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tv   Senate GOP Tax Reform Plan  CSPAN  November 16, 2017 4:03pm-5:34pm EST

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work through. certainly not that the president is getting into the back and forth. again, he spoke with senator johnson. he supports the priorities. he wants to work with members of the senate to bring them together to make sure we pass historic tax cuts and tax reform. he did encourage him to get on board and support the tax reform package. thanks so much guys. we'll be around the rest of the afternoon. >> white house press secretary and we heard from president trump as he was visiting capitol hill ahead of the house voting on tax reform. the house passing its tax reform bill 227-205. no democrats voting for that and 13 republicans voting against it. the legislation calls for a partial repeal of state and
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local income tax deductions and we heard some of those questions during the white house briefing and doubling the standard deduction for $12,000 for single families. it is limited to $1.5 trillion over 10 years in order to qualify rules for the senate to pass the bill. we'll look at the final hour of debate on the house floor, but we join now the senate finance committee's review of the plan live now on c-span. [captions copyright national cable satellite corp. 2017] ick nick >> that is a tool to lower the cost of purchasing that equipment. on the margin, more equipment is going to be purchased. that's what happens when you change the incentives. and guess what, somebody gets to
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make that equipment and middle-income workers at a factory and someone else gets to use that equipment when it is put to work and that expands the productive capacity of the economy. that is the dynamic we want that is also in the bill. that's why we are doing this together and why we should stick with the underlying bill. senator hatch: the clerk will call the roll. roll call]
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the clerk: 123 ayes, 14 nays. we just had a conversation and discussion, maybe a debate here that is worthy of this committee, worthy of this committee. >> it's within your discretion,
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we had a debate and had a vote. and we have a lot more voting ahead of us. >> take a moment to say, this is the kind of discussion and debate we should have. senator hatch: warner number five. >> i call up my moichings of amendment 330, warner amendment number five. i will try to do this very quickly. my colleagues would actually listen to my point because they completely build upon what has been made. my amendment is standing by your talking point amendment. and it is based on the premise, i was a businessman. economic growth is absolutely a key component and a lot of economic growth is driven by business. this would add fiscal responsibility by triggering a reduction of tax cuts on highest
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earners like me if we don't meet the revenue targets and don't meet the growth assumptions. i think we have been pretty clear this loses $1.4 trillion. i believe the number when you add in interest and add in some of the provisions that will probably be included that the actual loss will be $2.2 trillion, but we don't know yet. the $1.5 trillion is based on the estimates from the c.b.o. etween $1.8 and $2.0 trillion. they believe the growth numbers will be much higher. and i would say to my colleague from pennsylvania, i spoke to that group right before or right after mr. cohn and sponsored by the "wall street journal." it was a small sample and not
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going to redebate that, but it was a sample. treasury secretary has gone farther and said the growth numbers are going to be so great that they are going to actually reduce the deficit by a trillion. so i'm not asking to go as far as secretary mnuchin but stand by the projections that are in your bill. but what is fair about that, mr. chairman and i didn't realize this, this bill has a trigger in it. this bill has a trigger that says if the growth numbers exceed what the projections are and revenue comes in $900 billion above the target, you will get rid of some of the offsets. if this is good on one side, it will be a better projection and take the debt down and you have a trigger in the bill that
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benefits -- if that happens, let's do it on the other side. i hope i'm wrong and i hope you're right. history has shown us that paying for big tax cuts with board money is bad policy. maybe this will be the one time that will prove that theory wrong. here's what i will hope my colleagues will give a serious listen. there might be incidents, and have a massive economic downturn caused by worldwide events and go one more and allow the secretary of treasury to say if we have a major economic downturn, this trigger wouldn't take the place. so all i'm saying, mr. chairman and you have made a lot of
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presumptions on growth numbers. if you believe those numbers, put in that trigger and we are going to take away the offsets. if we don't hit those numbers and the fed ends up being right, particularly my friend from ohio where we spent years and let's stand by our talking points and put this trigger in and make sure we have a trigger here so if it doesn't happen, we don't end up with having tax cuts that i and all d for that i ask that you give it serious consideration. senator hatch: senator cornyn. senator: i appreciate what our friend from virginia is trying to do here and absolutely we
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hope the economy does grow in response. ofthere is as little as /10o 1% in g.d.p. it will erase the deficit on a static basis. and we hope it will grow above the 1.9% rate that is currently the subject of the c.b.o. score. but i would suggest that your trigger in is in the wrong place. you are a successful business guy, very successful, you wouldn't make an investment on a tax rate that could change in a year or two years. so let's put the trigger in the right place and put it on spending. that's the problem. we have a spending problem. it's not the american people are taxed too little but we spend too much money. and if we did that, we could have a productive conversation. but no business is going to make
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an investment based on a floating tax rate that they can't rely on. so i urge colleagues to vote against the amendment. >> mr. chairman. senator warner: i would simply say, i sometimes believe the united states of america is the most successful enterprise, no enterprise or size would make investment decisions based on growth assumptions and would adjust if those aren't met. and i think, all i'm saying is a little quality here. if growth exceeds 3% and the way the secretary said, you have a provision in the bill that takes out more taxes. i'm simply saying if we don't hit the revenue numbers. if the fed and c.b.o. are dead wrong and we hit these numbers,
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then i don't like all the provisions but i will eat my words about the deficit hit because the growth will provide those numbers. if it doesn't hit those numbers and i'm even giving my friend from texas, the notion that here is some macroeconomic event, secretary of treasury can waive trigger. >> mr. chairman, i want to reinforce what senator cornyn said. this becomes -- if a trigger was in place, this is self-fulfilling. no one can predict what the rate will be and we will not the investment that we are trying to encourage so we won't have the growth. and say, we didn't have the growth and put rates back up and make it even worse. and by the way, there's an ultimate safeguard. any future congress can address
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this. what we are doing here today can stop us from deciding that something ought to be modified. this is a very bad idea and would undermine the features of he tax code.
