Schumer Floor Remarks on Healthcare, the Crisis in Puerto Rico, and Tax Reform

Washington, D.C. – U.S. Senator Chuck Schumer today delivered remarks on the Senate floor regarding ongoing bipartisan negotiations over healthcare, the dire need of resources in Puerto Rico, and the GOP’s tax reform proposal. Below are his remarks:

Thank you, Mr. President, first I’d like to thank my friend from Oregon for his outstanding remarks. He has been a leader in keeping the internet open and free. In making sure that it, a new highway system in effect, is as free as our old highway system, our existing highway system. To let the big guy and the little guy compete on equal terms. That’s all we want, and Mr. Pai doesn’t seem to get that. There is a whole round of appointees from this administration that simply side with big corporations no matter what, and this is an example of just that. So I thank my friend from Oregon, for his remarks.

Now Mr. President I have three topics this morning. First, on health care, then on Puerto Rico and the US Virgin Island, and then on taxes. On health care, a bit of good news.

I’ve just spoke with Senator Murray this morning, I saw senator Alexander in the gym as I do just about every morning. Both are about two of the best negotiators that we have in this body. Both have come to agreements from across the aisle on many other occasions. And they both informed me that they are on the verge of an agreement on a bipartisan healthcare agreement to stabilize markets and lower premiums.

Now, we have had some bipartisan sprouts on healthcare recently; it’s time for those sprouts to flower – and I’m hopeful that they will.

I told Senator Murray, she has my faith and confidence – she has freedom to cut the best deal she can. I hope the leadership on the other side will tell the same to Sen. Alexander. It was widely reported before the Graham-Cassidy Bill was withdrawn that there was pressure on Sen. Alexander to pull back. Well, that’s over. Let’s all come together. Our healthcare system needs it, our constituents need it. They don’t want premiums to go up and coverage to go down, and it would be a great start for some bipartisanship in this place. Which I hope we can continue on issues. 

Puerto Rico and the US Virgin Islands, Mr. President, we know about the crisis.

You just look at the pictures and it breaks your heart, you hear the stories of people desperately needing their medicine – diabetics needing insulin and it cannot be refrigerated because there is no electricity to keep the refrigeration going. There are people dying right now because they cannot get the medical attention they need and of course there is a shortage of food, and water, and power, and transportation. It’s awful.

Yesterday, Leader Pelosi and I met with Air Force General Lori Robinson, it was nice, amidst this devastation to see a woman with four stars on her shoulder, she is a four star general in the air force and she is head of the U.S. Northern Command, so she is the military person in charge of the response. We met with her to get an update on the Dept. of Defense’s work in assisting the islands. It was evident from our conversation that while the military is increasing the amount of resources it’s sending to the island, there is a lack of command and control about how those resources are distributed.

In other words, they probably have enough food they probably have enough gasoline, that’s what the Governor of Puerto Rico said today. But they can’t get it to the places where it needs to go and part of it – they need transportation, trucks and things. But a lot of it, there is no one there to make sure. Puerto Rico command and control has been decimated by the storm as well. People can’t get to the places they are supposed to go, they don’t have their phones, etc.

I’ve spoken with Senator Rubio this morning, in the gym as well. He has recently visited Puerto Rico and seen the devastation firsthand. He has told me the same: that Puerto Rico and the U.S. Virgin Islands are really struggling. They need help fast, his visit to Puerto Rico confirmed this idea that we really need command and control. Well there is no better command and control organization than our military. We need our military to start aiding Puerto Rico in the command and control sense as well as in the shipping of supplies, food, and the kinds of things they need. Puerto Rico needs help fast, they need personnel to direct and transport supplies and resources on the ground. All the aid in the world will be ineffective, Mr. President, if it doesn’t go where it needs to go.

So I’ve joined Senators Cantwell, she’s the ranking member on the energy committee which has jurisdiction here in many ways, Sen. Nelson, who cares a great deal about Puerto Rico, he’s from Florida, nearby, and 30 other Senators in sending a letter to the Trump Administration that contains a list of needed resources and personnel to coordinate our relief efforts.

It appears there will not be a request for an emergency supplemental appropriation this week; we hope it comes very soon.

Mr. President, we cannot forget the utter devastation facing 3.5 million American citizens in Puerto Rico and US Virgin Islands. I’ve been on this Earth now for quite a few years, I have never seen such devastation anywhere, anywhere in the United States or its territories like this. And so, we need to act and we need to act quickly and so command and control, which our military can help supply, should be at the top of our list.

Finally, Mr. President, on taxes.

Yesterday, President Trump and Republican Leaders laid out their tax plan, sharing the first sketchy set of details with the American people about what they want to change in our tax code.

Any serious analysis of their proposal would leave you with one conclusion: President Trump and the Republicans have crafted a massive tax giveaway break to the very wealthy in our country.

Welfare is supposed to take care of the poor. This plan takes care of the rich. Plain and simple, the Republican tax plan is “Wealthfare.” The opposite, of welfare. It’s designed to take care of the rich.

It repeals the estate tax, which goes to so few people in such large amounts of money, it slashes the corporate rate, creates an enormous tax loophole for wealthy hedge fund managers in the form of a rate cut on pass-throughs, and it lowers the rate – amazingly enough - on the top tax bracket for the wealthiest Americans while raising the tax rate on those at the bottom of the income scale. Who would have thought

Secretary Mnuchin, Gary Cohn, the President himself have said, ‘we want to help the middle class.’ And then the first thing they come out -- and then again we don’t know all the details -- lowers the top rate on the wealthiest and raises the bottom rate on the working families. The opposite of what they are saying. And on the estate tax, Mr. President, bottom line: only couples whose estates are above 11 million dollars pay a nickel of estate tax. Only those. It’s a handful. We are compiling how many people in each state, paid the estate tax for the last 5 years. Everyone in their state will see how few people is affected by their own state. You know maybe if someone has a big farm and maybe its 12 or 15 million dollars and they don’t want to sell it and pass it on to their kids, I’m willing to making an exception to that, I think most people will.

