Senator James Lankford of Oklahoma joined me this morning:
HH: Joined by United States Senator James Lankford from the great state of Oklahoma. Senator, good to talk to you. I ran into Matt Pinnell last night. We talked a little Oklahoma politics. He’s going to be a great lieutenant governor. You turn out candidate after candidate down there. It’s just terrific.
JL: Well, there’s some really great folks that are running that are engaged. Matt was a great state party chairman for us as well. And so he’s a good friend.
HH: He’s a good, good guy. So I want to talk to you about taxes, but first, I want to talk to you about judicial nominations. Last night, the Wall Street Journal posted a piece by Minnesota Supreme Court Justice David Stras about the fact that his grandfather survived Auschwitz, has his number tattooed on his arm. His grandmother, by the way, it’s not in the piece, but she survived Dachau. Al Franken’s got a blue slip on David Stras. I cannot believe, I really cannot believe that the Judiciary Committee is not getting him moved to the floor, Senator Lankford.
JL: Well, I think the Judiciary Committee will move him to the floor, that this is just taking a little bit of time to give every option for him to be able to do the right thing, and then we’ll just be able to move around him. As we did with the Supreme Court, once we proved that they’re really not going to move on doing the right thing, we’re going to go ahead and move forward.
HH: Now Justice Stras is a brilliant legal mind. He’s been called the Little Scalia. But does Al Franken even know he’s the grandson of Holocaust survivors and the message that sends of indifference to the American dream?
JL: Now that, I have no idea. You’d have to ask Al on that one. But I would tell you the American people do, obviously, and we do as we’re working through the judiciary process. He is not just a good heritage that has, his family has endured incredible trauma, obviously. But he has proved to be a very sharp legal mind and is eminently qualified for that, personally.
HH: Now you have also been pushing a floor rule change that will get all nominees, not just Justice Stras, who’s bottled up by Al Franken, but all nominees are being hit with 30 hour debate because of an obscure rule in the Senate. And that’s just got to change. It’s just absurd, Senator.
JL: No, I completely agree. This is a 30 hour rule that wasn’t used in the past. To give you a for instance, in the first year of President Obama’s term, when Republicans were in the minority at that time, we did not bottle up President Obama’s nominees at that time. There were about two or three cloture votes that year entirely. There have been 50 of those this year. It’s been designed to really stop what’s happening in the Senate. And here’s the difficult part about it. The Senate can only do one thing at a time. So if you’ve got 30 hours of debate on a nominee that’s going to pass, because when they come out of committee, we have the votes to pass them. They will pass. If you clog it up with 30 hours of debate for that person, that means you can’t debate other tax reform, you can’t move on legislation, you can’t work on regulatory issues, you can’t work on anything else, because you’re clogged up on that one. There are 1,200 nominees that we need to get through, and I’ve proposed a very simple straightforward rule change – two hours of debate for a lower court nominee, eight hours of debate for a mid-level person, and 30 hours of debate if it’s the Supreme Court, a circuit court, or a cabinet official. Let’s move these people through.
HH: That is brilliant. And do you think, under the Reid Rule, it requires only 50 votes to change a rule. That’s Harry Reid’s doing. He broke the rule pattern.
JL: That’s correct.
HH: Do you think that the Reid Rule will be invoked to import the Lankford Amendment to the rules?
JL: Well, I am working through the process right now to get Republicans and Democrats on board. There was a bipartisan agreement on a rule very similar to this in 2013 when Harry Reid was there, to be able to work the process through. I’m invoking that to see if we can get 60 votes on it. If we cannot, I am proposing to do the Reid Rule. But if we do the Reid Rule on it, I’m proposing that we only do two hours for all nominees except for Supreme Court, circuit court and cabinet. They would be 30, but everyone else would be two. Let’s expedite the process.
HH: Good luck on that, Senator. I think, I really hope we get that done by the end of the year. People will proclaim that. Now Chuck Todd just agreed with me that the Republicans have to pass tax reform in the aftermath of the Virginia vote. And I think anyone who says otherwise is a lefty hoping for the Democrats to take control of both the House and the Senate next year. So the question is, are we going to pass tax reform?
JL: We are going to pass tax reform, but it’s not just for political reasons for a campaign. It’s for the American economy. We’re stuck. I have affectionately said we’re in the groove of a record player playing the same thing over and over again in our economy, and it’s stagnant growth. To be able to get out of that, we’ve got to bump the record needle and let’s get us out of this groove and let’s try to get this economy growing again, which a historic American economy does. So the big issue is we’re going to get jobs and we’re going to get growth from the economy. We have got to fix our broken tax system.
HH: Now the problem is the budget resolution under which you are operating via the reconciliation rules requires that whatever come out be scored at less than a [trillion] and a half deficit overall. And the House bill as it stands presently is at $1.8 [trillion], so it has to be amended, and Kevin Brady is working on that. What about new revenue, Senator? I propose getting rid of the mandate on Obamacare, adding to the gas tax, instituting a delivery fee on residential receipt of packages ordered over the internet, because that, they’re infrastructure using costs on the federal system of what we used to call internal improvements. What about increasing revenue in some places?
