Pelosi Remarks at Press Conference on Devastating GOP Budget Fast–Tracking Billionaires-First Tax Plan
Contact: Ashley Etienne/Henry Connelly, 202-226-7616
Washington, D.C. – Democratic Leader Nancy Pelosi joined Congressman John Yarmuth and Congressman Richard Neal at a press conference to highlight Democrats’ opposition to the Republicans’ job-killing, seniors-betraying budget which paves the way for the Ryan-McConnell billionaires-first tax plan. Below are the Leader’s remarks:
Leader Pelosi. Good afternoon. Thank you for being here. I’m very honored to be here with two leaders in the House – our Ranking Member on the Ways and Means Committee, Congressman Richie Neal of Massachusetts who will discuss what we know of the Republican tax proposal, then we’ll hear from Congressman John Yarmuth of Kentucky, our Ranking Member on the Budget Committee. The relationship between these tax cuts and the opportunity costs in the budget is something that the American people should be aware of, because they pay the price for tax cuts for the wealthy.
This week, as you know, the House Republicans hope to run through a devastating and, in my view, an immoral budget to fast-track their immoral tax plan to hand millions to the wealthy while raising taxes on the middle class. Taxes will be raised on middle class families across America, especially by eliminating the state and local tax deductions claimed by almost 40 million families. In California alone, there are six million households that use the deduction with an average of more than $18,000 – I’ll talk more about that in the Q&A.
This proposal – it raises taxes on the middle class, it borrows trillions from the future to give tax cuts to the wealthiest. Eighty percent of the GOP tax cuts go to the wealthiest one percent at the expense of children and working families, and in the budget, on the floor this week, the Republicans have revealed the true cruelty of their tax plan. This budget ransacks Medicare and Medicaid after adding trillions to the debt – robbing from the future, adding trillions to the debt in tax breaks for corporations and the wealthiest – the GOP will use the deficit to justify devastating Medicare and Medicaid. Our distinguished Ranking Member will go more into detail there.
The GOP budget is the first taste of the brutal cuts to children, seniors and working families that Republicans will demand after adding trillions to the deficit in tax breaks for the wealthy – it’s just hard to understand how these deficit hawks have become so extinct, how they add trillions to the debt – for what purpose? Tax cuts for the rich.
Democrats are fighting for A Better Deal. Democrats want a real, bipartisan tax reform that puts the middle class first – A Better Deal: Better Jobs, Better Pay, Better Future – but the Ryan-McConnell framework is not reform. It is a deficit-exploding, multi-trillion dollar giveaway to the wealthiest delivered on the backs of children, seniors and hardworking American families. The Republican budget shows their cruel, dangerous plan as clear as day and we are going to be beginning with the Budget [Committee] to explain more about that.
With gratitude to his great leadership and for the hard work of our House Democrats on the Budget Committee, as you’ve heard me say over and over – a budget should be a statement of our national values – what’s important to us as a country should be reflected in how we allocate our resources. Who better to make those judgements than our distinguished Ranking Member from Kentucky, Mr. Yarmuth?
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Leader Pelosi. As our Distinguished Ranking Member on Ways and Means [Congressman Neal] tells us regularly: to have real tax reform you have to have bipartisanship, for it to be sustainable, and that was what happened before, before I was here, in ’86.
Before we get into questions though, I wanted to call to your attention to the impact of this on my great state of California – as probably you have seen, Leader Chuck Schumer has been traveling New York State with Governor [Andrew] Cuomo to point out what the impact is in New York. New Jersey – all of the Members from my understanding have come out against eliminating the SALT deduction, the state and local tax deduction, but they haven’t said – the Republicans haven’t said whether they would vote against a budget that had that elimination of the deduction in it.
I was in Illinois the other day, people are very concerned about what it to means to the economy of Illinois – not just in terms of the tax deduction and what it means to people in their lives – but what it means to public education system and all the rest that depends on people being able to deduct therefore they will have something to deduct from.
