Hire More Heroes Act of 2014—Motion to Proceed—Continuedby Senator Ron Wyden
Posted on 2014-05-13
WYDEN. Mr. President, this morning the Senate begins
consideration of a tax cut bill. The Finance Committee agreed to call
it the EXPIRE Act, and I am going to take a few minutes to talk about
why it is so important that this bill be passed--and passed now. Here
are a few of the key reasons:
First, if the Senate doesn't act, veterans who are now packing job
fairs across this country are going to face an even tougher struggle to
get good jobs.
Second, because the jobs most essential to our economy--the good- paying, innovation-driven jobs needed to underpin a growing middle class--will be harder to create.
Third, because just when underwater homeowners get hold of a life raft that keeps them in their homes, a big tax hike could yank it away.
Fourth, because millions of students are already up to their eyeballs in debt, and without this they will go even deeper.
In addition, producing clean energy will grow more expensive, risking the high-tech jobs every Member of Congress wants to protect.
The EXPIRE Act addresses all of these issues and more.
The second question that I think is going to be relevant to this debate is, What are the implications for the cycle of stop-and-go policies that have made the Tax Code in this country so unnecessarily complicated and uncertain? The EXPIRE Act ends that and builds a bridge to comprehensive tax reform. Many of these stop-and-go incentives are good policy, and they ought to be extended permanently. The EXPIRE Act gives the Finance Committee and the Congress the room to work on reform and decide which provisions to keep.
For now, this is about balancing short-term needs and long-term goals. In the coming months, the Finance Committee is going to pursue a tax reform plan on a bipartisan basis that gives all Americans the opportunity to get ahead. But right now, what is needed is to protect jobs and deliver more certainty.
On April 3 the Finance Committee passed the Expiring Provisions Improvement Reform and Efficiency--EXPIRE--Act. There was a strong bipartisan vote in the committee. We called the bill the EXPIRE Act for one reason: It is supposed to expire. I stated this morning that, on my watch, this is going to be the last time--the last time--the Finance Committee considers a tax extenders bill. Once this piece of legislation is enacted and behind us, the committee will move on to the critical next challenge; that is, comprehensive bipartisan tax reform.
I will talk for a minute about how this package is going to help middle-class individuals and families.
We all understand that a prosperous middle class is the key to long- term economic growth for the country. This legislation boosts that cause by extending incentives that help workers get back on their feet, such as the work opportunity tax credit. This provision is a lifeline for our veterans in every State in the country because it encourages employers to hire the vets when they come home from overseas. Veteran unemployment is still at crisis levels. This bill is going to help address that.
Thanks to work by Senators Portman and Cardin--again, on a bipartisan basis--the work opportunity tax credit is now going to be available to businesses that hire the long-term unemployed. They are the Americans who have been hit the hardest by the recession, and, without help, we are going to see them fall between the cracks. This legislation can be an important role in helping those Americans find good jobs.
The EXPIRE Act also extends and expands the credit for research and experimentation. The reason this is so important is this is the lifeblood of innovation that is so important for our economy. Not only does this credit incentivize research and innovation, but thanks to good, bipartisan work--I heard that mentioned a couple times this morning, and we are going to hear it again--in this case, Senator Roberts, Senator Schumer, and others made adjustments to the credit to [[Page S2929]] make it work better for small businesses and for startup firms. Many of these firms just getting out of the gate can't really use the research credit in its current form, so the EXPIRE Act says to all of those startups that if they want to use the credit, we are going to make it easier to hire and pay workers. We are going to help them do that.
Congress also needs to keep pushing business investments in innovation. That is why the EXPIRE Act extends incentives such as bonus depreciation and expanded business expenses. This makes it easier for companies to invest in new equipment and property and grow their operation and create more jobs.
We know many of our communities are hurting. They have been battered over the past decade by the financial crisis and by an exodus of manufacturing jobs. So it is critical to drive investment to those communities to help promote growth and create good-paying jobs.
