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It's a Spending Problem, Not a Revenue Problem

Floor Speech

Location: Washington, DC

Break in Transcript

Mr. WOODALL. Mr. Speaker, I appreciate you being with us this afternoon and giving me the opportunity to come down here and talk about where we have been this week on Capitol Hill trying to find a pathway forward.

Now, as with every decision we make, Mr. Speaker, as you know, you and I have been here for 18 months with a voting card in hand, trying to make those decisions for our constituents back home, trying to bring their voice to be heard on Capitol Hill, and we're facing one of those choices right here today.

Which lane will we choose, Mr. Speaker?

We proposed, passed today here in the House in a bipartisan way a proposal that will create 1 million new jobs. Now, I'm going to go on and bring out some other studies and where those jobs are coming from. But one of the folks we're going to hear from that's going to confirm the job-creation opportunities that exist in this proposal is going to be President Barack Obama because he will have stood about 10 feet behind me in a State of the Union address just 18 short months ago and advocated in favor of this job-creation proposal.

I don't know what has changed in 18 months, Mr. Speaker, but what we saw here on the floor of the House today is our Democratic colleagues advocating for a different choice. A choice that Ernst & Young in an independent analysis of legislative proposals said will destroy 710,000 jobs. It will lose the opportunity to employ 710,000 Americans. As we are hearing what is unquestionably the worst recession in my lifetime, and when presented with a choice between creating a million new jobs or losing 710,000 others, we are faced with a choice.

The House made the right choice today, Mr. Speaker. The House chose to create 1 million new jobs. But just in the last 7 days, the Senate made the wrong choice. The Senate chose a path that study after study after study shows us results in failure. Why is that, Mr. Speaker? Why is that?

What I have here, Mr. Speaker, is a chart you'll remember from our budget debate. I'm just so proud, I serve on the Budget Committee here in the House, Mr. Speaker. And, you know, we've brought two budgets to the floor. In the short 18 months that I've served here in Congress, we've brought two budgets to the floor that made tough decisions. Tough decisions.

When you're running $1.4 trillion deficits, Mr. Speaker, and when you're trying to create jobs for a Nation that's hurting, when you're trying to prevent job-killing tax hikes from being imposed on American job creators, there're no easy decisions. They're tough decisions, and they have consequences.

But this is what I learned in our budget debate. What I have here is a chart that shows tax revenue from 1947, just after World War II, all of the way out to 2077, about 130 years of tax revenue. And what we'll see, Mr. Speaker, is tax revenue that's actually come in represented by this green line, and then the tax revenue that's projected to come in. You'll see that's a flat line. It's taxes as a percent of GDP, and what we see is whether we operated America with some of the highest tax rates in history, and we've had 90 percent income tax rates in this country--90 percent income tax rates--or whether we operate America with the lowest income tax rates in this Nation's history, we bring in about the same amount of money either way.

I know that's not intuitive. I could bring up chart after chart after chart that shows how it's true. I can show what happened in the Kennedy years when he cut those top marginal rates and more revenue came in. We can look at what happened in the Reagan years when we cut those top marginal rates and more revenue came in. And we can look at what happened in the Bush years when we cut those marginal rates and more revenue came in, over and over and over again.

But rather than dwell on those charts, Mr. Speaker, I just want you to see that over time, revenue is relatively constant. Americans are willing to give the Federal Government about 18 percent of the size of the economy. And if the government asks for more than that, Americans change their behavior so they don't have to give it.

But the red line, Mr. Speaker, represents spending in this country, spending going back to just after World War II, going out to where we are here today and a projection forward based on current law. Based on current law, Mr. Speaker. Folks look at this chart and they see this giant red line, government spending as a percent of GDP as it threatens to consume all of American GDP, and they think: Golly, what in the world. Who are the crazy people proposing that we do that? Who are they?

Mr. Speaker, that's what happens if we do nothing. If we fail to proactively offer a solution, if we fail to confront the challenges that are facing this country with respect to spending, if we do not act, this is what we get. No President need sign a law to create this dangerous circumstance; the laws have already been signed.

The question is: What are we going to do about it, Mr. Speaker? We don't have a taxation problem in this country in terms of needing to tax Americans more; we have a spending problem in this country in terms of the Federal Government needing to spend less.

And just to put that in sharp relief, Mr. Speaker, I've reflected here in this green the path to prosperity. This is debt as a share of the economy. This is America's debt as a share of the economy.

You remember when we had all hands on deck in World War II, when we were literally fighting for the future of the world, debt crested 100 percent of GDP. We borrowed an amount equal to the entire size of the United States economy. Well, we're right back there today, Mr. Speaker, we will be over the next decade. And if we do nothing again, that spending will create a debt pattern that will completely consume not just all of the revenue, it will consume all of the wealth of this country.

