Schumer Floor Remarks on the Republican Tax Bill and the Need to Reach a Budget Agreement

Washington, D.C. – U.S. Senator Chuck Schumer today spoke on the Senate floor regarding the consequences of the Republican tax bill and the urgency surrounding the need to reach a budget agreement. Below are his remarks which can also be viewed here:

Mr. President, even as my Republican friends move to reconcile their two tax bills in a conference committee, their problems are far from over.

At the heart of their bill is a toxically unpopular idea: giant tax breaks on big corporations and the very wealthy paid for by cutting care and raising taxes on millions of middle-class families. The new Republican Party is the party of tax hikes on the middle class to subsidize corporate welfare.                                            

That menacing idea at the core of their bill is a problem that, like Hydra, sprouts many heads.

Slashing the state and local deduction remains a massive problem for House Republicans from suburban districts in Virginia, New York, Illinois, Washington, and, of course, California. Multiple analyses have shown that despite the so-called compromise that allows families to deduct up to $10,000 in property taxes, the pain inflicted on suburban families won’t be much mitigated. States like California and New York will still experience an exodus of taxpayers, draining local resources and impacting services. For those House Republicans, voting for the conference report is a poisonous vote, substantively and politically.

Not to mention that home values will fall in those districts of those House Republicans. If they are voting to decrease home values by eight or ten percent for every homeowner in their district, that is political suicide. Why would they do it? That’s what will happen. Homeowners will start seeing that right away.

Another problem, the last-minute inclusion of a corporate AMT has Republicans and corporate leaders scrambling to figure out if it will have the unintended consequence of functionally eliminating the value of the R&D tax credit. Remember, the corporate AMT was added at the last minute because the Republicans needed more revenue to offset a more generous rate on pass-throughs.

That’s what Republicans were working on in the waning hours last week – not trying to figure out how we can help middle class families with a kid in college, with a kid who has serious medical expenses, not reducing the impact it would have on our deficit, no, no! – they were busy making tax cuts for the wealthy more generous. 70% of pass-through income already flows to the top 1%. Not the top 20% or 10% --- the top 1%. 70% of pass-through income goes to the top 1% of earners. The Republican tax bill already slashed the rate on pass-throughs, but several Republican Senators withheld their votes until that loophole was widened further.

Now, I understand that wanted to help smaller businesses. But take the time and figure out how to help the small businesses without helping the hedge funds, the corporate law firms, the big lobbying firms and other wealthy individuals. Take the time to figure it out. But no. In the rush to get a crumb for small business owners, they are giving a whole big nice chocolate layer cake to the wealthy. It is wrong! Very wrong.

The inclusion of the corporate AMT is another reminder that Republicans can’t have it both ways – you can’t cut every conceivable tax on big corporations and the wealthy without blowing up the deficit. If Republicans are forced to go back and look at the corporate AMT, they’ll have to find revenue elsewhere.

Will they slightly lessen another corporate tax break or will they ask working Americans to pay more? Which they have done in previous iterations on this bill.

Yesterday, we learned that Republican leadership circulated talking points that questioned the legitimacy of the Joint Committee on Tax – the nonpartisan, independent scorekeepers of tax legislation. Rather than confront the awful truth that their bill will not pay for itself, but instead costs about $1 trillion dollars even with dynamic growth estimates, the Republican leadership asked their members to shoot the messenger. JCT - widely respected, always accepted by both parties is all of a sudden a pariah in Republican circles because it told the truth. That this bill would not cause the growth that they projected. That this bill will increase the deficit far more than Republicans had hoped. 

Republican leadership tried to discredit the non-partisan umpire they have long praised and they had appointed. What a disgrace.

And it brings up that what happened in the last week or two here has been one of the most disgraceful episodes in the whole history of the Senate. A major bill. Done behind closed doors. Rushed through. And then, adding insult to injury, the truth tellers, the independent and appointed by Republicans monitors, are discredited because our Republican colleagues didn’t like hearing the answer.

Now, there is still time to avert this awful bill. If my Republican friends vote no on the conference bill, we can do bipartisan tax reform bill. We can pursue a much better process, a much better product, and go so far as to heal a Senate that’s been wounded by the partisanship and strife recently aggravated, greatly aggravated by the Majority’s actions on this tax bill.

Now, end of the year.

Instead of rushing a bad tax bill through conference, the Senate should focus on the bevy of year-end issues confronting us. First and foremost, we must reach a spending deal that would have us meet our commitments to support the military and also urgent priorities here at home, like combatting the opioid crisis, shoring up pension plans, supporting veteran’s health care, relieving student loan debt, and building rural infrastructure.

In previous budget agreements, Democrats have always strived to achieve a parity between our investments in defense and in economic development here at home. It’s continually been a sticking point with Republicans as we go through these negotiations. They want to increase spending for defense, for the military, but shortchange important domestic programs like infrastructure, education and scientific research; things that create jobs, things that help the middle class.

We Democrats support an increase for our military, but we want to make sure other, crucial programs don’t get left behind. So we will fight just as hard in this budget agreement to ensure that, for each dollar we add for defense, a dollar is added for domestic economic development – 50/50.

We care about our soldiers. They are the greatest. They risk their lives for us.

But, we also care about a pensioner who spent his whole life working in the steel mills, driving a truck, building buildings – they put money religiously away every month so they would have something for when they retire and when it is not there… they are important, too! General Mattis came to see me and told me how badly our defense department needs help. I agree. But I told him to go back to the White House and tell the White House that the domestic side of the ledger needs help as well. Spending on the domestic side of the ledger is lower than it was in 2010, despite increased costs. 

We also need to provide funding for community health centers and Children’s Health Insurance, as well as relief for the millions of Americans still recovering from natural disasters. And we must come together on a bipartisan deal to pass the DREAM Act along with tough border security measures.

So, this is a lengthy to-do list. Lengthy. It is going to require the hard work, steady cooperation, and compromise of both sides. Last night, however, there was a concerning spectacle on the House floor. The Freedom Caucus held up an unrelated vote on the tax bill, because they were unsatisfied with the Republican leadership’s plan to keep the government open. If we’re going to solve all the problems that confront us before the end of the year, House leaders cannot let the Freedom Caucus – a small band of hard-right, reactionary, conservatives – run the show. If they cooperate with Democrats, they can accomplish something. To just let the Freedom Caucus dictate? A recipe for chaos.

And once again, negotiations broke off because we were at an impasse on the 50/50, on parity for the defense and not defense. That has been very important to Democrats for years. We have settled our budget agreements, our spending policy, omnibus agreements always with 50/50 and we believe it is still important today. Parity, parity, parity.

As we continue to negotiate with our Republican counterparts, we hope that Republican leadership can avert more of this unnecessary hostage-taking like we saw on the House floor last night, which can only impede the serious, ongoing bipartisan negotiations.