Statement of Sen. Michael B. Enzi
Senate Floor Consideration of the
Tax Cuts and Jobs Act
Tuesday, December 19, 2017
Mr. President, we stand today on the precipice of the most sweeping change to our nation’s tax system in over 30 years. This is a historic moment, as this distinguished deliberative body begins final consideration of the Tax Cuts and Jobs Act – tax reform that will help boost America’s economy, create more jobs, and leave more money in people’s paychecks.
The last time we considered tax reform similar of this magnitude was 1986. To help remind us how much our country, its economy, and people have changed since that time, let’s review some of the events of that year.
In 1986, the Dow Jones Industrial Average closed at 1,895; it now stands at over 24,000.
A gallon of gas cost just 89 cents, today it’s close to $2.50.
We still used land lines to phone our loved ones. Iconic movies such as “Top Gun” and “Aliens” opened, Americans were watching TV shows like “Dynasty” and “Hill Street Blues.” The Associated Press chose NBA star Larry Bird as one of the athletes of the year.
And President Ronald Reagan signed into law the Tax Reform Act of 1986, which ushered in deep tax rate cuts for American families and an overhaul of our complicated tax code. When he signed the bill, Reagan commented on the length of the journey and noted that some people thought it would never happen.
Today too, some have asserted that tax reform either cannot or should not happen. But as our strongly optimistic president said in 1986, and as I continue to believe, the American people “haven't made this the freest country and the mightiest economic force on this planet by shrinking from challenges.”
Reagan noted: “This country was founded on faith in the individual, not groups or classes, but faith in the resources and bounty of each and every separate human soul. Our Founding Fathers designed a democratic form of government to enlist the individual's energies.”
For that reason I want to remind my colleagues about the hard work that brought us here. It’s a journey that has been years in the making, under the leadership of both sides of the aisle. It’s one that we started and will finish for the benefit of the American people and the health of the U.S. economy.
I’m proud of the work of the Finance and Budget Committees, and I’ve had the honor to play a role with both.
The Finance Committee held more than 70 hearings on how the tax code can be improved and streamlined to work better for all Americans.
Almost three years ago, Finance Chairman Hatch and Ranking Member Wyden convened bipartisan tax reform working groups to analyze challenges of our outdated tax code, and develop policy recommendations for comprehensive tax reform. The conclusions reached by these groups helped identify the issues for reform and shape the contours of the legislation that we are considering now.
It is worth nothing that the entire fiscal year 2018 budget reconciliation process has been open, transparent, and subject to regular order, starting with the passage of the Senate budget resolution. The Senate Budget Committee marked up the budget over two days and accepted amendments from both sides of the aisle to make the resolution stronger. In fact, for the first time ever, the minority received a copy of the Chairman’s Mark five days prior to the start of our markup. According to many of my colleagues, it was one of the most transparent budget resolution markups in history.
The budget resolution, complete with the adopted reconciliation instructions, was then debated on the floor. This was an open floor process that allowed every Senator the opportunity to offer and vote on amendments to improve the resolution before its final passage.
Last month, the Senate Finance Committee held a four-day markup before approving tax reform legislation designed to modernize our tax code. The markup lasted 23 hours and 34 minutes over the course of those four days. Of the more than 350 amendments filed, 69 were considered in committee. Amendments offered by both Democrats and Republicans were adopted.
Since then both chambers of Congress have passed similar versions of the Tax Cuts and Jobs Act, and over the past two weeks conferees worked tirelessly to resolve and bridge the differences between the two bills and come to agreement on a final piece of legislation.
In this chamber, the legislation reflects the outstanding work and leadership of Finance Chairman Hatch and Energy Committee Chairman Murkowski in developing legislative recommendations that adhere to the budget resolution’s reconciliation instructions, and I thank them for their efforts.
I also thank my Senate colleagues who earlier this month supported Senate passage of the Tax Cuts and Job Act and whose advice and consent during the conference has shaped the final bill. The legislation is truly a reflection of the broad range and consensus of members who engaged with this process.
Throughout my work on this bill, I have carried with me the many lessons I’ve learned from when I owned and operated a small business, or worked as an accountant.
I have been led by one singular purpose — to help improve the lives of millions of hardworking American families, including the residents in my own state of Wyoming.
I am pleased with the outcome of our work, because I believe it includes meaningful changes that will help individuals and families struggling to move up the economic ladder.
The tax plan includes reforms that will help grow the economy, create more jobs, and simplify taxes. It provides American workers and families with an across-the-board tax cut and puts more money in people’s pockets. It lets Americans have a greater say as to how to use their hard-earned money. The changes will help small businesses in our communities thrive, and encourage the largest multinational companies to remain in the United States investing profits here instead of overseas. Not a bad wish list for Santa.
