Sen. Lee: We Need to Reduce Repatriation

Utah senator on his 'Rebuilding America Act'

This is a rush transcript from "Your World," November 10, 2011. This copy may not be in its final form and may be updated.

NEIL CAVUTO, HOST OF “YOUR WORLD”: My next guest says you do not need new spending of any sort to be able to build things like roads and bridges.

Utah Republican Senator Mike Lee says he has a plan to pump up to $1.4 trillion into the U.S. economy.

What would that be, Senator?

SEN. MIKE LEE, R-UTAH: Well, there are a number of things we could do right now, including eliminating the repatriation of foreign-earned wealth penalty on U.S. corporations operating abroad.

This is something that would allow free market forces to operate as they were intended. And we could stop penalizing American businesses just for earning money and that would bring money back into the United States, money that doesn’t come from the federal government.

CAVUTO: It might very well bring a lot of money back. The criticisms from a number of your Democratic colleagues, sir, is that it just goes the back to those institutions and their shareholders, which might be their prerogative, but it certainly won’t create jobs, it didn’t last time and it won’t this time.

What do you say?

LEE: Well, Neil, that is exactly why with the legislation I introduced today, we would make this not just a simple temporary tax holiday. This would be permanent. We would permanently reduce the repatriation tax to 5 percent, down from 35 percent.

When you do it temporarily, you encourage companies just to take care of their immediate bottom line but it doesn’t bring about the kind of permanent investment you need to create jobs and that is what this bill does. That’s why this would be a good solution.

CAVUTO: But you wouldn’t attach any quid pro quo to it, right? In other words, there has been some sentiment expressed by some Democrats, Blue Dog Democrats more to the point, not all of them, who say maybe if we attach a proviso to this that we will let you repatriate this money at 5 percent, 5.5 percent, 5.75 percent, vs. 35 percent, the top corporate rate now, but, but you have to hire some folks.

Would you do that or would you just say have at it, take the cash, do whatever you want?

LEE: No, I wouldn’t do that and my bill does nothing of the sort.

Look, this is not our money and this doesn’t belong to the U.S. government. This belongs to private investors who own these companies and they should be able to do with it what they want. But one thing we know about U.S. companies is they want to hire people. And they do when we give them the chance.

When we get out of the way, when we allow them to operate and to do what they do best, which is invest their money, they create jobs without us telling them how to do that.

(CROSSTALK)

CAVUTO: I generally agree with that free market approach. I’m a free marketeer myself.

The dirty little secret of the last go-round when they tried this is they didn’t do that. Now, maybe for a variety of reasons. It was a slow time then as well. They shored up their balance sheet and that maybe stabilized them and prevented them from laying off more workers. You might be right about that.

But that is the rub that your party encounters and a lot of your like- minded fellows have to sort of take on, that you give these guys a break and they just gobble it up, as is their wont. They can do that. But if you are expecting a bang for the buck, you might be disappointed.

LEE: But when you tell them in advance this is just a temporary holiday, you cannot expect reasonably for them to say, OK, we are going to create jobs.

(CROSSTALK)

CAVUTO: You make it permanent and you hope that encourages it? All right.

LEE: Absolutely. By making it permanent you encourage them to create permanent jobs. Without that, with a temporary tax holiday, you are never going to have that kind of incentive to create permanent jobs.

CAVUTO: All right, Senator, good seeing again. Thank you very, very much.

LEE: Thank you.

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