▶ 0:15:38The committee will come to order today. This committee will move forward on President Trump's promise of delivering historic tax relief for working families, farmers, and small businesses. The one big, beautiful bill is the key to making America great again. This moment has been years in the making.
▶ 0:16:02While Democrats were defending IRS audits on the middle class and tax carveouts for the wealthy, Republicans and on this committee got on the road to hear from real Americans about how the 2017 tax cuts benefited them. This bill wasn't drafted by special interest or K Street lobbyists. It was drafted by the American people in communities across the country.
▶ 0:16:31We heard from a mother in Iowa, Sarah Curry, who can afford the care required for her son living with disabilities because of lower taxes and the double child tax credit the 2017 tax cuts delivered. We met another Ian, a farmer named Jolene Rezen, who takes comfort knowing her sons won't have to sell off the family's farm's acorage thanks to a double death tax exemption.
▶ 0:17:00An accountant for small businesses in Georgia, Allison Couch, shared how the small business tax deduction helps her clients create jobs. And a North Carolina manufacturer, Courtourtney Silver, was able to give every employee a raise, expand her workforce by 20%, and start an apprenticeship program, training the next generation because of the tax relief delivered in
▶ 0:17:302017. After the Trump tax cuts went into effect, real household incomes grew by Prices were stable. 5 million jobs were created. Investment poured into every corner of America. And the economy grew faster than so-called experts in Washington ever predicted.
▶ 0:17:54If the Trump tax cuts expire, every single American will face on average a tax increase of Democrats who vote against this tax relief will be voting for the largest tax hike in American history. The loss of the small business deduction would destroy jobs and shutter doors on Main Street.
▶ 0:18:18Workingass communities would be devastated by the loss of more than 1 million manufacturing jobs. Family farms would be sold off. This bill makes the 2017 tax cuts permanent. locking in lower tax rates for workers, small businesses, and farmers.
▶ 0:18:38These provisions offer the certainty and support small businesses and manufacturers need to invest in America and bring back the economic prosperity of President Trump's first term. The 2017 Trump tax cuts gave a boost to workers. The new 2025 Trump tax cuts will provide even more tax relief by delivering on President Trump's promise to hardworking Americans.
▶ 0:19:07And it prove it provides that relief immediately. A single mom waiting tables will no longer owe taxes to the federal government on her hardearned tips. the linemen who worked countless hours restoring power in the aftermath of devastating natural disasters in places like North Carolina and my home state of Missouri will no longer pay taxes on overtime pay.
▶ 0:19:37Seniors like my aunt who had to take a job as a door greeter at our local Walmart to supplement her social security income after the loss of my uncle, her husband, will receive much needed tax relief in this bill. Working families will be spared from a $1,700 tax hike.
▶ 0:20:03Parents will benefit from a 25% increase in the child tax credit that will grow with inflation and get help with the high cost of child care, adoption, and education. Americans will pay less for health care through expanded eligibility for health savings accounts, the elimination of bureaucratic waste and abuse, and the end of illegal immigrant access to Obamacare's premium tax credits. Main Street will grow again.
▶ 0:20:33This legislation makes the small business deduction permanent and increases it to 23%. Helping small businesses compete with larger corporations with a lower rate. Mom and pop businesses will power the economy to new heights, adding 1 million new jobs annually and over 750 billion in growth over the next decade.
▶ 0:21:01Opportunity zones will ensure lowincome and distressed communities, especially those in rural areas, share in this surge of new investments, new jobs, and new possibilities. 2 million familyowned farms and small businesses will benefit from a death tax exemption that is larger, permanent, and index to inflation, keeping the legacy of family farming alive in America.
▶ 0:21:32This tax bill will jumpst start a revival of manufacturing in our country. We are delivering on the president's pledge of lower taxes for companies who make the smart choice to build new factories in America. Workingclass families buying Americanmade cars will pay no taxes on their auto loan interest.
▶ 0:21:52And business will boom with a restored R&D credit, full expensing, and interest deductibility, creating jobs here at home, and helping America compete abroad. The story of American manufacturing will transform from one of lost jobs, abandoned factories, and forgotten towns to good paying jobs for Americans in new state-of-the-art facilities.
▶ 0:22:19This bill also means the end of Washington's special treatment of wealthy elites. Exclusive universities with the largest endowments, many whom have failed to protect their Jewish students, will pay an endowment tax as high as the corporate tax rate. Democrats bad tax policies that shower the wealthy, the big banks, and China with billions of dollars of special interest tax breaks will be replaced by good tax policy helping the working class.
▶ 0:22:50Illegal immigrants will no longer be able to claim the refundable tax credits. F foreign nations will no longer profit from the Biden error surrender of our tax revenues. Hardworking Americans like waitresses, mechanics, nurses, and farmers are the winners of this tax bill. Progrowth tax policy will shift our economy toward one that serves them, not the wealthy and well-connected.
▶ 0:23:17A 3.2% 2% boost in long run GDP will translate to $4500 of more income for the average family. My Democrat colleagues will continue to ignore the facts and make false claims about who benefits from this bill. These are the same falseholds they repeated after the 2017 tax cuts under which the share of taxes paid by the wealthy increased while lower income Americans paid less.
▶ 0:23:47I come from a community in Missouri of less than 5,000 people. Today, one in six people there live in poverty. I grew up a family of four most of my life in a single wide trailer. My priority is the working class because I'm a product of the working class.
▶ 0:24:12This bill delivers for those American families just like mine who have struggled to get ahead for far too long. Where I come from, you work until the job is done. The American people, they expect it. They voted for it. They deserve it. And they are tired of political grandstanding. They want real relief. And Congress must deliver it as quickly as possible.
▶ 0:24:41I urge all of my colleagues, put aside the politics, focus on the people, and vote to advance this bill. Remember the Americans we met traveling on the road and the people in each of your districts who are better off today. Thanks to the Trump tax cuts, together with the one big, beautiful bill, we can ignite the second Trump economic boom and improve the lives of millions of our neighbors back home.
▶ 0:25:11I'm now pleased to recognize the ranking member from Massachusetts, Mr. Neil, for his opening statement. Thank you, Mr. Chairman. So, here we are, one big, beautiful tax cut for billionaires legislation. The Republican pathology with tax cuts for wealthy people continues. The theology for a long time until it was put to rest was that tax cuts would pay themselves. Well, that's just what it was, theology.
▶ 0:25:41Then we heard in the middle of the Iraq war, the Republican whip in the House of Representatives say, quote, "It was patriotic to cut taxes in a time of Then we were told it would always be about accelerated growth. Well, we'll take the Clinton growth rates any day. In 2017, our colleagues on the Republican side passed a tax law that was supposed to pay for itself, raise wages, and help working families. None of that happened.
▶ 0:26:11Instead, it exploded the deficit, worsened inequality, and left everyday Americans behind. This bill, as currently proposed, will cut health care from 14 million members of the American family. Now, they want to double down on the same playbook. One that rigs the system for billionaires while everybody else pays the price. Here's the real K. They're going to ignore the baseline for 2017, just make people think it never happened.
▶ 0:26:40So they borrowed $2.3 trillion in 2017 for a tax cut that did not impel greater growth. They don't want to even pay attention to that. The other part of this, how about raising the debt ceiling by $4 trillion to pay for their tax cut, which will be with borrowed money. Let's be clear, the Trump economy didn't work for all American families then and it won't work now. What we've seen is the continued chaos.
▶ 0:27:10No real trade deals, no lower prices, no economic stability, empty ports, anxious markets, and rising costs while the president blames everybody but himself. Complain about the debt on Monday and then borrow $4 trillion on Tuesday to add to the debt. This legislation pours gasoline on the fire that's already burning. Americans are buckling under the chaos that our Republican colleagues have helped to create and this bill will make it worse.
▶ 0:27:40No wonder a strong majority of Americans believe that this could trigger a recession. They're right. This isn't about growth or prosperity. It's about protecting the ultra wealthy. Again, let me point something else out that's really important. We haven't seen the Joint Committee on Taxation distribution tables yet. You know why?
▶ 0:28:01because that shows who will get what and it'll give the American people a chance to contrast what's going to happen to those at the top and what's going to happen to those at the bottom who will get a dollar a day in tax relief. 70% of the benefits in this bill go to the top 20% of the American family. That's before the Trump tariff tax takes $2,800 out of our household budgets each year.
▶ 0:28:28And then Republicans gutting health care that will just drive people to emergency rooms when the hospitals don't close. That's not a tax plan. It's a wealth grab. While the richest Americans are raking in piles of cash, they want to gut the Affordable Care Act, Medicare, Medicaid, and SNAP. This bill is the greatest loss of healthcare in our history. According to the Congressional Budget Office, 14 million Americans will lose their health care plan.
▶ 0:28:57Two in five pregnancies are covered by Medicaid. It funds long-term care, addiction services, mental health treatments. We all know people that have those challenges and problems. There are constituents. Cuts like these will devastate families and entire communities, especially in rural areas. And what are they offering in exchange for this pain? the same tired promises that tax cuts automatically will give you more growth. Even though the CBO says that's false.
▶ 0:29:26In fact, in fact, extending that tax scam could conceivably slow the economy, not expand it. It doesn't have to be this way. Republicans have chosen this path. They could have extended the expanded expanded child credit, cut poverty in half. They could have made the ACA subsidies permanently. They could have made meaningful progress with long-term care and housing. Instead, another $2 trillion giveaway to the wealthiest Americans.
▶ 0:29:54When they start talking about the deficits, don't forget $10 trillion worth of tax cuts that have never been paid for. They'll use this hole as an excuse to come to Medicare, Medicaid, and Social Security next. It's the same pattern. Blow up the budget, then gut the programs that people rely on. We deserve a tax system that works. We deserve peace of mind and not the fear that our retirement plans will be taken away.
▶ 0:30:18We will continue to fight for the future as Democrats and we intend to lay out for the American people precisely what this legislation means. It is a tax cut for billionaires. I yield back my time, Mr. Chairman. Thank you.
▶ 0:30:32Our only business today is consideration of the committee print providing legislative recommendations to comply with the reconciliation directives included in section 2001 of the concurrent resolution on the budget for fiscal year 2025 hconres 14. The committee will now proceed to consideration of the committee print. Mr. Chairman, at this point I want to reserve a right to object to your unanimous consent request and raise a point of order concerning its consideration.
▶ 0:31:02So the next line is without objection. It is with objection. With with a reservation of objection. Hopefully we can I can not object. State your objection. Uh Mr. Chairman uh I just asked to be heard briefly about the the amendment and the nature. State your objection.
▶ 0:31:20My point of order is under House rule uh 16 clause 7 uh in that your 28-page bill that you filed Friday night is now a 389page bill that it includes multiple provisions that were not uh in any way referenced on Friday night from the salt cap uh to the $20 billion voucher plan uh to uh just one provision after another and under House uh rule Rule 16,
▶ 0:31:50clause 7. Uh, it is designed to help the members of Congress properly legislate by knowing what's going to be considered before we act. I have people in my district who will spend months researching uh a $40,000 car. We're being asked to consider a $5 trillion tax bill where we don't have uh the information. Uh since this bill uh deviates so much from the one that was filed Friday night, I have uh Mr. chairman the House practice manual.
▶ 0:32:20Uh and it makes very clear that uh on page 565 that uh the the burden of proof is on the offer of a u an amendment that deviates so fundamentally and that this applies to amendments in the nature of a substitute.
▶ 0:32:39So I just ask you to clarify uh perhaps your broad definition of gerainess if if that is your position will be applied similarly to any democratic amendment that would be offered but I'm trying to ensure that we don't have one standard that applies to your amendment and another standard that is applies to mine or the others that might be offered. So perhaps you could just explain why you think this is germanine to uh what you offered on Friday night.
▶ 0:33:13the the the House substitute that we provided provides with all house rules. Um and so the gentleman is more than happy to discuss any of the conversations when we move forward within the substitute. So your your position is that we our amendments for example to deal with the affordable care act enhanced uh credits though they're not dealt with directly in your bill that germanine will permit us to debate all of those matters on the merits.
▶ 0:33:43We'll consider um case by case basis as we move forward. Sometimes your consideration uh tends to run a little one way. Uh I you stated your objection. We're going to move on. All right. Well, my objection I raise a point of order that state your point of order. The amendment in the nature of a substitute is not germanine to the base bill because it includes multiple provisions salt uh the vouchers uh the denial of healthcare.
▶ 0:34:12The gentleman will suspend for a moment. Surely the amendment is a nature of a substitute hasn't been called up yet. So it's not timely to raise a point of order at this moment on well you're about to make a unanimous consent request that we dispense dispense with any objection. So if you want to make that request, I will renew.
▶ 0:34:39I was about to say um the measure will be considered as read and open for amendment at any point. If there's no objection, are you referring to the uh amendment in the nature of a substitute? We are not there yet. When you're there, I have a reservation of objection and it will be somewhat similar to the one I just stated. to share the committee.
▶ 0:35:08Without objection, the measures will be considered as read and open for amendment at any point. At this time, I offer an amendment in the nature of a substitute which was distributed in advance along with the green sheet explaining it. Without objection, the amendment chairman, at that point, I would reserve an objection and raise a point of and that is the appropriate time. Thank you very much. That is not the appropriate time. Does the gentleman um wish to reserve a point of order and geraness?
▶ 0:35:38I reserve a point of order under uh the house rule that I cited hoping that we can comply with the rules or if you're adjusting the rules that it will apply the same to Democrats as Republicans. House rule 16, clause 7. Uh the committee is complying with all house rules and we will continue to comply with all house rules. Mr. Chairman, uh you're not complying with House uh rule 16 clause 7, which applies to amendments in the nature of a substitute of this type.
▶ 0:36:08Uh and it's obvious from the your expansion from uh uh 28 pages to 8. Would the gentleman suspend? Surely.
▶ 0:36:39After I read this next line, the gentleman would have the opportunity to make the objection. So sorry to jump or to raise the point of order and geraness. Without objection, the amendment in the nature of a substitute shall be considered as read, open for amendment at any point and considered base text for purpose of amendment. Mr. Chairman, at that point, I would reserve uh a an objection and uh raise a point of order. This is the time you need to raise it, not reserve it.
▶ 0:37:04Well, uh, I'm I'm I'm reserving it because I'm hopeful that you'll give me an explanation that geriness would apply the same way to democratic amendments as you have applied it to your amendment in the nature of a substitute.
▶ 0:37:17And if if that's not the case and there's some possibility that our amendments will be rejected as non-gerermanine while yours which is obviously non-gerine is okay to consider uh I'm willing to withdraw the objection really was hoping to get more insight from you about uh your approach to germaniness and the vast change in this bill from Friday night uh which gave us almost no time to prepare amendments or to be prepared to discuss its mult multiple
▶ 0:37:47provisions of a big beautiful bill and I'm hoping that the house rules will be followed more closely than the rule of law has been followed by the administration. So the amendment in the nature of a substitute is germanine um and will move forward as it as it being germanine. Mr. Chairman, I raise a point of order against further consideration of the amendment and request a vote on my point of order uh as described that the amendment in the nature of the substitute is not gerine to the base bill.
▶ 0:38:15It legislates on a different subject matter. It has a different fundamental purpose from the bill that you noticed. And the burden is on you to show geraness. And you've done nothing to show geraness here. You've not only not met your burden, you've not even offered an explanation as to why you deviated from a bill of 28 pages and went to 389 pages with more new provisions than you had old provisions. Okay. Okay. So, the chair is prepared to rule that this is germaine.
▶ 0:38:45So, you're objecting to that and you want to um want a record vote on it over. Okay. So, point of order, Mr. Speaker, Mr. you can't entertain another point of order. While this is pending, can I ask a question about this about this vote before us before we vote? It's not debatable or discussion. We're going to it. No discussion of geraness. In other words, you're just going to rule on germiness with no discussion.
▶ 0:39:14Does the gentleman wish to be heard on his point of order on gerineess? I do. Proceed. Oh, well, thank you very much. Uh, Mr. Chairman, uh, I believe you you are taking a very expansive view of gerineess when you add multiple provisions that are wholly unrelated to the 28 pages that you presented us on Friday evening.
▶ 0:39:36uh that Friday evening presentation seemed to be designed to minimize scrutiny of what you were doing but not included in that 28 pages is any mention of assault whatsoever. Uh a matter that seems to have gendered some discussion uh in not only the Democratic caucus but in the Republican caucus. Uh your expansive definition uh includes uh an entirely new 20 billion voucher system that seems to encourage parents to abandon our public schools.
▶ 0:40:05You helped throw millions of Americans out of their health plan. You repeal all the renewable energy credits that was not in Friday night. Uh which have been generating so many new jobs, especially in Republican districts. You've given the Trump administration dangerous new authority to impose capital punishment on nonprofit university, civic, and organizations. And uh you have established a new category of tax preferred savings accounts which were not in the base bill.
▶ 0:40:33House Rule 16, clause 7, is designed to help all of us on both sides of the aisle. Uh, as members of Congress, be prepared to legislate. It's designed to prevent hasty, ill-considered decisions. You know, Mr.
▶ 0:40:48Chairman, last Tuesday, it was Speaker Johnson himself who said that the legislation that we're considering right now would quote be the most important, the most consequential legislation that will ever be involved in in our lifetimes and arguably one of the biggest in the history of Congress. Shouldn't a matter of such importance, according to the speaker, be in full compliance with the rules of the House of Representatives?
▶ 0:41:15uh at such a momentous measure uh we ought to be complying with the house rules and the precedents are clear uh under the house uh there have been bills brought to the floor uh that uh have been rejected because they did not comply with the house rules on Friday night you set out what we were supposed to be prepared to legislate on Tuesday and then hours ago you totally altered it if as you and the president have been describing it this is one big beautiful bill I have to say it
▶ 0:41:45certainly hidden beauty. You certainly didn't want anyone admiring the flawless beauty very closely by introducing a new subject matter not contemplated in Friday's base text and changing the fundamental purpose of measures before us today. This proposed substitute is manifestly non-gerain. If you're rejecting the bill that you introduced on Friday night and asking us to consider this monstrosity, uh that is your right.
▶ 0:42:13But it is a right that can only be exercised after proper notice to us, which means giving members the requisite time to read, to understand it, and to prepare any necessary amendments, and to have the information that the ranking member referred to that we lack from the joint committee on taxation. Mr. Chairman, I would just particularly uh address your attention to page 565 of the discussion of this rule in the House practice manual, which I brought along with me.
▶ 0:42:42Uh since under the House rules, you as the sponsor of this gigantic new amendment bear the burden of proof that is germanine to the underlying 28 pages, I would just ask you to explain how it is gerine and assure us that if you're applying what appears to be a very liberal interpretation of germanine that you do the same for any amendment that may be offered by any member of the committee. The chair is prepared to rule.
▶ 0:43:08The gentleman from Texas makes the point of order that the amendment proposed is non-gerermanine. The amendment is in order and the point of order is overruled. Mr. Chairman, on that I would ask for a record vote. Can I have a point of clarification, please, Mr. Chairman? You have to pardon. You have to appeal the decision. I'm appealing the decision of the chair and asking for a record vote on that. Mr. Chairman, may I have a point of clarification? There it's no discussion. A pending motion. I can't make a point ask for a point of clarification. No. What is the what is the I mean we can what is the clarification?
▶ 0:43:39I would like you just to clarify why the bill that you put in the amendment in the nature of a substitute is germanine because it is gerine Mr. Buchanan. So there's no there's no rationale behind it just because you say so. Go ahead. The gentleman Mr. Buchanan is recognized for a motion. I move to table the appeal because I said so the the clerk will call the role. Mr. Mr. Buchanan. Yes. Mr. Buchanan. Yes. Mr. Smith of Nebraska.
▶ 0:44:10Yes. Mr. Smith of Nebraska. Yes. Mr. Kelly. Yes. Mr. Kelly. Yes. Mr. Schwikert. Mr. Schwiker. Yes. Mr. Le Hood. Mr. Arrington. Mr. Arrington. Yes. Mr. Estus. Mr. Estus. Yes. Mr. Smucker. Mr. Smucker. Yes. Mr. Hearn. Yes, Mr. Hearn. Yes, Mrs. Miller. Mrs. Miller. Yes, Dr. Murphy. Dr. Murphy.
▶ 0:44:40Yes, Mr. Kustoff. Mr. Kustoff. Yes, Mr. Fitzpatrick. Mr. Fitzpatrick. Yes. Mr. Stwie. Mr. Stwie? Yes. Miss Tenny. Miss Tenny. Yes. Mrs. Fishbach. Mrs. Fishbach. Yes. Mr. Moore. Mr. Moore. Yes. Miss Vanine. Miss Vany, yes. Mr. Finstra, Mr. Finstra, yes. Miss Malotakus. Miss Malottoakis, yes. Mr.
▶ 0:45:10Kerry, Mr. Kerry, yes. Mr. Yakam, Mr. Yakam, yes. Mr. Miller, Mr. Miller, yes. Mr. Bean, yes. Mr. Bean, yes. Mr. Moran, Mr. Moran, yes. Mr. Neil, Mr. Neil, no. Mr. Dogget, Mr. Dogget, no. Mr. Thompson. Mr. Thompson, no. Mr. Larson, Mr. Larson, no. Mr. Davis, Mr. Davis, no.
▶ 0:45:41Miss Sanchez, Miss Sanchez, no Miss Sule, Miss Su, no Miss Oenet, Miss Doen, no Miss Chu, no. Miss Chu, no. Miss Moore, Miss Moore, no. Mr. Boille, no. Mr. Bole, no. Mr. Byer, no. Mr. Mr. Byer, no. Mr. Evans, no. Mr. Evans, no. Mr. Schneider, no. Mr. Schneider, no. Mr. Petta, Mr.
▶ 0:46:10Panetta, no Mr. Gomez, Mr. Gomez, no Mr. Horsford, Mr. Horsford, no Miss Plask, Miss Plasket, no Mr. Swazy, Mr. Swisy, no Mr. for the hood.
