STEVE INSKEEP, HOST:
A Republican tax bill would have to win the votes of almost all Senate Republicans to become law. Because the party plans to pass it with no Democratic votes, they can only lose two Republicans in the Senate, and as many as 10 GOP Senators have expressed various reservations, including our next guest. Republican Jeff Flake of Arizona is on the line.
Senator, good morning.
JEFF FLAKE: Hi, and thanks for having me on.
INSKEEP: Is your mind made up? Is your mind made up?
FLAKE: No. We're still working at it.
INSKEEP: Well, what would hold you back?
FLAKE: Well, obviously, I've had debt and deficit concerns when we have a debt that is, you know, 77 percent of GDP. You know, 15 years ago, it was only 30 percent of GDP. That's a concern. But that's another reason we do need tax reform. We've got to have a more conducive tax and regulatory environment to have economic growth, and that's the best way to deal with debt and deficit - is to have good growth.
INSKEEP: So...
FLAKE: So that's a concern, as well.
INSKEEP: So wait a minute. You're - this is a bill that would increase the deficit by I think $1.5 trillion over a decade, so you don't like that. You would like to change tax policy so that it grows the economy. Do you not think this would do that?
FLAKE: I do think it would do that. And we - in the budget that we passed a few months ago, we said that we would allow $1.5 trillion as part of this plan scored statically, but if it were scored dynamically - if we assume economic growth - in fact, only about 0.4 percent economic growth over 10 years would make up for that 1.5 trillion. And I do think that we can achieve that. We've got to have a more realistic and more competitive corporate tax rate, in particular. I think that's recognized by both sides of the aisle.
INSKEEP: Wait a minute. You sound like you like this.
FLAKE: There are parts of it I do like, yes. I've been - I mean, this is being portrayed as President Trump's tax plan. This is a plan - tax reform - corporate tax reform - that Republicans in Congress have been pushing for years and years, long before this president was elected.
INSKEEP: But let's remember, outside analysts like the Tax Policy Center - we could name a number of them - have concluded that millions of Americans would not pay lower taxes. They would pay more. And I suppose, in part, that's to keep the effects on the deficit under control. Would you support that part of the tax plan?
FLAKE: Well, it - this - the Senate tax plan would give tax relief in every bracket. There are individuals, depending on which state you're living in, who may see a tax increase - I think 9 percent overall, and that includes those in the upper tax brackets because the Senate plan doesn't give a deduction for state and local taxes paid. So if you're living in a state with very high state and local taxes - and the inability to deduct that might result in a tax increase. For most Americans and people in each tax bracket, it would be a tax decrease.
INSKEEP: Senator, we noted that a couple of Republicans who'd expressed doubts went ahead and voted this bill out of committee and got it to the Senate floor. Do you think opposition on your side is decreasing?
FLAKE: Well, a number of us have had concerns - Bob Corker, myself, Jim Lankford and others on the debt and deficit. And we want to make sure that if we don't hit the revenue numbers that we're talking about, if we don't have economic growth to justify the increased short-term deficit and - that we would go back and reimpose current tax rates.
That's a backstop which would protect the debt and deficit. There's indication that we will be able to get provisions like that, and that has made a few members more comfortable. I'm more comfortable on that score. I still have some concerns on the flip side. Gimmicks like sunsetting expensing after five years, I'm still working on to protect the debt and deficit.
INSKEEP: Oh, you're referring to some provisions that only last a few of the 10 years.
FLAKE: That's right.
INSKEEP: ...So that the bill can pretend to be less damaging to the debt than it seems.
FLAKE: Well, that's - these are age-old tricks that Congress plays to fit things into a budget window.
INSKEEP: Can I just ask, Senator - can I...
FLAKE: And so that's something that concerns us.
INSKEEP: Can I ask, Senator, why any of your colleagues would favor something that increases the deficit so much? Because I do feel confident that if President Obama were still president and proposed any measure that increased the deficit at all, that your party would be unanimous against it.
FLAKE: Well, there's a need for a more conducive tax and regulatory environment to allow for economic growth. We've had stagnant growth for eight years - less than 2 percent. And it's very difficult to pay down debt and to get rid of a deficit when you have growth rates of under 2 percent. And let's face it. We're not competitive globally with a 35 percent corporate tax rate. And so there is - and I mean, there is this notion - some economists dismiss it; many economists embrace it - that if you have a conducive tax and regulatory environment, even with lower rates, you can bring in more revenue. We've seen that in certain areas. I do believe that that is the case with certain tax cuts and not others.
INSKEEP: I want to ask about one other thing before I let you go, Senator. We understand that you're planning a series of speeches about President Trump. Some people will know that you announced your retirement next year so that you can speak freely and that's your first subject is going to be the president's problem with the truth, as you see it. What's his problem with the truth?
FLAKE: Well, these speeches that I'm going to be giving aren't necessarily, you know, just on the president, but on certain issues, and the first one will be on the need to have shared facts that we all agree on. And I was responding to a story that was being written for The New York Times where the president seems to be questioning whether or not that was his voice on the "Access Hollywood" tape or still questioning the president - President Obama's birth certificate. Those are things that I think are empirically settled, and I think it's important that that we recognize that as such. And a democracy really depends on having shared facts, and I'll be addressing some of those issues.
INSKEEP: In a sentence or so, is the president damaging the country by insisting that isn't facts?
FLAKE: I've mentioned in a book I wrote and in speeches I've given that I think it is damaging to democracy if you say things are fake news that aren't and portray facts as something else. And so I do think that it's damaging to a democracy. I do.
INSKEEP: Senator, it's always a pleasure talking with you. Thank you very much.
FLAKE: Thanks for having me on.
INSKEEP: That's Senator Jeff Flake, Republican of Arizona.
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