ARI SHAPIRO, HOST:
Earlier today, as the bill was coming up for a vote in the House, I spoke with Congresswoman Claudia Tenney, a Republican representing part of upstate New York. Welcome to the program.
CLAUDIA TENNEY: Thank you. Thank you for having me on.
SHAPIRO: Republicans describe this as a middle-class tax cut. And nonpartisan analysts of the bill conclude that while middle-class people do get a cut, the majority of the money in this package goes to corporations and to wealthy people. How do you reconcile that?
TENNEY: Yeah, actually, I'm a business owner and someone who raised my son as a single parent and also knows - know what it's like to go through that process. But actually, the large majority of the taxes paid now are paid by the upper echelons. And so when you look at it as a percentage, yes, they seem to be getting broadly a tax cut. But on balance, even the fairly liberal, I would say, Brookings Tax Policy Center has said 80 percent of the middle income and - or almost all of the middle-income and lower-income taxpayers will be paying either no income tax or a substantially reduced tax, especially our working families.
So for me, I mean, we talk - we're talking about growth, which is something that's going to grow the economy. A lot of these people who are paying a lot of taxes are actually people who are already footing the bill now and paying a substantial amount of our taxes. A huge problem for me in NY 22, where we have some of the largest outmigration of jobs and people in the nation and some of the...
SHAPIRO: NY 22, your district. Yes.
TENNEY: Yes, my district in upstate New York, where IBM was founded and no longer exists there or only has a couple hundred jobs and once had 15,000 to 20,000 jobs. Places where Remington Arms was founded. GE had a huge presence. We had an Air Force base with a number of businesses off that. We've had a lot of losses in our community. The Erie Canal was founded in my district over 200 years ago, which started the Industrial Revolution. You know, all those jobs, much of the textile industry, have been lost to Asia.
SHAPIRO: I want to let listeners know the buzzer that they heard behind you indicates that it is time to vote, and so we appreciate your speaking with us...
TENNEY: Yes.
SHAPIRO: ...Just as this comes down to the wire. The middle-class tax cuts in this proposal are set to expire. The corporate tax cuts are not. How do you explain that choice to middle-class Americans?
TENNEY: It's a tough choice. But in order to get corporations and pass-throughs, remember; corporations and pass-throughs are people. They're people who have run business. They're entrepreneurs. In order to get them to invest and put the billions of dollars back into our economy that we need them to do and to get - take advantage of those tax breaks, they're not going to be able to do it under the so-called reconciliation process, which has a 10-year window. By the time...
SHAPIRO: That's the way you get this to pass with a majority rather than 60 votes in the Senate.
TENNEY: Right, the simple majority in the Senate. That's how we get around that rule and the Byrd Rule. One of the great things that I'm hoping that we're going to get in the C.R. or we're going at least bring up next year is to make these permanent for the lower and middle-income taxpayers. And we're going to hope the Democrats will join us in celebrating that and bringing that forth. It's really important. But in order to...
SHAPIRO: If you do make them permanent...
TENNEY: Go ahead.
SHAPIRO: Then the $1.5 trillion cost of this package increases even further. I know you've expressed concern in the past about the deficit. Earlier this year, you supported cutting Medicaid because of the debt. Why are you comfortable with this amount of spending, which could go even higher if, as you suggest, the middle-class tax cuts are made permanent?
TENNEY: Well, because the interesting thing is tax cuts prove that growth will happen.
SHAPIRO: Many economists would dispute that that growth will come from these tax cuts.
TENNEY: Yes. Many more economists - actually almost all economists - are now saying if we're to continue the 3 percent growth that we're seeing now without even having the tax cuts passed, we're going to be eliminating that deficit. And not only eliminating, we could even see larger growth as we see the stock market continue to grow, we see more labor participation, we're seeing unemployment go down. All those things are going to be happening in a larger scale.
We're going to probably be seeing even greater than 3 percent growth, which - in a short period of time we're going to reduce the deficit, and we're also going to be reducing the long-term debt of this nation. Finally, growth is going to catch up. Next year, we're going to be reducing spending, which is going to be another aspect of this. But we desperately need this growth. We need to be repatriating the money that needs to be put into the American economy.
SHAPIRO: Today, the AARP said they oppose this bill because they are concerned that the deficit will not shrink and this will lead to cuts in entitlement programs. Is that a concern for you?
TENNEY: Well, the AARP certainly - I just am - marvel at the sudden concern in deficit spending by the Democrats and liberal organizations after eight years of unprecedented debt growth. I sit in the Financial Services Committee and look at the debt clock every single day and see how it's growing, growing, growing. If we do nothing, we're going to continue to see us spiraling into increased debt and spiraling into increased deficits. This is giving us a chance at growth. And I think it's going to happen. The hysteria on the side of the left is showing that this is actually going to work.
And I think the American people in the end are going to be happy. It's not going to be perfect. We're going to have to work on a few things just like every major tax initiative, including the Reagan tax cuts from 31 years ago. We're going to be tinkering with it and making it even better. And I know that Democrats are going to be joining with us next year because they want to be part of this growth machine that we're creating.
SHAPIRO: Part of the original goal was to simplify the tax code and eliminate loopholes. Why didn't that happen?
TENNEY: I think that one of the issues is we wanted to have deeper cuts and deeper cuts for the middle and lower-income taxpayers. We had to make a decision between simplification and deeper cuts, and we chose deeper cuts. When we get outside of reconciliation and we can grab some Democrats on the Senate side to join on to this, you're going to see even more growth coming forward.
SHAPIRO: Claudia Tenney, Republican congresswoman from New York state, thanks for joining us.
TENNEY: Thank you.
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