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>> a heart felt appeal to rational budgeting. senator hatch: the clerk will call the roll. roll call]
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>> and first thank senator bennett for his leadership on this issue. the two of us worked on the development of this amendment and worked to improve infrastructure in this country and i thank senator portman, because this is part of a proposal that came out of the working group that his proposal along with senator schumer in looking at ways that we could responsibly use one-time revenue sources to expand infrastructure in this country and create jobs. what this amendment does is take the one-time only revenue in this bill using the house percentage and infrastructure so we can get real job growth in a most cost efficient way.
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it's the right thing to do one time time only revenues are one changesenues and offset in the revenue revenue. it does create great jobs, we know that. it was interesting and i will give you this comparison. speaker ryan used the bill to move through the house at 975,000. that's at $1.5 trillion in addition to the debt. hat is $1.5 million per job. pretty expensive. this bill would bring in about $293 billion ent, for infrastructure growth which will bring approximately four million jobs. so the numbers are quite
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dramatic that we have a chance -- and this is only one time revenue in order to rebuild america and create the jobs in the most responsible way and i thank my colleagues for their attention to this matter and i hope that we are committed to infrastructure and this is certainly the right revenue to use. senator hatch: the current amendment undermines the tax bill without addressing our infrastructure funding issues. this amendment does not deal with our long-term infrastructure funding by being dependent on one-time revenues. by creating a new trust fund, the multi modeal trust fund, the amendment ignores the current funding issues with the highway trust fund which would still remain. but undermining tax reform is not the way to do it. this amendment would only make those issues more difficult to
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deal with. i ask my colleagues to vote on his amendment. >> let me just point it's better to use one-time only revenue for permanent reductions in the tax code rather than one-time revenue as an influx for rail or e high-speed highways. it is a much more effective way. senator carper and i serve on the environmental and public works committee. it can be leveraged and of the way we used leveraging financing. tax s not possible for deduction. >> right next to ben cardin on
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his left. and i was not as listening to this conversation, but do you think it's ok to use one-time revenue in order to pay for long-term tax reduction? you didn't say that, did you? >> i don't speak for the chairman. >> one of our republican leaders couple of years ago, paying for transportation infrastructure. highways user fees and and bridges that actually pay for the improvement of those facilities. and our colleague -- and we talked about repatriation. and he said we think that money ought to be used for rate
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reduction. and i said that doesn't make much sense to me. across this country, senior democrats sit next to ben on the public works committee, we have enough projects of national importance to spend every dime that might come back and then some. and i wouldn't use the money we might bring back from overseas for the base load if you will, ongoing every year to pay for ur highways, roads, bridges.
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roll call]
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senator hatch: the clerk will report. ayes 12, 14 nays. senator hatch: casey number five, i guess. governor kasich: i will describe senator: once people on both sides of the aisle. the amendment provides much needed resources for communities beginning the critical work of
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repairing roads and infrastructure. provides $500 billion and 100% tax credit bonds and while it would be my preference and many others to provide direct funds for infrastructure. as the chairman has repeatedly noted, our amendment must stay within the confines of the tax code. i believe now more than ever we need to invest in our infrastructure. we know the american society of civil engineers stated we must spend $1.6 trillion above current levels to get to a state of good repair. pennsylvania is second in the country in the number of structural deficient bridges. 4,500 out of 23,000 bridges are classified as structurally deficient. that's not a category that we want to be in the top.
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but that's the reality in our state. 19 million daily trips are taken over these structurally different bridges. and there is broadband and digital divide is most apparent when we compare rural america with the rest of america. 39% of rule residents in the united states of america lack access to broadband, high-speed internet. that means 530,000 people in pennsylvania lack access to high-speed internet, maybe the most compelling argument was made to me by a county commissioner in southwestern pennsylvania. he just didn't talk about his small businesses that can't connect and therefore can't have
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their businesses grow, but talked about children in rural schools not being able to learn because they don't have a connection and can't access broadband. that's a basic equity issue .etween rural america 39% of the people who live in rural america lack access to high-speed internet. and in its recent strategic plan, the federal communications commission stated that broadband for all americans has gone from being a luxury to a necessity to ull participation in our country. we know this tax bill is asserted and been asserted here during the debate is an effort to create incentive. hard to create an incentive if
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you don't have the tools or in a rural area. it encourages investment and transportation broadband as well as roads, bridges, water resources and other parts of our infrastructure. it is offset in the following way. and we just got feedback on this from j.c.p. here are the offsets. the first offset is reinstate current law for the top individual tax rate and bracket. that's number one. second offset is increase the tax rate on repay try ated earnings to offset this amendment. i yield. senator hatch: senator sfr florida first. senator nelson: i'm a co-sponsor of this amendment such as florida, that is growing 365,000
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per year, we have surpassed new york in population three years ago with the third largest state. you can imagine the growth needs but on an infrastructure that is crumbling. in this nation, there are 50,000 bridges that are deemed structurally unsound. we saw that on the interstate in minneapolis when the interstate bridge fell in. there's no disputing the fact that we are so far behind in our infrastructure rebuilding and that especially is compounded in the gross states. of all things, the last two amendments have been dealing with trying to find money for
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infrastructure. i thought that was one of the things we were going to try to do in an income tax bill. we were going to try to produce some sufficient revenue to get rid of tax expenditures in order to have some money for infrastructure that everybody in is senate agrees is so esperately needed. >> i wish the senators would please consider this amendment. senator hatch: i have been interested in infrastructure, as i served on this committee, i think we all are considering the recent highway bill, but i do not support this amendment. i urge a no vote on the amendment. >> mr. chairman. >> i just want to strongly support my colleagues and thank them for this amendment.
