Job Protection Act of 2003

Mr. President, I have sought recognition to join Senator Tom Harkin, my colleague and distinguished ranking member of the Appropriations Subcommittee on Labor, Health and Human Services and Education, which I chair, in introducing the ``Medicaid Attendant Care Services and Supports Act of 2003.'' This creative proposal addresses a glaring gap in Federal health coverage, and assists one of our Nation's most vulnerable populations, persons with disabilities.

In an effort to improve the delivery of care and the comfort of those with long-term disabilities, this vital legislation would allow for reimbursement for community-based attendant care services, in lieu of institutionalization, for eligible individuals who require such services based on functional need, without regard to the individual's age or the nature of the disability. The most recent data available tell us that 58.5 million individuals receive care for disabilities under the Medicaid program. The number of disabled who are not currently enrolled in the program who would apply for this improved benefit is not easily counted, but would likely be substantial given the preference of home and community-based care over institutional care.

Under this proposal, States may apply for grants for assistance in implementing ``systems change'' initiatives, in order to eliminate the institutional bias in their current policies and for needs assessment activities. Further, if a state can show that the aggregate amounts of Federal expenditures on people living in the community exceeds what would have been spent on the same people had they been in nursing homes, the state can limit the program. No limiting mechanism is mandated under this bill, And finally, States would be required to maintain expenditures for attendant care services under other Medicaid community-based programs, thereby preventing the states from shifting patients into the new benefit proposed under this bill.

Let me speak briefly about why such a change in Medicaid law is so desperately needed. In 1999 the Supreme Court held in Olmstead v. L.C., 119 S. Ct. 2176 (1999), that the Americans with Disabilities Act, ADA, requires States, under some circumstances, to provide community-based treatment to persons with mental disabilities rather than placing them in institutions. This decision and several lower court decisions have pointed to the need for a structured Medicaid attendant-care services benefit in order to meet obligations under the ADA. Disability advocates strongly support this legislation, arguing that the lack of Medicaid community-based services options is discriminatory and unhealthful for disabled individuals. Virtually every major disability advocacy group supports this bill, including ADAPT, the Arc, the National Council on Independent Living, Paralyzed Veterans of America, and the National Spinal Cord Injury Association.

Senator Harkin and I recognize that such a shift in the Medicaid program is a huge undertaking--but feel that it is a vitally important one. We are introducing this legislation today in an attempt to move ahead with the consideration of crucial disability legislation and to provide a starting point for debate. The time has come for concerted action in this arena.

I urge the Congressional leadership, including the appropriate committee chairmen, to move forward in considering this legislation, and take the significant next step forward in achieving the objective of providing individuals with disabilities the freedom to live in their own communities.

Mr. President, I have sought recognition today to introduce legislation designed to permit certain youths, those exempt from attending school, between the ages of 14 and 18 to work in sawmills under special safety conditions and close adult supervision. I introduced identical measures in the past three Congresses. Similar legislation introduced by my distinguished colleague, Representative Joseph R. Pitts, has already passed in the House in the 105th and 106th Congresses. I am hopeful the Senate will also enact this important issue.

As Chairman of the Labor, Health and Human Services and Education Appropriations Subcommittee, I have strongly supported increased funding for the enforcement of the important child safety protections contained in the Fair Labor Standards Act. I also believe, however, that accommodation must be made for youths who are exempt from compulsory school-attendance laws after the eighth grade. It is extremely important that youths who are exempt from attending school be provided with access to jobs and apprenticeships in areas that offer employment where they live.

The need for access to popular trades is demonstrated by the Amish community. In 1998, I toured an Amish sawmill in Lancaster County, PA, and had the opportunity to meet with some of my Amish constituency. In December 2000, Representative Pitts and I held a meeting in Gap, PA with over 20 members of the Amish community to hear their concerns on this issue. On May 3, 2001, I chaired a hearing of the Labor, Health and Human Services and Education Appropriations Subcommittee to examine these issues.

At the hearing the Amish explained that while they once made their living almost entirely by farming, they have increasingly had to expand into other occupations as farmland has disappeared in many areas due to pressure from development. As a result, many of the Amish have come to rely more and more on work in sawmills to make their living. The Amish culture expects youth, upon the completion of their education at the age of 14, to begin to learn a trade that will enable them to become productive members of society. In many areas, work in sawmills is one of the major occupations available for the Amish, whose belief system limits the types of jobs they may hold. Unfortunately, these youths are currently prohibited by law from employment in this industry until they reach the age of 18. This prohibition threatens both the religion and lifestyle of the Amish.

Under my legislation, youths would not be allowed to operate power machinery, but would be restricted to performing activities such as sweeping, stacking wood, and writing orders. My legislation requires that the youths must be protected from wood particles or flying debris and wear protective equipment, all while under strict adult supervision. The Department of Labor must monitor these safeguards to insure that they are enforced.

The Department of Justice has raised serious concerns under the Establishment Clause with the House legislation. The House measure conferred benefits only to a youth who is a ``member of a religious sect or division thereof whose established teachings do not permit formal education beyond the eighth grade.'' By conferring the ``benefit'' of working in a sawmill only to the adherents of certain religions, the Department argues that the bill appears to impermissibly favor religion to ``irreligion.'' In drafting my legislation, I attempted to overcome such an objection by conferring permission to work in sawmills to all youths who ``are exempted from compulsory education laws after the eighth grade.'' Indeed, I think a broader focus is necessary to create a sufficient range of vocational opportunities for all youth who are legally out of school and in need of vocational opportunities.

I also believe that the logic of the Supreme Court's 1972 decision in Wisconsin v. Yoder supports my bill. In Yoder, the Court held that Wisconsin's compulsory school attendance law requiring children to attend school until the age of 16 violated the Free Exercise Clause. The Court found that the Wisconsin law imposed a substantial burden on the free exercise of religion by the Amish since attending school beyond the eighth grade ``contravenes the basic religious tenets and practices of the Amish faith.'' I believe a similar argument can be made with respect to Amish youth working in sawmills. As their population grows and their subsistence through an agricultural way of life decreases, trades such as sawmills become more and more crucial to the continuation of their lifestyle. Barring youths from the sawmills denies these youths the very vocational training and path to self- reliance that was central to the Yoder Court's holding that the Amish do not need the final two years of public education.

