tv House Ways Means Cmte. Democrats on Tax Bill CSPAN December 14, 2017 2:53pm-4:31pm EST
land. and that's the legal foundation upon which we are operating at this point. >> last question. >> rick weber, inside cyber security. if you can go back to the ftc and memorandum of agreement, the draft that came out a few days ago, can you talk about implementation of that, now that the order has been approved? what's the schedule of that mou, and how -- what's the process? >> sure. so it was a draft memorandum of understanding, as you probably saw. and now that the order has passed, i would imagine that the fcc and ftc will execute that memoranda of understanding, and that our stats will be able to collaborate going forward to ensure that the consumer protection and competition functions in that order are discharged appropriately. okay? >> thank you, everyone. >> thanks, everyone. happy new year. >> we're going to transition to the bureau press conference right now. and we'll break away here with a reminder that our
coverage is going to continue over on our companion network, c-span. you can also see all of today's fcc hearing later in our schedule. and on the c-span.org. here on c-span3, we'll bring you a discussion with house democrats on the ways and means committee. they held a meeting yesterday on the republican tax reformulation. joining them were house democratic leaders, nancy pelosi and steny hoyer, invited speakers, mark zandi of moody's analytics and jason fuhrman, former chair of the white house economic advisers during the obama administration. this is 90 minutes. [deval patrick -- tolet me bring this hearing order. it might be the only hearing let me bring this hearing to order. take note of the fact this may be the only hearing on impending
tax legislation where conferees will get together for the first time today. i want to thank our witnesses for joining us. today's hearing is the first, and as i noted, likely the only hearing on hr-1, the ryan/mcconnell tax legislation. so i thank our witnesses. let me give some historical perspective. on january 19th, 2001, when president bush took over from president clinton, cbo estimated that the total budget surplus for 202 to 2011 would be $5.6 trillion. but what actually happened? the federal government ended up running deficits totaling $6.1 trillion. what happened between president clinton's time and republican tax cuts going into effect is simple. tax cuts in 2001 followed by $1 trillion in 2003. and in 2005, there was a repatriation tax holiday, which also brought back billions of
dollars in terms of federal revenue. here we are again. the treasury department issued a one-page analysis of the republican tax bill on monday, citing 2.9% growth. that's entirely contrary to what mainstream economists have suggested across the board. it finds that the republican tax bill will still cost over $1 trillion. and frankly, even the treasury department's one-pager concludes that in their entirety, tax cuts don't pay for themselves. so let me also note something else that happened that i think is very important. in 1981, the reagan tax cuts not only did not pay for themselves, but they were promised based upon the idea there would be cuts to federal spending.
our military is committed around the world, noting this morning that it is estimated that at least two more year commitment in somalia alone. so we have thousands of baby boomers, 10,000 of whom retire every day, and they're about to begin receiving social security and medicare benefits. let's not gamble with another republican tax plan. let me conclude by saying that the bottom line in the ryan/mcconnell tax package is a bad deal for everyone. it's a bad deal for the 36 million middle class families who are going to see their taxes go up. it's a bad deal for the 13 million americans who will no longer have health care coverage. and it will be even a worse deal for our children and grandchildren who republicans have decided will foot the bill for this irresponsible proposal. second mnuchin yesterday issued a one-page analysis as it was called -- projected tax cut
proposal. >> thank you and all the members of the ways and means committee on the democratic side for fighting out there for the great middle class. i thank lloyd dogget of the sub committee and mr. thompson, because he knows firsthand how damaging in this bill is to our state. i just left the meeting with the governor of puerto rico, saying that on top of all of the other damage, this tax bill is very devastating to any recovery there. so from coast to coast, and -- and states and territories, this is a very bad -- very bad idea.
a discussion of the cold, hard facts of their tax scam. the gop tax scam is the product of haste, carelessness and vast dishonesty toward the millions of middle class families it will hurt. every day, the cruel consequences of this bill are better understood, and the overwhelming opposition of the american people grows louder. but the gop crawls deeper into denial. when the "washington post," as edward, former chief of staff of the joint committee on taxation, if the tax package would mean middle class tax cut, he said that's inclusionnal and dishonet to say. it's factually untrue. the only group you can point to that wins year in and year out, and wins in the very large magnitude is the very highest incomes. the -- other issue, of course,
is what it does to the deficit. and doug -- well, in this very room, bruce bartlett told us that anybody that tells you that this trickle-down economics pays for itself, it's not true, nonsense and went further to use a crude expression that begins with bs to describe it. doug hokin said it doesn't pay for itself. he said it in a larger statement. or how it steals trillions from our future. it robs from the future, rewards the very rich. the gop wants tax cuts for the wealthiest 1%, no matter the cost to anyone. so later today, they will go to
conference on two monstrous versions of a gop tax scam, intent on shutting out reality and silencing the voices of the american people. we're honored to be joined today by a distinguished panel of experts in taxes who will share their insight on the consequences of the gop tax scam. we're grateful for their leadership and honored by their presence today. mark zandi, chief economist from moody's analytics. jason fuhrman, kennedy school of government. phd candidate, university of pennsylvania. and will attic, executive director, union veterans council. our members are eager to hear your wisdom. i yield back to our distinguished ranking member. >> thank you, madam leader. i would like to recognize mr. hoyer for three minutes. >> thank you very much, mr. chairman. i appreciate your holding this hearing. i join leader pelosi in
expressing my deep, deep disappointment that this legislation is before us. it is dangerous, it is reckless, it will adversely affect not only our economy, but a very, very large number of americans. and because the economy will be adversely affected, all americans will be adversely affected. i appreciate the opportunity to be here, along with leader pelosi and chairman neil and the members of ways and means committee and members of leadership and members of the caucus. as i said, the bill that is before us poses great dangers to the american people. some of those dangers we already know. we know it relies on the fallacy of supply side economics. disn disproven again and again. i came here in 1981. so i have been through a number of these iterations where tax bills cutting revenues sharply
were represented to be paid for by the growth that would follow. that was true in '01 and '03, and a few years later, we experienced the worst economy and recession that any of us in this room have ever experienced. we know that the -- every macro economic analysis, even from the trump administration, own treasury department, agrees it would fail to achieve the president's promise on economic growth and add more than $1 trillion. we know it fails to focus on cutting taxes for the middle class. instead, will raise taxes for 78 million middle class working people. in this country. while giving more than 60% of tax cuts to the top 1%. speaker ryan talked about the average family of $59,000 getting a $1,182 a year tax cut.
what he did not talk about is that 60% getting a $1,198 per week tax cut. we know it would be a trigger for a $25 billion cut in medicare next month. and we know it would eliminate health insurance coverage for 13 million americans. sadly, secretary mnuchin did not accept the ranking member's invitation to join us and explain why the administration believes any of this is good policy. luckily, we do have, as the leader has pointed out, and i'm sure chairman neil did before i got here, a distinguished panel with us today to share their insights and to not only the economic consequences of these tax proposals, but the human consequences, as well. so i thank all of you. many of whom i've worked with before, certainly the two on
the -- on your right. i've talked to on numerous occasions. thank you for your input. and i thank the doctor-to-be. and will, thank you, as well, for being with us. we have an opportunity to learn more. i want to say something in closing, mr. chairman. i want to give you a quote. i think the message of the moment is that the american people all across the country are asking us, even the most liberal state, massachusetts, stop this health care bill. i think that means there will be no more health care votes in the senate prior to the swearing in of scott brown, whenever that may be. he said that -- senator mitch mcconnell, on january 20th.