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there is a difference of how we view of creating jobs and purchasing -- spurring the economy. is it supply side or supply and demand to put money in the pockets of working people so they can buy a house and buy the car and so on. senator stabenow: if we put infrastructure, the upper peninsula of michigan and the efforts for small businesses and our farmers want to be able to have high-speed internet and export around the world or the mom in the u.p. who organizes the college applications because it's the only place with high-speed internet. we could do so much to spur the economy.
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and in a broader sense. f we looked at taking the $1.5 trillion that's built into this bill as acceptable debt, $1.5 trillion and decided we were going to instead invest that in rebuilding america, that would be about 22 million jobs. nd so, to me, that is a much quicker way to get money in peoples' pockets and spur the economy. i strongly support this amendment. >> just for a quick moment to describe where we are on infrastructure because this is a key part of this debate. . murphy: -- senator wyden: just that simple. senator carper has been making the point for some time and he is so right that we need to go
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at both sides of the ledger, the public side and private side. senator cardin just tried to do it with respect to repatriation, a sensible and now comes senator casey doing very good work on the private side with respect to tax credit bonds. the final total for the build america bonds that we authorized in 2009 part of the recovery act, in a year and a half, we sold $183 billion worth of build america bonds. there is a market here. republicans have some concern about these federal roles. along came our republican colleague, senator holden, he is the lead that said ap pro poe of senator casey's idea, he wants to do tax credit bonds giving
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the states a bigger role. in other words, he is the lead. governors like it and attractive to the state. this is the kind of idea that senator casey is green lighting and goes to the heart of the transportation debate led by senator carper for the years that you need the public side and private side. now we have the private side. i hope my colleagues will vote for it. and if you do, republicans you open up the opportunity in terms of trying to take the tax credit bonds and give a bigger role to he states.
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>> i call up amendment number 2. this amendment would improve some of the most important tools we have in our tax code for economic growth in our country. it's offset by adjustment on the estate tax exchanges. . cardenas: -- senator cardin: which you, mr. chairman put in bills to improve -- we incorporate those improvements in this amendment. the new market tax credits, we index and make that permanent. the housing historic tax credits, and restore the cuts in the mark. and by 50%.
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we restore that and improve the historic tax credits and we restore the advanced refunding bonds for state and local governments that was taken out under the underlying mark. 2,500 reduce landfills by
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tons. when we look at the number of jobs created the new market tax credits between 2003 and 2015, d leveraged $80 billion in total capital investment with high rights of poverty and led to the creation of over 700,000 jobs. in maryland, between 2003 and 2014, more than 3.25 billion in new market tax credits have created 27,000 construction jobs and 2600 full-time jobs. i'm going to show this. i'm sure you could see these examples. the new market tax credits and made it possible for us to develop areas that are quite frankly very difficult to do. one is the american brewery
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poster, baltimore was a bruring town. we had old breweries and built in 1887. and at the hub for nonprofits, social service providers creating 167 construction jobs and 175 permanent jobs. miller court is a redeveloped area of baltimore, old tin box manufacturing plant which was completed in 1910. after the factory was shut down, it was leased as industrial space and then sat vacant for 20 years before they transformed it nto property that it is today. >> and i might tell you, it has transformed that entire neighborhood.
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that neighborhood is for development and homes and buildics. that's what happens with these tools. this amendment would take the good ideas of many members. it would improve it and give us the tools to create more opportunities. you are pretty darn construction. but the current amendment makes permanent some programs that enjoy a lot of support on this committee. the high cost of this amendment combined with the issue of cost extenders make this an impractical provision to this bill. there are some issues in this bill that merit consideration and i will certainly help the senator at the right time. this amendment would put tax reform at risk. i don't think we can afford to
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do that. urm my colleagues to vote no. senator portman next. senator: i appreciate what senator cardin has said and my understanding with regard to the low-income housing credit, it doesn't reduce it at all and follow the house on that. i know members of this committee are interested in legislation including senator cantwell and senator hatch in expanding it. but we do not. because this gets a lot of private capital engaged and with regard to the new markets credit, i would like to see that permanent but something we are going to take that up. we'll have that debate separately and with regard to the historic tax credit, i do think we can make some improvements to the mark. senator cassidy is coming back, is going to have an amendment
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along those lines which i intend to support. i appreciate mr. cardin's interest in this and his passion for it. i think these programs working together with the bonds have been effective in my state and apparently in maryland and i think we will have the opportunity to take up the new markets credit separately. and we don't change the productivity bonds in our mark in the senate bill as compared to the house bill. i yield to the chairman and senator isakson. senator: i don't want to be republic tissueous. i want to echo but acknowledge the chairman's leadership on low and moderate life income house credits to get us where we are today. i worked with a number of these and because of this tool.