I offer my legislation with the hope that my colleagues will work with me to provide relief for the Amish community.

Mr. President, I have sought recognition today to introduce legislation designed to improve the Department of Transportation's Essential Air Services program and reinstate Lancaster, PA's eligibility to receive subsidized air service.

The Essential Air Services program provides operating subsidies to airlines, enabling them to serve smaller markets which would otherwise be unable to attract or retain commercial flights. To be eligible to receive such a subsidy, the community where the airport is located must be greater than 70 miles from the nearest large or medium hub airport. If the airport is located within 70 miles of a hub airport, the Secretary of Transportation may use his or her discretion to award a subsidy if the most commonly used highway route between both places is greater than 70 miles. It is up to the Department of Transportation to determine what route is used in making this mileage determination.

Residents and businesses in many rural and smaller communities throughout the United States rely heavily upon air service to provide a necessary link to larger cities. Lancaster, PA is one such community which had been designated as an Essential Air Services city since the Airline Deregulation Act of 1978. Up until the events of September 11, when the Airport faced a sharp decline in passenger revenue, Lancaster had never required a subsidy under this program.

When Lancaster ultimately found it necessary to seek a subsidy for its three daily flights to Pittsburgh, the Department of Transportation issued an Order to Show Cause on March 8, 2002, stating that Lancaster was not eligible for an Essential Air Services subsidy because it was located within 70 miles of Philadelphia International Airport. The Secretary of Transportation declined to use his discretion to award the subsidy because the Department identified a driving route of less than 70 miles between Lancaster City and Philadelphia Airport. While there is no question that such a route exists, it is by no means the most commonly used highway route as required by law.

The route selected by the Department of Transportation is one which the average person would never travel, via back roads and seldom used streets. In making its distance determination, the Department used a 66 mile route along Route 30 which would take over three hours to drive. The more commonly used highway route to the Philadelphia International Airport would be along US 222 to the Pennsylvania Turnpike, and then on to I-76, which is over 70 miles.

The legislation I am introducing today addresses this issue by designating an area's local metropolitan planning organization, rather than the Department of Transportation, as the organization responsible for determining the most commonly used highway route. If no such organization exists, the Governor of the State in which the airport is located, or the Governor's designee will make the determination. I believe that a local entity, not the Department of Transportation, is better suited to identify the route most travelers would drive. In such cases where that route exceeds 70 miles, the Department should be required to designate a community as eligible to receive subsidized air service.

My legislation will not place too great a burden upon the Essential Air Services program by allowing additional airports to participate. I am advised that there are only eight other communities, including Lancaster, which could become newly eligible to receive subsidized air service as a result of the changes I am proposing. Further, I would note that of the $113 million the program received in Fiscal Year 2002, there was an excess of $10.9 million which remained unspent and which carried over into Fiscal Year 2003.

Lancaster Airport's only commercial air carrier, Colgan Air, ceased operations on March 23, 2003, because it could not sustain service without a subsidy. The loss of commercial air service has already had a serious impact upon the Lancaster community. I am confident that my legislation will not only reinstate Lancaster's eligibility for subsidized air service and allow for the return of commercial air service, but it will also provide for a greater level of fairness for other communities which rely so heavily upon this important program.

Mr. Speaker I yield myself 8 minutes.

(Mr. McGOVERN asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I thank the gentleman from New York (Mr. Reynolds) for yielding me the customary 30 minutes.

Mr. Speaker, all of us recognize the need to quickly fix the FSC-ETI export tax issue. Thousands of U.S. exporters are needlessly paying 8 percent tariffs to European countries simply because the Republican- controlled Congress has failed to pass legislation to avoid these penalties. These tariffs will continue to climb 1 percentage point each month as long as the issue remains unresolved.

These retaliatory tariffs are especially hard hitting as the United States continues to experience difficult times in the manufacturing sector, which has lost nearly 3 million jobs under the Bush administration. In my congressional district in Massachusetts, jewelry, textiles, and small manufacturers have especially been hit hard by these sanctions.

Throughout the WTO process there has been bipartisan consensus that the U.S. should repeal the extraterritorial income exemption, the ETI and comply with the WTO decision. The disagreement has been over what to replace it with. Last year the gentleman from New York (Mr. Rangel) and the gentleman from Illinois (Mr. Crane) and the gentleman from Illinois (Mr. Manzullo) and others introduced a bipartisan, revenue- neutral fix to this problem, H.R. 1769.

This bill currently has 172 bipartisan cosponsors. When our colleague, the gentleman from Indiana (Mr. Hill), filed a discharge petition in March to bring the bill immediately to the floor, 18 Members signed that petition.

The Crane-Rangel bill would take the $50 billion in tax incentives that American companies operating overseas receive under the current ETI and create new incentives for American companies to produce goods in the United States. It lowers the corporate income tax rate for U.S. companies and addresses the growing problem of U.S. companies moving their plants overseas.

Simply put, H.R. 1769 is a clean, paid-for bill that remedies the FSC/ETI problem without unduly burdening those companies that have benefited from this exemption in the past, and without unduly burdening our children and grandchildren by adding to our deficit.

So why did we not fix the problem months ago by passing the Crane- Rangel bill? Why are we not debating H.R. 1769 this morning? Why is the Republican leadership denying the gentleman from New York (Mr. Rangel) the opportunity to offer his alternative on the floor today?

Because time after time the leadership of this House has demonstrated that it would rather offer a goody-bag of corporate tax giveaways to special interests than simply and quickly fixing the problem.

What is in this grab bag of a bill? The closer you look at it, the uglier it gets.