scott brown was elected to the senate on january 19th, the day before. there ought not to be another vote in the united states senate on this bill until the people's voice of alabama is ceded. because the present incumbent was defeated in the primary. and is not the voice of alabama. hopefully, senator mcconnell will have the good sense to follow his own advice, or perhaps this was simply transactional ethics. i hope not. thank you, mr. chairman. >> thank you. with that i'd like to recognize mark sandy, whose work i follow at moody's analytics.com. mark? >> thank you, ranking member neil, leader pelosi, leader hoyer, and the rest of the committee. i should say, the views i express here are my own, and not that of the moody's corporation. the tax cut legislation that has passed the house, and similar
legislation has passed the senate, is bad economic policy. and it -- there are five significant problems with the legislation. problem number one, it does not sustainably increase economic growth. in any meaningful way. that's the result of my analysis, which you can see in the written testimony. that's the conclusion of penn wertton. this does not result in any significant, sustainable increase in economic growth. probably number two, it does add significantly to the debt load and deficits. joint committee on taxation, their analysis says $1 trillion over ten years. by my calculation, i think
they're being generous. it will probably be greater than that. and this is at a time when our fiscal situation is critical. we have a debt to gdp ratio of 75%, and even without the tax cuts under current law, we will see the debt load increase quite dramatically. so that's problem number two. problem number three, this exacerbates, makes worse, the ongoing skewing of the income and wealth distribution. lower middle income, middle income households do not materially benefit in a sustained way from this tax legislation. higher income, very wealthy households, do benefit in a very significant way. from the legislation. we have a very significant problem with income and wealth. the skewing of the income and wealth and distribution and this only makes that worse.
problem number four, this does not simplify the tax code. yes, there are elements of the legislation that do -- that does do that. raising the standard deduction, probably a pretty good idea by itself. makes life simpler for the folks that don't have to file a tax return or simple tax return. but there are elements of this tax legislation that are incredibly complex. i can't even get my mind around it. particularly with regard to taxation of the businesses that the legislation is intended to help most significantly. small businesses pass-through entities, in particular. and the unintended consequences will be quite significant. i'm sure there are going to be many mistakes in this legislation that are going to be difficult to fix in the political environment, and it's going to make life very difficult. for many small businesses. finally, and i'll end, problem number five, this couldn't be worse timing. i mean, if you crack open a macro economic textbook, this is not what you would do. deficit finance, tax cuts on a
full employment economy simply means the federal reserve will have to respond by raising interest rates more aggressively. they're going to raise rates today, they have to raise them more aggressively next year. so whatever benefit businesses and the economy will get from lower marginal rates will be completely washed out by the ill effects of the higher interest rates. this is not the kind of policy you would want to implement at this point in time. thank you for the opportunity to participate. >> thank you, mr. zandi. and another economist well-known to all of us and whose work i follow, his work appears regularly in the "wall street journal." jason fuhrman, president obama's economic adviser. >> so thank you very much for including me in what is the only hearing since the most significant legislation to change the tax code in over three decades has been introduced. >> the only hearing that's been had on this extraordinary bill? >> that is my understanding. and i don't think that's the fault of anyone in this room. the -- i can speak about this
from an economic perspective. i can tell you, many of my friends who are tax law professors look at this legislation and see enormous complexity, enormous avoidance opportunities, huge amounts of activity that will take place in the tax law profession over the next decade, and that set of issues, which i will not be testifying is worth taking into account as well. what i -- my testimony is about how the tax bill is bad for the middle class. bad for the economy. and bad for america's economic future. the direct effects of the tax cut are very easy to measure. you can just put someone's income in and calculate what it would do to their taxes. speaker ryan talked about a typical family that would get a $1,100 tax cut in the first year of the legislation, assuming everything went right for them.
within a few years, the very same family that speaker ryan held up would actually be getting a tax increase, and a growing tax increase over time. you see that feature in both the house and the senate bill, that in the first year, tens of millions of middle class families would get a tax increase. and then over time, the tax cuts for high-income households stay, while the tax increases for the middle class continue to grow over time. so it becomes an increasingly bad deal for tens of millions of households, despite the fact that over $1.5 trillion was spent on the tax cut. advocates of the tax cut say don't worry about the tax increase, because you'll get a raise from your employer. my analysis, drawing on a range of other analysis, is that this bill would have an imperceptible effect on economic growth over the next decade, and as a result, an imperceptible impact
on wages over the next decade, as well. this is consistent with work by the joint tax committee, by moody's economy.com, by the penn wharton budget model. the american enterprise said the economic growth associated with this bill would be less than .1 of 1% per year over the next decade. the bill would have a number of deleterious effects. the tax increase would have to be paid for that would come out of middle class families. by cutting the state and local deduction, it would reduce taxes on the highest income households on those states. it would lead states to do that in a competition to keep those people there, which would lead them inevitably to reduce state and local services, a cost to families that's not factored into any of the analysis that we have seen. and finally, it would affect the health system, leading to, according to cbo, 13 million people to lose their health insurance premiums, up 10%.
the shame of all of this is the tax code should be reformed. we can do much better than we're doing today. and in my testimony, i outline some of the ways to do it. this, however, isn't tax reform. it's a very large unneeded tax cut that would make the tax code more complicated, and over the long run, less pro growth. thank you. >> thank you, mr. fuhrman. i would like to recognize brenda salantaz in cell and molecular biology at the university of pennsylvania. >> i'm a graduate student pursuing my phd at the university of pennsylvania. for the past four and a half years, i've been studying prevention and cure strategies for hiv. the virus that causes aids. i have been -- it's been a great honor to be able to share how this tax reform bill personally affects me as a graduate student. but just before i do, i wanted to take a minute to just acknowledge the path that led me here today. so i was born oahu, hawaii.
