Big, Beautiful Bill

Floor Speech

BREAK IN TRANSCRIPT

Mr. GROTHMAN. Mr. Speaker, we are heading into what many people hope is the finishing stretch of our legislature, putting through what Donald Trump calls the big, beautiful bill.

There are a lot of issues yet to be decided, and I would like to address some of those issues today.

The first issue I have talked about once already, but it seems to be a major holdup, the rumors are, in negotiation.

There are clearly going to be some tax cuts in this budget. Our goal will be to continue with tax cuts that were put in place in 2017 but add some others.

As we hear rumors of what tax cuts will be added, we have to remember that taxes in the United States are so high that every tax provision affects our behavior.

Some people want taxes, and I am one of them, to be lower on manufacturers because manufacturers have to compete with other countries. A good way to make sure we have good manufacturing jobs, as well as to make sure we get more research on manufacturing in this country, is to aim our tax cuts at manufacturers.

Some of them specifically aim at research and development. They feel the most important thing in manufacturing is research and development.

Others are made to encourage savings. In the past year, we have passed tax cuts to encourage people to put more money in their IRAs or 401(k)s.

We have a problem in this country that not enough people are having children, and that is not only a problem for the country; it is a problem for individuals who, I think--I am told, many of which regret when they are 35 or 40, not having children when they were younger.

People want to use the tax code to incentivize people to have more children. There are a variety of ways you can do that. President Trump floated a balloon just to give people a large check. I think that is a big mistake because we do not want to have people having children just to get a large check.

If you want to make it easier to raise children, maybe raising the personal exemption to $5,000 would be a good way to favor parents.

One thing that concerns me. Unlike people who want to encourage more manufacturing, encourage more work, encourage more overtime, encourage more children, there are people who want to change the tax code to encourage local governments and State governments to raise taxes.

There is a provision called the SALT provision in which they want to make tax deductible State and local taxes. They are already, to a degree, tax deductible, but there are people who want to help the wealthier people deduct their State and local income taxes as well.

I have talked to both my State legislators, and last weekend I talked to a county executive, and they both gave me the same story. They are both conservative people. They said they were shocked that there were Republicans who want to increase the tax deduction for State and local taxes because what does that incentivize? It doesn't incentivize more children. It doesn't incentivize more research and development. It doesn't incentivize more manufacturing.

What it does is it incentivizes State and local governments to raise taxes and spend more money. I had to explain to my State legislators these were Republicans who wanted it. They found it hard to believe. It sounds like a tax provision that you would be more likely to hear Democrat legislators want.

In any event, I think we have to follow the negotiations that are going on, and we have to see whether within the Republican Party we wind up with a product to encourage more work, encourage families, or whether we wind up with a bill designed to encourage State governments to raise the income tax or sales tax, or encourage local governments to raise their property tax.

I am going to be very disappointed. It would certainly be a defeat for, I guess what I will call, traditional Republicans, such as myself, but that is one of the negotiations going on behind closed doors.

There is another provision that they are going to use the IRS code in--which concerns me a little because there are rumors that this may be out there as well. Quite frankly, I have a suggestion how we could cut taxes and put ourselves in a stronger position.

Right now there is a provision in the tax code called low-income housing tax credits, and what it means is that if a developer wants to build a new development, they would get a credit equal to 10 percent of the cost of the building over 9 years, which, right off the bat, sounds like the government is paying for 90 percent of the value of the building.

That is not quite right because there is a time value to money, and if you are getting a building that you paid $10 million for, if you get a credit worth $1 million 10 years out, you have got to wait for that credit, and there is a time value to money.

Nevertheless, even taking into account the time value of money, a potential developer has the government, through tax credits, pay for 70 percent of the cost of a building.

Now, this is not open-ended. Usually these credits go to politically well-connected developers picked by State agencies or State organizations.

I think, personally, of all the tax cuts particularly, people complain about tax cuts for the rich. Of all the provisions in the Internal Revenue Code, I can think of no provision more questionable than having the Internal Revenue Service reduce somebody's taxes so that you get 70 percent of the value of your project paid for.