This bill is chock full of sweetheart deals, special fixes, and big giveaways to special interests. It looks like every lobbyist in town will be celebrating tonight. The list of provisions that favor particular companies or industries includes cruise-ship operators, whale hunters, Chinese ceiling fans, foreign gamblers, NASCAR track owners, timber companies, cattle ranchers, bourbon distillers, movies theater owners, small plane manufacturers, bow and arrow sets, fishing tackle boxes, and corporate jet owners.

This is no way to do tax policy.

The list of narrow special interest giveaways is very familiar because we have seen them all before, when a similar set of giveaways held up passage of the Armed Forces Tax Fairness Act for 18 months, until finally, finally, they were thrown out and this House decided to do the right thing and support our uniformed men and women and their families.

But like the evil poltergeists in the movie, they are back. And this time they have brought along some friends. What else is in this bill?

How about paying a private company to make a profit collecting debts owed to the IRS so that all our private tax information will now be given to private bounty hunters. How about tax provisions that give U.S. companies fresh incentives to locate operations anywhere other than in the United States by giving them even more tax shelters for their foreign income? At the very core of this bill are $35 billion in tax incentives for U.S. firms to invest overseas.

If you are a small manufacturer or farm cooperative that creates jobs and has production solely in the United States, too bad. You are simply out of luck in this bill.

Mr. Speaker, let us talk about the frosting on the cake. This bill as it is written will add at least another $34 billion to the deficit. In just 3 short years, the Bush administration and the Republican- controlled Congress have taken our Nation from record surpluses to the largest budget deficits in the history of the United States, in the history of the United States, Mr. Speaker. And now the leadership of this House wants to add at least $34 billion more to these deficits.

The legislation passed in the other body at least has the benefit of being revenue-neutral. And the Crane-Rangel bill is fully paid for.

Why is it that everyone seems to be able to pay for their corporate tax legislation except for the Republican House leadership? Why are they the only ones that want to pass the burden of debt on to future generations? And let us not forget that when all the phony accounting gimmicks such as slow phase-ins and phase-outs and sunsets provisions are factored in, the amount added to the deficit is more likely to be closer to $45 billion.

This bill may mean more jobs, Mr. Speaker, but they will not be U.S. jobs.

This bill rewards companies that move off shore, that shelter income from production abroad, and that outsource even more jobs now and forevermore.

Now, I seem to remember the Republicans saying over and over that our Tax Code is simply too complex, too confusing and too costly; but this bill, instead of simplifying and tightening the Tax Code and closing loopholes, creates over 400 pages of new and expensive special interest exceptions.

This bill makes our Tax Code more complex, not less; more unfair, not less. It does too little for those businesses that prefer to produce and hire

in the United States. It hurts farmers, stiffs small businesses, and benefits large multinational companies first and foremost.

It increases the deficit and tacks on major unrelated initiatives. Instead of simply fixing the $5 billion FSC/ETI problem, it creates a $150 billion special interest giveaway.

Mr. Speaker, this Special Interests Christmas Tree Giveaway Act is quite simply a scandal. Now, in light of such largesse for special interests and large corporations, I was surprised when this morning the Republican majority in the Committee on Rules did not make in order an amendment proposed by the gentleman from California (Mr. Lantos) and me. Our amendment would provide tax relief to every company and business that makes up the difference in income to an employee activated into the National Guard or Reserves and would have provided support to those same companies to train temporary employees to fill the jobs left vacant by active-duty employees.

At a time of national emergency, when members of the Reserves and National Guard are serving extended deployments in Iraq and Afghanistan, the Republican majority in the Committee on Rules decided that this modest tax relief proposal was not important or relevant enough to be considered during the debate on this bill.

This bill before us helps Halliburton and Bechtel, two corporations that are ripping off the American taxpayer through fraud and abuse of their defense contracts in Iraq; but the Republican leadership will not help the hundreds of small businesses suffering from long-term vacancies or the families whose loved ones have been activated for service in Iraq and Afghanistan.

Mr. Speaker, at the end of the debate on this rule, I will offer a motion to defeat the previous question. If the previous question is defeated, the gentleman from California (Mr. Lantos) and I will offer our amendment to H.R. 4250 to help the Reservists and small business.

We have the chance to do the right thing today. I urge my colleagues to reject this rule and to oppose the underlying bill.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I just want to clarify to the gentleman from Washington (Mr. Hastings) that the sales tax deduction provision phases out in 2 years. It is not permanent. And this morning the gentleman from Washington (Mr. Hastings) and other Republicans voted against making it permanent.

Mr. Speaker, I yield 5\1/2\ minutes to the gentleman from New York (Mr. Rangel), the ranking Democrat on the Committee on Ways and Means.

(Mr. RANGEL asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield myself such time as I may consume.

The distinguished chairman of the Committee on Ways and Means refused to show me or the gentleman from New York (Mr. Rangel) the same courtesy that the gentleman from New York (Mr. Rangel) showed the chairman of the Committee on Rules, and he refused to answer the question as to whether or not the Committee on Rules would have made in order the Crane-Rangel alternative, in whatever form it would have been in. The answer is clearly they would not have.

The gentleman mentioned American democracy. Twenty amendments were denied in the Committee on Rules. That is not democracy.

Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Doggett).

Mr. Speaker, may I inquire how much time remains on each side.

Mr. Speaker, I yield 2 minutes to the gentleman from Washington (Mr. McDermott), a member of the Committee on Ways and Means.

(Mr. McDERMOTT asked and was given permission to revise and extend his remarks, and include extraneous material.)

Mr. Speaker, will the gentleman yield?

Mr. Speaker, I appreciate the gentleman yielding. How many of those amendments were made in order?

Mr. Speaker, I thank the gentleman.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, let me also say that the Republican leadership made it clear last night that no substitute in any form would have been made in order.

Mr. Speaker, I yield 4 minutes to the gentleman from California (Mr. Lantos).

Mr. Speaker, I yield 2 minutes to the gentleman from North Carolina (Mr. Etheridge).

(Mr. ETHERIDGE asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 2 minutes to the gentleman from Oregon (Mr. Blumenauer).