▶ 0:46:41Chairman Smith. Yes. Chairman Smith. The clerk will report the vote. The yeses are 25. The nos are 19. There being 25 yeses and 19 nos, the appeal is tabled.
▶ 0:47:08I will now turn to Tom Bartold, chief of staff for the joint committee on taxation, Josh Sneed, chief trade council, Patrick Dum Dumas, staff director of the subcommittee on health, and Shawn Freeman, deputy general counsel to provide the technical description of the amendment and the nature of a substitute with an emphasis on the changes made since introduction. I ask that members hold their questions until after their presentations.
▶ 0:47:38Chairman Smith, Mr. Neil, members of the committee, you have before you several joint committee documents, JCX 18, 19, and 20, which describe the mark as noticed and more relevant for today's proceeding. Uh, JCX 21 and JCX 22R, which described the chairman's amendment in the nature of a substitute with respect to the tax provisions of the legislation that's before you. Uh the legislation makes a substantial number of changes.
▶ 0:48:06I'll try to uh briefly highlight a number of number of them. In general, as was noted in the opening uh in the opening statement, the legislation would extend and make permanent almost all of the provisions of public law 11597 that were otherwise scheduled to expire at the end of this year. While extending those provisions, it does make a number of modifications.
▶ 0:48:32So for example, the rate schedule that was established in the 2017 legislation is extended and made permanent. The standard deduction that was ex uh increased uh in the 2017 legislation is uh extended and made permanent. And the section 199A uh special deduction for pass through businesses is extended and made permanent.
▶ 0:48:53But each of these is also modified in terms of the indexing that was uh uh the indexing of the thresholds of the break points and the values under those provisions by providing an additional year of inflation indexing in the calculation of each year's indexed uh change.
▶ 0:49:13In addition, the standard deduction for four years from 2025 through 2028 has an increase in value of $1,000 for single taxpayers, 1,500 for head of household filers, and 2,000 for joint filers.
▶ 0:49:29The child tax credit, which is extended permanently by the legislation, has for four years, 2025 through 2028, an increase in value to $2,500 and also on a permanent basis makes uh changes in terms of requiring social security uh uh requirements to be eligible to claim the child tax credit.
▶ 0:49:50Uh the section 199A uh small pass through business deduction that I already mentioned has its deduction amount increased from 20 to 23% modifies the test for uh the limit based on either wage uh or uh or capital.
▶ 0:50:07And I want to point out that in the uh document describing this that was passed out to you, there's an error, two errors on page 22 where it incorrectly references 22% rather than the 23% uh deduction increase that I just mentioned. The estate and gift tax uh effective for 2026 will be 15 have a $15 million exemption. That amount uh is indexed and is made uh made permanent.
▶ 0:50:34The legislation repeals the old P's limitation on itemized deductions, but enacts in its place, effective uh for next year, a limit on the value of itemized deductions to 35%. That would generally affect only taxpayers in the uh top income tax bracket of 37%.
▶ 0:50:55In addition, the 2017 legislation had enacted a limitation on the deduction of state and local taxes, the so-called salt uh limitation. The legislation before you would increase the current year $10,000 limitation to $30,000 uh this would be phased out for taxpayers with a modified adjusted gross income in excess of $400,000.
▶ 0:51:24And in addition, this legislation limits certain substitute payments such as pass through entity taxes that a number of states have enacted to enable taxpayers to uh to to mitigate the effects of this limitation. The legislation before you also enacts an exclusion on tip income. The exclusion applies to uh tips that are reported on W2 wage statements. It requires reporting uh requirements.
▶ 0:51:53Uh it's available to both itemizers and nonitemizers and this would be effective for years 2025 through 2028. The legislation also provides an income tax deduction for qualified uh overtime. This would apply to all taxpayers other than to highly compensated taxpayers. There are reporting requirements established under the legislation and this provision would apply years 2025 through 2028.
▶ 0:52:20An additional increase in this uh an additional increase in the deduction for taxpayers aged 65 or older is provided for years 2025 through 2028. The increased amount is $4,000 per uh eligible taxpayer. It is phased out for taxpayers with higher incomes.
▶ 0:52:41The legislation also provides an exclusion of up to $10,000 of qualified automobile loan interest for uh vehicles that are domestic uh assembled domestically. Uh this uh ex uh interest exclusion would apply for years 2025 through 2028. The legislation also increases the amount of refundability of the adoption credit up to um $5,000 on a permanent basis.
▶ 0:53:10There is an error in the description in the document that was passed out uh before you. Uh to be clear, this provision would be effective for years after uh 2024. Uh the charitable deduction, the limited charitable deduction for nonitemizers uh is included is reinstated I should say in this legislation. It applies for years 2025 2028.
▶ 0:53:36Um on uh business provisions, the legislation uh enacts uh effective for uh property placed in service uh after January 19th, 2025 and through c the end of calendar year 2029, 100% bonus depreciation.
▶ 0:53:53The uh legislation also provides for full expensing of uh domestic research expenditures under code section 174 again applicable for years 20 expenditures incurred in years 2025 through 2029. The uh legislation reinstates the adjusted income uh limitation on deductible business interest by reference to EBIT rather than IBIDA.
▶ 0:54:20again effective for uh interest payments in 2025 through 2029. The legislation uh freezes and makes permanent the current levels of the uh deduction uh amounts under the fitty and the guilty uh and the tax rate under the beat uh regimes for manufacturing property for years 2025 through 202032 100% depreciation uh is permitted.
▶ 0:54:50This is generally for property for structures uh that are engaged in manufacturing uh activities. A second uh round of uh opportunity zones is established with an emphasis on increasing the number and opportunities uh in rural zones.
▶ 0:55:07The legislation increases the uh expensing permitted under code section 179 generally applicable to smaller businesses to $2.5 Um the uh uh legislation also uh repeals uh let's uh the uh phase uh well excuse me just garbled that forgive me.
▶ 0:55:34Um the legislation establishes a tiered structure an increased level and tiered structure of excise taxes on university endowments and private foundations. uh it creates uh a new code section uh 899 which provides remedies against unfair foreign taxes.
▶ 0:55:53Generally this would increase certain taxes already in the codes such as uh the beat uh gross basis withholding and it would apply to individuals and corporate residents in those countries that are deemed to have discriminatory tax uh tax regimes.
▶ 0:56:14Uh and the e the legislation would also uh establish a new excise tax on remittances from persons in the United States paid to uh uh paid to uh persons uh in another country. Uh there's many other provisions in the legislation. Uh I'd be happy to answer any other questions that the members might have. It's just a general uh overview. Uh again, happy to answer questions the members might have. Thank you, Mr. Sneed.
▶ 0:56:44You are recognized. Thank you, Chairman Smith, Ranking Member Neil, and members of the committee. Um, I have simply one trade provision to cover today. Section 112031 modifies section 321 of the tariff act of 1930, which is commonly referred to as the dimminimous law in two ways. First, it adds a new penalty provision applicable to violations of US law through dimminimous shipments. The level of penalty is up to $5,000 for the first violation and $10,000 for the for any subsequent violation.
▶ 0:57:15These penalty levels are the same as those included of Representative Murphy's bill that this committee marked up in April of 2024 and also are the same as those included in former Representative Blumanau's dimminimous bill. The effective date for this penalty provision is 30 days after enactment. Second, it repeals section 321 A2C of the tariff act of 1930, which provides an $800 threshold value for dimminimous shipments and is the provision under which commercial shipments currently may qualify for dimminimous treatment.
▶ 0:57:43The effective date of this change is July 1st, 2027. This separate provisions in the statute providing dimminimous treatment for bonafide gifts or for articles accompanying persons arriving in the United States remain unchanged. This concludes my walkthrough and I welcome any technical questions. Thank you, Mr. Demar, you you are recognized. Thank you, Chairman Smith, Ranking Member Neil, and members of the committee. The amendment in the nature of a substitute contains three provisions amending Medicare statute.
▶ 0:58:11111201 amends sections 1861 and 1834 of the Social Security Act to allow otherwise eligible facilities that closed between January 1st, 2014 and December 26th, 2020 to reopen under the rural emergency hospital designation.
▶ 0:58:32112104 adds a new section to part E of title 18 of the Social Security Act to limit Medicare benefit eligibility only for US citizens, lawful permanent residents, certain Cuban individuals, and individuals living in the United States through a compact of free association.
▶ 0:58:51Section 112204 adds a new section to part E of title 18 of the Social Security Act to require the Secretary of Health and Human Services to contract with artificial intelligence vendors and data scientists to identify, reduce, and recoup improper payments under Medicare and report on such progress. This concludes the technical walkthrough of the Medicare provisions of this title. Thank you, Mr. Freeman. You are recognized. Uh thank you chairman Smith, ranking member Neil and members of the committee on ways and means.
▶ 0:59:21Uh in addition to the matters covered by Mrs. Bartold, Sneeed and Duma and in compliance with the reconciliation instructions provided by House Concurrent Resolution 14, the chairman's amendment in the nature of a substitute includes a provision that increases by exactly $4 trillion the general limitation on public debt imposed by section 3101 of title 31 of the United States Code.
▶ 0:59:45and that was most recently reestablished on January 2, 2025 following a debt limit suspension period that ran from June 3, 2023 through January 1, 2025 in accordance with section 401b of public law 118-5. Thank you, Mr. Chairman, Ranking Member Neil, and members of the committee.
▶ 1:00:09This concludes my walkthrough and I welcome any technical questions related to this provision of the amendment in the nature of a substitute. Thank you. Does anyone wish to ask a technical question? Mr. Nil. Thank you, Mr. Chairman. Mr. Barold, let me start with a simple question. What has the JCT reported as the fiscal impact of this bill that's being uh considered by the committee today? Uh Mr.
▶ 1:00:34Neil, uh, as reported the tax provisions, uh, only uh, are in JCX 2225R, which is made available to all the, uh, all the members and we reported the, uh, total for fiscal years 25 through 2034 uh, as uh, minus 3.819 uh, trillion dollars. Thank you.
▶ 1:00:59Uh, as you know, it's the standard practice for JCT to report the cost of tax bills over a 10-year budget window. I've noticed that the document that you cited and in one of those 10 years that included fiscal 2025, even though that fiscal year is now almost over, would a bill that is being considered in May of 2025 normally include 2025 in the budget window? And sim similarly wouldn't that score instead include the year 2020 2035 in the window?
▶ 1:01:30Uh Mr. Neil in the routine uh course uh we would report through 2035 consistent with the congressional budget office macroeconomic baseline for the uh for the budget period. Uh the reporting here is under the rules for the rec uh current rec budget reconciliation provision instructions resolution instructions. So, let me ask you this then, Tom.
▶ 1:01:55Has JCT prepared an estimate of what this bill would cost under our standard budget window rather than the bespoke budget window that's been requested by the Republican colleagues? I do not have that at this time. Uh we will be working on that and it will be provided to all the members of the committee uh as soon as uh we are able to do so. So looking at those numbers, Tom, it seems clear that if my colleagues use the standard budget window, the cost would be well in excess of $4 trillion.
▶ 1:02:24And that's not even counting the gimmicks that have been used to make much of the policy temporary. So let me move on to the Republican claims that notwithstanding the eyepopping JCT score, which by the way is even higher than I thought, uh, of this bill, that they're being fiscally responsible. Now, one of those ways in Republican claims that these tax cuts will drive so much growth that they will increase revenue. In fact, Mr.
▶ 1:02:49Barthol, the chairman of the budget committee, claimed that the tax cuts that you see here would drive so much economic growth that it would generate $2.6 trillion in additional revenue. Let me ask you this, Mr. Barthol. Does the JCT believe that the growth from these tax cuts will generate $2.6 trillion in revenue? Uh, Mr.
▶ 1:03:09Neil, under House rules, uh this legislation before it'd be considered major fiscal legislation and require us to undertake a macroeconomic analysis. We have uh started that. Uh so it's probably inappropriate for me to prejudge the result of that analysis. So how about one trillion? Well, again, I shouldn't prejudge the result of the analysis. How about 500 billion? Again, I should defer and let my colleagues do their work.
▶ 1:03:38and we will report that we will report that to the House. So, you're pretty good at this. Worked with you for a long time. The effects of these tax changes on the economy are really not in front of us right now, but there's no one I'd trust more about cutting the edge of the research that's done by JCT.
▶ 1:03:58So with that in mind, maybe you might be able to name a respected economist other than those that are on this dis. Anybody suggested that these tax cuts being considered today would raise $2.6 trillion in revenue? Mr. Neil, I have read news accounts from uh uh economists uh um who have said that there would be large uh increases.
▶ 1:04:28I believe the White House's Council of Economic Adviserss uh has. I do not recall the specific That's really important that they would say that. Yes. Okay. So, let me ask you this. Have you even seen a CBO score that's done a study showing that what these deficit financed tax cuts will actually reduce Uh Mr. I have read the uh uh report that you're ref uh referencing.
▶ 1:04:53Uh the issue is uh does additional uh borrowing particularly in the short term uh crowd out some potential for private investment which could diminish future future growth. So I'm assuming uh Tom that when this analysis comes in way way way below 2.6 trillion our colleagues across the aisle will accuse you of having no idea what you're talking about. But let me say this.
▶ 1:05:19We value the honesty that has come from JCT and the facts still matter to us. This is going to blow another massive hole in the budget debt because of the borrowing from 2017 to the $4.5 trillion that will be borrowed when they raise the debt ceiling because of this legislation. Yield back my time. Mr. Chairman, additional members have technical questions. Um I'll recognize myself for a technical question. Um, Mr.
▶ 1:05:48Bartold, I want to ask you a couple questions to make sure we all understand the scope of the no tax um on overtime proposal that's within the legislation. A good friend of mine in Missouri is a hardworking lineman for the electric co-op. He makes $40 an hour for an annual salary of just a little over $75,000 a year. Under this policy, is my friend eligible for the new overtime tax deduction?
▶ 1:06:18Uh, yes, sir. He he would be because the only uh taxpayers that would be excluded are those that were considered highly compensated as defined in the prior year. Highly compensated. I believe the uh limit the threshold uh at present is $160,000. So your friend the lineman would surely qualify. So he often has to work overtime. Last year he worked more than 300 hours of over overtime.
▶ 1:06:47If I have this right, he could claim a deduction for his premium pay, which would be $20 per hour, multiplying that by 300 hours, and you get $6,000. He could claim that $6,000 deduction in addition to the standard deduction. Mr. Bardold, do I have that right? That's correct, Mr. Chairman. Thank you.
▶ 1:07:11That is real tax relief for one of the hardest working people that I know in my congressional district and there are millions and millions of workers like him across the country. Additional technical questions. Mr. Snder. Uh thank you. And Mr. Brol, thank you. Um, I'm grateful that ranking member Neil clarified the so-called official score of this bill, significantly underestimating the true cost.
▶ 1:07:41Uh, just to emphasize, what is the standard window normally used in legislation? How many years? uh we uh hue to the Congressional Budget Office's 10-year uh baseline uh which would uh the present macroeconomic baseline runs through fiscal year 2035. And and just to be clear, that's not what's done here. It's a shorter window on this under the budget resolutions instructions.
▶ 1:08:10Uh uh we're looking through fiscal year 2034. So cutting off a full year of of what this would actually cost. Um, I think there's other real costs. It seems like my colleagues on the other side either willingly or or naively are deluding themselves believing that they're doing something fiscally responsible. Uh, part of that comes from the, you know, the mind-boggling number of $2.6 trillion made up out of whole cloth.
▶ 1:08:38But another part of the delusion comes from the fact that so much of of this bill is temporary. And we've seen this script before. In fact, we're talking about here in the 2017 bill, the Republicans put all sorts of arbitrary and artificial cliffs into the tax bill uh back in 2017. And yet here we are today pretending like those don't exist. Virtually everything that either had a sunset or is now being e if it had a sunset, it's now being extended.
▶ 1:09:08Tax increases that were to go into effect on a delayed basis are now being turned off. The real question is why on earth would we think that the Republicans on the other side of the aisle would change their behavior at the end of of these sunsets? Uh Mr. Bartholo, let me ask you this. Has JCT estimated the cost of this bill if all the provisions with artificial sunsets are indeed made permanent like they're doing to the 2017 bill?
▶ 1:09:39Uh Mr. Steiner, uh at present we have not. Now I can reasonably I can prepare and deliver to the members um estimates of making permanent uh those provisions that have identified as temporary but we have not worked on the interactions that would be uh involved. So each estimate would be as a standalone.
▶ 1:10:05If you were to make the uh exclusion for overtime permanent, what would what would that be? uh if you made the uh exclusion for tips, what would that be? But we have not worked the interaction effects of how that plays in with uh both of them together interacting with the changes in the standard deduction and the rate. Is that something?
▶ 1:10:25But I can I can prepare and we will deliver to uh all the member offices um during this markup unless the markup concludes in the next 45 minutes that uh that information. I'm I'm confident it won't conclude in 45 minutes, but that would be useful because we have seen what they did last time. They're making permanent as if there was no cost.
▶ 1:10:48And and just to be clear, uh if we can get those numbers on the traditional 10-year budget window, so we're seeing the the uh normal uh Mr. Mr. Snider, I I don't uh I don't have anything uh run out through 2035. Best I'll be able to do tonight is through 2034. Well, may maybe later we can look at that.
▶ 1:11:09And and looking at the numbers, some of the scores uh the committee has gotten in in the past on these policies, it's pretty clear that we are or the Republicans will try to make everything uh permanent. And the estimate the uh committee for responsible budget is saying that it will cost well over $5 trillion over a 30-year period. The estimate is that these will cost $45 trillion. adding $45 trillion to our national debt that already sits at at 36 trillion.
▶ 1:11:39That is a unfathomably large number. A and just to put it maybe into a context uh and maybe instead of using dollars we should be be using astronomical units just as an example the nearest star to us uh Proxima Centuri is 25 trillion dollar miles away. You could travel to that star, but it would take four years traveling at the speed of light.
▶ 1:12:06Travel there and back and you would have the size of of the debt that we will have in 30 years because of this bill. Um, so in in a few short months, you know, we're we're adding uh to the deficit, we're adding to the debt. Uh the president's failing trade and economic uh agenda has already devastated the economy, putting small businesses over a barrel, raising costs for working families.
▶ 1:12:33Uh many economists are warning of uh the potential for an economic downturn or an impending recession. That really should concern us all. I want to take a minute to talk about the broader impacts of a potential recession on our economy. Mr.
▶ 1:12:48Brought in previous recessions this common enemy has endured what were the impacts generally on revenues for the fisk of tax revenues during recessions sir during recessions there generally income tax receipts decline sometimes quite substantially also payroll tax receipts as unemployment rates uh increase payroll tax receipts decline so it's it's really more than just income tax it's it's across the board which should raise concerns for all of us In light of
▶ 1:13:18the chaos and havoc we're seeing from the president on the economy. It's not just me saying this. Goldman Sachs has said it. Uh Bank of America has said it. So many economists are predicting that we are headed towards a recession. Mr. Snder, um your time is expired by more than one minute. Well, I I yield back. Thank you. Thank you, Mr. Thompson. Thank you, Mr. Chairman. Mr. Barthol, um are you going to have distribute will we have distribution tables?
▶ 1:13:47uh before this hearing is over today. Uh uh Mr. Thompson, members of the committee, yes. Uh uh my colleagues are uh trying to finalize a distribution. How long do you think that will take? Um 90 minutes. 90 days. 90 minutes. Minutes. Okay. Thank you. Um Mr. Barthol, the bill that we're considering today, how many people will lose their health care if this bill becomes law?
▶ 1:14:23I'll I'll have to uh I'll I'll have to get back to you in a second after I check with my colleagues. I do I I do have a note of some work that we have that we have done plus million of close. Um if by the bill you mean the actions under the entire budget resolution which involves work from uh the energy and commerce committee. I I'm not familiar with what's happening in energy and commerce and the effects of that.
▶ 1:14:49Do you know some of the effects with within the tax bill that we're marking up today add to our national debt? Uh again the tax provisions only Mr. Thompson as I responded to uh Mr. Neil uh over the budget period would reduce revenues by approximately 3.8 trillion in our estimation. So so minimum of 2.8 8 trillion to our 3.8. Does the bill that we're marking up today end tax on social security?
▶ 1:15:19Uh the legislation uh under reconciliation does not uh change uh any uh benefits or taxes paid into the trust funds for social security. Thank you. So in 2024 for the first time our interest expense exceeded our discretionary non-defense spending. In 2035, CBO projects our total defense and non-defense spending will be $2.2 trillion. $2.2 trillion.
▶ 1:15:48And our interest payments will be $1.7 trillion. That's a scary fiscal picture. Mr. Barthol, you reported the cost of this bill to Mr. Neil as $3.8 trillion, but we know that as Mr. Neil and Mr. Snider both pointed out the real cost is more like 5.3 trillion.
▶ 1:16:11So that being said, I'd submit that even the 5.3 trillion number isn't the real cost because uh and Mr. Both Mr. Barthol, tell me if I'm correct that the cost cited in uh the conversation that you had uh didn't include any additional interest the government will have to pay to service all this new debt. Is that correct? Uh that that's correct, Mr. Thompson.
▶ 1:16:38Uh we do not uh report on changes in uh interest that will be required if the debt increases. Thank you. And Mr. Barthol, why should our committee or why should the American people care about interest payments on the debt? What's the economic impact of the growth of interest payments? Well, um, Mr.
▶ 1:17:04payments, as you just pointed out, uh, they're a cost to the federal government. they potentially uh crowd out other items that members might think are worthy in terms of uh uh fiscal activities of the federal government. It's an increase in in government outlays which either at some point uh should be offset by uh increased revenues or reduced uh spending, a combination of both. Thank you.
