Prepared Opening Statement by U.S. Senator Chuck Grassley of Iowa
Chairman, Senate Finance Committee
Hearing on the President’s Fiscal year 2021 Budget
Wednesday, February 12, 2020
We are pleased to have Treasury Secretary Mnuchin here today to testify on the President’s Fiscal Year 2021 budget proposal.
The President’s budget includes proposals to confront a number of important policy issues. I look forward to working with the President, the Secretary and others in the Congress to address these and other pressing issues in the Committee’s jurisdiction. Drug pricing and the multiemployer pension crisis are two such issues.
This budget proposal comes at a time when the economy is strong, especially for working American families. Better trade deals, less regulation, and lower taxes from tax reform have translated into wage increases, especially for lower-wage earners and historically tight labor markets.
Over 6.7 million jobs have been created since President Trump was elected, with nearly 70 percent of the job gains occurring since we passed the Tax Cuts and Jobs Act.
Unemployment has fallen to a 50-year low. We’ve had 23 consecutive months with the unemployment rate at or below 4 percent, the longest streak in nearly five decades. Unemployment for Hispanic and for African American workers have set all-time record lows.
America’s middle class is growing and families are benefitting, with a family of four earning $73,000 seeing their tax bill cut by over $2,000 after tax reform.
Statistics like these show that tax reform is a success. The Treasury Department’s work to implement the new tax law as we intended has been an important part of that success.
We appreciate the diligence and dedication Treasury and IRS have maintained over the last 18 months to release extensive guidance necessary for hardworking Americans and the business community to file their tax returns.
Despite Treasury’s steadfast efforts, however, the critics have continued their assault on the Department for doing its job – criticism that is unfounded.
While Treasury plays an integral role when any major tax legislation is enacted, the heavy lifting occurs when the new legislation is implemented. Treasury is following the same process set out in the Administrative Procedures Act that has occurred after enactment of other tax legislation, like the Affordable Care Act.
Critics continuously use preliminary and incomplete data to distort the effects of tax reform to support their political narrative. Their focus on revised CBO projections of corporate tax receipts is just the latest installment as I discussed in my statement yesterday on the Senate floor.
Similarly, we all recall the misinformation campaign in last year’s filing season when critics tried to persuade the public that tax reform was a failure because early tax refunds were down. Of course, they conveniently ignored that the size of a tax refund says nothing about the tax liability of an individual or family. In the end, the criticism proved to be flat-out wrong. Americans got tax relief, and the average size and number of refunds ended up being closely in line with previous years.
I’m hopeful that we can avoid similar scare tactics in this year’s filing season. Nothing the critics can say will refute the fact that every income group in every state saw a tax cut under tax reform, or the fact that this is particularly true for low and middle-income families.
Instead, I hope we can work together on policies that will benefit all Americans, including some in the President’s budget proposal.
We have a solid foundation of bipartisan accomplishments in recent months, including the SECURE Act, the Taxpayer First Act, and the USMCA trade deal.
And, after extensive negotiations, we came together to extend a number of temporary bipartisan tax provisions. I wish more could have been done to resolve them once and for all, as we did in repealing three onerous Affordable Care Act health taxes. But hopefully our efforts in December can lead us to success in future discussions on the expiring provisions that are coming up at the end of this year.
I’m also encouraged by the progress that has been made at the OECD to reach a multilateral global tax agreement on the digital economy. Senator Wyden and I have remained united and bipartisan in our message that unilateral measures that discriminate against American companies cannot be tolerated, and we continue to support Treasury in these negotiations.
As this year progresses, we should build upon these past successes to make sure Treasury and our tax laws are working for the American people.
I’ve seen administration budget proposals from Republican and Democrat presidents alike. No matter which party controls the White House, members won’t support everything that they see. As a matter of fact, one of former president Obama’s last budgets was defeated on a 99-0 vote.
As I’ve said before: in our system, the president proposes and the Congress disposes. Even so, today’s hearing is part of the important process of looking for things that people on both sides can agree on to support the American people in the most fiscally responsible way.
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