Under the plan, Americans will reap tax savings from reduced tax rates, a higher standard deduction (which creates a larger “zero” tax bracket for low-income individuals and increases many people’s tax refunds). It also includes a child tax credit that doubles in size to $2,000 to help struggling families. All this while preserving important deductions for medical expenses, charities, home owners and state and local taxes. Our farmers and ranchers will receive stronger protections from the reach of the death tax to help them more easily pass on their businesses to future generations.
Businesses small and large will benefit from a range of tax breaks, including lower tax rates, expanded opportunities to expense the purchase of capital assets, a new 20% deduction for many unincorporated businesses, and international tax reforms to give U.S. headquartered multinationals a strong competitive footing in the global marketplace. These are changes you can take to the bank.
Now it is time for us to act. It’s time for us to modernize our outdated tax code so that our nation can remain competitive in a 21st century economy. The code as it stands now hurts American workers and hampers economic growth.
Along with reforms to the code, this bill will also promotes economic growth. For too long some have accepted the presumption of a U.S. economy that won’t grow as strongly as it has in the past. As a supporter of this bill, I reject that false narrative.
Better tax policy will boost the value of everything we produce, and this will mean more revenue for the federal government.
I’m tired of the accusations that Republican budget Hawks - and that definitely includes me - are willing to throw in the towel and accept a trillion and a half dollar deficit over the next 10 years. I’m still a deficit hawk. And here’s why: claims to the contrary that this tax bill will go unpaid for are based on an incomplete analysis of the tax bill.
We have a Congressional Budget Office tasked with impartially evaluating any legislation that we do. Unfortunately its evaluations are tied to static scoring. That means it’s evaluated without considering the underlying economic effects of the changes we are making.
The problem really isn’t how much revenue we’ll have under the new tax bill. I believe it will increase revenue as the tax cut did in the 1980s. The problem is spending. We never make cuts to budgets. In Washington, a cut in the budget brings screams if an agency or program doesn’t get as much as it requested even if it but gets more than it ever had before. That is not a budget cut, but that’s how it works in Washington. If we continue this way we won’t ever get our spending in line. For years I’ve tried to institute the Penny plan where we just cut one percent in real cuts from where we’ve been. It gets lip service but not votes! It’s a lot easier to give away money than it is to take away money. So we need a new approach. We need to grow the economy. We need businesses to do well so more tax money will come in. We need individuals to make more so more tax money will come in. That’s been done before with tax cuts. Unfortunately, when the tax cuts performed to provide more revenue, we spent twice what we brought in.
So here’s what I’ve done as Budget Chairman. A good economy brings in more tax money. Our economy has been limping along, last year it grew at a mere 1.6 percent GDP. GDP is private sector growth - not government growth. The norm for the United States is 3.2 percent GDP - NOT like what we saw during the past 8 years when GDP remained below 3 percent. In fact, since this President got elected, the GDP has been 3.2 percent already! And for the fourth quarter of 2017 we may almost hit 4 percent. Every 10th of a percent increase in GDP brings in $273 billion in taxes over 10 years. If we could raise that anemic 1.9 percent to a mere 2.4 percent GDP, we can recover the deficit effect from the tax cuts. If we can bring up our productivity in the private sector, that’s GDP, to it’s norm, we will pay down significant debt over the ten-year window. Some 130 economists have agreed with me. They say 2.4 percent is way too low and 3.2 GDP is much more reasonable. Some even predict 4 percent growth of our economy. That’s how you can be a deficit hawk and cut taxes. You just have to bet America can do better. Actually we are just betting we can be as good as we used to be. Our American spirit should say, “We can do a lot better than that!”
The Tax Cuts and Jobs Act will help our economy expand. It will provide tax relief to hardworking Americans and make the changes to our tax code that businesses large and small need to boost the economy and create jobs.
But ultimately, we know that increased revenues alone are not going to solve all our long-term budget and debt problems because Washington’s real problem isn’t revenue – Washington has a spending problem.
I urge my colleagues today to finish the task before us. Let’s pass this bill to make critical and long overdue changes to our tax code that will jumpstart our economy.
Our country needs it. Hardworking American families need it, and they deserve to have the opportunity to make more choices about how their hard earned money should be used.
In closing, I again remind my colleagues of the words of President Reagan:
“Let's not let this magnificent moment slip away. Tax relief is in sight. Let's make it a reality….We can do it. And if you help, we will do it this year.”
Thank you, Mr. President.