▶ 1:17:34So um make no mistake about it, Mr. chairman and colleagues, what the committee is dealing with here is a deficit finance tax cut which will cause soaring interest payments. This is a fiscal tenuous moment for our country. Our debt and our deficits are soaring and our interest payments will as well without a doubt crowd out any growth aspects you might hope to receive from this tax bill.
▶ 1:18:03We could have done we could have gone a different way here today. We could have worked together to protect 98% of Americans who earn under $400,000 a year. We could have ensured that they wouldn't receive a tax increase and worked together for a responsible way to pay for the cost of that smaller bill. Instead, we're maxing out our credit card, passing the debt on to future generations, and then also applying for three more.
▶ 1:18:32This is the height of irresponsibility and I can only hope we don't pay for this in the credit markets. Although uh I remain hopeful, I am concerned. Thank you and I yield back. Mr. Arington. Thank you, Mr. Chairman. I'm sure my friend and colle colleague Mr. Thompson would like to know what the interest rates in terms of US treasuries have increased over the last uh four years since President Biden was in office.
▶ 1:19:03Mr. Barthol, do you know what those uh what our payments on uh our debt was when President Biden took Uh Mr. Mr. Arrington, I'm afraid I don't uh have Does roughly 300 billion ring a bell sound uh relatively close? Uh again, Mr. Arrington, it was around $300 billion. Do you know what it is?
▶ 1:19:27Uh do you know what it was when President Trump took over after four years of of uh 40-year high uh uh inflation after a record spending spree? Do you know what those payments are today? I I It's almost a trillion dollars just to kind of cut to the chase. So, we're talking about triple uh the interest payments uh because of the policies of the previous administration. So, we'll see what we as Republicans with unified Republican leadership can do about that.
▶ 1:19:57But so far, the prices have come down. The recent uh inflation reports, do you know, Mr. Barthol, what those are? Are they going up or down in terms of inflation? Core inflation? uh core inflation has uh has moderated is still slightly above moderated in terms of it slightly going down. It's coming down close to a 100 days. That's pretty remarkable to me. Uh core output is core output going up or down in terms of economic output. Uh the gross domestic product has continued to grow in real terms, sir? It continues.
▶ 1:20:27So we're growing that. And uh do you know about the job participation rates for the last four years under the Biden administration? They've been below what we had pre-COVID. Are they going up in terms of people going back to the workforce or going down? Uh I honestly do not uh know the current labor force participation. They're slightly up and improving. We're talking about a 100 days into this new administration.
▶ 1:20:55Um my friend and ranking member made mention of the growth rate assumptions um suggesting that they I think I think fairly suggesting that they were not um I mean I hope this is fair to say and to characterize suggesting that they were they were the gentleman finishes I'll say right that that they were not based um uh any rationale of um accomplishment in any recent
▶ 1:21:26historic terms. 50 years, what's the average of 50-year uh GDP growth in this country? Do you know what it was? The average annual growth rate in this country over the last 50 years or 30 years. Historically, there's uh a break uh in postw World War II growth noted about uh around 1973 to 1975 at the time of the uh uh oil crisis and uh and stagflation.
▶ 1:21:55So the average is% it's I was going to say it's lower now than it was from 1945 to 1972. Yeah. So it's 3% roughly and there were a couple of decades where we had over 4%. Um, do you know what the annual average growth rate was for uh this country and our economy under President Biden uh controlling for the first year $2 trillion sort of flooding the market with spending.
▶ 1:22:24So do you know what the last three years were annual average growth rate for President Biden? Uh I don't have those fig 27 2.7%. Do you know what the growth rate annual average growth rate of President Trump was before co uh again I don't have those figures. It 2.8%.
▶ 1:22:45Do you know what the assumption was of the budget committee in terms of the annual average growth rate uh for the purposes of budget reconciliation 2.6%. So we are actually more conservative than both President Biden or the growth rate under President Biden and under Trump. Remarkable, isn't it? So do you know last question about growth rates?
▶ 1:23:14Do you know what the growth rate increase was from when President Trump took over when it was at 1.8% and just prior to COVID under President Trump and unified Republican leadership? Do you know what that uh delta was in terms of growth? Uh again, Mr. Arrington, I don't have those figures here at the It was 1%. Which which was the 2.8 on on average. Ours was 2.6.
▶ 1:23:41If we' have maintained 1%, we would have had $3 trillion in additional revenue. Um did we have record corporate revenue after TCJA for the following uh year or two?
▶ 1:23:56Uh yes uh yes sir we did corporate receipts right record revenue record low uh unemployment and record low poverty rates record investment record repatriation record job growth 1% GDP growth uh an annual average of 2% I'm just the gentleman yield the gentleman's time's expired but I'll call on you next my time's expired thank Thank
▶ 1:24:26you, Mr. Neil. Thanks, Chairman. So, what the gentleman has suggested, record this, record that, no, none of what he has suggested comes close to what was produced during the administration. None of it. Record growth, four balanced budgets, poverty down, revenue through the roof. So, that's simply a misstatement of fact. I yield my time Mr. Horford.
▶ 1:24:59Thank you. Uh Mr. Bartold, is there anything in the current no tax on tip section that would stop a related part party like a family member from calling a $20,000 gift payment? A tip just to get the tax break. Uh Mr. Horford, the the legislation does have uh several guidelines.
▶ 1:25:22One, tips generally have to be to be qualified have to be reported by an employer on a wage statement, a W2. Also, ha tips are only qualified tips if they're in uh industries uh in which tipping is has been historically customary. So, for example, um the hospitality hospitality industry.
▶ 1:25:47suggest any uh any employee could uh could not readily claim that some income was tip income. Thank you, Mr. Barthold. And I do know uh that there are a number of necessary guard rails to ensure tips are not used as a loophole.
▶ 1:26:07And while I'm glad to see that the no tax on tips is in the bill, albeit temporarily, uh I would ask that my Republican colleagues join me to prevent tips from being used as a loophole. And so uh we'll be coming back to that later. Uh Mr. Bar told, "My concern overall is that this bill benefits the wealthiest.
▶ 1:26:30um millionaires are getting a tax cut while those uh earning under 50,000 per year are getting just pennies. Meaning the people of Batty, Nevada uh in the rural part of my district whose median income is $24,000 are getting pennies while billionaires are getting gold bars. But I think there's even more to this story than that. Mr.
▶ 1:26:56Barl, can you briefly describe for the committee what this bill does to the estate tax? Uh, under the uh legislation before you, Mr. Horsesford, it increases the exemption uh amount to $15 million effective for uh gifts and uh uh estates for bequests uh in 2026. and it indexes that $15 million amount.
▶ 1:27:27Uh that's an increase relative to present law. For 2025, the uh estate and gift tax exemption amount is $13.99 million, just under $14 million. Uh it also is indexed. If it were extended uh with indexing, it would be somewhere in the $14 million range for 2026.
▶ 1:27:54So, it's an incremental increase beyond simple extension of what was enacted in the 2017 legislation. So, and how much did that cost? Um the 2017 legislation I'd have to look up. I don't recall offhand, but our estimate for the effect of the legislation that's before you is uh uh $211 uh billion dollars over uh the period 2025 through 2034. Thank you.
▶ 1:28:24And are those changes to the estate tax outlined uh here reflected in those uh distribution tables? Uh because the estate tax is uh this is a real wonky uh answer. It's a tax on a stock, a transfer of wealth. Uh, and everything else that we're looking at is really looking at flows, be it a flow of income or a flow of consumption if it was an excise tax.
▶ 1:28:50Uh, it's not really cricket to weave the two together. Uh, that's a long answer to say. Uh, the answer to your question is no. Changes to the estate tax will not be reflected in the distribution tables that I'll be dist be making available later in the day. Thank you. So these aren't in the distribution tables, but the benefits certainly go to welloff individuals. Let me ask you this, Mr.
▶ 1:29:16Bal, for 2022, the last year for which you have data, how many people paid the estate tax who had an estate of over hund00 million? Um, I'll h I'll have to respond later to you on that. I uh I know that we've done some analysis. I believe it's approximately 200. I I will uh I will respond to all the members of the committee and give them a figure. Doesn't this bill give those $100 million plus estates?
▶ 1:29:46Doesn't this bill give those estates tax benefits of millions of dollars? U absent this legislation, the estate tax exemption uh would fall substantially. Uh so yes, it would provide uh an additional exempt amount for all large estates and more modest estates as well. So thank you. So clearly the estate and gift tax provisions benefit very wealthy taxpayers.
▶ 1:30:16Isn't it fair to say the JCT data underestimate just how much this bill benefits wealthy taxpayers then? Uh again as I explained uh why we don't distribute uh the effects but it does not reflect the uh effect of transfers of wealth. That's correct sir. So let's then turn to the other side of the distribution tables then the lowest end of the income scale. Uh Mr.
▶ 1:30:43Bar told there are other committees that have also uh have instruction uh around the reconciliation process and one of those committees the energy and commerce committee has an instruction to raise billion. How are they going about doing that? Uh uh Mr. Bhold, I'll let you respond to this, but we're a minute over and I just let him respond and then your time is expired. Uh Mr. Mr.
▶ 1:31:11Horford, I'm I'm really not up to speed on what's going on in the other committees. Um, this committee's been keeping us fairly busy. Well, their Medicaid cuts. It's the largest cut to health care in the history of the country. That's what's happening in the other committee. The exact same time this committee is marking up the biggest tax cut for billionaires. I yield my time. There was nothing to yield, Mr.
▶ 1:31:41Uh thank you. Thank you very much, Mr. Chairman. Uh Mr. Barthol, I just want to be sure that it's clear the enormity of what's at stake here today. Now, you've indicated, I believe, that the tax cuts you estimate at $3.8 trillion. Is that Uh that's correct. As reported on JCX 22R, if they're made permanent, it's $1.4 trillion more. Uh I have not uh made uh that estimate.
▶ 1:32:09I will be getting supplemental information responsible federal budget has. And of course that's not even considering interest. We had over a trillion dollars in interest payments this past year, more than defense. Uh and we're going to have hundreds of millions of dollars there. And and just to understand how big that figure is, it's about if you make these tax cuts permanent, it's about twice the size of the entire social security trust fund. That's what's at stake. It's more than the entire gross domestic product of Germany, the strongest country in Europe.
▶ 1:32:39Now, let's talk about the enormity of the harm that is being done to people on their healthcare. Uh, is it correct, Mr. Barthol, that this legislation fails to extend the enhanced tax credits that lower the cost of insurance for millions of Americans who purchase their own coverage through the marketplace? Uh, that that's correct.
▶ 1:32:59And when the Republicans permit these credits to expire in a mere 7 months, what is the effect on health insurance premiums for those individuals that rely on the market place today? Uh work that uh uh our staff has done in conjunction with the Congressional Budget Office uh suggests that the premiums uh will increase for individuals, sir. Yes, sir. They go up about almost 8% I believe is the specific calculation that you did.
▶ 1:33:27And is it true that this failure on the part of Republicans will raise premiums not just for those not that they'll raise them really for nearly everyone in the marketplace, not just for those who receive the subsidies? Uh that's that's correct. That's part of the uh analysis. If my understanding is correct, failure to extend this policy will result in an increase in the number of uninsured Americans. Is that right? Uh that's uh uh correct, sir. That's Yes, sir.
▶ 1:33:57And I've received data. In fact, Mr. Chairman, I'd ask unanimous consent to include this letter uh from CBO saying that 4.2 million Americans will lose their coverage in 7 months uh if uh you are successful with this bill. Is it is it gerine? Uh well, I guess that's the question. And gerineus, Mr. Chairman, goes to another question I have for Mr. Barthol because Mr.
▶ 1:34:24Barthural tells us he cannot tell us the macroeconomic effects today. Cannot tell us who gets what out of this bill. We think it's mostly billionaires, but who gets what? Because Mr. Barthold, you only got uh this full bill uh within the last 24 hours or so yourself, didn't you? Well, Mr. dog.
▶ 1:34:44I I think you know that we do work with the uh the chairman and as they develop policies but yes the final legislation you didn't have the final bill till yesterday and that's one of the other reasons it's so important to comply with all the rules of the house rather than to break them as has occurred today. Let me ask you also about another entirely different section of the bill concerning the energy ITC and PTC provisions. Uh these investment credits that have been so important.
▶ 1:35:12If I understand it, over the past 15 years when clean energy uh production and investment credits were being guaranteed so that someone could begin construction uh that you consider the year facilities are placed in service, not the year that the construction began. Is that correct? Uh yes, that's you.
▶ 1:35:34And with all the unpredictability of Trump's up and down tariff taxes, the supply chain difficulties, and the natural disasters that are made worse by climate change, all this chaos, no project developer uh worth the salt can actually guarantee when their facility will be placed in service, can they? Uh there is uh more substantial uncertainty.
▶ 1:35:56Under current law, if a taxpayer started construction, say on an offshore wind facility on January 1st of this year and maintained continuous construction, would they be eligible to claim the credits uh if their facility was placed in service in 2032? Uh yes, sir, under the begin construction rule.
▶ 1:36:15And if the proposal today was amended to maintain the 15-year precedent that these credits are based on when the construction begins, but Republicans still chose to phase the credit out, say in 2028, would the taxpayer still be eligible? Uh, yes. No, sir, not if it's phased out. Well, uh, wouldn't it be based uh, if you maintain it the way it is? Oh, under begin under begin construction.
▶ 1:36:42Yes, that that's instead under the text before us today, the value of the credit they'll be entitled to by changing that uh is zero, right? Uh yes, sir. They get no benefit. We reject a 15-year way of handling uh these important facilities, many of which may already be under construction. They're doing their due diligence. They're proceeding with their construction on a continuous basis, but suddenly uh this bill will wipe them out. Thank you, and I yield back. The gentleman yields back.
▶ 1:37:11And I recognize Mr. Miller for five minutes. Mr. Miller is recognized for five Thank you, chairman. My friends across the aisle appear to be opposing tax cuts for all Americans just despite President Trump. But Mr.
▶ 1:37:32Bar told, "Is it true that doubling the standard deduction in 2017 helped simplify the tax code and lower taxes for millions of Americans?" Uh, yep. Mh. Mr. Moore, the uh increase in standard deduction uh reduced the number of itemizers substantially from around one-third of tax filers to the neighborhood of 10 to 15%. And many people consider that a substantial simplification. So the answer is yes. Thank you, Mr. Bartold.
▶ 1:38:01Now, my Democrat friends oppose this bill. What happens to the standard deduction that so many everyday Americans rely on if this bill passes and this provision expires? Mr. Bar told, could you run that back if the standard deduction is not extended? That is correct. If the standard deduction is not uh extended, uh a substantial number of taxpayers again uh will probably choose to itemize.
▶ 1:38:27Requires additional uh recordeping generally more complexity probably back up again above one-third of tax filing units would be itemizing. Thank you. And for what we have within this bill, would you we added for a year of inflation? Is that correct within the standard deduction? uh the standard deduction, the rate bracket points, uh a couple other provisions, modified the inflation adjustment, uh effectively giving an extra year of inflation in the calculation, increasing those values.
▶ 1:38:57Thank you. So, we accounted for inflation and added it for an extra year. I appreciate that. So, essentially, we have a four-year boost, would you say, from 1,000 to 2,000 starting in 2025? Well, inflation is calculated year-over-year. It's just that you're getting an extra year's boost from the uh relative to that base. Thank you. So, it's still 1,000 to 2,000. So, the answer is yes.
▶ 1:39:21Uh this is incredibly helpful for our constituency as the vast majority of the country uses standard deduction in the Ohio 7th congressional 93% of my constituents use standard deduction. So, if this were not to continue, 93% of my constituents would be hurt by this expiration. Is that 93% would have uh would have a smaller deduction.
▶ 1:39:49Not everybody necessarily has lower uh uh would have an increase in taxes because of the other provisions that would be expiring. Uh but yes, a substantial number of people uh would lose the benefit of the higher standard deduction. Thank you very much. I yield back. The gentleman yields back. I now recognize Miss Sanchez for five minutes. Oh, excuse me. Uh, Mr. Del Benning, my my apologies. Thank you, Mr. Chairman. Um, thank you, Mr. Bertold.
▶ 1:40:16Um, I wanted to talk to you about the child tax credit. Um, you likely recall the changes Democrats made to the child tax credit as part of the American Rescue Plan. Um, back then, we increased the value of the child tax credit to $3,000 per year and $3,600 per year for young children. Mr. Bart told is that number those numbers higher or lower than what is proposed by Republicans in this legislation?
▶ 1:40:45Uh this legislation for a temporary period would have a child tax credit at 2500. So lower lower. Um and Democrats also ensured by making the credit fully refundable that the full credit went to all taxpayers especially the ones with the lowest incomes the families that arguably need the credit the most. Um Mr.
▶ 1:41:07Bar told does the republic this Republican bill ensure that children in the poorest families receive the same assistance as children in families that make $400,000 a year? Uh uh no uh Miss Del Benny, there is a phase in of the credit which is based on earned income. So it's limited by uh the refundability is uh limited by the amount of the household's earned income. Thank you. So, no.
▶ 1:41:33Um, under this bill, a family making $400,000 per year gets 2500 per child, but a struggling family where maybe there was a job loss or even a family when both parents are working full-time earning minimum wage, but are still stra scraping to get by, they just get a fraction of that. Um, Mr. Mr.
▶ 1:41:54Bar told, does JTCT know how many lowincome children won't receive the full value of $2500 the $2,500 credit under the Republican bill? Um, I can uh I think I can provide the committee with an estimate of that. I don't have that at my fingertips, but I will uh I will get an estimate to the committee. And it's true that some children um even if they have social security numbers may not um get access to the credit.
▶ 1:42:25Uh again for the point that you raised Miss Del Benny because uh there's a limitation on refundability based on the earned income of uh uh of the household. Uh there can be some households where there's not full Um lastly, the American Rescue Plan ensured that taxpayers would get delivery of the child tax credit on a monthly basis to ensure that funds were available to meet famil family's monthly needs. Um does this bill do that?
▶ 1:42:56Uh it does not provide for a monthly refundability. No. Um, and also under this bill, if a family has a baby on January 1st, does that family receive the child tax credit before the child turns one year old? No. Uh, no.
▶ 1:43:17But and and if I I a colleague did just pass uh pass me the information that uh we have on uh number of children with social security numbers who would not receive the full value of the 2500 child tax credit and our estimate of that for tax year 2026. So next year would be approximately 17 million children. Um thank you. Astounding number.
▶ 1:43:44Um, and then if a but if a family had a baby in November, would they receive the child tax credit before the child turns one-year-old? Yes. Yes. So, um, inconsistency um, depending on the time of the year also in this in the legislation Republicans are proposing. Um, so it certainly seems like the child tax credit, this bill is woefully inadequate, does not reach all the children um and their families who have needs and does um not prioritize children in families who need it the most.
▶ 1:44:14Um, thank you. I yield. Mr. Bainy, would you yield? I yield to Mr. Thompson. Thank you. Mr. Barththell, uh, my friend from Texas has made the point that middle class folks are going to get something out of this and got something out of the last bill.
▶ 1:44:27Uh, isn't it true that this committee can write a tax bill that benefits people in that proverbial middle class, people who make less than $400,000 without having at the same time to give a huge tax cut to the richest people in the country? M Mr. Thompson, the members have often chosen uh to limit benefits. Can we write a tax bill that targets the middle class people?
▶ 1:44:56Of course, you can uh you can design policy to uh target as you as the members choose without a big giveaway to the richest people, people who don't need the help right now. As as I said, uh decisions for the members to make, sir. Thank you. I yield back. Gentleman yields back and I recognize Miss Sanchez for five minutes. Thank you, Mr. Rifle.
▶ 1:45:21The title of part two is removing taxpayer benefits for illegal immigrants, but I think that title does not match the actual language of the bill. Mr. Barthold, my understanding is that these sections make changes to whether lawfully present individuals can access premium tax credits. Is that correct? Yes, Miss Sanchez, that's correct. So, we are talking about lawfully present individuals. Uh yes, Miss Sanchez.
▶ 1:45:51So lawfully present individuals are not illegal immigrants, are they? Uh not uh no, they're lawfully pre present. Okay, so the title removing taxpayer benefits for illegal immigrants is actually false Well, it's I didn't make it's inconsistent. Is it inconsistent?
▶ 1:46:17Uh I I think you established that under the legislation there could be some lawfully present individuals who are denied. Do these sections make changes to illegal immigrants eligibility? Are any of the categories of immigrants covered in this section those that are illegally in the United States? Uh those such individuals already are not eligible. Miss Sanchez, correct? Illegal immigrants are not eligible.
▶ 1:46:44But I'm asking whether or not the sections in the text of the bill that we are marking up today make any changes to illegal immigrants eligibility. Uh no they they do not. No they do not. Are any of the categories of immigrants covered in this section those that are illegally in the United States? Uh uh no no. So the title is patently false and misleading. Do these legally present individual pay taxes?
▶ 1:47:11Generally uh the lawful uh uh lawful res uh lawful residents present in the United States uh can have jobs. Uh they may pay payroll taxes. They may pay uh income taxes. So generally speaking, if they're in the country legally and they're working, they generally pay taxes. There will be some uh there will certainly be some taxes paid. Yes. Okay.
▶ 1:47:36So the title of part two, removing taxpayer benefits for illegal immigrants, is patently false. It's misleading, but this section nevertheless is removing benefits for legally present individuals. And I would note that a similar change is made with respect to Medicare, again pertaining to legally lawfully present individuals. Is that correct?
▶ 1:48:01Um, I don't know about the Medicare uh uh piece, Miss Sanchez, but uh yes, related to the provisions here in the Internal Revenue Code. Okay. So, they're saying they're taking away these benefits from illegal immigrants, but the section solely deals with lawfully present people who are paying taxes into the system and now are going to be denied those benefits. Really great work, guys. Um Mr. Mr.