Now, people do not earn enough income to use, say, in the case of $100 million, a building, they don't have enough credits to offset $70 million in taxes. So they have to sell the credits to somebody else. This means getting lawyers and experts from LIHTC involved so that these credits can be transferred.

A significant number of these credits go to some of the largest banks in the country. And, of course, the largest banks in the country, I am sure, would love to have Congress change the provisions so that they were able to use still more tax credits.

Why at a time when we can do so many other good things would we do that? I don't know, but they have been very active in this building, and they are looking to get more tax credits.

The next thing to remember about this is there are some units, but not all units, which have restrictions on the amount of rent that can be charged. Quite frankly, there is no guarantee that any of these rents will be below market rate. In fact, some of the people who live in these projects will be able to use vouchers, what we call Section 8 vouchers.

So the government, first of all, sets aside money for somebody to get free rent, and then the vouchers are given to a property developer or a syndicate that is going to wind up owning the building, and they wind up with a voucher as well. It is kind of hard to believe it is developed that way, but it has developed that way.

I had always wondered before hearing about these things why sometimes low-income housing developments look nicer or more elaborate than regular old apartments. Part of that is they are newer, and, of course, newer buildings are usually nicer. A lot of it is we are paying these developers 70 percent of the cost of their building.

And just like if you at home were building a new house and the government said we will give you 70 percent of the cost of that new house, if a developer is building something new and the government says we will pay for 70 percent of the cost of your apartment building, of course the building becomes more lavish, which, of course, makes the property developer wealthy as well.

And you can begin to see, as we work our way through here, that the developer is the big beneficiary here.

Then what happens is the building is sold to a syndicate of a variety of wealthy people who get the tax benefits of depreciation for about 15 years, and then eventually it is returned to the original developer.

So there are many people making money here. Certainly the banks are making money. Above all, the developers are making money. The lawyers are making money, as they have to constantly draft documents between the banks and the syndicate and the developer. And, like I said, the syndicate itself, which is made up of a variety of wealthy individuals or wealthy limited partnerships, is able to get money here as well.

When I think of all the things we can--well, I digress. Again, the developer who gets this is determined by a State agency. It is naive to think anything other than these developers are politically well-connected people.

I do not know why, if we think it is the Federal Government's business to provide housing to people--which, of course, it is not--we would set up a system in which a private developer gets such a large chunk of money that the Federal Government is laying out.

Right now, as a matter of fact, the money is so great, even though new projects are spread out or the tax credits are spread over nine years, we are spending over $13 billion a year on this method of so- called creating workforce housing or low-income housing.

I will also point out that there are some people who would say this is necessary because nobody builds any housing anymore. Well, I am from Wisconsin, which is not what you normally consider a booming State. It is not like Florida. It is not like Texas. As I go around my district, everywhere I look there is new housing. There is single family housing and new apartments.

For a variety of reasons, it is grotesquely expensive. We can deal with that by working our way towards more of a balanced budget, so interest rates are not so high. As the cost of energy goes down, it will lower the cost of anything and lower inflation on other goods as well. Anybody who remotely believes in the free market believes there will always be a market for new housing.

There are apparently some places around the country where it is hard to build new housing, but that, in general, is because there are State governments and local governments which are hostile to business in general and hostile to developers in particular. People then don't want to do more building in this city or that city.

In any event, as we work our way through the process, I hope the negotiators who are meeting in unknown rooms in this building, if they need to balance the budget, think about getting rid of the low-income housing tax credits and use the $13 billion a year that is primarily benefiting some well-connected and wealthy property developers and use it somewhere else. I think that is one of the things that we have to look at carefully.

There was another topic I wanted to take up. I have been talking to some people who wonder why we have demonstrations in this country hostile to Israel, and even more bizarre, demonstrations favorable to Hamas and people who live in the Gaza Strip.

It has been my belief--and I give this conversation privately to people, but I should make my case more public--that when people take bizarre positions, in other words, when they see Hamas invade Israel and kill over a million people with pride, not even embarrassingly and hiding it, but taking pictures of it, and their sympathy goes towards the people killing the thousand people, including young children, one has to wonder if something psychological is going on here.

