I'm thrilled to be a part of it.
[11:41:03] REP. STEVE SCALIA, (R-LA), HOUSE MAJORITY WHIP: This is an exciting day for American families who are tired of paying too much in taxes, who are fed up with the tax code that's so complicated that if you call ten different IRS agents you're going to get ten different answers. People who are fed up with an economy that's not growing, where they see their wages stagnant, and the good news is, that changes today with this tax cut plan that finally puts money back in the pockets of working families.
If you look at what was done here, Chairman Brady and his committee at Ways and Means have worked incredibly hard to make sure that hard- working families will get more of their paychecks, they will be able to keep more money. You will see wages grow by getting our economy back on track.
Look, every time I see a company moving jobs overseas, it makes me angry. Now we can be angry, we can be mad, but today we do something about it. By changing the tax code, we actually bring those jobs back to America. You're going to see tens of thousands of high-paying jobs come back to America because right now America's dead last in the industrialized world because we have the highest tax rate. That needs to change. Let's make America competitive again. That's what our bill does. By making America competitive again, we have an opportunity to rebuild the middle class, to bring good jobs back to America and to grow our economy. And just like these families behind me, they want to see more money in their pockets. They deserve to have more shots at the American dream. You're going to see more people have real opportunity and have a real chance to get their piece of the American dream by having more money in their pockets and by seeing things like the death tax eliminated, just like Kristi talked about.
This is an exciting day not only because we're standing here today as Republicans in the House moving forward, but President Trump is standing with us. President Trump campaigned on doing this exact same thing, of putting money back in the pockets of hard-working families, and to make sure we can rebuild our middle class and get our economy back on track. It's exciting to be working with President Trump to do something that's truly going to grow our economy, and give more people a chance to have their piece of the American dream. Now I would like to turn it over to Peter Roskam, who has been a
leader on the Ways and Means Committee and helping make sure we can simplify the tax code so much you can actually fill out -- over 90 percent of Americans will be able to fill out their taxes on a postcard. That's what simplicity means. Not only having more money in your pocket but being able to do this - Peter Roskam?
I'll leave that there for you.
REP. PETER ROSKAM, (R), ILLINOIS: Thank you, Mr. Whip.
You notice that the children were becoming impatient with tax reform. They walked out a couple of minutes ago.
She's saying get me this action right now.
Look, what we're going after is, we're directly attacking the status quo. The status quo of the tax code, the status quo of the internal revenue code is the problem. It's the few that benefit under the status quo. And as everybody else that basically feels crushed by this, and overwhelmed by this, and we act as if historically this is a natural disaster that we can't do anything about, it's not a natural disaster. The internal revenue code is a statute. It was created by Congress, and it can be changed by Congress. What you sense right now, the optimism here on this podium, the sense of forward looking across the American public, people are longing for something that gives them relief. They're longing for something that will bring back sort of competitive nature.
Look, there's two views of the economy that are competing for the affections of the American people right now. One view is wrong. It's the zero-sum game view of the economy. It says if somebody is successful that comes at someone else's demise. We reject that wholeheartedly. The other view says, no, no, when people are successful it ensures a benefit to everybody. We're sensitive to making sure everyone can participate and that at its structure, these changes that we're proposing, are transformational for everyone.
So I think what we need to do now is to be diligent, to be convincing, to be invitational, and recognize that opportunities like this are few and far between. And so I want to thank our speaker and our leadership team and Chairman Brady especially for being tenacious and being willing to listen to changes and hear criticisms and critiques, but ultimately, to be incredibly disciplined and persevering to make sure that we have the opportunity to determine our future.
[11:45:55] RYAN: First I'm going to say, these kids are behaving better than my kids do at church.
(LAUGHTER) Fantastic job, guys.
Kevin, come up here.
UNIDENTIFIED REPORTER: (INAUDIBLE) like you guys worked hard last night to make sure you committed the corporate rate deductions while parts are of the individual on family credit are temporary. How do you square this?
BRADY: We are focused on increasing paychecks in a major way and the families that struggle the most have seen their paychecks leave for other countries. We drove towards a 20 percent rate, so our local businesses can compete and win anywhere in the world, especially here at home. So they can compete and create jobs, against China, Europe, Canada, and Mexico, can create jobs here in America as well. It was critically important the rest of the world understand. We're not going to be doors mat any longer and stand still for 30 years as they lead us in the dust. We're going to compete and win. And our jobs and paychecks for middle-class families are going to grow. So permanence for businesses, permanence for families matter. We did create in the new family credit, which I think you ought to take a close look at, look at our neighbors, not only getting more help with their child, getting more help for themselves, and that college kid, I've got one at home, you know, or that parent coming back be to live. And the most important thing about that family credit, it doubles the amount of Americans who can finally get help with their kids. This is a family-friendly tax code. And so I am very excited about what this brings middle-class Americans and I think permanence and certainty drives that growth.