▶ 1:48:27Bartholome, can you describe the rules that the Republicans placed on the child tax credit related to identification requirements when they enacted their bill in 2017? Uh yeah,
▶ 1:48:57pardon the uh the delay. In the 2017 legislation provided that the child had to have a social security number. The child had to have a social proving that the child is in fact a citizen. Um can you explain the rule that has been added to this bill in contrast to that bill? uh both the child and the uh uh uh and the tax uh taxpayer and taxpayer spouse have to have social security numbers.
▶ 1:49:22So under this rule that's in the text of the bill today, a child with a social security number, a citizen of the United States, is going to be denied the vital support of the child tax credit um that that the child tax credit provides if one of the parents doesn't have a social security number. Uh that's uh that's possible, Miss Sanchez. Yes. Okay. Can the GC I I I don't think that's possible. I think that's the whole purpose of this section of the bill is to penalize these children even though they're United States citizens.
▶ 1:49:52Can JCT provide this committee with a number of the citizen children that will be denied the child tax credit as a result of this provision? Uh yes, but it'll probably take me a couple of minutes to find it. Okay, I'll let you do that calculation, but I just want to make this last point in closing. Okay. Okay. In the 2017 tax bill, we were told many things about how great that bill was. And we were we were sold on the many benefits, benefits, I might add, that never materialized.
▶ 1:50:20One of which was that it was going to be so easy that people were going to be able to file their income tax on a postcard. Mr. Barfold, do people file their income taxes on a postcard? Uh M Sanchez, no. No to the postcard. And no and my colleague did provide an estimate that we have developed in answer to your question.
▶ 1:50:41Uh and we estimate again looking ahead a year 2026 uh we estimate that approximately 2 million children with social security numbers will be denied the child uh tax credit. Two million kids who are citizens of this country are going to be denied the child tax credit. And I would just say this, this bill is more inflated promises, but the reality it's pain for American families and it's gain for millionaires. My yield back is expired. I now recognize Mr. Yakam for 5 minutes.
▶ 1:51:11Thank you, Mr. Chairman. Mr. Bal, uh my colleague on the other side of the aisle just described the child uh tax credit provisions under the American Rescue Plan Act. How long were those provisions in for in effect for?
▶ 1:51:27um two two just one year I think one year one year so what you're saying is that when Democrats held the House the Senate and the presidency and they h had the opportunity to make those provisions more generous and potentially even make them permanent. They chose to allow them to expire after one year. Is that Uh one uh one year. Yes, sir. Thank you, Mr. Chairman. I yield back. The gentleman yields back.
▶ 1:51:57I now recognize Mr. Davis for five minutes. Thank you, Mr. Chairman. Uh, Mr. Barthur, one of the primary anti-poverty tools that we have in this country is through the earned income tax credit, which lifts nearly 6 million people above the poverty line every year.
▶ 1:52:22In 2021, Ways and Means Democrats led the charge to strengthen the earned income tax credit by significantly expanding the credit for taxpayers without dependence. This assured that workers were not being taxed into poverty by the federal government. So, Mr. Bartho, let me ask you this question.
▶ 1:52:49Other than for a narrow group of Purple Heart recipients who also earn SSDI, does the bill before today make any changes to the earned income tax credit to better help single workers, younger workers, older workers, foster youth, or homeless youth? Um, Mr.
▶ 1:53:13Davis, the legislation before you does not specifically address uh any of the categories of uh workers that you mentioned. Uh it establishes uh in section 112206 uh a certification uh program for establishing a child's status as a qualifying child of the uh of the taxpayer.
▶ 1:53:37uh as you noted, it does make change for Purple Heart recipients, but it does not directly address specific categories of workers. Thank you very much. And let me ask uh am I correct or correct me if I'm wrong, but didn't the 2017 Republican tax bill change the way in which we adjusted for inflation, causing the growth in the earned income tax credit to slow down?
▶ 1:54:07Uh the 2017 legislation changed for almost all purposes in the individual income tax uh inflation adjustments that was rate brackets, standard deduction and as you note the earned income tax credit. It went from uh the regular CPA uh the regular CPI to what is referred to as the change CPI. The change CPI generally grows at a slower rate than the regular CPI. So the short answer is yes.
▶ 1:54:35The result is that the parameters uh defining the earned income tax credit grew more slowly as did the parameters for the standard the values of the standard deduction and the rate uh rate brackets. So as a result of this TCJA have there been fewer earned income tax credit payments to lowincome workers than if the TCJA never passed? Uh yes sir. That's correct.
▶ 1:55:06But roughly how Um, okay. We've looked at some research on uh this uh in 2021 and 2022. Uh the estimated difference in the effect due to the indexing using regular C uh old CPI versus the chain CPI, it was about 1.5 to2 billion dollars in So, while my Republican colleagues seem
▶ 1:55:36intent on showering their wealthy donors with tax cuts, they're doing nothing for the vast majority of our poorest workers. Even while the poorest continue to feel the consequences from their original bill. Similarly, I'd like to ask you about child care.
▶ 1:55:55As you know, Ways and Means Democrats significantly expanded the child and dependent care credit in the American Rescue Plan and made the credit refundable so all families could benefit from it. So, Mr. Barthur, as child care prices skyrocket, does this bill before us today do anything to increase the child independent care credit? Uh, Mr.
▶ 1:56:25Davis, this legislation does not address the child independent care credit. And so the priorities reflected in this bill are truly disappointing. Whereas Democrats put supporting the neediest and supporting working families at the top of our priority list, my Republican colleagues are ignoring these struggles while showering those at the top with tax cuts once again. and I yield back.
▶ 1:56:55Gentleman yields back. And I recognize Mr. Larson for five minutes. Thank you, Mr. Chairman, and thank you, Mr. Barthol, for uh Mr. Barthol, how long have you been doing this? Uh this uh actually two days from today will mark my 16th anniversary as the chief of staff of the joint committee on uh I think you can tell from the applause
▶ 1:57:25the enormous respect that people have for your job. When did you receive this bill that we're asking you all this questions on the full bill? The the final completed version of the bill uh was uh delivered to us when it was delivered to you yesterday afternoon. Now to be fair and as you know from your experience uh we work closely with all the members we work closely with the chairman and his staff.
▶ 1:57:54So we totally understandable but I want viewing audience to know that uh when you actually receive this that are supposed to answer all these questions. I have some technical questions that I wanted to ask you. Especially was interested in what you were saying how in a bill sometimes things can get crowded out by the changes that occur from a 28 page to over 400.
▶ 1:58:19But uh how many you know uh because initially we had heard about this uh social security uh tax on income and that it was going to be eliminated alto together. But how many individuals will still be subject to tax on social security income after accounting for the what's now called the senior deduction in this Um well, let's see.
▶ 1:58:48Um under under present law for 2026, we estimate that there will be about 56 million tax filing units with social security benefits. 32 million have social security benefits in their adjusted gross income because there is the ex exclusion for a number of taxpayers and about 27 million have social security benefits uh in AGI and owe some individual income tax under the proposal for 2026
▶ 1:59:18about 25 million tax returns uh are estimated to have social security benefits included in AGI and owe any income tax. Now, that's in part because they have have uh other income. About 24 million tax returns will have social security benefits included in AGI that exceed the $4,000 additional seniors deduction uh and also will owe some individual income.
▶ 1:59:46So essentially, uh, this bill doesn't do as President Trump promised to eliminate taxes on Social Security because some seniors will receive no benefit or less than full benefits from the additional senior deduction uh, from this bill. Believe it or not, Mr. Chairman, we do have a solution for that in a bill that we'd like to see at some time at least be heard. Uh, but uh, um, Mr.
▶ 2:00:15Bar told uh at what income amount does someone stop paying FICA contributions to social security? Um for the uh uh present year it's uh 176,100. Thank you. And so someone who's making let's say 2.5 I won't go to the 500 billion that Mr. uh my our favorite person Mr. Musk is getting but 2.5 million in annual wages.
▶ 2:00:46Will they pay FICA throughout the uh year? Uh FICA is collected until you reach the uh uh until you reach the maximum. So at that substantial rate of pay, no you do not uh pay FIC. So in in the case of Mr. Musk who uh receives a compensation package of more than 50 billion from Telsa but has never received the salaried income.
▶ 2:01:13How much would a person who makes millions or billions in compensation through stocks contribute to social security each year? capital gain income uh return on you know equity uh equity grants uh are not wages subject to FICA uh there are certain stock compensation that is subject to FICA and I'm not specifically familiar with Mr.
▶ 2:01:42Musk's is there anything in this legislation that would increase the amount of those making over 400,000 to contribute to social security or its solveny? Uh uh no sir, there's uh there's nothing that would increase contributions. So this bill raises the debt by over 4 trillion yet. Gentleman's time is expired. Nothing to improve the social security benefits. Gentleman's time is expired. I now recognize Miss Chu for 5 Mr. Mr.
▶ 2:02:12Bartold, not only does this legislation appear to cut trillions of dollars in taxes, but it appears to do nothing to address Trump's mass firings at the IRS or address the cuts to the IRS. Does funding to the IRS result in higher or lower revenue for the federal Uh Ms.
▶ 2:02:36you um the funding of the IRS uh just just to be precise uh the analysis that's carried out by our colleagues at the Congressional Budget Office. The Congressional Budget Office did as part of the analysis for the reconciliation legislation in 2022 estimate that increased expenditures in different areas of the IRS uh such as modernization, uh customer service, uh other different aspects would have an effect of increasing
▶ 2:03:07uh collections by the IRS in excess of the uh investments in human and uh IT resources that would be necessary. Thank you. And if this legislation were to be enacted, will this increase the federal budget deficit? Uh uh again, drawing only on what uh the joint committee staff has reported in JCX22-25R for the tax provisions.
▶ 2:03:38The tax provisions uh as we conventionally estimate them prior to a macroeconomic analysis would increase the deficit by $3.8 trillion over the budget period 20 fiscal 2025 through 2034. Yes. So it will increase the budget deficit by $3.8 trillion is what you just said. Yes. Yes, ma'am.
▶ 2:03:59So, can you confirm that not only will this bill slash taxes for the wealthiest people in the country, but it will also make it easier for the same people to avoid paying the taxes they do owe because the IRS's ability to audit those returns and address this lawb breaking has been greatly diminished by President Trump and his administration.
▶ 2:04:19Uh well, Miss M Miss Chu, again, I have to rely on the uh uh colleagues at the Congressional Budget Office to opine on effects uh in terms of expenditures and allocation of resources within the uh within the IRS. Uh and I believe we're just in the process of making available uh our distribution analysis on this legislation. Member officers should be getting it and and you should be getting it at the dis uh soon.
▶ 2:04:48So I can't really comment on the first part of your question about uh the distribution of the tax benefits under this legislation. Well, if this bill is enacted, will this bill compound the fact that the budget deficit would be made considerably worse at a time when it is already rising and threatening the long-term solveny of programs like Social Security and Medicare?
▶ 2:05:12Uh well just just repeat in terms of the analysis of the tax provisions setting aside what might be happening in terms of reduction in uh uh in spending uh or other off or potential offsetting receipts. the tax provisions would contribute to a higher uh deficit does not I do not know the total effect of what will be reported under the budget resolution but it will result in a higher deficit.
▶ 2:05:42I would like to repeat that. And will anything in this bill improve the solveny of Social Security and Medicare and strengthen those programs to ensure that Americans who paid into them for their entire lives can count on receiving their benefits when they reach retirement age? This legislation uh makes no changes to uh social security. Thank you.
▶ 2:06:03Uh this clarifies quite a bit about the bill which would not only cut taxes for the ultra wealthy but also give wealthy tax cheats the knowledge that they can break the law without consequences because our tax law enforcement has been defunded by the Trump administration. And together, these decisions will worsen the budget deficit and do nothing to pro to protect Social Security and Medicare, which are under attack.
▶ 2:06:32And I'd also like to ask you about something that thousands of my constituents have been calling and writing to me about since the start of this administration, which is President Trump's decision to let Elon Musk, an unconfirmed unelected billionaire, into the government's most sensitive systems, including the IRS records. Now, these are the most private and sensitive taxpayer information for our constituents. It's how the government pays social security benefits.
▶ 2:07:03Um, and so Mr. Bartold, is there any provision here to keep Doge employees out of the Treasury payment system that includes taxpayer information which is required to be confidential by the gentleoman's time is expired. I now recognize Miss Su for 5 minutes. Thank you, Mr. Chairman. Mr. Mr.
▶ 2:07:20Bartol, my question is regarding 25F and pertains to the qualified elementary and secondary education scholarships that are found on page 57 in the amendment in the nature of a substitute. Can you elaborate on the tax benefits that donors to private school voucher programs would receive from this measure?
▶ 2:07:47And is it possible for taxpayers to receive more than a dollar benefit from uh taxpayers if they donate a a dollar? Uh Miss Sul, the way this provision uh works is the proposal creates a non-refundable income tax credit that's equal to the aggregate amount of qualified contributions made by the taxpayer. So one to one year one. So if I give a dollar, I get a dollar tax credit. Is that right?
▶ 2:08:14that credit allowed cannot exceed uh the greater of 10% of the taxpayers's aggregate gross income. But yes, give a dollar, you get a credit for uh get a credit for a dollar. Now, could the taxpayer uh also receive a credit from the state on that same dollar that it they that they donated? Uh the legislation uh does not uh uh bind state law in any way. So, I guess that would be possible, Miss Su.
▶ 2:08:41So there it's possible that uh that you could give a dollar to these scholarship funds uh and get a dollar credit. Actually, let me correct that. The legislation does try to provide that um credit allowed to the taxpayer would be reduced by the amount uh that's allowed on a state tax return. So it's not So what about a deduction? Can you can you get a deduction a state deduction for that same dollar? Yes, you can.
▶ 2:09:08So basically a person can give a dollar and get the benefit of more than a dollar on their taxes if if you combine both federal and state. What is the uh income amount for qualified students to receive these scholarships? Can a student uh whose parent uh makes over $100,000 receive one of these scholarships? Uh there are no um uh restrictions on uh on the students of these schools.
▶ 2:09:38So I I guess what I'm asking is so the student parent can receive can make over $100,000 and they can still get a scholarship from the scholarship fund. Yeah. Yes. So, so basically you can give a dollar to a scholarship fund and then those people the the students who receive those that scholarship can have a parents can have an income of unlimited amounts of money. Is that right?
▶ 2:10:09Um uh yes as as you've uh laid laid out the possibility. So, is there a provision within the tax code that would require that teachers at any of the privatemies receiving these vouchers be certified or Um, I'm not aware of code section. There's not that.
▶ 2:10:30Is there a provision in the tax code that requires these private schools to provide special education or to uh educate disabled students like you have to do in public high schools? I mean, public schools. Uh, generally again uh no requirement. So um does the contribution to churches get the same kind of tax treatment as this program described in this bill?
▶ 2:10:57Well, um, a donation to a a church may be deductible as a charitable contribution. Uh, and itemizers might be able to claim the charitable deduction subject to they are not going to be able to get the same kind of double dipping that um that that No ma'am. Okay.
▶ 2:11:15So, my parishioners uh the parishioners that uh tied with me at my home church of the historic Brown Chapel AM Church gets uh gets a less generous tax benefit than those that give to this scholarship fund. Is that right? Uh as you've uh posited the situation. Yes, ma'am. So what makes me concerned about this is that House Republicans have set aside up to5 billion dollars a year to go to scholarships for private and religious schools.
▶ 2:11:46This is an unprecedented effort to use public money for private schools. Um the program would fund be funded by donors who would who can contribute money or stock and the students who receive it can have parents that make as much money as Elon Musk, right? There is no income limitation on the uh on the donor.
▶ 2:12:09What makes me particularly concerned about this is because in the deep south where I represent Alabama, many of those private schools are segregated schools that are all white and would be giving a public benefit to private schools that promote segregation. The gentleoman's time is expired. I now recognize Miss Moore for 5 minutes. Thank you so much, Mr. Chairman. Uh Mr. Virtual, I'm going to ask you a lot of questions and I don't want all my time consumed.
▶ 2:12:39So, just uh follow me and please be patient. I want to ask you questions about code section 199A. This is a section that my colleagues, we've talked about helping families and workers. This one is the one that my colleagues like to refer to as a small business deduction. First of all, how much did this bill cost to will it cost to extend this code section 199A?
▶ 2:13:08And I realize you don't have the 23% and if you got only 20% numbers, that's acceptable. How much will it cost the loss to the treasury? Ms. Morz, uh, as we report in JCX22-25R, uh, the permanent extension plus the expansions of code section 199A, we've estimated uh, at a cost of approximately $818 billion over the budget period. Okay.
▶ 2:13:35$818 billion is the cost to help these small businesses find. Can you please tell me how um you you have data for 2022, I understand. Can you tell me how uh um what was the total amount of the deductions claimed for section 199A? Uh a little bit over $216 billion in tax year 2022. Thank you.
▶ 2:14:01$216 billion in $818 billion in loss in revenues. That's a lot of money. But what we will do to help small businesses, we ought to do. Okay. Now, we like to I like to talk a lot about helping only the 1%. And the 1% makes maybe about $650,000 a year. Is that right, Mr. Barto? Uh in uh reported adjusted gross incomes. That's uh that's about right, Ms. Moore.
▶ 2:14:31Okay. So, the top 1% of taxpayers by adjusted gross income claimed um what percentage of these 199A deductions, the top 1%, how much did they get out of the whole package? Uh about 50%. 50% the top 1% got 50%. And these are small business benefits. Wow. Half of it.
▶ 2:15:00So, for the sake of illustration, I want to take a a real small business. Say a business that $200,000 of of uh AGI. Um what is the average amount of a 199A deduction um that that kind of business could claim? Well, just to clarify, uh, Ms.
▶ 2:15:21Moore, uh, applies to the the taxpayer, and so it can be, um, income from multiple multiple sources. This is all qualified business income. If it's all qualified business income, $200,000 uh dollars under present law, uh, the 20% deduction, that would be a deduction of about $40,000. Okay.
▶ 2:15:49But uh if but if your question was taxpayers with AGIS of around $200,000 with qualifying business income qualifying business income being that was my question, Mr. Barto. Well then about I'm sorry is about six is about $6,500. That's right. It's about $6,000. So I'm going to go on I don't want to burn all my time up. 10.
▶ 2:16:16If you had a $10 million, there were 10 people, taxpayers claiming the 199A deduction had 10 mill million dollars and they got how much on average? Um adjusted gross income 10 million, not all of which is qualified business income. So on average, those sort of taxpayers claiming about a half million dollars in deductions. All right. They got a half million dollars in deduction.
▶ 2:16:45I'm going to skip some because it's taking a long time. So, u there are taxpayers in in my state, the Elines, who made over $100 million that claimed deductions under 199A. And so, can you tell me how much that they received uh as a deduction? One 100 uh 100. Yeah.$100 $100 million of these small businesses.
▶ 2:17:15Uh well, in 2022, there's a neighborhood of uh 800 taxpayers with adjusted incomes exceeding hund00 million who claimed a deduction under code section 199A and the average deduction was around 11 million.
▶ 2:17:32And did they and and I'm going to tell you gentleoman's time is 17 million of these businesses 84% of these businesses had zero employees so they didn't create jobs thank you so much for your indulgence Mr. Mr. time now recognize Mr. Byer for five minutes Mr. Chairman thank you very much Mr. Bartold. The goal of my question is to elucidate how current law operates and how this legislation proposes to change current law.
▶ 2:18:01Current statute prohibits the president and the secretary of treasury from initiating an IRS investigation on any specific taxpayer as outlined in 26 US code 727 which states and I quote it should be unlawful for any applicable person that is the president vice president any employee of the executive office of the president the secretary of the treasury and other members of the cabinet to request directly or indirectly any officer or employee of the IRS to conduct or terminate an audit or other invest investigation
▶ 2:18:31of any particular taxpayer with respect to the tax liability of such preparer. Mr. Bartold, can you confirm that it would be illegal under current law for the president or the secretary of the treasury to initiate an IRS investigation on an organization's nonprofit status? Uh that that's correct, Mr. Ber. Thank you, sir.
▶ 2:18:52Under current law and IRS practice, if a taxpayer has demonstrated it is operating outside the requirements of his tax exempt status and there's an investigation by non-political IRS civil servants and due process for the organization involved. Isn't that Um yes, Mr. Bar, there there are situations where the um uh an investigation could involve chief counsel at the IRS and the chief counsel is a political appointment. Great. Thank you.
▶ 2:19:21But now I want to turn to the legislation. In section 112209, it claims to combat taxexempt organizations that provide material support for terrorism. Considering the Trump's administration's clear weaponization of government, including the IRS, to pursue their political enemies, I want to make sure that I understand how this proposal would operate if it became law.
▶ 2:19:42The language in this section states, quote, the term terrorist supporting organization means any organization which is designated by the secretary as having provided material support to a terrorist organization. So the secretary must notify the offending organization of its or forthcoming designation and the name of the terrorist organization being provided material support quote as determined by the secretary. Mr. Mr.
▶ 2:20:03Bartal, does this language require that the offending organization be convicted in a court of law for for providing material support to an organization before losing his tax exempt status? Uh, no, Mr. Byer. The language does not require a conviction for providing material support. Thanks. To be clear, the only requirement is that the secretary determines an offense has taken place and that the secretary can do so on his own authority and judgment without any judicial determination at all. Correct. Yes, that's correct, Mr. Byer.
▶ 2:20:32proposal does not require judicial determination. Thank you. And this legislation states that the secretary must provide quote a description of such material supported resources except to the extent except to the extent that the secretary determines this disclosure of such description would be inconsistent. Could the secretary assert that documentation of an offense is classified or quote unquote law enforcement sensitive and therefore provide no substantive description let alone evidence to an organization on their alleged offense?
