Schumer Floor Remarks on Tax Reform, Healthcare, and the Need to Pass an Aid Package for Puerto Rico

Date: September 27, 2017

Contact: Matt House, (202) 224-2939

Schumer Floor Remarks on Tax Reform, Healthcare, and the Need to Pass an Aid Package for Puerto Rico

Washington, D.C. - U.S. Senator Chuck Schumer today delivered remarks on the Senate floor regarding Republicans' newly released tax proposal, the need for bipartisanship on healthcare reform, and urging the Senate to vote on an aid package for Puerto Rico. Below are his remarks:

First, I'd like to talk about taxes.

President Trump and Republican Leaders will announce today several proposals as a part of their tax plan. According to recent reports, that plan will include proposals to repeal the estate tax, lower the rate on pass-through entities, lower the top rate, and actually raise the bottom tax rate.

Each of those proposals would result in a massive windfall for the wealthiest Americans and provide almost no relief to middle-class taxpayers who need it the most.

It seems that President Trump and Republicans have designed their tax plan to be cheered in country clubs and corporate board rooms.

Repealing the estate tax" How does that help middle-class people" Only 5,200 of the wealthiest families in America - couples whose estates are worth $11 million pay the estate tax. Any middle-class families worth $11 million" Is that the President's definition of the middle class" The estate tax is so skewed to the very wealthiest among us, and they're going to repeal it. This is not going to fly with the American people, let me tell you. Our Republican colleagues tried to do something the public dislikes on health care, taking away benefits, reducing health care. Now they're trying to do the same thing on taxes, helping the very wealthiest. They're going to be in for a rude awakening, because the American people are going to rise up against this. Over 70% of Americans are against tax breaks for wealthy Americans and wealthy corporations.

Lowering the rate on pass-through entities" That would create a huge loophole allowing very wealthy Americans like hedge fund managers to funnel their income through a business entity in order to avoid the top bracket and pay a much lower rate. So the upper middle-class family who makes $100,000 or $200,000, $300,000 could pay 39%, but these wealthy hedge fund managers, and lawyers, and whoever can, through a pass through, pay no corporate tax, and then a 25% rate on the rest of their taxes. Does that help middle-class Americans" Absolutely not. Does it help the wealthiest, who have the lawyers to set up these pass through entities" Absolutely.

Lowering the individual top rate" The top 1% who make about $490,000 a year would get a tax break, because their rate would be lowered. God Bless America, they made a lot of money. Do they need a tax break" I don't think so. President Trump clearly believes, despite his rhetoric, that the very wealthy in this country deserve another tax cut, while middle-class families, at best, get crumbs.

Amazingly, amazingly, the Trump tax plan will even including a proposal to increase the bottom tax rate, a punch to the gut of working Americans.

The American people should be able to see the principle behind President Trump's tax plan in this one fact: he proposes to cut taxes on the highest income brackets and raise them on the lowest. He raises the bottom rate and cuts the top rate. This is 'wealth-fare.' Wealth-fare. Helping those of great wealth with more tax breaks.

It's little more than an across-the-board tax cut for America's millionaires and billionaires. God bless them, I'm glad we have a lot of rich people in America. I don't begrudge them. Many of them worked very hard to make their money. Some get it through an estate, so be it. But, they don't need a tax break, the wealthiest among us. They're doing great. All of the statistics show that those at the highest end are making more money than ever before and the middle class is flat or sinking. Who needs the break" A Washington Post/ABC Poll released yesterday said that more than 7 in 10 Americans say that our tax system already tends to favor wealth more than the middle class. This bill makes it much worse.

One more thing to watch for today is whether or not the President and his Republicans provide any details about how they intend to pay for these massive tax cuts. Without those details, I suspect Republicans will turn the age-old trick of promising that economic growth will make up for the entire difference. Some call it dynamic scoring. But that name obscures what dynamic scoring really is.

President Trump calls some media outlets Fake News. Dynamic scoring is Fake Math. It's just made up, fake math to hide another deficit-busting tax cut to benefit the wealthiest Republicans.

No less of an authority than James Baker, conservative Republican, former Republican Treasury Secretary who led the last successful tax reform effort under President Reagan said that: "we must not let tax revenues decline and worsen the deficit. In other words, tax reform must be revenue neutral and should be judged on its own merits."

Let's call that the Baker Rule, the Jim Baker rule: tax reform must be revenue neutral, judged on its own merits. No dynamic scoring. No Fake Math.

So today, and I have to say, Mr. President here. I am amazed. President Trump, whenever he talks, says he wants to help the middle class. And his plan, at best, throws crumbs for some middle-class people, some will get a tax increase, especially those in high-tax states like New York. But his plan benefits the wealthy. Has the President read his plan" Has he been involved in creating his plan" Or is it the people around him, many of them from Wall Street who came up with this plan, and the President doesn't even know what it does" Because I'll tell you, if he goes to Indiana today and says his plan helps the middle class, rather than the wealthy, he's got it backwards. It helps the wealthy far more than it helps the middle class.

