Reed Opposes Fiscally Irresponsible Tax Bill
Madam President, two weeks ago, I urged my colleagues on the other side of the aisle to reject the partisan and fiscally irresponsible Republican tax proposal in the so-called Tax Cuts and Jobs Act. I asked them to remember that, when it comes to our responsibility to plan for the nation’s long-term economic future, we are here to create opportunity and security for future generations—not to serve the short-term interests of partisan politics. Today, I regret to say that the process surrounding the Republican tax bill has only become more rushed, more partisan, more bitter, and less transparent.
My Republican colleagues wrote this bill behind closed doors, held no serious hearings or debate, and even now are planning to make substantial changes to the final bill that we will vote on before we have even had the benefit of a comprehensive, nonpartisan score of its cost. We all know better than to believe that this irresponsible process will lead to a responsible or sustainable outcome. Therefore, because it is clear that this bill is an unprecedented giveaway to wealthy corporations and individuals at the expense of poor, sick, elderly, and middle-class Americans, and because it will drive our Nation trillions of dollars further into debt, I strongly urge my colleagues to reject this bill and to work with both sides of the aisle to craft tax reform that will help—rather than burden—future generations and the middle class.
The only future generations that this bill appears to take into account are the children and grandchildren of the wealthiest families in the United States, including President Trump’s family and the families of the wealthiest Cabinet ever assembled by any President. According to the non-partisan Tax Policy Center, half of all households, and two-thirds of households making between $54,700 and $93,200 would see their taxes go up under the current Republican bill. Individuals who struggle to get by because of sickness or the unavailability of well-paying job opportunities would lose tax exemptions and advantages that have helped them stay afloat. Many Americans who have played by the rules and persevered through our long recovery from the great recession will open their paychecks to see a little more taken out every month, but not for their benefit. On the other hand, for the 5,000 American families with fortunes in the millions of dollars or more, the Republican plan to repeal or drastically curtail the estate tax could, on its own, funnel hundreds of billions of dollars to those few who need it the very least. The mere idea that we would raise taxes on poor and working Americans to pay for tax cuts for the wealthiest American estates epitomizes how this Republican tax bill is wholly at odds with our values. The trillions of dollars this bill will add to our deficit will almost certainly lead to deep cuts in earned benefits like Social Security and Medicare, as well as our national defense. Indeed, major cuts to defense historically follow deficit-increasing tax cuts, and this is almost precisely why we have an estate tax in the first place.
Our nation first enacted estate taxes in order to pay for military conflicts without driving the nation deeply into debt. Starting in 1797, and continuing through the Civil War, the SpanishAmerican War, and World War I, the United States used temporary estate taxes to offset the costs of war. Congress kept the estate tax after World War I as a means of balancing the Federal budget and countering the growth of massive wealth inequality. Because of this foresight, the estate tax was a critical source of revenue that softened the blow of the Great Depression and supported the war effort in World War II. Prior Congresses saw it as their responsibility to pay America’s bills at home and abroad. They did not leave years of war on America’s line of credit, nor did they expect the poor and working classes to pay while the wealthiest took a tax cut. There were certainly times when running a deficit was necessary, and even economically wise, but because of this pay-as-you-go principle, no American generation has faced what we do now: 16 years of deficit-financed military conflict with no end in sight, compounded by the Bush tax cuts for the wealthy that never paid for themselves, despite repeated Republican promises.
Before we give the wealthiest Americans another tax cut at the expense of our children and our children’s children, we need at least an idea of how we are going to handle trillions of dollars in compounding war debt—not to mention the trillions more we must spend to maintain and modernize our military— and address our basic domestic needs that have gone unnoticed and underfunded for so long. That is why I plan to file a motion on this bill that would send this bill back to the Finance Committee to reinstate the estate tax at current levels and place all the revenue generated by it into a trust fund. Those funds, which amount to hundreds of billions of dollars over a decade, will be devoted evenly between maintaining the readiness of our Armed Forces and addressing the opioid epidemic here at home. This motion not only restores original intent of the estate tax as a tool for combating deficits in times of war but also makes a much needed down-payment on our long-stalled domestic agenda.
