ROBERT SIEGEL, HOST:
Senator Charles Grassley is an Iowa Republican, he's on the Senate Finance Committee and he's a supporter of the Senate tax bill. He joins us. Welcome to the program, Senator Grassley.
CHARLES GRASSLEY: Glad to be with you. Thank you very much.
SIEGEL: Republican Alan Simpson and Democrat Erskine Bowles, who co-chaired the National Commission on Fiscal Responsibility and Reform, write this about the tax bill today. They say (reading) it reads as if it were developed for a country whose debt problems have been solved when in reality debt is the highest it's been other than around World War II.
I want to hear from you. What happened to your concerns about deficits and the size of the debt, which would go up by $1.5 trillion, it's said, under this bill?
GRASSLEY: It's because of the concern of the debt that we're very much writing this bill and because over the last eight years, the economy has only grown on an average of 1.4 percent. The 50-year average is about 3 to 3.5 percent. So we have a situation in our country where the economy isn't growing, and the whole idea behind this is that we get the economy growing at 3 percent so we can start to pay down on the national debt like we did between 1997 and the year 2000.
SIEGEL: But you agree that before you begin to do that, this bill would increase deficits and the debt by at least $1.5 trillion, some would say, unless you really do take away middle-income tax cuts, $2 trillion, right? Are those numbers about right?
GRASSLEY: Yeah, if you look at it on paper the way the Congressional Budget Office puts things together, that is right. But here's what it leaves out is if we can get just four-tenths of 1 percent growth in the economy, then that is made up.
SIEGEL: But since the president says the economy is going gangbusters right now and there was a good growth figure, doesn't that show that you can have it without cutting taxes by $1.5 trillion?
GRASSLEY: And we can have it more.
SIEGEL: If corporations get tax breaks on their profits and on money they bring back to the U.S. from overseas, how do you know that they'll use that money to either expand or to hire more Americans or pay them more as opposed to, say, paying out more in dividends and in bonuses?
GRASSLEY: Either way, the money is in the country. And today, it's overseas, and it's not doing us any good overseas.
SIEGEL: I want to ask you about estate taxes. The Tax Policy Center estimates that nationwide only about 80 family-owned small business and small farm estates will face any estate tax in 2017. Why is it so important to raise the ceiling on estate taxes when already a couple can pass on an estate of up to $11 million tax free?
GRASSLEY: I suppose to show appreciation for people that have lived frugally early in their life, delayed spending so they could save. It seems to me there ought to be some incentive and reward for those who work and save and invest in America as opposed to those who just live from day to day. You could take the same hundred-thousand-dollar income for two people - one of them, they spend it, have it all spent at the end of the year and the others have saved a fourth of it and invested and create jobs and leave something for the future. The first person leaves nothing for the future.
SIEGEL: But very, very few couples that make a combined income of $100,000 are going to have estates of $20 million that they pass on. I mean, that's a tiny fraction of people.
GRASSLEY: Listen, in no way is my statement meant to dispute the statistics you gave me. I'm giving you a philosophical reason for recognizing savings versus those who want to live high on the hog and not save anything or invest in the commodities.
SIEGEL: Yeah. One last question - the last big tax law in 1986 was approved in the Senate by a 97-to-3 vote. There were long, public hearings over it. There was obviously strong bipartisan support for it. Are you at all concerned that the way in which this tax bill is being passed sets a precedent for rushing big legislation through, for not inviting lots of public comment and for not striving for bipartisan support?
GRASSLEY: Well, public comment would come from the 70 hearings that we've had over the last six or seven years on taxes. So there's nothing new you can quite add to that. And the other thing is in the 1980s, we had people like Senator Bradley that realized a 70 percent marginal tax rate was bad for the economy, and he fought to get it down to 28. And we have no Democrats that are of that philosophy today.
SIEGEL: Although 97 to 3 was more than just Bill Bradley voting from the Democratic side for the tax bill. It was - it was the general position of the Senate.
GRASSLEY: Yeah. But I'm saying we have - we don't have a single Democrat now that wants to lead the way Bradley led the Democrats. And in leading the Democrats, he led a lot of gutless Republicans.
SIEGEL: Senator Chuck Grassley of Iowa, thanks for talking with us.
GRASSLEY: Thank you.
SIEGEL: And by the way, former Senator Bradley has criticized the current tax bill for, among other things, giving too much money to the rich. Transcript provided by NPR, Copyright NPR.