Job Creation and Tax Cuts Act of 2010

Mr. President, I believe by consent I am to be recognized for 30 minutes.

Mr. President, we have heard a couple of very spirited defenses this afternoon on behalf of jobs in China, which I pose is a wonderful thing if you live in China and have a job in China. The issue here is what about jobs in our country. What about the people who woke up this morning unemployed in America looking for work who could not find it? Who is standing on this floor speaking for those folks?

I have heard a lot of discussion about support for jobs in China, Mexico, or elsewhere. But who is standing up talking about the jobs at home?

Let me describe what this issue is about, if I may.

I think this issue is something most Americans understand because they have heard it over and over. In recent years, we have seen millions and millions of manufacturing jobs gone from America because the very manufacturing plants that were open in this country to manufacture goods that had a label on it that said made in America are gone from America. They are now in China, they are in Mexico, they are in Thailand, they are in South Korea, and elsewhere. Let me talk about those jobs and why they have left this country.

Listening to my colleagues--and, of course, the Chamber of Commerce, the National Association of Manufacturers, all of the usual suspects who get in the same tub and make the same thumping sounds--one would believe that what has happened is that we have actually increased manufacturing jobs in this country and that moving American jobs overseas does not hurt anybody; it helps our country. Of course, that is just patently untrue.

My colleagues were talking about something called deferral. That is not something people sit around a coffee shop talking about--deferral. It means, in certain cases under this bill, those companies that shut their American manufacturing plant, get rid of all

their workers, and move the manufacturing to China or Mexico, for example--let's take China--actually get a tax break from our country that says if they are on one side of the street and their competitor is on the other side of the street, and they close their plant, fire their workers, scat out of town, go to China, hire people there, manufacture the same product, ship it back here, their country will be generous enough to say: Good for you, we will give you a tax break for doing it. That is what is called a deferral.

In the narrow scope of what is in this amendment they object to, deferral says if they leave this country with their jobs, shut them down here, move over there, manufacture there with foreign workers, and then ship the product back into this country to compete against the business men and women who stayed here, who manufacture here, who employ people here, they are not going to get a tax cut anymore. It is just not going to happen.

My colleagues say we have to have this principle called deferral. What about having every American have the opportunity for deferral? How about every American having the opportunity to defer their income taxes until it is more convenient for them? No, not everybody gets these things. Just the interests at the very top.

Then when we tried to narrow it a little bit because it gives a pernicious incentive to move jobs overseas, we have people standing up saying: We support those companies that are moving American jobs overseas. We support those jobs in China. God forbid you want to interrupt this process.

My colleague says: In 1962, there was this carefully crafted tax agreement on deferral--48 years ago. Do not interrupt that after 48 years. We made this careful agreement 48 years ago.

Let me tell my colleagues what has happened since then. I have shown this on the Senate floor before. In the last 48 years, the tax system has changed a little bit. This is a five-story white house on Church Street in the Cayman Islands called the Ugland House. The first time I showed this chart--by the way, this is enterprising reporting by David Evans from Bloomberg--there were 12,748 companies in this building. It is only a five-story small white building on Church Street in the Cayman Islands. It was inhabited by 12,748 corporations. A little crowded, I would say. Were they there? No, they just got their mail there. Why did they get their mail there? So they could slip under the American Tax Code and not pay taxes to the U.S. Government.

When I first showed this chart some years ago, it was 12,748 corporations. But there was room for more. Now there are 18,857 entities that call this building home. Is that unbelievable? They must enjoy each other's company, or at least their mail must fraternize.

Mr. President, more than 18,000 companies claim that little building. We made this careful agreement in 1962 on deferral? How dare you deal with the Tax Code in a way that you would upend that 1962 agreement. Everything has changed. There is not a ghost of a chance in 1962 that American companies would have even thought of trying something that audacious--just gather together in a mailbox in a white building someplace to avoid paying your obligation to this country.

I have shown this as well. Wachovia Bank (formerly First Union Bank) bought a sewage system in Bochum, Germany. Why? Did they have sewage specialists on their staff? I don't think so. Did they put out television advertisements: Come do business with Wachovia Bank because we know about sewers or we want to buy sewers in foreign cities? No, they did this to avoid paying U.S. taxes. This is Wachovia Bank. They did not pay $175 million in U.S. taxes because they bought a sewage system from a German city.

Did they move the sewage pipes? No. Do they know anything about sewers? No. They bought it from the German city and leased it back so they could depreciate it and not have to pay U.S. taxes. Unbelievable.

The Tax Code has changed, I say to my friends. It is a punch board of gimmicks allowing people to do things they could not previously have done before, and the most significant enterprise is to move American manufacturing jobs overseas and get a tax break for doing it.

This amendment is very misunderstood based on the discussions by the two previous speakers. There is discussion on the floor of the Senate about what is the motivation for moving jobs overseas--to serve, for example, a foreign constituency; want to move jobs to China to be able to sell into Thailand or Korea. The tax deferral piece of this amendment does not affect you. You can win that argument we are not having, if you wish, but you are misstating what the amendment suggests. The deferral part of this amendment does not do anything of the kind.

This amendment is narrow--narrower than I would have it, as a matter of fact. But it says if you are going to get rid of your American workers, close your plant, move those jobs elsewhere, and then ship back into this country to compete with the American businesses that stayed here, you do not get the advantage of deferring the payment of U.S. taxes. It is just very simple.

The question today is not just who is going to stand up for American jobs on this floor, who is going to stand up for American businesses that stayed here, manufactured here, hired workers here, paid the rent here, who is going to stand here and support that? I have not heard it yet.

Let me go through some points. Before I do, let me mention one other thing. One of my colleagues just said: There are some things you cannot make here. So if you make them abroad, we do not want to punish you in our Tax Code from selling them in this country.

They previously used bananas. I want my colleagues to understand, we actually have a banana exemption. We do not actually spell out bananas, but because the specter of fruit was raised the last time this was discussed, we included a banana exemption.

Of course, we do not grow bananas in the United States. If somebody ships them back here, they will not be affected by this amendment either.

There are a lot of points raised that have nothing at all to do with what we are describing in terms of public policy.

Let me go through a few items. Some people may not know this. I described previously in unsuccessful attempts to try to do what we are doing that in New Jersey, there are a lot of folks who loved their jobs and they worked for a company call Fig Newton. Some actually shoveled fig paste. By the way, the company's name was Nabisco, which stands for National Biscuit Company. But it was not quite so national because Nabisco, the National Biscuit Company, decided the pay they had to provide for people to shovel fig paste in New Jersey was way out of line, so they just took Fig Newtons right off to Mexico. If you want Mexican food, buy some Fig Newtons. It goes on and on. The list is so long.

I want to mention, as I have mentioned before, some of these same stories because it is important to understand what motivates people who want to stand up for American jobs.

Pennsylvania House Furniture--I was in Pennsylvania this weekend--was made in this country for over 100 years with fine Pennsylvania wood. It was a wonderful company making high-end furniture. One day it was sold to La-Z-Boy. La-Z-Boy decided: We are going to move Pennsylvania House Furniture to China, and we are going to ship Pennsylvania wood to China and have Chinese workers put the wood together and ship it back to be sold in the United States. It had nothing to do with whether the folks at Pennsylvania House Furniture were slothful, indolent workers not doing their job. It had nothing to do with that.

What it had to do with is La-Z-Boy did not want to manufacture Pennsylvania House Furniture in the United States. They wanted to acquire 50-cent an hour labor, 12 hours a day, 7 days a week in China.

On the last day at work at the Pennsylvania House Furniture manufacturing company, these craftsmen--nearly 500 craftsmen--as the last piece of furniture came off the line, they turned the cabinet over, and then they all gathered round to sign their name on the bottom of the cabinet. These wonderful American craftsmen signed that cabinet. Somebody has a piece of furniture they are probably not aware has all the names of those workers who were fired as those jobs went to China.

Why did they do that? Because they cared about their jobs and were proud

of their work, but they could not compete with 50-cent-an-hour labor.

Stanley Furniture in Virginia is a furniture company that was started by Tom Stanley, a young dairy farmer in Virginia. He started it in a city that now is named Stanleytown. A couple of months ago, it was decided that Stanleytown was going to have some pretty bad news. Stanleytown was going to find out that these jobs were no longer going to be in Stanleytown. Stanley Furniture, another fine furniture manufacturer, was going to China.

