The Big, Beautiful Bill

Floor Speech

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Mr. GROTHMAN. Madam Speaker, I think it is important that the Chair and the public know that there are always debates going on in this building that will determine how the big, beautiful bill is sent to President Trump.

One of those debates involves the State and local tax deduction.

Another of the debates, which hasn't been as highlighted, involves President Trump's proposal to reduce the marginal rate on manufacturing to 15 percent. President Trump is, rightly, obsessed with America being the world leader in manufacturing.

Another one of the debates is what we should do to encourage Americans to have more children, and President Trump has proposed a $5,000 credit for people having children. I think that might not be quite right. I personally prefer a new $5,000 exemption. Nevertheless, there is no time in life when people are more financially strapped than when they have young children.

I am strongly opposed to the so-called SALT Caucus of people who desperately want to have a greater deduction for State and local taxes. These people are, as a practical matter, looking to encourage their Governors, their school boards, and their county boards to raise local taxes.

Last weekend, when I was home, a conservative county executive in my district begged me not to increase the deduction for property taxes. He is a conservative and does not want to have the liberals on his county board make the case that it would be great if all of our property taxes and income taxes were tax deductible so we could raise taxes.

I am sure right now, particularly in the more liberal States--places like California with Governor Newsom, places like New York--the Governors and State legislators are waiting to see if they can increase the deduction for State income taxes and for local property taxes, so they can spend more money.

We have to realize that if the SALT Caucus succeeds, there will be less money available here to lower the income tax on manufacturing, as President Trump tries to bring back American manufacturing jobs from China, Korea, and Mexico.

We will not have the money available to do eventually what I would like to do, and that is have a $5,000 personal exemption to help out young couples who are just starting out, so they have more income at a time in their lives when they need it more than anybody else.

I strongly encourage our negotiators to turn back the people who want a big State and local tax deduction, even though Wisconsin is a mildly high tax State.

Madam Speaker, I think encouraging any more taxes anywhere in the country hurts us all as it slowly takes away the freedoms of people in America and makes America more of a country that you would not want to move to start new manufacturing. That is one of the things that is going on in this building.

The next topic to take up--and I am kind of disappointed we didn't deal with it like we should have in our proposed big, beautiful bill, but I know President Trump's team is concerned about this. It is the degree to which so many of our welfare programs are designed to discourage people from getting married.

We know that people who get married and have children--well, all types of families have successful children. I personally know many people who, on their own, both men and women, have done a very good job of raising children we would be proud of. In the long run, it is not fair to the next generation to discourage people from getting married and having children.

Right now, there are many Federal programs. They used to be called food stamps, low-income housing, Medicaid, which is healthcare for the poor, and Pell grants. All of these programs are designed to penalize young couples who get married.

Madam Speaker, if you are a single parent, then you may be eligible for all of these programs. If you are married, then you may be eligible for none of the programs.

I think the most generous of the group is low-income housing, or Section 8 vouchers, whatever. In any event, it is not unusual to look up a hypothetical in which if a woman marries say the father of her children, she will lose $25,000 to $30,000 a year.

This is why since the Great Society in the 1960s we have gone from a situation in which in the fifties, 4 percent of the children in this country were born out of wedlock. Now we are in a position in which we have over 40 percent of the children in the country who are born out of wedlock. It did not happen by accident. It happened because the Great Society programs in the 1960s were designed to encourage this sort of behavior.

Madam Speaker, you may say, who wants to discourage people who are married from having children?

In fact, Karl Marx, of course, was very opposed to the traditional family. We have known since I have been here.

Black Lives Matter made it clear that they were opposed to what they referred to as ``the Western-prescribed nuclear family.'' Of course, even after Black Lives Matter came out for that, it did not prevent many of our Members, particularly on the Democrat side of the aisle, from standing with Black Lives Matter, a group opposed to the nuclear family.

We know that many of the feminists in the sixties, I think Kate Millett, who was described as the mother of women's studies classes, which are all over our universities, were outright opposed to the nuclear family.

It is disappointing they are not doing more in this budget to address that problem, to stop encouraging young people not to be married. We all by now have run into young couples who may even want to be married, but they won't get married because they lose $20,000 or $25,000 a year.

Indeed, in this program, we are expanding the Pell Grant program. It is a program that was one of these things that has a marriage penalty associated with it.

We are expanding the low-income housing tax credits. While some of those credits do not come with a marriage penalty, particularly when coupled up with State programs that do have a marriage penalty, it is another program we are expanding and it is going in the wrong direction.

In any event, I encourage President Trump to do what is already going on behind the scenes, and that is to work towards, perhaps in our next reconciliation bill, a program to stop the hatred of the traditional family that is the marker of the Democratic Party today.

Again, I emphasize we have to look at every one of these programs: the earned income tax program, the Pell Grant program, the low-income housing program, and the Section 8 program. In general, all of the housing authorities have this hostility.

If America is ever going to truly become a great society again, then we have to work our way back up to where we were in the sixties and the fifties where we had 4 percent or 5 percent of the children born out of wedlock.

By the way, Madam Speaker, if you read historic experts on this topic, and I am talking about people like George Gilder, who is a very bright guy, a lot of times the person who is penalized the most when you set up a society without couples having children is, in fact, the man in the society who has no purpose in life.