when people hear this, they often have this perception of a life in pair daradise. but even in paradise, when you are from a low-income family, financial hardship knows no boundaries. in the united states, there are hundreds of thousands of low-income students just like me who wonder if they have a place in higher education. while most high school seniors worry about college acceptance letters, we worry about how to afford student housing or meal plans or those expensive, heavy winter coats that we don't yet own. despite these very real concerns, we persist, often taking up part-time jobs and multiple student loans in hope that some day our college degrees will allow us to give back in ways we only dreamed of. becoming a biomedical scientist was my dream. there were numerous s.t.e.m. outreach programs and merit-based scholarships that heavily rely on funding from universities. these are the programs that convinced me that a phd was even possible, despite my circumstances. i worked for four years before i enrolled in graduate school to
ensure that i would be able to financially survive. and as graduate students, we know that pursuing a phd will be a modest living. in philadelphia, we're on $32,000 or less, forcing us to put off starting a family. by waiving our 37 to $49,000 tuition, the economic disincentives are drastically reduced, making it feasible for people like me to pursue an advanced degree. the house version of the tax reform bill would require me to pay taxes on both my stipend and tuition, a total of over $70,000 annually, even though i take home less than $24,000 a year. furthermore, many biomedical graduate students like me study at universities with large research hospitals, located in expensive metropolitan cities. the infrastructure at these universities allows for the groundbreaking medical discoveries and is funded by the university's endowment. this bill would negatively
impact the infrastructure which currently exists to support this research. pursuing a phd requires every ounce of your focus and ambition. the financial stress that would result from the passage of this bill would disproportionately affect those from middle and low-income backgrounds, forcing many of us to have to reconsider whether we can even afford to complete our degrees. but what is perhaps more disheartening are the prospective students that have also experienced economic hardship who might have to give up their dreams of becoming scientists, too. pursuing my phd has been one of the most fulfilling experiences of my life. i have access to world renown scientists at the center for aids research, in addition to professors and university administrators who are deeply invested in my intellectual growth and well-being. i'm not just a graduate student here. i'm the scientist that i would hope i would some day become. and as an advocate for students in historically underrepresented communities, a researcher that's passionate about the advancements in biomedical science and local girl who grew up in the small countryside
town, i implore all of you to focus your efforts on ways to increase access to education by continuing to build upon the paths that i once took to be the person that i am today. thank you. >> brenda, with that i'd like to recognize the executive director of the council of the afl-cio, and having done two tours of duty in iraq. >> thank you very much. i'm the executive director of the union veterans council. i lead an organization that represents well over 1 million working class veterans, and hundreds of thousands of retired veterans across this country. like many millions of young men and women, when i turned 18, i signed a line to go fight for an idea of america. i served proudly. i served with dignity. what i didn't realize, when i came home, i had to come home to a different fight.
i came home in 2009. i found myself without a job, i found myself without a degree and i found myself without a future. and this is the same story of hundreds of thousands of veterans around this country and this generation. we have come home to a rigged system that rewards the wealthy and overlooks everyone else. since 2009, when i came home, i was able to find a very good job. i got lucky. i became construction worker. pipe welder, to be precise. and as i did that, i decided to dedicate my life to veterans. and my fellow brothers and sisters that i fought with in the generations before me. and what i found out was, as everybody in this room knows, a lot of people like to wave a flag, and they like to talk about how much they support veterans. and the problem is, the underlying issues for veterans are the exact same as everybody else in america. i saw firsthand -- and when i came home in 2009, the unemployment rate for my
generation, my age group, was twice that of the regular standard of american people. it's a difficult thing when you come home. you spend your first six years of life where you're supposed to be learning a career, serving our country. when you come home, a lot of those skills don't coalesce to job opportunities. so programs that i was able to work with veterans and employers to get jobs for veterans in illinois, programs like returning heroes tax credit. wounded warrior tax credit. active military reservist tax credits. those were tools that have significantly dropped the unemployment rate for veterans in america. and i always say the best medicine for a veteran when they come home is not a prescription. it's a job that they can go home on friday with and have dignity and be able to take their family out to dinner. this bill that paul ryan is toting as an amazing bill for america cuts every single one of those programs.
i'm going to say their names again. returning heroes credit. wounded warrior credit. active military reserve -- active duty reservist tax credit. these things are gone away. we have 18-year-old kids about to deploy to afghanistan. we have been at war for 16 years. we have got to be able to make sure that these next generations, this next segment is taken care of, too. that's not the only thing. i have heard countless stories of veterans when they come home that couldn't afford health care. the basic means to survive. and they have been able to receive that through the aca. and through new health care programs. these are things that are going to be stripped away from them with these major cuts. our retired veterans. and, you know, representative thompson up here is a vietnam veteran. our vietnam veteran community is
about to be retired. in the next five years, they're all going to be retired. [ laughter ] not you, sorry. >> a determined age. >> but when they retire, they rely on social security, they rely on medicare, they rely on these programs that this bill completely slashes. it's unconscionable, and it's anti veteran. this is not the america i fought for. i fought for an idea that everybody gets a fair shake. and right now, there is that shiny city on the hill, but only a few elite have the keys to that city. that door is not wide open for everybody. we have a v.a. that's underfunded and understaffed. and we're still trying to put america more into debt -- into debt even more. there's issues that my community faces. this tax bill is one of them. and i'm very happy to be here. thank you. >> thank you. let me ask our economist here a
pretty simple question. two days ago, the secretary of the treasury put out a one-page analysis after months of thought, and considerate work. and the secretary pronounced we could be guaranteed 2.9% growth. i responded with a one-page press release that said with one word, maybe. could you two comment on the assurance we have from administration that this tax proposal will offer at least 2.9% growth, and then you might talk about the idea of what happens if you drop that top rate of 39.6 to 37? in order to accommodate those who believe that they're losing the deduction for state and local taxes. mr. zandi, mr. fuhrman? >> sure. well, i saw the press release. and the question was posed to me, what do you think of the analysis? and i said, i see the press release. where's the analysis? so, you know, it's a statement.
they're numbers. but how you get to those numbers, i don't know. there's no set of models or analysis or experience that would be consistent with the kind of results that the secretary and -- in that press release state. i mean, if you look at the joint committee on taxation and the work they did -- and i think they do very good work. bipartisan work. i think it's important for congress and policymakers to rely on their work, just as they rely on the cbo. i think they do -- excellent work here. their analysis shows that by the end of the ten-year budget window, the level of gdp will be no more than .8 of 1% higher. so if you kind of do the arithmetic, you take .8, divide by 10, over ten years, that means average annual growth will
rise by .08. not -- so if we're at 2, which is where we are now, we're not going to 2.9%. we're going to 2.08% per annum. and, again, my sense is, because the joint committee wasn't as -- if you actually kind of read it carefully and see what they actually did, their numbers are probably going to end up being lower than that. so that's the reality. it's 2 to 2.08, maybe. it's not 2 to 2.9. that's just a number. >> thank you. would you comment on that, the idea of taking the top rate from 39.6 to 37 as part of your answer? and contrasting that with the proposal on the state and local tax deduction for relief? >> yeah, sure. if i could also briefly answer the growth one, as well. >> by all means. >> a republican friend of mine e-mailed me after that treasury analysis or press release came out. and said it read to him like a coded cry for help. and so he read it backwards to
see if it was like a hostage note. [ laughter ] so i had earlier this year done an analysis to figure out what the odds are that we get 3% economic growth over the next decade, based on past variations in growth. and i put the odds at 4%. which is to say, if you ask me, you know, will it be 60 degrees on christmas day in boston this year, there's a chance it will be. but only a lunatic would forecast that. and certainly if you made your plans based on the assumption that it will be 60 degrees in boston on christmas, you're very likely to be disappointed. in answer to your question on the tax rates, yes. in a lot of states like california and new york, massachusetts, you would still face a net tax increase as a result of eliminating the state and local deduction and cutting the top rate to 37%.
moreover, my concern about getting rid of state and local deduction is it would lead to a race to the bottom in taxation that would undermine the services in those states, and that would happen, regardless of what you did to the top marginal tax rate. so all of those harmful consequences would still follow. >> thank you, mr. fuhrman. with that, i would like to recognize the leader, miss pelosi. >> i'm very eager to hear the questions of the members of the committee and others here. but i want to thank our witnesses today for their testimony about what this does, as far as growth, what it does to the deficit, what it does to our education. nothing reduces the deficit more than investments in education. so it's hard to understand why they would go down that path. and to will for what it does to our military, who are there to protect our constitution and our way of life. and i thank jason for his clarity and presenting. so thank you, mark, jason.