Let me read from the Journal of Commerce of this year:

Stanley Furniture's decision to close its plant in the

small town that bears its name fell like a hammer blow on

southern Virginia and resounded across an industry,

increasingly now moving overseas. More than 500 workers will

lose their jobs this year as the manufacturer shuts down

its Stanleytown, VA, plant, where the company has made

furniture since 1924.

So it goes--moving jobs overseas. Let me, if I might, go through a couple of others.

I notice the Hershey company--speaking of Pennsylvania--Hershey company's York Peppermint Pattie is that silver pattie with the ``York'' in the middle and the advertisement that says: ``The cool, refreshing taste of mint dipped in dark chocolate will take you miles away''--in this case, of course, to Mexico because Hershey decided it is time to move. So York Peppermint Pattie moves 260 jobs to Monterey, Mexico--part of a longer term job strategy by Hershey, they said. Well, that is a peppermint pattie. America's manufacturing strategy probably doesn't depend on peppermint patties--who knows.

I have previously mentioned a series of American manufacturers, and I have used this one often because they announced with great fanfare some years ago that they were going to leave America altogether. Not another piece of underwear was going to be made by Fruit of the Loom in the United States. The dancing grapes, for all their advertisements, must have been unhappy. Their advertisements were always happy and upbeat, with guys dressed as grapes and such marching in the meadow. They can't have been very happy when Fruit of the Loom said: We are not going to make underwear in America anymore.

Radio Flyer's little red wagon. This was a 100-year-old company in Chicago. All gone. Now made in Mexico.

Here is another company. I have been talking about this one for a long time. Last week, my colleague from Ohio talked about this company--Huffy Bicycles. You can buy them at Walmart and Kmart and Sears. They were made in Ohio--except, no more. No more. All those workers lost their jobs. All those jobs are in China. All those jobs are done by people who make 50 cents an hour, working 7 days a week, 12 to 14 hours a day. Huffy said to the workers in Ohio: You know what, you can't compete, so you are done. On the last day at work, where they parked their cars in the parking lot, those workers who were fired that day left a pair of empty shoes in the places where their cars were parked. It was the only thing they could do to say: You can move our jobs to China, but you can never replace American workers.

So I could go on and on, but I want to describe what so many here in this Chamber wish to ignore. This is a quote from Mr. Paul Craig Roberts, one of the top Treasury officials in the Reagan administration. Here is what he said this year:

Outsourcing is rapidly eroding America's superpower status.

Only fools will continue clinging to the premise that

outsourcing is good for America.

Only fools will cling to that premise. And I agree with him.

Again, another quote from Mr. Paul Craig Roberts:

In order to penetrate and to serve foreign markets, U.S.

corporations need overseas operations. However, many U.S.

companies use foreign labor to manufacturer abroad the

products that they sell in American markets. If Henry Ford

had used Indian, Chinese, and Mexican workers to manufacturer

his cars, Indians, Chinese and Mexicans could possibly have

purchased Fords but not Americans.

Again, he is absolutely right. It seems to me the question is, Will America remain a world-class economic power without a world-class manufacturing capability? Does anybody really believe that could be the case? You are going to decimate and erode a manufacturing base in this country and then say: Things will be just fine; don't worry about it. We can all sell hamburgers to each other and things will be just great? We know better than that. What is happening before our eyes is a hollowing out of America's manufacturing capability.

There is a lot of discussion about what do we do about jobs, what do we do about trying to create new jobs in the country, and that has to do with what is called the faucet. If we are trying to put new jobs in the tub, they say, turn on the faucet. That is fine, and I support a range of policies that try to turn on the faucet to create more jobs in this country. But what about the open drain? As we work on the faucet, what about the drain, when Stanley Furniture says: Well, I know you are trying to create jobs, but we are out of here; or Etch A Sketch in Bryan, OH, says: Yeah, we know every kid plays with Etch A Sketch. We know we have always made it in America. But we were told by Walmart that if we couldn't produce it for $9.99 or less, they wouldn't sell it. If they don't sell it, we are out of business, so we are closing down our plant and moving to China.

The list goes on and on. The question is, What do we do about all of this? My colleagues--too many of them--say: Let's do nothing. Let's act as if nothing is really going on. In fact, let's come in here and say: You know, we made an agreement in 1962 on some deferral tax issue, and let's stick with it.

One of my colleagues earlier today said: You know, we have to worry about American corporations because they pay some of the highest tax rates in the industrial world. Well, that is a little like Penn and Teller talking about fiscal policy, and only one speaks and the other is silent. It is true that our corporate tax rates, I believe second from the top of the OECD countries. But there is another truth. The other truth is that our corporations in America pay an effective tax rate that is right near the bottom. What is the difference? One is a statutory rate--that is what the law says you should pay--and the other is how much you pay, which is right near the bottom. Why? Because we have a punchboard of gimmicks to allow that to happen. I have described a couple: American banks and other companies buying German sewer systems, buying German railcar systems, streetcars, buying German city halls for the purpose of sale-leasebacks so they can avoid paying taxes to the United States. It is pretty unbelievable, when you think about it.

The only reason I have mentioned some of the companies over the years when I have talked about this is to give them full credit for what they are trying to do. They and all their neighbors should understand that they want all the benefits America has to offer, but they don't want to sign up for the responsibilities that exist for Americans, including an American company.

I want our corporations to do well. I want American corporations to be profitable. But I will tell you this: If you have two kinds of corporations, and one decides to stay here and manufacture in our country and the other decides to take the jobs and move to a low-wage, lower tax alternative, I want to be helpful to that corporation that stays here, that hires workers here, that keeps the plant open here and is proud to put a made-in-America label on their product.

There is a company called HMC in this country that makes very substantial industrial products. You can see that this is a company everyone admires. Let me tell you what this corporate CEO has said. The CEO of HMC corporation, Robert Smith, said this:

Offshoring in search of higher profits is a mistake because

it ignores manufacturing's larger purpose in U.S. society.

Here is something else Mr. Robert Smith said, and I compliment him because you will find precious few who will say it.

It is my belief that every American citizen, not only me,

should feel strongly about maintaining one of the most

important cultures we have, and that is manufacturing. Now,

why is it important? Does anybody think we would have

prevailed in the Second World War without the prodigious

manufacturing capability of our country? If anybody is

interested in that, go read Manchester's ``The Glory and the

Dream'' and understand what we did and how we did it in

manufacturing war planes and ships and tanks and

trucks. We had the most unbelievable manufacturing capability

in the history of humankind.

Some say that none of this matters--why should we pick winners and losers? If the marketplace says we manufacture products in China or Mexico, if, in fact, we actually import more cars from Mexico than we export to the entire rest of the world, so what? Don't worry, be happy. That is the way the U.S. Chamber of Commerce wants it, and it is what the National Association of Manufacturers wants to have happen, apparently--except I know of companies that belong to both those organizations that have called me and written to me and said that they are dead wrong. How about having a chamber in the U.S. Senate stand up for American manufacturing?

I know that when I talk this way and when I say these things, there are people in this room--and the Washington Post would be a good example--who will instantly say: Aha, I hear all that nonsense. This is about protectionism. It is about America becoming protectionist and building walls around its country to keep goods out.

Are you kidding me? Are they nuts when they talk that way? Last month, we had a $50 billion trade deficit in 1 single month. In a recent year, we had a $750 billion trade deficit. You can make a plausible case that our fiscal policy budget deficit is what we owe to ourselves. You can make that case, and we will pay it back to ourselves. You can't make that case with a trade deficit. The trade deficit is what we owe others in the world, and we will repay that with a lower standard of living in this country inevitably.

The question is, When will we start to decide that this trade strategy is not working? We are dealing with other countries that are engaged in managed trade, and yet we are saying it doesn't matter what happens to us. It just doesn't matter.

We, by the way, spent a century doing what other countries wouldn't or couldn't--in most cases, couldn't--and we lifted up this country. We had unbelievable battles.

The other day, I described the battle on workers' rights. In the first book I wrote, I described James Fyler. James Fyler was shot 54 times. I said--and I shouldn't have--that he died of lead poisoning. He died because he was shot 54 times in 1917 in Ludlow, CO. He was shot because he believed that people who worked underground digging for coal ought to work in a safe workplace and ought to be paid a fair wage. And for that, he gave his life.

There are many things we have done over the past century that people have died for to lift up standards in America, and now they are routine--decent wages, fair labor standards, and safe workplaces. We did all that. Other countries, in many cases, have not. So now the question is, Is it important for us to lift up others around the world or to allow ourselves to be pushed down in terms of the standards we have created and fought for over a long, long time? To me, the answer is self-evident: Let's stand up for what this country has done.

