Estes, Hern, Feenstra Say “Big, Beautiful Bill” Will Increase Economic Growth

WASHINGTON, DC – Just hours before President Trump met with House Republicans in an effort to get the “Big, Beautiful Bill” through the lower chamber, three influential members of the U.S. House of Representatives Ways & Means Subcommittee on Tax discussed their work on the landmark legislation at a breakfast meeting of The Ripon Society.

The members were Congressman Ron Estes (KS-04), Congressman Kevin Hern (OK-01), and Congressman Randy Feenstra (IA-04).

Estes is a fifth-generation Kansan who proudly represents a district that hosts an economy supported by aviation manufacturing and agriculture. In addition to serving on the Tax Subcommittee, he chairs the Subcommittee on Social Security and is a co-Chair of the House Aerospace Caucus. Estes opened the discussion reflecting on the Research and Development (R&D) work that was left unfinished by the 2017 Tax Cuts and Jobs Act (TCJA) and how he is working to rectify the situation.

“We were starting to lose our superiority in terms of research and development and new innovation. And so, I’ve really focused on how do we continue to grow that? How do we continue to make research and development a keystone in the United States? So, what we put into TCJA was making sure that we could have a 100% deduction of R&D cost in the first year that they’re incurred.

“Unfortunately, the Senate took a great TCJA and made it a really good one by dumbing down some of the provisions. And one of those was expiring the R&D as well as depreciation and interest deductibility. And what we’ve seen is actually a drop off. R&D was growing about 6.6% in terms of spending before 2022. After that, it’s grown less than 0.5% just because companies don’t have the cash flow to manage that.”

Hern, a businessman by trade who represents the First Congressional District of Oklahoma, then shared his perspective on how the tax code has and could impact the individual American taxpayer and local economy.

“Probably the most enjoyable time that I have is working on tax policy because I know how important it is to small businesses, businesses, and individuals.

“The tax code really is as simple as this: there are three things that really drive our economy in the United States of America, and that’s our corporate rate, that’s our individual rates that we all pay because they are directly responsible for the parity rates that our passthroughs pay with 199A. Everything else is about speeding up or slowing down the cart.”

“But when you took corporate SALT and you reduced the ability to look at those as far as tax deductions, they effectively raised a corporate rate. And the last thing you want to do when you’re in a dead-heat economically with the largest superpower in the world, us, and then the second, China, is to raise your rates higher than your competitor.

“So, I think we’ve gotten to a good spot, and we’ve added a lot of things. It’s what makes us grow. It’s what makes us special. That’s why we want to keep our tax code the best place to be in the world.”

Feenstra, although he was not in the U.S. House of Representatives when the TCJA was passed, shared the lessons he learned from his time in the Iowa State Senate that he has brought with him to Congress and is using to shape the “Big, Beautiful Bill.”

“When I was in the Iowa Senate, we had to couple with all the provisions that were done in the Tax Cuts and Jobs Act. There was one area where I missed, and I’ll never forget it, it was GILTI. I had so many businesses come up to me in Iowa and say, ‘Hey, you missed something.’ And I went back, and now I’m focused on what the international tax code looks like, and what we did with GILTI, and what we did with FDII and BEAT was incredible on how we onshore so much business and had zero inversions.

“And we wanted to make sure in this tax bill that we keep those things the same, and we did that. We kept all the rates the same because we saw how important it was to our economy, and then how we could compete with the rest of the world with our corporate rate at 21%.”

The Hawkeye state legislator then shared how these economic moves changed the international tax landscape in America’s favor.

“Then when you start looking at OECD and other things that are happening internationally, all of a sudden everybody’s coming to the table. A year and a half ago, I think we were in London talking with OECD in Paris, and they’re sort of blowing us off and all of a sudden, they’re at the table and saying, ‘What can we do together?’ Shocker, isn’t it, how the administration changes and all of a sudden they come to the table? So, this is really exciting for businesses that do things overseas.

“This bill is economics on steroids. And I look forward to giving it a run. There are so many great things in here. I’m excited and this is going to definitely grow our GDP.”

Later on, the three Members fielded a number of questions, including one on how the Senate Finance Committee will address the “Big, Beautiful Bill.”

Feenstra answered first.

“We’ve been working with the Senate back and forth on creating permanency in a lot of these provisions – GILTI and FDII – which again, you want to make sure that businesses know what’s happening over the next five to ten years, and you create certainty by creating permanency.”

In addition to encouraging the Senate to “not mess it up,” Estes pointed out that the more permanent work that can be done on the House side, the better.

“They have fewer constraints than we do on the budget side. So, the more we can make permanent in this bill, the better off we are because it provides the certainty for anybody to go out and make an investment, or for an individual to go buy the new car if you know what your tax rate’s going to be, which helps so much with the economy.”

To close, Hern reflected on President Reagan’s 80/20 rule in his answer.

“None of us gets a hundred percent. Take your 80% and go away, because those who fight for the 20% get the 20% in turn but lose the 80. So, this is an important message for everybody who’s currently negotiating for a better bill for tomorrow. Remember 80%, let’s take it and go and live another day for the other 20. And that’s the same message that goes to the Senate.”

To view the remarks of Estes, Hern, and Feenstra before The Ripon Society Tuesday morning, please click the link below:

The Ripon Society is a public policy organization that was founded in 1962 and takes its name from the town where the Republican Party was born in 1854 – Ripon, Wisconsin. One of the main goals of The Ripon Society is to promote the ideas and principles that have made America great and contributed to the GOP’s success. These ideas include keeping our nation secure, keeping taxes low and having a federal government that is smaller, smarter and more accountable to the people.