▶ 2:21:01In other words, if this legislation were law, are there scenarios where a target organization could have no opportunity to review the evidence against them in order to meaningfully respond to the allegations? Well, the proposal contemplates and allows the secretary to withhold a description of the nature of the uh support provided by the organization if the secretary's determined doing so is inconsistent with national security.
▶ 2:21:32Um but um the secretary uh must note that he's made such a determination in a notice to the organization and so then the organization uh may seek a judicial review of that determination. Thank you. So in summary, this legislation will allow the secretary on his sole authority to determine a tax exempt organization has provided material support to a terrorist organization without any prior judicial review.
▶ 2:21:57and he could also do so without providing even a description of the alleged offense to the accused organization. The Constitution requires the executive branch to faithfully execute the law. But we've seen what contempt this president and this administration has for due process. Their current cases in litigation where federal officials are being threatened with criminal contempt and operating in bad faith. The administration's track record is taken to heart.
▶ 2:22:21This proposal will allow the Treasury Department to rescend the tax exempt status for law-abiding organizations without due process, without judicial termination of guilt, and without providing evidence for the alleged offense. Mr. Bartold, if this legislation were passed into law, any administration, the Trump administration, any future ones would be allowed to target his political enemies through unsubstantiated claims of supporting terrorism without providing evidence to revoke their TexasM status status.
▶ 2:22:50If a group, a social welfare organization, a civil rights group or religious institution, advocacy coalitions disagrees with the administration, they risk their tax exempt status. Gentleman's time is expired. And my point is made. Thank you. I yield back. And I'll recognize Mr. Swisy for five minutes. Okay, Mr.
▶ 2:23:09Bar, I have some technical questions for you, but first I want to point out a op-ed piece from Senator Josh Holly from Missouri, the chairman's home state, when he said, I think it was just yesterday, Republicans are having an identity crisis, the nub of the conflict. Will Republicans be a majority party of working people or a permanent minority, speaking only for the seauite. Mr. Trump has proposed workingclass tax cuts and protection for workingclass social insurance such as Medicaid.
▶ 2:23:34But now a noisy contingent of corporist Republicans call it the party's Wall Street wing is urging Congress to ignore all that and get back to the good old time religion. Corporate giveaways, preferences for capital, and deep cuts to social insurance. This wing of the party wants Republicans to build our big, beautiful bill around slashing health insurance for the working poor. My argument is it's both morally wrong and politically suicidal. So with that in mind, Mr.
▶ 2:24:00Barthol, the president has said that we have massive deficits and they're going to be reduced to practically nothing in Asheville, uh, North Carolina in Politico reported that the president committed to publicly support Senate Republicans in their efforts to massively reduce the deficit.
▶ 2:24:16Chairman Smith said, "If we don't reduce the deficit, we will spend more in the debt than we do on national defense." Jody Arrington, the chairman of defense said this trajectory of the deficit is unsustainable and is arguably the biggest threat failing our nation. And we had he said we have to reverse the curse. Lloyd Smucker, a good friend, said the reconciliation bill must not add to the deficit.
▶ 2:24:37And there are other quotes from Schweikert and Finstra and Murphy and Moore and Arensson and Vern Buchanan and Adrienne Smith and Mike Kelly says is a threat to our national security. Darren Le Hood even estee a good friend another good friend said we have to have a balanced budget amendment.
▶ 2:24:53My question to you regarding the deficit does the bill before us and this committee right now increase the The legislation before you as we've reported in JCX22-25R the tax provisions would increase the deficit. Okay. Does the president authorize the president authorized as part of this bill before this committee to borrow $4 trillion? Uh, yes, that's correct, sir. Okay.
▶ 2:25:23Regarding salt, the president said when coming to Nashville County during the campaign, he says, "I will I will turn it around. I will get salt back. I will work with the Democratic governor and mayor and make sure the funding is there to bring New York State back to levels it has never seen in 50 years." Mr. Mr. Barthold, does this bill before us restore the entire state and local tax deduction? No, it does not, Mr. Swazi. Okay. The president has said that we are the party of the working class.
▶ 2:25:50And Chairman Smith has says we're the party of the working class and other people have said they're the party of the working class. Punch bowl reported, Financial Times reported on May 9th of this year, Trump and Johnson agree to a new tax bracket for earners making more than $2.5 million. President Trump on Truth Social said he will graciously accept a tax increase under uh in order to help lower and middle class families. I'm okay if they do it.
▶ 2:26:17Is there an increase in the tax rate for the wealthiest people in the United States of America? Uh the legislation before you extends permanently the top bracket at 37%. So So it does not restore it to what it was before to 39.6. That is correct, Mr. Swazi. But this is a tax decrease for the wealthiest Americans in our country or it's a continuation of the the previous tax decrease for the wealthiest Americans. Is that correct? That's subject to different member interpretation. Mr.
▶ 2:26:47Okay. On tips, the president has said your tips will be 100% yours. Does this tax bill continue the payroll tax on people's tips? Uh yes it yes it does. Mr. Overtime. The president said your overtime will be tax-free. Does this bill continue the payroll tax on overtime? It does not exempt overtime from the payroll tax. The president has said he's going to remove taxes on social security. Does this bill remove taxes on social security benefits?
▶ 2:27:15The legislation provides an increased uh uh exemption amount for But does it remove taxes on social security benefits as promised by the president? has not changed. Social the president and this the Republicans have made a very big deal about the importance of tariffs. Tariffs are essential, they say, in order for us to balance the budget to do things to help bring money into the federal government so we don't have to cut as many things. We need to bring money in from tariffs. Does the Ways and Means Committee have the sole jurisdiction of the dem of the committees in Congress on tariffs?
▶ 2:27:46I believe that is so sir. Is there anything in this bill whatsoever, this massive 400page bill, this big beautiful bill, this important bill that's comprehensively looking at the finances of the United States of America? Does it have a single thing in it about setting tariff policy in America? I'll ask my colleague from the trade subcommittee. The answer to the question is yes. What does it have? The provision I walked through. How much time is expired?
▶ 2:28:11the provision I walked through which eliminates our dimminimous law and tariffs would be applied to any packages that currently receive dimminimous treatment under which you do not pay a tariff. Okay. I support the dimminimous elimination especially if we do it sooner instead of waiting 2027 but all the other things we've been talking about tariffs have not been discussed in this expired I now recognize plas for 5 Thank you very much Mr.
▶ 2:28:39chairman and thank you for being for um your patience in dealing with us and answering these questions. We know that this information was given to you at a very short time. Um I I listened to my colleagues just recently discuss the um amount of money that's given to the largest bracket. Uh you said that that was a reduction in how much Mr.
▶ 2:29:03Barto told for the top uh this uh absent this legislation, the top bracket would revert to a rate of 39.6. This legislation extends the 37% bracket that was established in 2017. It extends the 37 bracket. And then what is the next bracket of individuals in in the tax code? Uh 35 is next down. 35. And who's within that group?
▶ 2:29:33What um income bracket is that? Um I'll have to check the uh the break uh the break points. I I'm afraid I don't know them off the top of my head. I'll I'll get that for you.
▶ 2:29:47I know that we just received the chairman's amendment in the nature of substitute the budget reconciliation legislative recommendations related to tax and this chart shows us in calendar year 2027 income categories and change in federal taxes in those categories. I was hoping um I'm not a math person. I actually went to Georgetown Foreign Service School because they told me there was no math requirement.
▶ 2:30:12I even applied early to get in and then I got bamboozled when I found out that there was a two-year econ. So, I'm going to need you to help me with the math here. Um, it says here that for those individuals in the income category of 80 to 100,000, right? Um, what is the change to them in this new bill? What are they going to be You want to know the provisions that affect them, Miss Basket? Okay.
▶ 2:30:39Well, uh remember absent this legislation, tax brackets would generally uh increase. The standard deduction would uh decrease. The child tax credit would decrease. And so many taxpayers in that bracket uh in that income group would have a change in tax rates. They would have a decrease in their standard deduction. They would have a decrease in child tax credit if they uh if their household had uh had children.
▶ 2:31:07Uh on the other hand, they would uh some might be more likely to itemize uh could claim uh um individuals making 80 to 100,000 are going to be itemizing. Sir, uh yes, some individuals in That's a small percentage. It is a smaller uh percentage. The itemization uh under prior law and under under current law is typically in uh the upper half of the income.
▶ 2:31:34So, let's talk about what the percentage those individuals are going to be getting. People within the Virgin Islands, I mean, our medium income and the amount of income that people in the Virgin Islands going to get is going to put them in the either the 60 to 80,000 range or the 80 to $100,000 range. And that's for a household income uh doing pretty well in the Virgin Islands. not compared to individuals in the $500 to the $1,000 range.
▶ 2:32:04What is the difference between those two and what this bill is going to be giving them? Right. Well, uh, as you can see in the, uh, very first column to the left of the income categories, it reports the change in federal taxes under the legislation. And on the first page of JCX23-h25, it shows for the income category of 80,000 to 100,000 that the aggregate reduction in federal taxes will be approximately 31.3 billion.
▶ 2:32:34If you compare that to um uh the 500,000 to 1 million category, the average uh the aggregate reduction is 73 uh.1 billion uh billion dollars. overall that's overall what we're going to get. That's in aggregate. But that's not going to tell us what the average individual is going to get. Well, some of the average effect you can see in the last two columns where it reports the average tax rate.
▶ 2:33:02And so for your category of 80,000 to 100,000, you see that under present law, the average tax rate that that that those uh taxpayers uh pay is a little bit over 15%. Under the proposed legislation, it would fall to 13 a.5%. So a a reduction in taxes.
▶ 2:33:24Now by comparison since you wanted to compare the uh reduction in average tax rate for the half million to the million category is from close to 30% to closer to 36%. How about this? How about this? This is what I've heard. The top 1%.1% stands to gain about $278,000 per year. That's $762 per day.
▶ 2:33:52While the average family is going to get $1,000 a year's time, that's about $2 a day. Is that correct, sir? General Gentleoman's time has expired. I now recognize Mr. Murphy. Can he answer the question? That was a yes or a no. I'll allow a yes or no answer. I I can't verify the uh the mathematics. Uh Miss Plask, I'm not I'm not doubting it, but I I just can't verify it. Mr. Murphy is recognized for five minutes. Thank you, Mr. Chairman. Just a a cl point of clarification.
▶ 2:34:23I think it's important just that we have frames of reference um with who pays the taxes in this country. Mr. Baldh Hall, do you know how much what percentage the 1% top 1% of earners in this country pay in in taxes, excuse me, the top uh uh the top 1%.
▶ 2:34:43Uh if um you look uh on uh page five of JCX 23 uh we have tried to uh uh provide income quantiles and you'll see that we report um the 99th to 99.9th uh percentile and then the highest onetenth of uh 1%.
▶ 2:35:09And in about the middle column, you can see that under present law that those uh so that would be the top 1% of taxpayers uh would pay 13.6% plus 11.9 uh% which is which is uh 25.5% of all federal taxes. All right.
▶ 2:35:33I was looking at something here on this illustrious thing called Google that said it was 40 Don't believe everything you say. 40% of federal tax. So, all right. So, you're saying how much? 26%. I said 25.5%. Okay. And the top 10% said accounts for 72% of all federal income taxes paid in 2022.
▶ 2:35:55Uh again, um I' I'd prefer if you'd look at my page five and then you'd be summing the last four rows of that middle uh middle column. And what is the Can you help me with the bottom 50% how much they pay in taxes? Okay. Well, I have to uh take Well, I'm looking at Google again and it says we don't want to believe Google not knowing well not knowing what Google's measuring.
▶ 2:36:23Uh what we're trying to measure here is the effect of payroll taxes, income taxes, federal excise taxes, and uh the corporate uh corporate tax. One tax that is not federal tax that's left out is the estate uh is the estate and gift tax. Okay. All right. Fair enough.
▶ 2:36:41Um are there provisions in this bill where those in the higher income brack bracket um have fewer Uh uh yes, as uh noted in the walkthrough, the extension of the 2017 legislation includes extension of u uh of a number of limitations on itemized deductions, state and local income tax, mortgage uh interest.
▶ 2:37:08Uh it creates in addition a new limitation on the benefit of those who itemize limiting the value of the benefit to 30%. the top bracket will actually end up paying more in taxes even though they will have those limitations. Some taxpayers will will pay more, some will pay less. Okay. All right. Thank you, Mr. Chairman. Yield back. Gentleman yields back. And now recognize Mr. Evans with the technical question for five minutes. Mr. Chairman, I'd like to yield to Mr. Doggy. Thank you very much.
▶ 2:37:38Uh you know at the beginning of this hearing uh the chairman told us that his priority was the working class and it sounds a lot like what President Trump has said in all of his broken promises that he's concerned with working people and now that we have which we didn't have earlier these green sheets. Uh I'd like to ask you Mr. Barthold about how much good they've done for the working class.
▶ 2:38:01First of all, given the last questions that you just answered, there's not any law of physics or law of tax law of any kind that says if you really want to help the working people of this country, you've got to give big tax breaks to the people at the top. There's no such law, is there? There's no reason we can't focus this tax relief on the people that are out there working hard for a living, not the Elon Musk of the world. I'm sorry, Mr. Dog it.
▶ 2:38:31Well, let me shorten it just a little bit. Uh there's not any requirement under the tax laws that you have worked on as the chief of the joint committee on taxation that say if we want to help working people if as the chairman told us his priority is the working class that the only way we can do it is to give huge tax cuts to Elon Musk and the billionaire class. As we discussed earlier, Mr. dog it.
▶ 2:38:58The members can uh choose to target uh tax benefits. That's why they seem we can target it if we want to, but we can also target it to the the limousine lobbyist and to the the power brokers in our country who already have so many loopholes and advantages in our tax code. Let's see how well based on the information you gave us just now that we did not have earlier, how well this Republican majority has done in prioritizing the working class.
▶ 2:39:28If I understand your numbers, uh it looks to me like it's about $263 per taxpayer for those who earn less than $50,000. Is that about right? Um and this is in year 2027. Mr. Dogget, you're ahead of ahead of me in that able to do the division. So, you you've got, don't you?
▶ 2:39:49Uh, first of all, in year 2027, those who earn over a million dollars a year, they're going to total they're going to get about $96 billion in tax cuts, aren't they? Uh, above a million. Uh the uh uh the the uh change under the proposal is uh about uh hundred uh 100red billion. Yes, sir. A good hundred billion.
▶ 2:40:19Uh and all of those below $50,000 if you add them up, I think it comes up to about 19, doesn't it? In the first year. Um, we're looking at the uh difference between I don't want to hold you up 5.14 uh basically by my calculations uh we're talking about something like 310 times the average tax cut for taxpayers under 50,000 as for those over a million.
▶ 2:40:49Does that sound in the range of of about what it is? Um again to do these calculations we provided the number of returns on page 15 and so you can compute the average. Yes sir uh by uh uh by category um I don't I don't want to overstate or under understate a result here in uh I appreciate your objectivity.
▶ 2:41:10I'm using your numbers and it looks to me like we are providing under the Republican bill the average tax cut for a pay taxpayer who's making more than a million dollars a year. somebody who's pretty comfortable in our society, more than a million dollars in a single year, they get 310 times the average tax cut for taxpayers making less than $50,000 a year.
▶ 2:41:34I don't call that prioritizing the working class wherever you came from, prioritizing uh the people that are out there providing the services that make America go. I call it more trickle down economics that a little will come dribbling down to those who are working hard out there from Elon Musk and all the people that were on the front row behind the president and his inauguration. It's pretty clear where the focus is, where the whole purpose of this tax proposal is. It's not to help working America.
▶ 2:42:04It's to take from those who are working their health care, their future, and use those proceeds and a trillion and trillions of dollars of debt to provide more benefits to the billionaire class. And it's wrong and it should be rejected. And thank you for your answers and for this le data. Gentleman's time is expired. I now recognize Mr. Hearn for five minutes. I will need five minutes.
▶ 2:42:29Uh the gentleman from Texas talks about the tax code only the the income tax and the change. Mr. Barto, how much is the child tax credit at? The um uh uh the uh extension of the child tax credit. Um just roughly. You don't have to get I don't care about pennies. Well, I wasn't pennies.
▶ 2:42:58I was trying to look for the specific line on the uh uh on the on the table. Uh over the 10-year period uh almost $800 billion. So, is that going to the billionaires? Uh no, there Okay, that's all I need to say. What about the no tax on tips?
▶ 2:43:14How much does that Uh no tax on uh tips is uh uh almost $40 billion and no tax on uh overtime uh $124 billion or either one of those going to the billionaires. I'm using the billionaires because that's what my colleague from Texas pointed to. Either one of those going to the billionaires.
▶ 2:43:40Uh well, there's no income restriction on tips, but I don't know that there's a lot of tips uh among billionaires. There is. So, so the the reality is, Mr. Bar told is that while we're talking specifically about the tax rate here staying permanent, all these other provisions that we put in there that President Trump has talked about taking that they're wanting to uh demagogue that these other ones do affect a lot a lot of billions, hundreds of billions of dollars to
▶ 2:44:11the folks that are making on the lower end in income scales that they don't want to allude to. So I just want to point that out for the record. Mr. Mr. Barto, thank you for all your work. Thank you. I Are there others? Uh, okay. I'll I'll uh ask my question now and then proceed uh forward from there with other members wishing to ask a technical question. Mr. need.
▶ 2:44:34Uh I wanted to talk a little bit about the dimminimus provision and um do you see a risk that perhaps this uh provision could possibly or or not conflict with the Trump administration's current actions on Uh thank you for that question.
▶ 2:44:54I I think as constructed I I don't see significant risk of that but I think that is important context we have that the President Trump has acted already in this area to eliminate the dimminimous exemption for shipments from China that took effect May 2nd so the week before last uh and so that has already taken effect as an emergency action under the under IPA the international emergency economic powers act um so this this uh provision in in today's uh legis recommendation
▶ 2:45:24is um is not conflicting with that is is completely ending the privilege not on an emergency basis on a p permanent basis for shipments from all countries. Um and so I don't see immediate conflict with that. I think if if there were sort of nearerterm action directly relevant to China, there might be more questions and challenges as far as how these two things fit together. One piece of the context I point to is there there is some litigation currently about IPA and its connection to tariffs.
▶ 2:45:51There was an argument in the court of international trade just today and I said I think this this approach takes um um takes an approach of creating long-term certainty while um providing room for the president to act. He's already acted on China has indicated and intend to act even sooner with other countries but this approach is ensuring that dimminimus does go away for commercial shipments from all countries uh within the next two years.
▶ 2:46:15And just to to clarify though for the sake of uh information, a traveler coming back into the US with some purchases of souvenirs, that limit would be as proposed. How much? Um so that that would be completely unchanged. That's a that's a $200 limit. That's a separate provision in the law. And and we're not looking to change that. Okay. Thank you. I yield back and now recognize Mr. Gomez for five minutes. Thank you, Mr. Chairman. Um, Mr.
▶ 2:46:45Barthold, can you help me with uh explain a little bit on this? I was just looking at the chart here, and it says that in the uh calendar year 2027, someone that's making less than $15,000 will see an increase in federal taxes by 18.7%. Is that correct? Uh, yes, Mr. Gomez.
▶ 2:47:07That's uh that's a consequence of um uh loss of uh premium tax credits uh uh healthcare. Okay. So, and then in calendar year 2020, anybody making less than uh 15,000 sees an increase of 53.5%. Anybody who's making 15,000 to 30,000 sees an increase by 11.7%. Is that correct? What What calendar year we in, Mr. Go?
▶ 2:47:3620 2029 it's the next page 2029 um yes and then we see the um the next page in 2031 anyone making less than 15,000 sees a check this out I thought this was a mistake I thought I was not reading this correctly an increase in their taxes of 74.3% and from 15,000 to 30,000 of 20.6% 6%.
▶ 2:48:06Is that correct or is that did you guys make a mistake or is that like no mistake in the numbers but uh an important thing to remember is in uh lower uh lower brackets it's actually uh hard to measure the denominator because there are some taxpayers that are uh getting uh refundable tax uh credits for example and so there's some with negative tax rates and so you're adding up some with negative tax rates and positive tax rates.
▶ 2:48:34So, it's like dividing a modest change over by zero. Well, here's the thing. This is what the the this is what the your own tax uh brackets suggest. And one of the things that we have my Republican colleagues over here saying, "Hey, we're not doing tax on tips," which we know is actually pretty limited. Oh, we're not going to do X, Y, and Z, but we're we're screwing over people who are making less than 30,000 a year.
▶ 2:49:01And what I actually find offensive is because my parents never made more than $38,000 a year in their entire lifetime after working four to six jobs a week to make ends meet. Right? And then we have Donald Trump and his chaotic, reckless tariff policy that is creating so much uncertainty that it's driving up the cost of living in this country. At first it was 48 uh $4,900 a year.
▶ 2:49:29then it became $3800 a year. Either way, the people at the lower income brackets are getting screwed over by Republican majority that doesn't give a damn about them. Then on top of that, we know this, the people that are under 30,000 a year are most likely to be on Medicaid, most likely to live in rural areas, more likely to be in urban areas that are the working poor.
▶ 2:49:56But then they're bragging about, you know what, the top income brackets make the most money, so we're going to give them the highest amount of uh refunds. That's insane. And they have no shame about it. You have no shame when it comes to hurting working men and women in this country. You know, I'm somebody that was supposed to not go to college. I ended up working at Subway and Target.
▶ 2:50:20I would make $700 a week working not 9 to5 but five in the afternoon to 9 the next day I had zero health care and to me you would tell somebody in my place you know what we're helping you out just giving you a little bit but the billionaires are the ones that make the most money and deserve the most help that's your logic but I like to quote one billionaire when it comes to Warren Buffett that says that a lot of people shouldn't be punished because
▶ 2:50:50it wasn't determined on what they did. It was the happen stance of birth. But you all want to like tout a tax plan that increases taxes on people making under $30,000 a year. The folks that are struggling and then cutting their Medicaid on top of that, but yet you want people to have more babies. That's the most insulting thing I've ever heard in my life.