In California, we have 14 Republicans who have exposure on the subject and I am going to name them: Congressman Doug LaMalfa, first district: more than 30 percent of his constituents take the deduction to the tune of an average of over $10,000 each. In [Congressman] McClintock’s district 4: 44 percent, over 44 percent take the deduction with an average of over $11,000, almost $12,000. In Representative Cook’s district, 28.7 percent to the tune of nearly $9,000 each. In [Congressman] Denham: it’s 30% to almost $10,000 each. [Congressman] Valadao: 17 percent of his people take the deduction to nearly $10,000 each. [Congressman] Nunes: 29.8 percent take it, almost $10,000 each. [Leader] McCarthy: 34 percent take the deduction with an average of over $14,000 each. [Congressman] Knight: 41.5 percent take it to the tune of almost $17,000 each. I’m going to give you this, I’m going to text it to you because people have to know what their Members of Congress are doing to them, personally, as well as to our state. Congressman Royce’s district: over 40 percent take the deduction with an average of $15,000. [Congressman] Calvert: over 41 percent take it with around $10,000 each. [Congresswoman] Walters: nearly 50 percent of her constituents take the deduction with an average of over $18,000 a year – she is going to vote for a budget that does that to her constituents and what that does to the economy of California? [Congressman] Rohrbacher: 42 percent take at about $18,000 dollars. [Congressman] Issa: around 42 percent take it, over $16,000 each. [Congressman] Hunter: around 37 percent take it, over $12,000 each.
And those are the 14 Members of Congress from California. I could read you the same list from New Jersey, from New York, from Illinois, from across the country. Members are being asked to vote to raise the taxes in a substantial way on their constituents in their state and why? To give tax breaks to the high-end and, also, at the same time, ransack Medicare and Medicaid. It is not a good vote for them – when they make this vote on the budget we want everybody to know what that vote means to households of California for one, but all these figures are available to you for all the Members and we can make them available to you – all the Members across the country.
[To Staff] Are we sure to make sure they have California though?
Any questions? None? Okay.
Q: Congressman Neal, you sounded pretty skeptical that this was going to come together for the Republicans and the kind of bold way the Speaker has been talking about this for so many months. Can you talk a little bit more about what you think will go on if they lose some of the revenue they’re getting and they’re rushing along without educating their Members –
Congressman Neal. Yeah, that’s part of it. The simple answer is when you go to the tax system and you touch one part of the tax system, it’s like squeezing toothpaste with the cap on – there are unintended consequences when you do tax work but there are revenues that have to be made up if you cut in another area that you have to make those adjustments for or the alternative is you borrow more money.
So right now, the Senate budget says you can borrow up to 1.5 trillion dollars for the purpose of providing a tax cut. When you consider the interest on that over ten years, that’s about 2.2 trillion dollars – so I think they are having trouble right now because many of the things we discussed earlier are very popular with the American people including the state and local deduction and including retirement savings.
And the retirement savings I would remind all of you in the audience today, it really works on the growth of the stock market and the preferences that are built into the tax code. It encourages the employer to set aside a prescribed number of dollars, it encourages the employee. It also – a very important fact that I think has not been touched upon as they have proposed making some adjustments – the number of employers who, in the midst of the recession, were forced to stop making their match means there are certainties that we are going to have to keep the catch-up provisions down the road for people who lost out on the match.
So I think – the idea that we’re going to leap from a budget that, by the way, is not a House budget, it’s a Senate budget – that we’re going to leap from that to a markup on tax reform in about seven or eight days before the American people have a chance to digest all of this, I think takes us down the path of where they made mistakes on the Affordable Care Act.
I had [former Congressman] Dick Gephardt in recently to talk to the Committee Members on the Democratic side as to the history of the Tax Reform Act of ’86. He filed the bill in early ’85 – he and [Congressman] Bradley and then, at the White House, Ronald Reagan took an interest in it – almost two years and 200 hearings – and all of a sudden this is going to be slammed through without an opportunity to reflect upon what it means to state and local deductions, what it means to retirement savings, what it means to competitive economic growth and opportunities to keep our companies competitive in a global economy.