i yield back, because i want to hear from the members of the committee. >> thank you. with that i would like to recognize mr. hoyer. >> thank you, very much. as i said, i've been here for some period of time, did the '81 vote against -- voted against the '81 bill. under ronald reagan, the deficit debt increased to 189%. it was something like $950 billion when i came. it was close to 2 when reagan left. under george w. bush, i heard the same argument about supply side and dynamic scoring that cutting taxes would raise substantial revenues. but, in fact, what it raised was about 87% increase in the debt. and the deepest recession we've ever had. why, given those examples, and the opposite example where
during the clinton administration, '93, we raised taxes slightly, we had the best economy anybody has experienced. why should we rely on the representation that is being made today? mr. zandi? >> i think you're correct, that there is no historical evidence that massive tax cuts will pay for themselves. you know, the cases you gave are perfect examples. the early '80 reagan tax cuts significantly increased deficits and debt. in fact, for most of the rest of the decade, up through the tax reform law, it was about raising taxes to address the ballooning deficits and debt that we suffered because of those early cuts in tax rates. similarly, with the bush tax cuts in the early 2000s, you can remember back, there was a
concern that we had run surpluses and we had run out of treasury bonds, and i remember chair -- fed chair greenspan testifying, that's our biggest problem. >> they fixed it. >> yep. so -- and so i agree. there is no -- of course, a more careful analysis would try to control for everything that's going on and try to tease it out. even when you do that, very difficult to come to the conclusion that these kinds of tax cuts, deficit finance tax cuts on a static basis are going to pay for themselves and the world is going to be -- we're going to have a much bigger economy down the road. one other quick point, because you brought up the historical experience. it's important in the current context. if you go back to the reagan tax cuts, the nation's debt to gdp ratio was 25%. roughly. in the early bush administration, when we had those tax cuts, it was 35%. today the debt to gdp ratio is
75%. the highest it's been since after world war ii, and as i said earlier, even without tax cuts, set to rise. so, you know, the historical experience, the historical record, is just not consistent with the idea this is going to be a boon to economic growth. and certainly not that this would -- these kind of tax cuts are going to pay for themselves. >> thank you. mr. lewis has a scheduling conflict, so we're going to go to him and then come back after he yields some time to mr. levin. >> thank you, mr. neil. mr. neil, i want to yield to ter terri sewell, back from the front line of alabama. [ applause ] so my question is to our economist. i know that you, mr. fuhrman, have had the opportunity to advise both presidents. if you were looking to provide economic growth, what would you
be advising this administration to be doing? at the end of the day, we know that we've gotten out of our worst recession since the great depression, and we are on the rise. unemployment hasn't been as low as it's been in decades. and so what would you advise this administration to be doing? because i agree with you, mr. fuhrman. not only is it the chances of economic growth paying for itself, through this tax cut, not only is it as impossible as 60 degrees in boston, it's almost as impossible as a democrat winning the senate seat in alabama. but things do happen. so i would like to know from both of you, what you would do if you were advising this president on developing better economic growth. >> so, first of all, i would make more investments in education. that would be at every level of education, from preschool, where the united states is way behind
the other advanced economies, k-12, where our scores are much lower than they should be through college and graduate school. in fact, if you look at the source of america's competitiveness in the global economy in parts of the country most successful, say silicon valley, that's not a function of tax rates or regulation. that's a function of education. and that's what gives us our unparalleled advantage. we need that across the board. second of all, investments in infrastructure. we were talking about the types of jobs veterans would come back to. that would be one area that could employ veterans and many others. third, i would reform the tax code. but i would do it in a way that, first of all, didn't increase the budget deficit. that invested in encouraging people to work. for example, expanding the earned income tax credit, including for workers without children. and finance that in part with tax increases on higher-income households, which i think would have little to no effect on
growth. and finally, i think over the medium and long run, we do need to bring down our budget deficit, and we need to do it in a balanced type of way, which this bill would take us in the opposite direction. >> all great policy suggestions. all would be very helpful. i would -- i think the one way to increase economic growth in a sustainable way quickly is to increase immigration sustainably. particularly -- there's been a lot of talk about skilled educated workers. that's pretty obvious. i mean, if you're a foreign student that graduates from the university of pennsylvania -- and by the way, that's a great school to get a phd at. just saying. congratulations. that's -- you should have a visa stamped on your forehead the day you graduate. you should stay. you're going to create wealth, you're going to create jobs, you're going to create income. we want you here.
and i -- as an employer, i employ lots of people all over the world. and my biggest problem is finding people here. and i -- you know, i'm hiring in prague, because i can't bring those people here to the united states to work. and i'm telling you, they come here and they say that zandi -- after a few years working with me, i know more than zandi, and they probably would. i'm going to start my own company and going to create lots of jobs in the suburbs of philadelphia, but now do it in the suburbs of prague. and i would argue we're going to need immigrants of all skills. i think business' number one problem for the foreseeable future -- i mean the next decade or two, is not finding people. and we should work very hard to increase immigration. and we had a great piece of legislation that came through, passed the senate, 2013, doubled immigration from about 1 million per annum to 2. that is a slam dunk win for the
economy, and that's the best, fastest, quickest way to get to 3% growth. that -- by the way, that's the only way. if you want to get there. you're not going to get there with taxes to corporations. >> thank you. and i i to and i yield back to the gentleman from georgia. >> thank you very much. brenda, i would like to welcome you on behalf of my good friend, congressman evans, who represents pennsylvania, second congressional district. >> thank you. >> i have many colleges and universities in my district. in metro atlanta. at emory, georgia tech, georgia state, atlanta university. you raise concern that i've heard from many of these students. i have a simple question. does this bill make it easier for the person to pursue their dream of a higher education? does this bill lighten the load
of crushing debt that many students all over america face today? >> absolutely not. to answer it simply. like i said before, there are hundreds of thousands of students who don't come from independently wealthy families that can afford to pay for the additional costs and taxes, should this tax reform bill come through. in fact, as a university of pennsylvania student, who is also involved in student government, we have polled graduate students across our campus to ask whether or not they would have to consider dropping out of their programs, despite being in their fourth or fifth years of their phds and what we found is six out of seven students we polled said they would highly consider dropping out of their programs, which is devastating to think that you would invest so much time and energy and basically risk five years of your life pursuing your passion only to have to give up all of that, because of this tax reform bill. >> thank you for being here. will, thank you for your
service. thank you for not giving up. but for keeping the faith. many of us are bitterly opposed to this bill, and we're going to do whatever we can to stop it. thank you for your testimony. >> thank you very much, representative. >> i yield back. >> thank you, mr. lewis. with that, i recognize mr. levin. >> thank you. thank you, mr. chairman. and thank you all for coming. i want to help zero in on i think two key points. one of them is i think the most outrageous of the republican fake claims that the middle class is the main beneficiary. and the other -- and mark, you've already talked about this a bit, about this myth that i think has been shattered that lower taxes pay for themselves and so will the increase in the
deficit. so let me start. i have just a couple minutes with you, jason. on page 2, you say, based on the joint committee on taxation at 2025, the house and senate bills would raise taxes by more than $100 on 36 million, and 22 million households making less than $200,000 a year respectively. that's an astonishing figure. so tell us, jason, where this comes from. >> yeah. i mean, this was an analysis that joint committee on taxation did. and it understates it. because, first of all, it's $100 or more. and second of all, they're assuming some of the corporate tax cuts go to every household. if you look at what households actually had to write as a check to the irs as a 1040, tens of millions more would get a tax increase than that number that i had in my testimony that you just cited.
