Inflation

Floor Speech

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Mr. KENNEDY. Mr. President, with me today is Mr. John Lowery one of my colleagues from my office.

I think I get it, Mr. President. I know you do. Tonight, millions of moms and dads will lie down to sleep, and they won't be able to because they are worried. One of the things that they are going to be worrying about is the cost of living. I get it.

We had really bad inflation under President Biden. It was, like, 9 percent. The President just spent so much money and injected so much money in the economy without increasing supply that prices went through the roof. That is what inflation is: creating more demand than supply. And prices went up.

We have gotten it down to about 3 percent--the inflation rate I am talking about. It jumped up a little last month--about 90, 95 basis points as a result of the price of gas, but I think after the fighting stops in Iran, the price of gas will come back.

That doesn't mean the problem is solved. When you reduce inflation from 9 percent to 3 percent, that is good, but all that means is that prices are rising much quicker. They were going up really quickly when they were rising at 9 percent. Now that they are back down to rising 3 percent, that is better, but they are still going up.

What people want--what I want, from one perspective--is deflation. You want prices to go down, not to just rise less quickly. Well, the problem with deflation is that we can cause deflation, but the cure will be worse than the disease because we will have to endure unemployment of 9 or 10 percent, and I don't want to see that many Americans--I don't want to see any Americans, but I certainly don't want to see that many Americans thrown out of work.

So what do we do about the cost of living? Look, no amount--no amount--of guilt can change the past. It can't. It doesn't mean you shouldn't learn from the past, but no amount of guilt can change it. And no amount of anxiety can change the future. I mean, it is human nature to worry, but it is not going to change the future.

The only thing we have is the present if we want to make things better. I want to tell you what we are doing--we are doing. We passed a major piece of legislation that is just starting to take effect. It is going to impact every American. They came up with a new name for it because they didn't like the old name, but I kind of like the old name so that is what I am going to call it: the One Big Beautiful Bill. It is really breathtaking in its scope--and will be in its effect.

We cut taxes. Right now--don't take my word for it, just pick up the phone and arbitrarily call some Americans who have filed their taxes. They are getting money back. The average tax refund is up, like, 11 percent. The average American who normally gets a refund and who is already filing is going to get what works out to be an extra $250 to $300 a month, so that is going to help them deal with the higher prices.

We also extended the prior tax cuts from 2017 that were about to expire. We made them permanent. Anybody who voted against making them permanent wanted to raise your taxes by $3.4 trillion. We beat them back.

We increased the standard deduction. Whether you get a refund or not, you are going to pay lower taxes because we increased the standard deduction. We gave Americans a larger child tax credit. We cut taxes for many Americans on Social Security. We cut taxes on tips. We cut taxes on overtime. We gave many Americans a deduction on the interest they pay for a car loan. Not everybody--I don't want to overstate the case here--but many Americans, and I hope you qualify.

For people in business--most businesses in America today are small businesses. I know you read about Google and Meta and all of the biggies, but most businesses in America and most of the jobs in America are created by small businesses. And most of the small businesses are what we call LLCs or sub S corporations. They are passthroughs. They are passthroughs. And we have provided that they don't have to pay any income tax on their first 20 percent of income. That may sound complicated; it is really not. But I can tell you it means more money in the pockets of small business women and small business men.

If you are in business, we have also provided for full expensing of research and development, full expensing of new equipment and machinery. Why does that matter? That means you can buy new equipment to grow your business and deduct it from your income tax, which lowers your taxes.

This is a major piece of legislation, and it is taking effect now. It is not going to solve the problem completely, but it is going to go a long way because the best way to deal with inflation is to grow your way out of it. If prices are going up between 2 and 3 percent, rather than suffering 10, 8, 12 percent unemployment to get prices down, to have deflation, you are better off increasing income so people's wages and income will go up faster than prices. And that is what the One Big Beautiful Bill is going to do.

So don't think we are not doing something. We are. We have. And that bill is just starting to take effect right now.

The second thing we have done--and I am not going to talk about all of them. We have a problem with housing in America. You don't have to be an astrophysicist to figure that one out. You don't have to be able to explain the law of special relativity to know that the cost of a home is breathtaking or to know that rents have gone up. Why is that? It is because of the lack of supply. Duh. It is because of a lack of supply.

So what do you do to make a new home or a used home more affordable? What do you do to make rents go down? You increase the supply. And that is what we are trying to do.

I sit on the Banking Committee. We have passed--the Senate has-- twice, a housing bill. It is right in front of the House of Representatives right now, and I hope my friends in the House pass it.

I will tell you one of the things it will do. It will increase housing starts. If you don't think this works, just go read an article about what is going on in Austin. They increased the housing supply in Austin. You know, rents are dropping in Austin like a fat guy on a seesaw. They are going down. Why? Because they increased supply.

Our bill I hope the House will pass will offer local governments-- local governments control the supply of housing. It is not the Federal Government. It is not the State government. It is local government. Do you know why? Because they have control of the zoning office, and they have to give you--the contractors--the permits to build. If they want to restrict the supply of housing, they just make it very difficult to build a new home. If they want to expand the supply of housing, they make it easy.

For a variety of reasons I won't go into, many local governments have been restricting the supply of housing. So what our bill does--we say: Look, that is up to you, local government. It is your call. We don't want to be in charge of zoning laws in America. We don't want to be in charge, at the Federal level, of permitting. But you do rely on us for money.

Every year, we send about $3.3 billion--$3.3 billion every year like clockwork--to local governments, called community development block grants. They love it. It is free money, and they can pretty much spend that $3.3 billion--these local governments can--on anything within reason that they want to. They love this free money.

So what we did--this is in the housing bill, among other things that we passed--we said: Look, this $3.3 billion, you like it?

Yeah.

Well, if you will increase your housing starts--here is the good news. We started out with the sugar. We said: If you will increase your housing starts--you don't have to, but if you will increase housing starts in your city or local area, we will give you an extra dose of that community development block grant money.

Here is the bad news for them. And we also said: Now, you don't have to increase housing starts, but if you don't, we are going to pay the cities that did increase their housing starts with the money that we were giving you that you don't get because you chose not to.

So this bill isn't going to cost the American taxpayer any more money. The $3.3 billion is going to remain the same. But those cities that do a better job of increasing housing are going to get more money. Where is that money going to come from? It is going to come from the cities that didn't want to increase housing starts. And it will work. All you have to do is go look and see what is going on in Austin.

I have two more topics I want to talk about.

(Mr. MORENO assumed the Chair.)

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