The people in those communities hit--and hit hard--by this economy deserve a chance to achieve the American dream just like everybody else. That is why the EXPIRE Act extends provisions such as the new markets tax credit, which drives private investment to these hard-hit areas. The new markets tax credit leverages private funds to create new businesses in economically depressed communities. And thanks to efforts by my colleague from Ohio, Senator Brown, these credits are going to be available to boost manufacturing--areas that have lost some of their good-paying, blue-collar industrial jobs. Through this, we will see more private investment head their way.
With the recent news of the economy's first quarter, the challenge of growing the economy--it is obvious our families and businesses need all the help they can get. That is why the EXPIRE Act allows families to continue to deduct their State and local taxes. Americans can already deduct their State income taxes thanks to a permanent part of the Tax Code. But families in States such as Texas, Florida, Washington, and Alaska don't pay State income taxes; they pay higher sales taxes. This legislation levels the field and lets families deduct their State and local taxes whether they are income or sales.
As the housing market continues to come back from the great recession, we know millions of Americans are still struggling to stay in their homes. Many of our homeowners found themselves underwater, owing more in mortgage debt than their houses were worth. To make matters worse, just when they caught a break and had their mortgage payments lowered or their debt forgiven, they got hit by a giant tax liability. Imagine that. Once you get your head above water, a huge tax bill pushes you right back underwater.
This legislation contains a provision to prevent exactly that situation from happening and to help keep American families in their homes by exempting their forgiven mortgage debt from taxation. And I feel particularly strongly about this because that is really phantom income, and middle-class Americans shouldn't get hit that way.
Over the past several years, States throughout the country have been forced to make a lot of painful fiscal choices. Over the past several years, States throughout the country have been forced to make a lot of painful fiscal choices in many communities. The budget ax has fallen on education. Teachers routinely face classrooms of 30 to 40 students, often even more. Too often those teachers run short on supplies and then they reach into their own pockets--into their own pockets--to make up the difference. These are hard-working, middle-class professionals. What this legislation does is help those teachers just a little bit by letting them deduct up to $250 of those out-of-pocket expenses from their taxes. Oregon teachers deduct more than $9 million in classroom expenses each year.
A college education is absolutely vital in our competitive, modern economy. For families and students paying for college, trying to deal with those skyrocketing costs and the mountains of debt they incur, this legislation extends the $4,000 deduction for tuition expenses. Oregon families use it to deduct more than $61 million in tuition and fees annually. It gets harder each year to maintain a middle-class life without a college degree. That is why this deduction is so important and why it is in this legislation.
There is one last part of the bill I would like to touch on; that is, the incentive for clean energy. Previously I chaired the energy committee, and I saw how essential it was to generate investment in clean energy. It is an area of our economy that has been plagued by the stop-and-go nature of tax policy. Now is the time our country should be investing in low-carbon and energy-diverse alternatives. Some of the provisions in the EXPIRE Act have been extraordinarily successful in doing just that. The production tax credit for renewable energy that includes wind, geothermal, hydropower, and biomass has helped drive major growth in renewable clean energy. Wind in particular has boomed over the past 5 years. It now accounts for more than 60,000 megawatts of wind generation across the country. Wind energy production has more than doubled since 2008. That is enough to power more than 15 million homes and the energy supports more than 50,000 jobs. The growth of this industry has been a boon to manufacturing, supporting more than 500 manufacturing facilities.
Still, the wind industry is not immune to the stop-and-go nature of tax extenders. Growth has leveled off over the past 2 years, mostly due to the expiration and late retroactive renewal of provisions such as the production tax credit. It is critical, in my view, to provide certainty to these businesses. In the energy sector, electricity generating stations and refineries are major investments that can take years to plan and to finance and construct. That is why tax reform is so vital. Our country needs a long-term, stable energy policy.
There are a lot of fresh ideas on how to improve energy policy in the Tax Code. As chairman of the Finance Committee, now-Ambassador Baucus put out a number of innovative, technology-neutral ideas that in my view deserve a significant amount of attention, but while working out those ideas in a transparent, bipartisan way, it is important Congress not let our domestic clean energy industry fall off the cliff, which is the reason this bill extends provisions such as the production tax credit through 2015.
