On Senate Floor, Portman Highlights the Benefits of Tax Reform After Six Months & Urges Senate to Continue Work Combating Opioid Crisis to Grow Workforce
WASHINGTON, D.C. – Today, Senator Rob Portman (R-OH) spoke on the Senate floor highlighting the sixth-month anniversary of tax reform. Portman has visited nearly two dozen businesses across Ohio that have benefitted from the new tax code and either created more jobs, increased wages, expanded benefits or reinvested in their businesses as a result. Many have done a combination of these things.
Portman also urged the Senate to continue its efforts to combat the opioid crisis, calling on the chamber to pass his bipartisan Synthetics Trafficking & Overdose Prevention (STOP) Act – which gives law enforcement the tools they need to help identify and stop synthetic opioids from being shipped into the U.S. The measure recently passed the House of Representatives by a bipartisan vote of 353-52.
A full transcript of his remarks can be found below and a video can be found here.
“Today I want to talk about the tax reform legislation that this body passed at the end of last year. Turns out this week is the six-month anniversary of the tax cuts and tax reform legislation. And it’s time for us to look at it and determine how it’s working. It’s particularly important because there are a number of provisions of the tax reform legislation that are not permanent. In other words, there’s a sunset on some of the tax cuts. By the way, some of these provisions expire as soon as the end of 2019, which is just the end of next year. So it’s time to start thinking about how has it worked. Second, we have members on the other side of the aisle saying we ought to get rid of this altogether. And that would mean big tax increases for a lot of folks. But let’s look at what the results are before we take those kinds of votes and make those kinds of decisions.
“I guess I would submit that in the six months since this has been put into place, it has worked incredibly well for the people I represent, for the workers I represent, the small businesses I represent. For those who are concerned about getting wages back up and fighting poverty and helping having a growing economy, I know in the debate we’re having on the farm bill right now, there’s been discussion about the food stamp program and one of the points that’s being made is the fact that food stamp spending is actually down right now. It’s decreased some in the lax six months. Why? Because the economy is improving. That’s a good thing. Before tax reform, let’s face it, our economy was incredibly weak and wages were flat and had been flat for almost a decade. And with the Congressional Budget Office estimating that this year’s growth was going to be only 2 percent, we were looking at more weak economic performance. We were looking at another year where we were going to be performing at way below our potential as an economy.
“So what’s happened? Well, a couple of months ago when the Congressional Budget Office looked at what’s happening with the economy, which they attributed to pro-growth policies including tax reform, they said, ‘you know what? The economy is not going to grow at 2 percent this year.’ Their projection now for this year is 3.3 percent growth. That’s a huge difference, from 2 percent up to 3.3 percent means a world of difference to people—in their lives, in their economy, in their ability to see higher wages, better jobs. So things are doing better. Six months into this new law, our economy is up and running, and it’s moving toward its full potential. In the most recent Congressional Budget Office estimate, by the way, for this quarter, it looks like we’re going to see some significant growth. Now, there’s no estimate yet from CBO, but one of the federal reserves has an estimate of over 4.5 percent growth. I don’t know if that will happen, but I think the consensus estimate, when you look at all the economists, is that this second quarter of this year we’re likely to see growth at over 4 percent. We’re going to know the final number from the Congressional Budget Office at the end of July, but again we are seeing more jobs, higher wages, and better economic growth, and, therefore, more opportunity for all Americans. That’s a good thing.
“Why is tax reform helping to create this opportunity? This new opportunity for higher wages and more growth? I’m going to discuss three reasons that I believe that this tax reform law has been helping to get the economy moving and, again, why it’s so important to keep these in place and to not risk just higher taxes on individuals but lower economic growth if we were to move away from this legislation and not make it permanent.
“First, updating our international tax code has definitely encouraged companies to invest in America. We had a totally outdated international tax code. We had the highest tax rates among all of the industrialized countries at the business level for international companies, and we had a system that actually encouraged companies to keep their money overseas—and, therefore, spend it overseas. So if you were a company facing our old tax code, your board, your stakeholders, were saying, ‘hey, don’t bring the money back because it will be taxed too high. Keep it overseas.’ That was crazy. It made no sense whatsoever. Frankly, it took too long to address that issue but we finally did. Let me give you an example. I’m told in the first quarter of this year, more than $300 billion was brought into this country, repatriated, back to America from overseas. $300 billion. This is profits U.S. companies were making overseas, $300 billion of it was brought back. That compares to the first quarter of last year when there was $38 billion brought back. So this is all about tax reform, and this is a good thing because this money is being brought back to invest in America. That’s the most on record, by the way, the $300 billion. So something’s changing and it’s positive. So that’s number one. When we changed the international system, it’s helping in a number of ways but one is to bring the money back and invest it here.