Mr. Speaker, I yield 2 minutes to the distinguished gentleman from Texas (Mr. Stenholm).

Mr. Speaker, I yield 1 minute to the gentleman from Massachusetts (Mr. Meehan).

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, the continuing activation of military Reservists to serve in Iraq and the war on terror has imposed a tremendous burden on many of our country's businesses. For too many of these small businesses, the temporary loss of these employees makes it difficult to continue operating successfully, and many are faced with severe financial difficulties, even bankruptcy. Why not help alleviate some of this burden for these employers who are doing the right thing for their employees and their families?

It is ironic that the party that never met a tax cut they did not like and that claims to support small business would deny small businesses a tax credit to help pay their employees who are serving their country in a time of war. I cannot imagine why the Republican leadership denied the full House an opportunity to vote on this amendment. Certainly this is a more important issue than tax relief for Chinese ceiling fan makers.

I urge my colleagues to vote ``no'' on the previous question and let this House vote on tax fairness for small businesses whose employees are bravely serving their country in the Armed Forces.

Mr. Speaker, I ask unanimous consent that the text of the amendment be printed in the Record immediately before the vote on the previous question.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present.

Mr. Speaker, I demand a recorded vote.

Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 681 and ask for its immediate consideration.

Mr. Speaker, for the purpose of debate only, I yield the customary 30 minutes to the gentleman from Massachusetts (Mr. McGovern), pending which I yield myself such time as I may consume. During consideration of this resolution, all time yielded is for the purpose of debate only.

(Mr. REYNOLDS asked and was given permission to revise and extend his remarks.)

Mr. Speaker, House Resolution 681 is a closed rule that provides for consideration of H.R. 4520, the American Jobs Creation Act of 2004. The rule provides one hour of debate in the House equally divided and controlled by the chairman and ranking minority member of the Committee on Ways and Means.

The rule further provides that an amendment in the nature of a substitute recommended by the Committee on Ways and Means, as modified by the amendment printed in the Committee on Rules report accompanying the resolution, shall be considered as adopted.

The rule waives all points of order against the bill, as amended, and against its consideration.

Finally, the rule provides one motion to recommit with or without instructions.

Mr. Speaker, America's economy has taken its share of hits over the past several years. We had a triple shock of terrorist attacks, corporate scandals, and recession. But each time this economy was stricken, this administration and this Congress responded with action to move forward, to create jobs, and to spur economic growth.

In fact, in just his first few months in office, after inheriting a slowing economy, President Bush and this Congress enacted a series of tax cuts that resulted in the shortest and shallowist recession in this Nation's history. Our work towards recovery has continued throughout its time and today real GDP growth has grown at its fastest rate in 20 years. More than 1.4 million jobs have been created. The unemployment rate is below the average level in each of the past 3 decades. Productivity has grown to the fastest 3-year rate in 40 years. Home ownership is at an all-time high and we have the highest number of total payroll employees in our history.

In the particularly hard hit manufacturing sector we have seen the best 4-month period of job growth in 6 years and the manufacturing employment index was at its highest level since 1973. Even in my region of the country, which has traditionally lagged national recoveries, one prominent economic survey reported ``signs of a long awaited rebound in hiring demand were evident across most regions and industries, suggesting that the economic growth may soon begin to shift into a new higher gear.''

But our work is not done until every American looking for a job finds one, and that is why, Mr. Speaker, I am pleased to be here today on behalf of the American Jobs Creation Act by supporting this rule and underlying bill.

The most recent data shows that employment remained strong last month, evidenced by the creation of 248,000 new jobs and continuing three quarters of a strong economic growth. Now it is time to seize on this momentum and continue to take steps to grow our economy, generate jobs, boost domestic manufacturing, and protect small businesses and farmers.

As my colleagues well know, recent European sanctions on American exports are hurting our manufacturers and farmers to the tune of up to $4 billion a year. Tariffs currently stand at 8 percent and will increase a staggering 1 percent per month until FSC-ETI is repealed. These sanctions are increasing the price of U.S. goods sold outside the United States. They are reducing the exporting capability of multiple industries, and they are threatening the ability of our domestic country to create jobs here at home.

We have the power to stop them now, and without our action many small businesses and other employers face financial ruin while their employees face their own job losses. But by repealing FSC-ETI through the underlying bill, this Congress will put an end to these sanctions and help yet again to put Americans to work.

H.R. 4520 permanently reduces the corporate tax rates from 35 percent to 32 percent for domestic manufacturers, producers, farmers, and small corporations. This is yet another stimulant for job growth, encouraging production and manufacturing here at home, giving employers incentives to reinvest, expand and, most importantly, create new jobs in the United States.

Mr. Speaker, the underlying bill also addresses a fundamental hurdle in realizing even bigger job growth, the double taxation of U.S.-based manufacturers. Our global counterparts currently share a significant advantage over the United States simply due to the onerous U.S. Tax Code. In reducing this double taxation faced by U.S.-based companies, we will greatly enhance their competitiveness and ability to sell American-made goods in the global market, all the while making it easier for them to create more jobs here in the United States.

Last month the Institute for Supply Management's manufacturing index

showed the twelfth straight reading above 50 percent and the seventh reading above 60 percent. Readings at this level indicate substantial expansions in manufacturing activity, which is more good news for manufacturing job creation.

Mr. Speaker, another important part of H.R. 4520 is its relief for millions of small businesses and farmers from the Alternative Minimum Tax. Over the years this tax has burdened more and more middle-income Americans, a clearly unintended consequence. With the passage of the underlying bill today, this House will deliver much needed relief for millions of American farmers and small businesses. This relief will help keep individuals from sending exorbitant amounts of their hard- earned money to Uncle Sam and use it instead to create new jobs and new opportunities.

Finally, H.R. 4520 makes it cheaper for existing businesses to increase their investment and for entrepreneurs to also expense their new ventures. The underlying bill includes provisions to promote investment in new equipment. Increased investment such as this provides significant stimulus to the economy and further aids in boosting job growth.