I am all for helping others. I want to lift them up, create standards that hopefully can mirror ours. I am not interested at all in having a Huffy Bicycle management team say to the Huffy workers in Ohio: If you can't compete with China's wages and China's workers, you are out of work, and we don't care what you think.

Well, the workers of Ohio said: You know what, we just can't live on 50 cents an hour, and we can't work 7 days a week, 12 to 14 hours a day.

The law won't allow U.S. companies to hire kids, so the company said: That is tough luck. You need to understand that it is a new world out there. If you can't compete, you lose.

Well, this is a race to the bottom in terms of standards.

Some say: Well, we can innovate. We are the innovators, yes, that is true. I chair the Congressional-Executive Commission on China, and so I held a hearing last week on counterfeiting and piracy. Do you know what? We innovate, and then we see it stolen. Intellectual property is stolen and produced elsewhere. It is always produced elsewhere. We invented the television set--gone, produced elsewhere; computers-- largely produced elsewhere. I could go through a whole list.

The question is, What kind of a country do we want to have? For example, we have done a lot of free-trade agreements. In fact, let me do this. I want to just mention a free-trade agreement with South Korea, and I could go through all of the free-trade agreements and show how unbelievably ignorant our country has been with respect to its own economic self-interest. But let me give one example.

This chart shows the number of cars in South Korea. In South Korea, 98 percent of the cars driven on the streets and roads are made in South Korea. Now, you might think that is really interesting, that they have an appetite for buying those South Korean-made cars. It is not an appetite, it is what that country decides it wants. They do not want South Koreans to buy foreign cars, so 98 percent of the cars on their streets are South Korean cars.

So let's talk about our relationship with South Korea, and it is this: Last year, because we had a recession, we didn't sell as many South Korean cars in our country. At one point, it was close to 800,000 a year. Last year, the South Koreans put 467,000 cars on ships and shipped them to America to be sold here in our country. That is 467,000. Does anybody want to guess how many cars we could sell in Korea last year? Six thousand. So 467,000 to 6,000. Why? Because South Korea doesn't want us to sell American cars in South Korea, and they have dozens of clever devices to stop it.

Our country negotiates a trade agreement with South Korea--guess what, they don't even mention the bilateral automobile problem, not even a word.

Our country did a bilateral agreement with China, a country with which we had a $200 billion trade deficit. We had a huge deficit with China, biggest in the world. Here is what our country said. We said, on bilateral automobile trade we will do this: When you ship a Chinese car to the United States we will only impose a 2.5 percent tariff on your car, but if we ship an American car to be sold in China, you may impose a tariff of 25 percent. You may impose a tariff that is 10 times higher than we would impose in bilateral relationship with a country with which we had a $200 billion trade deficit. If that is not defined as ignorance, then I have missed the definition of ignorance.

Why wouldn't we step up for our economic interest? China, by the way, right now is ratcheting up a very aggressive automobile industry. You are going to see a lot of Chinese cars on the streets in this country in the years ahead.

But I rest my case. I mentioned automobiles. I could mention lots of other issues. I have written books about this. But the fact is, the issue before us today is not somebody coming here and saying, in the 1962 agreement on deferral--or another speaker talking about how if you let people go overseas there will be more jobs here at home.

Let me finally say, this issue of deferral is that in some cases these companies know they never have to pay taxes. The reason? Because they defer and defer on foreign profits. This amendment is only about if you have profits in a foreign subsidiary, from selling back into America, into this marketplace. Some of them can leave to go overseas knowing they will get the advantage of deferral and pay lower taxes than the company that stayed here, but they will get an even better deal. If they hang, we will have somebody in one of these Chambers thumbing their suspenders and shuffling around and harrumphing about maybe what we should do is say all of those people who have money overseas, let's let them bring it back here and pay a 5.25 percent tax rate. You say: Oh, they would never do that. Oh, they sure did. It is the rest of the people who do not get to pay the 5.25 interest. It is just the biggest interests who closed their American companies and moved their companies overseas and produced overseas after they got rid of their American workers. They were told in addition to getting a tax break for doing it, we want to give you something on top of that, the cherry on top of the sundae: If ever you do bring it back, you get to pay a tax rate that is one-half of the lowest tax rate that the lowest income American has to pay. What an unbelievable deal.

Let me say, as I started, if ever someone wishes to hear the strongest defense possible of sending American jobs to China, listen up because in the next few hours we will hear some more of it. We have already heard some.

They don't say it quite this way: We think it is nice that if China is not competitive, and their government decided they don't need to do certain things that we have done to increase standards and lift the American standards, we think it is OK if American jobs migrate elsewhere because we do not believe we have to long remain a world economic power in manufacturing to really be a world economic power.

They could not be more wrong. This is not a big step. This is the smallest of steps that you would take in the direction of saying: You know something, we are going to do something about a very serious problem. We are trying to work the faucet to put more jobs into this country, into this economy, at a tough time. We are also trying to shut the drain in circumstances where our Tax Code rewards those who now leave our country and move their jobs overseas.

If we cannot do that now, then, in my judgment, we can perhaps never do good public policy that lifts this country's economy, stands up for American businesses and American workers.

I yield the floor.

Mr. President, before I start to speak, it is my understanding I have 30 minutes for our side and I ask unanimous consent that Senator Dorgan be recognized immediately after my time.

Mr. President, I wish to tell my colleagues why I think the bill before us, S. 3816, is not a good approach. This bill is being sold as somehow having the potential to create American jobs, but it would likely have the exact opposite effect. It would lead to a net decrease in American jobs. For that reason, I encourage my colleagues to vote against this bill.

The bill has three key aspects: a payroll tax holiday for employers hiring U.S. workers to replace foreign workers; a denial of business deduction for any costs associated with moving operations offshore; and lastly, ending deferral for income of foreign subsidiaries for importing goods into the United States. This last provision, according to my colleagues on the other side of the aisle, is the principal issue of the three, and from that standpoint, in my opposition, I agree. It certainly is the most dangerous, so that is the one I wish to address in detail.

To understand this partial repeal of deferral, it is best to consider the topic of deferral more generally and then we can consider this particular idea in context.

The term ``deferral'' refers to how U.S. corporations pay U.S. income taxes on foreign earnings of its foreign subsidiaries, only when those earnings are repatriated to the United States. That is, the U.S. tax is deferred until the earnings are paid by means of dividend back to the U.S. parent corporation. Deferral is not a new policy.

Rather, it has been a feature of the tax law since 1918.

President Kennedy proposed outright repeal of deferral, but the then- Democratic Congress did not agree with him. Instead, the Congress and the President compromised. The compromise was this: For the passive kinds of income such as interest, dividends, royalties, and the like earned by a foreign subsidiary, the U.S. parent company would pay immediate U.S. tax whether or not the foreign subsidiary sent the earnings back to the parent. However, for active business income of the foreign subsidiary, there would be no U.S. tax until the foreign subsidiary sent such money to the parent corporation.

In short, the compromise during the Kennedy era was this: For passive income, deferral was repealed. For active income, deferral was still allowed. That compromise is embodied in subpart (f) of the Internal Revenue Code. That compromise was hammered out in 1962 and, with slight tweaks at the margin, that compromise has stayed in place for the last 48 years.

The compromise struck in the John F. Kennedy administration was the right one. Passive income is easy to move from one jurisdiction to another. If a U.S. corporation had a lot of interest income, it was very easy to instead have the foreign subsidiary earn such interest income in a low tax jurisdiction. So when interest income was earned by a foreign subsidiary of a U.S. parent corporation, there was a high likelihood that it was earned in the foreign jurisdiction out of motivation for the sole purpose of avoiding the U.S. tax. But with active business income, there are usually legitimate nontax business reasons for the income to be earned overseas. The reason a U.S. car company sells cars in Hong Kong is not out of some desire to avoid U.S. tax but, rather, out of a desire to sell cars to customers that live in Hong Kong.

So the underlying rationale to the subpart (f) compromise is this: If there is a high likelihood that a particular type of income is earned overseas out of a desire to avoid U.S. tax, then deferral will not be allowed. If there is not a significant likelihood of that, then deferral will still be allowed.