>> so i think this needs to soak in. part of it comes from the change in the state and local taxation. but from other points. just quickly, mark, on page -- whatever the number is. >> i wrote the testimony. i know where it is. go ahead. >> you talk about debt loads. that they were much lower prior to past tax cuts. and these are striking figures. 25% of gdp under reagan. 30% just under that under bush, compares to 75% today. so you have just about a minute. what's the significance of this? >> well, it means that we have less of a cushion. you know, part of the reason why the budget -- the debt load has increased over that period is we had a major financial crisis. the great recession.
and that was a recession where unemployment hit 10%. it was the deepest recession since the great depression. and we needed all of the fiscal resources, along with all -- what the federal reserve did, to navigate through that incredibly dark period. so now here we are, on the other side of that. and, you know, the textbook would say -- and this is 4% unemployment. incomes, profits, are good. we should be working to bring down the debt load so that if we do get into another crisis, if we have another major problem, if we have war -- you know, who knows, things happen. we have a cushion. and we just don't have that cushion. in fact, we're -- whatever cushion we do have left remaining, we're using it in this way, which, you know, doesn't help middle income households. doesn't help low-income households and doesn't lead to economic growth. so why? why are we doing this? it's just -- it's just the opposite of what a macro economic textbook would -- any textbook would say. you know, why would you do this?
>> did you bring a big sign, "why?" >> i could. yeah. i'll get my desktop publishers to work on that for you. >> thank you. mr. dogget is recognized. >> thank you so much for all of your testimony. i think it makes it even more apparent that what we have here is not really just a bill, but a giant lie that is wrapped in lies. perhaps it's understandable why treasury secretary mnuchin, instead of honoring mr. neil's invitation and repeated invitations we've made for him to come before committee, has been kept in a secure, undisclosed location, be unresponsive. indeed, like all members of the trump administration, none of them have had the courage to come here and answer questions about this tax bill. perhaps not wanting to disclose how much of the benefits of the tax bill will actually end up in the pockets of the trump family personally. the testimony you've given makes
clear that this will not grow jobs, will not grow our economy. i do want to ask you, mr. fuhrman, about one other aspect we have not addressed yet. and that is to the extent to which this bill will only encourage the outsourcing, the exporting, of more american jobs abroad. i know that that was a central theme of candidate trump, how he was going to bring jobs back and prevent jobs from going abroad. but i note that speaker ryan's own home state republican senator, ron johnson, has been quoted as saying that the bill provides a real incentive to keep manufacturing overseas. is it true that under this plan, multinationals will get a tax break on an investment that they make abroad that would not be available to them for an investment that they could make here in america? >> yes. under the bill, there would be a lower tax rate on production that was undertaken overseas or profits that were reported to
have been made overseas than domestically. the bill would also fail to recoup the tens of billions, up $100 billion a year of revenue that's currently lost to income-shifting. in fact, it doesn't regain ongoing permanent basis any revenue from the international sector at all, even though that's widely understood by economists to be a real area of loopholes in the current tax code. >> isn't that becoming widely accepted, that as much as $100 billion every year is being lost to the treasury through these offshore tax-dodging schemes? >> yeah. and the bill would do nothing to recover that revenue. >> would you believe -- do you believe that permanently exempting profits earned abroad from u.s. taxation will just increase the incentive for more of these shenanigans? >> yeah. this bill includes whole new opportunities for profit-shifting that, you know, we haven't even figured out yet, but lawyers will very quickly. >> well, and while it's not a
bill to encourage job growth, certainly it will be hyper growth for tax accountants and tax lawyers to figure out ways around this. is there actually a way that a multinational could lower its tax bill on foreign earnings to zero if it locates some of its production, say, in an economic competitor like germany and as some of its revenues, often the cayman's or the bahamas? >> congressman, you're exactly right. the way it's structured is -- looks at the minimum tax on a global basis. so that if you are below the threshold in some country like the cayman islands, you can then invest in another country, like germany, average the two against, and not have to pay any tax against that provision. and that was a design choice in the bill. it didn't need to be written that way. >> well, i know you followed the latest release of the paradise papers, like the panama papers before them. they show immense amount of
tax-dodging by wealthy individuals, and multinationals. and this bill would appear to only reward those people with more loopholes and tax breaks. i thank you, mr. chairman. >> thank you, mr. dogget. with that, i would like to recognize mr. thompson. >> thank you, mr. chairman. and thank you for having this hearing. >> it's already been said that we're doing this tax bill, and there hasn't been a single hearing in the house on a tax bill that's going to have incredible implications to every american. and this is the first time we've been able to hear from expert witnesses. so thank you all for being here to share your expertise with not only us, but the american people. and, you know, the last time we did tax reform was almost 30 years ago. so if that's any indication, we're not going to revisit this again for another 30 years. and to write a tax bill that's going to be with us for potentially that long without having hearings, without hearing from witnesses, i think it's just absolutely shameful. so thank you all. and i want to focus in on
veterans this year. and thank you for being here. thank you for your service. your service with a big red one in combat, and your subsequent service to the american people and your brothers and sisters and the veterans community. we need to remember, i believe, that this does have, as you pointed out, this tax bill does have impact on veterans. but it also has impact on veterans' families. so there's more than just a veteran out there. there's a whole family behind them. and this bill is going to hurt them. you talked about the hire more heroes provision, and the related work opportunity credit, which had bipartisan support when it passed. and really removed barriers that veterans face to get into the workplace. i understand there's about 100,000 veterans that are currently taking advantage of
that. but the bill also eliminates deductions for small businesses that get some relief for making their facilities accessible for people with disabilities. and when you talk about people with disabilities, you can't help but reference veterans. so it hurts them, it hurts their families, and it also hurts small business owners who are trying to do the right thing by hiring veterans into those businesses. and the gi bill we passed under leader pelosi's leadership when she was the speaker, i think has done a lot. but we need to remember that the gi bill doesn't cover everything. and veterans put their life on the line for our country, and for our future. and they come back, you mentioned the need to come back and get an education. this bill directly hits veterans and their families in the
education area by the student loan issues, and also by the -- reducing the interest that they can deduct for their student loans. and then i guess to add insult to injury, we're hearing now from the speaker that after this is passed, they're going to come back and they're going to look at cutting social security, medicare, medicaid. the programs that they call entitlement programs in order to pay for this. and there's over 175 million veterans that rely on medicaid alone. >> 1.75. >> yes, 1.75. and there's also -- i can't even begin to guess how many veterans rely on the veterans health care. these are all entitlements. medicare, social security, veterans benefits. are entitlements. so they're talking about not
only hitting you and the people that you represent, the people that fought for our country in the bill, but then coming back and taking a second bite by reducing the services that you and your family rely bite in re services that you and your family rely on. i would like to give you an opportunity to talk about that. >> you made a lot of excellent points. and i think many times when you hear the word veteran, and especially for a lot of people that decided they didn't want to come to this meeting or hold hearings, it seems like we just magically appear wherever there's an opportunity for a photo opportunity, or a punch line in a speech. but the reality is we come from the working fabric of america. 89% of all veterans that work right now make less than $100,000, 58% make less than 50,000 dlr$50,000 a year.
