tax reform

Bloated Budget Limits Tax Reform Plans

November 1, 2017 by GregC

Republicans cleared a major hurdle on the march towards tax reform legislation last week when the House and Senate agreed on a budget bill, but one House member says GOP members have their heads in the sand and are limiting the scope of tax reform by scrapping their own conservative budget for a status quo approach from the Senate.

Rather than head to a House-Senate conference committee, the House agreed to vote on the Senate’s budget bill. It passed 216-212, with 20 Republicans voting against it. One of the them was Rep. Matt Gaetz, R-Florida.

Critics accused Gaetz and the other Republicans opposed to the budget of opposing tax cuts. Gaetz says the explanation for his vote is simple.

“While I’m all about getting the economy moving with productive tax cuts, we’ve got to be honest with ourselves about the challenged we face with spending. I’m going to use my position on the budget committee to try to advocate for spending cuts so that wee don’t drive up deficits while we’re working to get the economy moving again,” said Gaetz.

He says the original House budget bill was one he was proud to support.

“The House of Representatives passed a conservative budget that cuts spending by over $200 billion. We actually laid out a plan to accomplish those spending cuts, by ensuring that able-bodied, childless adults, who can choose to work, would actually have to meet a work requirement before getting benefits from the government,” said Gaetz.

He says the Senate wanted no part of that.

“When we sent these conservative ideas over to the United States Senate, unfortunately the Senate did not agree to cut a single nickel in spending. Instead, they merely sent a budget back that kept things the way they were and preserved the status quo,” said Gaetz.

He says that not only kicks the can down the road on fiscal responsibility but chokes off a more aggressive approach to tax reform.

“I was very disappointed that the swamp creatures over in the Senate didn’t have the guts to cut spending. We’re going to keep fighting for spending cuts in the House. I think that’s the way that we get the full value out of tax reform. If businesses in our country have the capital to be able to hire more people, it will all be for naught if we don’t deal with the workforce challenges that incentivize people to stay home,” said Gaetz.

He’s also tired of the House playing second fiddle to a Senate that can’t make good on the GOP agenda.

“I didn’t run for the House of Representatives to come here and be a rubber stamp for the Senate. I think too often in the House, we’re the Senate’s lapdog. Look at health care. We would have passed whatever the Senate passed. Look at the budget. We take whatever the Senate gives us.

“My hope is when we get to tax cuts, we won’t whittle down the value of tax cuts, we won’t fail to deliver on the promises President Trump has made regarding massive tax cuts, just because the Senate cannot do both things,” said Gaetz.

Gaetz is also frustrated with the Senate catering to the whims of the most liberal Republicans who he says ran on the same agenda of cutting spending, repealing Obamacare and cutting taxes only to embrace the status quo once they came back to Washington.

He says tax reform is going to present more hurdles as senators get bombarded by special interests to keep their special provisions in the tax code.

“[Fiscal conservatives} are becoming a bit of an endangered species on Capitol Hill. It’s indicative of the environment we live in, where every special interest wants the government to spend more money because then there’s more room in the trough for their respective snouts,” said Gaetz.

He says the bottom line is lawmakers must stop piling up debt for future generations, a problem he says ought to be blamed on both parties.

“They’re all fighting for more spending in different areas. So we’ve got to have courageous conservatives ready to stand up and say, ‘No more. We are not going to participate in this great wave of generational theft. In the last 15 years, we’ve stolen more than $15 trillion from the next generation. And they’re going to have to pay that back with interest,'” said Gaetz.

He says the mounting debt is also a burden on efforts to jump start the economy.

“The debt is a wet blanket over our economy and there is no amount of tax cuts that will ever allow us to grow to meet the obligations we’ve set forth in the absence of spending cuts,” said Gaetz.

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Post Condemns Racist Ad, Terrorist Strikes NYC, GOP Delay Tax Bill

November 1, 2017 by GregC

Jim Geraghty of National Review and Greg Corombos of Radio America applaud the Washington Post, not only for condemning the Latino Victory Fund ad that depicts Republican voters in Virginia as racists that want to run over minority kids but also slamming Democratic nominee Ralph Northam – whom the Post has endorsed – for a weak response to the ad. They also grieve for the victims of Tuesday’s terrorist attack in Manhattan and get frustrated as the media immediately tried to rule out Islamic terrorism and then insist it’s not a time for politics once they find out it was related to radical Islam. And they groan as congressional Republicans are forced to postpone the release of their tax reform bill because of ongoing disagreements within the party.

Reporter Actually Meets Red State Voters, Trump vs. Corker, Math is Racist

October 24, 2017 by GregC

David French of National Review and Greg Corombos of Radio America applaud former NPR CEO Ken Stern for taking the time to meet voters in red states and realizing they are nothing like the caricature offered by the mainstream media. They’re also exasperated as President Trump and Tennessee Sen. Bob Corker resume their public feud and accomplish nothing other than choke momentum for tax reform and tax cuts. And they react with disgust to a University of Illinois professor who argues that proficiency in algebra and geometry perpetuates unearned white privilege and that “mathematics itself operates as Whiteness.”

