Bush Tax Cuts

Floor Speech

BUSH TAX CUTS -- (Senate - May 15, 2007)

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Mr. CORNYN. Mr. President, I wish to join the distinguished Senator from Utah, Mr. Bennett, who gives, to my mind, one of the most cogent and understandable explanations for the economy given around here, and I wish to add a few comments about the fourth anniversary of the Jobs and Growth Tax Relief Reconciliation Act of 2003.

While we have a lot of people trained in a lot of disciplines who make their way to the Senate, I daresay there are not very many of us who have a background in economics or accounting or the type of disciplines that would help them make good economic decisions. The good news is that I think the fundamentals are pretty clear when it comes to what provides people an incentive to work hard and save, and what Government policies--particularly tax increases--make it harder for people to save their hard-earned money and invest it as they see fit--whether it is spending it on their family, investing in their children's college education or perhaps buying things that they would prefer--rather than having Uncle Sam stick his hand in their pocket and spend it on things the Federal Government wants.

It is important to go back and highlight some of the challenges our economy was facing when the Senate first passed this protaxpayer legislation 4 years ago. The economy was hit with not just a one-two punch but with a one-two-three punch. We were dealing with the fallout from the corporate accounting scandals of the late 1990s, the bursting tech bubble and, of course, the horrific attacks of September 11, 2001. All these events combined would have knocked out any other economy in the world. But because we acted with well-timed tax relief that put money back in the pockets of working men and women, small businesses and entrepreneurs, our economy bounced back. Indeed, our economy has roared back.

The 2003 act accelerated a number of individual and small business tax relief provisions Congress passed 2 years earlier. We allowed parents to take the $1,000 tax credit sooner. We accelerated relief from higher marginal tax rates--the marriage tax penalty and the alternative minimum tax. This legislation, passed 4 years ago, provided capital gains and dividends tax relief, which has helped increase economic activity and fill the Federal Government's coffers.

How could it be that Federal revenue has seen historic highs even as we cut taxes 4 years ago? Well, it is for all the obvious reasons: People respond to financial incentives when they know they are going to be able to keep more of what they earn. They work harder, risk takers and entrepreneurs invest in ventures that generate revenue not only for them--and create new jobs--but generate a lot more revenue for Uncle Sam as well. That is exactly what happened here.

Since 2004, Government revenues have outpaced projections by the nonpartisan Congressional Budget Office, and the deficit this year could tumble to $150 billion, or about 1 percent of our Nation's gross domestic product. Things such as bonus depreciation and the $100,000 expensing provision have allowed entrepreneurs and small businesses to grow and create jobs. This tax relief has helped produce 22 straight quarters of growth, with 7.8 million new jobs over the past 44 consecutive months. That is an outstanding accomplishment, which makes America the envy of the world, and it is a trend we must continue as we face significant fiscal challenges ahead.

We can and we should take great pride in the economy's performance and look with optimism toward the future. As we move forward, the last thing we should consider is reversing the policies that have generated this kind of beneficial economic activity and created so many jobs in America. Unfortunately, this tax relief will soon expire, resulting in a tax increase for all taxpayers without a single vote on the floor of the Senate.

The other side is now pushing a budget that will result in a $736 billion tax hike for taxpayers over the next 5 years. This, unless it is reversed, will not only jeopardize future economic growth but also the financial well-being of millions of Americans--families, small businesses, and seniors.

If Congress fails to make this tax relief permanent, the fourth anniversary of which we are celebrating today, every American taxpayer will see their taxes go up. For instance, a family of four with two children, making $50,000 in annual income, would see an increase of $2,092 a year in their tax bill, or a 132-percent hike.

Four years ago, many of our colleagues on the other side of the aisle argued that the Jobs and Growth Tax Relief Reconciliation Act of 2003 would not only not benefit our economy, they actually said it would endanger the economy. For example, the now-majority whip said:

The Republicans who push this tax plan have to face stubborn facts, and facts can be stubborn. The last time they got a tax cut through, the American economy fell backwards. We did not make progress. We lost jobs. We lost opportunity. We lost a lot of hope in this country.

There is one thing I agree with the distinguished majority whip about, and that is facts are, indeed, stubborn things. Four years ago, the Senate voted for hope and against fear. It voted for progress and against stagnation. It voted for the entrepreneurial spirit and against command and control out of Washington, DC.

I think 4 years later we all have seen and can celebrate tremendous results as an outcome of this important legislation.

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