Tax Extendersby Representative Steny H. Hoyer
Posted on 2015-12-15
HOYER. Mr. Speaker, within the next few days, the House could
take up a tax package that extends a number of tax breaks permanently.
The cost of such a package runs in the $600 billion to $800 billion
range--none of which is paid for--ballooning our deficits in a way that
reinforces a misguided double standard that investments in the growth
of jobs and opportunities must be offset, but tax cuts are always free.
Tax cuts, like everything else, have a cost. If we fail to pay for them, we will [[Page H9311]] once again increase deficits and debt, which in turn will be used as the catalyst for another round of cuts to the very programs I believe are vital to our economy and to our people. Therefore, Mr. Speaker, I will oppose an unpaid-for tax extenders package like this that is proposed, should it come to the floor.
Before going through my concerns about this deal in greater detail, let me say that the package being discussed has a number of tax preferences that I and many others support. These include making permanent expansions of the earned income tax credit, the child tax credit, and the American opportunity tax credit launched under the Recovery Act in 2009. It would also provide incentives to businesses and individual filers for investment, research, charitable contributions, and teaching expenses, among others. Most of us support those efforts.
In many ways, this would be a bill where everyone gets something they want. But, Mr. Speaker, our children and grandchildren will get the bill.
What concerns me most about this deal is that it further entrenches the false notion that offsets only matter when it comes to spending priorities. The direct consequences will be providing Republicans with the ammunition they need to propose even deeper cuts to the very investments that help grow the economy and create jobs both in the short term and in the long term.
Frankly, I am surprised that we haven't heard more of an outcry that the roughly $800 billion in lost revenue from this package is nearly the same amount as the $813 billion in discretionary cuts Republicans insisted upon in the sequester. It would appear that we are setting ourselves up for Republicans demanding the next round of severe cuts that harm our economy and our people, both on the nondefense side and on the national security side. Frankly, Mr. Speaker, we must move away from this dangerous pattern.
Republicans have continued to argue that tax cuts pay for themselves by spurring economic growth, a theory that has been proven wrong, and, sadly, as I said, our children will pay the price for the deficits that have resulted. Others will argue that the effect on our deficits and debt of another $700 billion in unpaid-for tax expenditures over the next 10 years can be ignored because we would extend them every year anyway. While convenient, neither of these is a responsible position for governing.
In a Wall Street Journal piece last Monday, Maya MacGuineas, president of the Committee for a Responsible Federal Budget--the Committee for a Responsible Federal Budget--asked: ``How do we explain to our children that we borrowed more than $1 trillion--counting interest--not because it was a national emergency or to make critical investments in the future but because we just don't like paying our bills?'' Our answer has to be not to justify the irresponsible behavior, but to correct it. And this tax extenders package will make that much more difficult. First, this package undermines Congress' ability to invest in creating jobs and opportunities that make the American Dream possible for millions of families.
When we cut taxes without paying for them, there are consequences. Every dollar in lost revenue is a dollar that must be made up somewhere else in the budget. As I said earlier, these unpaid-for tax extenders will set the table for further Republican attempts to slash critical investments in our Nation's future.
Secondly, Mr. Speaker, it will hinder our ability to restore fiscal stability by making it less likely that we will be able to protect the future sustainability of entitlement programs like Medicare and Social Security.
In order to appear balanced, recent Republican budgets proposed trillions of dollars in cuts to health programs for seniors and the most vulnerable in our society. Worsening our deficit outlook by passing this bill invites them to continue that tack.
While we face a challenge to our most critical retirement and health programs--a challenge driven by the retirement of the baby boom generation and the looming effect of compound interest on our debt--my Republican friends continue to offer budget proposals that severely cut benefits for seniors and the most vulnerable Americans and they try to justify doing so because our deficits are too high. Their proposal would exacerbate that by about $1 trillion, as Maya MacGuineas said. Here we are, though, about to consider proposals to raise the deficits even higher.
Thirdly, Mr. Speaker, this type of unpaid-for, permanent extension will undercut our economic competitiveness by making comprehensive tax reform more difficult to achieve, not easier. We need comprehensive tax reform, and this will make it more difficult. Locking in preferences while lowering the revenue baseline by more than half a trillion dollars will ensure a plunge into further debt.
Mr. Speaker, I continue to believe that the business community would much prefer to see rates go down through comprehensive reform than simply an extension of individual preferences. This bill promises them both--more preferences and lower rates--at the cost of deficits, debt, and diminished investment in our economic competitiveness.
There are certainly components of this tax extenders package that I, as I said before, would like to make permanent. I wish we could make them even better, in fact. For instance, the child tax credit should be structured to keep up with inflation so those working the hardest to get by don't continue to see their resources dwindle year after year.
Again, let me quote Maya MacGuineas when she highlighted this important point in her op-ed when she said: ``Most of the extensions under consideration are sensible enough policy--and their merit is an argument for paying for them.'' I couldn't agree more. This tax extenders package, itself, serves as a powerful argument for Democrats and Republicans to come together to achieve that which we really need: comprehensive tax reform.
So, in closing, Mr. Speaker, while I agree we need short-term certainty for tax filers before the end of the year, I believe the price this package would have us pay is too steep and too irresponsible in the short term and in the longer term. Instead, we could provide that same immediate certainty with a simple 2-year extension. That is what we ought to do.
Mr. Speaker, I urge my colleagues to think carefully about the long- term impact and consequences of this tax extenders package on the ability to create jobs and opportunities, grow our economy, invest in strengthening our security, reduce our Nation's debt, and balance our budget.
In closing, Mr. Speaker, I believe that this Congress and our people expect us to do better. We have a responsibility to our country and to our children to do better. Let's do it.