This needs to be digested fully in front of the American people and discussed. They are proposing to address the architectural underpinnings of our finance system in terms of gathering revenue and to do this in four or five days? It doesn’t make any sense. And the Leader described this perfectly, we accept the idea on our side that the tax code in America is broken. And the best way to address it is the way it was done in ’86, on a bipartisan fashion.
Q: Leader I want to ask you about the Russia dossier, it’s been widespread reporting that the Democratic National Committee and the Clinton Campaign –
Leader Pelosi. I’m happy to take questions on another subject but while we have our distinguished leadership of our Committees here – I’ll come back to you, I promise.
On the subject at hand, the taxes, the ramifications on the budget. Yes, sir.
Q: On the child tax credit, Ivanka Trump is on the Hill today pushing the expansion of the childhood tax credit. What’s your openness to what she and Senator [Marco] Rubio have proposed, doubling the childhood tax credit?
Leader Pelosi. Well we had quite a presentation. Do you want to speak to that?
Congressman Neal. Congresswoman [Rosa] DeLauro spoke about it in the Caucus this morning and she talked about those who would not derive the benefit and I think clearly if they want to make for a more robust benefit to address the people that were being left out who ought to be included in the Child Tax Credit then that’s worthy of discussion but otherwise I think Congresswoman [Rosa] DeLauro’s office can point out to who’s not in.
Leader Pelosi. Among the people who not in are people making the minimum wage, people in military, there’s a real problem with what they’re presenting -- because again it neglects the people who need it most.
So [Congresswoman] Rosa [DeLauro] made a very impassioned plea against what the Republicans are doing now. If there’s an interest in going to a better place that really does the job for the American people we’re always receptive to that.
Q: Leader Pelosi, this budget also sets the opening for spending fights, and you said that DACA is sort of a red line on the spending. Do you have any other red lines on the upcoming spending fight? Issues that would prevent you from wanting to vote for spending bills?
Leader Pelosi. Mr. Yarmuth can speak to the parity issue and the rest –
Congressman Yarmuth. Well, we had this debate going in 2017 final budget, the last five months, and both sides negotiated in very good faith. Both sides negotiated, neither side ecstatic but left both sides satisfied and it was a model that increased defense spending but also increased non-defense spending.
In spite of the fact that the Administration had started from a position in which they wanted a $50-something billion increase in defense and a $18 billion cut in non-defense and we negotiated that.
I think that’s a good model for going forward, but our red line is that we’re going to insist that if you increase spending for defense, you decrease spending for non-defense – and that we seriously consider raising the caps because the caps are creating all these amazing problems for us budget wise.
Q: On the spending limits, issues such as DACA, CSRs, CHIP, there are all sorts of other issues that are part of this. Are those red line issues?
Leader Pelosi. Here’s the thing, we could get some of that done before we get to the debate on the omnibus although the Speaker said this morning that DACA – well it was reported that he said, I don’t know what he said – that would be part of that.
The Republicans have the majority and they have the signature. This year is the first year they’ve had all of the ability to pass a spending bill, keep government open, it’s in their hands. If they need our votes though, as Mr. Yarmuth said, we’ll have some influence on what that legislation is. My hope would be DACA would be done before then.
But let me just say another issue that is floating right now, that is a source of grave concern: CHIP – Children’s Health Insurance Program, the Republicans are insisting that there be offsets. Okay? So as we look for offsets they’re taking offsets right from children. The prevention fund, where children get their inoculation, where they’re tested for what’s in the water and the rest of that, they’re saying, ‘children should pay for it.’ So why do the children have to offset children’s health? So if we agree that we’ll offset, let’s do it in a way that does not harm children.
