Transcriber: nvidia/parakeet-tdt-0.6b-v2, sat-12l-sm, and large-v3-turbo
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david rubenstein
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jason smith
rep/r41:56
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Committee One: Eight Years Later00:05:03
unidentified
This is C-SPAN, giving you your democracy unfiltered.
And now House Ways and Means Committee Chair Jason Smith discusses President Trump's tax agenda, Medicaid spending, the state and local tax reduction cap, and tax relief for the middle class.
This is hosted by the Economic Club of Washington, D.C.
Since we're using the Rules of Reconciliation, which is a tool to help the Senate get the 51 votes to pass any legislation, there's certain parameters that we have to fall under.
We had to pass the budget resolution.
The budget resolution was passed by both the House and the Senate, and it gave us specific instructions.
And within that budget resolution, it instructed 11 different committees in the House of Representatives.
10 of the 11 have marked up.
The last one is finishing up right now, the Ag Committee.
And once all 11 are done, their bills that they marked up, it goes to the budget committee.
The budget committee is meeting on Friday morning, tomorrow morning, and will compile into one bill.
And then Monday, we go to the Rules Committee on that one bill.
How much confidence do you have that somebody can project what a tax bill is going to cost 10 years into the future?
And that's kind of hard to say this provision is going to cost X or Y or Z. Do you have ultimate confidence in that, or you just say it's a ballpark kind of number?
So I'll give the example of like back when we did the original 2017 tax cuts, CBO and joint tax scored that it would add $1.5 trillion to the deficit.
And then they showed the projection numbers of how much revenues would come in over the next eight years.
And if you look at what they projected over those eight years, in fact, revenues came up $1.7 trillion more than what they projected eight years ago, which so then it wouldn't have been a $1.5 trillion.
The Inflation Reduction Act, something that scored at just under $300 billion, is now I'm repealing provisions of the Inflation Reduction Act that is bringing a savings of $520 billion.
I go back to that first day that when I was sworn into office, my senator at that time was Roy Blunt.
And Roy Blunt pulled me aside and he said, Jason, there's two ways you can be effective in Washington, D.C. One, you can be here for 20 years and just build natural seniority, or two, you can build relationships.
And as someone who did not want to wait 20 years to be a leader or to be effective for the people that sent me to Washington, I knew that building relationships.
And so I made it a focus to schedule five to 15-minute meetings, coffees, teas with every member of Congress that would meet with me whenever I came up here because they all knew who I was being the new special election kid, but I didn't know who the other 434 were.
And so I just started going through, getting to know them, not asking for anything, but just figure out where we have some common ground.
I will never forget some of my meetings.
Don Young, you know, the former congressman, the first time I met with him, he kept talking about the bridge to nowhere and how much he didn't like his former governor.
I've been elected twice now as chairman of the House Ways and Means Committee.
The first election, just over two years ago, I ran against two great members of my committee.
And I was not the most senior member of the committee that was running, but I worked really hard.
I traveled to 42 of the 50 states campaigning for my colleagues and for candidates in 87 different congressional districts.
I did more than 300 TV appearances trying to push the Republican message.
And I met with every one of the 30-plus members of the steering committee multiple times, giving them the pitch of why I should lead the Ways and Means Committee and under what leadership I would lead on.
And then, of course, the day that they decide, every member has to give a 30-minute presentation and take questions from those 30 members, 30 elected members of the steering committee, and was very...
What was your most effective argument for why somebody from a farming district in Missouri should be the chairman of the Ways and Means Committee at a relatively young age?
So it was the I truly believe that that our party is not the party of seniority or who's next in line, but it's the party who's best for the job.
And I felt like I was the best person for the job.
That's why I was running for it, or I wouldn't have done it.
The very first slide that I put in my presentation to the steering committee was a poll from August the year before that said, what party is the party of the working class?
And it showed 54% said the Republican Party was the party of the working class.
And I said that if you elect me to be the chairman of this committee, that the policies that's within the Ways and Means jurisdiction, tax, trade, health care, social security, needs to be the policies that reflect the priorities of the working class.
I'm a product of the working class.
I grew up in a single-wide trailer most of my life, and then we upgraded to a double-wide.
My mother was a factory worker just so that we had health insurance.
That's how we made it by.
But I am so grateful for how I was raised because it doesn't matter what family you're born into.
If you get a quality education and you're determined to work hard and not give up, you can accomplish just about anything.
And that's how I view everything that I've done, whether it's becoming the Ways and Means chairman or when I ran for Congress.
There were 26 other Republicans that I had to beat out in order to just become the nominee to take my predecessor spot.
And so going to my grandparents' house on the weekends or in the evenings or the holidays, like I thought it was kind of normal to go outside and pump water from a cistern and have an outhouse.
