Mitch McConnell, Senate GOP Press Conference Transcript: Biden's Tax Proposals, Reconciliation Package

Mitch McConnell: (00:12) Well, good afternoon everyone. We know what's coming next. A $3.5 trillion reckless toxin spending spree. The absolutely worst possible thing we could be doing in our country right now. Playing Russian roulette with this economic recovery, which has already been threatened by this raging inflation created by the rescue package earlier this year. These taxes are going to hit the country really hard. It was a Wall Street Journal article a couple of days ago featuring a landlord in my state who had been investing over the years in rental property in order to guarantee his retirement. This would affect under these capital gains increases that they have in mind that basically would cut his assets in half, in half. This is a devastating proposal whether it's corporate tax increases, pass-through tax increases, capital gains tax increases, stepped up basis. An absolutely devastating blow to our economy at the worst possible time. Senator Thune: (01:36) Well, as the leader pointed out, we know what's coming next and that is the Democrat's reckless three and a half trillion dollar tax and spending spree. And we know it's going to raise taxes on middle income Americans. I am particularly concerned and interested in this subject because agriculture is our number one industry in South Dakota. And farmers and ranchers stand to bear the brunt of a lot of these tax increases. There was a study done by Texas A&M. And in their 30 state region that is contained in their database, they said that every farm and ranch operation would be impacted and that the average tax liability, average tax liability for farm or ranch operation in this country will be $700,000 under the Biden proposal. In South Dakota and like a lot of states that are represented here today, we have generationally owned, family owned, small businesses, farms and ranches. Senator Thune: (02:35) You want to see them to be able to pass that on to the next generation. And what this double death tax would do as the leader alluded to, not only do you have the death tax, which hits these farm and ranch operations. But now you will have this new increased capital gains tax which does away with what's called the step up in basis, which dramatically increases the tax liability for people this country. And you're not talking about rich people. The gentleman that the leader referred to in Kentucky pays himself $75,000 a year. He invested in these apartment buildings 27 years ago and he was hoping at the age of 64 to be able to have a little nest egg for retirement. And his tax advisor has told him that it would reduce his take home pay or what he would get out of the sale of that asset by a half. He'd end up with a half of what he was looking at for his own retirement after investing for 27 years in that business enterprise. Senator Thune: (03:35) That's going to happen repeatedly all across the country if what the Biden tax plan and the Democrat's reckless tax and spending spree here on Capitol hill is allowed to go forward. We are going to do everything that we can to stop it. We are going to stand with middle income Americans who are going to be hit and again bear the burden of paying for all this new massive increases in spending that the Democrats are proposing. And we just think that the American people when they find out what's going on, no matter their income class are going to say enough already. And we're going to be there with them trying to stop this at every turn. And we expect that when this is all said and done the American people when they render a verdict on this idea, it's going to be a big thumbs down. Next up is Senator Barrasso. Senator Barrasso: (04:31) Well, you talk to the Democrats and they are actually eager to jump to this reckless tax and spending spree is going to start next week. We've already spent $6 trillion in Coronavirus relief. And now they're talking about three and a half to five trillion more of big government spending. It is time for the American people to stand up and speak out and say, "We've had enough it is time to stop." Because the American people realize every one of them is in one way or another going to pay for this. We're suffering right now, their paychecks are getting eaten away by inflation. $25 more a week every time you fill up with gas, $25 more a week when you go to the grocery store. So it's $50 less a week that you have to spend for other things just to buy the same amount of groceries and the same amount of gas that you were at the time that Joe Biden became president. Senator Barrasso: (05:23) We're talking about thousands of dollars a year eaten away from Americans' paychecks. And it's not just the inflation component, the amount of money they're talking about spending, the only way they can do that is significantly raising taxes. It's not just going to be in a couple of rich people or a couple of big companies. The amount of spending is so dramatic that everybody will be paying in one way or another. People are going to get hit in their savings, in their investments, in their retirement accounts. That is what's going to happen to each and every one of the folks in America who see what the Democrats are trying to do here. And the