Today we face something old, something new and something borrowed. But they all beg the same questions.
This debate is not about the value of these provisions. Of course we support the R&D tax credit and we support the deduction for those who live in states with no state income tax. We have been long-time supporters, have introduced legislation and voted to preserve these tax benefits.
The real questions are: Is the Republican majority on this committee going to be serious about tax reform? Is it going to be serious about bipartisanship? Is it going to be serious about fiscal responsibility?
Unfortunately, on all three, the answer now is no - maybe later. We are back to where we were last year, and last week - passing unpaid for, permanent individual tax cuts.
As to tax reform, this bill does just the opposite. It cherry picks provisions. It does the opposite of handling permanency through tax reform as Chairman Camp did last year.
Senate Republicans agreed last week. Senator Roy Blunt said: "As long as the Finance Committee feels there is an opportunity for overall tax reform, I think you're going to not see a quick response to individual bills coming over."
The danger in taking these bills individually is seen in the handling of the state and local tax provision.
Chairman Camp eliminated it his Tax Reform Act of 2014, and we made clear then as we considered tax reform, we would keep it. And when you deal with these provisions individually, it heightens the perils of inconsistency.
The Republicans are suggesting making permanent - without offsetting the cost - this provision on state and local sales taxes, even though our new Chairman said recently that he supported its total elimination.
As to bipartisanship, our Chairman said just a week ago that as to tax reform he supported looking for common ground on common aspects. This is the opposite of that approach. Republicans do not seek common ground when they act on bills that the Administration said last year that it would urge the President to veto, a threat that has already been repeated on the permanent tax provisions Republicans are putting on the floor this week.
As to fiscal responsibility, the answer by the Republican majority is also clearly no.
With today’s bills the total added to the deficit is up to $317 billion, well on its way toward the more than $800 billion that the committee voted to add to the deficit with the 14 permanent, unpaid-for provisions passed last year.
Chairman Camp's approach was fiscally responsible. This again is the opposite.
On the 529 education savings account changes, we are supportive of these technical changes that would reinstate the technology expenses permitted in 2009 and 2010 and allow any college refunds to be reinvested back into one’s account within 60 days.
We will offer to pay for these improvements costing $51 million by capping the availability of the 529 tax benefit so it is only available to families with an income of less than $3 million.
At the end of the day, we should keep in mind that this tax savings program is used by only 3% of American families. While this committee does not have full jurisdiction over education, we should take seriously our responsibility to join in addressing the college affordability crisis gripping our country.
Tuition is going up, State investments are going down, the federal grant programs are covering a much smaller portion of tuition - and our young adults are bearing the burden. Forty million student loan borrowers have more than $1 trillion in outstanding debt and the average debt of a 2013 college graduate was $27,300. At the same time the gap in bachelor-degree attainment between the nation’s richest and poorest students by age 24 has doubled during the last four decades.
I’m afraid we have not made a real dent in that problem today, and I hope we will give it the attention it deserves in the future.