But that's not normal.
But those kind of experiences helped me become a better advocate for the working class families that are struggling in my area.
Because the average income in my entire congressional district, now since it's moved closer to St. Louis, has went up.
It's in the mid-40s.
But it's still one of the absolute poorest.
And it's just people that are salt of the earth.
They work really hard and they're just trying to get by.
And this tax bill, whether it's no tax on tips that affects 4 million tipped employees, whether it's no tax on overtime, which affects 80 million Americans, whether it's tax relief for seniors, these are all priorities that I pushed aggressively to get in here because I wanted to deliver for just the common person.
So let's talk about how we got to where we are today.
In coming up with the bill that you have passed through the committee, did you meet with the Treasury, with the Senate Finance Committee people, and the President from time to time?
So we had the big six meetings, which was referred to as the Speaker of the House, the Leader of the Senate, so Mr. Thune, also Chairman Crapo of the Finance Committee, myself.
It had Kevin Hassett, economic advisor, and then also the Treasury Secretary of Besson.
And so the six of us met quite often.
Typically, it's about every week to two weeks, and we've been doing that for several months right now, discussing different tax provisions.
But in regards to my counterpart over on the Senate side, Chairman Crapo, we talk, our teams communicate nonstop, and we've been working pretty well hand in glove.
I had someone the other day stop me in the hallway in the Capitol, and they're like, do you ever talk to Mike Crapo?
I was like, he was the last person I spoke to before I went to bed last night.
And so I went in the Oval Office and I shared with him the main priorities that he asked us to deliver on and what I could deliver on and what I couldn't deliver on.
In order to make something permanent, for one, the way that they did corporate tax is that it was counted within the 10-year window, but then also the next 10 years had to be paid for.
If you do that, then it can be made permanent.
And that's what happened back in 2017.
Several of the business provisions were not made permanent in 2017, one of them being the 199A small business deduction, which helps a lot of pass-throughs, LLCs.
When you have somebody that was already permanent, even though it will still cost X dollars over the next 10 years, you don't count that as part of the 3.7, right, for whatever reason.
So the idea of the no tax on tips to the president was he was actually having dinner at one of his properties in Nevada during the campaign, and the waitress said, can you not tax my tips?
And that's where the idea came from from a waitress in Nevada to the President.
And so what we've done within this bill is to eliminate the tax on tips altogether to the $4 million.
So within the rules of reconciliation, by statute, you cannot touch Social Security.
And so we wanted to make sure we delivered on this priority in reconciliation.
And the way that we are doing that is, and if you want to know about the Social Security tax, in like 1981, it was created that you were tax-free off your first $25,000 for an individual or $32,000 for a married couple.
And that hasn't changed in 40, 43, 44 years.
And so there is an item within the tax code that you get an added standard deduction if you're a senior, if you're 65 years old or older.
It's currently about $2,000 that could be added on top of your guaranteed deduction.
And so we've increased that $4,000 per person so that their deduction would be $6,000.
And that equates to anyone who makes less than $75,000 per person, so $75,000 for an individual or $150,000 for a married, that they would not be paying any taxes on their Social Security because of the tax cuts from the income code.
So throughout this whole process, David, I've had to thread a needle.
We have one of the smallest majorities in the history of Congress, both in the House and the Senate.
And so I can only lose three people in passing this tax bill.
And so trying to thread that needle where people are in the extremes in all areas, whether it's the green credits, whether it's salt, whether it's other various tax provisions, just trying to find that balance has been what I've been striving and trying to do in this bill.
In regards to carried interest, I got a letter from 35 different members of our Congress for being committee chairman that was saying, do not put this in the bill.
We can't support the bill.
And so I shared that with the President on Friday when I met with him.
I showed him what I could deliver and what I couldn't deliver.
It was a priority.
The president wanted it.
The president had a lot of priorities, and I delivered on most of them.
Now, some controversy about the Big Beautiful bill in even Republican circles is the Medicaid cuts, so-called, and also the cutbacks in the things that President Biden had in his energy bill and so forth.
So can you talk about you didn't do the Medicaid cuts, but is that going to be so controversial, those cuts, that you think it couldn't pass the House easily, or you think it will pass the bill, the House?
It has been bumpy through the process, but this is probably the largest legislative feat that I will ever participate in in my entire time in Congress or most members.
In regards to Medicaid, I'll just give you an example.
During the hearing, we had all these protesters that were standing along the walls in the Ways and Means Committee room with shirts, don't cut my Medicaid.
And I was getting text messages from the Energy and Commerce Committee, which was going on at the same time, and they arrested like 20-plus protesters that was disrupting the meeting.
And I was thinking they are going to disrupt ours.
