During a House Ways and Means Committee hearing Tuesday, Rep. Vern Buchanan (R-FL) spoke about the Federal deficit.
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NewsTranscript
00:00Thank you. I now recognize the Vice Chairman of the Committee, Mr. Buchanan.
00:04Thank you, Mr. Chairman, and thank you, Madam Secretary, for being here. We appreciate your service.
00:11A lot of us have had an opportunity to work with you over the years.
00:14I want to touch on two things and have a little bit of a conversation.
00:18IMF came out a couple of days ago with a report. They're very concerned about where we're at financially.
00:24My background before I got here, 30 years in business, a lot of entities,
00:28basically hundreds and hundreds of balance sheets and income statements.
00:33I'm very concerned as well, because at some point, 49 out of 50 governors have to balance the budget.
00:40You can't continue down this road.
00:42Now, they're concerned because our deficit this year went from $1.4 trillion last year to $1.7 trillion.
00:49Interest on the debt, as you know, is close to a trillion.
00:52I've been here long enough, not quite 20 years, but been here long enough to clearly know that in the last 20 years,
00:59it's over $20 trillion in debt.
01:02There's a lot of finger-pointing going on, but we need to find a way to work together.
01:06It's got to be dealt with at some point.
01:08I know you've laid something out, but I've heard these stories, not so much from you, but others,
01:12about pretty pitchers down the road.
01:14But I look around the room here, and I have 10 grandkids, and I look around the room,
01:18and there's a lot of kids in here under 30.
01:20And we're spending their money, and we've got to get very real about it.
01:23If you're in the state of Florida, one thing they have to do is pass a balanced budget amendment.
01:28That's the only thing they have to do, but they have to do that.
01:31And by the way, 49 out of 50 governors have to do the same thing.
01:34So I guess I ask you, what's your feeling about the IMF and their report a couple of days ago
01:42where they're very concerned about where we're at financially and where we're going?
01:48Well, I would say I'm not terribly concerned about where we are,
01:53but I do have concern about where we're going unless we undertake some significant steps
02:02to reduce the budget deficit.
02:05And if you look at the President's 2025 budget, you'll see that he's proposed $3 trillion
02:14in measures to reduce the deficit over the next decade.
02:21I think that's important.
02:23Let me ask you, Madam Secretary.
02:24What it does is it keeps a key metric of the burden of the debt,
02:33which is real net interest that we have to pay on the debt.
02:37I'm limiting all my time.
02:38I want to get to this other question.
02:39You talked about nobody paying any taxes above $400.
02:43I was chairman of the Florida Chamber, 130,000 businesses in the chamber,
02:49and I'd say 95% were pass-through entities.
02:52You're talking about letting that sunset.
02:54So what that means, so you understand, if someone's got 200, 300 employees or 50 employees,
02:59you could very well be at 53%, 54% taxes all in,
03:03because the pass-through rate would go back to 39.6.
03:06There's a 3.2.
03:07And then if you look at states, I hate to say it, California and New York
03:10and some of the other states are great states, but they have another 10%, 15% tax on top of it.
03:15So pass-through entities could very well, and then you're looking to get rid of 199A,
03:20could very well be north of 50%.
03:23What's your thoughts on that?
03:25Well, the President is committed to ensuring that no family,
03:32including those with pass-through businesses making under $400,000, would see their tax increase.
03:39But he does believe, for the sake of tax fairness,
03:44that it is appropriate for wealthy individuals and corporations to pay more.
03:49I've been in the real world in terms of building businesses and everything else.
03:52You might have 60, 80, 90 employees, you make 600,
03:56but then you've got to give up half of it or a good portion of it.
03:59Just 400 is nothing if you're trying to build a business, small and large.
04:02I'm not talking about large corporations.
04:04I'm talking about small business.
04:06And it will be a huge burden on these entities from that standpoint.
04:11So I'm just telling you, if I look across Florida, a lot of these small and medium-sized businesses,
04:16yeah, they do make 600, but they don't take home 600.
04:19They take home 100, 150, 200.
04:21They leave the capital in there to grow and build their business.
04:23That's the reality about where that's at.
04:26What's your thoughts?
04:28Well, as I said, I think the president feels it is important to tax those
04:35who are earning very high incomes at higher rates.
04:41One big thing is 199A.
04:43Where are you at on that in terms of whether you're going to let that sunset?
04:47199A is a 20 percent for a pass-through entity.
04:54I need to get back to you on that.
04:56Let me know because that's very critically important.
04:58We went from corporate rates, 35 to 21, but you can't have pass-through rates at 40 percent.
05:03It makes no sense because everybody's going to move to a C corp.
05:06With that, I yield back.