these are the middle class people. millions of people are making money off the economy and the stock market. they're in small towns in southern illinois, and they're in the inner city in chicago, and i'm really happy you brought up the conversation of outsourcing, because many v vetera veterans, especially when they come back to urban areas, they come back to manufacturing jobs. i was just in chicago with a rally with a large number of laid off svveteran workers that had their jobs outsourced. i'm not quite sure what's the most unpatriotic thing you can say, is that we sent a veteran's job overseas, because we can pay a worker there over a dollar an hour, instead of giving you a decent middle class wage in illinois. veterans, especially vietnam veterans are getting ready to retire, they were in the same wage bracket, so they're going
to rely on social security and medicare. i was raised not to be a gambler and all this is is a giant gamble with $1.5 trillion and we have no idea where we're going with this. >> jason and mark, does this bill reward corporations that send jobs overseas? >> no, as i was answering to congressman doggit is that you would get a better tax rate overseas rather than united states. so it tilts it towards moving jobs overseas. >> i just want to thank mr. thompson for emphasizing the veterans' issue. yesterday will fisher was with us with senator tammy duckworth and she made the point about all of the issues affecting
veterans, but to hear her speak to it from her own personal experience and that's why the disabled veterans of america have been so outspoken about this legislation, we owe veterans a future in exchange for their service. >> we have seven more members have been heard and i would like to recognize mr. larson. >> i want to thank mr. neil and i want to thank the leadership for organizing, what amounts to the only hearing with expert witnesses that we have on this bill. mr. neil started out the conversation with the statement that this was a lost opportunity. and as is evident in all of your testimonies, that clearly is the case, this was a lost opportunity for the country. it's one that we hope that we can regain and i want to thank
both will and brenda for your testimony, i think that's the kind of anecdotal evidence that we need to take all across this country. but i want to turn my focus and question to our two expert witnesses on the economy. and it seems to me, you know, outside of the fact that we could address the other side seems to have amnesia when it comes to the national debt or only seems to want to talk about it when a democrat is in the white house. it seems to me that this apparent lack of focus on the deficit was somewhat disguised with almost a cheshire cat grin with grover norquist, with the underlying theme of this is what they're going to do with entitlements. and i rarely disagree with my colleague, but i believe that social security and medicare are
the insurance that people actually pay for. so when we find in this provision, that because of payroll rules instituted by democrats that there will be an automatic cut, without a vote having ever to take place into medicare of $25 billion a year i would ask our experts how would you try to rectify that and what is your sense whether or not this is a very specific goal to go after entitlements? we're shocked by the fact that our colleagues then turned around and said as well, we're going to be going after entitlement, not the inf infrastructure, but what will put people back to work after entitlement. i want your sense of what this will need for the overall subject of health care. >> the most desirable thing
would be to pass this bill. if you can't get either of those, i would think you would have to figure out among the third best solutions what the least bad would be. >> i don't think there's any good answer to that question. i mean, i think in the case of medicare, the issue and medicaid is the issue of the growth in health care costs. i actually think we have made some progress on that, the affordable care act suggested -- we don't have proof, but there was evidence that suggested that it was slowing the growth in health care costs and reducing the long-term costs of medicare
and medicaid. that's where our focus should be, how do we make the health care system work for effectively, for efficiently, the affordable care act seemed to be going down that path. so trying to preserve that as best as possible in the current political context, would, i think, be helpful. and that's the kind of reform we need, it's not cutting benefits, it's figuring out how to deliver better benefits at a lower cost. it doesn't sound like it's not doable, it's very doable. >> let me recognize mr. blumenour. >> just on a footnote of infrastructure, when people are
advancing one of the singular most popular advanced tax cuts in history, it makes the proposal like i have to raise the gas tax to fund infrastructure look more attractive, especially when we have a broad base of support from people who would pay for it. maybe we could return to that at some point. i hope you can help us focus for a second on what i think is the largest transfer of wealth in our nation's history, from people who are going to be our future with the debt, and transfer to people who arguably need it least. one of the aspects of this that i find singularly intriguing, is they are changing the way the tax system works. for going forward, people getting their income from where people get it from wages and
salary will be paying the highest rates. and people who can afford accountants and cpas and lobbyists can recharacterize how they earn their income and have access to far lower rates. the majority get stuck full boat, and those that can pass through are going to get a substantial break. can you comment on the implications of this shift from how much to how we make it? >> yeah, that's something that's not just unfair, which was i think the tenor of your question, but it's also something that's economically inefficient, because what you want the tax code to do is to tax similar types of income at similar rates and when you get a lot of different rates, you get
into people exploiting those loopholes for tax reasons other than economic reasons. >> in the obama administration, there was an effort to reform the corporate tax code, that i thought was a very reasonable and appropriate way of doing it. and one of the tricky parts of that was making sure that when you lower tax ratings for c-corps, you make sure you're careful on the dual high for tax which is a complicated issue and i thought they did a very good job at getting at that issue. and that's a process, jason still has a full head of hair, but it's turning gray, but it's probably because he worked on that many nights and here we're trying to do that in a couple of three weeks, and i really think
on the other side of this, we're going to have a lot of mistakes and the result be a significant amount of gaming and unintended consequences, and it's going to be very, very difficult to go back and fix those things. you know, everyone wanted to change things in the affordable care act, and it was a big piece of legislation and you needed to go back and fix it, and we could never get that done and that's going to happen here. so we're going to have a tax situation that's going to be very unfair, very inefficient and it's going to generate a lot of gaming and unintended consequences. >> with that let me recognize mr. pascual. >> you distinguished yourselves in a very short period of time. 12.8 million households will see a tax increase under this bill. this is a donor bill, this is not a middle class bill.
