The highly-anticipated tax overhaul bill was unveiled by House Republican leaders on Thursday. While proponents claim it reduces rates on the middle class and corporations, Democrats are labeling it a scam and saying the middle class will actually bear the brunt of increased rates to pay for cuts going to corporations and the wealthy.
House Majority Leader Kevin McCarthy joined "Face the Nation" Sunday to discuss the tax proposal.
What follows is a transcript of the interview, which aired Sunday, Nov. 5, 2017, on "Face the Nation."
JOHN DICKERSON: And we turn now to House Majority Leader Kevin McCarthy. He joins us from Bakersfield, California. Mr. Majority Leader, we want to talk about the tax cut. The Congressional scorekeepers have weighed in and said that this will increase deficits by $1.5 trillion. Supporters, of course, say that there will be economic growth that will take care of that problem.
But I was looking back at the claims made for the Bush tax cut in 2001, there was a Heritage study that said the debt would be gone entirely from those tax cuts. So, things sometimes don't turn out the way everybody hopes. Given that, and given this score of $1.5 trillion in the deficit, isn't this a huge gamble for all of the reasons that Republicans have long said about adding to the deficit and debt?
REP. KEVIN MCCARTHY: No, and really, John, look at this, for decades the hard-working Americans have been ignored or forgotten from Washington, but not anymore. This Tax Cut and Jobs Act bill is going to be the start to changing that. Let me give you three points why.
First, it lets every American keep more of what they earned. If you're single, the first $12,000 is tax free. If you're a couple, 24. That means the average family is going to save almost $1,200 more in their pocket. So, the first $55,000 a family of four earns will not be taxed at all.
Second, what it does for small business. I created my first small business when I was 20. The lessons I learned, I was the first to work, I was the last to leave, and I was the last to be paid. They create more jobs than anything else. Lowering it to 25% is the lowest it's been since World War II.
And now to your question, I was in the Oval Office just this week. This is going to make America competitive again. Broadcom came in there based upon our tax bill. This is a company who'd left America because the taxes came too high. They announced, because of the tax bill, they are moving back to America. That's $20 billion in revenue a year, but you know what's even more important? They put $3 billion every year into R&D and $6 billion into manufacturing. That's jobs, good paying jobs for America.
JOHN DICKERSON: Right. So, those are the promises being made on behalf, but there's nevertheless the score from the people who do the accounting. They know about the economic effects here. They may not - they may not calculate them in every way you'd like, but there is a big risk here.
We also will get to talk in a minute about whether everybody really does get a tax cut from this bill. But given how much Republicans have talked over the years about the dangerous effects of the debt and its downside on growth, the answers here are basically we've got to hope this turns out. Is there any mechanism to save the downside if things don't turn out as you would promise and hope that they would?
REP. KEVIN MCCARTHY: Well, there's a philosophical difference in Washington. Democrats do want to charge more and spend more. Republicans want you to keep more of your money and spend less. One thing that Republicans have shown since they took a majority, when it comes to discretionary spending, we've actually cut spending.
We know where the challenge is when it comes to entitlements. We've put those plans out there. We have to grow the economy and save the entitlements for the next generation by changing them to be actually prepared for the future. And you say these are studies, but think of this, Broadcom took an action to move their company back to America based on just the introduction of this bill. That is stronger than any study out there that jobs are coming.
JOHN DICKERSON: Well, but the study that's out there is by the Congressional scorekeepers who will ultimately determine how this thing gets voted on and, and determine the rules of the Senate. But let me just finally, very quickly, often Republicans have said the federal government needs to balance its budget like a family does. Would a family balance its budget based on this kind of promise of the future? Would that be wise family budgeting?
REP. KEVIN MCCARTHY: I think so because the one thing I will tell you is it's only Washington who thinks letting a family keep $1,200 is not a lot of money. Let them make the investment. And the one thing, if you're going to grow the economy, think about the last eight years.
Always in America, we've averaged more than 3% growth, but the lowest of growth we've had in those last eight years. If you look back to Bill Clinton, his worst growth year is higher than the largest of Barack Obama's. Growing the economy is the key to getting us working back and helping us to be able to balance the budget.
JOHN DICKERSON: Let me ask you, Mitch McConnell, the Senate Majority Leader, said, "At the end of the day, nobody in the middle class is going to get a tax increase." Is that the case with the House legislation that is proposed? Everybody in the middle class will see no tax increase?
REP. KEVIN MCCARTHY: Look, we are cutting rates. We're not raising rates. So, this is a tax cut. As I said--
JOHN DICKERSON: Will everybody get one in the middle class?
REP. KEVIN MCCARTHY: Yes. It is a fact that the first $55,000 you earn for a family of four will not pay any tax. So, it is a tax cut for the middle class.
JOHN DICKERSON: So there is - there is some discrepancy because there is some sunsetting of some of the provisions, including the Child Tax Credit, so that some of the analysis done here finds that, in fact, middle class families will end up paying more in years 2023 and 2024. So, is that math wrong or, or what's - why is there that discrepancy?
REP. KEVIN MCCARTHY: Well, John, as you understand, we've made most everything permanent, but because of the rules of the Senate, we could not make those permanent as we go forward. But I will promise you this, as the growth comes in, those will be kept. They will not go away within the tax credit in the sixth and seventh year. That's exactly what Chairman Brady has said as well.
JOHN DICKERSON: But why not guarantee that--
REP. KEVIN MCCARTHY: You understand it better than most--
JOHN DICKERSON: --in the legislation?
REP. KEVIN MCCARTHY: --with knowing the rules.
JOHN DICKERSON: Why not guarantee it in the legislation?
REP. KEVIN MCCARTHY: Well, we know the rules - well the one thing we see, because of the rules of the Senate, for us to move forward within the sixth and seventh, but we know with the growth and you look at the studies coming in saying more than a trillion dollars, we will keep those in the sixth, seventh, eighth, and ninth, tenth year.
JOHN DICKERSON: Of course, the rules of the Senate are there to keep fiscal responsibility and keep gimmicks from happening. Let me ask you though about the individual mandate. Some people have talked about getting rid of the individual mandate that's a part of Obamacare in this tax legislation. Would you support that?
REP. KEVIN MCCARTHY: Well, I know people are talking about it. Currently, it is not in this bill. I know the Senate is looking at it. We will start marking up this bill in Ways and Means next week, and I look for having the bill on the floor the week after that. The Senate will come out with theirs shortly.
JOHN DICKERSON: Would you like to see it happen now?
REP. KEVIN MCCARTHY: We do not currently have it in there. Look, my focus is on tax. If the individual mandate goes, I would not be opposed to that, but I want to see this bill go forward so the American people can win and start keeping more of their own hard-earned money.
JOHN DICKERSON: Finally, Mr. Majority Leader, the Speaker has said it would be naïve to suggest that sexual harassment doesn't happen in Congress. Is there a sexual harassment problem in Congress?
REP. KEVIN MCCARTHY: Well, we're a microcosm of society. We take this very serious. The House administration is holding hearings on this coming forward to look at if there's other rules. The Speaker and others, we put out a letter to every office to make sure they're taking training. My own office will be done with the training this month as well. There is no role for that inside the House, and we have to make sure that there are not problems inside the House as well.
JOHN DICKERSON: All right, Majority Leader Kevin McCarthy, thanks so much for being with us. And we'll be back in one minute with our politics panel.
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