Democratic Leader Nancy Pelosi delivered testimony today at a House Rules Committee hearing on tax cut legislation being introduced in the House. Below are the Leader's remarks:
"Thank you very much Chairman Dreier. I thank you. Members of the Committee, Ranking Member Slaughter, for your leadership and dedication to bringing legislation as we all have to do.
"I want to begin by saying "hello' to Chairman Camp outside and sending our prayers to him. He's such a kind, lovely person. I hope that he finds time to release the stress from his mind and so I hope that the passage of this legislation will contribute to that peace.
"I was listening attentively both when I was in the room and when I was not in the room but hearing it on the t.v. -- as the distinguished Chairman said, there are cameras in the room -- to some of the questions and observations that were being made by Members and our distinguished Chairman, Mr. Camp and Ranking Member, Mr. Levin. And I thought we're sitting at this table and around this time, across the country, people are sitting at their kitchen tables having dinner, finishing dinner, and part of what they will be talking about is how they are going to make ends meet. How do middle income families in our country address the uncertainty that they see in our economy.
"And so, as I listened to Congresswoman Foxx's questions about growth, and I heard the Chairman say that growth was so important, I think it is important to go back to some of the history that Mrs. Foxx asked about of Mr. Levin. And that is to say that in 1993 we passed an economic bill that did increase taxes. We needed revenue and we needed growth and we needed to reduce our deficit. And that is exactly what happened. So there was an occasion where an increase in taxes created an atmosphere where the private sector, where most of the jobs are created, could create over 20 million jobs and take the deficit down to a place where it was on a trajectory of $5.6 trillion, to be in surplus, which quickly was turned around under a new President, President Bush, with the Bush Tax Cuts and other things like the Medicare Prescription Drug Bill and two unpaid for wars.
"But just starting with the tax cut, turn that around to a $5.5 trillion trajectory to deficit, an $11 trillion dollar swing. Mr. Hoyer knows these facts and figures better than anybody. Eleven trillion dollars switch, unheard of in our country. And so, I reference it here because you asked Mrs. Foxx, but also because you're asking us to go right back to how we got into this fix in the first place -- tax cuts at the high end which do not create jobs, which increase the deficit, and on top of it, took us to a brink of recession, a deep recession, as well as a meltdown of our financial institutions. That lack of revenue that sprang from the financial institution meltdown contributed to the deficit as well. So, that's where the deficit came from, tax cuts for the wealthy, giveaway on the Medicare prescription drug bill, two unpaid for wars, meltdown of the national financial services industry therefore a reduction of revenues coming into the Treasury. Some disagreement [exists] on what supervision should have been there or not. But I don't [think] there is any disagreement, as Mr. McGovern said, in the fact that we all think middle income Americans should have a tax cut. Those making up to $250,000 a year should get a tax cut.
"If we just pass what we agree on -- and that's what people don't understand, why can't you just do what you agree on and then continue the conversation on the rest? Two-hundred and fifty-thousand dollars, now what does that do? Two-hundred and fifty, between $250,000 and above you save, if you go down this path the President is proposing, you save a trillion dollars. Or you borrow a trillion dollars from the Chinese and others in order to fund that debt.
"But let's get back to that kitchen table. What does that mean to me if I'm a middle income person in our country? Or a senior or a person trying to put families through school? The uncertainty as to their job, their income, whether they're going to be able to send their kids to college, whether they're going to hold onto their home, the value of their pensions -- it means everything. Because the uncertainty that is out there for the economy brings uncertainty to that kitchen table and in order to reduce the deficit I believe you do have to have growth. So we want to watch our investments carefully so they produce jobs, help create jobs, help the private sector create jobs. Also, that brings revenue to the Treasury. Now, at $250,000 a year the money that is in the pocket now of the middle income people is money that they will spend. They will spend that money. They will inject demand into the economy that will create jobs, jobs for them. What it also does is it takes a trillion dollars that we don't have to go further into debt by giving tax cuts to the high end and don't have to borrow, as I say, from China and other lenders, adding to the deficit.
"So, it's hard to explain to anybody why, we can't -- okay, you agree on this, we also agree, we have to have as Steny's been singing this tune forever, that we have to have tax fairness and tax simplification. We have to address the tax code in a way that is bipartisan, is non-partisan really, that does the right thing for our country. I'm going to yield to [Mr. Hoyer] in a moment, I keep referencing him because he's been such a champion on fiscal soundness, fair taxes, and fairness as you mentioned Mr. McGovern, that's really an issue for our country. It is the theme of America. The most enduring theme, the American dream and that's predicated on fairness and taking responsibility for each other from one generation to the next.
"So, I come before the committee to respectfully request your consideration of the alternative that Ranking Member Levin presented earlier, which said: here's the place where we are all in agreement, we all agree that there has to be a middle income a tax cut. Whatever else we have we can continue that conversation later, but do not hold the middle income tax cut hostage to giving tax cuts to the high end that do not create jobs, increase the deficit, continue injecting uncertainty into the economy, which is not a healthy thing for the economy, for businesses, and for America's working families. It's a bill that the CBO says: '97 percent of small business will not be affected by it,' I think that even Speaker Boehner has conceded that point. So this about most small businesses in our country when people come up with that as saying "we can't give middle income people something because the Bechtel's of the world, which we defined as a small business for some reason or other, won't get a tax cut.
"But in any event let's do what we all agree on. Let's give middle income families a break. I just want to show you one chart and then I'm going to yield to Mr. Hoyer, the difference between our two bills is as follows: [the Democratic bill] gives a middle income tax cut to those making up to $250,000. Under the GOP plan, people making over a million dollars a year, I'm sure a few made a million dollars a year, you would get $160,000, an average -- you and your friends -- would get an average of $160,000 a year in tax breaks under the Republican plan. And, in order to pay for that, middle income families would on average have to pay $1,000 more. So not only are we borrowing to cover this, we're taking from the middle class to give this tax cut at the high end. It's just not fair. And so I urge your consideration of what Mr. Levin came in and spoke for, which is the President's proposal that is fair, that creates jobs, and I yield back my time."