MICHEL MARTIN, HOST:
We're going to talk more about that big Republican tax bill, which could bring about some of the most sweeping changes to the federal tax code in more than three decades. As you probably heard, the Senate passed its version in the early-morning hours Saturday, bringing Republicans a big step closer to a major political victory before the end of the year. But the House and Senate versions still need to be reconciled, and Democrats from around the country have reacted with fury, saying the bill explodes the deficit, exacerbates income inequality and was passed without serious debate for a measure of such magnitude.
We wanted to talk about all this, so we've called Congressman Tom Cole, a Republican who represents the 4th District of Oklahoma. He serves on the House Appropriations Committee and the House Budget Committee. Congressman, welcome. Thank you so much for speaking with us.
TOM COLE: Thank you for having me.
MARTIN: So if adopted, this would be a major change in tax policy, and according to a nonpartisan analysis, a pretty hefty price tag for either version of the bill. The Congressional Budget Office, for example, says the Senate bill will increase the deficit by more than $1.4 trillion dollars over a decade. And that was enough to give Senator Bob Corker pause. So do you really believe this bill will pay for itself in the long run because of economic gains, or is this really a matter of scoring enough political capital so that you can come back to fight the bigger war or perhaps, you know, fix it later on?
COLE: Well, I absolutely do believe that it will pay for itself through faster economic growth. And I'm amazed that some of the folks that focus on the deficit in the sense that President Obama increased the deficit by over $10 billion in eight years and - excuse me - $10 trillion. And we'll have a similar increase over the next decade. This is actually a relatively small part of the quote, unquote, "deficit increase." But we believe - and I think the evidence pretty clearly shows - that it's more than likely to pay for itself through faster economic growth and frankly help us with the overall budget deficit.
MARTIN: Well, Congressman, actually, the nonpartisan Tax Policy Center is suggesting that the economic gains would actually be pretty modest. But on the hypocrisy score, there are those, even some Republicans, who say that actually, you know, deficits are only a problem for Republicans as long as Democrats are running the government. Do you think that's a fair criticism?
COLE: No, I don't. Frankly, we're pretty serious about the deficit when, you know, anybody is in power. We actually reduced it from $1.4 trillion on an annual basis when the Republicans in the House took, you know, the majority in 2011 down to less than 500B (ph) and we continue increasing. The real driver of the deficit is an aging population and higher Social Security and Medicaid and Medicare costs - frankly, not likely to be tax cuts. It's actually very modest. And again, much less than we saw under President Obama. So to me, the critics were deficit hawks now, but they weren't deficit hawks that really mattered. We exploded the deficit back in the Obama administration.
MARTIN: So let's talk a little bit about process here - a little bit more. Republicans frequently and loudly complained about some of the Obama administration initiatives and how those were adopted, particularly the Affordable Care Act. In that case, there were more hearings than there were in this case. The concern here is that these massive shocks to the economy don't necessarily come with buy-in from the other side, and they're vulnerable to being undone when the parties change seats. So the two questions here - you know, what about that? And is this the new normal? I mean, is this going to be the way we're going to govern from now on?
COLE: Well, I would hope not. But there's no question - governing has become a much more partisan exercise in the last, you know, 15-20 years or so, and I think that's true under both parties. In terms of deficit, again, you know, I look at the evidence, and I see a very different picture than the critics do here. I think we're likely to make up ground by growing faster economically. And I would point to the last couple of quarters, where in anticipation of this tax cut and in reaction to the deregulation of the economy, we've seen 3 percent growth for two quarters in a row. That's something we never saw while President Obama was president.
MARTIN: Can we talk a little bit more about some of the specifics of the proposals here? We just heard a few minutes ago from Brian Gallagher who is the president and CEO of the United Way. Now, he had a specific concern, which is the way charitable deductions are treated. But he had a bigger concern, which surprised me somewhat given that this organization generally doesn't take positions on major bills like this. And he said that his concern was that this exacerbates this existing trend toward income inequality.
Now, the bill includes a lot of tax breaks scattered across the spectrum, but there are also a lot of tax breaks that mostly help the wealthy - from getting rid of the estate tax to the changes to the alternative minimum tax. Well, what do you say to those who say that the wealthy are the biggest winners under the GOP tax plan and that it does exacerbate income inequality? And if you don't mind my mentioning this, you are a member of the Chickasaw Nation. You're one of only two enrolled tribal members in the current Congress, and part of your reputation is as an advocate for this community since Native Americans are often on the losing end of gaps in income inequality, what do you say to that particular concern?
COLE: You know, first of all, thank you for mentioning that, and thanks for the focus on that. In this particular case, I just don't think, you know, we're likely to have the impact that was suggested - that is, that we'll see growing inequality. Actually, you know, our experience is a rising tide, you know, really does raise all boats. And in this case, I think faster economic growth is good for every single American - More job opportunity, higher wages, a better chance to keep jobs in this country by equalizing the playing field, so to speak, between American companies and foreign companies. So at the end of the day, this will actually rebound to the advantage of the American people.
MARTIN: Well, maybe in the aggregate, but what about specific? For example, I also want to note if you don't mind my mentioning that you have two graduate degrees. I don't know whether you worked as a graduate student - a graduate assistant when you were earning those degrees - a masters and a Ph.D...
COLE: I can assure you I did (laughter).
MARTIN: ...So I guess we could call you Dr. Cole. Dr. Cole, but - so to that end, I mean, one of the changes would tax graduate students on the value of their tuition. And a number of people say, how can you do that? That is exactly one of those things that pulls up a lever for people who are coming behind you. Can you speak to that?
COLE: I couldn't agree more. I've actually made that exact same point to our leadership and the people in the Ways and Means Committee. And we'll see what the final bill is. But I've been assured that particular problem is going to be taken care of. And I hope it is. That's why you have a legislative process. You go through, you know, the Senate version, the House version, lots of amendments, several iterations. And we're not at the final bill yet. I think that's actually a place where the Senate bill, which actually protects the people that you've mentioned, is superior to the House Bill. And so, you know, we'll look at the final product when it gets here, but my guess is that particular provision will be taken care of.
MARTIN: And before we let you go, if you don't mind my mentioning that you were talking to other colleagues about a month ago when this bill was still being worked through, and you made up a point that I think Senator McConnell has made subsequently, which is this is a bit of a gamble. I mean, in the near term, this could - this is deeply unpopular. Are you absolutely convinced that, in the long run, it will be worth it?
COLE: Well, I think it's the right thing to do for the American people. Look, we've had lots of companies moving overseas. We've got the highest corporate income tax in the world. The American taxpayer hadn't had a break obviously in many, many decades. So I think, in the end, these things work to increase economic growth, help all Americans, and I think the evidence so far suggests that. But is it a risk? Certainly it's a risk. I think anybody that thinks otherwise is frankly not being realistic and, frankly, lots of folks react to this not on the basis of what's in the bill but because they simply are mad at the president or the Republicans. Fair enough, but I don't think that's the final measure.
MARTIN: All right, I'll let you go at that. Congressman Tom Cole represents Oklahoma's 4th district. He's on the Appropriations and Budget Committee. Congressman, we really appreciate your speaking with us today.
COLE: Thank you. Transcript provided by NPR, Copyright NPR.