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it's a great tool and proven to put private capital and good capital investment activities into low and moderate housing like east immediate oost which was known as little vietnam. i would love to vote for the amendment. but we want to enhance these tax credits down the road with senator hatch. think he will be on it. senator: mr. chairman, i would like to join in the comments we have heard already from senator cardin and senator portman and senator isakson. it is important to note in our mark, we do not diminish the low-income housing tax credit and we do not diminish the private activity bonds and that's very important. and there is a lot of support,
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bipartisan support for making sure that we address this general issue and preserve with things that are working now and we work to strengthen them. i want to put my comments on the record this is an important area that we do understand and i do understand that we have the full intention to deal with this issue further. senator hatch: senator scott will be the last one. senator: thank you, senator cardin for your amendment here. i had the privilege of taking ecretary ben carson in spartanburg, south carolina, an old factory that has benefited from vision that has brought new life back into an old community. so i look forward to hearing further comments and amendments on this issue and senator
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cassidy has passion around this issue and i have been talking about this the last severing weeks and i look forward to address it. senator hatch: i think you will ve a lot of everyone on this ide. >> i appreciate it. senator hatch: i'll help you get that up. >> there is strong support. senator hatch: we appreciate you bring bringing it up. ou want to vote on it? senator hatch: clerk will call the roll. roll call]
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senator hatch: clerk will read the results. the clerk: 11 ayes, 14 nays and one absent. senator hatch: amendment is defeated. go to cantwell, number one. senator: i thank my colleagues
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for recognizing of the low-income housing tax credit. we need to do something to address the housing crisis by increasing the amount of affordable housing credits. as my colleagues are talking about this specific mark, my understanding is that we have two problems. one, that this amendment tries to address, albeit, it increases the tax credit. ut the pressing issue ensuring private dollars will insure private development at the level they do today, investors who buy the credit under this mark, the modifying discount rate basically has a perverse rate on the value to investors, is that right?
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'm asking the counsel. under the current draft of the bill because of the corporate rate for internationals is going to 20%, investors buying the credit modifying discount rate is perversing the value to investors and complicating their investment. >> they have less need for the credits. the changes -- in the bill under consideration reduced the need that investors would have to take the credits and therefore less supply. senator: i think it's a little different than that. little different than that. if you said look i'm going to give 10% of my income, yes, you could see that, but it's causing
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a perverse impact to the rate as it relates to the investors. mr. chairman, maybe we could get some clarification on this. i wanted to address something else and senator grassley is back but i think that's in a further amendment. could we set this aside for now and get an answer. >> i would like to speak after senator cantwell has spoken. >> she wants to set it aside and i think that is appropriate. senator hatch: that is appropriate. senator: thank you, mr. chairman. senator hatch: senator bennett amendment number 7. senator bennet: thank you for allowing me to offer this amendment on coal communities and i would like to set the context here. since 1980, the top 1%, roughly
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1 million people with the highest earnings have seen their share of their income grow by 90%. the bottom 90% which is nearly everybody else seen a 22% increase in their share over the same period. that tells you where our economy is headed. a handful of folks are doing extremely well and others are struggling. i'm glad for the success of people and have been successful. but as policy makers, i think it's critical that we have choices to make with limited resources and that's why we have to set priorities. and if you want to know the priorities of this tax plan, look at the numbers. this chart is from this morning's j.c.t. distribution table. and what it shows is that there are in this country approximately 572,000 taxpayers
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with incomes over $1 million. over half a million of people over $1 million. this plan which he we have heard all about today, tax relief for the middle class, the purpose was to bring relief to the middle class, every income group gets a tax cut. this is what we have heard over and over again all day today. that group of people, that half of million people gets $39 billion in tax cuts in this plan. the 90 million americans that $14 50,000 or less get billion in tax cuts. again that's 39 billion for those earning $1 million a year.
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put differently, that's an erage tax cut of $68,000 for those making over $1 million but just $160 for those making under $150,000 dollars. math that's about $7.50 a paycheck. for the 90 people that are making $50,000 and less in our country. all week the majority has claimed this is a middle-class tax cut. the numbers say absolutely otherwise. it's a tax cut for the wealthiest americans massacre aiding as a not well described tax cut for the middle class. by the end of the decade, those $14 billion tax cuts for lower income families will sunset and corporate tax cuts will stay permanent.
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and just to add insult to injury, you're not paying for it. you are borrowing the money to give money to the people at the very top and borrowing it from the children and school teachers and the police officers and firefighters and coal miners and factory workers. this amendment does a very -- is a very nottest attempt to try to move things in the other direction. there aren't a lot of things in here to deal with the disturbance that coal country has faced. y amendment would spur job creation and communities struggling with our economy. specifically, the amendment introduces a $3,000 employer credit for each new higher in coal communities and puts aside $1 billion in bonds to rebuilding these communities while investing $300 million in
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new market tax credits to spur growth. if you buy stock from coal country and hold it for five years, this wol eliminate your capital gains' tax. that is an amendment directed at the middle class. mr. chairman, i yield. >> mr. chairman, i don't think anybody on this dais deserves a lecture on what is happening to coal because congress played a big role in it. i lost the textile industry largely because of trade agreements, trade agreements that were negotiating in our best interest. senator burr: i never came up here to ask to hire workers and