This is a very sensible rationale that was agreed to during President Kennedy's administration in the 1960s, because one of the most fundamental tax principles of all this is transactions should not be tax motivated but should be motivated by business or other nontax reasons. Tax motivated transactions should not be allowed the benefits of the favorable tax treatment sought. This fundamental tax principle prevents the tax laws from distorting decisionmaking and from distorting the economy. And the bill that is now before the Senate called the ``runaway plant'' bill cannot be justified by any similar rationale. They say they want to repeal deferral for foreign subsidiaries having income from importing goods back into the United States. But are they claiming that when a foreign subsidiary of a U.S. company imports back into the United States, there is a high likelihood that the production of the good would have been in the United States but for the motivation to avoid U.S. tax? They would have to be claiming that, if they wanted to be consistent with a half century of reasons why certain specific limitations on deferral have been justified.

But that simply can't be. There are numerous nontax reasons for having a foreign subsidiary of a U.S. parent company import goods into the United States, and I will mention a few. One reason could be that there is only small demand for the product back in the United States as compared to the overseas markets. For example, diesel engine cars are very popular in Europe, comprising 50 percent of all car sales. Here in the United States, diesel engine cars are well less than 10 percent of all car sales. So there is a very good reason for having diesel engine cars made in Europe and not here. Nonetheless, the bill before the Senate acts as if the reason these cars are not made here is because of our tax laws.

It may be that some items simply aren't found in appreciable quantities in the United States. For example, there is no diamond mining or chromium mining to speak of in the United States. A U.S. parent mining corporation with a foreign subsidiary engaged in diamond mining or chromium mining where such diamonds or chrome are imported into the United States may find deferral repealed. This could be true to the extent that the parent had any domestic restructuring at the same time it started up any foreign operations. But obviously the reason for the diamond and chrome mining outside the United States is not tax avoidance. The reason is those minerals are not found here within the United States. So I wish the sponsors of this bill to make clear whether minerals not found in the United States and imported into the United States would be included in this proposal.

I wish also to know whether this proposal would have applied to the Ford Motor Company's ownership of Volvo. Ford owned Volvo cars from 1999 to 2008. During that time, many Volvos were made in Sweden and imported into the United States for sale. If the acquisition had happened after the date of enactment, deferral would be denied in this situation, at least to the extent that Ford may have been shutting down any plants in the United States. However, no one can seriously claim that the reason the cars were made in Sweden rather than in the United States was from the desire to avoid U.S. taxes.

Keep in mind that another foreign car company--let's say Volkswagen-- would not be treated the same way Ford's Volvo car income would be treated. Volkswagen would be better off taxwise on competing auto sales into the United States market over Ford's Volvo, thanks to this bill, if it were to pass.

There are lots of nontax reasons for having foreign subsidiaries of U.S. companies import into the United States. But it seems that the bill before the Senate does not recognize that fact, or maybe it doesn't care. Perhaps the bill is motivated not by a desire to curb tax-motivated transactions but by something else. Perhaps the bill has an anti-free trade motivation. Perhaps the bill is attempting to make it more difficult for American companies to conduct business outside of our country. Whatever the case, the bill's sponsors should make the rationale clear--is it to curb tax avoidance or something else?

Perhaps the bill's sponsors will admit that the bill has nothing to do with curbing U.S. tax avoidance. Perhaps they will say that it instead has to do with preserving and creating U.S. jobs. But if that is their position, that cannot be right. In some limited circumstances, perhaps it would increase employment in the United States, although probably mostly for tax lawyers than anybody else. But whatever the case, the net effect would be to decrease employment in the United States.

Allow me to explain why the net effect of the bill would be to decrease U.S. employment.

First of all, if a U.S. parent company has a foreign subsidiary, then this creates managerial headquarters jobs in the United States that would otherwise not be here. The bill before us might encourage American companies to simply sell off their foreign subsidiaries. This would, in turn, mean laying off employees in management positions at the American headquarters.

A bigger way this bill would hurt employment in the United States would be to discourage assembly jobs in the United States. A U.S. parent company could have foreign subsidiaries engage in manufacturing parts that are shipped back to the U.S. parent. The U.S. parent, in turn, might assemble those parts here in the United States into a finished product. So, yes, maybe this bill would encourage the company to repatriate the parts production, but it is just as easy to imagine that this bill would encourage the company to expatriate the assembly jobs. So this bill is an unacceptable gamble with American jobs.

In the words of the late Senator Moynihan, who preceded me and Senator Baucus as chairman of the Senate Finance Committee--he spoke in opposition to this proposal 14 years ago, so this issue has been around this body for a period of time. He said this: ``Investment abroad that is not tax driven is good for the United States.''

Senator Baucus's concern that this would put the United States at a competitive disadvantage is exactly right. I don't have the exact quote of Senator Baucus, but it was in Congress Daily

recently. I am sorry I don't have that quote for my colleagues.

Senator Baucus very rightly states it. Phil Morrison, the Treasury Department's international tax counsel, criticized this proposal in congressional testimony 19 years ago. Mr. Morrison noted that the bill would be very hard to administer and that it departed from the traditional focus of the limited areas where deferral is denied.

As President Clinton's international tax counsel, Joe Guttentag, explained in 1995, during the Clinton administration:

Current U.S. tax policy generally strikes a reasonable

balance between deferral and current taxation in order to

ensure that our tax laws do not interfere with the ability of

our companies to be competitive with their foreign-based

counterparts.

This proposal has been made year after year for 20 years. I ask that my colleagues again reject it, in an effort to keep American companies globally competitive, to protect American jobs, and to preserve the underlying rationale of why deferral should only be denied in limited circumstances.

Finally, I wish to briefly comment on one other aspect of the bill-- the payroll tax holiday. This, too, has provisions that will be difficult to administer. For example, do foreign workers actually have to be fired to have their employer get the payroll tax holiday in the United States or do they need only to be reassigned job roles?

This provision only scores, according to the Joint Committee on Taxation, as costing $1 billion. Let's make sure we are clear on this point. The other side is seriously considering raising taxes on small businesses--the lead creator of jobs--by tens of billions of dollars by letting top individual tax rates go back up in the year 2011. But in an effort to support job creation, they offer this $1 billion payroll tax holiday.

According to the Joint Committee on Taxation, 50 percent of small business flowthrough income will be hit by a marginal tax hike of somewhere between 17 percent, on the low end, and 24 percent, on the high end. That tax increase is scheduled to hit these job-creating small businesses in just a little over 3 months. Finance Committee Republican tax staff calculates the effect of that tax hike to be 50 times the benefit provided by this bill. On our side, we don't see the logic of raising $50 in taxes and providing a complicated tax benefit of just $1.

Why aren't we dealing with the real problem for the folks responsible for creating 70 percent of American jobs? Of course, that is small business. We ought to take time out on the tax hit that is coming to small business this December. That is what we ought to be debating on the Senate floor.

But the Democratic leadership would rather spend valuable time talking about a bill that is artfully politically labeled a jobs bill. Given that the bill will lead to a net loss in American jobs, it seems there might be a truth-in-labeling claim against the Democratic leadership.

Let's have votes on real job creation incentives and get out of this gamesmanship. Let's do the people's business and forestall the big tax hike coming at American small business.

I also wish to take some time to address the issue of the estate tax, which is going to expire at the end of this year, at the very same time.

The majority party has had control of the Senate since January 3, 2007. That is 3 years, 8 months, and 24 days ago.

During the 3\1/2\ years of Democratic control, my colleagues have had an opportunity to address the death tax.

More pointedly, the Democratic leadership had a duty to provide certainty in the law as it relates to the estate tax.

My colleagues have had the duty to address the fact that this ill- conceived tax will snap back to pre-2001 law on January 1, 2011.

That is only a little over 3 months away. To be exact, it is 3 months and 5 days from now.

Unfortunately, as this chart shows, the estate tax is not the only piece of long overdue tax legislation.

Mr. President, the practice of ``good government'' is providing certainty in the law.

What I mean is, our country is made up of law-abiding citizens. As legislators, we were hired by these law-abiding citizens to make the law.

When we fail to provide certainty in the law, we fail to do our jobs.

But despite the fact that the Democratic leadership has not acted in over 3\1/2\ years we still have 3 months before the estate tax reverts back to a 55-percent tax rate and a $1 million exemption amount. So Congress still has time to act.

But I am skeptical that the Democratic leadership will indeed act.

Why? Because when my friends on the other side of the aisle were in the minority earlier in this decade, they blocked--let me repeat blocked--Republican efforts to make permanent an estate tax law that law-abiding citizens all across America could rely on.