I am not encouraged. Our Members – Frank Pallone, our Ranking Member on the [House Energy and Commerce] Committee, has done a wonderful job trying to present different options to them but they seem solid on undermining the Affordable Care Act, that’s where the prevention fund is and they shouldn’t be spiteful, they should try to be useful for our children. But just looking at the contrast – trillion and a half dollars in tax cuts plus interest on the debt to seniors and we are going to make sure children, themselves, pay for CHIP. So this is going to be an immediate fight – this is where we are now, next week, while this is going on.
Congressman Yarmuth. Can I just say one thing? I hope I’m not speaking out of turn. I think for many Members in our Caucus there will be red lines and one of them, I think, will be DACA. So the issue is – if they need our votes and if we are going to be able to provide enough votes then they need to be very cooperative in negotiating with us.
Congressman Neal. I know this is really drilled-down, inside stuff – but remember the tax debate is an argument over tax expenditures so that’s part of the spending argument.
Leader Pelosi. Remember, so all of these tax cuts are an expense – they’re a tax expenditure that they’re saying they don’t have to offset but paying for children’s health, they do. Okay, we accept that, but don’t take it out of the good health of children to do so. Yes, sir?
Q: Congressman Neal, you released some tax reform proposals yourself today. I was wondering a) do you have the reaction of any Republican Ways and Means Members to that? And b) on the upcoming idea of a markup, do you have any idea if you guys would get a revenue loss estimate from JCT or distribution tables from JCT prior to seeing the Chairman’s draft?
Congressman Neal. I haven’t seen anything yet and I would have thought distribution tables would kick off everything and I also think that what we intend to do is to draw attention to middle class values and items that the middle class in America need some attention drawn to. So we intend to propose, for example, making the Build America bonds permanent. Using New Markets Tax Credits. We’re going to go heavy on the investments side for American families. We think that, as I noted earlier, single filers ought to be eligible for the Earned Income Tax Credit. More robust child credit.
At the same time, begin an infrastructure program. I think that some of the items that we intend to message, it will give people a chance to see what we would do in the majority as opposed to what they’re doing in the majority. We are going to focus this, as we said from day one, on the middle class out.
That’s where the conversation ought to start. And incidentally, that’s what the President campaigned on. The middle class. The architecture that we’ve seen from, at least, the reports of what they intend to do, it’s inconsistent with what the Mnuchin rule said: This is only about the middle class. So we intend to hold them to their word. This ought to be about the middle class.
Q: You’ve heard nothing from Republicans about your proposals?
Congressman Neal. No, I think they’re pretty busy trying to decide what theirs are.
Leader Pelosi. It will be interesting to see because we haven’t seen a bill yet. But it is important to note, the proposal that Mr. Neal put forth is consistent with our Better Deal. Better Jobs, Better Pay, Better Future. Build, build, build. Build the infrastructure of our country, build the human resources of our country with education, health, and I would add a third build to that, to answer your question, which is to build and strengthen our democracy and our elections. Any other questions on this subject?
Q: Chairman Brady, this morning, said that there might be a deal on state level taxes that allows for the write off their – but not sales and income. Is that something you’d be open to?
Congressman Neal. No. I think that this is a middle class benefit. If they intend to move away from that, that means it’s going to be a middle class tax increase. So I think that keeping that, that’s one of the few benefits that’s almost universal in America. You have that opportunity.
So I think shaving it back, in the end, only increases deficits and I think that means that you need to go back and borrow more money. So I would stick to the position. First of all, I’m glad you raised it. From an academic perspective, we need to focus on these proposals to shave back this benefit and shave back that benefit that the middle class derives a benefit from. Only because it demonstrates how complicated this is.
Where do you build the corridors if you start making those, well, only a certain person making up to 100,000 dollars arbitrarily can use the benefit and then you trade off the mortgage in-state deduction for the state and local tax deduction. I’m in favor of keeping the mortgage interest deduction.
So I think those are the things we need to stick with. If we really did hearings for the better part of a month, you’d really have a chance to have a full-scale, full-throttle debate and discussion on who derives what benefit, rather than arbitrarily saying like a number and saying those who fall above or below, they either receive a benefit or are penalized.