And if they do, I'm going to tell them they're in the wrong committee hearing.
They need to go to Energy and Commerce because they're the ones that deals with Medicaid.
It's not in Ways and Means.
But they were great.
They didn't disrupt.
They just had their shirts on.
And we didn't have the problem.
But in regards to Medicaid, it has been debated amongst my colleagues a lot.
From members who want to go farther to members who feel like we're going too far.
And they've been trying to balance that.
There's been a lot of private working groups for the last several weeks in regards to trying to figure out that $880 billion of cuts that Energy and Commerce has to do.
And I have not went through everything that they did in the markup.
Their markup finished a little bit after ours yesterday.
But I know that work requirements was an item that they were putting in it.
But also, I think they are getting $70 to $80 billion in other areas, such as selling the, what is it, the broadband, like spectrum.
I tell everyone, I've said this before, the bills were out there, is that pretty much everything is on the table because we don't know what is needed to thread that needle to get the votes.
People would talk about different tax brackets or whatever, and I would just say everything's on the table.
So I did that last Congress, and the Senate killed it.
Myself and Chairman Wyden did the Smith-Wyden bipartisan tax bill, and it passed with 357 votes in the House of Representatives.
I mean, it passed with more votes than banning TikTok did in the House of Representatives.
And what we did, we struck a very good balance of bipartisan items and got it over there.
Unfortunately, it didn't get past cloture in the Senate.
That's why it died.
But I truly believe that, of course, this is a partisan tax package that we're working on, but I would love to work with Senator Wyden, Chairman Crapo, Ranking Member Nil in trying to craft like a bipartisan bill before the end of the year, because there's a lot of tax provisions that I really care about that are expiring or have expired that are truly truly bipartisan.
But they couldn't make it in our bill because there's Republicans that really dislike those provisions and the only way they could ever become available is if it's bipartisan.
So I changed how we run the Ways and Means Committee from my very first committee hearing.
My first committee hearing as chairman was not in Washington.
We did it in Petersburg, West Virginia at a lumber yard.
And we brought in a restaurant owner, a coal miner, working moms, and farmers just to hear of the issues that they were facing in today's economy.
And we did that throughout the country.
It was actually 15 different field hearings.
We went to a Native American reservation in Arizona.
We went to a factory in Peachtree City, Georgia.
We went to a farm in Yukon, Oklahoma.
We went to a homeless shelter in Chicago.
We went to a port in Staten Island, New York.
So we went all over.
We went to the Iowa State Fair and got input on all the expiring provisions of the 2017 tax cuts.
And that is how we crafted the bill.
I set up 10 different tax teams where I picked 10 different members of my committee to chair for over the last year, where they traveled to more than 23 different states themselves, had more than 120 site visits.
They met with stakeholders to listen to all items within the code.
And then we brought that all back.
And that is how we crafted the bill, is by what we took input from everyone.
Small business owners, farmers.
I think about the manufacturer in North Carolina that we visited that was talking about how important 199A is just for her business and for being able to keep everyone who she has employed, employed.
But what I do want to say is we have a 300 and almost 400 page bill.
And I'm sure there's things that we may have not seen all the facts in.
And when you hit one domino here, it can really mess up some other dominoes.
And I'm completely, I want any American who feels like that there's like something that an unintended consequence of what we're trying to do that we may not be aware of, please let us know.
Work with my team.
I hope that you feel that any member of the Ways and Means Committee that I serve with or members of my staff, please work with us.
I'm not saying we may agree, but you may bring up a point, and there's been a couple since markup that I'm like, oh.
When you were doing the markup, you knew you had the votes on all your provisions, I assume, or did you not know how the votes were going to be on each provision?
So I am very proud of my team on the Ways and Means Committee.
My members have worked so hard.
We have put in almost 60 hours behind closed doors discussing different tax provisions, different pay fors, having some lively debates.
And if you look at the members, the 26 Republican members of the Ways and Means Committee, very diverse.
And they are reflective of the House Republican conference.
And so it was so helpful to have the inputs from folks who really like the IRA credits to those who really hate the IRA credits.
To those on the committee, like Nicole Maliatakis, who is from a state who cares about SALT, she cares about SALT.
She's part of the SALT caucus.
So having her champion those priorities, and she's done a she's probably been the most productive a member in trying to push the most tax relief for the folks in New York, New Jersey, and California than anyone I've worked with.
Yeah, it's 30,000 if you make less than $400,000 a year, and then it starts phasing back down to $10,000.
So we've tried to find what is that good spot.
Even talking to my ranking member, he's like, SALT is just SALT's an obstacle for both parties in that sense.
And so we've checked numbers.
I've got numbers from Treasury and the IRS of the different SALT congressional districts within our conference.