If we took everything from everybody, Mr. Speaker, if we confiscated every stock and every bond, if we confiscated every small business and every large business, if we took everybody's bank account and took everything out from under their mattress, if we sold everyone's car, everyone's home, we still wouldn't have enough money to pay for the promises that previous Congresses have made to America.

It's a spending problem; it's not a revenue problem. But this green line, Mr. Speaker, represents the budget that you and I and our colleagues on the other side of the aisle came together to pass. It's not about blaming folks. Did all of this red line come from previous Congresses before I got here? You better believe it. But it's not about finding out who was to blame in those previous 5 years, 10 years, 15 years, 20 years; it's about finding out who's going to offer the solution to get us out of this mess. And you know who it is, Mr. Speaker? It's this freshman class that you and I have the great fortune of being a part of. It's the conservatives who have served in this Congess, calling out in the wilderness time and time again, the senior leaders of this conference, and this Congress who are going to come together and provide solutions.

This green line represents not just a proposal that one man wrote, not just an idea that maybe 10 or 15 people agree on. This green line, this solution represents the budget that passed this United States House of Representatives in a bipartisan fashion.

Don't let folks tell you it's hopeless, Mr. Speaker. Is it dire? Yes, it is. But we have proffered solutions, we have debated solutions, and we have passed, on the floor of this House, solutions. The problem is not that taxes are too low in this country; the problem is that spending is too high in this country, and we have offered solutions to that. That's been the debate on the floor of the House this week.

Before I get into the debate that we've actually had this week, Mr. Speaker, I've brought a chart of who benefits from tax loopholes. Who benefits from tax loopholes? We talk a lot about tax loopholes.

I'm a cosponsor of the Fair Tax, Mr. Speaker. I'm a big believer in the Fair Tax, the fundamental tax reform proposal. It has more sponsors than any other fundamental tax proposal in the House or in the Senate. It's H.R. 25 here in the House. It proposes that we turn our tax system on its head, to stop punishing people for what they've earned and begin to tax people based on what they spend.

If you're going out and you're buying a brand new Mercedes, I don't care what kind of job you have, you can afford to pay the tax. If you're driving a used Ford Festiva, I don't care how much money you earn, you're plowing that money back into the economy instead of taking it out.

This is what we see. Who benefits from tax loopholes? The bottom 20 percent, Mr. Speaker, get next to nothing from tax loopholes. The bottom 40 percent, Mr. Speaker, you see, get nothing from tax loopholes. The bottom 60 percent, the bottom 80 percent get next to nothing in terms of tax loopholes. The top 20 percent, Mr. Speaker, that finally starts to show up on the chart. But it's the top 1 percent of all income earners who benefit the most from all the tax loopholes. In this case, it's just over $250,000 each.

Now, why is that? I'm not picking on our top 1 percent. The top 1 percent pays about 40 percent of all the income taxes in this country. The top 1 percent pays 40 percent of all the income taxes. The bottom 50 percent pays zero. If the bottom 50 percent is paying zero, that means the top 50 percent has to pick up the whole tab. We pay more on the top 1 percent. So it only makes sense that if you have a complicated Tax Code that allows for lots of loopholes, exemptions, deductions, and carve-outs, those loopholes, exemptions, deductions, and carve-outs are going to benefit the people who are paying all the tax--top 1 percent paying all the tax, and so top 1 percent benefiting from all the loopholes.

Why am I talking about those folks in the top 1 percent? Because I'm not picking on them. I admire them. I just want to make that clear. I admire them. I'm not one of them, but I aspire to be. I hope I come up with that next great idea like Bill Gates, like Steve Jobs. I hope that I do something that makes a difference for America. I hope that I'm one of those folks who owns a business back home that provides jobs for families, jobs for my neighbors, income that supports people's families. I want to be one of those guys. I don't demonize the 1 percent. I admire folks who have gone from nothing but the power of their ideas and the sweat of their brow and created something. Golly, that's what America is to me. That's what it is.

But there are some in this Congress, there are some down at 1600 Pennsylvania Avenue, Mr. Speaker, who are intent on demonizing that 1 percent. And what they have now today, this week on the floor of the House, has been a proposal to raise taxes on all of those job creators there in that category. Fully 50 percent of all of the income generated by small businesses is what my colleagues in the Senate, my colleagues here on the Democratic side of the House have proposed to raise taxes on. Those 50 percent of small business owners who are providing all the jobs, that's where my colleagues believe a major tax increase should be levied.

Mr. Speaker, we have put forth a proposal--I'm just so proud--that says, rather than raising taxes on job creators, killing jobs--I showed my choice of two futures--why not introduce fundamental tax reform that eliminates those deductions and loopholes, those carve-outs and exemptions that all of America knows are in the Tax Code, that all of America would like to see eliminated. And if we know that eliminating those has the greatest impact on the highest of our income earners, why do we need a class warfare that's going on down here on the floor of the House?