As an Indian immigrant in my district told me: In America they have the woman marry the government.

Of course, I think society is better off if we have the woman marry the father of the children, not the government, like so many members of this conference want to do.

The next thing I want to look at, which we are going to be doing in the next few days, is we have a proposed reconciliation bill in front of us. I was under the impression that this bill would be an opportunity to decrease the amount of government programs, decrease the degree to which we have government programs controlling or directing Americans' lives.

One of those programs that I really don't like the more I talk to experts on the topic is something called low-income tax credits.

These low-income tax credits are given to property developers that are equal to 10 percent of the value of what they spend on new apartments for 9 years in a row. Now, there is a time value of money, but even given the time value of money, it means that the government is paying for 70 percent of some people's projects.

There are some requirements as to whom they rent these to, but the requirements are not stringent. Some people point out that they can almost take people at random in the street, and that would be enough to fill their housing units. It really doesn't do a lot to help the so- called low-income people.

It does help, however, because the government is giving so much money, it does encourage developers to spend far more than they would otherwise on their projects.

Why not make Cadillac projects if the government is going to spend or pay for 70 percent of those projects?

Furthermore, as we spend more on the projects, it is going to turn around and result in greater depreciation expense for the wealthiest banks in the country who frequently wind up buying the credits.

For something that should be a relatively simple transaction, once the States gets ahold of it, Madam Speaker, you can wind up with regulations of hundreds of pages that have to be negotiated when you begin running the projects, which obviously means a lot more money for the lawyers and much more difficulty for the politicians to understand exactly what is going on.

You would think, Madam Speaker, that of all the government programs this would be the easiest to get rid of because we are supposed to be broke. In fact, under our big, beautiful bill, and I know President Trump wants the most beautiful bill he can get on his desk, in this bill we are, in fact, expanding the number of tax credits, which is to say expanding the amount of money that the property developers on these projects are going to make.

We are increasing the amount of tax credits, and I am told a very high number will be going to the biggest five banks in the United States, tax credits the banks get.

Furthermore, because there are only so many new rental housing units we need, it expands, or they wind up crowding out the what I call legitimate developers and the legitimate users of low-income housing tax credits.

I would hope, as we put together, hopefully, the final version of the big, beautiful bill sometime in the next couple of weeks, we look at this. It is not something that costs nothing. It is currently costing us even under current law about $13.8 billion a year in tax credits which are going to these well-connected developers.

I think one thing that will also tell us that they are well-connected is it is up to States to distribute which property developers get the credits.

What do you think is going to happen?

It is going to be the same people who know the same bureaucrats, who are connected to the same politicians, who are going to get these credits again and again and again. Again, on the face of it, the idea that in the future in this country the people who build the apartments are going to be determined by State bureaucracies is just an invitation for trouble.

The fact that we are paying 70 percent, therefore, results in a situation given--some areas in California, in particular--we may be paying more than $95,000 a unit.

Does that make any sense at all if our goal is to create lots of new housing units for the so-called poor or working poor?

No. You would never do that, Madam Speaker, except for that is the way the property developers make more money.

In any event, I encourage our leadership team as they are looking for more money to seal the deal on this project, I don't think they have their 217 or 216 votes yet to grab that $13.5 billion.

Another thing I will point out, these credits have been around since the late 1980s, and people might wonder where they came from. I think they probably came from developers who found a way to snooker the poor U.S. Congressmen in the late eighties. At the time Congress felt something had to be done because we had just gotten done with the apparently increasing the depreciation schedules on new residential real estate. So in the early eighties, Madam Speaker, you could depreciate an apartment building in 15 years. When they changed it to 27\1/2\ years, it greatly reduced the number of new apartments that people were building and, therefore, it was easier to sell to Congress that one way to get more apartments online is to have these ridiculously overgenerous credits.

I don't know if I am going to have much of an impact. One of my goals is I would like to have the credits renamed. Instead of the low-income housing tax credits, name them the big banks, big law firms, and especially well-connected developer tax credits, because I think that would more accurately describe the people who benefit from these credits.

In any event, these are some of the issues that I think are going to be debated in the next few days.

I hope the press does a good job of covering what low-income housing tax credits really are.

I hope the press does a good job of setting before the American public, and particularly the Republican volunteers who did so much to get us here, laying out the differences between the tax cuts based on how high the property or sales taxes are, how high the local property taxes or State sales and income taxes are.

We will see how our base feels about who we should reward or what type of behavior we should encourage through the tax code.

Should we encourage people to have more children?

Should we encourage people to work harder?

Should we encourage businesses to make more manufacturing jobs?

Or should we encourage local governments to raise taxes?

Finally, in the future as we determine how we are going to build new apartments, should we encourage the builders of the apartments to go through the government accepting lavish tax credits?

Or should we do it the way we always have in America, and that is let the free market win out?

The idea that we cannot build apartment buildings is, on its face, preposterous. I know everywhere right now, be it single family or multifamily, the costs are way too high.

I would hope that the Speaker would maybe put together a committee or a subcommittee to see what we can do to lower those costs. I am told it is possible to lower the costs, and the answer is not paying developers 70 percent of the cost of their project.

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