The first effort was made in 2002. Specifically, on June 12, 2002, the Democratic leadership blocked legislation that would have permanently repealed the estate tax.

In 2004, Republicans in the House of Representatives approved a bill that would have permanently repealed the estate tax. But due to maneuvering by the Democratic leadership, a vote in the Senate was never allowed to occur.

Finally, in 2006, Republicans offered a compromise proposal on the estate tax. Under that compromise, the estate tax unified credit exemption would have gradually been increased to $5 million. The rate would have also been phased in to a 30-percent tax rate.

But again, the Democratic leadership filibustered the proposal to its death.

Mr. President, I believe on our side were practicing good government as it relates to the estate tax.

We were doing our jobs, and providing certainty in the law.

Yet the Democratic leadership stymied the practice of good government.

To this day, the Democratic leadership continues to stymie efforts to provide certainty in the law.

So why is the estate tax being held hostage?

Because a number of liberal leaning Senators would be satisfied if the estate tax reverted back to pre-2001 law--that is, a 55-percent tax rate and a $1 million unified credit exemption amount.

And why wouldn't they? There is $233 billion in extra revenue to spend.

Also, in this hyperpartisan environment that is plaguing the Senate, many policymakers are politicizing the estate tax issue.

What do I mean?

A number of Senators have taken to the Senate floor and characterized a reasonable estate tax rate as a ``give-away'' to the rich.

These Senators also argue that if the estate tax is ratcheted up to a 55-percent tax rate, we could use that revenue to reduce the deficit.

I respect every Senator's opinion, but I question whether these members are actually going to use this revenue to reduce the deficit.

Unfortunately, we have seen my friends' desire to spend, spend, spend. Increasing the deficit one dollar at a time. Not the other way around.

I will acknowledge that due to the budget rules that we must live by here in the Senate, making permanent an estate tax regime at a tax rate lower than a 55 percent will result in revenue loss to the government.

For example, my friend Congressman Pomeroy--a Democratic Congressman from North Dakota--sponsored a bill to make permanent the estate tax at a 45-percent tax rate and a $3.5 million unified credit exemption amount.

When you compare this proposal against what the estate tax would revert to in 2011--a 55 percent tax rate and $1 million exemption--you find that this change in the law would cost around $233 billion over 10 years.

Now, when you compare $233 billion to the $2.5 trillion health care reform bill that was recently signed into law, it is a drop in the bucket.

Also, compare this to our $13 trillion national debt.

But $233 billion is nothing to sneeze at.

While it could be used to reduce the deficit, my colleagues on the other side of the aisle have made every indication that they will simply spend this money.

My colleagues on the other side will gloss over their plans to spend, and instead attack any proposal that includes a tax rate lower than 55- percent as a ``give-away'' to the rich.

I have some news for my colleagues. A large number of Americans who

would be impacted by a 55-percent tax rate and a $1 million unified credit exemption are not ``rich.''

Let me repeat that. Those taxpayers that would be impacted by the estate tax if it reverted back to pre-2001 levels are not wealthy people.

I would like to take a moment and provide my colleagues with a real world example of an Iowan who would not consider herself ``rich.''

Recently, I received an email from Landi McFarland, who is a sixth generation Iowa farmer.

This is what Landi had to say about the impact of the estate tax and her ability to continue the family farm:

. . . As a 6th generation Iowa farmer whose family

homesteaded land in Union county 154 years ago, I have

concerns about current estate tax law. I am 26 years old and

have a dream of pursuing a future in agriculture, the same as

the generations that have come before me.

I currently raise Angus cattle with my parents and

grandparents, where we are tax-paying citizens and supporters

of our local economy and schools. My grandparents are both 84

years old, and own about 90 percent of the land, cattle, and

equipment on our farm. Their combined estates will total

approximately $7 million (the vast majority of this being

farm assets like land and cattle). Recent land values have

escalated the values of my grandparents' estate.

This rise in land values, however, does not increase the

value of what the land produces (Angus cattle sell for the

same price no matter if the land is valued at $1000 or $4000

per acre).

If my grandparents pass away AFTER 2010, and current estate

tax laws are not fixed, my family will not be able to afford

to pay the estate taxes without liquidating the herd and

selling a large portion of the farm ground. This will put an

end to our business that we love, and hence and end to our

support of local businesses through daily business

operations.

In the last four years, my family has worked on estate

planning to try to help ease the burden of estate tax. This

includes taking advantage of the $12,000 tax-free gifting

each grandparent can do per person per year.

However, this only amounts to a total gifting of $48,000

per year, a drop in the bucket for a combined $7 million

estate.

We are one of the oldest Angus operations in the country,

and is all we wish to do is continue our family business that

has been built with our own blood, sweat and tears over the

past years. If current estate tax laws are not fixed, there

will be thousands of small family businesses like ours put

out of business. We need a SENSIBLE and PERMANENT fix.

Thanks for your help,

--Landi

Mr. President, Landi's story is not unique to her. There are more farmers like her in Iowa and around the country.

I want to talk more broadly now about how failing to address the estate tax sunset will affect Iowa farmers.

Over the past few years, farm prices have been escalating dramatically. According to the U.S. Department of Agriculture, U.S. farm prices have nearly doubled in the last decade.

While recent economic troubles have led to home prices dropping, this has not been the case for farmland. In fact, as reported in a recent LA Times article, Wall Street investors have actually turned to purchasing farmland in hopes of finding refuge from an unstable stock market. This in turn has pushed farm prices higher. Based on a recent survey by the Federal Reserve Bank of Chicago, Iowa farm prices are up 8 percent in the past year alone.

Why is this discussion of escalating farm prices significant?

Because this means that should the estate tax law revert to 2001 law, many farmers are going to be surprised to discover they will be considered ``rich.''

Now, I am not talking about wealthy corporate farmers, I am talking about many family farmers, just like Landi, who are taking over a farm that has been passed down for generations.

Mr. President, let me walk my friends through some data.

In 2007, the U.S. Department of Agriculture reported that there were 92,800 farms in Iowa.

In 2007, the average Iowa farm was 331 acres.

According to a survey conducted by Iowa State University, in 2009 the average acre was worth $4,371.

Let's do some simple math. If we multiplied the average acreage of an Iowa farm--which was 331 acres as reported in 2007--by the average cost per acre in 2009--which was $4,371 in 2009--we find that the average Iowa farm is worth $1.4 million.

Mr. President, $1.4 million exceeds the $1 million unified credit exemption amount that would be in place on January 1, 2011, if Congress does not act.

Admittedly, the value of a farmer's farmland does not tell us conclusively whether or not the farmer will be subject to the estate tax. Farmers sometimes carry debt. That would reduce the value of the farm. But they also have assets, including equipment and bank accounts, that would increase the value of the estate.

Let me shift gears and provide my friends with some national statistics.

The Joint Committee on Taxation has told us out of 92,700 estates of people dying in 2011, 49,000 of these estates would be taxable under the 55-percent rate and $1 million exemption. If the law were changed to a 35-percent tax rate and $5 million exemption amount, for example, 3,900 estates would be taxable. That is a ratio of 13 to 1.

For every one estate that would be taxable under a 35-percent and $5 million estate tax regime, a whopping 13 estates would be taxable if the law reverted to a 55-percent rate and $1 million exemption.

Even if the rate were set at 45 percent and an exemption amount of $3.5 million, this ratio is 8 to 1. That is, for every one estate that would be taxed under the 45-percent rate, with the $3.5 million exemption, eight estates would be taxable under the 55-percent rate and $1 million exemption if we do not change the law.

I will conclude this way. Let's now look at farmers who would be affected. Based on the Joint Committee on Taxation in 2011, 3,200 farms would be taxed if the law included a $1 million exemption amount. Compare that to 300 farms that would be taxable if the exemption was $3.5 million.

That means the result of no action will be that 10 times as many family farms will be hit by the death tax. The time for action on the estate tax is now, not a month from now or 3 months from now. We owe it to the farmers and small business owners and their young heirs to give them certainty. We need to give to the tax lawyers and consultants who advise people on their estate planning some certainty.

I yield the floor.

Mr. President, let me thank the Senator from North Dakota. He is retiring. We are going to miss him. He has been a powerful voice in the Senate and no more powerful on any issue than on this one, talking about American jobs and how we are giving them away, literally giving them away.

