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Hearing of the House Budget Committee - Hearing with Treasury Secretary Lew


Location: Washington, DC

"Welcome, everybody. To start, I want to thank Secretary Lew. Mr. Secretary, I want you to know that despite our disagreements, we appreciate your taking the time to join us today.

"Well, yesterday was Tax Day. And tax season was a lot more stressful than it should have been. Our tax code is a Rubik's Cube that Americans spend 6 billion hours each year trying to crack. Today, the code is about 4 million words long--enough to fill 70,000 pages. In fact, it's so long that roughly 90 percent of Americans pay for professional help to file their returns. That costs them $160 billion each year. And after all that trouble, the process leaves them--as my colleague Todd Young put it--feeling like either a crook or a sucker.

"We also have the highest corporate tax rate in the industrialized world--which hurts workers most of all. A high corporate tax means they will take home less pay than they otherwise would. So I'm glad this budget calls for corporate tax reform. We agree on the problem. A complex code doesn't help anyone but the well-connected. Now, we need to work on a solution--because we can't stop at the corporate rate. Under the President's budget, the big companies would pay no more than 28 percent of their income in taxes. But small businesses would pay up to 39.6 percent. That's unfair. That hurts jobs. We need to reform the individual code too.

"The administration wants to limit deductions at the individual level. But they don't want to use that money to lower rates and spur economic growth. Instead, they want to use it to pay for more spending. Their budget calls for a $1.1 trillion tax hike to pay for nearly $1 trillion in new spending. In short, the President's plan is to take more from families to spend more in Washington.

"We've seen this movie before. Under this budget, we will have run deficits at or close to $1 trillion for five years straight. Yet millions of Americans are out of work or living in poverty. This administration's response is more of the same: more spending, higher taxes, record debt. We can't keep spending money we don't have. We need a new approach--one that encourages economic growth. The longer we delay fundamental reform, the longer we delay a real recovery--because our national debt is weighing down our economy like an anchor.

"The administration claims that if we approve this budget, we will have reduced the deficit by $4.3 trillion. But that's not true. Let's break this number down:

The administration says we've reduced the deficit by $2.6 trillion since Republicans took control of the House. They start the clock a little late. The President is responsible for all the policies he enacted before then. Add back the money for the stimulus, for the payroll-tax holidays, for the extensions of unemployment benefits, for the 24 percent increase in discretionary spending, and total deficit reduction comes to only about $500 billion.

And all those savings have already been signed into law. So that $500 billion is irrelevant to this new budget.

So the President then claims that this budget reduces the deficit by $1.8 trillion. But once you take out all the baseline games and add in the nearly $1 trillion spending increase in this budget, the total deficit reduction comes to a paltry $119 billion.

"So the President's budget is a disappointment--because it's a missed opportunity. We need a new approach in Washington to meet our country's most pressing challenges. That's what our side is offering. Our plan balances the budget in ten years to foster a healthier economy and to help create jobs. Our plan expands opportunity for the young. It guarantees a secure retirement for seniors. And it repairs the safety net for the most vulnerable.

"We can't simply dwell on our differences. We've got to move forward. We've got to find common ground. Even if we can't agree on everything, we need to make a down payment on our debt--now. So I want to learn more about the President's proposal today--and see where we can find common ground.

"With that, I yield to the ranking member."

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