In the News

Rep. Hill: No regrets on tax cut vote, prediction for gridlock remaining of year

2/23/2020
TB&P

U.S. Rep. French Hill, R-Little Rock, expects legislation to move through the House this year, but he’s uncertain how much of it will be bipartisan and worthy of becoming law. In the post-impeachment Congress and with Democrats leading the House and Republicans controlling the Senate and White House, Hill described the mood in Washington, D.C. as “intensive.”

“It’s moved into presidential election politics in Washington. Plus, in 2019, with the spending bills being done and so much of the defense bills being completed and other items, there are not a lot of ‘must-pass’ items between now and September 20th. So, leadership on both sides of the aisle got those things done in ’19. But we’ll have a robust debate, I’m sure, this year on a number of political topics that’ll get brought up and the appropriations bill,” said Hill, who appeared on this week’s edition of Talk Business & Politics.

He said House Speaker Nancy Pelosi has brought up a number of bills in the last year – described as ‘messaging’ bills, he said – and Hill admits it happens on both sides of the aisle.

A defining issue in Hill’s record is the 2017 Tax Cuts and Jobs Act. It will surely be a focal point in his re-election campaign and one that his opponent, Democratic challenger Sen. Joyce Elliott, D-Little Rock, will draw contrasting positions.

Hill believes the tax cut sparked business investment, positive GDP growth, and provided tax relief for workers. Congressional budget hawks contend it has led to deficit spending growth by another trillion dollars annually.

“I think the tax vote was right,” Hill said. “The economy has grown faster than it had in the previous decade. Capital investment is up. And I think it was very positive and it continues to do what we thought it would, which was spur business investment and have large tax increases in revenues in the out-year. So, I think we’ll be pleased we rebalanced our tax system to make America more competitive, particularly in the corporate tax. That was the heart of what we did in that tax system.”

Acknowledging that many public companies spent their tax breaks on stock buybacks, Hill said he can defend the moves.

“It did. I’ve seen the numbers. I’ve looked at the numbers intimately, and business investment in R&D and business capital investment has been at or above its long-run average,” he said. “And stock buybacks are a trend in finance. When profits go up, a portion has tended to go into stock buybacks over the last 20 years, but not to the detriment of making good capital investments. Warren Buffett always says the best investment you can make if your stock is under-priced, if it’s not priced to the market, is take that stock off the market.”

Hill was critical of the budgets approved by the White House and Congress over the last few cycles. He said defense spending needed to be raised, but other spending growth needs to be curtailed.

“One of the big disappointments I’ve had in the last, say, three years between the Trump Administration and the Congress is they don’t seem to be able to prioritize spending. It’s always tit for tat,” he said.

“If you look at non-defense discretionary spending since 2010, so a long time ago, a decade ago, it’s still less than we spent in 2010. So, we have still slowed that total rate of spending, but I’ve offered and I continue to support the Congress being on record about a balanced budget amendment. Why? Because we’ve got to get people to focus on spending reforms, including over in the mandatory spending programs like Medicare, for example. How do we reform it for the future so that we have a Medicare-type program, but that it’s at a sustainable rate,” Hill said.

Congressman Hill also recently quizzed Jerome Powell, chairman of the influential Federal Reserve Bank. Watch more of Hill’s comments on Fed policy, immigration reform and border control, and his thoughts on the president’s meddling in Department of Justice cases in the video below.