Time and time again Senator Byron Dorgan has come to the floor to explain that our Tax Code rewards American companies that want to ship production overseas. Is that upside down? As Senator Dorgan has said on the floor, and I completely agree with him, we should reward American companies that keep good-paying jobs in America. That is what our Tax Code should reward. If they will pay a living wage and good benefits to a worker, and stay in the United States of America, we ought to give them every tax break we can give them--help them in every way we can. Instead, it is upside down. We create incentives for them to move jobs overseas.

We are a few weeks away from an election. I wish this election would be a simple referendum on the debate we are having on the floor of the Senate right now. The Senate Republican leader has come to the floor and said we should not be talking about this issue. He wants to talk about something else. Others, representing the largest corporations and businesses in America, say that the position being taken by the Democrats to stop the tax breaks for American companies that ship jobs overseas should be defeated. I wish to take that question to the American voters. You pick the State, you pick the city, you pick the neighborhood. I want to be there. I will take our position and I invite the Republican Senators and the Chamber of Commerce and whatever other groups happen to believe the other point of view for an active debate. Who in the world believes we should be rewarding corporations in our country for shipping jobs overseas?

We know what we are going through here. This recession has cost us millions of American jobs. Under President William Jefferson Clinton, we created 22 million new jobs in America. We had the growth of small business at a pace we had never seen. We had minority ownership, woman ownership of business at a pace we had never seen. We saw the growth of new home construction and new home ownership at a record pace. During the course of that 8-year period of time, we generated a surplus in the Federal Treasury--a surplus. We had not done that for a decade or more.

So came the time when President Clinton was leaving office, handing it over to President George W. Bush. This is what he gave him: a growing economy creating jobs, home ownership and business ownership. He said to President George W. Bush: Here is the state of our economy. We are reducing our national debt because we are generating a surplus, and the entire national debt of America, given from President Clinton to President Bush, was $5 trillion.

President Clinton said to President Bush: In addition to a strong economy that is growing, I also want to tell you I am leaving you a surplus in the Treasury--$120 billion in the next year, more than you need for the expenses of our government. President Clinton said: We have been taking the surplus, incidentally, putting it back into the Social Security trust fund, and that fund will now guarantee every payment with a cost-of-living adjustment through the year 2032. Not a bad gift from President Clinton to President Bush. That was when President George W. Bush took office.

What was the state of America 8 years later, when President Bush left office, when he said to President Obama: Now it is your turn. It was a much different picture. The national debt in America was no longer $5 trillion. Eight years later, after President Bush, it was $12 trillion. In 8 years, only 8 years, President Bush and the Republicans who supported him more than doubled the national debt. How do you do that? How can you take a debt accumulated from George Washington through President Clinton of $5 trillion and make it $12 trillion in 8 years? You had to work at it.

First, you had to engage in two wars we didn't pay for and then you did something--President Bush did something no President had ever done in the history of the United States. In the midst of a war he declared tax cuts. Remember that Republican theory: If we give tax cuts, this economy is going to mushroom and grow with jobs? It did not work. In fact, it failed miserably. It added to our national debt, more than doubled our national debt during the Bush Presidency, so that when President Bush left office he handed to President Obama a $12 trillion debt--not $5 trillion, $12 trillion. Instead of handing him a surplus in the budget of $120 billion for the next year, as he had been given when he came to office, he announced it would be a $1.2 trillion deficit in the next year. That is what President Obama inherited. And of course jobs were melting away--8 million jobs.

The month President Obama was sworn in as President and took his hand off the Bible, we lost 750,000 jobs, a leftover from the Bush economic policies.

Now come the Republicans. They have announced if they are given control of Congress in the next election, they have an idea of where we should go as a Nation. We should go back to the Bush economic policies. That is what the Republican plan for America is, go back to the Bush economic policies of declaring tax breaks for the wealthiest people in America. Senator McConnell stated proudly on the Sunday talk shows yesterday that he has had the courage to step up and put a bill before Congress of what he thinks we should do as a Nation when it comes to economic policy. He did. It was historic. It was so historic that Senator McConnell suggested a tax program that would nearly double the national debt--nearly double it--during the same period of time: $4 trillion of new debt for America. How does he do it? On the Republican side, by suggesting we continue to give tax breaks to those in the highest income categories in America.

I for one think that is totally irresponsible. In the midst of a recession, let us help working families, middle-income families struggling to pay their bills, struggling to deal with a home mortgage payment where the value of the home may be going down instead of up. Help those families. But for those who are making $1 million a year or more, why in the world would we add to the national debt to give them a $100,000 tax cut a year? Why? It only adds to the national debt.

The Republican theory is, if you give tax cuts to the wealthiest people in America, this economy is going to flourish. I say to the Senators on the other side, it is a theory we tested and it failed. It is the same theory we tested over the last 10 years of Bush tax cuts. If tax cuts for the wealthiest people in America is what we need for our economy, I have one basic question after 10 years: Where are the jobs? Where are the jobs to show for it?

Our approach I think is more reasonable, reasonable in that we would give tax breaks and tax cuts to those working- and middle-income families below $250,000 of income so they can get through this tough economy. I don't care if the economists tell us the

recession is over. As far as I am concerned, to use the vernacular: It ain't over until it's over, and it ain't over until we start creating jobs again.

That is what this debate on the floor of the Senate is about, not just tax policy but basically what is our policy when it comes to shipping jobs overseas.

I think American workers are the hardest working, most productive workers in the world. Put them up against anybody. Will they work for the lowest wages in the world? No. And they should not. We should have a standard of living in this country that we are proud of. But our workers have shown that when paid a living wage, they are productive workers and can compete with anyone.

Yet American companies have decided they want to ship their jobs overseas and see if they can make more money. As far as I am concerned, that is their choice. I think it is a wrong one. That is their choice. But the last thing in the world we ought to do is give them a tax incentive to ship those jobs overseas. We know what has happened to American families here over the last 10 years and longer in America. They have been falling a little bit behind each and every year, in terms of their earning power.

As the Wall Street Journal, which I do not quote very often, put it recently, it was the ``Lost Decade for Family Income.'' The median income in America fell almost 5 percent between 2000 and 2009.

Meanwhile, Merrill Lynch reported earlier this summer the number of financial millionaires in America rose by 16 percent. Solid middle- class manufacturing jobs have been disappearing across the country. The AFL-CIO estimates that from 2000 to 2007--that was the period of time during the Bush Presidency--the United States lost 5.5 million manufacturing jobs.

In the 8 years before, under President Clinton, we had created 22 million jobs. Under President Bush, we lost 5.5 million manufacturing jobs. By the end of 2009, the fewest number of Americans were working in manufacturing since before World War II. But it is not just the jobs on the shop floor that disappeared during the Bush administration.

Goldman Sachs estimates between 400,000 and 600,000 professional services and information sector jobs have moved overseas in the past few years. That was during a time when these businesses were raking in record profits and jobs were leaving America. Then, when the boom turned into a bust, those wizards of Wall Street, those captains of capitalism, those kings of commerce, those malefactors of great wealth experienced a temporary setback. Profits were down, stocks were down, and so compensation was down on Wall Street, for about 15 minutes.

Corporate profits are now surging, the stock market is roaring back, and endless bonuses are raining down on the chosen few, just like the good old days on Wall Street. But what about the rest of hard-working families across America? What about the families who never have made a million bucks? That is the vast majority of them. What about the families who earned the median wage in this country, about $50,000 a year? Those jobs are not coming back fast enough.

The Recovery Act that we passed last year, with the support of three Republican Senators--only three who would join us in this effort--has at least slowed down the recession and the loss of jobs. It has not produced the turnaround we all want to see. It will take some time. But at least it stopped the recession from becoming even worse.

This recession would not be over yet by anyone's measure had President Obama taken the advice from the other side of the aisle. They believed we should do nothing--nothing--in the midst of a recession. I have heard Senate Republicans come to the floor and criticize President Obama for loaning money to General Motors and Chrysler. I will tell you, in my home State of Illinois, those automobile manufacturing jobs, at General Motors and Chrysler, are good-paying jobs. We have lost a lot of them. But the good news is, those companies are back. They are profitable. They are selling fewer cars and trucks now, but they are selling and they are competitive.

That would never have happened had the Republicans had their way and stopped the President from giving loans necessary to these automobile manufacturers. We would have seen maybe one company, Ford, that might have survived. The other two probably would not be here today in any form, and all the jobs, the tens of thousands of jobs they provide in America, would have been lost.

