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Schumer Floor Remarks on Senate Republicans’ Tax Plan and President Trump’s Trip to Asia

Washington, D.C. – U.S. Senator Chuck Schumer today delivered remarks on the Senate floor regarding Senate Republicans’ tax plan and the need for bipartisanship on tax reform as well as President Trump’s embarrassing trip to Asia. Below are his remarks which can also be viewed here:

Now first, Senator McConnell always comes down and says, ‘I hope Democrats will join us on the tax reform bill.’ Mr. Leader, we want to join you, but that doesn’t mean you write a bill behind closed doors and then say ‘support it.’ The way we have done tax reform successfully in the past – I was there in 1986 – is Democrats and Republicans sat down together and came up with a bill that maybe a few in each party wouldn’t support, but the mainstreams of both parties would. It avoids the secrecy. It also avoids the one or two saying ‘unless I get this I won’t be for the bill,’ which pulls the bill in many different directions.

So Mr. Leader, yes, Democrats do want to join, but it is totally disingenuous of you to say that without letting us sit at the table and without letting us see the bill. So let’s knock it off. If you want to do a bill with just Republicans, fine. You tried it with healthcare, you are trying it with tax reform, it is a lose-lose. You will either not pass the bill, or you will pass the bill that was enshrouded in secrecy that will have so many problems, that every Republican who votes for it will regret it.

Yesterday, the markup in the Finance Committee indicated the same thing. The markup of the Republican tax bill wasn’t the actual bill. It was only a preliminary draft. How do we know that it wasn’t the real bill? Well, today, the Finance Committee has notified us that instead of continuing the markup as usual, the Committee will recess after a morning session because the Republicans are not ready with their replacement bill – the real one.

This is crazy. The President, who doesn’t know what is in the bill, we all know that, has set an arbitrary deadline. Our Republican colleagues, to meet that deadline, are sacrificing the integrity of the process and the quality of the bill.

We are two days into a markup – nearly halfway -- and Democrats haven’t even seen the real bill yet. In their desperate rush to get this tax bill through Congress, the Republicans started by marking up a bill that’s not even the one they intend to pass.

It’s the perfect example of the problem with rushing a bill of this magnitude through Congress. Even Republicans can’t keep up with their own reckless, breakneck pace and they are going to have to delay the markup.

This same problem is going to repeat itself over and over again, on issues of greater complexity and greater consequence. What happens when Republicans realize their new international tax regime encourages scores of new tax havens and avoidance schemes? What happens if the independent analysts say that their new loophole for pass-through businesses doesn’t have enough guardrails? What happens if the House and Senate are unable to reconcile their disparate approaches to slashing the state and local tax deduction?

The New York Times this morning – I commend all my Republican colleagues to read it - identified several other potential problems like this in the Republican tax bill. Problems that the writers hadn’t thought about, but corporate lawyers by the dozens, by the scores, by the hundreds, will find a way to walk through these loopholes even though our Republican colleagues didn’t intend those loopholes to exist. You can be sure that for every one of these loopholes, these misadventures the Times identified, there are 5 or 10 more lurking in the fine print. (The only question is whether Republicans find them now or later when it is too late after the bill passes.)

So this idea of rushing through a bill of such enormous complexity, sunlight is the great fermenter of this type of legislation. If it lays out there for a little while, people come in and say ‘this is wrong or that is wrong.’ That will be individuals, that will be pundits, that will be the companies our Republican friends are trying to help. They will say ‘well wait a minute, this doesn’t quite work.’ Because no one has really had a chance to see it, to examine it, to let it stew. 

And now we are asked for other significant changes. What happens if, as we’ve seen, every few days President Trump tweets asking the Republicans to change their bill, repeal the individual mandate and drop the top rate, as he did yesterday?

Each of these decisions has enormous, drastic consequences for American families and American industries.

President Trump’s absurd idea to repeal the individual mandate as a part of this bill would boot, according to CBO, 13 million people from the health insurance rolls and cause premiums to skyrocket…all to pay for an even bigger tax cut at the top bracket, the wealthiest people in America.  What a toxic idea. Are any Republican going to go home and campaign on that? We are going to get rid of the individual mandate, kick 13 million people off healthcare, raise premiums, so we can lower the top rate when no one, no one but the hard right is clamoring for it.

Income distribution is a problem in America we all admit, we have different solutions for it, so be it. But I haven’t heard like I did in the 80s, the 90s, and even early 2000s a clamoring to lower the top rate even among those who pay it. They know they are doing well. Wealth has gone way up in America and it has agglomerated to the top. That’s not what we need. But, it is a toxic idea, and yet Republicans may have to consider adding it to their bill to placate the President. But somehow our Republican colleagues, instead of just ignoring the tweets, pay attention to too many of them.

Yesterday, the nonpartisan Joint Committee on Taxation said that they would not be able to properly analyze the effects of the Republican tax bill in the time they’ve planned for it. So we are not even having JCT, non-partisan, respected for decades, analyze the bill before we are going to vote on it in committee and maybe on the floor. Again, the Republican leadership in the House and Senate will ask their members to vote on a major bill without knowing the consequences. In no world is this proper legislative procedure.