Democrats have been very upfront about the fact they are ready to supersize the IRS to go after all of the taxpayers in America to make sure they get every last dime from them. It's time for the American people to stand up, speak out and say enough is enough. Senator Ernst: (06:23) Thank you. And these are concerning times and we've heard over and over again about Bernie and Biden's reckless three and a half trillion dollar spending spree that will be happening very soon. And they really have been eager to talk about how this is going to impact middle-class Iowans and how they'll be taxing them to pay for their scheme. And it's time for Bernie and president Biden to level with the American people. And one example is one that Senator Thune brought up because it does impact Iowans heavily agriculture is also our number one industry in the state of Iowa. Senator Ernst: (07:06) And that example is the farm to table tax that the Democrats are proposing on our farmers and our small business owners. And Bernie and Biden what they're going to do, they're going to hit Iowa's family owned businesses. Most of those farms out there they are modest farms, they are family owned. And what we consider this a double death tax. It is a double death tax and that's on top of rising prices, inflation, all of that which we all know is basically a tax in itself. So this Bernie and Biden's tax and spending spree is going to be paid for one way or another by our middle class Iowans, middle-class Americans. And you know what? Our Senate Republicans we're going to stand up against it. We're going to stand with our hard working Americans. Thank you. Senator Thune: (08:04) Senator Scott. Scott: (08:08) Well, first off $30 trillion with a debt is pretty scary. And that's where we're getting close to. When I became governor of Florida we had a $4 billion budget deficit and we had increased the debt. The state had increased its debt a billion dollars every year. And everybody wanted to spend more money on things. And so what we did was we did what we should be doing up here. We started paying down our debt, we grew our economy, which allowed us to have record money for education, for the environment, for transportation, all of these things. And we kept cutting taxes. And every time we cut taxes and fees we kept getting more money and more people moved to our state and we grew our economy. We've got to do the same thing up here. And what we can't do is raise taxes on people. Scott: (08:48) There's not enough money to raise taxes on the rich. And by the way, in the American rescue plan the Democrats already raised tax on Uber drivers, Door Dash drivers, people like that. Which is to the gig workers which is completely unfair. And it's exactly the opposite of what they said they were going to do. But if you look at it, they want to just tax [inaudible 00:09:05] enough money. If you look at how much money they're spending, if they're going to pay for it, which eventually the market's going to... People are not going to buy our debt if we don't have ability to pay it back. They're going to have to tax everybody and it's not fair. It's not fair to people that are working hard. They can't do this at their house. You have to watch how they have to live within their means. They don't run up debt like this, and we can't do it here. And the taxes will be completely unfair. Senator Thune: (09:32) Thanks. Let's get us Senator Blackburn. Senator Blackburn: (09:36) I absolutely love getting home to Tennessee every weekend and talking to Tennesseans about what they perceive to be happening here in Washington. And it is so interesting to get their take on what is going on with these taxes. Last weekend I had a guy that came up to me and he said, "During the Obama years I always felt like I had too much month left at the end of my money. And then we got the Trump tax cuts and I felt like I had a little money left at the end of the month." And that was a good feeling. And it gave them the ability to do some things they wanted to do for their family. And now Tennesseans talk regularly about what they fear is going to happen. What they fear is going to happen. Now, we've got a chart right over here that talks about America's debt. Senator Blackburn: (10:37) If you go from George Washington to George Bush the day he walked out of the oval office, you're at about $10.6 trillion in debt. You look at the increase close to double through the Obama years. You have president Trump and then of course we have what we spent on COVID. And Senator Barrasso talked a little bit about that. And then you look at what has happened since Joe Biden went into the white house and the amount of debt that they're continuing to add, this is record spending. It is reckless spending. It is raising taxes in order to allow reckless spending. Spending that my two grandsons who are aged 12 and 13 and my granddaughter who is now 11 months old, they are going to have to pay this bill. Because the bill is going to come due on them. And it is going to compromise their hopes, their dreams, their opportunities. It is why we as Republicans have to stop this spending spree. Senator Thune: (11:55) Senator Boozman. Boozman: (11:58) Thank you. I have the pleasure of being the ranking member on agriculture. So I visit with lots of farmers as they come