But the bill’s elimination of the estate tax is just one of its many harmful provisions. The bill sabotages our healthcare system by repealing the individual mandate, which could easily throw 13 million Americans off their health insurance and increase premiums for millions of others. Yet again, the 130 million Americans with preexisting conditions must fear that their premiums will skyrocket or that they will be left with no options at all. And the poor and the sick may find even fewer options after this bill forces $25 billion in cuts into Medicare in 2018 alone because of the massive deficits it will produce. Do not tell me this will pay for itself with growth. I have served in this body long enough to know that trickle-down economics doesn’t work, and I take the word of the scores of economists who say, in no uncertain terms, that this bill will balloon the debt and will not create enough growth to offset it. Even major companies like Cisco, Pfizer, and CocaCola say they will use the gains from these massive corporate tax cuts to pay shareholders, rather than create jobs or raise wages for the middle class.
We are making decisions here that will guide the largest economy in the world. We simply cannot roll the dice on a plan of this scale and hope for the best. It remains my sincere hope that my Republican colleagues will see the error of their ways and choose to work with Democrats on tax reform that is bipartisan, reasonable, and in keeping with our responsibility to leave this nation better than we found it. We can and should address other domestic priorities in dire need like our nation’s infrastructure, the economic security of children and seniors, and programs that create and sustain employment for the middle class. I and my colleagues are ready and willing to work in good faith on tax reform, but we cannot begin that work until we abandon the kind of recklessness and partisanship that led to this Republican tax bill.
Once again, we are all here, and we are all committed to defending our nation, but this bill will make it virtually impossible to do what we know we must do. There are unavoidable costs in our national security that are not even counted in this bill. My fellow members of the Armed Services Committee and I have committed to making needed increases to the size of our military forces. It costs roughly an additional $1.8 billion per year for every 10,000 servicemembers. Where will we get that money when we are going $1.8 trillion in debt to provide tax cuts for the wealthiest Americans? We want a 355-ship Navy. There have been some estimates that doing that will require at least an additional $1 trillion a year. Where are we going to get that when we have already given $1.5 trillion to the wealthiest Americans? We have to modernize our nuclear triad, our submarines, our land-based missiles, and our aircraft. There are estimates that this will cost about $400 billion per year in costs. Where are we getting that, since we have given the money— $1.5 trillion—to the wealthiest Americans? We have overseas operations in Iraq. Over a 10-year period, roughly $10 billion must be repaid. We pay about $1 billion a year there. For Syria, that is $13 billion. If we stay there for 10 years—and that seems to be the present policy—that is $130 billion. We pay $50 billion a year to support the Afghan operation. We are going to stay there, apparently, under the current procedure—not based on time but conditions—for another 10 years. Add that up, and that is about $640 billion over the next 10 years, just to maintain the situation in those three countries.
These are not costs we can ignore. If we did, we would—at the very least—be turning our backs on the policies announced by this President and this Congress—and by my Republican colleagues in particular. But where is this money coming from? We don’t have the situation we had in 2001 when President George W. Bush proposed his tax cuts. We don’t have an expected $5 trillion surplus. We already have a multitrillion-dollar deficit over 10 years, and we are adding to that deficit. We know we have to maintain the military expenditures. Anyone who is voting for this bill is essentially saying: I will talk a good story about supporting national security, but when it comes down to the money, it is going to go to the wealthiest Americans, to things like the estate tax cut. It is going to go to the wealthiest Americans who are paying the alternative minimum tax. The money we need for security will not be there unless we borrow it from future generations—to fund the things we know we already have to fund to defend America. This is absolutely irresponsible, and, as a result, I would hope we could regain our senses, sit down, and deal, on a bipartisan basis, with tax reform that could help all of us and could indeed even begin, after 16 years, to put real money into our national defense rather than borrowing it from future generations.
Again, this bill is not only economically unwise because it will not generate growth, but it is also irresponsible because it will put us in a position where we will be choosing, very shortly—in the next several years— whether we are going to cut defense or whether we are going to cut Social Security or whether we are going to cut everything because the deficit is growing so large. I don’t think we should put ourselves in that position. I yield the floor.