Jason Smith

Jason Smith of Missouri, as chairman of the House Ways and Means Committee, which was responsible for drafting tax legislation, had a chance to ask him how the new tax legislation is going to change the way the economy operates. Let's talk about the overall bill itself. Now, the bill has passed the House Ways and Means Committee. Now you need to get a rule from the Rules Committee, and then you take it to the floor.

Is that the way it works?

Pretty close to that.

Since we're using the rules of reconciliation, which is a tool to help the Senate get the fifty one votes to pass pass any legislation, there's certain parameters that we have to fall under. We had to pass the Budget resolution. The Budget Resolution was passed by both the House and the Senate, and it gave us specific instructions. And within that budget resolution, it instructed eleven different committees in the House of Representatives. Ten of the eleven have marked up.

So let's talk about how we got to where we are today in coming up with the bill that you have passed through the committee. Did you meet with the Treasury, with the Senate Finance Committee people, and the President from time to time? And how regularly did you meet with these people?

So we had the Big Six meetings, which was referred to as the Speaker of the House, the Leader of the Senate, so mister Thune, also Chairman Crapo of the Finance Committee, myself, It had Kevin Hassett economic advisor, and then also the Treasury Secretary of Besson, and so the six of us met quite often. Typically it's about every week to two weeks, and we've been doing that for

President get involved too. Did you meeting the President in the Oval office talk about the bill or how often did that happen?

I do.

Our President is very accessible and he calls me when he wants to talk tax or trade or some other items that's within our committee's jurisdiction, and so I've met with him several times. On this on this tax bill. Twice in the last two weeks in the Oval office. I shared with him the main priorities that he asked us to deliver on, and what I could deliver on and what I couldn't deliver on.

Okay, so let's go through some of those.

So the main thing that he wanted, I thought, was to get the tax cuts that we'd had before extended for corporations and for individuals, so individuals will have their tax rate be the same as it's currently Is that right.

That's exactly right.

The first thing in his first priority was permanency of his expiring two thousand and seven tax cuts, and some of the main items that we're expiring was all the individual rates would go up. This makes the current rates that you're paying taxes right now will stay the current rates, regardless of what tax bracket that you're in. The child tax credit was going to be slashed in half. It

So let's talk about things that President was famous for morning and the bill No tax on tips. Is that because people getting tips or paying a lot of taxes.

The idea of the no tax on tips to the President was he was actually having dinner at one of his properties in Nevada during the campaign and the waitress said, can you not tax my tips? And that's where the idea came from from a waitress in Nevada to the President.

And so what you know, what we've.

Done within this bill is to eliminate the tax on tips altogether.

What about no tax on overtime? What if you take care of that?

We did.

We eliminated no tax on overtime. It affects about eighty million workers across the country. And we put special guidelines both in no Tax on tips and overtime that it can't be high compensated employees. For example, by definition within statute, a high compensated employee as someone who makes more than one hundred and sixty thousand dollars a year.

What about now?

President also talked about no tax on Social Security what about that.

So within the rules of reconciliation, by statute, you cannot touch social Security, and so we wanted to make sure we delivered on this priority in reconciliation. And if you want to know about the Social Security tax in like nineteen eighty one, it was created that you were tax free off your first twenty five thousand dollars for an individual or thirty two thousand for a married couple, and

Let's talk about the famous carried interest provision.

I've never heard of it.

Yeah, well I should disclose.

I don't collect carried interest the way I've structured my affairs because I didn't like being criticized for it so much. So I'm not a carried interest recipient any longer. It is reporting the press that the President of the United States likes to get rid of carried interest, and you didn't do.

That in this bill, So is he going to be upset?

So throughout this whole process, David, I've had to thread a needle. We have one of the smallest majorities in the history of Congress, both in the House and the Senate, and so I can only lose three people in passing this tax bill, and so trying to thread that needle where people are in the extremes in all areas, whether it's the green credits, whether it's salt, whether it's other various tax provisions. Just trying to find that balance has been what I've been striving and trying to to do

What about the other one which doesn't affect me, either the sports stadium exemption or something.

Is that did that get in there?

Or what I delivered on that one?

Oh?

Okay, So, but you're going to be fine.

You're going to be fine, David, because you've purchased the team before it.

Takes Oh yeah, okay, good, thank you.

So it's only new owners.

Okay, okay, good. So I'm glad to hear that.

So okay, I was thinking, oh, thanking, okay, thanks very much.

I appreciate it.

So I saw it, which is a state and local tax deduction. It was limited to ten thousand dollars. Now you've increased its thirty thousand dollars.

Yes, we increased it three hundred percent because it was currently ten thousand. Now it's at three three hundred percent increase. It's thirty thousand.

Unless you have a larger income than which case it goes down a bit.