▶ 2:51:20With that, I yield back. Are there additional members with technical questions? Seeing none, we'll move to strike the last word. Are there any members that wish to strike the last word? Mr. Dog, it is recognized to strike the last word. Thank you, Mr. Chairman.
▶ 2:51:43Trump's one big, beautiful bill is nothing but an ugly lie built on a mountain of lies preserved today through a process that is a lie in blatant violation of the rules of this House of Representatives.
▶ 2:52:00Republicans can talk fiscal responsibility all day long, and they usually do at their campaign rallies, but they are practicing incredible, incredible fiscal irresponsibility by adding trillions of dollars to our national debt and endangering the future of what Elon Musk condemns as a Ponzi scheme, but what both most Americans, generations of Americans recognize as social security and a respectable retirement.
▶ 2:52:30It is a lie first to claim that this bill shows fiscal responsibility because the Republicans are following their cult leader, the self-described king of debt when it comes to more and more tax breaks for those at the very top.
▶ 2:52:45Too much is never enough, even when it means total fiscal Republicans have a one-sizefits-all solution to loopholes that allow some of the most profitable corporations in the world to pay so little on their taxes. Their solution, widen the loopholes. And that's what this bill does. Let them avoid even more of their fair share of paying for our national security and other vital services.
▶ 2:53:13Second, it is a lie that this bill is focused on tax relief for the middle class. And we have just seen that 310 times more relief for those who earn over a million dollars a year than for those that earn $50,000 or less.
▶ 2:53:30This entire bill could be about half its total size if we were not providing benefits to those at the top, the billionaire class that they hope will eventually come down to the rest of our society, but which it never has. And guess who does this Republican tax bill treat better? Someone who trims hedges for a living or someone who's a hedge fund manager?
▶ 2:53:58Well, if you guess the hedge fund manager, it wasn't very difficult. But under this bill, most of these Wall Street titans can put most of their income through carried interest and pay a maximum rate of 20%. Multinational corporations are paying an average of about 7.8% tax rate, far below the tax rate for a nurse or a teacher.
▶ 2:54:26Whatever incentive or reward these Republicans think hedge fund managers and major corporations need to do their job, shouldn't that tax incentive apply to those who nurse the sick, who educate our children, and those who keep us safe? I think the answer is quite clear. and the ideological attacks on clean energy will leave families paying the bill.
▶ 2:54:50A coalition of 23 retired fourstar generals and admirals just this week advised the committee that it was vital to both our economic security and national security to preserve the incentives that we enacted in a Democratic Congress which they proposed to wipe out. And third, I would say this bill is based on a lie that this bill protects our health care and access to a family physician.
▶ 2:55:16Republicans are turning safety net programs into more whole than net. Gaping holes that will deny almost 14 million vulnerable Americans access to a family physician. After more than 60 repeated failures by Republicans to repeal the Affordable Care Act, they're at it again. They're sabotaging it. They're trying to deny the access that uh our countrymen need to get health care.
▶ 2:55:44Four million alone will lose coverage because of their failure to extend the Affordable uh Care Act enhanced incentives. And the beauty of this bill may be in the eye of the billionaire class, but to the rest of us, it is just another dangerous swing using the wrecking ball that Donald Trump keeps using to wreck our economy and our democracy.
▶ 2:56:10And if all the lies were not enough, if our tax cut code did not already look like a block of Swiss cheese, Republicans are creating even more loopholes to benefit every special interest from tanning studios to tobacco companies.
▶ 2:56:25Even as they shut down the Department of Education and slash billions from preK to 12 funding, they're pushing a $20 billion tax credit over four years, effectively a federal voucher plan to encourage parents all over this country to remove their children from our valued public schools. All of it is a package of lies that must be rejected. I yield Mr. Thompson is recognized to strike the last word. Thank you, Mr. Chairman.
▶ 2:56:55I've got to hand it to you, Mr. Chairman. Uh, your bill touches just about everyone. Gives incredible amount of big dollars to people who need it the least. It takes health care away from 13 million people. And it passes the bill on to future generations. Mr. Chairman, this Republican tax bill to extend the Trump tax cuts for billionaire donors like Elon Musk is a bad deal for the American people.
▶ 2:57:24The extension of these cuts will disproportionately benefit those who don't need the help while failing to prioritize hardworking Americans. The reality is Democrats have been behind some of the most significant middle class tax cuts we've seen in a generation by expanding the child tax credit, the earned income tax credit, and the dependent care tax credit.
▶ 2:57:52In other words, when Democrats cut taxes, we focus on those who need the help the most, not our large donors. People making over a million dollars a year are not the ones that need a helping hand in today's economy. They simply get their priorities backwards. And it's the hardworking American people who are getting left behind.
▶ 2:58:16If Republicans were serious and we bu be willing to abandon their goals of cutting taxes for their largest donors and focus on cutting taxes for the middle class in a responsible manner, a lot of my colleagues on this side of the aisle would join them.
▶ 2:58:35Instead, they're slashing and burning our tax code, social safety net, hurting taxpayers in high salt states, dismantling our nation's ability to lead the world in green energy and domestic manufacturing and uh for future uh and and hurting kids who need uh food and nutrition nutrition programs and cutting health care for working people.
▶ 2:59:04These tax cuts will come at the expense of real lives, costing real hurt to our constituents, all of our constituents. Take Kate Ladish, a constituent of mine from Yolo County, California. Kate has rare and chronic conditions that have resulted in extensive hospital stays, the need for a motorized wheelchair, and inhome health services, much of it paid for by Medicaid.
▶ 2:59:32Her treatments, inhome care, and wheelchair allow her to have a quality of life and contribute to our community. Let me be clear, without these specialized treatments, she will die. And from listening to and watching the actions of this administration and some of my colleagues, she believes many would not care. We all know people like Kate. We represent people like Kate.
▶ 3:00:01We also know people who have been down on their luck and need a little extra help to put food on their table. We all know people who have worked long hours and multiple jobs to care for their families. We have a moral responsibility as members of this committee to ensure that our tax policies work for everyone, not just the welloff and the well-connected. That's why this is a bad bill and that's why we should all vote against it.
▶ 3:00:31I yield back the balance of my time. Mr. Larson. Thank you uh Mr. Chairman. And uh I don't know if you've ever had the opportunity, Mr. Chairman, to go to Auggie and Rays in East Harford, but it's this uh incredible institution that's located right next to Prattton Whitney Aircraft. And a shout out quickly to the AM there who's on strike for for fair wages.
▶ 3:00:58But um you get real straightforward questions and answers uh from them and they would they would be somewhat confused about this when you for example they don't talk a lot about geraness and uh when asked about um and you know you heard the discussion at the beginning here that we had with regard to what would be ruled gerine and what wouldn't we'll see as we progress uh through the through the tonight.
▶ 3:01:28But basically, uh, Germaine is here is, uh, what people don't want to vote on. Uh, and so whatever is put forward by this side of the aisle will not be deemed gerine and therefore not voted on.
▶ 3:01:48And I guess the disheartening thing here is that and listen, everybody on this side of the aisle, they're good people. They're decent, caring Americans who love their country as much as we do.
▶ 3:02:10And that's what makes this so When you look at how disproportionate this bill is, because what it is simply is fulfilling a Trump promise to make permanent the tax cut of 2017.
▶ 3:02:34But to do that, he charged Elon Musk with finding And so they look to 70% of the budget includes Social Security, Medicare, and defense and decide that's what they're going to do.
▶ 3:02:54And in this bill, what we find is that while the top percent gets the bulk of the tax cut, they pay for it. pay for it by cutting people's health benefits.
▶ 3:03:1514 million Americans get cut their health benefits so that billionaires can have How much more money does Elon Musk need billion? I guarantee you the billionaire class is embarrassed by what's being proposed here.
▶ 3:03:44The largest cut to Medicaid in its history. 42 million Americans will see lower food assistance and SNAP benefits so billionaires can have more.
▶ 3:04:13is at the core of what makes Americans and I've had public hearings throughout my district and Aaron from Bristol who says she has no idea what she would do without Medicaid and SNAP. She's a wartime veteran and a single mother of four boys and groceries. This is who we're talking about.
▶ 3:04:38the people who will be directly impacted by this bill. You're good people. You know this. And yet we're going to persist and take this to a vote. Our amendments will be ruled non-gerermanine, won't go forward, and you'll take this on to the floor.
▶ 3:05:07Katherine and Richard of Southernington say, "We have a 39year-old son who was born intellectually disabled and asked me, if we cannot take care of the innocent in our society, how can we be called Judith from Graanby who said, "My daughter with MS asks, should Mr. Trump or his 1% cronies get more?
▶ 3:05:33my daughter and thousands of others who do not need to suffer because of unbridled greed. Can it be possible that MAGA really stands for make America greedy again? I yield back. Miss Tenny is recognized to strike the last word. Move to strike the last word.
▶ 3:05:56Thank you so much, uh, Chairman Smith, and to all of my Ways and Means Republican colleagues and the dedicated committee and staff for your work on this landmark legislation, which actually delivers for American families, workers, and small businesses. As a member of Ways and Means, we were tasked with leading the charge to build on the successes of President Trump's Tax Cuts and Jobs Act, and deliver meaningful tax relief for hardworking Americans and their families.
▶ 3:06:21And as someone who voted yes on the 2017 Tax Cuts and Jobs Act from upstate New York, there has been nothing in legislation better for upstate New York than the Tax Cuts and Jobs Act for our small business community, our farmers, and our middle inome taxpayers and lower income taxpayers. And I'm looking forward to making these permanent in so many ways. It's been a long and winding road to get where we are today.
▶ 3:06:46and House Republicans on this committee have spent countless hours deliberating these changes together, pouring over data, numbers, uh, making informed decisions, and meeting with individuals and businesses and communities in our districts and across the country. President Trump's tax cuts and jobs act led to the strongest American economy in decades.
▶ 3:07:06And we are poised to extend critical tax relief for American workers, the very people who work for me and their families, and include new policies that will drive growth and economic prosperity, something we lacked over the last four years. I commend the chairman for leading the and crafting this bill.
▶ 3:07:22An unenviable task considering the difficult choices that had to be made to get this here in a partisan way because not a single Democrat in this entire capital complex will vote for tax cuts for the American people.
▶ 3:07:37Um, while we would like to see all of the work that we have done come to fruition, we acknowledge the reality that we are working within limited parameters and that individual priorities do not take precedence over ensuring the American families, workers, and businesses do not face tax hikes in 2026. While this is an impressive package, I join my colleagues in expressing concern over the windown of the 45U nuclear power production tax credit. Nuclear power represents nearly a quarter of New York's electrical supply.
▶ 3:08:08And my district in central and western New York is home to all four of New York's reactors. Those reactors are critical to the base load power of our region and our state and should be considered separately from convers uh from our conversations on renewable energy. This is an issue that I will continue to work with the chairman and to ensure that uh continued success in the nuclear sector. And before I close, there's many issues that I would like to to highlight.
▶ 3:08:37Some I I can't hit list them all, but there are many. Um and these were priorities that unfortunately did not get in the package because of the limited space, and I will continue to work with the chairman and our team to pass. First of all, the permanency of the new markets tax credit co-sponsored by uh Representative Sul of Alabama, which has been a critical tool for economic development in rural districts like mine, ensuring that domestically manufactured fuel cells are treated with uh on par with other initiatives under the electricity investment tax
▶ 3:09:07credit. Supporting technologies and energy delivery options like fuel cells that can deliver on-site power will continue our country's efforts to prevail in the artificial intelligence war with China, ensure the resilience of America's energy in infrastructure, and to combat the absurdity and catastrophic policies in states like mine and New York uh where energy intelligence is not available.
▶ 3:09:29Um, also the Motorsports Fairness Act, which will sustain the long-term financial health of motor sports facilities by making that seven-year cost recovery period permanent. The PAR Act, which modernizes the tax code's so-called sinless, by striking golf courses, especially small familyowned entities that are dotted all across New York State and allowing their eligibility for financing using taxexempt bonds.
▶ 3:09:54I sure hope the president who's an avid golfer will consider making golf again great uh golf great again in the state of New York. The basic act promotes further investment in establishing new production facilities to manufacture semiconductors which will spur job growth in advanced science, technology, engineering and manufacturing as well as ensure that the United States can compete globally and maintain its technological dominance over adversaries like China. This is critically important to Central New York.
▶ 3:10:23And also, highquality charter schools act to expand uh school choice by creating a new tax credit for charitable contributions to nonprofit charter school organizations. And last on my list, but not certainly not the last, many others I haven't included, but really important to my district, is the Susan Muffley Act to restore deli salaried employees pensions. They've waited for decades for Congress to provide reprieve, and this reconciliation bill is a great opportunity to deliver it.
▶ 3:10:49I urge the education and workforce committee to take this bill up under the p their perspective title of the one big beautiful bill. And I want to again thank the chairman and all of my colleagues on the Republican side of the Ways and Means Committee to bring us to where we are today. And I look forward to supporting this bill with enthusiasm for American families and workers, those especially who reside in New York's 24th congressional district. And with that, I yield back. Thank you. Miss Malotakus is recognized to strike the last word. Thank you, Mr. Chairman.
▶ 3:11:17Um, you know, this this legislation is about providing relief for our working Americans, for our senior citizens, and for our middle class families. I thought it was sick. That is the core of what this legislation is about and who will benefit. One of the most important provisions I see here is a bonus deduction for our senior citizens that would provide $4,000 for individuals, 8,000 for married.
▶ 3:11:45for those earning 75,000 or less if they're individuals or $150,000 if they're married. I don't know how anyone can argue something like that goes to benefit the wealthy. As a matter of fact, it phases out when the income reaches $175,000. the increase in the salt deduction critical to the people I represent in Staten Island and Brooklyn.
▶ 3:12:09It will be tripled to $30,000 and it will have an income limit so that way it is truly benefiting the middle class. It's interesting to hear the Democrats and the governor of my state of New York, who's the reason why we need salt relief to begin with, because she keeps hammering people to death with high income taxes and refusing to put a cap on New York City taxes, saying that they want an unlimited cap. Unlimited would actually benefit the billionaires.
▶ 3:12:40We're focused on the middle class and I do hope that we'll see that relief take place to address 2025 so my constituents can benefit in 2026. Increases to the standard deduction. Expanding the child tax credit. These are also provisions that benefit the middle class. No tax on tips. Helping people who work with their hands. They're working overtime.
▶ 3:13:08our responders. No tax on American loans, auto loans for American vehicles, preventing the return of the alternative minimum tax. This is huge for the people I represent. In fact, it was the reason the alternative minimum tax was the reason why so many of my constituents could not benefit from salt because it was never indexed, never adjusted.
▶ 3:13:34and you saw increasingly middle class families being hit with that alternative minimum tax. Additionally, if you're a new employee, if you come out of college with debt, your employer will be able to now permanently be able to give you up $5,250 annually tax-free to help you pay off your loans. It's legislation I'm proud to also sponsor in this that have made has made this bill.
▶ 3:14:03the Educational Choice for Children Act. This is going to be able to deliver scholarships for the families who need it most so they can attend private and parochial schools. Again, we're talking about poor children, giving them schools choice, giving them access to education does not benefit the wealthy at the end of the day.
▶ 3:14:28This bill actually benefits middle class families, working families like the ones I represent in Staten Island and Brooklyn. So, I'm proud that so many of my provisions that I've championed have made it into this bill. And I want to thank the chairman who has really been a good friend to the people of New York. I understand that everybody here has very different districts than I do.
▶ 3:14:54I might be the only salt caucus member that's on this side of the deis, but this committee and the chairman has really have really worked with me to get to a medium that I think will obviously continuing, as you know, to work through this, but I believe that we will get to a place that truly represents the hardworking people in Staten Island and Brooklyn.
▶ 3:15:17And the $30,000 deduction that is currently on the table and that we'll be voting on today actually covers 98% of my district. And so I'm very happy that I'll be able to go home and tell everyone that I was able to triple deduction and that those who want unlimited and there may be an amendment here to make it unlimited that will support the millionaires and the billionaires
▶ 3:15:47that that's not who we're for. The Republicans are fighting for the working class. We're fighting for the middle class and that's who we're delivering relief for today. So, thank you to my colleagues who understood where I was coming from as a New York City Republican and working with me to address and provide much neededed relief for my constituents. Thank you, Chairman. I yield back. Thank you, Mr. Thank you, Mr. Chairman.
▶ 3:16:17You know, the good book teaches us to care for the least among us. In medicine, doctors are taught do no harm. Yet the Republican budget we are dealing with today does harm to every category of individuals and groups in our country except the rich, the wealthiest, and the most
▶ 3:16:47secure. Billionaires get tax cuts while tens of millions of children, seniors, people with disabilities, and workers suffer deep cuts to their health care, food, education, and housing. That's not right. Americans want their government to help them, and they expect the wealthy to pay their fair share.
▶ 3:17:19Trump's tariff taxes forced families to pay almost $4,700 more a year on essentials like groceries, cars, and appliances. The GOP blesses CEOs. Let's tax teach run wild. Tell children they can't have a toy.
▶ 3:17:44ignore the work of not forprofits, lay them off, shut them down, kicks millions of seniors off Medicare, rips tens of millions of people off Medicaid, evict people from nursing homes so that the nursing home has to become your home.
▶ 3:18:08And even if one manages to keep their health insurance, this bill makes their health premiums skyrocket. The Republican priorities are shameful. The plan bestows immediate, permanent, and monumental tax handouts to obscenely affluent individuals and corporations. But the crumbs they give to hardworking vanish.
▶ 3:18:38It leaves out the poorest children from the child tax credit and the poorest workers from the earned income tax credit. Rather than directly giving families paid leave and child care assistance, this bill bestows riches on businesses again in my district alone.
▶ 3:19:04This cruel Republican plan threatens to cut health insurance from over 240,000 people on Illinois medical assistance programs, including over 102,000 children and 27,000 seniors. Thousands of seniors and persons with disabilities could lose their nursing home coverage.
▶ 3:19:32This ruthless plan also will increase hunger for about 20 244,000 people in my district alone, who could lose SNAP. And for over 80,000 children who won't have a free lunch, government should help people, not harm them.
▶ 3:19:58Government should make it easy for the vulnerable to ask for help to lift their burdens, not exclude them from assistance with excessive barriers only to freely shower the wealthy with trillions. Government should encourage charitable service, philanthropy, and education, not terrorize them. As does a good con artist.
▶ 3:20:26Republicans use slight of hand and tricks to make us believe they are helping when they are hurting. Nothing justify the biggest Medicaid cut in the history of this country. Nothing can justify taking SNAP benefits from hungry children. No, we're not helping the wealthy.
▶ 3:20:55We are not helping the wealthy. We need to help the children save the babies. I thank you, Mr. Chairman, and I yield back. The gentleman yields back. Miss Sanchez, you're recognized. Let's try the last word. Well, here we go again. Republicans are once again choosing billionaires and big corporations over working families.
▶ 3:21:22This bill that we are marking up today is an insult to every hard-working American. It sends a very clear message that you'll pay more and you'll receive fewer services just so that billionaires can pocket another tax cut that they really don't need. American families, in case you haven't noticed, are struggling. Under President Trump and Republican leadership, they have seen nothing but chaos.
▶ 3:21:47They've watched Elon Musk gleefully take a chainsaw to vital programs that they rely on like Social Security, Medicare, and the VA. Travel is less safe at airports because they're left in disarray due to the cuts to our air traffic control systems. And prices for everyday necessities like food and clothing and diapers and formulas keep rising because of Trump's tariffs.
▶ 3:22:11Premiums for health insurance, car insurance, and housing are going up, making it harder and harder for families to make ends meet. And now, rather than providing real relief, Republicans want to look at this at this chaos, put it into law, and call it a one beautiful bill. All to pay for more tax cuts for the rich while adding millions to our national debt.
▶ 3:22:36Nearly 20 trillion dollar in debt over the next 10 years by Republicans, your own members estimates, not our estimates, estimates. Americans are worried about their future. Consumer confidence is at a record low. And people are afraid of losing their jobs, their health care, student aid, and food assistance. And this bill today compounds that pain.
▶ 3:23:0314 million people will lose healthc care coverage under this plan. And for what? Again, so billionaires can get even richer. while we all drown in debt. This is outrageous. Billionaires already have more money than they could ever spend and they can afford to pay their fair share. What's equally disturbing is that you're not being honest about the fact that you are meeting out crumbs to the the most needy while you are helping the most wealthy.
▶ 3:23:33And don't buy the that tax cuts for the rich create more jobs or better wages because it's been the excuse by every Republican administration over the last half century to pass more and more tax cuts to the rich. And it's failed to deliver on that promise each and every single time. The wealthy just got richer while the working families got harmed. All while piling on more debt that families will have to pay off.
▶ 3:24:00I'm outraged that this committee is focused on doing more for the richest in this country while destroying the means of survival for the poorest. And this bill double downs on that, doubles down on that assault on those seeking the American dream by stealing tax benefits and services to working people who are paying taxes. It would deny the child tax credit to 2 million US citizen children. Even worse, it would deny Medicare coverage to those who've worked and paid into the system.
▶ 3:24:30How dare Republicans say that they're for the working class when they are making it harder for those that are struggling to get by. Enough is enough. My constituents are fed up. They're sick and tired of Republican tax cuts that only benefit the ultra wealthy. Our tax code needs to be about fairness. It needs to be about balance. It should support families, not the rich. But this bill does the exact opposite.
▶ 3:24:56To my Republican colleagues, I said, "Please just stop this in insanity. You have to lie about what is in this bill. Otherwise, probably your constituents would be rioting in the streets." Here's an idea. How about you think about putting your constituents first for once rather than the people who donate to your campaigns? But I guess that's asking a little too much from people who have completely lost their moral compass.