UNIDENTIFIED REPORTER: Thanks, Mr. Speaker. You talked about the political will for Republicans to compromise among themselves as this moves forward. You saw with the health care bill even though you did ultimately pass that, was messier and secondly, for years, you and other Republicans have argued that all Americans that pay taxes and work should get a tax cut, but with some of the elements of this bill, and where your rhetorical focus is on people in a certain position on the income scale, and it's steered away from the argument you have with Democrats over the past to 20 years, certainly under Obama. Can you talk about that?
RYAN: The political will is strong and you can see it right here. We have not reformed the tax code since 1986. The world is passing this country by and we're losing jobs and companies as a result of it. So the political will among the members here in the House as shown by the members of the Ways and Means Committee is iron clad to get this done. Because if we don't do this, we will not get the kind of economic potential that we know we can reach. And the fact that people are living paycheck to paycheck in this country about half of the people living that need a break. Yes, the focus is on middle-class tax relief and directing that to the people in the middle and trying to get there and we put our emphasis on that tax relief for those people who are in the middle who are working paycheck to paycheck striving to get ahead. And what Kevin just said, we've got to modernize our tax code to be competitive again to keep jobs in this country, so we can keep businesses in this country. We have seen a flurry of U.S. companies moving overseas and becoming foreign companies. That will only increase if we stay at the back of the pack. That is why we have to work quickly to fix our tax system, clean it up, level the playing field, make it more fair so we can get bigger paychecks more jobs and keep businesses in America and get businesses coming back home. The only country that says to a business if you make money overseas keep it there because our tax laws basically don't let you bring it back.
This levels the playing field and gets that money back to our country to invest in our jobs here. That's going to help competitiveness and Republicans are committed to doing this.
[11:50:07] UNIDENTIFIED REPORTER: The Bush tax cuts did not result in growth or higher wages or more jobs. Why are you concerned this will?
BRADY: First can I comment? Did the speaker sound like a former chairman of the Ways and Means Committee?
I'm pretty sure.
BRADY: He was getting tough.
So the question is what?
UNIDENTIFIED REPORTER: Our last experiment with the Bush tax cuts didn't lead to growth or higher wages or more jobs. In fact, quite the opposite.
BRADY: This is a complete redesign of the code. We can simplify it so much that nine out of 10 Americans can file using a postcard style system, lowering the rates. Protecting more of the dollars you earn and making sure we have strong middle-class relief. It's more than that. We are not just putting higher octane fuel in a clunker of a tax car. We proposed to drive a newer tax car that can compete and win against any country in the world. That redesign for simplicity and fairness and competitiveness, I predict under this tax reform plan, America will vault from 31st in the world among competitors to the top three as the best places on the planet for that next new job or manufacturing plant and that next research headquarters. That's what is different.
RYAN: Casey (ph)? UNIDENTIFIED REPORTER: If Republicans can't get this done, do you deserve to control of Congress?
RYAN: What's your second question?
We are going to get this done because the American people are counting on us. We told them this is what we are going to do if we get the majority and we are doing it.
Thank you, everybody. Appreciate it.
ANA CABRERA, CNN ANCHOR: There you have it. That's the GOP tax reform plan. They are naming it the Tax Cuts and Jobs Act.
Let's discuss with our panel, CNN chief business correspondent and co- anchor of "EARLY START," Christine Romans, CNN senior economics analyst and former labor secretary under President Clinton, Robert Reich, and CNN senior economic analyst and former Trump economic adviser, Stephen Moore.
Christine, first to you.
What are the big takeaways?
CHRISTINE ROMANS, CNN CHIEF BUSINESS CORRESPONDENT & CNN ANCHOR, EARLY START: Taxes are about what you think you will pay. Let me give you the takeaways. There are a bunch of tax brackets. This will simplify it to shrinking it down. These are the levels we know of what you would pay, keeping a 39.6 percent tax bracket for couples who make a half million. That's important because that was going to go away and seen as giving a gift to the rich and more tax relief for companies than the middle class. They changed that there. It doubles the standard deduction to $12,000. For the first $12,000 of income for everybody is tax-free. What it means is no change to your 401K. This was wildly negotiated over the past few weeks. The child tax credit is $1600. The mortgage interest is capped at $500,000 for new mortgages. $500,000 loan. One of the buildings why you see the home builder stocks, the property tax is capped at $10,000. No more writing off state and local income taxes. That's going to be a hard sell in New York and New Jersey and the high tax states. It repeals the AMT and keeps the estate tax for six years and gets rid of it. That helps higher earners. They will double it to like $10 million. Not a lot of small family businesses fall under this. That will be -- middle class advocates say that's not fair.