No party has ever done this before: Democrats, Republicans, Whigs, anti-Federalists, Democratic-Republicans, Federalists. We have never seen this before. It is so wrong.

Why the rush? Because my Republican friends, fearful of the President and his self-imposed deadline, are trying to hide that their bill would transfer even more wealth to the super wealthy while raising taxes on millions of middle-class families.

According to the JCT, of all taxpayers making less than $200,000 a year, nearly 13 million taxpayers will see a tax hike in 2019 and nearly 20 million taxpayers will see a tax hike by 2027. Both Leader McConnell and Speaker Ryan said ‘we will not raise middle class taxes.’ They had to back off. For working Americans who do get a tax cut, the average is a pittance compared to what the folks at the top are getting. Americans making forty to fifty thousand dollars a year get an average tax cut of 480 dollars while folks making over a million will get a tax cut of $50,000 – 100 times more than what working Americans get.

Now you could say ‘well that’s because the wealthy are richer.’ But that is not what we need in America right now, the wealthier getting wealthier. They are doing fine under the present tax regime. Middle-class people’s median income is going down over the last decade. It is harder for middle-class people. It shouldn’t be ‘oh it’s okay for them to get 500 and the wealthy to get 50,000.’ We ought to be directing the tax cuts at the middle class.

Republicans, Trump’s organization, had an ad on TV. They said people’s tax rates remain the same while the middle class gets a cut. That is false advertising, because when you compare apples to apples, the wealthy get a much larger cut than the middle class.

We’ve known for weeks that the longer this bill is in effect, the worse it gets for the middle class. To stay within deficit numbers, the JCT confirmed that under the revised House bill, entire middle-income groups will see a tax hike on average just a few years down the road.

Now Speaker Ryan and other Republicans say those tax hikes won’t happen because future Congresses will extend certain tax breaks in perpetuity. If that’s true, all the deficit hawks out there, Mr. President, better pay attention. There is a gigantic hidden cost to this bill if we are going to make these tax cuts temporary in this bill, and then make them permanent.

The scores this week will say these bills blow a $1.5 trillion hole in the deficit over the next decade. That’s bad enough. But if a bunch of breaks and deductions and expansions that are now temporary are made permanent, as the Speaker says they will be, the real cost of this bill will be hundreds of billions more. All of my Republican friends who care about the deficit should be wary of that. We do need permanents. We need corporate America in particular to be relying on a permanent change. But you can’t do a permanent change without blowing a hole in the deficit, so you do a temporary change.

There is a simple solution, which if Democrats and Republicans worked together we could do. Close corporate loopholes, lower the top rate, keep the corporate deficit reduction neutral and permanent. My guess is most corporate leaders would prefer that. They would prefer less of a tax decrease and more permanence, because you can’t build a factory or make a major investment if you know that the decrease is going to vanish.

We shouldn’t be rushing through such an ill-conceived, backward bill -- breaking all of the fine traditions of this body, busting the deficit, breaking the back of millions of middle-class families, making the funding of defense far more difficult -- when there is so much agreement between our two parties on tax reform. On healthcare, hard to agree. Diametrically opposed visions. But on tax reform that is not true, and our Republican friends are just polishing this up.

Somehow they had in their heads they had to do it through reconciliation, they had to do it without Democrats, and the result is a very poor product that most American already don’t like, and even more won’t like when they learn more about it. We all want to reduce the burden on small businesses and encourage companies to locate jobs here. We could put together a bill that does those things. This bill doesn’t.

If Republicans turn their backs on this deeply flawed approach, my commitment to so many of my colleagues on the other side of the aisle who I know are squirming about this bill is: we will come together and put a good bill together that a majority of both parties can support. Both parties, that is how it ought to be done.

One final topic: As President Trump returns from his week-long trip to several Asian nations, it’s worth asking, what did America get out of his trip?

Did he forcefully confront the Chinese leaders about our imbalanced and unfair trade system, where we play by the rules, and they do not? No – he said China’s behavior was “not their fault” and blamed American leaders instead for China’s trade abuses.

Did President Trump engage the various regional powers in a project of great importance to the region: curtailing and containing the rogue North Korean regime? No – he settled for a sophomoric exchange of insults on Twitter far below the dignity of his high office.

Did President Trump stand up for human rights and American values, especially in countries like Burma, where there is a brutal military operation against a religious minority, and in the Philippines, where a strongman leader is engaged in a vicious campaign of extrajudicial killings? No - he lectured and unsettled our allies while emboldening our adversaries like China and Russia, treating them with kid gloves.

All in all, President Trump’s trip to Asia was a flop.

He seemed far more interested in pomp and circumstance – red carpets, fancy meals, and the flattery of foreign leaders – than advancing American interests in a region that is increasingly looking to China for leadership. And after the President’s performance, those countries are going to turn more to China. At least they have strength and direction, even though China will take advantage of them for sure as they have taken advantage of us.

It’s a sad state of affairs when the simplest of stratagems -- flattery – can derail an entire foreign trip and undercut American influence in the world. President Trump was played for a fool by China’s leaders, and he enthusiastically accepted the role.

The President of the United States – this great, grand country we love - is supposed to be the single strongest voice and advocate for the national interest. If he won’t stick up for America – her interests and her values – on the world stage, who will?