“Second, lowering our tax rate for businesses, small businesses and large businesses, has resulted in amazing new investments in people, in plant and equipment, and technology. We’ve seen it in terms of bonus, higher wages, increased retirement contributions, lots of examples. We’ve seen it in terms of investing in new technology and new equipment, which in the end is probably as important as anything because, think about it, one thing the economists have said about our economy over the last decade is we’re not improving our productivity like we should. What they mean by that is the productivity of each worker has been disappointing and that leads to lower wages and not having higher economic performance. If you make a worker more productive by investing in the latest technology, new equipment, that helps everybody. It helps that worker have a higher salary and helps our economy. That’s actually happening out there. I’ve seen the results of it all over Ohio.
“I represent a state, Ohio, that’s got a lot of manufacturing, a lot of small businesses, and I’ve gone around and talked to them. I actually visited 21 individual businesses and also held about a dozen roundtable discussions with small businesses, mid-size businesses, one with large businesses, and talked about this. At the 21 businesses that I visited, every single one of them is taking the tax savings and investing it in their people, in their plant, in their equipment. Some are raising wages. Some are delivering bonuses to their employees. Some are buying new equipment. Some are expanding their operations. Some of them are improving employee benefits. There’s a company that has three branches of an auto parts store that stopped offering health care about five years ago because of the cost of the Affordable Care Act. They just couldn’t afford health care. Their people had to go out on the individual market and get it through the Affordable Care Act. And they are now offering health care again. And boy, the employees are extremely happy. So their costs are down. Their deductibles are down. They did that all with tax savings.
“Many companies have done a combination of these things. They’re both investing in their people—there is a small manufacturing company in Cincinnati I went to shortly after the tax bill was signed into law. They said, ‘we’re immediately going to give bonuses to all of our people, which they did, $1,000 bonuses. I was there when they handed them out. But they also invested in the equipment. One of the pieces of equipment at one of the companies I went to in Columbus, Ohio, is a steel processor. This equipment was from 1986, meaning the equipment itself was 32 years old which is exactly the age of our old tax code because ‘86 was when we last reformed the tax code. So, they took a tax bill that finally modernized an antiquated tax bill that was 31 years old and they got rid of a 31-year-old piece of equipment and replaced it with a brand new piece of equipment. I thought that was appropriate. That’s how these tax savings are being used. I know there are some groups here in town that have put up a website saying ‘this many  groups have benefited from this and this many employees.’ I can just tell you it is way understated because I can’t find a business in Ohio that hasn’t benefited from it. Some are doing more than others. Some of the big companies, big financial service companies, for instance, are giving big wages increases and so on. Other small businesses aren’t doing that, but they might be investing in a new piece of equipment. But there are so many businesses out there. They’re not all putting out press releases or talking about it, but they’re doing something. This is good. This is why you see this economic growth coming up. And, finally, after so many years of flat wages and higher expenses and the middle-class squeeze people were feeling, finally you are seeing people begin to see a little improvement in their wages, and that’s really important.
“So, first the international part. Second is what you’re doing in terms of the business side and in how it affects people. The third one is direct tax relief to individuals because that’s part of this bill, too. And if you hear people talk about this bill sometimes on the other side of the aisle, you would think that’s not in there. But it’s very much in there, people are able to keep more of their hard-earned money, and it goes directly to the middle-class constituents that I represent. They’re the once ones that get the biggest bang for the buck. Why? Because we doubled the standard deduction, taking it from $12,000 to $24,000 for a family. Because we doubled the child tax credit, including increasing the part that’s refundable. Even if you don’t have income tax liability you get it. We also lowered tax rates for people, so that combination means that people have seen their paychecks go up. 90 percent of workers in America, 90 percent, got a paycheck that had more money going into their bank account rather than Uncle Sam’s because their withholding changed, and you know this if you’re listening today because you probably had this happen to you if you’re one of the 90 percent, which you probably are. In other words, Uncle Sam’s taking a little less, you are being able to keep a little more. As I said consistently in debate about tax reform, I just said, ‘look, the proof is in the paycheck.’ We can argue this all day long. When people get their pay checks it’s either going to be better or not. For 90 percent of the people I represent, it’s better. They’re happy about that.