it increases to $47.5 million in ten years, and families in the middle of the income distribution would on average see no benefit from the plan. so who benefits? well, by 2027, all of the tax benefits, all, will flow to millionaires and billionaires and the top 1% of earners would see cuts of nearly $100,000 per year. this bill is bad for new jersey, my state. you know how i feel about that, jason. one of only four states to see a net tax increase immediately under the bill, this increase comes from the immediate ability to deduct the state and local taxes which both you guys have written about extensively, tens of thousands of taxpayers in every county in new jersey claim the deduction and nearly a third of households in new jersey deduct their property taxes, with millions more doing that at
different points in their lives. that changes every year, it's not the same people in any state. in my state of new jersey, itemized deductions average $30,000, put that in your pipe and smoke it, mr. ryan. what's more, salt repair, paired with the interest mortgage deduction is predicted to hurt home values. furthermore salt repeal harm local communities that rely on state and local property and sales taxes to raise revenue for local services. that was put into effect from the civil war, long before we had a tax code. this gop tax bill quite simply punished those who work, labor, and rewards capital. those few fortunately enough to already have enough assets and wealth guilbuilt up. i have a question for you brenda
and i just spoke to a lot of graduates at rutgers university. and they're devastated if this bill goesthrough. and i know they're in the midst of exams, you're the perfect example of hard working, paying off in a citizen meaningful contributing to american society. but i want to ask you, you took four years to work, you saved up the money to go to school in molecular buy yiologbiology. the gop tax bill would charge upwards, correct me if i'm wrong, $15,000 in new taxes. isn't that wonderful to look forward to? contrast that with children born to america's richest parents, those with more than $1 million. they may spend money recklessly
because they never have to work a day in their lives. the gop tax bill rewards them with $3 million each. let me just ask you, in response to senator grassley's great pronouncements. in your opinion, do we need more kids with silver spoons, or if we are investing our limited resources into one of these tax bills, who should it be, brenda? >> that's a really, really good question, as i spoke earlier about not being one of those students who come from independently wealthy families, i'm particularly affected. what this makes me think about is an analogy that we use in science sometimes called the bottleneck effect. there's a large bottle, with many coins, they represent many people with different economic stances. some that are wealthy, some that
are not wealthy, a mix if you will. and then you have the neck of the bottle, and at the end of the neck of the bottle you have an opening, and then you have a chance for those to leave the bottle and pursue economic opportunities they so desire. so when i think of this tax bill, i think of that neck of the bottle becoming smaller and smaller and smaller, and only those who have access immediately to the neck of that bottle will be able to escape efficiently and pursue whatever they desire after their education. >> thank you and i really appreciate you being here today. yield. >> thank you, mr. chairman. i just want to say that based on the one-page press release that the secretary of the treasury put out, and the one-word answer from our ranking member, i had a better word, it started with bull and ended with it, but they
thought that was a little too racy of a response, but i wanted to start with mr. fuhrman and mr. sandy, i know this is territory you have probably covered a lot. but i think people need to hear it in a straight forward way. do tax cuts pay for themselves? >> no serious economist thinks that tax cuts pay for themselves. >> mr. sandy? >> no. a good rule of thumb is that you might forever dollar in tax cut, this is just a rule of thumb, it depends on the tax cut -- but every dollar cut in taxes will raise 25 cents or 30 cents in revenue, so you're left with a whole of 65, 70 cents. >> as much as i suspected. do any of the economic analysis of the house or senate bill show that growth could remotely offset the tremendous cost of
this bill? >> a wide range of analysis from the left to the right as found that growth would not offset the cost of this bill. >> i don't think i have seen any analysis, literally, i don't think i have seen any. >> i don't think so either. yet the mantra of the republican party seems to be we're going to give out these huge corporate tax cuts and cuttings for the wealthy and magically somehow they're going sprinkle fairy dust or north pole dust and it's going to help us pay for the tremendous cost of this bill. so depending on who you ask, we're looking at an increase in the deficit of $2.3 million if you add interest payments on to what it's going to add to the deficit. and that's a tremendous cost which i have no doubt then my republican counterparts will come back and be aghast at the
huge deficit increase and then they're going to jump into wow, we've got these crazy deficits and so we're going to have to cut something. any guesses as to what that something might be? >> i wouldn't guess, i would just look at the president's budget or the congressional budget resolution, you see cuts to snap, you see cuts to infrastructure. >> how do you think those cuts are going to affect working families, seniors, the middle class that this bill is supposed to help? >> it would have a very adverse effect and most of the numbers we have talked about in this hearing don't even factor in that negative consequence, we have just been looking at the direct consequence of the bill, not the negative indirect consequence that you're asking about. >> so this bill, which is a middle class tax cut, it's supposed to help the middle
class, actually means that middle class families, seniors, students, veterans, are all going to end up getting fewer benefits that they have earned and they're going to end up basically paying for this huge tax benefit to corporations and to the wealthiest individuals in our country, is that correct? >> yes. >> and i would just ask, i probably know the answer to this, but how does it make you feel to think that you're going to actually be paying for the tax cuts for the wealthiest in this country, the highest income earners and the largest multinational corporations? >> it's devastating to think that i have, you know, spent the last 4 1/2 years of my life trying to focus on curative therapy for hiv and to think that republicans don't value that as a substantial contribution to our society is just really disheartening. >> thank you, and i want to end
with mr. edaddig. patriotism, i tell people, being a patriot, you don't measure it by how loudly you cheer when you send our troops off to war, but patriotism should be measured by how do we treat our servicemen and women when they come back from defending our values and our country, how do we treat them? and with respect to the work that you do, i just want to thank you for that and you were pretty clear about how devastating cutting all of these educational opportunities and these tax credits to help put veterans back to work where they can earn, you know, middle class lifestyle and support themselves and their families and if you have anything further to add, i would love to hear your take on th that. >> really quickly, senator tammy
duckworth was in iraq when she lost her legs and one of her arms. she has a quote, she said i know the true cost of war, and she learned about that at walter re reeding dealing with veterans from this world. we have got to invest in our veterans, not just on the battlefield, but when they come home. george washington said that a nation's ability to fight future wars and get people to serve in the armed forces will be a direct result of how they treat their veterans. unfortunately, this bill does not treat our veterans the right way. and i for one will fight to make sure that the next generation, and the generation before we gets a fair shake at it and that's why i'm here today. >> i yield back. >> let me recognize mr. hilton and then we'll go upstairs to vote. >> let me just make a comment
and cite two examples and then answer the question about corporate tax rates. firstly, this is deliberate blatant fraud, this tax bill being perpetrated by the white house and against the american people. there is not a semblance of credible evidence to support the wild growth projections that the council on economic advisors and the treasury secretary make to support these tax cuts. the white house advisors stated explicitly that these cooperate tax cuts will trickle down to each american household resulting in an annual income increase of between $4,000 and $9,000. that is not true. that is not true and nobody believes them or it.
additionally, the united states treasury secretary said that these tax cuts will pay for themselves, in fuel, an additional $2 trillion in economic activity over the next ten years. that's not true. tax cuts have never come close to paying for themselves, not once in human history. we have all been bamboozled by the white house and the proponents of this tax cut bill because of the enormous tax liability for american corporations. american corporate taxes, income taxes right now are 9% of total federal revenue. representing $310 billion. that's it. corporations are recording report profits, everybody says
the statutory rate of 35% is too high in and they're right. according to the national budget office, the effective tax cut is 14.6%. regardless, it's not 35%. take you back to 1950, we had economic growth that year of 8.4% in the american economy. the corporate tax rate was 40%, not 9%. and it just seems to me that more light has to be shown on this issue of corporate tax breaks. just a final thought on this and then i'll let it go. american corporations today have $2 trillion of money hidden, hidden in foreign bank accounts to avoid taxation, their
responsibility. somebody said, corporations are people, well, you know what? for those who believe this, these people aren't paying their fair share. additionally, additionally, u.s. corporations have 1.9 trillion of cash hidden in u.s. treasury bonds. you know, if they wanted to give the american households an income increase every year, they have plenty of cash to do it. and i just think it's so easy to expose the blatant fraud in all of this. and you know what? you know what bothers me? a fair argument here, a rigorous argument about tax policy and about ideological arguments is fair. there's a lot of people, there's
a lot of things going on in their lives that don't have the core competence or the ability to determine what is right and what is wrong. we should at least expect good, accurate information coming out of the white house and of these high officials. i apologize i went over. >> not a problem. >> we' >> mr. larsen is going to take over the chair after the votes. >> thank you, mr. chair, and thanks all of you for being here with us. currently there are about 6 million jobs across the country that we -- that we have a responsibility to tackle this problem from every possible angle and that includes from our tax policy. so i wanted to hear from you, the ryan mcconnell plan makes no
new investments in research but makes it harder for our best and brightest minds to do their work that helps the economy and unmatched innovation. is this a tax bill that's designed for students and reacherreach -- researchers? >> no, this bill is not designed for students and researchers. i have spoken to a lot of my colleagues, can they do research at penn? and also can they continue to do research in the united states. many of them have discussed perhaps leaving to study abroad and europe just so they can complete their passion of actually completing their phds in a place where they know they will be supported by their government. >> and mr. furman, the ryan plan makes it easy for corporations to invest in things, like a factory full of robots and no investments in people.