▶ 3:25:25I will be voting no on this bill. I hope that some on that side of the aisle see the light and do the same. And with that, I yield back the balance of my time. Mr. Chairman, I'm going to strike the last word. Recognized for five minutes to strike the last word. Thank you, sir. I want to express my strong support for this pro- family, proworker, progrowth, pro- America, one big beautiful bill before us.
▶ 3:25:53It makes the tax cuts permanent for working families. It also increases the child tax credit. It increases incentives for employer provided child care and the standard deduction. A family of four could see well over $1,000 in additional tax cuts. That's real money in Indiana, not mere crumbs.
▶ 3:26:21As my colleague across the aisle just said for workers, we're delivering on President Trump's promise of no tax on tips and no tax on overtime. We're expanding 529 accounts to cover post-secondary credentiing for Americans looking to advance in their career or tool up for a new one.
▶ 3:26:43And we're giving businesses the certainty to invest, enhancing the small business deduction, incentivizing research and development to be done right here in America. We're incentivizing buying new equipment and building new factories so again we can manufacture things here in America. We're also putting disastrous democratic policies in the rearview mirror. No subsidies for China.
▶ 3:27:14No more. We're ending President Biden's global tax surrender that sent billions in revenues to foreign countries. We're also repealing the 1099K gig worker rule, which was going to bury everyday Americans under a mountain of paperwork for the simple act of reselling tickets or buying something on eBay.
▶ 3:27:39It was so poorly thought out that even President Biden's IRS refused to implement that policy. There are so many other great provisions in here. increasing the child, increasing the adoption tax credit, savings accounts for newborns, tax relief for seniors, and no auto loan interest. No tax on auto loan interest. And there's also there's also no tax credit for recycling talking points.
▶ 3:28:07We've already heard the same tired complaints from my friends on the other side of the aisle about giveaways to the rich. They said the same things about the Trump tax cuts in 2017. It wasn't true then and it's not true now.
▶ 3:28:22The New York Times admitted as much in a 2019 article titled, "Face it, you probably got a tax cut," which said that most taxpayers got a cut, but quote, "There's a good chance you don't believe it." And why is that?
▶ 3:28:40to quote to a large degree the gap between perception and reality on tax cuts appears to flow from a sustained misleading effort by liberal opponents of the law to brand it as a middle class increase. So let's be clear, our one big beautiful bill will deliver real tax cuts to families in Southbend, Indiana.
▶ 3:29:06It will deliver real tax cuts to seniors in Gan to manufacturers in Elkcart, to innovators in places like Warsaw, Indiana. It will deliver real tax cuts to farmers in Marshall County, to farmers in Breamman, and to small businesses on main streets in places like Wabash, Indiana.
▶ 3:29:31And it will deliver real tax cuts to people who are working out of a garage and starting a small business in places like Napa, Indiana. These tax cuts are real, folks. Trust your bank accounts, not lying politicians. I certainly want to thank Chairman Smith and his staff for fostering an open and collaborative process throughout the course of putting this one big beautiful bill together.
▶ 3:29:58I urge my colleagues to support this pro- family, proworker, pro-growth, pro-american one big beautiful bill. And Mr. Chairman, with that, I yield back. Gentlemen yields. Uh, M. So, you're recognized. Strike your last word. My colleagues, let's be honest about why we're here today. We're here because according to President Trump, Elon Musk, and Republicans in Congress, the wealthiest individuals and the largest corporations in our country are not wealthy enough.
▶ 3:30:28This committee could be working to help Americans deal with the high cost of living. We could be working to make health care more accessible and more affordable. We could be working to strengthen social security. And of course, we could be working to support our small businesses who are reeling from President Trump's reckless tariffs.
▶ 3:30:47But what we're doing instead, at the direction of President Trump, we are marking up a bill that would give $4 trillion dollar worth of tax giveaways to the wealthy, the well-connected, and welloff. And how are we going to pay for it? Not by reducing the billions of dollars we spend to subsidize oil industry. No.
▶ 3:31:10Instead, my Republican colleagues would rather kick 14 million Americans off of their health care, cut off food stamps and food assistance for hungry families, and bankrupt our small businesses into because of this tariff war. It's outrageous and it's unacceptable. In my home state of Alabama, half of all births are covered by Medicaid and more than half of the Medicaid recipients in Alabama are children.
▶ 3:31:3860% of the nursing homes in Alabama have Medicaid beneficiaries. So, let's be clear. The face of Medicaid are our children, our seniors, and the disabled. When our Republican colleagues cut 715 billion dollars from Medicaid, it is our children, our seniors, and the disabled who will pay the price. Mr. Chairman, these cuts are about more than just statistics. They are about lives and livelihoods.
▶ 3:32:09Real people will be impacted by the actions that we take. Last Friday, I had the chance to meet with one of my constituents, Latoya Mims. Latoya's beautiful six-year-old daughter, Harper, has cable pausy. She is one of the three million American children living with disabilities. It was because of Medicaid that Harper is able to live at home with her family surrounded by her loved ones.
▶ 3:32:38Without it, she would be forced into an institution. To strip children like Harper of their health care in order to cut taxes for Trump's billionaire friends is an outrageous betrayal of our American values. It's shameful. Everyone in this committee has a Harper in their district. Everyone on this committee represents tens of thousands of Americans who rely on Medicaid to make ends meet.
▶ 3:33:07We should be standing up for them instead of ripping the rug out from them. The people that I represent are good and honest Americans. They work hard every day. They make enormous sacrifices to support themselves and their families. But they are hurting. They are being crushed by the high cost of living and many are living paycheck paycheck.
▶ 3:33:33What are my constituents to do to make Donald Trump care about protecting their healthcare? They can't afford to bribe him by funneling millions of dollars into crypto scheme. They can't afford to buy him another jet. The American people sent us here to speak up for their needs, not to do the bidding for the billionaire class.
▶ 3:33:56As members of this committee, we have the opportunity to build an economy that works for all Americans, but we are failing them. My constituents deserve to have a voice in this democracy, and I will fight each and every day to provide them with that voice. This is a sad day on this committee, a sad day for Congress, a sad day for the American people. I am a hard no on this bill.
▶ 3:34:26Actually, I'm a hell no on this bill. I will continue to fight to make sure that those those who are the most vulnerable in our society get a voice. We have to speak up and speak out for the least of these. I will continue to do that and I ask that my colleagues do the same. Thank you and I yield back the balance of my time. Gentlely yields back. Miss Delaney, you recognized to strike the last word. Thank you, Mr. Chairman. I move to strike the last word.
▶ 3:34:57Um, this bill is one big broken promise. Republicans promised that when they were elected, they would lower costs for American families. But that's not what's happened. Families have seen the cost of basic goods like groceries and household products go up because of Trump's trade war. a trade war.
▶ 3:35:17He had no authority to start because he did not get congressional approval before imposing sweeping tariffs against some of our closest allies like Canada and Mexico. These tariffs will raise costs on families by thousands of dollars a year. And while the president has paused some tariffs, it's only temporary. He changes his mind all the time.
▶ 3:35:42And that uncertainty itself is damaging to businesses that cannot plan or invest for the future, further raising p prices and straining supply chains. Meanwhile, the Republican members of this committee have been silent. They won't stand up for their constituents because they work for Donald Trump. And that brings us to this bill, which will make life even more expensive for families.
▶ 3:36:09Republicans are trying to move this bill through um even going through the night because they don't want the American people to see it. But the American people do see what they're doing. They see that you're giving another massive handout to the ultra wealthy. They see that you're trying to pay for it by ripping away health care and food security from millions of Americans.
▶ 3:36:34They see that you're going to saddle future generations with even more A constituent of mine from Kirkland wrote to me recently sharing that she was horrified to see what Republicans are trying to do to programs Americans rely on. She raised her family with the support of Medicaid, of SNAP, and the child tax credit. Her children grew up to be a nurse and an aircraft mechanic.
▶ 3:37:02She was able to give back to the community through nonprofit work helping people with dementia because she had the resources from these programs when she needed them the most. These are the people that are going to suffer because of this tax bill. Hardworking everyday Americans who are just trying to get by and raise their families.
▶ 3:37:23And as costs are increasing because of the president's recklessness, Republicans are cutting the programs that are supposed to help families make ends meet. I was here in 2017, the last time Republicans moved a massive tax bill for the ultra rich. And they promised that it would pay for itself. Just another broken promise. Instead, the tax bill ballooned our national debt. They said it would stimulate the economy and benefit workers.
▶ 3:37:52Another broken promise. A recent study that included some JCT economists found that of the corporate gain that the corporate gains flowed to shareholders and executives, not to 90% of the workers. You continue to break the promise to make life more affordable for Americans. And on top of the price hikes from Trump's tariffs, you're raising health care bills by taking away Medicaid and affordable care act coverage.
▶ 3:38:23This impacts every American because when people don't have coverage, hospitals cut services or close entirely. ER weight times are going to swell, which will mean the difference between life or death for some patients. and you're taking away food assistance, which will lead to more families in our communities going hungry.
▶ 3:38:45Washington's governor, Bob Ferguson, and governors from 22 other states said it would be impossible for states to pick up the tab from these cuts. There was a way we could do this Last Congress, we approved with overwhelming bipartisan support a tax package that would have made a real difference for Americans by investing in our children, building more affordable housing, and supporting innovation.
▶ 3:39:10It was a compromise for both sides, but that's what Americans want us to do, to compromise and put them first. I know that's a dirty word um on the Republican side right now, but people want us to find a way forward together to improve communities. Unfortunately, that's not what's happening today. I urge my colleagues to reject this massive broken promise because the American people deserve better. And I yield back.
▶ 3:39:41Mr. Chu, you're recognized to strike the last word. I move to strike the last word. Republicans are trying to spread the lie that there will be tax relief for everybody in this bill. But this is far from the truth. This is a bill that gives billionaires gold bars worth of tax giveaways. And what do hardworking families get? Pennies. Yes.
▶ 3:40:09In this bill, the top.1% stand to gain tax giveaways of $278,000 per year. And a family earning less than $50,000 a year gets tax relief $273 per year. It's so it's laughable, if not tragic.
▶ 3:40:34What it means is that billion billionaires get 1,000 times more tax relief than working families get. Yes, billionaires get the gold bars. Working families get the pennies. This bill could have been an opportunity for Republicans to get serious about correcting the damage they've caused since their original tax scam was enacted seven years ago.
▶ 3:41:01They could have reversed the 40% cut to the corporate tax rate that flowed entirely to executives and the largest shareholders instead of workers. They could have recognized that giving millionaires a tax cut 288 times larger than for those making under 50,000 per year was unfair. They could have worked to protect social security or Medicare.
▶ 3:41:30They could have stopped the president's senseless trade war that's turned our economy upside down in a matter of weeks. They could have revisited their decision to give a 20% deduction on tech take-home pay to some of the richest people in the country instead of making this giveaway even larger. But Republicans did none of these things.
▶ 3:41:56They chose to once again give tax giveaways, $5 trillion of tax giveaways to the richest people in the country and the largest corporation. But that is not even the worst, most irresponsible thing about this budget reconciliation scam. The worst part is that they're taking this money out of the pockets of those most in need.
▶ 3:42:25They're doing it with the most devastating cuts to health care benefits for lowincome and middle inome people in our nation's history through draconian cuts to Medicaid and the Affordable Care Act that together are going to leave almost 14 million people without healthc care coverage.
▶ 3:42:48That's the entire population of LA County and Orange County combined. And this will devastate so many, but especially children, the elderly, and disabled. 40% of births are paid for by Medicaid. Medicaid pays for two out of every three nursing home residents. In fact, Medicare covers on the average 28 days of hospitalization.
▶ 3:43:18And after that, who pays for it? It's Medicaid. And people all across the country are in fear of what could happen. Such as Chief Kuang from my district in Monterey Park. When he heard about Republicans plans to cut Medicaid, he called my office and said, "I am a 74 year old who's worked for 40 years as a warehouse worker.
▶ 3:43:43After decades of hard work, I now rely on Medicaid and Medicare for life and especially after undergoing hip and spine surgery. Now, on top of all of this, Republicans are cheering the president as he wages a senseless trade war that's turned our economy upside down. So, the bottom line is this. To my constituents watching this, you're paying the bill.
▶ 3:44:10When you pay more for basic necessities, when you l lose your SNAP benefits, when your small business is forced to close its doors, when you lose your Medicaid coverage or the tax credits for your health premiums, know that this is the reason why. It is so that Elon Musk can get another yacht. It is so that Donald Trump and congressional Republicans can give another tax cut to themselves and their friends. I yield back. Gentle yields.
▶ 3:44:40Mr. Bean, you're recognized to strike your last word. Uh, Mr. Chairman, I move to strike the last word and thank you very much and a very good evening ways and means. Uh, Mr. Chairman, call me old-fashioned. Uh, but, uh, I love robust debate, but do we have to do it with profane words and cuss words? Uh, we're better than that. We're the ways and means. So, let me, for the record, say I object. Uh, let's keep it clean. Let's keep it classy. uh to everybody out there that's going to be writing a a headline or a by line.
▶ 3:45:10I know uh the deadline we're in a 24-hour news cycle, but you're going to have a choice. You're going to have a choice. What's your headline going to be? Are you going to buy into the hype that we're giving tax cuts just for billionaires? You can buy into that hype or or you can read the bill because do you really think Elon Elon Musk is working for tips? No, he's not working for tips. It's the waitress that's raising her kids trying to get by.
▶ 3:45:41That's who we're bringing tax relief for. Do you think it's the billionaire that's trying to make ends meet by working overtime? No. It's the family of that's struggling that the husband or wife says, "I'll work extra to make ends meet." Overtime, it's the American taxpayer. I've got it right here.
▶ 3:46:01A family under household under $50,000 is going to see their taxes reduced by 16% uh in the coming years under this bill. That's America, if I can reach you, the taxpayers that probably aren't watching anyway because they're working right now. They're trying to still afford uh the damage done by the previous administration.
▶ 3:46:26So, we're trying to fix this economy to light it on fire to do great things so that everybody can have a chance at the American dream. So, the people that are paying the bills, the people that are working overtime for tips, trying to buy a car, do you think billionaires are financing their cars? Uh, they are not. But the people trying to make ends meet, they are. And that is the target. And that's the delivery of this bill to bring hope and prosperity to those who are quietly paying the bills and trying to get by.
▶ 3:46:56So yes, the right answer on this bill is yes. We are determined to stay here as long as it takes to get the job done. Uh I just had my first cup of coffee. I'm ready to jump in for round two. So Mr. Chairman, with all that, I'm fired up and ready to go to bring real relief to the American taxpayer. Let's go get them. I yield back. The gentleman yields back and don't have another copy yet. Uh, Miss Moore, you're recognized for five minutes to strike the last word. Thank you, Mr. Chairman. I move to strike the last word.
▶ 3:47:28Um, ma'am, thank you. You know, Mr. Bean, um, you admonish those of us who might believe the quote unquote hype that this big, beautiful bill would harm families and small businesses and workers. Well, I think this big beautiful uh bill is just a big bonanza for billionaires.
▶ 3:47:50And I'm going tell you when historians, researchers, and scientists study this bill and this country's fray and fall this day, May 13, 2025, and the markups of energy and commerce, the ad committee, and this prestigious Ways and Means Committee will be exhibit A of the breach of the American Social Contract, the E Pluribus UNM
▶ 3:48:21envisioned by our founders as we dismantle health care benefits for at least minimally 14 million people. We destroy the health care infrastructure of hospitals, nursing homes, home care, community health centers.
▶ 3:48:36As we undermine the Affordable Care Act and Medicare, as we take food from the mouths of babies and older adults, as we interrupt breakthrough medical research, as we retreat from our from saving our planet from climate change and other things, and as we add $5 trillion and upwards to our debt. all of this to provide monuddies and breaks to the ultra wealthy.
▶ 3:49:06You know, these are choices that we're going to make. But I am saying to my Republican colleagues, this no matter what you've done in Congress, this will be your legacy. And as Liz Liz Cheney warned you, Donald Trump will be gone. But this when people Google you, when your descendants Google you, this will be your legacy.
▶ 3:49:33And let me say you, you know, all these talking points, you know, all this word smithing, you know, this these are the facts right here. You're not doing this because the debt reduction. You're adding trillions of dollars to the debt for these tax cuts for the rich. You're not doing it for economic growth. The trickle down hasn't worked for 40 years and it just hasn't trickled and it ain't going to trickle.
▶ 3:50:02That e trickle down economics has been debunked. This is not about work and work requirements. If it had been, we would have we would have been expanding the earned income tax credit. This is not about helping small you know it it you we would not be increasing the 199A deduction instead of doing something meaningful for working families. Don't tell me that this is what the MAGA base wanted.
▶ 3:50:32The MAGA base, as Steve Bannon told us, need Medicaid. This is not what they asked for. And I'm telling you, anybody with basic understanding of math, including our colleagues in the Freedom Caucus, can tell you that this is not going to reduce our deficit at all.
▶ 3:50:57And I just want to say, you know, you can fool yourself, but you cannot fool the real numbers. And the thing that is so outrageous is to hear people talk about how this is going to help families and boost the child tax credit can create. It's a trick. You do it temporarily so you can get through the 2026 election cycle.
▶ 3:51:26Good luck with that. And then these benefits for children and elders and workers disappear while the tax benefits to the ultra wealthy sore. You know, three months into President Trump's term, the chorus of MAGA and others is growing louder. This is not what they signed up for.
▶ 3:51:53and they're realizing that this tax reconciliation bill is coming after them and will hurt their families. Not only are you taking health care away from people, you know, they will have fewer access to fewer goods and services because of the tariffs. The promised jobs are not going to materialize. I believe as Democrats believe in building from the bottom up.
▶ 3:52:18This means that none of our kids go hungry, that they all have access to higher quality education to not just some of our kids. And I urge my colleagues to join me in voting no on this big bonanza for billionaires. And I yield back. Gentle yields. Mr. Boy, you recognize the strike and last word. Thank you, Mr. Chairman. Well, here we are.
▶ 3:52:45the president's big, beautiful bill billionaires. Tax cuts, almost all of which go to the top 1% paid for by the biggest cut to healthcare in American history. Don't take my word for it. Just days ago, the nonpartisan Congressional Budget Office confirmed that at least 13.7 million Americans will lose their health care because of this bill.
▶ 3:53:15That's historic. I went back and checked. No other previous bill, no other previous law, no other previous event caused so many millions of Americans to lose their healthcare. not even the Great Depression. So, congratulations. This is one hell of an achievement. And why?
▶ 3:53:38All to pay for tax cuts for the richest people in America, the top Now, you can understand why many of us on the Democratic side are attacking this awful proposal. But it's not just us.
▶ 3:53:57Just yesterday, conservative Republican from Missouri, Senator Josh Holly, called cutting Medicaid and the other health programs quote morally wrong. He's right. But that's not all.
▶ 3:54:12It turns out after cutting Medicaid and cutting the Affordable Care Act and cutting nutrition assistance and cutting education programs and on and on and on, even after all of that, all of those cuts, as large as they are, only pay for 25% of the tax cuts for the rich. So, how does this legislation pay for the rest of it? more added to the national credit card.
▶ 3:54:43Our national debt will explode as a result of this to the tune of almost $4 trillion more added to the national debt. I never want to hear ever again anyone on the other side lecture us about deficit and debt. No single piece of legislation in my time here in Congress will do more to add to the national debt than this one. The American people get it.
▶ 3:55:11They were asked a few weeks ago in one uh opinion poll, do you support cutting Medicaid to pay for tax cuts? 81% of the American people said no. And that was before the Congressional Budget Office confirmed that over 13 million Americans will lose their health coverage. Now, sure, you can spin numbers. You can spin statistics. It's a reason why Mark Twain once said, "There are three kinds of lies.
▶ 3:55:40Lies, damned lies, and statistics." You won't be able to spin the 13 and a half million Americans who lose their health care as a result of this bill. No amount of spinning will convince them to believe something contrary to what they actually are about to live. I say to all of my colleagues here, we can do better.
▶ 3:56:04We can ensure that we have tax relief for almost every American and we can do it in a way that doesn't rip away health coverage for more than 13 million Americans. I urge all of my colleagues to reject this big, beautiful bill for billionaires. I yield back. Gentleman yields. Mr. Bar, you're recognized. Strike the last word. Thank you, Mr. Chairman. I move to strike the last word. Gentleman's recognized.
▶ 3:56:32Top heavy tax cuts paid for by lowincome benefit cuts. President Trump and the Republican majorities in Congress were narrowly elected by a little more than 1% with the simple hope from the American people that would lower costs. The president himself declared that he would bring prices down on day one and Trump republicans are now breaking that promise.
▶ 3:56:54In fact, thanks in part to the unprecedented taxes Trump has imposed the American people through his nonsensical tariff plan, prices remain high and con consumer inflation expectations have surged. Americans are seeing the evidence of his broken promise everywhere. When you buy a cup of coffee or a used car or a dozen eggs, we're paying more now than we did before Trump took office. And on top of that, under Trump's reckless leadership, our economy took a nose dive in the first quarter of the year, the first time it's contracted in years.
▶ 3:57:24And many other indications are flashing red. In economic uncertainties at an all-time high, and the conversations around the kitchen table and in small businesses are the same. Everybody's scared. And that brings us to today. My Republican friends are hoping this multi-t trillion dollar giveaway to the wealthy will somehow dig them out of the hole the president has gotten them into.
▶ 3:57:46If history is any guide, more tax cuts for the rich won't do much, if anything, to put the economy on a firmer footing or provide lasting assistance for working and middle class Americans. Their model is the 2017 tax cut and jobs act. Trump and the Republicans want to extend it here, but look at it. It failed across the board. Wages didn't rise any faster. The economy didn't grow any faster, and the bill definitely didn't pay for itself. It just exploded our national debt.