But that doesn’t justify repealing the entire estate tax, on corporate, on corporate taxes. There is a difference between big corporations and small corporations. The big corporations right now are making record profits, say the thousand biggest, record profits. They have more money than they’ve ever had. Their tax rate, according to a study, I believe it is Goldman Sachs, hardly a left-wing think tank, says that they are paying the lowest taxes, the lowest percentage of their profits in taxes in a very long while.

Big corporate America is flush with money, they are not using it to create jobs. Why in God’s name anybody thinks that giving them more money through a tax break is all of a sudden they’re going to start creating jobs, when they are not doing it now, is beyond me.

It is different for small businesses. We Democrats understand that small businesses need a break. We will work with our colleagues to do it. But even this pass through, the biggest benefit is going to be wealthy lawyers and hedge fund managers who are going to pay and individual tax rate of 25% when others who have much less wealth are paying less.

So, the President gets up and says this is a tax break for the middle class? I believe he said this morning he won’t benefit from it? Please. Let’s have some honesty here. If you really believe giving tax breaks to the wealthiest people and the biggest corporations is going to create jobs, then have the courage to say it. Don’t fudge it. 

President Trump said his tax plan would create a middle-class miracle. I think it would be a miracle if it helped the middle class. Given the numbers I’ve seen.

While the tax plan doubles the standard deduction, that’s one of the points they say will help the middle class, it eliminates the personal exemption. If you are a family of three or more, you lose – not gain.

How about this one, personal exemption is not the only one gone: state and local deductibility I predict that will be a downfall of this plan. I know the ideologues say, ‘lets go after the states that charge taxes!’ Let me tell you, there are 40 or 50 Republican congressman from well-to-do suburban districts, in high tax states like New York, California, New Jersey, Pennsylvania, Illinois, and Maryland whose constituents will be clobbered by removing state and local deductibility. Clobbered. What they gain in the standard deduction minus what they lose in the individual deduction is far less than what they pay in state and local taxes in those districts.

We’re going to be watching them like a hawk. I’ll tell my New York Republican friends from those well to do suburban and upstate districts. You’re going to be hurting your constituents if you’re going to be voting for a plan that gets rid of state and local deductibility. The eyes of America will be on you. Certainly the eyes of each state.

How about this one, one of the potential itemized deductions Republicans may eliminate is the deduction for extraordinary medical expenses.  You have a child with cancer that is hard to pay for your insurance covers some – not going to get a tax break? Shelling out money for that extra medicine, for that extra MRI machine? MRI scan.

Mr. President, the Republican game plan: give some crumbs to the middle class, and many in the middle class will pay higher taxes, a few hundred off in taxes maybe, and at the same time give a huge break to corporations and the super wealthy.

The American people won’t buy it – this is not 2000 or 1982, my Republican friends. We have huge problems where the wealthy are doing great and the middle class are doing badly. The American people will not buy tax breaks for the rich. Not going to buy it.  70% of Americans already think our tax system favors the wealthy. The Republican tax plan drops an anvil on the scales of our tax system, tipping them even further in favor of the wealthy. The American people won’t be for that.

What about the deficit? We hear about deficits every time we hear about a new program.  This dwarfs any spending program in terms of debt. Given this deficit we have enacted over the years

Economists estimate that the Republican tax plan will cost somewhere between five and seven trillion dollars. $5-7 trillion. What happened to all the Republicans who wanted to be deficit neutral when it comes to spending? Is that out the window? We’ll see.

Let me tell you something that really got under my skin. This morning, Chief Economic Advisor to President Trump Gary Cohn said that the Administration believes it “can pay for the entire tax cut through growth” by using a dynamic scoring model. Gary Cohn comes from Goldman Sachs. If he used the kind of funny math at Goldman Sachs the way he is in Washington – he’d have be kicked out of that firm a long time ago. Gary Cohn should know better, Gary Cohn does know better.

Let me repeat what I said yesterday: dynamic scoring is Fake Math. Paying for tax cuts with “growth” is Fake Math; and we know it’s Fake Math. We have real-world examples.

Republicans enacted the 2001 and 2003 Bush tax cuts, promising they would “pay for themselves” through economic growth. Same thing you hear from the Club for Growth and some of my colleagues. Some dynamic scoring models at the time predicted that the 2001 and 2003 tax cuts would grow the economy so much it would nearly wipe out the national debt.

What actually happened? 10 years later, because I heard the club for growth leader get on TV and say, ‘well, there may be a deficit in the short run, but after 10 years it will all be taken care of.’

10 years after the Bush tax cut, the CBO estimated that the Bush tax cuts added $1.6 trillion to the deficit.

How about the great example of the great state of Kansas, Governor Brownback and Republicans in Kansas slashed the state’s top tax rate and exempted “pass-through” business income from taxation. He said it was a “real-life experiment.” His plan is similar to what President Trump announced.

Governor Brownback’s backers used dynamic models to estimate that his tax cuts would generate $323 million in new revenue by 2018.

Guess what actually happened? It added so much money to their deficit (almost $700 million) over four years, that they’ve had to raise taxes now, just as Ronald Reagan did in ’86.

So this idea that the Administration says that they think they can pay for a $5-7 trillion tax cut through growth, they are selling a bill of goods using Fake Math.