And this $30,000 cap that we have under $400,000 will provide more than 90% of every one of our SALT members' districts coverage under this.
So it's a balance.
It's not everything that some of the SALT members want, but I have members of our conference that doesn't even think you should be able to deduct $1, let alone $30,000, but it's a fair and balanced approach.
So for those two members who maybe you are not going to get in the House, can't you give them some provision they want and put it in the bill and take care of them?
Oh, I'm already pushing my team of the priorities that we need to focus on now.
There's a lot of trade items that we are going to have to discuss and be a part of.
We are in the middle of a lot of trade discussions with the administration, with other countries right now, with some really good things I think that we can do.
No, but I do project that with the growth provisions that we have within it, whether it's 100 percent expensing, a lower rate for pass-throughs and small businesses, the 100 percent expensing of factories and structures for four years, that will have a huge impact to the economy and will affect the GDP over the next couple of years.
So if we cut $1.5 trillion of spending, which is projected to cut in this one big, beautiful bill, that will be more than 300 percent of what has ever been cut in the history of Washington.
And so we are at least moving towards that.
The most you have ever seen in cuts was about $400 billion.
You know, in the Inflation Reduction Act, they added $80 billion to increase the IRS, which would lead to what their priorities were, a lot more audits for taxpayers.
And I believe that we need to make sure that the IRS is definitely efficient, accessible.
They pick up a phone and actually talk to you in a prompt way.
I'm looking forward to the new IRS Commissioner, my fellow colleague from Missouri, our district's bordered, to be the new IRS Commissioner.
But the IRS, their yearly budget is right under $15 billion.
And to have $80 billion just thrown in to an existing $15 billion, even if you'd spent $20 billion on technology and improvements and stuff, which they didn't, not at all.
It was right around like $5.
But that creates a lot of problems.
There is $22 billion of that $80 billion that has not been rescinded or spent.
And so I wanted to rescind that $22 billion in this bill, but the Congressional Budget Office said that for me to take $22 billion back, it would cost $65 billion.
And so that wasn't worth to me to do that.
And that goes back to scores with the Congressional Budget Office and joint tax, that I just don't buy what they're saying.
Let me ask you, on the endowment tax, there has been talk that the administration, I guess through the IRS, would say we are taking away the entire tax deductibility of Harvard University, for example, or other schools.
Can the President of the United States, under your bill, decide by himself, or can the IRS decide just taking away the tax deductibility of certain institutions, or that is not a problem?
There is nothing in our bill that grants additional powers or authorities in regards to that, except we do point out specifically that if you are a non-for-profit funding terrorism, that you should lose your tax exempt status.
This was a piece of legislation that we passed out of the House last year because we actually highlighted from the Ways and Means Committee 10 different nonforprofits that were funding Hamas and other terrorist regimes.
And we pointed it out, sent a letter to the IRS, asked for them to pull their tax exempt status.
The IRS has the authority.
The IRS has the authority right now, but it's their discretion of whether they pull whatever nonfor-profits.
But they do have the authority.
Our legislation in regards to terrorist organizations says that they have to be pulled out when they are found.
There was a story around Washington recently that there was going to be an executive order saying that if you gave money to an organization that was designed for climate change, reducing climate change, you would not be able to deduct that.
So now that you've got this bill behind you, what is the highest priority when you get the bill through the House and the Senate and you ultimately have your July 4th ceremony?
We have to get this bill signed into law, delivered for the American people.
But after it's signed into law, I'm going to hold Treasury accountable to make sure that they're implementing the tax bill, how Congress passed it, because it's not always been fun.
When we passed the 2017 tax bill, Treasury interpreted some of the stuff that Mr. Roscom and myself put together that we needed to clean up.
And so that's going to be a big priority to make sure that the tax code is implemented as the priority that we're passing Congress.
But trade.
Trade is super important.
96 percent of the world's consumers are outside of the United States.
I represent a farming congressional district.
We're dependent on trade.
We grow rice, corn, cotton, beef cattle in my district.
And so we need more markets.
We need to eliminate those non-tariff barriers, which I'm thrilled about the United Kingdom agreement that came out, because what it did for AG was exponentially impressive.
Because if you look at just agriculture trade alone in this country, we're at a $32 billion agriculture trade deficit.
And just four years ago, we were at a $5 billion agriculture trade surplus.
And that $32 billion alone is just in the European Union.
He is the most accessible executive I have ever worked with.
I will wake up in the morning sometimes from a text message from the President at 5.30 in the morning, and it is sent to me at like 2.30, and I am like, oh, no, he knows I was sleeping.
But he is always working.
He will text you.
I can text him.
I woke up to a text today.
So he calls, and he will call quite often, and I call him.
And he is so productive in regards to talking policy.
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