Yeah, it's thirty thousand. If you make less than four hundred thousand dollars. A year and then it starts phasing back down to ten thousand. So we've we've tried to find what is that that good spot. Even talking to my ranking member, he's like, salts just salts an obstacle for both parties in that sense.

And so.

We've checked numbers like I've I've got numbers from Treasury and the irs of the different Salt congressional districts within our conference, and this thirty thousand dollars cap that we have under four hundred thousand will provide more than ninety percent of every one of our SALT members districts coverage under this.

So it's a balance.

It's not everything that some of the SALT members want, but I have members of our conference that doesn't even think you should be able to deduct one dollar, let alone thirty thousand dollars.

But it's a fair balance approach.

When do you think the bill will actually become law? Is it before the end of the year or before the end of the Congress.

My goal is July fourth. I want the President to be able to sign into law on July fourth. That's my goal, and that's the president's goal.

You are from the Great state of Missouri, Missouri.

Is there any other all right?

And did you grow up in a city, a big city like Saint Louis or something like that.

So the congressional district that I represent, David, my family's called it home for seven generations. My hometown is less than five people. It's called Salem, Missouri. It's the county seat. The population of my county is only about sixteen thousand.

So what is the main business of your district? Is it farming?

Agriculture?

Agriculture without a doubt in manufacturing.

I grew up working on my grandparents farm.

My father was an auto mechanic, and so where I lived was we had a single white trailer right next to his auto repair business, which was just a two bay unit, and my grandparents farm was three miles away, and so I always spent the weekends, the summers, the evenings working on the farm. And now I own that farm. I purchased it when my granddad died.

But you decided to get into politics. So you went to college.

Where University of Missouri in Colombia. Graduated with two degrees.

At twenty business administration emphasis finance and agriculture economics. And then I went to law school three days later.

All right, so you're a lawyer as well, but you did not practice law.

I practiced law for just about a year and then got elected to the Missouri State House when I was twenty four. Was one of the youngest members in the Missouri State House. I became the majority whip, the youngest Speaker pro tem in Missouri's history, and then ran for Congress at thirty two.

Thirty two, So you got elected and what year did you get elected Congress?

Initially it was June of twenty thirteen. I will never forget my first day I got sworn in. My predecessor was Congresswoman Joe and Emerson, and she led me down to the floor. She was there when I got sworn in entire with the Missouri delegation, and she's like, do you know how to get back to your office, which my office was her old office at that time in the Rayburn House Office building.

And I was like, yeah, I can do it.

Right, So okay, So now, how do you go from being a young member of Congress to being the Waysey Means Committee used to be Seniority?

How did you become the chairman of the Waysey Means Committee.

It's all about relationships.

I go back to that first day that when I was sworn into office. My senator at that time was Roy Blunt, and Roy Blunt pulled me aside and he said, Jason, there's two.

Ways you can be effective in Washington, d C.

One you can be here for twenty years and just build natural seniority, or two you can build relationships. And so I made it a focus to schedule five to fifteen minute meetings, coffees teas with every member of Congress that would meet with me whenever I came up here, because they all knew who I was, being the new special election kid, but I didn't know who the other

So it used to be on seniority. You work your way up up and then you become a chairman of the committee. Now the members of each caucus decide who they want to have. And so you ran for an election as chairman of the Ways and Means Committee. I did, and you got elected the last congress I did.

I've been elected twice now, as Chairman of the House Ways and Means Committee.

I worked really hard.

I traveled to forty two of the fifty states, campaigning for my colleagues and for candidates in eighty seven different congressional districts. I did more than three hundred TV appearance appearances trying to push the Republican message. And I met with every one of the thirty plus members of the Steering Committee multiple times, giving them the pitch of why I should lead the Ways and Means Committee and under what leadership I would lead on.

So what was your most effective argument for why somebody from a farming district in Missouri should be the chairman of the Ways and Means Committee at a relatively young age.

Believe that our party is not the party of seniority or who's next in line, but it's the party who's best for the job.

And I felt like I was the best.

Person for the job. That's why I was running for it. I wouldn't have wouldn't have done it. And I said that if you elect me to be the chairman of this committee, that the policies it's within the Ways and Means jurisdiction, tax trade, healthcare, social security needs to be the policies that reflect the priorities of the working class. I'm a product of the working class.

I grew up in a.

Single by trailer most of my life, and then we upgraded to a double wide. My mother was a factory worker, just so that we had health insurance. That's how we made it by. But I am so grateful for how I was raised, because it doesn't matter like what family you're born into. If you get a quality education and you're determined to work hard and not give up, you

So when you were elected chairman of the Weaseley Means Committee, did you call your mother and explain it to her and was she ecstatic or what did you say?

She's like, what does that mean?

Does she tell everybody her son is the chairman of the Waisley Means Committee?

Or she doesn't she doesn't like people don't care.

I don't care.