“In addition to that, we also made the tax code more progressive. What does that mean? That means those at the top of the income ladder are actually paying a larger portion of the overall tax burden, not a smaller portion. Let me say that again. The tax code is more progressive. If you’re at the top of the income ladder, you’re now paying a larger portion of the tax burden, and if you are at the lower end, you’re paying less of the overall tax burden. The biggest percentage tax increase is for those making over $1 million a year and the biggest tax decrease is for those making $30,000 a year or less. This is why the Joint Committee on Taxation said that over 3 million Americans now have no tax liability at all thanks to this tax reform effort, because they are at the lower end of the economic scale. Doubling the standard deduction, doubling the child tax credit means 3 million Americans don’t have to worry about Uncle Sam because they don’t have any tax liability under this bill. So is this has changed the way our tax bill works, and the Joint Committee on Taxation can show you those numbers. All of this has resulted in higher wages, for the first time in about decade—the strongest wage growth for nonsupervisory employees in nine years. That’s the latest data. You can check it out at the Department of Labor. The strongest wage growth for nonsupervisory employees in nine years.
“It’s also resulted in a lot more optimism out there. If you look at the surveys on optimism, I saw there was one by one of the NBC stations recently—the highest level of optimism they’d seen. This optimism is also in small businesses. The National Federation of Independent Business does surveys regularly. Their surveys, they say, are unprecedented because they say small businesses are ready to invest and planning new investments. In my home state of Ohio, we had the Ohio Chamber of Commerce do a survey. 70 percent of businesses have already added new employees, and in this second quarter we’re in now, 75 percent are planning to add new employees. It is amazing. This is actually happening as we talk here because we changed a tax system that was discouraging growth, discouraging investment, making it harder for people to get ahead and see wages go up to meet expenses. So there’s some good things going on.
“Since December, the number of long-term unemployed has decreased by about 400,000 people. The unemployment rate has fallen from 4.9 percent to 4.3 percent in my home state of Ohio. Nationally, unemployment is down to 3.8 percent, the lowest since 2000. All good news.
“What do I hear now? I hear from businesses not so much about the tax burden and frankly not so much about the regulatory burden because Congress has also done things to relieve the regulatory burden, particularly on small businesses. But I hear that finding qualified workers is their biggest challenge. I heard it last weekend. I’ll hear it again this coming weekend when I’m home. As a small business person myself, I sense it. It is a major hurdle right now. A big reason is what economists call the labor force participation rate. What does that mean? It just means the number of Americans who are unemployed and not looking for work at all is higher than it’s been in the past. These are folks who are on the sidelines, not even recorded in the unemployment numbers.
“It is so bad that our labor force participation rate was at its pre-recession level of 66 percent of people working rather than the current level of 62.7 percent—if we just had the level of 66 percent that we had ten years ago, our unemployment rate today would not be 3.8 percent. If you take into account those people, our unemployment rate would actually be 8.6 percent. Pretty disappointing. So that is one challenge we still have with this incredible tax relief and tax cut legislation that’s increasing economic opportunity, growing jobs, raising wages. We still have a lot of people who are on the sidelines, not in the workforce. Among men, by the way, between 25 and 54, able-bodied men, 8.5 million are in this category—not even showing up in the unemployment numbers. That’s wrong. You want them to have the dignity and self-respect that comes from work, and our economy needs these people to be able to work.
“According to the Congressional Budget Office, 30-year projection they just gave us yesterday, they think the labor force participation rate is going to get even worse—that’s what they told us yesterday—declining over the next 30 years to even below what it is now, below 60 percent. That can’t happen. That’s unacceptable. The low labor rate participation cannot get worse. We want people to get that dignity and self-respect that comes from work. We want them in our economy. So as the economy is growing and businesses are expanding, there is no better time for us to reverse this trend, to bring these people into the economy and bring them back to work. I will tell you, having dug into this issue, figuring out, why is this? There are a number of reasons—dependency on government programs, the tax issue when you go to work to have higher taxes. We should do more to get people into work, make work pay, we should have some work requirements in some of these programs. That’s been talked about a lot here on the floor here. We should deal with other issues, including the skills gap, and we’re doing that with career and technical schools and other things.