I say to my colleagues who want to demonize the top 1 percent, join me in eliminating deductions and carve-outs and loopholes and exemptions and you will raise taxes on that community, because those are the folks who benefit because those are the folks who pay the taxes.

There's a better way. Mr. Speaker, that's not just some hardcore freshman Republican who is the sponsor of a fundamental tax reform bill talking.

The President of the United States, this President of the United States, stood not 10 feet behind me at this podium at that microphone right behind me, and he said these words in January of 2011:

Over the years, a parade of lobbyists has rigged the Tax Code to benefit particular companies and industries. Those with accountants and lawyers to work the system can end up paying no taxes at all, but the rest are hit with one of the highest corporate tax rates in the world.

President Obama said that, and he followed it with this:

It makes no sense, and it has to change.

Hitting job creators in America with the highest tax rate in the world ``makes no sense, and it has to change.''

This was January of 2011, 1 month after December, 2010, when the President signed the tax package for 2 years that the House passed today. I ask the Speaker, where is the contention today? This is the same proposal that was passed 2 years ago when the President acknowledged the challenges facing our job creators and said ``it has to change.''

We have a bigger plan for fundamental reform that changes the debate in Washington forever, but right now, we are about the business of stopping the largest tax increase in American history from destroying jobs in this country beginning in January of next year. The President acknowledges it and said it had to change.

Right here behind me in January, 2011, he says this:

So tonight, I'm asking Democrats and Republicans to simplify the system, get rid of the loopholes, level the playing field, and use the savings to lower the corporate tax rate for the first time in 25 years without adding to our deficit. It can be done.

It can be done, says President Obama--and he's right. Our Ways and Means Committee has held more hearings on fundamental tax reform than any other Ways and Means Committee in my lifetime. We are talking about those fundamental reforms that the President has asked to talk about. And this week, this week, Mr. Speaker, we passed a framework that gives expedited procedures.

We all know how things get slowed down in Washington, D.C. We all know how easy it is for somebody to latch on to something and stop it from passing because they want to stand in the way of progress. We passed expedited procedures to do exactly what the President has asked us to do. This is not Republican politics. This is not partisan politics. This is folks coming together to try to save what is a fragile economy today. Is it the strongest economy in the world? You'd better believe it. Is tomorrow going to be brighter than today in America? You'd better believe it. But not by holding our tongues, not by sitting on our hands, and not by fighting amongst ourselves about who gets the credit.

Mr. Speaker, I don't care. I've got a fundamental tax reform bill that I believe solves this problem. You can call it anything you want to. Call it the Democratic plan to save America. It doesn't matter to me. We don't care who gets the credit. We care about solving the problem. And that's what our President charged us to do.

He goes on, January, 2011, 10 feet behind me:

We measure progress by the success of our people, by the jobs they can find and the quality of those jobs, by the prospects of a small businessowner who dreams of turning a good idea into a thriving enterprise.

My colleagues here are trying to raise taxes on 50 percent of all the income those small businessowners make. The job creators in this country are faced with the largest tax increase in American history. Our President has asked us not to do that. He goes on to say this:

By the opportunities for a better life that we pass on to our children, that's the project the American people want us to get to work on together.

And we did. We passed our plan for fundamental tax reform together in a bipartisan way this week.

Talking about the agreement that the President passed and signed in December of 2010, the very same agreement that we're trying to pass today, he said this:

We did that in December. Thanks to the tax cuts we passed, Americans' paychecks are bigger, and these steps taken by Republicans and Democrats will grow the economy and add to more than 1 million private sector jobs this year.

Did you remember my saying the President was going to back up, that this proposal was going to create 1 million private sector jobs? He said it in January, add to more than 1 million private sector jobs created last year.

I'll close with this, Mr. Speaker. That was 10 feet behind me January 2011. Ten feet behind me January 20, 2012, the President said this:

We have a huge opportunity at this moment to bring manufacturing back to America, but we have to seize it. We have to seize it.

I bolded this so everybody could see it, Mr. Speaker. We should start with our Tax Code. Right now, companies get tax breaks for moving jobs and profits overseas, meanwhile companies that choose to stay in America get hit with one of the highest tax rates in the world. It makes no sense. Everyone knows it. So let's change it.

Mr. Speaker, that's the bill the House passed this week. The bill the Senate passed this week continues to punish those small businessowners and continues to reward those companies that do their businesses overseas.

Don't let an election year get in the way of doing what's right. The President called for it, the Ways and Means Committee delivered it, the House has passed it, and we can do it. I call on my colleagues on the other side of the aisle to believe as I believe, that tomorrow can be better than today.

With that, Mr. Speaker, I yield back the balance of my time.

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