Shipments of core capital goods, which is the category most directly linked to business investment, has continued to rise recently, and we can build on that progress.

Mr. Speaker, the Committee on Ways and Means has worked tirelessly on behalf of the American people and I would like to commend the chairman and committee members for their steadfast support of sound tax policy and job creation.

We have the opportunity and responsibility to not only continue, but to accelerate the last 9 months of economic growth and job creation. We can do that today by passing the American Jobs Creation Act. I urge my colleagues to support the rule and the underlying bill.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I spent a good deal of time doing the presentation, the fact that I think our economy is moving, that the American Jobs Creation Act of 2004 is going to create more jobs across America; and I just want to make sure that my view of that is again on the record.

Mr. Speaker, I yield 4 minutes to the gentleman from Washington (Mr. Hastings), a distinguished member of the Committee on Rules.

Mr. Speaker, I yield 5 minutes to the gentleman from California (Mr. Thomas), the distinguished Committee on Ways and Means chairman.

(Mr. THOMAS asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 2 minutes to the gentleman from Kentucky (Mr. Lewis).

Mr. Speaker, I yield myself such time as I may consume.

I sit here and I listen to some of my colleagues on the other side of the aisle try to rewrite history. It was only 4 hours ago that we were in the Committee on Rules. We took testimony. Some of the Members who are the loudest critics on the floor today were not there.

When I came to this Congress, I had served almost all of my entire career in the minority. I know what it is like to have to cough up a substitute and not be able to do it because of the diversity of the minority party in coming up with it. I did not see a substitute. It was awfully clear there was no substitute for the committee's consideration.

Now there are a number of line-by-line amendments that were brought before the committee by the minority in rollcall votes. They are well recorded. There will be no document that says there was a substitute before the Committee on Rules.

I yield to the gentleman from Massachusetts.

None.

The amendments were brought before the committee. Again, there was no substitute.

I did see a Rangel amendment that excluded all parts of the tax cuts and left the tobacco bill.

Today this body, after this rule is passed, is going to have the opportunity to make a decision: Tax cuts and a competitive agenda, or the same old business as usual, drag it out, mess it up.

Today, with H.R. 4520, the American Jobs Creation Act of 2004, my colleagues are going to be able to end sanctions by repealing the FSC- ETI, compensating for lost benefits by permanently cutting corporate tax rates for domestic manufacturers and producers and farmers and small corporations.

It is going to provide a pro-growth tax incentive for manufacturers, small businesses and farmers to help create more American jobs, and it is going to enhance the competitiveness of U.S.-based companies engaging in exporting and/or manufacturing by greatly reducing double taxation. These companies receive more than 90 percent of the FSC-ETI benefits under the current law.

Mr. Speaker, we talked about it a long time. Today we are going to have a vote up or down. America deserves this legislation because it is going to give everyone who wants a job an opportunity to get a job.

Mr. Speaker, I reserve the balance of my time.

announcement by the speaker pro tempore

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, the gentleman from California (Mr. Lantos) outlined a couple of things, and the debate on this rule also should bring us back to perspective on this.

I thought I understood from the gentleman that his plan encourages American companies to outsource overseas. The U.S. companies only benefit if they manufacture in the United States. This plan temporarily reduces the tax rate on repatriated income but only if that income is currently reinvested in the United States.

The plan provides for $13 billion in transitional tax relief to manufacturing and production in the United States. It eliminates double taxation on foreign sales corporations and will not allow these businesses to expand their operations hiring Americans.

Finally, any sanctions imposed by the EU and other tariffs imposed on the American products will encourage business expansion, creating jobs right here at home in the United States.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

I know that my colleagues in the Chamber know there is a debate on. I believe those who are watching throughout the offices know there is a debate on. I hope America knows. We are having that debate first on this rule, and we are seeing viewpoints expressed. And then we will have full debate on the Ways and Means chair and ranking member managing the underlying legislation. Let it be clear that there will be 2 full hours of debate that this honorable body will have on this issue. I am sure there will be many different viewpoints that are expressed. At the end, I hope we are successful in passing this legislation so that we can continue to grow jobs in America.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 30 seconds to the gentleman from Texas (Mr. Stenholm).

Mr. Speaker, this is a fair and customary rule. I reserve the balance of my time.

Mr. Speaker, I yield such time as he may consume to the gentleman from California (Mr. Dreier), the distinguished chairman of the Committee on Rules.

(Mr. DREIER asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution.

Mr. Speaker, today, I am proud to introduce legislation that will protect American jobs and will create new job opportunities for those Americans in search of employment.

The American Competition Enhancement Act of 2003 would ultimately provide an across-the-board tax cut of 5 percent for all corporations. Specifically, the ACE Act will cut the corporate tax rate by 3 points in 2004, initially lowering the corporate rate to a tax level of 32 percent. Three years later, the ACE Act would cut the tax rate by an additional 2 points, lowering the rate for corporations to 30 percent in 2007.

Since 1996, our trading partners have realized that being competitive in the global marketplace requires cutting taxes of the businesses that employ their workers. Many countries, including Australia, Canada, France, Germany, Japan, Poland and Turkey, have cut their corporate tax rates drastically--some by 10 percent or more. In fact, the average top corporate tax rate for governments in the Organization for Economic Cooperation and Development (OECD) has dropped from a rate of 41 percent in 1986 to 30.9 percent in 2003, while the U.S. corporate rate has remained unchanged at 35 percent over the same period. When state and local taxes are added on top of this rate, the U.S. corporate tax rate averages 40 percent--which is more than 9 percentage points higher than the OECD average.

While other countries have learned that lower taxation enables them to compete for business, and ultimately jobs, the United States has failed to respond, and American workers have suffered. Many in this Congress have remained content to sit idly by as other nations have lowered corporate taxes. Instead of freeing American businesses and our workers from oppressive taxation and burdensome regulations, this Congress has continued to support efforts to make our tax code more ambiguous and difficult to navigate.