“We talked a little bit about a growing economy, we talked about the fact that one of the weaknesses we have right now is the fact that despite a growing economy and lower unemployment, all this good news coming with the tax cuts and the tax reforms, and the investments, we have a problem right now, which is that many people are outside the workforce altogether. There is historically high levels of the labor force not being part of the workforce but instead people being sidelined. And how do you get those people back into work? 8.5 million men between 25 and 54, as an example, who are not working, not showing up on the unemployment levels because they aren’t even looking for work. I made the point that there are a number of reasons for that. We talked about those, but the one that is most significant today—it puts us at this very high level of people outside the workforce—is the opioid epidemic. I talked about the fact that we have data on this from the Federal Reserve, from the Brookings Institute, from the Department of Labor, and the Trump administration showing this is a huge problem. About half the people outside the workforce are taking pain medication on a regular basis. This opioid crisis is affecting us in every way. So what’s Congress doing about it? We have made progress.
“In the last couple of years we have made unprecedented progress to combat addiction with legislation like the Comprehensive Addiction and Recovery Act, a bipartisan bill I coauthored with Sheldon Whitehouse, the 21st Century CURES legislation, which has been very important in getting funding out to the states to deal with this crisis. We just passed legislation that provides more funding to go to the kinds of treatment and prevention and longer-term recovery programs that are proven to work that have evidence-based results, measurements behind them. That’s all very important. And we need to continue to push back against this addiction by helping people get the care they need and the treatment they need to overcome their dependency. By the way, I have been with three community roundtables in the last few weeks talking about specifically how this funding is being used, and it’s exciting because it is being used on new ideas that are going to make a big difference going forward in terms of getting people, for instance, who are addicted and are overdosing, getting them the Narcan they need to save their lives but then not allowing that gap to occur where they go back to the same environment but, rather, getting them into treatment. This is through quick response teams, a combination of law enforcement, social workers, and treatment providers, getting in immediately and saying, ‘Okay, you overdosed. Your life was saved by this Narcan, this miracle drug that reverses the effects of the overdose. Now instead of you going back to your old community—and unfortunately, many of these people are overdosing again and again—let’s get you into treatment.’ One of these organizations that’s funded by the Comprehensive Addiction Recovery Act is telling me they’re getting an 80 percent success rate of getting people into treatment. That’s huge. It’s still too low, but that is so much higher, unfortunately, than is typical out there.
“We are beginning to make progress in closing some of the gaps, getting people into the treatment they need and sending a stronger prevention message out there, keeping people out of the funnel of addiction in the first place. In the meantime, we have a huge problem. It’s not getting better in my home state. It’s actually getting worse. In most areas of the state you now see higher rates of addiction and more overdoses and it’s almost all due to one thing. The increase is almost all due to one thing and that’s fentanyl, the synthetic form of opioid coming in and taking over, pushing out heroin, prescription drugs, other drugs. Fentanyl is incredibly powerful, 50 times more powerful than heroin. It’s incredibly inexpensive. Most of it is coming, we’re told by the experts, from China. Not over land from Mexico but from China through our United States mail system. Unbelievable. It’s a shock but it’s true. It’s so potent that a few flakes of it can be deadly and totally unacceptable that some lab in China is making this poison and allowed to ship it into this country. It is the number one cause of overdose death in my state. Two-thirds of deaths we believe are going to be the result of fentanyl, not heroin or prescription drugs. It’s tragic and eye opening that when you look at what’s happened, the Ohio Alliance for Innovation and Population Health estimated that opioid overdoses were responsible for more than 500,000 years of life expectancy lost in Ohio between 2010 and 2016. It’s an interesting way to look at it. Tragic. Overdoses are the top cause of death for all Americans under the age of 50, top cause of accidental death in my state for everybody. Increasingly these drug overdoses are fentanyl.
