WASHINGTON, D.C. – Today, U.S. Senator Angus King (I-Maine) introduced a motion to instruct members of the bicameral conference committee on tax reform to return a final conference report that does not increase the federal budget deficit for the period of FY 2018 through FY 2027. He spoke on the Senate floor in support of the motion, which was defeated by a vote of 48 to 50. Excerpts from the speech are below:
“We are headed into literally uncharted territory with regard to our national debt… It is a threat to this country. It’s a threat to our national security. It’s a threat to every man, woman and especially child, because they’re the people that are going to have to be paying this debt.
“The bill that was passed in the dead of night early Saturday morning adds $1.5 trillion to that debt…We’re adding to the debt at a time of low unemployment, enormous growth in the stock market and a relatively strong economy. Not perfect by any means, but compared with where we were 5 or 6 years ago, we’re in positive territory on the economy. That’s when you should pay down debt, not add to it unnecessarily. If we were in a crisis, if we were in a recession, if we were in a conflict that required immediate mobilization, that’s when you want to add to the debt.
“That’s what you borrow for – we’re borrowing to pay park rangers salaries. We’re borrowing to do the ordinary operation of government, and now we’re borrowing to give major tax cuts in a time of relatively positive economic growth. And I know it’s not as it should be, and as high as we want it to be, but this bill that we passed that’s going to add to the debt isn’t going to do much of anything to assist us with growth. The analysis of the Joint Taxation Committee is that it will add 0.8% to GDP growth in 10 years. That’s almost immeasurable…it doesn’t come close, by the way, to paying for itself…
“It’s unethical, what we’re doing. If 5-year-olds knew what we were doing and could vote, we would all be out of a job because they are the ones who are going to have to pay this bill…it’s unconscionable. It’s unnecessary. If indeed we were going to expand the economy 3% or 4% a year, and everyone says that’s what we’re going for…but we’re talking about 0.8% over 10 years. Not per year, over 10 years. So my motion is very, very simple: don’t come back with a bill that adds to the deficit.
“And there’s lots of ways we can do tax reform…without hammering the deficit. In fact, I understand as of this morning, we improve the finances of this bill by mistake to the tune of $389 billion. A mistake in the bill that we passed because we did it so fast that nobody knew what was in it. I have a new rule: the faster a bill goes through the United States Congress, the worse it is. And I think that’s what we’ve seen in this case.
“We can deal with tax reform. We can increase our competitiveness. We can get our taxes aligned, particularly our business taxes, with the rest of the world without loading this debt onto our children. A tax cut when all you’re doing is borrowing to fill the hole is not a cut. It is a shift of the tax from you to your kids…
“I think one of the questions we have to ask is…what are companies going to do with this newfound income when the taxes are cut dramatically…is that money going to go into new plants and equipment? Is it going to go into wages? Is it going to increase people’s wages… or is going to go into stock buybacks, which raise the value of the stock. That’s great for the owners, but doesn’t do a thing for the workers. And it doesn’t do much for the United States economy.
“So again, my motion couldn’t be more straightforward and simple. Work on the tax bill in conference – I think you’re going to have a hard time making a good bill out of it – but whatever you do, come back with something that’s deficit neutral. And by the way, that’s where this discussion started. Last January, the leadership in both Houses, in both parties, was talking about deficit-neutral tax reform. And somewhere along the way, it became: ‘Let’s break the bank. Let’s add new debt to our kids. Let’s create a situation where we’re not going to have any slack when we need it.’ No business would run this way, and it’s wrong for us to try to run the country this way…”
During his speech, Sen. King used Chart 1 to walk through the history of our national debt, which has ebbed and flowed based on economic circumstances and U.S. participation in armed conflicts. He specifically noted that following a large spike of debt to fund World War II, the Greatest Generation paid down the debt going into the 1970s.
Senator King’s motion would have given nonbinding instructions to the conferees, asking them to return a final conference report that is deficit neutral over a 10-year period. This is his most recent push for a deficit-neutral approach on the recent tax legislation; prior to the Senate’s passage of the tax bill last week, Senator King offered an amendment to refer the tax bill to the Finance Committee with instructions to create a deficit-neutral proposal. The amendment failed along party lines following more than an hour of debate and an unusually long voting period.
Senator King, a member of the Senate Budget Committee, has consistently called for a responsible, balanced and long-term approach to addressing our national debt and deficit. In 2016, he was named a “Fiscal Hero” by the Campaign to Fix the Debt, a nonpartisan movement to put America on a better fiscal and economic path.
Chart 1: Federal Debt Held by the Public as a Percentage of Gross Domestic Product