FLOOR SPEECH: Reconciliation Legislation (Tax Reform)
Thank you, Mr. President. I appreciate the fact that I’m able to follow my colleague from South Carolina who has described and encapsulated in pretty simple terms what this proposal is before us, this tax proposal is, is good for the country.
It’s good for American families. It’s good for Alaskan families and South Carolina, and I’m pleased to be able to join my colleagues this afternoon in support of the reconciliation legislation that we have pending before us. I happen to believe that the tax reform title will help our families keep more of their hard earned dollars. I think it will make American businesses more competitive. I am also proud to be the author of the energy title, contained within this measure, that works to strengthen our long-term energy security.
I think it’s important that we look at the moment here, recognize the magnitude of this moment —once in a generation do we have the opportunity to take a hard look at our economy, the role that Congress can play in encouraging true growth, and then take the action that we need to get the economy back on track.
Our historic tax reform effort will grow Alaska’s and the nation’s economy. And when you look at it from the broader view, from a thousand-foot view, the Tax Cuts and Jobs Act is a pro-economy, pro-growth, and pro-jobs proposal reduces taxes and puts dollars back in the pockets of hard-working Americans at every income level.
When you think about all that does in terms of boosting the economy to create jobs—jobs that feed our families, that help us put our kids through college. The kind of jobs that allow folks to build up their savings to cope with the unexpected, to retire with peace of mind, and give flexibility to be the great innovators that we are in this country.
What we see in this proposal are meaningful developments in the tax code to provide substantive relief to Americans across the economic spectrum.
In Alaska, a family of four with two kids, earning $50,000 that uses the standard deduction will see a tax decrease of $1,400. If that same family earned about $75,000, their tax liability would be reduced by $2,000.
The Child Tax Credit, the benefit that we see from near doubling that tax credit from $1,000 to $2,000, being refundable, expanding the eligibility to children under 18 years old. This expansion is a significant form of help to the 22 million Americans who use the Child Tax Credit.
In terms of simplifying the tax code—how often do we hear our constituents say “just make it simpler for us.” Making it simpler, fair tax treatment for individuals in every income bracket, again, this is a proposal that delivers. Most Americans take advantage of the standard deduction and this Act doubles the standard deduction, resulting in a $12,000 deduction for single filers and $24,000 for married taxpayers filing jointly.
I focus a lot on the families in Alaska, we don’t happen to have a lot of large corporations, but when you look to the benefits contained within this proposal and the impact that they have on our larger businesses, our corporations, it is significant. Recognizing that the steps we are taking to lower the corporate rate, to allow us to be more competitive, not only in this country but globally, all we need to do is really look to what we are seeing already with the uptick in businesses and how we can be doing more to further incentivize that.
I think we recognize that lower corporate will allow American businesses to compete against foreign competitors, and make the investments in American operations that will bring the jobs and economic growth that have eluded us for years.
In Alaska, 99.6 percent of our businesses are small businesses; they’re taxed at the individual rate. So the discussion that we have had with regards to allowing of pass-through small businesses to be able to deduct an additional percent of their business income from their taxes, this is a significant benefit for our entrepreneurs and one that I certainly endorse.
Some of the other provisions that help our businesses — the100 percent immediate full business expensing for the next five years, the expansion of the Section 179 small business expensing — these incentivize the kind of foundational investments that implement long-term plans, that help to expand operations, and encourage businesses to take the risks needed to create lasting economic growth.
And the bill also helps our smaller businesses protect what they’ve built; and when someone passes on, the ability to be able to pass to that next generation. What we have done with the doubling of the exemption for the estate tax is important.
There’s been a lot of discussion about the benefit that is seen with this particular provision on our farmers. In Alaska, we don’t have a big agriculture section of our state, but we view our fisherman as the as farmers or ranchers of the sea, truly small businessman. When you think about the investment that a fishing family makes, in a vessel, in the gear, in the permits, in the quota, you can have a significant investment totaling millions of dollars, $7 or $8 million. It’s about $1 million when you think about the quota and the permits.
So recognizing how we are able to provide for just a little bit of relief to those smaller families, I don’t think they would consider themselves millionaires in terms of having that disposable income, but being able to pass that hard work that you have built as a small family operator in a fishing business is important, and it’s significant.
Bottom-line, Mr. President, this is a proposal that does the work. It does work for Alaska families. It gets dollars in pockets and relief to families. It will help restore competition in the global marketplace, certainty to job creators, and also confidence that now is the time to invest in America.
So I thank the members of the Finance Committee, the good work done by Chairman Hatch, for the work that they have done on tax reform. I’d also thank the members of the Energy and Natural Resources Committee, who worked with me to report the second title of this legislation and to report it on a bipartisan basis.
We’ve got a very straightforward text—just six pages in total, which is pretty impressive in this day in age—this small package offers tremendous opportunity for Alaska, for the Gulf Coast, and for all of our nation.
Within this title we authorize responsible energy development in the 1002 Area, this covers 1.57 million acres of land in the non-wilderness portion of ANWR in the northeastern corner of the state.
We require the program to be managed in a manner similar to the environmentally protective framework that is used for other federal lands on Alaska’s North Slope. It also provides two lease sales to be conducted over the next ten years.
In terms of how the revenues are shared, we split the revenues from development evenly between the federal government and the State of Alaska.
We have limited surface development to just 2,000 federal acres within the 1002 Area—this is just 1/10,000th of all of ANWR. Again, we are talking about a very limited surface development to just 2,000 federal acres within the 1002 Area.
Many have raised concerns about the environmental process, does it get sidestepped; not at all. We have not preempted the environmental review process. We have not limited the consultation process with Alaska Natives in any way. All relevant laws, regulations, and executive orders will apply under our language.