Over the past 20 years, the Congress has passed tax law that has led to the creation of complicated and excessive rules--rules that have negatively impacted the ability of American companies to compete in the world market. These have been ``defensive'' responses to competition, not ``offensive'' responses to increasing worldwide competition. Throughout, the Twentieth Century, the United States competed aggressively in the world market, and as a result our competitors responded. To remain competitive, this Congress MUST act again, and we MUST begin by reforming our tax policy that has become a choke collar on our American workers, restricting them from being free to compete with other workers in the world market.

As this Congress debates export subsidies and global competition, we will continue to hear much about the challenges faced by American manufacturers. Yet, the first and foremost challenge that American manufacturers, and all American employers, face is an increasingly restrictive and oppressive tax code. The ACE Act would address this fundamental issue and enable American workers in all sectors, including manufacturing, to once again compete in the world market. This bill would instill confidence in our manufacturing industry and would entice many other industries to operate here instead of locating overseas.

As the greatest workers in the world, there is little doubt about the outcome, if only the Congress will free our workers to compete.

Some will say that we cannot afford the ACE Act, but American workers cannot afford the alternative--continued taxation that restricts, limits and chokes their ability to compete. Some are saying that any tax legislation must be budget neutral; yet, over the last two years, the corporate income tax structure remains unchanged, and corporate revenue has only declined. In fact, Corporate Income Tax Revenue has decreased significantly--from 2000 to 2001 Corporate Income Tax Revenues fell from $207.3 billion to $151.1 billion, a decrease of $56.2 billion; in 2002, Corporate Income Tax Revenue dropped to $148 billion--a decrease of $59.3 billion from the 2000 level. In 2 years, our corporate tax laws have resulted in lost jobs, lost dollars in American workers' pockets, and a combined loss in revenue of $115.5 billion (See Table F-3 of the Congressional Budget Office--Budget and Economic Outlook: Fiscal Years 2004-2013).

Over the past 3 years the United States has seen a loss of 2.7 million manufacturing jobs--with an average of 60,000 job losses per month over the past 2 years. Some of these jobs have disappeared due to increased production efficiencies, but many more have been relocated overseas.

History has shown that lower taxation leads employers to keep the employees they have, to invest in capital expenditures that create new jobs, and to increase their profits which, in turn, means economic growth, more jobs, more exports, more production, and, ultimately, more dollars flowing to the Federal Treasury. Let us learn from history and pass meaningful tax relief to stimulate economic growth and, in turn, increase the funds in workers' pockets; ultimately, this would mean more dollars for the Treasury of the United States.

I urge my colleagues in this House to consider the actions of others around the world, to consider history's lessons, and, most importantly, to consider the effect of our tax code on workers in their own districts. I have considered this all and am determined that we must

free American workers from the choke collar of taxation. This Congress must act and provide much needed relief for all American corporations that employ our people.

Mr. Speaker, I call on the House to consider American workers and consider the challenges they face. It is time that the House pass solid, meaningful tax legislation that supports the American worker.

[From the Tax & Budget Bulletin, CATO Institute]

The U.S. Corporate Tax and the Global Economy

(By Chris Edwards, Director of Fiscal Policy, Cato Institute)

The corporate income tax is at the center of numerous

policy debates today. First, the World Trade Organization has

ruled that the U.S. Foreign Sales Corporation/

Extraterritorial Income Exclusion (FSC/ETI) tax break given

to exporters is illegal. The European Union has threatened

the United States with trade retaliation unless it repeals

FSC/ETI by the end of this year. Next, corporate tax

avoidance has been in the news in the wake of the Enron

scandal. Finally, there is growing concern that the corporate

income tax damages business competitiveness and reduces U.S.

economic growth.

In response to the WTO ruling, bills have been introduced

to repeal FSC/ETI, including H.R. 2896 by Ways and Means

chairman Bill Thomas (R-Cal.) and H.R. 1769 by Phil Crane (R-

Ill.) and Charles Rangel (D-N.Y.). The Thomas bill, and a

similar proposal by Senator Orrin Hatch (R-Utah), includes

many useful tax reforms in exchange for repeal of the $5

billion per year FSC/ETI provision. However, more fundamental

tax reforms are needed, including a large cut to the

corporate tax rate.

corporate tax reform is long overdue

Global direct investment flows rose six-fold in the past

decade, and research shows that these flows are increasingly

sensitive to corporate taxes. To attract capital and build

the economy, the United States should have a neutral and low-

rate corporate tax. Instead, the United States has perhaps

the most complex corporate tax and the second highest

corporate tax rate among major nations.

The U.S. statutory corporate tax rate is 40 percent, which

includes the 35 percent federal rate and an average state

rate of 5 percent. By comparison, Figure 1 shows that the

average rate for the 30-nation Organization for Economic

Cooperation and Development is 30.9 percent, down sharply

from 37.6 percent in 1996.

Aside from a high rate, the U.S. corporate tax has

uncompetitive rules for firms that compete in foreign

markets. The U.S. Treasury's assistant secretary for tax

policy, Pam Olson, recently testified that ``no other country

has rules for the immediate taxation of foreign-source income

that are comparable to the U.S. rules in terms of breadth and

complexity.'' The complexity of the U.S. rules on foreign

income are infamous--Dow Chemical has calculated that 78

percent of its 7,800-page U.S. tax return relates to the

rules on foreign income.