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i look at north carolina, eden, north carolina, morganton. and furniture and textile mills are closed and communities were challenged, the residents there, the entrepreneurs, when people don't have money in their pockets, it's hard to have a retail clothing store. and what i would say to my good friend -- because that's why we are here today. we are here to stimulate growth and make sure that the private sector can compete globally and individuals have more money in their pockets and we stimulate private sector dollars whether it's in north carolina or a coal wn so a customer base can be created once again to believe that you do that because you
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divert money defies logic. i heard senator stabenow said if we devote $1.5 trillion to direct investment by the federal government, that will create 22 million jobs. $800 billion into a stimulus package that was supposed to do that. why don't we try something that's been tried and been successful. let's make sure that we give the private sector more incentive tom deploy capital in these communities that desperately need the job creation and need the buildings built and need the factories resupplied. that can best be done bypassing this tax bill. senator: i do appreciate the amendment acknowledging that
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eliminating capital gains tax is pro growth and encourages investment. t i would point out that the devastation of the coal industry has resulted from a combination of factors, one is certainly the extraordinarily low prices of natural gas which has made it extremely competitive and the other form of generation. the war on coal and the previous administration openly declared their intent to destroy the coal industry. this is not a secret or my wild speculation. they told us that was their goal and made some progress on that. it seems to me there are in some places some green chutes, some some sign that things have bottomed out. this legislation, the underlying
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economic viding the growth. that will be helpful to all of these communities. senator enzi: mr. chairman, i come from coal country, 40% of the coal came out of my county and doesn't anymore. but because of the changes we have made since president trump got elected, the industry is coming back, but i do remember when we had hundreds laid off because of some of the regulations and the president promised they would do job training. we didn't know any jobs you could get trained and get $80,000 and the tax credit doesn't provide that either. and no sense us in creating a war between coal and other industries. everybody is having problems. i think the economy will be
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stimulated without specifying a particular type of energy or business and all will be able to benefit. so i would oppose this amendment. >> again, coming back to my colleagues on the other side, continue to make the argument that somehow this doesn't deliver tax relief to middle income families and that it's skewed toward the high end, and i just want to point out again that based on the distribution tables, if you look at the chart , who benefits from this, the $20,000 to $30,000 people who are in that income category get the largest percentage tax cut. mr. thune: under the chairman's modified mark. so, they can say it and say it and say it, but it just doesn't comport with reality. if you're in the lowest income category, if you're an individual and let's say you're married filing jointly, with the change in the standard deduction, doubling the standard deduction, and if you have any kid, add the per child tax credit on top of that, you would
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have zero tax liability. in the lower income category. , so you can keep saying it and i know it's a great throw-away line that democrats like to use. but it just doesn't fit with the facts it. doesn't fit with reality. this proposal delivers tax relief across all different income categories and if you look at the percentages, it's particularly good in terms of percentage tax cuts in some of the lower income categories. >> mr. chairman, may i close? i didn't use my five minutes completely. if i could have a minute to respond. this is not some off the cuff thing, senator thune. this is the math. and the math is that -- you can't even see this by the way. this is -- and i apologize for this. there are so few taxpayers at this level that it's a pencil line on the chart. this is 572,000 taxpayers getting $39 billion in tax cuts. this is your plan, not my plan. but this is the math.
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mr. bennet: that works out to about $58,000 a tax cut for the million people that are in that category. for the 90 million taxpayers that are earning $50,000 and below, your bill gives them $14 billion. that is $160 a year. it is on average a cut, it is on average a cut that's worth $7.50 every two weeks. that somebody gets a paycheck. that's not a talking point. that is the math that is at the heart of your proposal. and it is not what we need to be doing. we should be helping the people that are struggling to get by. that will generate economic growth. and i realize we have a difference of opinion about whether that's true or not. we should not have a difference of opinion about what the math is here. mr. thune: as the senator from colorado points out, everybody is getting tax relief under this. middle income taxpayers get the largest percentage in most cases of the tax relief.
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and if you look at tax burden when this is all said and done, who ends up paying more of the tax burden as a percentage of total tax, taxes paid in this country, is the highest income category. mr. bennet: i would say about that that it's so deeply reflects how bad our tax code is right now -- mr. thune: which is what -- my time, mr. chairman, i believe. which is what we're trying to correct by creating a faster growing economy that creates better paying jobs and higher wages. and that, mr. chairman, is precisely why the balance that we struck in here delivers tax relief to middle income families , at the same time delivering tax relief to businesses who can expand their operations, create the jobs and raise wages for the very people that you're trying to help. mr. bennet: this is going to sound presumptuous but i know colorado's republicans don't want this deal. mr. hatch: senator kasey. >> mr. chairman, mr. chairman, mr. chairman. mr. hatch: senator kasey.
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mr. casey: let me say two things about this amendment. number one is, this amendment will help a lot of places, including pennsylvania. i know a number of counties that would benefit. green county would. armstrong county would benefit as well as clarion county. all counties that would benefit. i have to say, i've not heard anyone on that side refute that number. so, we're supposed to say it's ok for people making more than $1 million to get $39 billion. why the hell do they need $39 billion? why don't you take all of that and give it to the middle class? then we could have a discussion. but what problem does anyone making over $1 million have? why do they need -- why do people making over d 1 million need another $39 billion? they've been doing quite well since about 1980. i just don't get it. why do they need $39 billion? mr. hatch: it's time to vote.
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anybody on this side want to make any comments? clerk will call the roll. roll call]
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mr. hatch: the clerk will read. the clerk: mr. chairman, the final tally is 12 ayes, -- ayes, 14 nays. mr. hatch: the amendment is efeated. are we all done now? you guys? >> oh, no. not even close. ot even close. mr. hatch: start accepting some bipartisan amendments, we'd be glad to. >> i think i'm next. mr. hatch: i don't want to break. >> i think senator mccaskill is next.