My belief is that anybody who is hostile to Israel in this conflict and is demonstrating in favor of Hamas has some sort of psychological problem. I will refer to this psychological problem as--we will name it after the young girl who was obsessed with global warming in Sweden.

We will call it Thunberg syndrome. You all remember the little girl whose father said she was depressed and unhappy, but then she read about global warming and decided to obsess over it. She, all of a sudden, became happy because she could run around and had a purpose in life. Prior to that time, like a lot of wealthy people in the West, she really didn't have a good purpose, but it gave her a purpose. Like I said, she could run around, she would give speeches and feel she was saving the world.

Of course, eventually, Greta Thunberg also wound up siding with the Palestinians, who had killed the Israelis, against the Israelis. I think it was for the same reason. She wanted to adopt a cause to feel she had a purpose in life.

When one particularly has kind of a spoiled life, the people you want to help are people who are kind of opposed to the successful society we have here in the West, be it America, be it Europe.

There is a certain hierarchy of needs that everybody has, right? We need food, we want safety. Once you take care of food and safety, you also need a purpose in life. There are sadly many, many people in America and Western Europe who don't have that purpose.

I think this is particularly a problem for people who may not have a family to devote time to. They may not have children to devote time to. They may be financially well enough off.

You very rarely see Thunberg syndrome on somebody who has three jobs. They are busy with their life. They are going from job to job and working all the time. You would rarely see Thunberg syndrome in, say, somebody with four kids, because four kids is very time-consuming. You have to earn money to take care of the kids, spend time with the kids. That is a purpose in life.

I think, as we have more and more young, single people not having children in the West, you have more and more people looking for a purpose in life. For whatever psychological reason, they want that purpose to be hostile to the West in general.

If they are in the United States, they frequently want that purpose to be anti-American. Of course, when Greta Thunberg wants to get involved in foreign affairs, it is not surprising that she picks global warming because then her enemy is the West and the factories and the cars.

It is interesting that when people have Thunberg syndrome, they do not get mad at things done by what used to be called Third World countries, right? People who have Thunberg syndrome, well, they may object to a new, clean power plant in the United States. They never worry about the plethora of new coal plants going up in Red China or going up in India, and that is because those aren't Western countries. There, miraculously, they don't care.

When it comes to the attacks on the Jews in Israel put out there by the Palestinians, they will purport to care about the Palestinians who lose their life when the Israeli Army inevitably had to go back into Gaza, but they don't care about Muslims who are dying in other wars. They don't care that many, many Muslims are dying in Syria.

That is because those people are being killed by other Syrians, and it doesn't fit the narrative of, I want to hate the West. They don't care about a civil war going on in Ethiopia, they don't care about the conflicts currently going on in Iraq.

They don't care at all about all the suffering of the Muslims in Western China, the Uyghurs. Why doesn't the left or why don't these demonstrators care about all the Uyghurs being killed or persecuted in the western part of China? It doesn't solve their psychological need to hate the West.

I think more research should be done on Thunberg syndrome to see how we can prevent it from growing because inevitably the United States and the West will fall if a significant number of their populous winds up for some psychological reason adopting causes that are hostile to the West.

That is what is going on right now, be it in global warming, be it in the Palestinian situation, be it the bizarre opinions that President Biden had about the United States being such a racist community.

I mean, here you have a country, the wealthiest people are Indian Americans, the second wealthiest are Filipino Americans. People come here from Cuba and do fantastically well.

Another cause adopted by these people with Thunberg syndrome, despite the fact that anybody could open their eyes and see the wild success of people from all around the world coming to the United States, these people have decided to adopt an ideology in which they have to fight this imaginary racism in the United States with people like Joe Biden or other opportunistic politicians egging them on.

I strongly encourage this body, or if not this body, some universities to look at people who have these bizarre opinions that will inevitably destroy this country. They hate wealth production, they certainly hate energy production even when it is new energy that is fantastically clean, so much cleaner than it was when I was a child.

They hate it when Western countries wind up in armed conflict with horrific opponents like Hamas, but for psychological reasons they side with Hamas.

Those are some of the issues that I think we ought to be paying attention to over the weekend. I think I have used up enough of my time.

BREAK IN TRANSCRIPT

Source