Rep. Tim Ryan: Tax Reform Push Will Trigger 'Recession'

The stock market may go up for some time, but the Republican plans for tax cuts could trigger a recession at some point, Rep. Tim Ryan said Tuesday.

"I think we may have a sugar high in the short term," the Ohio Democrat told MSNBC's "Morning Joe" program, and he thinks that a "recession" could follow.

The congressman pointed out that the United States is borrowing trillions of dollars, mostly from China, and bringing it "back here to the United States and giving it to the wealthiest people in the country."

"Every year, we're going to be paying interest on the money we're borrowing, and you have to tie it into the context of what China is doing with their economy and military," he said. "They're expanding their cyber capacity. They're building islands in the South China Sea and doing infrastructure projects with battery powered cars, wind, solar.

"They're racing to the new economy with American dollars and we're going to be owing them even more than we do now. I think that's foolish."

Ryan, though, said he does think the corporate tax structure needs to be reformed as does the nation's tax code, to simplify it and make it able to help with entrepreneurship and innovation.

"I understand the need and the desire to want to reform the tax code," said Ryan. "It's absolutely necessary at this point. But as far as the corporate tax goes, corporate profits are higher than they have ever been. If a corporation wants to invest and they want to hire people, they have the cash right now to do it."

The tax code, he added, should be reformed in order to get businesses to invest in places that have been disconnected from globalization and getting "hammered by automation."

"Those are the places we should be encouraging through the tax code for people to invest," said Ryan. "They're sitting on a pile of cash. The idea they're going to invest because they have a tax break is foolish. It doesn't make any sense.

"If a company can make an investment and they could make more profit and hire more people, they're going to do that, and the tax code should in some sense incentivize that, but right now the profits are so high, they could do it now if they wanted to."

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