and it actually makes it harder to go to college, get a stem degree or get the training you might need that would equip americans for jobs. is this a tax bill for that part of the country? >> education and capital are really at the center of economic growth going forward and this would reduce those rather than increase them. >> and the ryan-mcconnell plan lines the pockets of very welt y wealthy individuals and corporations, so is this a tax bill for any of the countless things that help make our economy and our middle class stronger? >> no, this tax cut legislation is not about any of those things, no. >> so clearly, from your
testimony, the ryan-mcconnell plan doesn't just fail to address the challenges that american workers are facing today, it really makes it even harder. and chairman brady likes to talk about this bill leap frogging us to the front of the pack. but what i can see from this bill, it doesn't leap frog us anywhere but backward, so thank you and i yield back. >> thank you. chair recognizes ms. chew. >> i'm extremely concerned about the gaming of our tax program, particularly through the tax provisions. right now the tax -- pass through entity and then enjoy a lower rate of 25%. and i understand that tax lawyers are publicly excited about this measure, they're
saying concept, it's like a new paint box, we have a new tool to play with. expect the best paid dentist to turn into a corporation so they can take advantage of the new 20% corporate tax rate rather than having to pay up to 40% on some of their income. look for more -- qualify for the 23% deduction the senate was told on pass through businesses. so mr. furman and mr. zandy, can you tell us how this tax code has become a new tool for tax lawyers to play with? >> two of my economic advisors who served two presidents, have been very negative for precisely the reasons you mentioned in your question.
i have been told by economists that this would be a new, unfair and inefficient loophole in the tax code. >> it i think lower marginal rates for businesses is a pretty good idea. i think it does -- if it's paid for, lead to stronger economic growth. and i think well done reductions, well designed reforms, can lead to stronger economic growth. so it's doable. but within of the most common indicated parts of doing it right, getting it right is this issue around the taxation of c-corps versus individuals, and it's designed that you don't get the result that you're talking about. and that's what i fear in this legislation, because it's been done so quickly, and there's been so many changes so rapidly, that it's not at all clear that
this is going to be done in a way that's effective, efficient, results in those economic benefits that i think would result in reduction for marginal ratines for businesses. so i think it's the wrong place to look, in fact the obama legislation, and their tax reform legislation that's where they were spending a lot of time and that's appropriate. and it's unfortunate that we're doing all this so quickly because there will be mistakes and the kinds of things we're talking about, the gaming, you know, it reduces the value of this, in all respects, in every respect. >> thank you, i yield back. >> thank you, mr. davis and mr. scott, we'll recognize them in that order. mr. davis, do you have any questions? >> i'll yield back. >> mr. scott, you're recognized as a would-be member of the ways and means. >> thank you, mr. chairman. you talked about income and equality and i think it may get
worse before it gets better because we are talking about a pension plan where 401(k)s a s e people will be leaving behind millions of dollars and if we do this over a couple of generations, we'll have millions of people born with million dollar estates. after you got through with the corporate tax and the estate tax, you're at 1.5, so net, everybody else got a tax increase. they do get, however, the opportunity to pay for it when the time comes. we were told last night that we couldn't afford $88 billion for america's college promise, 1.5 trillion for tax cuts. earlier today we were faced with the pension crisis, that will cost 10s of billions of dollars to get out of that. one of the things we keep hearing is you keep talking about tax cuts paying for
themselves as if they're tax cuts in general. i think dr. zandy, you indicated, it depends on how it's designed. it seems to me this is the worst thing you can do for growth. if they were aimed at lower and middle class taxes, 1.5 trillion, you'll actually get some growth because they're consumers, they'll actually spend the money. but what relative growth would that be from this design of tax cuts to a better design of tax cuts or infrastructure or other things you could do with the money, like you mentioned education, summer jobs to low income teenagers and kinds of things that actually stimulate the growth. what relative growth could you get with 1$1.5 trillion. >> if i had $1.5 trillion -- >> you would have a whole lot better growth than this bill.
>> you make a good point, some of the work we did in the crisis around the recovery act, that was in the february '09 legislation that helped stimulate the economy and end that great recession. that was a carefully designed plan where there was a lot of thought given to these relative impacts, the so-called multiplier impacts and they did quite a bit and they depend a lot where you are in the business cycle and how much slack you have in the economy and so on. so a carefully designed tax plan would take that into account in designing it and i don't think that's what this tax plan is about, it's not designed from that perspective, for sure. >> jason, you want to comment? >> i would give the money to you and let you spend it. hopefully spend it on preschool and college and other infrastructure and other such things. but i think it would be even better to pay for it.
>> thank you, mr. chairman. >> thank you, mr. scott. i want to thank our witnesses and our colleagues on the democratic side for joining us and making the argument against this tax proposal, we have had a productive discussion on this and the forum is adjourned. c-span recently sat down with mercedes schlapp senior white house advisor for strategic communications. she talked about growing up in miami and the 2000 presidential
recount in florida. see all of the conversation at 8:00 p.m. eastern over on c-span. jefferson probably knew more about more things than any single man in north america. and i include franklin in that. who would be his only rival. and everyone was impressed by jefferson's, extent of his knowledge. adams was smart, but he did not have the breadth, but he had some depth in history and law that jefferson didn't have, not because jefferson couldn't, he just wasn't as interested in the law as adams. >> sunday on c-span's q & a, gou gordon wood and his book "friends divided." >> adams was a israelrealist, h not believe that all men are created equal, he believed that
all men are created unequal. he did not believe in american exceptionalism. that we americans are no better than any other country. and jefferson -- we're all born equal and the differences that emerge are due to different experien experiences, different environmentalists. th that's why education was so important to us americans and that's why it was so important to jefferson. >> professor and historian gordon wood sunday night on c-span. the senate judiciary committee held a confirmation hearing last month for a group of president trump's nominees. a good part of the first hour was spent discussing the company's blue slip policy and it's application to a nominee in this hearing. in this blue slip process, the president's nominees submit forms or blue slips of paper to
initiate the nominee's confirmation process. initially if senators don't turn in their forms to senator leadership, they do not receive confirmation hearings and their nominations stall. chuck grassley proceeded with supreme court justice david strauss's confirmation process, withholding his blue slip to strauss's nomination for the united states court of appeals. this is 2 hours 15 minutes.