“In Ohio, we had two-thirds of all overdose deaths last year were from fentanyl, up from about 58 percent in 2016. It’s the deadliest, most difficult drug to deal with right now. Two weeks ago, police in Dayton, Ohio, seized 20 pounds of fentanyl during a drug arrest. Last Friday, federal agents in Columbus arrested four people and seized 22 pounds of fentanyl. Taken together these two busts, 20 pounds and 22 pounds of fentanyl, is enough fentanyl to kill 9.5 million people. Think about that—by the way that’s about 80 percent of the population of my state of Ohio, just these two busts alone.
“On Monday we had a tele-town hall here. We do these on a monthly basis. One question I started to ask in the last several years is if you know anybody directly affected by the opioid epidemic. We had the highest percentage response ever at the town hall meeting Monday. The tele-town hall meeting response was 67 percent of the people on the call said yes, they knew someone directly affected by the opioid epidemic, the highest level we’ve had. One woman I spoke to on the call, Pauline from Zanesville, Ohio, told me a tragic story that’s unfortunately similar to other ones I hear as I travel the state. It’s about her brother. Her brother died of an overdose. He did not use opioids according to her, but he died of an overdose. She said he smoked marijuana but there was something put into the marijuana he was smoking that caused him to overdose and die. I hear this a lot of back home. I talked about three roundtable discussions we’ve had in Ohio. At two of those roundtables in Ohio, I had a police chief and sheriff respectively talk about how in their case a young man who overdosed was saved by Narcan and then woke up and said, ‘I was just smoking dope.’ They checked and guess what it was? It was fentanyl sprinkled into the marijuana. And I’m sure it’s the same situation with Pauline’s brother. The fentanyl she talked about was what killed him. So what’s the lesson here?
“Every street drug, whether it’s cocaine, whether it’s heroin, whether it’s crystal meth, all of them are now subject to having fentanyl included within them, including prescription pills because some are reformulated to look like prescription pills and the fentanyl is the killer. Not that those other drugs can’t cause you to overdose and die, also but with regard to fentanyl that is the deadliest and riskiest of all. Any of these street drugs can be deadly. We need to combat the growing influx of fentanyl. Congress has had a breakthrough recently in a way to do that.
“I mentioned it comes from China primarily, and it primarily comes through our U.S. Postal System. The STOP Act, which is bipartisan legislation I authored with my colleague Amy Klobuchar from Minnesota—and I see some colleague on the floor now—will combat fentanyl at the source by closing a loophole in place as a result of federal law. After 9/11 we insisted that all the private carriers, think of FedEx, or UPS, or DHL, had to give law enforcement information about every package that comes into America. This was after 9/11, you remember. So even though if you send something by one of these private carriers like FedEx, you have to provide this information up front, what’s in the package, where it’s from, where it’s going—electronically, law enforcement takes that big data, decides what packages should be taken off-line. They have been able stop a lot of bad stuff, including fentanyl from coming through. The Post Office doesn’t require that because we haven’t required it here in the United States Congress. It’s time for us to do that. I’m pleased to tell you that after a few years of work, two weeks ago the House of Representatives passed the STOP Act by a vote of 353-52. The appropriate committee in the Senate with jurisdiction, the Finance Committee, also agreed to discharge the STOP Act recently so now we can vote on it in the full Senate and get it to the president’s desk to be signed into law. As we developed the STOP Act, we conducted an 18-month investigation into this in the Permanent Subcommittee on Investigation, which I chair. We revealed how easy it was to purchase fentanyl online and have it shipped to the United States. Based on our undercover investigation, these drugs can be found through a Google search, overseas sellers accessed by an undercover investigator guaranteed delivery if sent through the U.S. Postal Service, not the private carriers.
“Let’s have a vote on the STOP Act in the Senate as soon as possible. I think we can do it next month. Let’s get it to the president. Let’s get it signed into law. There’s an urgency here. As I mentioned, in just seven years in my home state, Ohioans have lost an estimated half-million years of life expectancy as a result of opioid overdoses. The impact is far greater than that, though, as families are broken apart, prisons are flooded, and businesses are depleted of workers because of this addiction. We talked about this earlier—the lack of workforce because of this addiction. The STOP Act will allow our country to push back against this international influx of fentanyl and will help our economy continue this positive momentum we’re experiencing since tax reform became law. We can do so by combating the scourge of the opioid epidemic.”