My friends and neighbors don't care. It's so funny.

I woke up this morning with the text message from a high school classmate who's a school teacher in my hometown. She's like, why is your face continuing to pop up on the TV?

Like are you important? I was like, no, not at all.

If you want to call the President of United States? How long does it take before you get a callback?

Most time when I call him, he answers, he's He is the most accessible.

Executive I have or worked with.

I'll wake up in the morning sometimes from a text message from the President at five thirty in the morning and it's sent to me at like two thirty, and I'm like, oh, no, he knows I was sleeping, you know. So he's always working. He'll text you. I can text him. He is so productive in regards to talking policy.

Now that you've got this bill behind you, what is the highest priority when you get the bill through the House and the Senate and you've ultimately how he his life worth ceremony?

Is it to deal with trade? Is that your next big issue?

So multiple things.

We have to get this bill signed into law, delivered for the American people, but after it's signed into law, I'm going to hold I'm going to hold Treasury accountable to make sure that they're implementing the tax bill how Congress passed it.

It's not always been fun.

That's going to be a big priority to make sure that the tax codes implemented as the priority that we're passing Congress.

But trade, trade is super poor.

Ninety six percent of the world's consumers are outside of the United States. I represent a farming congressional district. We were dependent on trade. We grow rice, corn, cotton, beef, cattle in my district, and so we need more markets. We need to eliminate those those non tariff barriers.

Let's suppose you have all this in the big bill, and let's suppose it passes. The total cost of the big beautiful bill, your parts and other things, is it four trillion dollars or something like that.

It was the House number was you could not exceed four and a half trillion, Yeah, trillion. And then they had this ratchet item that if you didn't didn't make two trillion dollars worth of spending cuts, it would ratchet down to four trillion. And so our bill actually comes in below four trillion dollars.

But part of the Big Beautiful Bill is to have the increase of the debt limit. Right now, we have a debt limit that's pull more more or less, it's sort of expired a while ago. But you're going to pass in this Big Beautiful bill as it a five trillion dollar increase in the debt limit something like that.

So you're right.

The debt limit, David expired at the first of the year. We're operating under extraordinary measures right now is what they refer to, and it's projected that will last us some time in July.

And so we have to address that.

And part of the bill that we voted out a committee increase the debt limit. It increased the debt limit four trillion dollars, which was in the budget instructions that we were required to do. The Senate instructions is higher with a higher debt limit, and so that's one of those things that I'm sure that is going to be figured out throughout.

I just get rid of the debt limit completely.

We've raised it over ninety times since it first was put into effect in the early part of the twentieth century. We've never really complied with it, Why not just get rid of it? I think President Trump said he would like to get rid of it.

At one point I was about to say, you, David, you and President Trump are exactly agreeing on that issue. And I think there's a lot of members of both parties that that view the debt limit as like a very poison pill that individuals have to worry about, and when you think about defaulting on US debt, that can create a big problem.

So well, you think it's unlikely that we're going to get rid of the debt limit in this bill, We're just going to increase it.

Probably.

I tell everyone, I've said this before the bills were out there, is that pretty much everything's on the table because we don't know what is needed to thread that needle to get the votes. People will talk about different tax brackets or whatever, and I would just say everything's on the table.

Is your expectation the Senate will take your bill and say it's really great and we're going to pass it, or it's going to come back to you.

So I'm sure they will make changes. We've been working with Senate Finance. I've been meeting with numerous Senators have been calling me telling me their priorities. We put a lot of the senator's priorities in this bill.

So what is the best way to get something in the tax bill? Or was the best way is it to call you up personally? Text you certain lobbyists have accessed. What's the best way to convince a member of the Ways and Means Committee or the chairman put something in the bill or take something out?

So I changed how we run the Ways and Means Committee from my very first committee hearing. My first committee hearing as chairman was not in Washington. We did it in Petersburg, West Virginia, at a lumberyard, and we brought in a restaurant owner, a coal miner, working moms, and farmers just to hear of the issues that they were

Let's suppose I'm just a lobbyist. I have one provision.

Is it to wait outside your office and as you're walking somewhere talk to you.

Is that a very effective way?

Please don't.

What I do want to say is is we have a three hundred and almost four hundred page bill, and I'm sure there's things that we may have not saw all the facts in and when you hit one domino here, it can really mess up some other dominoes.

I want.

I want any American who feels like that there's an unintended consequence of what we're trying to do that we may not be aware of, please let us know.

And are you ever thinking of running for a state wide office? Would you ever consider running for the Senate or the governorship.

I didn't originally plan when I came to Congress that I would be Chairman of the Ways and Means Committee, and I've had such a great honor to do this. I just want to make a difference in the lives of the people who have trusted me and sent me to Washington, and so I haven't really planned ahead of anything other than let's pass this one big, beautiful bill.

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