Congressman Yarmuth. The Republicans like to say we shouldn’t be picking winners and losers and of course you always are in taxes. If you accepted that proposal, it’s great for people in Florida. Not great for people in other states, and states choose to tax their residents whatever way is best to provide, basically the same services. So basically what you’d be saying was the property tax is a different category than state income tax even though they’re funding the same basic services that the state offers, so I don’t understand why the distinction makes any sense.
Congressman Neal. And if you’re proposing, for example, a mortgage interest deduction and a state and local tax deduction, you’re saying that you’re going to curtail those so you can give the people at the very top a tax cut?
Leader Pelosi. And in addition to which, if they did trim it, they’re still taxing the middle class. And that holds true but in addition to which, they’ll now have a bigger debt and we’ll see where that takes their so-called budget hawks because apparently they have some unease about the size of the debt.
Even the Speaker said they may make an adjustment, I guess in one of the speeches he made today, may make an adjustment to state and local, the SALT, state and local taxes, and it would diminish the deficit reduction they were hoping for. Mr. Speaker, see the math of your own budget. There ain’t no deficit reduction in your budget. You’re only increasing the national debt.
Again, to what Mr. Neal alluded to earlier, the idea that some of them say the growth that will be created by this tax cut to the high-end at the expense of the middle class is going to create so much growth that it’s going to come back and cover the action of all this increase in the national debt, it hasn’t happened. It’s never happened.
Trickle-down-economics has never produced that result. Don’t take that from me, take that from Bruce Bartlett who was a part of the supply-side economics with Kemp. It doesn’t happen. Anybody tells you that those tax cuts will cover the increase in the debt, it’s not true, it’s nonsense, and BS except he said the words. Which I won’t go into here. But you know what I mean.
So, in any event, the budget they create is not a statement of our values. The inequality that they create with their tax plan is not a statement of values either. I commend our colleagues for their great leadership and the Members of their committees who worked so hard on this. Really, we just want to go to the table in a bipartisan way and put growth in the middle of the table. What creates growth, will create good-paying jobs to reduce the deficit. That ain’t here. But it could be in a bipartisan way. Thank you all very much. Now to you. I’m sorry I wasn’t really fully listening because I wasn’t on the subject, go ahead.
Q: Your reaction to these stories that the DNC head a role in funding this dossier, you have any personal knowledge of this?
Leader Pelosi. No.
Q: Does this give any ammunition to the President’s continued claims that this is all somehow a politically motivated smear campaign?
Leader Pelosi. Well first of all, no I have no knowledge of it besides what I saw on TV and that wasn’t much. It was very late last night. But I don’t think the President needs any fuel. I don’t think he needs any facts. I think he does what he feels like so no I am not concerned about that. But what I am concerned about is the fact that the Republicans are now going into all of these investigations.
They just do not want to get the real story of the Russian intrusion and disruption of our election. Let’s have an independent commission outside not inside this Justice Department, that’s good. Not inside the Congress, not inside – that’s good – but what is also needed is an outside commission to study all of this. But as you can see, this is just one of another thing. Now they’re going to look into, I forget what else. Hillary’s emails again. Anything to divert attention from the fact that 80 percent of their so-called cuts go to the top one percent. It’s just an appalling number.
But any distraction and the President himself is the Deflector-in-Chief. He will talk about anything. He will talk about my colleague, Congresswoman Wilson, a very distinguished Congresswoman from Florida’s, hat. He’ll talk about football, he’ll talk about any subject not to face the facts and the actual numbers.
It’s a funny thing, I love to tell this story of a little boy at school. He was being asked by a teacher ‘What is one and one’ He said ‘two.’ She asked, ‘What is two and two?’ He said ‘four.’ She said ‘good.’ He said ‘Not good, perfect.’ There’s something beautiful about numbers. They add up or they don’t. And what we want to do is have honesty and as we stipulate to a set of facts how we go forward to have a budget that creates growth and creates good-paying jobs to reduce the deficit. Thank you.
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