to Washington and I get to go throughout the country and visit with them at their meetings. And I'll give you two examples of how this affects them. In being at their meetings on several occasions, they talk about all of the difficulties that they see in the future. They're concerned about waters of the US, they're concerned about increased regulation, they're concerned about inflation, the price of fertilizer going up. All the things that make it very, very difficult for them to make a profit. But several of the members as they have approached and talked to their groups, they pause and say but that's nothing compared to if the stepped up basis tax comes into effect. They understand after visiting with their accountants and this and that, the devastating impact that it would have. Boozman: (12:56) We commissioned Texas A&M it's not John Boozman saying this, it's not their accountants. We commissioned Texas A&M who's really the leader in this type of economic research to look at the farms that they were following. 98% would be affected dramatically. The average was $720,000. State forester was from Arkansas who's actually the national state forester testified before our committee a few weeks ago. He said that if this goes into effect, it would be devastating to the agriculture community. He said, "Well John, why are they doing this?" Boozman: (13:31) Well, they realized that they've got to have some taxes coming in. They're searching every corner because of the chart. Even they realized that the chart can't continue to go up as it is you have to have some pay forwards. These pay forwards again would be devastating to American agriculture. Senator Thune: (13:51) Senator Cornyn. Senator Cornyn: (13:55) As bad as the Democrats' reckless taxes spending spree is the story actually gets worse than what you've heard. Because growing up I remember learning about the story of Robin hood. Robin hood stole from the rich to give to the poor, but actually the Democrats want to take money from hardworking, middle income American families and give it to the rich. Now you have not heard that very often, but let me give you just a couple of examples. For example, they want to eliminate the cap on deductibility for state and local taxes. So that wealthy Democrats mainly in blue parts of the country can have you and me and my constituents in Texas subsidize them. These are wealthy people who can afford to pay, but they want to make a transfer from middle income people to wealthy people living in blue states. Senator Cornyn: (14:49) And then when it comes to their energy agenda, you've heard about electric vehicles. I've got nothing against electric vehicles, but I do question whether you and I and my 29 million constituents ought to subsidize electric vehicles so that rich people can drive around and feel good about themselves and with the $7,500 tax credit. And obviously a lot of subsidies that would be included and benefits be included in this reckless tax and spending extravaganza bill in pursuit of this ideology really of a completely renewable energy economy. This is raising money or taxing middle income Americans, including Texans to give money to their rich constituents. It's the anti-Robin Hood. Senator Thune: (15:44) Senator Kramer. Senator Kramer: (15:48) Well, it'd be hard to improve on what ranking member Boozman said and certainly my colleagues from the Midwest Senator Winston, Senator Thune and others. So let me give what's a pretty average probably example from Real Ville, North Dakota. It would not be unusual for a great, great grandfather to have purchased land at $20 an acre. It would not be at all unusual that today that would be worth $2,000 an acre. You don't eliminate step up in basis if you have a hundred acres valid at $2,000 an acre, you are suddenly taxing a whole bunch more money that no one did a thing other than produce food for hungry world on for five generations. Secondly, their input costs have been skyrocketing thanks to inflation. The price frankly, prices they've been getting in the last several years have not been all that great. Not to mention things like floods and droughts and hail and the other things that make farming so difficult. But let's just double the tax on that increased amount that you aren't getting any more money for. Senator Kramer: (16:58) And that's what the capital gains tax proposal does. And worse after all of that, if in fact there's an estate tax bill that comes due, that's based on a lower threshold than what we're talking about today, that means more of the estate is going to be taxed if in fact it changes hands between generations. And suddenly you have an outcome that's not just the farmer with the $725,000 tax, you have a farmer who has to sell his family farm just to stay alive. That should not be anybody's goal. I'm embarrassed that it is. Or maybe they just don't know. Now they should. Mitch McConnell: (17:44) Questions? A couple of quick questions. Yes, sir. Speaker 10: (17:47) Senator Thune, yesterday we saw the house progressive sort of flex their muscles for the first time with the eviction moratorium. How concerned are you that that could derail some of the moderation in the budget reconciliation with senators [inaudible 00:18:01]. because you're counting on them to sort of keep the price in line even