Late Night Activism, Trump Resists Gun Control, GOP Embraces Deficits

October 3, 2017 by GregC

Jim Geraghty of Natonal Review and Greg Corombos of Radio America sigh as liberal late night comedians demand new gun control legislation while getting their facts wildly wrong. They also react to reports that President Trump does not appear likely to embrace gun control efforts in the wake of the horrific attack in Las Vegas that killed dozens and wounded hundreds. And they shake their heads as White House Budget Director Mick Mulvaney – a deficit hawk while in Congress – says he is embracing deficits as part of the emerging tax reform legislation.

Brat Lauds Trump Tax Plan

September 28, 2017 by GregC

Economics professor turned Rep. Dave Brat, R-Virginia, says the framework of the Trump tax reform plan provides tremendous progress on all the key issues, sets the table for tremendous economic growth, and may even provide a path to resolving the standoff over immigration policy.

Brat is a member of the House Budget Committee. He says the panel is just about ready to clear the road for Congress to take up formal legislation based on Trump’s priorities.

“It’s par of the whole budget negotiation process. We just wanted to know, roughly speaking, what’s in this tax package. Is the S corporation going to be taken care of? Is it rate reductions? Is it enough to get economic growth? They came out with a good plan that satisfied all those major categories and bullets,” said Brat.

On the business side, Brat is very excited that the corporate income tax rate would fall from 35 percent to 20 percent, a move he says would make us far more competitive with other nations and entice Americans firms to scrap their headquarters in other nations and bring their trillions in capital equipment back home.

For small businesses, the key issue is the S corporation, which files under individual tax rates.

“The highest personal income tax is 39 percent. That’ll go down to 25. That again is a significant pro-growth piece for the small businessperson that generates 70 percent of all the jobs,” said Brat.

On individual tax rates, Brat says Trump is bring virtually everyone’s rates lower. He says one point of confusion is that the lowest bracket, which is now 10 percent bumps up to 12 percent.

“The Democrats are jumping all over that. ‘You’re taxing the poor more.’ But as (House Speaker) Paul Ryan has said umpteen times now, it’s actually 10 percent to zero. (Democrats) are skipping the biggest detail, and that’s a $26,000 deduction for a couple. The bottom income earners are going to pay zero income tax,” said Brat.

However, adding more Americans to the number who pay no income taxes creates other concerns.

“People who are fiscal hawks are worried we’re creating too many people who don’t have skin in the game. There’s a balancing act there, but roughly speaking Trump is trying to do a middle class tax package,” said Brat.

He says even in a zero sum game the package is good for the middle class, but he says if the incentives in the legislation jumpstart the economy as expected, the benefits will be abundantly obvious.

“People are going to lose some of their deduction, but you’re going to get much lower rates. So even if you break even – and I don’t think you will, I think you’ll be better off just on that – but what people can’t forget about is it’s pro-growth.

“If your stock market and retirement account isn’t growing, if the economy isn’t growing and your wage rate isn’t growing over time, you’re losing the power of compounding and everything,” said Brat.

He says tax cuts are a proven positive jolt to the economy.

“If we get people entering the labor force instead of leaving, I think we can get back to the good old days. JFK got four to five percent growth. He was pro-tax cuts, pro-supply side, pro-business. Reagan did the same thing,” said Brat.

“If this thing gets the optimism flowing. Kids will be pro-business, people will get back in the workforce and then you’ve got a virtuous circle instead of the opposite,” said Brat.

But even with Republicans controlling Congress and the White House, getting big legislation done is proving elusive. Brat says that job gets even more complicated once the lobbyists flood Congress trying to keep their favored nuggets of the tax code in place.

“Now we’re going to go head-to-head with the swamp and K Street will come in and try to get every special deal and deduction, etc. All of those will come at the expense of the American people, so we’re going to keep our eyes open as well,” said Brat.

The House Freedom Caucus, of which Brat is a member, is already enthusiastically on board with the Trump framework, but Brat says the special interest push is getting ugly,

“Karl Rove wrote a cynical, biting piece against the Freedom Caucus. He said, ‘Just pass it. You don’t need to see what’s in it,'” said Brat.

“Are you kidding me? So when K Street and the cronies say that, they probably know more about what’s in it than I do and that makes your radar go up all the more. When they’re saying to just pass it without seeing it, it’s like, ‘OK, somebody you’re protecting has a hidden nugget in there and my job is to look out for my constituents,” said Brat.

However, if the fundamentals of the tax plan stay in place with minimal tinkering from the special interests, Brat thinks the economic growth can actually take a lot of the vitriol out of the immigration debate, specifically how to treat those who came here illegally as children.

In addition to demanding that any enshrinement of the Deferred Action for Childhood Arrivals, or DACA, program be conditional on aggressive use of E-Verify to ensure legal hiring and an end to chain migration, Brat says robust growth changes the equation a great deal.

“Immigration and all the controversy has to do with economics. You’ve got to fix the labor market, the welfare system. We’ve got to get these kids jobs. Then you won’t have this contentious issue surrounding DACA. Everybody wants to help kids but we want to do it legally. First, you’ve got to get your own house in order,” said Brat.