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mr. hatch: senator mccaskill, you have an amendment? senator mccaskill is next. ms. mccaskill: mr. chairman, my amendment is going to try to avoid some of the complications that the chairman's mark is writing into the code. i think we remember a few days ago when i asked the j.c.t. whether or not we were going to remove a book. we had seven books. 70,000 pages. and i believe he acknowledged that we'd probably end up with another book. one of the reasons we're going to end up with another book is what is going on with pass-throughs. i want to make sure everybody understands what pass-throughs are. because there seems to be some confusion with the people i talk to. the reason it's called pass-through is it's designed for the income to pass through to the individual. the simplicity of that is he will ganlt because it means -- is elegant because it means you're taxed based on the level of your income. so guess what. if you're a small business, you pay less in taxes. your business makes $150,000 a year, you pay a lot less in
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taxes. if you're organized under a sub-s or l.l.c. or a partnership. now, what the chairman's mark is propurposed to do is begin a complicated scheme of where you're going to get to take 50% of your a.g.i. but then you have to figure your payroll and for a whole bunch of folks that is layer upon layer of complication. because you share payroll with various l.l.c.'s, some are partnerships, some are sub-s'. i mean, there's questions about this that even the experts can't answer at this point. this will be regulation after regulation after regulation. and i will tell you the people who will be most adept, because complexity is the playground of loop holes. that's why we've got law firms in this country that have people that make more than $1 million a year just telling people how to navigate complexities in order to legally avoid taxes. 80% of the income of pass-throughs goes to
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millionaires. and above. let me say that again. 80% of the income from pass-throughs goes to millionaires and above. so my amendment is very simple. all we have to do is say, you don't get the $17.4% deduction for pass-through if your income is over $1 million. now, if you want to organize your business as a c-corps, you can get to 20%. then is you to worry about the defendants and the -- dividends and the double taxation. but if you want the simplicity of a pass-through, and if you're a small business you're you're still going to have a low tax because you won't have income at that level, are not going to have a 35% level. i think that's what you guys ended up with, didn't you? 35. 8%. the mark changed so many tifmentse what did we end up with? -- times. what did we end up with? >> the top marginal tax rate is 38.5%. ms. mccaskill: we ended up with 38.5% from 39.6%.
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you're already getting a tax cut if you're a millionaire. and guess who's going to have the money to hire these lawyers to figure out how to navigate this complexity? it's going to be people that have maybe dozens of l.l.c.'s, hundreds of l.l.c.'s. i think we've got somebody in the white house that has lots and lots and lots of l.l.c.'s. most real estate folks do. so, i just think this would be so simple to say, hey, you want to help the middle class, give them the 17% deduction. but your a.g.i. is over $1 million a year, you're not entitled to the 17% deduction. there's no offset on this, mr. chairman. because it makes money and i would like to state the intention i'd like that money to go to tax credits for small businesses or other ways that we can help small businesses. the clerk: mr. grast no. mr. crapo no. mr. roberts no.
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mr. enzi no. proxy.nyn, no by mr. thune, no. mr. burr, no. mr. isakson, no by proxy. mr. portman, no. mr. toomey, no. mr. had had heller, no. mr. scott, no. mr. cassidy, no by proxy. mr. widen -- wyden, aye. ms. stabenow -- ok. ms. cantwell aye. mr. nelson, aye by proxy. mr. menendez, aye by proxy. mr. carper, aye. mr. cardin, aye. mr. brown, aye. mr. bennett, aye. mr. kasey, aye. mr. warner, aye by proxy. ms. mccaskill, aye. mr. chairman, chairman votes no.
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ms. stabenow aye by proxy. mr. chairman, the final tally is 2 ayes, 14 nays. >> mr. chairman, this amendment is listed as brown modification to brown amendment number 20. as we've learned, this bill -- we've painfully found out in the last -- well, the only been given a day and a half or, so this bill is not just a tax bill but a health care bill. as we've learned from expert witnesses here today and yesterday, this bill effects medicaid and medicare and will cause 13 million americans, think of that, 13 million
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americans to lose their health insurance. mr. brown: despite all this, you insist this committee continue to rush the consideration of this badly crafted bill. something you never would have allowed to happen in any other congress. a bill which the joint committee on taxation has said will actually end up increasing taxes on everyone within the next 10 years. even those making less than $10,000 a year. we could be focusing on other critically important issues. take children's health care. the children's health insurance program, chip covers nine million children. 209,000 in senator portman's and my state. it expired september 30. this committee passed it out with only one dissenting vote. the chairman has always been interested in chip. he was there at its birth. it's been more than six weeks. so what are we doing in this committee? it's been six weeks since chip expired. states are running out of money. today c.m.s. had to provide nine states -- and the district of
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columbia with supplemental funds so those states can keep their chip programs running and we're doing this instead? mr. president, of taking care of chip? it includes the chairman's state. today c.m.s. sent utah an emergency 13ds million to keep its chip program running. $13 million to utah, millions and millions, tens of millions to eight other states and the district of columbia. yeah, we're doing this instead of taking care of the priority of chip. other states represented in this committee also needed emergency help. senator casey and toomey in pennsylvania, senator nelson in florida. senatorwiden in oregon. senator cantwell in washington. they wouldn't need emergency help if we were actually doing our jobs, mr. chairman. unfortunately instead of taking up these critical issues and meeting deadlines here in the senate we ignore our responsibilities, we simply blow past deadlines like chip. under senator mcconnell's leadership, we're six weeks past the deadline to fund chip. to fund community health centers. to extend critical medicare
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programs. six weeks past. what are we doing? we're not doing that. we're doing this. instead we're spending time rushing a bill through this committee which will result in a tax increase for all americans, cause 13ds million -- so instead of doing chip, taking care of $200 -- 200,000 children in my state, and millions around the country, we're doing a bill that will cause 13 million people to lose their insurance and rob the medicare trust fund of billions of dollars and see insurance premiums, c.b.o. tells us, 10% a year, insurance premiums in the exchanges. is that what we're going to go home this weekend over thanksgiving, this is what you have to give thanks for, a congress, a government thatting noeser chip and instead -- that ignores chip and instead cuts shuresforns -- insurance for 13 million people and gives tax cuts to people who don't need it? is that what we want to go home and do? my amendment's simple. it makes sure the passage of this tax bill does nothing to make the situation worse for children. if we're not going to do chip, the least we can do is say we're
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not going make it worse for children. we've already failed to extend chip on time. we need to make sure that children -- that no other child remains at risk of losing their insurance coverage because of congress' actions. i give chairman hatch credit for going through a bipartisan process to craft a bill that will extend chip for five years. that was well done, mr. chairman. but it's dust in the wind. because the congress hasn't really moved on it. we should get back to work on moving the kids act forward in a bipartisan manner as soon as possible. but today, since we seem to be so focused on this, i urge this committee to refocus on issues that matter, like making sure we protect the health insurance that people already have by voting for this amendment. mr. chairman. mr. hatch: senator, the chair rules your amendment nongermane. for our purposes. mr. brown: wait, wait, wait, mr. chairman. could you explain why this isn't germane?