though you don't agree with it in general. So how do you see that sort of plan the future in this, and then other battles between the house and the Senate? Senator Thune: (18:14) I think that the Bernie Sanders wing of the party is the tail wagging the dog. I think that the progressive wing is where their energy is, it's where the political money is on their side. And so when they play the music, Democrats up here dance. And I just think that's the way it's going to be. I think you're going to have a lot of pressure particularly on people like Sinema and Manchin who otherwise might be inclined to vote for less. Vote for less in taxes, vote for less spending that are going to be under enormous amounts of pressure because that wing of their party in both the house and frankly in the Senate, I think is really ascended today. Speaker 11: (18:57) You said that you guys would try and do whatever you could to stop this. Is there any possibility you would consider trying to deny quorum as Lindsey Graham suggested? Senator Thune: (19:07) Well that was a suggestion that Lindsey was being creative with. My guess is that that's probably not something that ends up happening. But I do think whatever we can do between now and whenever the budget resolution or when the budget resolution comes up and then follow on the reconciliation bill, we're going to do everything we can to stop them. And I hope that we have some Democrats who will help because if this is in size and scope and scale of what we hear and believe it's going to be it's going to be catastrophic for a lot of folks around the country. Namely a lot of the farmers and ranchers who would get hit with a double death tax. Senator Thune: (19:50) I mean think about what they're talking about here. This has never happened before. They're talking about taxing unrealized gains. Not only do you get a death tax, but they're raising the capital gains tax rate from 20% up to a high rate of 43.4% for people in the high income categories. But they're also applying that to a lot more income which hasn't been realized yet. I mean this is unprecedented as a matter of tax policy. But it's an example of the extremes that they have to go to to raise the amount of revenue they need to pay for all this spending. Yes ma'am. Speaker 12: (20:24) Just looking past the reconciliation process with respect to the debt limit it seems unlikely that Democrats may fold that into the reconciliation package and may potentially be eyeing tying that to a short term government spending bill. What is your position on that? Would it change your position on a debt limit increase? Senator Thune: (20:44) I think that they need to do the debt limit at 50. I mean they literally are trying to... The amount of spending the amount of taxation they're talking about, and frankly they've already done. I mean they did 2 trillion as has been pointed out already earlier this year, which has given us this inflation problem that everyone's been talking about that's affecting every American's pocket book. But if they try and do three and a half trillion or what many are arguing if you look at real dollars over the true window of time there about five to five and a half trillion dollars in spending, then they ought to own raising the debt. I mean they're the ones that are adding to it and they ought to do that under their 51 vote of majority. I can't think of a single Republican who wants to help them do that. Speaker 13: (21:31) Last question. Speaker 14: (21:33) Senator, how much help or cover do you think you might get from the parliamentarian in this process? Obviously Democrats are trying to put a ton of stuff like immigration changes and things like that into this bill. And how aggressively do you plan to lobby to use the rules to your advantage to keep stuff like that out of whatever they bring to the floor? Senator Thune: (21:51) Both sides will no doubt be working the refs and the parliamentarian is the referee. And my observation in the past at least is then she tries to play down the middle. And I don't think that she's going to try advantage one side or the other. But expect them to make every possible effort to include things that are completely unrelated to spending a revenue which is what the threshold should be under a reconciliation bill or otherwise you're in violation of the bird rule. I think they're going to try and draw loose connections to everything they do, including immigration. But it has to have a direct impact, not an indirect impact on spending or revenue. So if they come up with policy measures that are like I said well, they have to manufacture some argument that it fits somehow within the parameters for what's allowed. Senator Thune: (22:42) I hope that they get busted for it. And we'll have people there that are working them too. And I think this is a hard job and I'm not suggesting that it's not. I think that if you look historically in previous bills like this where this mechanism has been used, both sides try to talk to the parliamentarian. But it's clearly outside the realm of what it was intended for if it's designed to make major policy changes that are unrelated to spending and revenue. That is the purpose of this and it should not be abused and misused. And we will fight at every turn there are attempts to do that. Thanks guys.