National Public Radio "Morning Edition" - Transcript
Interview
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MS. MONTAGNE: In a prime time address to a joint session of Congress last night, President Obama spelled out more of his ambitious agenda. He argued for restructuring health care, an improved education system and an end to government waste. He also promised to get credit flowing again.
Senator Chuck Grassley of Iowa was at the Capital for the president's speech. He's the top Republican on the Senate Finance Committee and handles taxes and entitlements and he joins us now for some reaction to the speech last night.
Good morning, Senator.
SEN. GRASSLEY: Good morning. Glad to be with you.
MS. MONTAGNE: Now, the president spoke last night about, and I'm quoting him, "ending the tax breaks for the corporations that ship our jobs overseas". What's the likely Republican response to that?
SEN. GRASSLEY: Well, we're going to make sure that we have a tax code that makes our industry competitive with other countries. The extent to which the tax code's being abused, Republicans -- just like Democrats -- are going to close that.
But the United States has a corporate tax system that's a lot different than other countries. And from that standpoint, what we have to do -- with the highest marginal tax rate of any corporate tax in the world, we have to make sure we have the incentives to keep business within our country and to keep our business competitive with others, because corporations don't collect taxes. I mean, I should say, corporations don't pay taxes; they pass through their taxes. And we want to make sure our consumers have a competitive product and we keep jobs at home.
But I've been involved in looking at corporate loopholes for probably the time I was chairman for six years and now helping Chairman Baucus -- that the Democrats are the majority -- in the very same way. And we brought in a lot of revenue, but we also want to make sure that until we reduce our corporate tax rates -- and even Democrats support that -- down to about 25 percent so we're more competitive, we're going to have to make sure that we don't hurt the things that make us uncompetitive.
MS. MONTAGNE: Well, that would be a point of conflict, it would seem then, because ending certain tax breaks would tend to mean companies pay higher taxes.
SEN. GRASSLEY: Yeah, but here's what we would do in the process: If you reduce marginal tax rates, you generally broaden the tax base, so closing loopholes would not be something that would be different than we have like with individuals when, if you remember the '86 tax bill, we reduced marginal tax rates. We very much broadened the tax base for individual income tax.
MS. MONTAGNE: Now, the president also -- as you're bringing this up right now -- also repeated his campaign pledge to raise taxes on the wealthy in order to reduce the deficit. Are any set of Republicans likely to accept that?
SEN. GRASSLEY: Yeah, I suppose some will. But let me explain to you something -- a headline I remember from an op-ed piece of a Harvard professor that said something along the lines: tax the rich, lower marginal tax rates. And that may sound counterintuitive, but the fact is, that if you're wealthy, you have an opportunity to choose leisure. And some people would, you know, make up their mind, you know, I'm not going to work and just give the money all to the government.
So I always say, wealthy people are greedy. Keep marginal tax rates low. They'll invest it. They're willing to take a gamble and every time they make an investment, create jobs and expand the economy.
You know, in the 2003 and 2001 tax bills, if you would take Congressional Budget Office projections for 10 years ahead from 2002 to 2012 and then look at what actually came in after we reduced marginal tax rates, you would find $758 billion more came in the years 2003, '04, '05 and '06. And I know it -- even when I hold town meetings in Iowa and you talk about reducing marginal tax rates and bringing in more revenue, it just doesn't sound reasonable to most people, because they think you raise tax rates you bring in more revenue. But quite frankly, that doesn't work that way.
MS. MONTAGNE: Now, Senator Grassley, we have time for just one more question -- it would seem to be a big one, but let me see if I can get you give us a reasonably short answer: Do Democrats and Republicans share any common ideas on how to deal with some huge looming expenses like Social Security and Medicare -- projected to lose money eventually?
SEN. GRASSLEY: Well, let me -- you know, I think that you're asking a question that comes from the cynicism of a lot of people, that everything in Washington is partisan. Nobody works together.
Just last night at 6:00 I finished the weekly meetings that I have with Chairman Baucus of the Finance Committee. He and I have been working together -- either myself as chairman when Republicans were in the majority, he is now chairman. You know, almost everything that comes out of that committee is bipartisan. And when it isn't bipartisan, we surely have friendly disagreements. But almost everything that comes out of our committee is bipartisan.
So yes, we will share this. And yesterday the discussion was working towards the health care reform that the president was talking about last night in his speech.
MS. MONTAGNE: Senator, thank you very much.
SEN. GRASSLEY: Okay, goodbye. Thank you very much.
MS. MONTAGNE: Senator Chuck Grassley of Iowa. He is the ranking Republican at the Senate Finance Committee.
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