Part of the problem is that Congress has viewed

corporations as cash cows, and has shown little concern that

high taxes reduce investment and drive capital and profits

abroad. One example of how the demand for more tax revenue

can backfire is the taxation of ``foreign base company

shipping income.'' It used to be that the foreign income

earned by cargo ships and other vessels owed by U.S.

subsidiaries was not taxed until repatriated to the United

States. However, Congress changed the rules in 1975 and 1986

to tax that income immediately as earned. But rather than

raising federal revenue, the changes reduced revenue as the

U.S.-owned shipping fleet shrunk and the tax base

disappeared. The U.S. share of the world's open-registry

shipping fleet fell from 25 percent in 1975 to less than 5

percent today. The Thomas and Hatch bills include a fix to

this counterproductive tax provision.

thomas bill includes modest REforms

The corporate tax reform bill introduced by Bill Thomas

would reduce the double taxation of foreign income earned by

U.S. multinational corporations (MNCs) and simplify the rules

for foreign tax credits and subpart F income. Simplifying and

reducing taxes on MNCs would benefit the U.S. economy in a

number of ways. U.S. MNCs would be able to increase U.S.-

based research and other headquarters activities if their

foreign operations were larger and more profitable. Also,

MNCs could better penetrate global markets with U.S. exports

if their foreign affiliates were more competitive. Indeed,

U.S. Department of Commerce data show that U.S. MNCs account

for two-thirds of all U.S. merchandise exports. By making

U.S. MNCs more competitive, the Thomas bill would boost U.S.

exports, employment, and incomes. The Thomas bill also

includes other useful but limited reforms, including faster

depreciation for some equipment investment, liberalizing the

subchapter S rules for small corporations, and changes to the

corporate alternative minimum tax.

The Crane-Rangel bill provides a targeted tax break for

manufacturing. A new deduction would reduce the tax rate for

domestic manufacturing by 3.5 percentage points, but would

not cut taxes for other types of businesses. This is poor

policy compared to a broad-based tax cut because it would

increase tax complexity and divide the business sector even

further into separate lobbying camps, each wanting narrow

breaks rather than overall reforms.

more fundamental reforms needed

Rather than provide narrow breaks, Congress should cut the

35 percent corporate tax rate to 20 percent so that the

United States becomes a tax reform leader, not a laggard. In

order not to increase the deficit, a rate cut could be paired

with cuts to federal spending on business subsidies, which

currently total about $90 billion per year. Such a reform

package would increase investment and employment incentives

for all firms and reduce government favoritism and business

distortions.

Beyond a rate cut, Congress should consider full repeal of

the corporate tax or replacement with a cash-flow tax. A cash

flow tax would increase domestic investment and make U.S.

firms more competitive in global markets because firms would

not be taxed on their foreign business income. A cash-flow

tax would also reduce wasteful tax sheltering. Indeed, most

of Enron's tax shelters would not have been possible under a

cash-flow tax.

Congress should aim to give this country the best possible

corporate tax environment, not one of the worst. A good first

step would be to simplify and reduce taxes for U.S. MNCs, and

then follow up with a reduction of the corporate tax rate to

20 percent.

Mr. Speaker, I yield myself such time as I may consume.

(Mr. THOMAS asked and was given permission to revise and extend his remarks.)

Mr. Speaker, we are here today because the United States Tax Code is out of sync with the rest of the world. Among our major trading partners, the United States is alone in the world in not using other forms of taxation other than direct income taxation.

Four times the United States defended our ability to create subsidies and, therefore, produce a more level playing field among our trading partners. We had for years refused to reexamine our code more fundamentally and thought that a subsidy mandate would create a more level playing field. Four times, the World Trade Organization said that under the rules of the World Trade Organization, of which we are a founding member, that that would not be permissible.

We are here today because the core of the bill is to repeal the Foreign Sales Corporation extraterritorial tax structure, and it also affords us an opportunity to examine an out-of-date Tax Code.

For those who say all we should be doing is repealing the subsidy, which has been declared against the rules, is to ignore the reason why we put the rules in place in the first place. The reason we did the subsidy was because we were at a disadvantage. It can certainly be argued we should have fundamentally changed our Tax Code back when we did that, but the simple answer is, we did not.

What we are trying to do is correct the errors of our ways, primarily by omission, but occasionally by commission, of not allowing U.S.- based, U.S. workers to put products and services out in the world on a level playing field with the rest of the world. That is what this bill does.

In addition to that, in examining these areas, we discovered portions of the Tax Code that are just flat out unfair. And this is an opportunity; I believe everybody deserves 1 day every 20 years to have a look at the problems they face in the Tax Code. Why? Because small business in certain industries are faced with a discriminatory U.S. Tax Code that puts U.S. small businesses at a disadvantage to foreign businesses.

We are going to hear there is a provision in here about arrows, there is a provision in here about tackle boxes, there is a provision in here about sonar, fish detecting equipment. The reason it is in here is because our code discriminates against American producers.

So not only are we rewriting our laws to be good trading partners and assisting those people who no longer get the subsidy because we are rewriting the laws, we are providing one day every 20 years to examine those portions of the code that make absolutely no sense.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

I do not rise to defend the honor of Miss Piggy, as the gentleman from New York indicated, and I am anxiously finding a flashlight because, apparently, the gentleman from New York exists in perpetual darkness since he believes night extends for more than 2 years. This bill has been around a long, long time.

Mr. Speaker, I yield such time as he may consume to the gentleman from New York (Mr. Walsh) for the purpose of entering into a colloquy with the gentleman from Colorado (Mr. Beauprez).

Mr. Speaker, I yield myself such time as I may consume to thank the gentlemen from New York and Colorado, because without their active participation, the Green Bonds provision would not have been included in the House Energy Conference Report, H.R. 6, but it was, and this House passed it. Therefore, the opportunity to examine it in this conference is available to us. We did not deliberately exclude that measure from this bill, and I look forward to working with the gentlemen as we deliberate with the Senate on this bill.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, it is my pleasure to yield 3 minutes to the gentleman from Illinois (Mr. Crane), and to observe that I was worried about a job for the young man, but it is clear that he now has a job being a shield for his father.

Mr. Speaker, I yield myself such time as I may consume.

In 1986 the reason the basket went from two to nine was for pure revenue to be spent in other areas. And as President Reagan said, it would entice someone to go from a high-tax country to a low-tax country. Shame on us if we are the high-tax country.

Mr. Speaker, I yield 1 minute to the gentlewoman from Washington (Ms. Dunn), a champion in trade around the world.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I tell the gentleman, only my friends on the other side of the aisle would have a 6-inch tree and call it Christmas.