I think it’s important to recognize this is not something that just appeared. Our title is the result of a regular order process here in the Senate, and it will include a regular order environmental process, with laws like NEPA all fully applied, after we pass it.
We also strengthened our bipartisan title in committee, during our regular order markup, by adding a bipartisan amendment sponsored by Senators Cassidy, Strange, and King. Their provision will increase revenue sharing for the Gulf Coast and be used for priorities like coastal restoration and hurricane protection—we’ve all seen that given the hurricanes that they have endured in the Gulf region this year, there is certainly need for this critical investment.
The 1002 Area, in the northeast corner of Alaska, is a long way from the Gulf Coast—but it will also bring substantial benefits to every part of our nation.
With this provision, we will generate substantial revenues for long-term deficit reduction—well over $100 billion over the life of the fields. I think that’s important to keep it into context, we’re talking not just about short-term within this window, but what will come our way over the life of the fields in terms of revenues to the country.
We’re going to create jobs—thousands of them, and not just in Alaska, but all really all over the country.
We will reduce our foreign oil dependence—and this is important because we are projected to remain a net importer long into the future—and in states like California, our foreign dependence has actually deepened as we have seen Alaska’s production decline. So this means for them, jobs and revenues as well.
And of course you cannot talk about energy security without recognizing the benefits to our country’s national security, and what this yields.
We’re also taking a major step to make energy more affordable. The fact of the matter is the world is using more oil, and not less. Our prices are rising. OPEC would like to keep it that way, regardless of the consequences for America. Meanwhile, the International Energy Agency, among others, is warning of a looming shortfall in global supply. We’ve seen the price spikes and disorder that result when we fail to respond.
I think we recognize that these are all significant benefits—jobs, revenues, national security, affordability. But we should be equally confident that this will not come at the expense of our environment, simply because we have the technologies, the new developments, that really have worked to dramatically reduce the footprint of development, smaller than ever.
The size of development pads on Alaska’s North Slope has decreased by roughly 80 percent since we began operations in the 70s. New technologies have expanded the subsurface reach of the newest rigs by more than 4,000 percent. Folks have seen the various charts we have had on the floor that show just how far we are able to reach below the surface from one single well. If you were to drop a drill down below the Capitol here, extended reach technology can take you all the way out to National Harbor, just to put things in context here.
So the technologies allow us to have a much, much smaller footprint. Many exploration wells are now built using ice roads and ice pads that melt when the spring thaw comes, leaving no impact on the tundra. So making sure that we are being environmentally conscious at every turn is what we do, is a priority for us, in Alaska.
We hear baseless claims of destruction and devastation, but the reality is that is not our experience in Alaska, that is not how we do business, and we need less land to access more resources than ever before. That’s the reality in Alaska today.
Alaskans understand this. That’s why there are so many of us that so strongly support this development. Our entire congressional delegation. Our independent Governor and our Democratic Lieutenant Governor. Alaska Natives who live on the North Slope, including in Kaktovik, which is actually in the 1002 Area; some people say that this is an area that is untouched, unspoiled, but you need to talk to the people who live in Kaktovik who fly in on the airstrip there, whose children attend the school, who work in the clinic, these are people who also support development.
The Voice of the Arctic Inupiat. The North Slope Borough. Dozens of our state legislators. Hundreds and hundreds of Alaskans have called or written in support of this effort—which is no surprise, because about 70 percent of Alaskans support responsible energy development in the non-wilderness 1002 Area.
They’re joined by a variety of national stakeholders. The U.S. Chamber of Commerce. The National Association of Manufacturers. Americans for Prosperity. Securing America’s Future Energy. North America’s Building Trades. The Laborers’ International Union of North America. The International Union of Operating Engineers. Just to name a few.
There are some who worry about the potential impacts of development in the 1002 Area, and I will be the first to agree that the environment and local wildlife will always be a concern, always be a priority—and that’s why we did not waive NEPA or any other environmental laws. And that’s why consultation requirements with our Alaska Native peoples will apply. And that’s why surface development will cover up to, but no more than, 2,000 federal acres.
Fact of the matter is, Mr. President, we will not sacrifice wildlife or the environment for the sake of development. But we also recognize: that’s not the choice we face here. This is not an either or proposition. This has not been the experience in Prudhoe Bay, where the Central Arctic caribou herd has grown more than seven-fold since development began. And it comes because we are taking the care as we seek to develop.
If we are allowed to move forward with development, we will do it right. We will take care of our lands, we will take care of our wildlife, and we will take care of our people. I would not support development if I was not convinced that it can be done safely and responsibly.
I was born in Alaska. I think I’m the first senator serving who was ever born in Alaska, actually in the Territory of Alaska. It will always be my home. My husband I have raised our boys there, and we hope they lead a long and a healthy life in this amazing and beautiful place. We know that there is no one who cares more about our place, these spaces, than those who call it home. We love this place, and we will not risk its future for the sake of development. But again, we know that’s not the case here. We know that is not the trade-off here. We know that this is not an either-or proposition.
The 1002 Area was created by a congressional compromise. We always knew that its future would require another compromise. And today, we have it before us. We are not asking to develop all of the 1002 Area, we are asking instead 2,000 federal acres, about one ten-thousandth of ANWR. And we have waited for nearly 40 years for the right technologies to come along, so that the footprint of development is small enough to ensure the environment is protected going forward.
So Mr. President, I encourage members to recognize the tremendous opportunity that we have before us. Clear from my words today and that leading up to it, that I support this legislation—and encourage every member to vote in favor of its passage.