JL: There are some places that’s actually seriously being discussed. For instance, when you deal with repealing the individual mandate, that is a pretty dramatic change. That’s a $330 billion dollar change right there in the positive for the federal government and for the American citizens. So that’s a big issue that’s being discussed right now, and that would also be helpful with health care. The gas tax is a very reasonable proposal, and it’s one of the things that many of us have floated to say we are miserably behind on that, and we’re continually taking money out of the general revenue to be able to offset for highway funds. Highway funds were set up decades and decades ago to be a user fee.
JL: If you drive on the highways, then you also pay for the highways. That has been lost since about 1993. So we have got to be able to get some stability there, because we are literally hurting our economy and our tax revenue by not also fixing the gas tax at the same time. So there are multiple conversations that are happening on this. Many of them are very controversial, but all of them are difficult issues. I have challenged our conference to say let’s not find the easy way to do things. Let’s actually fix the problem. That’s the main thing that needs to be done right now.
HH: Now I wrote about the delivery fee in the Washington Post on Tuesday, and it is controversial among some conservatives, but I believe it is a fee. And the old brick and mortar retail stores have actually paid for a lot of the infrastructure through their sales tax at the state and local level. But a delivery fee, because the new economy just avoids all sales taxes, and that’s fine. I don’t want to tax internet sales. I don’t want to tax business to business sales. But if you’re someone who can afford to order goods to be delivered at your home, you can afford a 5% fee on that delivery that goes into the federal receipts. So I hope you will consider that, Senator. When does the conference sit down to talk about revenue-raising stuff?
JL: So we will have a conference meeting at 11:30 Eastern time today. The Finance Committee from the Senate will lay out all the work that they’ve done from all the meetings we’ve literally had for months. Now remember, this is not a new process. This started three years ago. There have been more than 70 hearings on tax reform from the Finance Committee over the past several years. This has been something ongoing for a long time. They’ll lay out the first draft of it to all of us at 11:30 today. We’ll go through that. It’ll take about a week to be able to process through all the details. There’ll be lots of input. There’ll be amendments to it. But at that time, all of these things will be out there to say what if, and how do we actually resolve some of these other issues, or what do we need to fix. Then, we’ll amend it, work it through the process right after Thanksgiving on the floor of the Senate, and then try to conference it with the House.
HH: Now the home mortgage interest deduction got whacked in the House. I think that’s a disaster, because Americans have relied upon it. So did the state and local income tax deduction. And a number of House members want to cling to that, even though that seems to me to be DOA in the Senate. What do you think about that, those two things?
JK: Yeah, I would tell you two things. One is the home mortgage interest deduction really is only relevant if you’re at a certain income level. For most Americans, about 70% of American don’t itemize at all. They use the standard deduction. If we double the standard deduction, then 90% of Americans won’t have to itemize. The real issue most people that I talk to is okay, I’m losing some deductions, but I’m gaining standard deductions. Wipe out all the noise. What do I really pay? What is the difference for me? They want it to be simpler, but they also want to make sure they’re not paying as much in taxes. So we’re trying to be able to work through that and lay out actual proposals. Here’s this person, here’s what they pay now, here’s what they would pay in the future, and give people the side by side on it. So the mortgage interest deduction, I know, is very dear to realtors and home builders, because they want to be able to stimulate the economy. I would tell you it is also an anomaly in our area. For instance, Canada has very high home ownership. They don’t have a mortgage interest deduction. Multiple other economies don’t have that. It has been a tradition for us. Most Americans that do itemize take their charitable deductions, their home mortgage deduction, are the two big ones, and then right behind it would be the high medical expensing deductions. So there’s a proposal that the Senate’s going to put out to be able to look at some of those, but I, Hugh, quite frankly, I have not seen the final proposal. I look forward to seeing it today and see where it actually landed.
HH: Well, I hope you keep in mind one thing, I’m an advocate here, that when the House rule kicks in, it will have a perverse effect of getting people to stay in the house that they are in, because the new mortgage above $500,000, which is basically every urban area in America, will not apply to them if their mortgage is greater than half a million dollars.
HH: So they will have a perverse incentive never to move, which has a perverse impact on the housing market, which is one market, which will increase scarcity, drive up costs, and by that measure, drive up rents for low income people. It’s really a disaster. Someone wrote that who has no idea how the housing market works, and I would appeal to you on that one.
JL: I would tell you that I anticipate the Senate proposal will look different. How about that?
HH: That’s great. I have one more. You are a longstanding minister. You’re a pastor.
JL: I am.
HH: An adoption credit is deeply important to the Christian community that believes deeply in adoption. I cannot imagine eliminating it. What do you think?
JL: I would be surprised if it’s eliminated as well, because that, you are correct. That is not just a pro-life, it’s a pro-family measure that’s built into the code. Adoption is very expensive, much more expensive typically than actually delivering a child in a normal, natural way in a family. So there’s been an incentive always to be able to say we want children to be adopted, we want to actually encourage this connection of families, connection of children to a family. And if we can help a family offset the cost of that, that is beneficial to all of society.
HH: Senator James Lankford, always a pleasure. Thank you for joining me, Senator. Be well and enjoy that today. Looking forward to the details of the Senate proposal and to the conference ahead.
End of interview.