The Recovery Act saved another 2.7 million Americans from the unemployment roles, according to economists Alan Blinder and Mark Zandi. In case you think: Well, Durbin, that must be your favorite Democratic economist, Mark Zandi happened to be John McCain's economist when John McCain ran for President, and he credits the Recovery Act with saving 2.7 million jobs.

But even with all these efforts, there is still a lot to do. It is not enough to help the private sector create more jobs. We need for them to be created right here in America. There is one line I can use anywhere in the State of Illinois, and I will bet across this Nation, which I think typifies what most people think about when they think about our economy.

I will bet you I could use this line in the State of Delaware. The line is this: I would like to go into the store tomorrow and find more products stamped ``made in the USA.'' People start applauding. They are sick and tired of all the imports coming in and all the jobs going away.

I know global competition is a fact of life. America could never be a wealthy nation if we just did one another's laundry. We need to produce goods and services that are competitive on a global basis, and we can do it. We have done it in the past and we can do it again. American workers can compete with the best in the world.

But our laws do not give many of our workers a fighting chance. Why should companies be rewarded for shipping good American jobs overseas? China, Germany and Japan and our other competitors do everything they can to generate more work in their home countries so they can sell products from China and Germany and Japan all around the world.

Meanwhile, our conglomerates and many corporations and their friends in Congress defend offshoring tax loopholes that other countries would never allow to stand. That is why I introduced the bill that is going to be voted on tomorrow, with the help of my colleagues and friends, Senator Harry Reid, the majority leader; Senator Byron Dorgan, who has been our leader for years on this issue; Senator Chuck Schumer of New York, and many others.

It is a bill that has three provisions in it. I think they make sense. First, we will make two changes to discourage U.S. companies from giving out pink slips to Americans while they open the doors at their new factories overseas.

We will say to firms: If you want to shut down operations in the United States and move somewhere else--I hope you do not make that decision, but if you make it, we are not going to give you a tax break to make it easier.

We will also say to the firms, if you want to sell your products in this country that you made overseas, we are not going to let you start making those goods overseas, ship them back to this country, and avoid paying your taxes on your profits, something called deferral.

Second, we will make it more attractive for companies to bring good jobs back home. This is a provision from Senator Schumer of New York, which says to firms: If you bring jobs back from another country, you do not have to pay your share of the payroll taxes on those U.S. workers for 3 years. It is an incentive to bring these jobs back home.

There is nothing radical in this proposal. You would think it would pass by a voice vote. Who in the world would object to ending tax loopholes to send jobs overseas? Who would object to creating tax incentives for bringing jobs from overseas back home?

But that is what this debate is all about. The defenders of these tax loopholes have wasted no time in launching an aggressive lobbying campaign against the bill: The Chamber of Commerce, the National Association of Manufacturers have written in opposition to the bill, and the Republican

leader has already spoken on the floor against even debating this bill. He does not want us to bring it up.

The message they send is clear: Corporate profits are more important than American jobs. I could not disagree more. I have watched too many hard-working, middle-class families lose their livelihoods as companies fire American workers and then use the Tax Code to make shifting jobs overseas more profitable.

In August, I was in Rock Falls and Sterling, IL. A woman named Julie came. She had worked at the local national manufacturing company there for 34 years. She was a grandmother, raised her family, and was trying to help with her grandkids. She had just been notified that company was moving overseas.

I said to her: As painful as it is for you to get that pink slip after 34 years of service to that company, I am sorry to tell you that our Tax Code made it easier for that company to leave town, made it easier for them to do away with your job.

I ran into other workers around Illinois as well. To add insult to injury, after a lifetime of working for these businesses, some of these businesses actually bring in the workers from China and Mexico and ask the American workers, in their last week or two of employment, to train the foreign workers to do their jobs. Can you imagine how hard that must be--to realize that tomorrow you are out of work, and the person sitting across the table, whom you are training, is going to have your job?

Then, how about this? How about the fact that the cost of bringing that foreign worker over here to be trained is now tax deductible under our Tax Code? What is wrong with this picture? A good example of a company moving good American jobs overseas happened in Hennepin, IL. The local steel mill there was built in 1966. I remember it. I was a college student out here at the time, and we were so exited. It was Jones Laughlin, if I am not mistaken, when it first started. It changed ownership over the years. It was a big employer in the region around Hennepin.

They employed 600 people at their peak in a steel mill. Imagine that. As of last year, they still had 300 people on the payroll. Arcelor- Mittal, the huge steel conglomerate, bought the plant in 2005. Many in the community said: This is a break, a godsend. That huge company is going to invest in this plant and we are going to keep our jobs.

It did not happen. Arcelor-Mittal decided last year that the profitable plant in Hennepin--they were making money--the profitable plant, was no longer worth keeping open. Just like that, 300 solid, middle-class jobs disappeared.

I received a lot of letters from members of the community. A 10-year- old girl wrote to me:

My dad . . . got laid off by Lakshmi Mittal, at Mittal

Steel. You see, instead of selling the plant, Lakshmi decided

to ship all of the parts over the oceans . . .--

This 10-year-old wrote to me and said--

I think the plant should not be closed because if he

shipped the parts all over, then hundreds of peoples' jobs

will be lost. Please Help Us!

The heartbreaking news for that young girl is that our Tax Code rewarded the plant for shipping the equipment overseas. This 10-year- old girl, wise beyond her years, heartbroken that her dad had lost his job, may not understand the global implications of plant closings, but she sure knows what it means to her family.

Here is what a 30-year veteran of that plant wrote:

The plant was shut down in the spring even though it made a

profit. . . . Being the father of two college freshman, I

have to wonder what the future will hold for my children . .

. American industry, the backbone of our country, cannot

exist in this environment.

Well, I agree. That is why I am on the floor. That is why this bill is on the floor. We have to do something about it. Here is another one. This is a company that once operated in my home State of Illinois, Honeywell International. They closed their plants in Freeport, Rock Island, Spring Valley, and Springfield and then sent the jobs to India, China, and Mexico.

The Department of Labor certified these workers lost their jobs because the jobs were actually sent overseas. In my hometown of Springfield, the plant closing cost us 120 jobs in the capital city. This was a plant that had been in production since 1938, long before I was born, when it produced the world's first electric clock for automobiles. The plant also supplied electrical products to support our troops during World war II. In an instant, this piece of American history vanished to Juarez, Mexico.

I received a letter from a victim of this particular example of offshoring good American jobs. Here is what he wrote to me:

. . . stop rewarding Honeywell and other corporations that

ship jobs out of the country . . . They don't deserve tax

money for making the US unemployment rate go up further.

Well, that is exactly what this bill before us wants to stop. Let me show you one other illustration. U.S. multinationals are increasing hiring abroad and decreasing hiring at home. In total, between 1999, at this end of the chart, and 2008, multinational corporations in the United States added 2.4 million jobs overseas, a 30-percent increase.

Well, there is nothing wrong with companies growing. But look what happened here at home. Here is the problem. During the same period, these American companies cut 1.9 million jobs in America, an 8-percent decrease. It is obvious. The jobs are being shipped overseas and killed at home. This notion by some companies that if you let us produce overseas it will help our jobs back home, it is not happening. Exactly the opposite is happening--jobs overseas, loss of jobs in the United States.

Well, enough is enough. We need to stop rewarding companies, through our Tax Code, for killing American jobs, and we need to create incentives to bring those jobs back home. This bill is very straightforward. It is a clear choice. Senators can decide. Do they want to stand with American workers? Do they want to stand with those corporate interests that want to ship jobs overseas? Do they believe our Tax Code should reward good American companies that pay good wages and good benefits to American workers and stay here or do they want to create an incentive to ship those jobs overseas?

That is what this bill is all about. I hope there will be at least one Republican Senator who will join us in this effort. It would be a breakthrough. I hope it is more than one. But I hope they are hearing the same thing back home. I would just ask those who oppose it to go to your home State, pick the community, pick the town, and invite me to come and debate you, if you are on the other side of the this issue.

You pick it. I want to be in on that debate.

I believe the bottom line is this: The American Tax Code should be designed to help American companies create good-paying jobs right here in the United States. Our focus ought to be to make sure when people walk in stores across America, they can flip that product over and see made in the USA again. With this vote, Senators will be given a choice where they want the next round of job creation to be. Do they want it in the United States or in China? Middle-class families in this country have been struggling for a long time. They are upset. They want more jobs. They want a Congress that will stand up and fight for them. With this vote, they will find out who is going to be on their side.