CABRERA: We look at we heard from Ryan and many of the others on that House Ways and Means Committee, $1182 more per year is what they say the average family will be keeping in their pocket or maybe getting in some form from a pay cut or pay check raise. Do you see any losers in this? They are billing it as a win-win for everybody.
ROMANS: They are. The big winners are companies. They will have their corporate tax rate cut to 20 percent. That's the central part of this. They are selling it as middle-class tax reform, but the company tax reform is what they are selling. The philosophy and you can debate this, if you cut the taxes for companies, that will create jobs and add wages for American workers. When you look at this for the big high-tax states like New Jersey and California, and I don't know if getting rid of this, will cancel out what they lose from the state and local deductions. That's something that GOP Congress people are really going to fight.
[11:55:23] CABRERA: Stephen, any surprises?
STEPHEN MOORE, CNN SENIOR ECONOMIC ANALYST: Christine, I think did a great job of explaining this bill. Well done. You are right, Christine. The real centerpiece of this -- I worked with Donald Trump 18 months ago when this plan was originally hatched. It really is about primarily in terms of economic impact trying to bring jobs and businesses ask capital back to the United States instead of outsourcing jobs. We will insource them. This will be a big start of that.
An interesting dynamic over the last few months, would this be tax reform or a tax cut? What they came out with is more about the tax cut version. My only complaint, I wish they had taken on more of the special interest groups that Trump promised to drain the swamp. Get rid of more and more deductions that are taken by special interest groups because most Americans think the system is rigged for the wealthy and powerful lobbyists behind them. That's my big complaint. I wish more of the loopholes were gotten rid of. I like capping the mortgage deduction at $500,000.
Bob Reich, that affects the millionaires and billionaires. I would think that would be something you like.
CABRERA: Go ahead and respond, Robert.
ROBERT REICH, CNN SENIOR ECONOMIC ANALYST: Stephen and I agree on a couple of things. First, I do think that the capping of the mortgage interest deduction is a good idea. I am disappointed there are not more loophole closers. Given all the concerns about draining the swamp and all of the lobbyists, that there would be a little bit more at least for the crowds, the public, more sense that they were being closed. I think the biggest problem here will be the state and local, the closing of that deduction. You can call it a loophole, but there are a huge number of people that depend on that in California and New York, and mostly Democratic states. There are a lot of Republican representatives from the states who will be very, very upset about that and they can no longer deduct state and local taxes.
This is mostly a big corporate tax cut. Let's not lose sight of that. There is no such thing as a free lunch. The real question is where are you going to get all the money to pay for this? How much of the deficit is going to have to increase and how much of the national debt is going to increase? It's all right $20 trillion. I think the Republicans who for years have been worried about deficits and the debts and crowding out of public debt crowding out private investment will have a lot of explaining to do over the next weeks. CABRERA: Stephen, how do you pay for this?
MOORE: Again, the hope is this will help grow the economy faster. If you got one statistic we use, if we can get the economy growing one percentage point faster and it's already growing at 3 percent under Trump, if we can keep the high growth rate, you are talking about $2-3 trillion and more businesses located here and not in Ireland or China.
CABRERA: That sounds good, but that didn't work when it has been tried.
MOORE: We did pretty well in the '80s. We doubled the income.
This is where Robert Reich and I agree. If you want to get the rates lower, get rid of the loopholes in the tax system. Put a cap on it so the really rich don't get a lot of those loopholes.
But on the corporate side, by the way, Robert Reich, we get rid of a lot of the loopholes. Some have to pay a higher tax and others pay low. Everybody will be at 20 percent. That's fair to me.
CABRERA: I will let you have the last word.
REICH: You didn't answer the question. It's an important question about deficit and debts. Growth has not been the answer with regard to tax cuts. We saw in the Bush tax cuts and we ended up at the end of the Bush economic crisis. The issue of debt and how much of this is going to be just pumping up the national debt and the national yearly deficits is a big issue. It does have to be addressed.
CABRERA: We have to leave it there, guys. We will have plenty of time to debate this in the weeks ahead. We know the Thanksgiving deadline is the next one that they have their sights set on.
Thank you very much, both of you
And thank you all at home for joining us AT THIS HOUR.
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