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Chairman Smith Committee Remarks: Build It in America Act

June 13, 2023

As prepared for delivery

“This Committee has traveled over 5,000 miles. The families, farmers, workers, and job creators we’ve heard have spoken with one voice.

They want Congress to invest in America, to give workers and businesses a fair shot at competing with the rest of the world, to stand up to China and restore our energy independence to lower gas prices.

Under the Biden Administration, the opposite is happening. Over the past few years, America has shrunk on the world stage.

The Biden Administration surrendered our energy independence. The average price of gas during Biden’s presidency is $3.60 per gallon – on pace to be the highest average price under any president. Under President Trump, America was on pace to become a net energy exporter. Today we are more dependent on other nations for our energy needs than ever before.

The Build It in America Act helps Americans pay less at the pump. It includes a solution recently introduced by Representative Carey that repeals Democrats’ superfund petroleum tax which Democrats used to pay for special interest tax breaks for corporations and big banks – their wealthy and well-connected friends.

Small business owners have testified before our Committee about the benefits of the 2017 tax reform law and the challenges they face with certain parts of that law expiring. The Build It in America Act recognizes how important the TCJA was for job growth, for wage growth, and for our economy, and extends those key provisions already expiring.

To give small businesses relief, this bill allows them to immediately deduct R&D costs – a bipartisan solution introduced by Representatives Estes and Larson – as well as interest expenses. This helps small businesses to continue growing, hire more workers, and serve more customers while not ceding any ground of innovation to China.

It extends TCJA’s 100 percent immediate expensing – a solution recently introduced by Representative Arrington – which allows American farmers and manufacturers looking to purchase equipment and machinery the opportunity to expand their operations. And during a time of historic inflation, it lessens the blow of rising interest rates by extending the ability for medium sized businesses to deduct interest expenses – another bipartisan solution introduced this Congress by Representatives Adrian Smith and Schneider.

These policies have a proven track record of success. Following passage of the TCJA, the economy grew on average a full percentage point higher than the average of the prior decade. In 2018 and 2019, wages grew at the fastest rate in 20 years. Those with incomes up to $26,000 saw their federal tax rate fall to its lowest level in 40 years while the top 1 percent of earners saw their share of taxes go up.

We’ve heard about the growing threat of China. China has expanded into the West and is beginning to settle in our backyard. It currently owns over a quarter of a million acres of U.S. farmland and looks to expand even further. We cannot allow hostile foreign governments, especially China, to subvert our food supply and harm our farmers and workers.

This bill takes an existing real estate withholding tax, increases it by 400 percent, and applies it to purchasers of farmland who are citizens of, or companies owned even 10 percent by, a foreign adversary – so-called ‘Countries of Concern.’ This is a solution recently introduced by Representative Van Duyne. According to the Joint Committee on Taxation, this will prevent U.S. farmland from falling into the hands of countries that burn our flag.

We also need to protect our supply chains from the Chinese Communist Party’s ambitions to disrupt our economic and national security. Biden’s Treasury regulations create unnecessary hurdles for companies trying to exit China and move supply chains closer to home. Based on legislation recently introduced by Representative Hern, the Build It in America Act repeals the Biden Administration’s misguided rule – limiting China’s grip on our supply chains and its ability to control the flow of goods and services.

Lastly, we are doing away with the very worst of Democrats’ special interest handouts for the wealthy – including subsidies for electric vehicles that have become a windfall for China under the loose critical minerals regulations the Biden Administration has pushed.

Democrats like to falsely claim that the pro-worker policies in the TCJA only helped big corporations, but it is obvious which party is bailing out the wealthy. The Democrats’ Inflation Reduction Act put Americans on the hook for handouts to big corporations and big banks. Over 90 percent of their electricity tax subsidies go to companies with over $1 billion in sales. 80 percent of electric vehicle credits go to folks making over $100,000. The Democrats are funneling money to the wealthy to subsidize both the sale and purchase of their luxury EVs.

The Build It in America Act prevents these permanent subsidies from going into effect – several of which do not begin for another two years but will explode the cost of this welfare for the wealthy further.

I encourage my colleagues to support the Build It in America Act.”