Now, on healthcare.

Yesterday the Majority announced that it would not be holding a vote this week on the latest Trumpcare bill, Graham-Cassidy. Every American should breathe a deep sigh of relief.

The Majority has vowed to revisit ACA repeal, maybe even with this legislation, but President Trump and our Republican colleagues should have learned from these failures that the American people do not want to cut health care. If they try to do it a third time, they will fail again for the simplest reason in politics: the public is against what they want to do. This administration, which campaigned as for the people and populist, on healthcare is doing what people don't want, on taxes is doing what people don't want. What is going on?

I would remind my Republican colleagues: continuing to threaten repeal is like hanging a giant sword of Damocles above our nation's healthcare system. It causes a great uncertainty in the healthcare market, which leads insurers to raise premiums on average Americans.

Now I understand that, for political purposes, the Republicans don't ever want to admit that ACA repeal is off the table. They promised it to the American people for seven years, but deluded them on what it really meant. The average American thought that if you took ACA off the table, premiums would go down, coverage would go up. The bills the Republicans have proposed are just the opposite. But I understand why they do it. They promised it so often. But those promises have a real, human consequences in the form of higher costs for everyone. The responsibility and the blame for those rate hikes, should they occur, and they probably will, will fall squarely on the Republicans' shoulders. President Trump and the Republicans are in charge. Saying 'gee, something in the past caused it' when they failed to correct it. That's not going to work. My Republican friends, you're no longer in the minority, you're running the show. It's your responsibility to help bring premiums down. We want to do that.

And in fact there are good bipartisan sprouts. Senators Alexander and Murray are very close to a bipartisan agreement. Now we hope out of peek or anger that our Republican colleagues won't reject a good bipartisan compromise that helps the American people, put together by the chair of the HELP committee and the ranking member.

I hope and expect those negotiations to pick up right where the left off, because we Democrats want to work with our Republican colleagues to stabilize the markets and lower premiums for millions of Americans. We hope that our Republican colleagues won't just sit back, repeatedly threated repeal, and watch as millions of Americans pay higher health care costs. That'll be wrong substantively and politically it'll fall right on their shoulders. So I hope we can have the negotiations between Senators Murray and Alexander pick up right where they left off. Each of them said they were close to an agreement before Senator Alexander was pulled away by Republican leadership. Insurers are about to set their rates for next year, and whether we can come together or not could be the difference between a stable market and premiums that are hundreds of dollars more expensive.

For the sake of the American people, for the sake of turning over a new leaf on healthcare, let us work together, in a bipartisan way, to shore up and improve our nation's healthcare.

Finally, Mr. President, on the crisis in Puerto Rico and the U.S. Virgin Islands.

Hurricanes Irma and Maria have left the islands, home to well over 3 million American citizens, hanging on for dear life. You've seen the pictures, they're just devastated. Water, food, diesel, power, cell service, medicine, shelter, security - basic needs for human survival are limited and running out. Diabetic patients who require insulin shots are unable to keep their life-saving medicine refrigerated. Hospitals still lack power and running water.

This was a catastrophe on an epic scale and may be one of the worst humanitarian crises within our borders.

Now, the President has a bully pulpit and - more importantly - is in direct control of vast resources of our federal government. The military, the Department of Energy, FEMA, the USDA and much more.

He can direct the attention of all Americans to important issues. Previous presidents have used this platform to focus our attention on disasters that strike our country, Barack Obama did it, George Bush did it, Bill Clinton did it, George H. W. Bush did it, Ronald Reagan did it.

And the President can direct resources, boots on the ground and a structure to coordinate it all. But a President needs to act more aggressively and comprehensively and urgently. And some of that has been lacking with this President, unfortunately.

A cursory scroll of President Trump's twitter feed and public comments from the past few weeks does not show him using the power of his office to focus our attention on the crisis in Puerto Rico and the U.S. Virgin Islands. It's been a week since the storm hit, and as I said, his twitter feed and public comments don't see him using the power of the office. When he did mention Puerto Rico, President Trump promoted his own Administration's efforts and implied that Puerto Rico was partially at fault for the devastation they're suffering.

The response from the Administration needs to get a whole lot better, fast.

I spoke to the Governor of Puerto Rico yesterday. He gave me specific items that would provide immediate help. I spoke about them yesterday and I hope the Administration acts on them quickly.

But most importantly, we need the Administration to send us an emergency and interim aid package for us to pass, just as we did in the wake of Hurricane Harvey. Puerto Rico and the U.S. Virgin Islands shouldn't have to wait a second longer for aid than any other American state or territory. We should take up and pass that aid package here in the Senate before the week is over.