Clean energy is not just about generating more low-carbon electricity; it is also about using energy more efficiently in reducing our overall consumption. That is why the EXPIRE Act extends and updates the credit that helps out homeowners who want to improve their houses and make them more energy efficient. Whether it is through better windows, installing insulation, perhaps replacing a water heater or a furnace, this provision helps those homeowners. These improvements can dramatically reduce the amount of energy used to heat and cool American homes, resulting in lower electricity bills.
The legislation improves this provision by cleaning up what has been current law and updating its standards. It will be easier to use and help push the boundaries on energy efficiency by allowing only the most energy-efficient improvements to qualify. Even in pushing for efficiency in how we use energy, it is important to make smart use of taxpayer dollars.
Commercial buildings use a tremendous amount of energy--20 percent of all electricity consumed in the United States powers the places we work. By reducing this consumption, the United States can drastically cut emissions and lower costs for businesses. It is obvious the areas I have outlined make sense for our economy and they have bipartisan support. They are going to help spur investment and innovation, boost our communities, help disadvantaged workers, and continue to drive investments in clean energy and energy efficiency.
A number of these provisions I have indicated should be made permanent, and it would be a mistake to simply let them disappear. In wrapping up, I wish to address the question: Why not make these provisions permanent now? Why not pass tax reform today? That would be my first choice.
Everybody knows our Tax Code is in bad shape. It is complicated. I think calling it opaque would be a compliment. It desperately needs fixing.
[[Page S2930]] We want a code that promotes economic growth and treats everyone fairly. A lot of Members have worked hard to develop ideas, but the reality is tax reform is not happening tomorrow. Reaching a comprehensive, bipartisan plan is going to take time, focus, and hard work.
I know something about that because I have put as much sweat equity into bipartisan tax reform as any Member of this body, starting with our former colleague Senator Gregg. We sat next to each other on a sofa every week for 2 years to write the first bipartisan Federal income tax reform plan in 30 years. Senator Coats has joined Senator Begich and I in this effort and we are not alone. Chairman Camp has put forward an ambitious tax reform draft that lays out several ideas as well on how to make the Tax Code simpler. All of these proposals contain the kinds of ideas we ought to examine as we look to reform our Tax Code. Once the issue of these extenders is settled, I look forward to working with Senator Hatch and all our colleagues on a broad-based tax reform plan that will grow our entire economy.
In the meantime, it would be a mistake to leave American families and American businesses out in the cold. Temporary provisions of the Tax Code continue to expire, leaving jobs, innovation, investment, and people's homes in limbo. By providing certainty to businesses and families for the next 2 years, the EXPIRE Act creates the space needed for true tax reform. I don't want us to lose sight of that during this debate. These extenders are important, but we are also going to talk on the floor about building a bridge to reform that this country desperately needs. We know there are inequities in the Tax Code. The inability to have the certainty and predictability we need is holding us back.
We need to make sure we have a Tax Code that gives everybody in America the opportunity to get ahead, especially our hard-working, middle-class citizens, our entrepreneurs and businesses. Our people work hard for the money they earn each and every day. They want to pay their fair share, but when they are asked to contribute part of their paycheck each month, they deserve a tax system that is transparent and equitable. We need to simplify the code. We need to level the playing field. We need to get rid of the disparities between different types of income that elevates some workers over others.
I encourage all of my colleagues today to, first, back this legislation so we don't see, for example, innovation and our veterans and teachers suffer as we work toward bipartisan tax reform; second, to be open about sharing their ideas with the Finance Committee and all Members about innovative bipartisan reforms that can improve our entire Tax Code. Voters send us to work. They are looking for results. They don't want to hear excuses about why families pay more for college or why homeowners face a huge tax bill after getting out from under a mountain of debt. Simply dropping those tax incentives sacrifices valuable priorities without getting the real job of comprehensive reform done. Let us pass the EXPIRE Act and let us move on to urgently needed bipartisan comprehensive tax reform.
With that, I yield the floor.