▶ 3:58:15And just like last time, dollar for dollar, the benefits in this bill overwhelmingly skew towards the ultra wealthy. It's nice to have my friends talk about the tax cuts on tips and the tax cuts on overtime. This is a tiny part of this bill, a distraction from what's really going on. They're trying to pull a fast on the American people by delivering massive long-term benefits to the millionaires and billionaires while throwing a few temporary temporary tax breaks to working people.
▶ 3:58:44Time to help them get through one election cycle. The folks who are getting the most help in this legislation are the same folks who don't bat an eye when the prices go up at the grocery store or they buy a new car or they go on vacation or they're affected by the tariffs that are cost average Americans at least $2,800 a year according to Yale. The ultra wealthy are the very last people that need a boost on their incomes.
▶ 3:59:06And yet my Republican colleagues closely attend to their needs in this bill, ensuring their tax rates stay low and estates where tens of millions of dollars don't get taxed. and the folks who manage hedge funds keep their special carried interest tax loophole. Making the legislation even worse is how my Republican friends plan on offsetting it eye watering price tax.
▶ 3:59:26I've heard again again they want to undermine America's fastest growing, most affordable energy sources and jack up utility bills for working families and do their friends in big oil a big favor in the process. They want to keep food assistance food assistance for the poorest Americans. and they're planning on ripping health insurance away from 14 million Americans, including seniors, kids, and people with disabilities. I have a constituent, Chris McCauley, with quadriplegia, and he uses a wheelchair.
▶ 3:59:54Medicaid pays for his equipment and support programs during the day. Without the help of his dedicated careers and the support Medicaid provides his mother, she wouldn't have been able to work full-time and support her family as a single mom for the past 20 years. These are the kinds of families that this legislation will harm. All to help give the richest Americans a tax break they don't need and they won't change their lives at all. Trump and Republicans have shown what their priorities are.
▶ 4:00:19Every ch turn, they choose to help the rich, often by taking money directly out of the pockets of working Americans. This bill will be a disaster for American people and will further divide our society between the thoughtlessly comfortable and the yearning discouraged. Top-heavy tax cuts paid for by low-income benefit cuts. I urge my colleagues to v vote no and I yield back. Gentleman yields. Uh, Mr. Evans, you're recognized to strike the last word. Thank you, Mr. Chairman. I move to strike the last word.
▶ 4:00:47Gentleman's Let's making one thing clear. The committee is here for one reason and only one reason. We are here today to watch President Trump wants to make his billionaire buddies richer in expenses of working people. We're here because Republican members want to help Donald Trump, find ways to to eliminate our health care for working families.
▶ 4:01:17Republicans are not here to help those who are struggling. Is a Republican bill, if it passed today, will take away health care for millions of Americans and the expenses. I urge all my colleagues to do the right thing. vote no against this bill and I yield back. Mr. Mr. Speaker Chairman, gentlemen yields. Mr. Snder, you recognize the last word.
▶ 4:01:47Seriously, Mr. Chairman, are the Republicans really serious about taking health care away from 14 million Americans? Are you all willing to demand those earning less than $30,000, many of whom are going to see their families lose their health care because of the Medicaid cuts, are you seriously going to vote to increase their tax burden?
▶ 4:02:08Are those of you who spent your careers calling for fiscal responsibility seriously now going to vote to increase our national debt by $5 trillion in just nine years? The fact of the matter is that there is nothing serious about this bill or the charade that we in this committee are having a serious markup.
▶ 4:02:29This is not a serious exercise, but an exercise of partisan parsimony favoring the most fortunate and especially the billionaire friends and family members of President Trump. And let's consider how we got to this moment. The Republicans weren't serious on Friday when they offered a 28page bill that was nothing more than a faint.
▶ 4:02:50The Republicans were not serious yesterday when they dropped a 400page substituting amendment barely 24 hours ago that is neither complete nor gerine. Republicans are cramming us with what they are calling one big beautiful bill. But it is really just a big package of gimmicks, faints, and pus that will add more than $45 trillion to our debt by the middle of the century. That's why we're doing this in such a rushed manner.
▶ 4:03:18Why Republicans are rushing to hold this meeting, this hearing in the dark of night rather than what could easily be held in broad daylight with constructive debate. And in fact, if we wanted to, if they wanted to, we could probably have bipartisan collaboration. Mr. Chairman, I've received thousands of letters from my constituents terrified what's going to happen to their families because of the Republican bill.
▶ 4:03:41I've heard from people dealing with life-threatening diagnosis who wonder if they will be able to continue their battle or be able to see their kids and grandchildren grow up. I've heard from patients of ch parents of children with disabilities that rely on Medicaid for long-term care. Medicaid is a lifeline for these families and they wouldn't be able to afford to get their children their care, the care they need if Medicaid is taken away. I've heard from one of my constituents whose son is autistic and receives homebased services from Medicaid.
▶ 4:04:10She can't afford the homebased supports, Medicaid funds for her sons. What's going to happen to her and her family if Medicaid is taken away? I've heard come from constituents whose parents are dealing with dementia and wonder if they they will be able to provide them the long-term care they need and deserve. How do I tell these people the Republicans one big beautiful bill will make their life better when it is so patently obvious that it will make their life harder? Mr.
▶ 4:04:38Chairman, in my home state of Illinois, nearly three and a half million people are enrolled in Medicaid. That's 20% of all Illinoans. Medicaid covers three in eight children, one in three working age adults with disabilities, and two in three nursing home re residents. This big, beautiful bill will not make kids healthier, won't suddenly disappear. Anyone's disabilities won't make nursing home care unnecessary.
▶ 4:05:01People's needs for these services will not go away, but by cutting Medicaid, their access to life sustaining, life-saving health care certainly will. Hospitals will close, especially in rural communities already struggling to get care. Nursing homes will either have to close or raise their prices. Either way, pushing care out of reach for countless seniors. We're here today to consider the nearly 400page bill. The tax policy in this bill is all smoke and mirrors.
▶ 4:05:29The real effect is that million America millions of Americans will be far worse off because of this one big, beautiful Republican bill. There is nothing beautiful in this bill. It's not going to help people who need support. They're gutting safety net programs, taking away health insurance, and stealing food from families in need. And not just make people worse off now. Americans will be worse off for generations to come.
▶ 4:05:54Remember, Republicans are adding more than $5 trillion to the national debt by 2034 and $45 trillion by the middle of the century. A kid born today, before that kid turns 30, this nation will be $45 trillion in debt. And here's the thing, we could keep the current tax rates for 98% of all Americans, everyone making less than $400,000 a year for a $1.8 trillion package.
▶ 4:06:24And we could responsibly cover that figure with smart bipartisan solutions that help hardworking American families not just make ends meet, but get ahead and give their kids a better future. That's what we should be doing with this bill. That's what we should be doing. Seriously. I yield back. Gentleman yields. Uh Mr. Moore of Utah, you recognize track last word. Thank you, Chairman. appreciate the opportunity to just address a few things um in this uh tax portion of the reconciliation bill.
▶ 4:06:54We're going to hear a lot today and that's the nature of any reconciliation bill. I wasn't on this committee when um the Democrats did the American Rescue Plan, but there were just as many arguments on our side against the nature of that bill. Um and from that, you know, we we saw an enormous amount of relief spending that was put into the monetary supply and subsequently some of the worst inflation that we've ever seen.
▶ 4:07:22What we're trying to do here is take what we learned and what we knew from 2017, the tax provisions that took place in 2017, and what that does to economic growth with respect to the entire economy. Let me just highlight a few things that I think are getting missed today in the conversation. Um and then some things that we're trying to actually address from the 2017. So um in 2017 the standard deduction was doubled.
▶ 4:07:48So the amount that you can write that you can write off on your tax liability was increased by 2x both for individuals and for married filing jointly. I I don't know how to say this over and over again. I don't know how to make this settle in.
▶ 4:08:03But that's one of the largest provisions in the bill along with the child tax credit that goes directly the largest provisions in the bill and the benefit goes directly to middle inome and lower income Americans. This is not a bill for billionaire relief. I'm I'm sorry. It's just a talking point. The Washington Post has refuted this over and over again. This is just rhetoric. We have to look at the actual pieces of the bill.
▶ 4:08:33Okay, the standard deduction was doubled. So what does that do? That means fewer people itemize. And guess what? There was an issue with that because charitable organizations realized, ah, fewer people are itemizing. They're less incentivized to give to charities because it's not a tax benefit necessarily because they're getting such a great big tax break by the standard deduction being increased so big. So what are we trying to do here?
▶ 4:08:57something called the Charitable Act, a very bipartisan piece of legislation that we've worked on in this committee for the last several years, the two years that I've been on, um is going to get enacted here. And what it does is it provides an above the line tax break for those people that are contributing $10 to the Salvation Army, $100 to their local Boys and Girls Club, and just make sure that we're encouraging f uh organizations like the United Way to still get those small dollar donations that are so
▶ 4:09:27important. Okay, so that's the kind of opportunity we haven't been able to do it for the last four years. this is a moment where we can do it because this tax bill will um if if this gets signed into law, those are the kind of things that we're working on here. This is important, right? There's things within um you know, making sure that that uh I'm a big supporter of of of private and family foundations.
▶ 4:09:51Um there's provisions in here that I've worked on to make sure to reduce the impact uh of the this this this sector has grown dramatically and and there's already attacks on this sector and there's there there's there's work that's being done on this. I've been working really hard to make sure that that good work is being shown.
▶ 4:10:09There is so much focus in this particular tax bill on making sure that um the world that that exists outside of public sector and private sector, the nonprofit sector is actually supported. So lower income, middle-income Americans are getting a huge amount of tax relief through the extension of what was done in 2017, which is the majority of this bill.
▶ 4:10:35Then you add on things that that that that there are also new provisions in this bill that are targeting lower and middle-income Americans. It it it just flies in the face of this concept that it's just for this for this wealthy class. Let me add in quickly the 199 cap A provision. This is hugely important for small businesses across the board. Um that you can you you will hear from the economy uh folks that are involved in this um world focusing on LLC's uh partnerships.
▶ 4:11:04This is where small businesses generally set up their their um status and this is giving a 20 to 23 even an increase on qualified business income relief. Okay, that is not some massive benefit to well this is a small business type of provision. Um and this is this is this is key to being able to make sure that um Utah for example, it's a state that focuses heavily on small business. We're not big Fortune 500 places uh location.
▶ 4:11:31We actually are the backs of small businesses and it's key that they have uh tax relief that will help them continue to grow. We did a bipartisan tax bill just last year, last Congress that had the provisions of R&D, interest deductibility, bonus depreciation that got unanimous support across the board. Those are the types of things that we're focusing on on this bill and a lot of the rhetoric is just going towards stuff that is is is is just not accurate. And I yield back. Gentlemen, you like to recognize the ranking member. Thank you very much.
▶ 4:11:59I had not intended to strike the last word to give our colleagues an opportunity, but has the gentleman had a chance to look at the distribution tables that just spoke to equate 500 bucks for a child with hundreds of thousands of dollars that are going to go to individual filers at the top billionaires.
▶ 4:12:21Doesn't make any sense under the magnifying glass of critical How can we say that this is relief for the little person who's going to get a buck a day compared to people who are multi-millionaires who are going to derive an enormous benefit? Digest the distribution tables. This is the Bible of the Ways and Means Committee when it comes to tax policy. I yield back my time, Mr. Yeah, I'm going to yield to Mr. Thompson.
▶ 4:12:51Thank you, Mr. Neil. I I just want to add um In regard to the comments my friend from Utah made about the talking points that we're using. Uh I I think the ranking member is correct. We're using the distribution tables. This explains exactly who gets what and my the ranking member was very generous to suggest that people on the lower end of the income spectrum get a buck a day. They actually get 72 cents a day.
▶ 4:13:22visav those on the other end that $223 a day. These aren't ways and means Democratic party talking points. These are the distribution table, the coin of the realm in the tax world. So to suggest that somehow we're making up numbers in order to make political points is absolutely ridiculous. And I yield back. Mr.
▶ 4:13:51Panetta and recognizes strike your last word. Thanks, Mr. Chair. Look, I think we've seen, we've heard, we've read what we could have of this 400page bill that this legislation guts benefits to working families to give tax breaks to billionaires. And all the while adding trillions to our debt. And by supporting it, you're giving up our commitment to this country.
▶ 4:14:15Look, I recognize how difficult it is to advance tax policies and balance fiscal responsibility with economic growth. Yet, if you call yourself fiscally responsible, that type of legislator, or if you call yourself a responsible legislator, you have to realize how thoroughly this bill fails working families, all the while undermining the fiscal state of our nation. Now, the larger reconciliation bill advances cuts to Medicaid, a program that provides healthcare for over 71 million American Americans.
▶ 4:14:45This bill would institute work requirements that would both cut healthc care spending and push people to work. Look, I get there's dignity in work, but the problem is less with that principle than with the implementation of such a program. Let's be clear, very few people who receive Medicaid do not work. Just 8% of working age able-bodied Medicaid recipients are unemployed without an excuse.
▶ 4:15:10Yet, it's very difficult to create a policy that targets that 8% and does not sweep others who are vulnerable. Recently, Arkansas tried this. It was such a failure that a court stopped the work requirements less than a year after it started. Why? Way too much red tape that led to 18,000 people losing healthcare coverage. And it didn't even increase employment. That doesn't just work in Arkansas.
▶ 4:15:34That in 2023, the CBO found a similar House Republican plan for work requirements would not increase employment and would lead to the loss of hundreds of thousands of jobs because of the decrease in healthc care spending. I get the idea of work requirements, but they also feed that ideological urge that Medicaid should not be an entitlement. But the fact is that Medicaid is a benefit that working families rely on. Yet, this bill sacrifices that program for billionaires.
▶ 4:16:01You are sticking us with this bill that not only worsens the lives of working families, you are worsening the unsustainable fiscal trajectory of our nation. Currently, our federal debt now exceeds 36 trillion, which is about the size of our economy. But this bill would increase the national debt by 5.3 trillion over the next 10 years. Something that is unthinkably irresponsible. Yet, this bill takes the easy way out when it comes to adding to our debt and deficit.
▶ 4:16:28So much so that they want to ignore the cost of extending the lower tax rates of TCJA. But let me tell you, working families won't be able to ignore the consequences of this bill. Interest rates will go up, inflation will go up, mortgages will go up, and the average American income will go down. This bill is about stealing from Peter to pay Paul. You're stealing from working families to pay for billionaires. You're stealing not just from our children.
▶ 4:16:56You're stealing from the future of this country by convincing yourself that you're fixing the problem. You're failing to be honest with yourself about meaningful fiscal reform. And by voting by voting for this bill, you're just making things worse. That's why I oppose this bill and so should you. I yield back. Mr. Gomez is recognized to strike the last word.
▶ 4:17:24I don't think I didn't think Republicans could get any worse, but here we are. But one thing that they do is finally admit that this is one quote unquote big beautiful bill. Calling it beautiful is like putting lip uh lipstick on a pig. You might put lipstick on a pig, but it's still a pig. And no, and the American people don't want to kiss that swine.
▶ 4:17:45And at the same time, the American people are witnessing one of the biggest transfers of wealth in the history of this country. In the Energy and Commerce Committee, just down the hall from here, Republicans are voting to slash almost 700 billion dollars from Medicaid, which is the health care for the working class, so that Republicans in this room can then give trillions of dollars in tax breaks to the billionaires,
▶ 4:18:15the ulty, and the largest corporations in this country. Republicans are literally stealing from the poor to give to the rich. This is in broad daylight without any shame. They're actually proud of it. And who loses when the Republicans cut Medicaid? It's you, the American people. 51% of new new moms and their babies who are covered by Medicaid, they will lose. Seniors that don't get enough coverage through Medicare, they will lose.
▶ 4:18:46the son or daughter that doesn't earn enough to cover their parents uh living uh assisted living facility uh bill, they will lose. People that live in rural communities, they will lose. And who represents those constituents? The Republicans. So, the Republicans claim to be the pro-f family party, but they hardly pass anything that actually values families. Republicans are making it harder for working people to get by.
▶ 4:19:12Harder for families to welcome a new child, get postpartum care, or cover basic medical needs during one of their most vulnerable times in their lives. But they don't care. Families are struggling. Many are working two to four jobs a week to make ends meet. They're already stretched thin by the increasing cost of food, housing, and child care. And now Trump's tariffs are hitting them even more, costing them another almost $4,900 a year in taxes.
▶ 4:19:41This doesn't uplift families, it pushes them down. Voters sent us here to lower costs and create real opportunity. And that's what we should be doing. We should make the child tax credit fully refundable and advancable. Make it bigger and make it pay out monthly. That's how we cut child poverty in this country by 40% uh during the one year it was implemented. We should help families buy their first home and build wealth.
▶ 4:20:07We should make child care affordable and guaranteed paid family leave. But this bill doesn't do any of that. That's because the Republicans choose the new billionaire establishment that has taken root in DC over their own constituents, over the working class, the ones that are they actually talk that they fight for. But we know that that is BS. We know that's not what they're doing because the tax cuts don't lie. The tax breaks don't lie.
▶ 4:20:37And the people who are going to get rich, who's going to be better off are the higher folks on the higher on the income ladder. That's who gets by. That's who gets wealthy. You know, we should be. So, it is one one big bill. They are absolutely right. And they're cutting Medicaid in order to pay for it. They're cutting SNAP in order to pay for it.
▶ 4:21:02They're cutting they're cutting everything that working FE people rely on. So to my Republican colleagues, I have one I have a few questions for you. Are you for the babies or the billionaires? Are you for seniors or the billionaires? Are you for rural communities or the billionaires?
▶ 4:21:23Are you for working men and women who are struggling in this economy, who are struggling to save up, to put a take care of a sick family member, to start a small business, to put a child through college? Are you for the billionaires? Words are cheap. It's your vote that matters. And we all know how you're going to vote. and you're not and you're going to say that you're not not taking from the poor, that you're not taking from the middle class.
▶ 4:21:53So, I want you to be honest with the American people. Stop pissing on our leg and telling us it's raining. With that, I yield back. Mr. Horseford. Thank you, Mr. Chairman. I would like to strike the last word. economic chaos, cruelty, and corruption. That's what lies before us.
▶ 4:22:23I know there's a lot of tension on a $400 million airplane. That's a distraction that's taking away from the fact that this bill screws America. The cuts in this Screw America bill are rigging the game, stacking the deck for billionaires while leaving working families to play with a losing hand.
▶ 4:22:45And while we're dealing with the chaos here in our committee, the other committee down the hall is making the biggest cut to health care in US history. In the other committee down the hall, they're cutting nutrition assistance for children and seniors, and they're planning on doing so in the middle of the night under the cover of dark because you don't have enough courage to bring this bill before the American people to read
▶ 4:23:15it aloud and tell them who actually benefits. Why are they doing this? To pay for their screw America tax cuts for billionaires. Mr. Chairman, the committee is not in order. Let's break down those cuts. If you're lucky, you might get $1,000.
▶ 4:23:39But Elon Musk, he'll pocket over 300,000 per year because of this big, beautiful bill. That's $762 every single day. their screw America plans to gut 300 billion in new private sector investments in clean energy solutions. How does it screw Americans? Simple. By repealing the credits that raises household energy cost by $110 a year.
▶ 4:24:09That means that so-called $1,000 tax cut for middle class families is now worth $890. This bill does nothing to address the housing crisis. nothing. Nearly half of the renters in Nevada spend an excessive portion of their monthly income on housing. Democrats have a plan for that. Republicans, they're handing out another tax break to Jeff Basos. Rents in Las Vegas have risen 30%.
▶ 4:24:40What was once $1,500 a month is now $1,900. The cause? Institutional speculators buying up homes. That's why My Home Act would directly address this. But Republicans, they just gutted the FTC and handed more power back to corporate landlords to jack up the rent. So that $890 tax cut now is worth $440.
▶ 4:25:06Even a free program to help people file their taxes is on the chopping block by Republicans. Industry estimates show that on average, Americans spend about $200 to file a simple return. So, this is just more money out of your pocket. And we can't forget the blanket tariffs, which are taxes that American consumers pay, not foreign governments.
▶ 4:25:31President Trump is weaponizing tariffs, not to boost US manufacturing and workers, but to punish allies and to raise cost on consumers. That's a tax hike. One that could cost the average US $2,800. So, remember that $440 I talked about? It's now wiped out. You're now losing over $2,000. Remember Elon Musk and other billionaires like him?
▶ 4:26:01He's still saving nearly $1,000 a day. That's the screw America agenda. So, how are Republicans planning to give Elon Musk more money? By slashing vital programs like nutrition assistance, like Medicaid. Twothirds of seniors in nursing homes are on Medicaid. My grandmother lived in a nursing home for 27 years of her life after suffering a debilitating stroke.
▶ 4:26:29One out of 10 of our veterans are on Medicaid. These are lifelines for more than 500,000 and 811,000 Neadans, respectfully. So, let's be serious. Show me where there is relief for working families. Show me where there is relief for rural communities. Make a rule make rural America great again. Their method, a tax break for large international corporations.
▶ 4:26:58Republicans want to give the American people, they want to give you pennies while handing out gold bars to billionaires. So, as we begin this process, and yeah, I'm going to fight all night. Mr. Chairman, I'm asking my colleagues to break from Donald Trump, break from this cruelty, break from this economic chaos, and join with us to chart a different path forward.
▶ 4:27:24one that ensures that we give permanent tax breaks to moms and dads and small businesses, not to billionaires and big corporations. Let's get serious about lowering cost. Work with us to hold corporate interests accountable. And if you're serious about serving the people, not the lobbyist in DC, then work with us and not this screw America bill that inflicts so much pain on the American people. I yield back.
▶ 4:27:54Votes have been called. We will um recess until the the last vote's been taken and the committee will start immediately after the second vote.