Brat urges Trump to force very tough concessions from Democrats before doing what they want on DACA.

“The Left has to meet us halfway. They should meet us more than halfway. We won the House, the Senate, and the White House. President Trump wants to make a deal. He has all the levers. We should compromise with them and work with them but let’s get the story straight. That’s the basic framework, I think, going forward,” said Brat.

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Is GOP Ready for Fiscal Fights?

August 30, 2017 by GregC

Congress returns to Washington next week with a full plate of urgent fiscal issues awaiting it, but how well-prepared are the Republican majorities to tackle these priorities in a fiscally disciplined way and respond to Democratic opposition?

Lawmakers will quickly need to steps to address the debt ceiling, spending for the new fiscal year that begins October 1, how to structure a disaster relief bill for the Gulf Coast, and how to accomplish tax reform.

Rep. Dave Brat, R-Va., sits on the House Budget Committee and is a member of the House Freedom Caucus. He expects any debt ceiling hike to include significant spending restraints going forward.

“In the past, Republicans wouldn’t even put a clean debt ceiling increase on a Democrat president’s desk. much less a Republican, without any reforms or discipline going forward,” said Brat.

Even if Congress hits a stalemate over the conditions of the debt ceiling hike or faces the threat of a government shutdown, Brat expects there to be no worries over U.S. solvency as the debt and the interest on the debt are still paid.

But going forward, Brat says lawmakers must acknowledge the fiscal realities staring the U.S. in the face and begin to address them with significant spending restraints.

“We’re $20 trillion in debt and we’ve got about a $600 billion deficit just this year under Republican stewardship. That’s our brand. We all run on fiscal responsibility. We have to give the American people some assurance we take this seriously and it’s got to show up on paper,” said Brat.

He says Washington needs to answer a simple question.

“Should we be doing more spending at the federal level or less. We’ve got to start showing some restraint or we’re going to put the kids in a real world of hurt,” said Brat.

Brat points out that the burden on the next generation is not just a talking point. He says kids starting kindergarten this year will graduate college facing a fiscal catastrophe if major changes are not made.

“Medicare, Social Security, Medicaid are all insolvent about 2034, according to Congressional Budget Office estimates. So those kids, when they graduate from high school, that’s 2030. When they graduate from college, that’s 2034. That’s when all of our major programs are insolvent, upside down, and will experience severe cuts,” said Brat.

In April, Congress passed a continuing resolution to fund the federal government through September. At the time, Republican leaders said it was not the time for major battles over spending, and the proper time for that would be during the appropriations debates in September.

So will they happen? Brat says not to hold our breath.

“No, I don’t think so,” said Brat. “It’s kind of like the health care debate. The surest sign that you’re going to get it right is you’ve got to have messaging coming from the White House and then from the Speaker’s office and then from Mitch McConnell’s office, that we’re going to get serious. That probably takes a year or two of prep work. On health care we didn’t do that. So we failed on health care.”

Brat admits pushing spending cuts that will actually make a dent in the debt and deficit are not popular.

“It’s hard because it’s like telling people you’ve got to eat spinach but some discipline is in order,” said Brat. “We’ve got to get our ducks in order and we’ve got to make some hard decisions and the American people want to see us stand up and start leading on the fiscal side.”

Brat is also urging Trump to go on offense when it comes to the debate over spending. He says Trump and the GOP need to stay on message that any shutdown is the fault of Senate Democrats.

“Eight Democrat senators are threatening to shut down anything you do that are in the president’s wheelhouse or the Congress’ priority list unless they get their way. I don’t think it’s on the president for the shutdown. I think he just needs to go to the bully pulpit and explain to the American people how government works,” said Brat.

When it comes to tax reform, Brat sees plenty of collaboration and coordination among the White House and GOP congressional leaders. He says Republicans have not choice but to get tax reform done this year, especially after the failed attempt to address health care.

“We tanked on health care after we said we’re going to repeal it for seven years in a row and then the Senate couldn’t even pass a skinny bill, which was more like a Madison Avenue tag line than a responsible policy position on how to run one-fifth of the economy,” said Brat, who also says Congress cannot give up on fixing a badly flawed health care system.

Brat is also siding strongly on the side of those pushing for generous disaster relief for the recovery and rebuilding after Hurricane Harvey. But he says unrelated pork barrel spending needs to be left out. He says the type of pet projects that often make into these bills were roundly rejected by Americans of all political stripes in 2016.

“It was a movement pretty much all the way across the spectrum from Bernie (Sanders) all the way over to Trump. The American people are just sick of the cronies, and the earmarks, and the pork spending, and the idea that the system is rigged and that the cronies, and lawyers, and lobbyists are getting the money and they’re not,” said Brat.

He says the people in his Virginia district made it very clear over recess that they expect Republicans to restore fiscal sanity in Washington.

“They’re frustrated. They’re like, ‘You guys can’t shoot straight. Get it done,'” said Brat.

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