Mr. Speaker, I yield 1 minute to the gentleman from Arizona (Mr. Hayworth).

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I just find it amazing that allowing American manufacturers to have a level playing field with foreign manufacturers is called a tax break.

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Florida (Mr. Shaw), a valuable member of the Committee on Ways and Means.

Mr. Speaker, I yield myself such time as I may consume.

The gentleman well knows that no substitute was offered in committee, no substitute was offered in front of the Committee on Rules. You can say it till you are blue in the face, but the Democrats offered no substitute, neither in committee nor in the Committee on Rules.

Mr. Speaker, it is now my pleasure to yield 1\1/2\ minutes to the gentlewoman from Connecticut (Mrs. Johnson), someone who is extremely interested in American jobs.

Mr. Speaker, it is my pleasure to yield 1 minute to the gentleman from California (Mr. Herger), a colleague and member of the Committee on Ways and Means.

Mr. Speaker, it is now my pleasure to yield 1 minute to the gentlewoman from Tennessee (Mrs. Blackburn), a newer Member of the House but someone who has already made an impact on a portion of this bill.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I believe the gentleman from Texas (Judge Doggett) needs to know that provision has been ruled by the courts not to provide attorney/client privilege and that there was no new power granted under that language. And the gentleman from Texas (Judge Doggett) knows that when the courts rule, we try to be responsible in that regard.

Former Speaker Tip O'Neill said, ``All politics is local.'' I had said that some areas of the code have not been examined in 20 years or more, and people deserve a day at least once every 20 years to try to correct the horrible, horrible condition of many areas of our economy under our current Tax Code.

Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from North Carolina (Mr. McIntyre) who wants to talk about ending a subsidy to a particular group of Americans, and this is the first time they have had their day in court in almost three-quarters of a century.

Mr. Speaker, I yield 2\1/2\ minutes to the gentleman from Louisiana (Mr. McCrery), the chairman of the Subcommittee on Select Revenue of the Committee on Ways and Means.

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Kentucky (Mr. Lewis) who understands all politics are local, and the Chair appreciates the tremendous work the gentleman from Kentucky has put in in perfecting this bill.

(Mr. LEWIS of Kentucky asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, now I guess I am a little bit baffled. The gentleman from Illinois, chairman of the Committee on Small Business, was an original cosponsor of H.R. 1769, the Rangel-Manzullo bill. That included a corporate rate cut and specifically limited it to C corps. It did not extend it to S corps and partnerships, and it did not have any of the 11 subchapter S provisions that we include. He is making an appeal for bullets, but he is not supporting bows and arrows.

Mr. Speaker, it is my pleasure to yield 1 minute to the gentleman from Tennessee (Mr. Jenkins).

Mr. Speaker, it is my pleasure to yield 1 minute to the gentleman from Texas (Mr. Sam Johnson), a valuable member of the Committee on Ways and Means.

(Mr. SAM JOHNSON of Texas asked and was given permission to revise and extend his remarks.)

Mr. Speaker, it is my pleasure to yield 15 seconds to the gentleman from Ohio (Mr. Portman) who understands the difference between spending and investing.

(Mr. PORTMAN asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I request respectively that I have the same 1 minute to be able to yield to the gentleman from Florida, a member of the committee.

Mr. Speaker, I understand 1 minute was yielded, and I just respectfully ask for 1 minute to the gentleman from Florida as was done on the other side. That is all.

Mr. Speaker, I yield 30 seconds to the gentlewoman from Guam (Ms. Bordallo) for a colloquy.

Mr. Speaker, will the gentlewoman yield?

Mr. Speaker, I tell the gentlewoman, a Delegate from Guam, and the gentlewoman from the Virgin Islands I would be pleased to work with them in conference to try to solve this problem for the Territories.

Mr. Speaker, I yield 1 minute to the gentleman from Wisconsin (Mr. Ryan), a very valued member of the committee.

Mr. Speaker, I yield 1 minute to the gentleman from Texas (Mr. Brady), who has been a champion for something that is extremely important to his constituency.

Mr. Speaker, I yield myself such time as I may consume.

Perhaps the gentleman is not aware that the gentleman from Virginia (Mr. Goodlatte), chairman of the Committee on Agriculture, and the chairman of the Committee on Ways and Means have exchanged letters on questions of jurisdiction as is often done. Also, I guess the gentleman is expressing clearly the current attitude of the minority, and, sadly, it is different than it used to be. What happened to the can-do attitude that Americans always exhibit?

It seems to me after 20 years, somebody ought to get 1 day to take a look at the fact that when he was in the majority, if one were in a State that had a sales tax and they rented, they got nothing. After 65 years people want an end of subsidy. Why not? Why not allow U.S. aero manufacturers to be treated the same as foreigners? If someone has new technology, why not, not punish them with a different tax system?

Mr. Speaker, I will place in the Record the Statement of Administration Policy which says ``The administration urges the House to pass H.R. 4520 promptly.'' And I would urge the House to do the same.

Statement of Administration Policy

h.r. 4520--american jobs creation Act of 2004

The Administration supports foreign sales corporation/

extraterritorials income (FSC/ETI) legislation that reforms

the tax code, removes the underlying reason for the tariffs

that have been imposed on American exports by the European

Union (EU), and further advances the competitiveness of

American manufacturers and other job creators.

The Administration urges the House to pass H.R. 4520

promptly. If Congress does not act to replace the current

FSC/ETI provisions in the tax code, then the tariffs that

were imposed by the EU on March 1st will inflict an

increasing burden on American exporters, American workers,

and the overall economy. To support the continued

strengthening of our economy and to create more jobs,

Congress should act now to end the threat posed by these

tariffs and to promote the competitiveness of American

manufacturers and other job-creating sectors of the U.S.

economy. The Administration looks forward to working with the

conferees on this legislation to move it toward budget

neutrality, and to enacting legislation that removes the

threat of escalating EU sanctions and encourages economic

growth and job creation at home.