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it's paid for by the exit tax, for one thing. mr. hatch: you told me it was not germane. >> i did not tell that you. mr. hatch: now i'm informed it is germane. so go ahead. mr. brown: i'm sure glad i asked, mr. chairman. thank you for the quick response. [laughter] on this beautiful afternoon. so you're accepting the amendment since no one's speaking against it, mr. chairman? mr. hatch: we'll vote. the clerk will call the roll. the clerk: mr. grassley, no. mr. crapo, no. mr. roberts, no. mr. enzi, no. proxy.nyn, no by mr. thune, no. mr. burr, no. mr. isakson, no. mr. portman, no. mr. toomey, no. mr. heller, no. mr. scott, no. mr. cassidy, no by proxy.
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mr. wyden, aye. ms. stabenow, aye by proxy. ms. cantwell, aye. mr. nelson, aye by proxy. mr. nelson, aye by proxy. mr. carper, aye. mr. cardin, aye. mr. brown, aye. mr. bennett, aye. mr. casey, aye. mr. warner, aye by proxy. -- ms. g cass kill, aye mccaskill, aye. the chairman votes no. ms. stabenow, aye. mr. chairman, the final tally is 12 ayes, 14 anyways. mr. hatch: the amendment is defeet. -- defeated. ok. who's next? >> mr. chairman. >> casey. mr. hatch: who? >> casey. mr. hatch: senator casey. mr. casey: i'm grateful i have the chance to talk about casey
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amendment number seven. this amendment directs the treasury secretary to deposit $500 in a college savings account annually for every child, every child living whose parent or parents are earning under $100,000 a year. the amendment is paid for by the following. retaining current law for the alternative minimum tax, which was established as a guardrail to ensure everyone pays their fair share. parents all across the income spectrum struggle every day to afford the cost of college and trying to prevent their kids from being saddled with a mortgage worth, i should say, of student loan debt before they even hit their 30's. if we're going to spend money, let's spend it on our future and not on tax cuts for the wealthy. let's tell every child growing up in a family who can't afford to save for their college that
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the american people believe in them as much as their parents do. and if we're willing to put aside money for their education, we're even -- we're willing to do that even if their parents cannot. if kids don't want to go to college, or if they get a scholarship, this money can be rolled over into a retirement account or it can be rolled over into an able account at any time. no child should be limited by poverty and every child's future should be -- should not be limited because of their parents' ability to pay. this is $500 a year towards that future. mr. chairman, i would yield. >> i would hope anybody that wants to put the alternative minimum tax into place would remember a little history from 1969, when there were 120 people n this country who, because of
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deductions, weren't paying any income tax. members of congress thought everybody ought to be paying a little bit of income tax. so we set up the alternative tax so everybody's contributing a little bit. mr. grassley: it was never indexed and consequently now it's taxing millions and millions of middle income people. maybe even say upper middle income people. but still middle income people. it was never intended to do that. so why do you want to do punishment to the middle class by re-instituting an alternative minimum tax? mr. hatch: the senator from pennsylvania. mr. casey: that's not the intention, nor would it be the effect. mr. grassley: it sends down here you want to -- says down here you want to, at least that's in the explanation of your amendment, that's where i got the information. >> mr. chairman. if i might, i think senator grassley raises a point about
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indexing, which i appreciate. the problem is, the bill, your underlying bill eliminates the alternative minimum tax. so -- eliminates it totally. which means we're going to go back to what was there before, with some people not contributing anything. this may not be correct, but i believe, as we were reading the summary of our one year on taxes we received, the only tax he paid was the alternative minimum tax, i believe. ms. stabenow: but the point is, and i say that as a wealthier person, that was the tax that caused him to contribute to our services of our country. in defense and so on. so it's one thing to say we need to fix it, which i appreciate. but it's another thing -- the bill eliminates the alternative minimum tax and goes back to a time where very wealthy people with a lot of tax deductions and so on could avoid contributing
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anything to the quality of life of our country. mr. grassley: what the senator forgets is this bill, in simplifying the tax code, does away with a lot of those deductions that rich people take advantage of. and so the need for the alternative minimum tax isn't as great as it was. ms. stabenow: with my good friend, and i mean my good friend, i would argue this is a big boone for very wealthy people. mr. grassley: you knee people that take the state and local , the top -- i don't want to say top so% or less than 10%, but they get 40% of the benefit of the state and local tax deduction. we're taking that away so those rich people aren't benefiting from it. >> without jumping into the
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alternative minimum tax tax issue, i agree with senator grassley. not having it indexed, it has an impact that nobody predicted at the time. i just think it's time for a little reset because we've been hearing from our colleagues on the other side of the aisle, how we're slashing medicare and medicaid and how their tax cuts for the wealthy -- the tax cuts for the wealthy here that are so great. i think we need to hear from mr. burtle again. we seem to be getting off track again. mr. portman: i'm told i should se the twitter handle now, @jtcgov in addition to correct the record for people to go to these charts and look at it. let's look at your chart. 58-17. which is your latest chart from today. which says, all the changes that are in there, let's go to the group that's being talked about here and again and again we hear that those million bucks are over are paying less in tax.
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what is the percentage of tax that they're paying now? and what is the percentage of tax that they would pay after this legislation was enacted? i'm looking at column -- >> which year? mr. portman: federal taxes three. i'm looking at 2019. 2021 you want. >> our estimate is that those . xpayers pay $19 -- 19.3% for 2019, 19.8%. mr. portman: so that gups, not down, right? -- goes up, not down, right? so how about folks who are making $50,000 a year or $75,000 a year. do their taxes, the burden of taxation go up or down? mr. barthold: it declines from 8.2% to 8.1%.
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port port -- mr. portman: i think it's important to have that reset now and again just to reprind us where we are here. people in these brackets are seeing a tax cut. these are the data points. this is the statistics. then this notion of medicaid and medicare, let's talk about that for a second. again, people saying this bill somehow slashes medicaid and medicare. is anywhere in the text of this bill, are there any cuts to medicaid? mr. batterhold: this is tax legislation, it does not address the medicaid program. mr. portman: so no cuts to medicaid. are there any cuts to the medicare program? mr. bart: hold: no changes to thed me care program. -- to the medicare program. mr. portman: i understand my colleague from pennsylvania has an amendment, but when he proceeds it by saying this is all about being sure that we're not continuing to provide these
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larger tax cuts for the wealthy, people making over d 1 million a year, just to know what we're doing in this bill, which is providing middle class tax relief. thank you, mr. chairman. >> mr. chairman, i just wanted to resfond my friend. because -- respond to my friend. because the fact is that in the budget resolution, it brought us to this point on this bill and others. ms. stabenow: the budget resolution, which is the larger overall priorities put in place does, does have a cut. in fact, i would ask our staff, jtc -- now if this is j.t.c. or if someone would like to respond or answer the question. in the budget resolution, is there a $1 trillion cut in medicaid? n the budget resolution?
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i don't mean to say actually cut it. that's something that would come before the committee. ut is a $1 trillion cut in medicaid part of the budget resolution? >> to be clear, a budget resolution just shows changes in numbers. ms. stabenow: i understand. >> so the implication is given how much they've cut out of those functions. ms. stabenow: they cut that function by $1 trillion. is the medicare function cut by almost $500 billion? $470-some billion? >> yes, that was our reading of the budget. ms. stabenow: so i just want to be clear. it's not -- this is more than one step in the process. just as during -- with the 2001, 2003 bush tax cut, that didn't have anything about privatizing social security in it. but when the deficit resulted, the big debt, as a result of the tax cuts, then the next step was trying to privatize social
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security. so this is the first step, the budget resolution has assumptions in it of lower spending. $1 trillion in medicaid, almost $500 billion in medicare. >> correct. ms. stabenow: in the budget resolution. >> correct. s. stabenow: thank you. >> clerk will call the roll. >> mr. grassley. no. mr. crapo. no. mr. roberts. no. mr. enzi. no. mr. cornyn. mr. cornyn. mr. cornyn, no. mr. thune, no. mr. byrd no,. mr. portman. no. mr. too many mi. no by proxy. mr. heller, no.
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mr. scott. no. mr. cassidy. no by proxy. mr. wyden. aye. ms. stabenow. aye. ms. cantwell. aye. mr. nelson. aye. mr. menendez. aye by proxy. mr. carper, aye by proxy. mr. cardin, aye. mr. brown, aye by proxy. mr. bennett, aye. mr. casey, aye. mr. warner. aye by proxy. ms. mccaskill. aye by proxy. mr. chairman. mr. chairman votes no. final tally is 12 ayes, 14 nays. >> amendment is defeated. we're going to take a 15-minute break right now and come back. with that, we break for 15 minutes.
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>> and the senate finance committee taking a short break here. s the fourth day of its review of the senate tax reform proposal. over in the house today passing its tax reform bill 227-205 with no democrats voting for the house measure, 13 republicans voting against it. and the legislation over in the house calling for a partial repeal of state and local income tax deductions and doubling the standard deductions for single filers and those who are married. and that tax reform plan again limited to $1.5 trillion over 10 years. in order to qualify for rules that in the senate's case allow the senate to pass a bill with a simple majority vote and again the house passing its proposal earlier. we're going to take a look at some of the last hour of debate on the house floor and we'll bring you back here to the senate finance committee when their work resumes. tempore: whe proceedings were postponed
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earlier today, 29 1/2 minutes of debate remained on the bill. the gentleman from texas, mr. brady, has 17 minutes remaining. without objection, the gentleman from massachusetts, mr. neal, has 12 1/2 minutes remaining. the chair recognizes the gentleman from texas, mr. brady. mr. brady: thank you, mr. speaker. i'm pleased to yield two minutes to the gentleman from alaska, mr. young. the speaker pro tempore: the gentleman from alaska is recognized for two minutes. mr. young: thank you. thank you, mr. chairman. congress established alaska native settlement trust in 1988, to provide permanent health ed -- health, education, and welfare benefits to alaska natives who were among the most economically disvanged population in the united states. unfortunately, mr. chairman, the tax code has many cases impeded the creation and funding of the settlements. as a result, alaska native settlement trust have not been able to function in the manner congress originally intended, to provide benefits for alaska natives. to remedy some of these tax issues, i have sponsored h.r. 3524, which permits alaska native corporation to deduct contributions to the settlement trust. the provision of


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