I yield the floor.

I announce that the Senator from Indiana (Mr. Bayh), the Senator from Delaware (Mr. Carper), the Senator from North Dakota (Mr. Conrad), the Senator from Connecticut (Mr. Dodd), the Senator from North Dakota (Mr. Dorgan), the Senator from North Carolina (Mrs. Hagan), the Senator from Massachusetts (Mr. Kerry), the Senator from Arkansas (Mrs. Lincoln), the Senator from Maryland (Ms. Mikulski), the Senator from Washington (Mrs. Murray), the Senator from Florida (Mr. Nelson), and the Senator from New Hampshire (Mrs. Shaheen) are necessarily absent.

Mr. President, reserving the right to object, I say to my colleague from Missouri, clean energy jobs are the jobs of the future. As we create more clean energy jobs, we will find a way to compete with China and other nations that are trying to take over this whole area. They know the whole world is moving toward more sensitivity to emissions and the environmental damage they cause. As a result of that, I object.

Mr. President, reserving the right to object.

The distinguished Senator from California said that if we choose to proceed, we will have a vote tomorrow at 11:30 on this bill. I think her actions are premature, so I do object.

Mr. President, it is my understanding--and I am asking the Presiding Officer--that under rule VI, No. 4, at 7 we are going to be presented with a live quorum call. Is that not correct? Is that the schedule for the Senate? I am asking to determine how much time I have between now and 7 o'clock.

It says, for those who take the time to be familiar with proceedings of this distinguished body, that:

Whenever upon such roll call it shall be ascertained that a

quorum is not present, the majority of the Senators present

may direct the Sergeant at Arms to request, and, when

necessary, to compel the attendance of the absent Senators,

which order shall be determined without debate; and pending

its execution, and until a quorum shall be present, no debate

nor motion, except to adjourn or to recess pursuant to a

previous order entered by unanimous consent, shall be in

order.

So I thank the President for making that very clear. Hopefully, that sheds some light on what we are doing on a Monday evening, which some Senators would simply call a bed check. We are scheduled to vote at 11:30 tomorrow on whether to proceed with a debate that has been taking place here on the Senate floor. I think that obviously would be the time for the debate. But I think I have about 20, 25 minutes here to make my comments. I shall proceed.

We are really talking about a tax bill. I know the authors of the bill, the people who have spoken before, obviously think it is a major issue. It is a very important issue, but what we are really talking about is bringing to the floor a debate that raises taxes on U.S. companies and makes them less competitive globally. I don't think that is a very good idea, a tax increase on these companies, given the difficult times we have and given the difficult times we have in our export markets, to make our U.S. companies that deal

overseas less competitive. But I don't think we should be surprised, given that the majority has not yet acted to keep taxes from increasing for families and small businesses--everybody--come next January. That is the real bill we should be considering. That is the bill we certainly should be considering before we adjourn until the lameduck session of Congress which I assume is still being planned.

It is most unfortunate that we are going to a lameduck session of Congress. I had a constituent say: Lameduck; that is going to be a Daffy Duck. I think that is a little harsh given the intent of both Houses of Congress, but what we really ought to be talking about is the tax increase that is going to take place in less than 90 days unless Congress acts. I know there was a great discussion within the majority caucus as to whether we should move on that, whether we should take a vote on that, both in the House and the Senate. That is really why I come to the floor.

This is a looming tax increase that will take effect next year. It is going to hit every American who pays income taxes. There has already been a great deal of debate about who will pay these higher taxes. The President and many of his supporters in Congress say they will not raise taxes on those families earning under $250,000 or individuals earning under $200,000. That was a campaign pledge of the President.

The American dream--or at least it was when I was growing up, and I had hoped it would be for my kids and grandkids meant one could climb the ladder of success, the ladder of economic success as high and far as they wanted, and nothing government-made or manmade would stand in their way, except they had to do the climbing. Now we find that when you hit $250,000, if you are filing a joint tax return or if you are earning $200,000 individually--you are rich. They describe people who earn over $200,000, $250,000, and regardless of their obligations, regardless of whether it is a small business, and regardless of what those circumstances may be, bingo, they are going to have to pay that higher tax rate. So we have somebody in Washington describing in manifest detail who is rich and who is not in the United States. I find that to be the antithesis of the American dream, at least as I understood it. I think now there is a hue and cry of, let's level everybody with everybody else. I do not think that is where we want to be in terms of our national intent.

The health care reform law has already broken the pledge in regard to that of the President, the $250,000 and the $200,000, because that imposes a slew of new taxes on small businesses and health care consumers, including those earning well under these income levels. So we should be weary of any pledge by the President or the majority to protect taxpayers from the harmful tax increases that are set to take effect in January. With less than 90 days--about 3 months--left in the year, this administration and the majority in Congress have done nothing except talk about it in their caucuses and to find out where the votes were and to find out how it was playing before the election. That is the truth. Nothing to prevent this massive tax hike on American families and small businesses.

Now it is September. I don't think most families are really thinking about their income taxes right now. They should, but they are not. They put the frustration of April 15 behind them. Tax freedom day is somewhere down the road in April or May. That is when you are paying all the taxes, and that is where all of your income goes to government and you finally have tax freedom day. That becomes something that comes to their mind right off the bat in the spring. But some families were fortunate enough to able to take a vacation as of this summer or late summer. However, many were working instead and very happy to do so, given the situation in regard to jobs. They are just happy to have a job to provide for their families. But none of them are probably thinking about what is going to happen on January 1. They will be handing more of their paycheck over to Uncle Sam. That is exactly what is going to happen if the administration and the majority in Congress do not act and do not act soon. We should act before a lameduck Congress.

Some have dubbed this tax relief package the ``Bush tax cuts,'' saying they only benefit the wealthy. Let me point out, that is simply not correct. I don't see how continuing existing tax policy that has been in effect for 10 years constitutes a tax cut. It is preventing a tax increase. If we want to get partisan about it, it is not about a Bush tax cut, it is about a President Obama tax increase that we are trying to prevent.

Let's take a minute and look at how this tax relief passed on a bipartisan basis and supported by several Senators in the majority who are still serving in this body let's take a look at it and how it has benefited families and small businesses across all income levels.

The bipartisan tax relief doubled the child tax credit from $500 to $1,000. This credit amount will be cut in half next year. The bill lowered capital gains and dividend tax rates to benefit families who invest long term and save for their future.

These taxes will go up dramatically next year. If you read any financial publication, are aware of any think tank that deals with taxes and finances and the economic outlook for this country, you find out that is going to have a dramatic effect--a very unfortunate law of unintended effects. Those taxes will go up, as I said, very dramatically next year by as much as 33 percent for capital gains and 164 percent for dividends.

This bill lowered income tax rates for every taxpayer who pays taxes--I am talking about the 10-year existing tax relief--whether you are a lower income taxpayer, a middle-income taxpayer or an upper income taxpayer. So unless we act soon--and that is in the hands of the majority--taxes will go up for every taxpayer as of next year, and that is the bill we should be considering now, not a bill that is going to cause quite a bit of harm to every company that does business overseas.

Here are just a few examples of what this will mean to working families if the majority allows these provisions to expire: A single parent with two children who earns $30,000 will see a tax increase of $1,100 a year. A family of four who earns $50,000 will see a tax increase, on an average, of $2,100 per year.

Clearly, these families are earning well below the $250,000 threshold the President promised not to raise taxes on, these folks. Yet in just 3 months, that is exactly what is going to happen. So you might want to think about it, America, as well as what is going to happen down the road a little bit. You have Halloween. That is about when the lameduck Congress comes back. You have Halloween and then you have Thanksgiving, Christmas--not the time you are thinking about a big tax increase that is going to whack you right in the forehead, but that is exactly what is going to happen.

The President's supporters in the Congress have yet to introduce a bill to prevent this tax hike. It is that simple. We certainly do not see any language on a bill to prevent these massive tax hikes that go into effect on January 1.

However, the President and his supporters in the Congress say they want to extend tax relief for everyone but those taxpayers they say are wealthy. Who are these folks? Who are these wealthy taxpayers? Well, under the President's proposal, and presumably the proposal supported by most in the majority, it is any individual who earns more than $200,000 in income per year or any family who earns more than $250,000.

I know there are some who earn much less than these amounts who think that sounds fine. Well, maybe to some it does. It is always:

Don't tax me. I won't tax thee. Tax the guy behind the

tree.

There is a little bit of envy here that goes on among all of us, I think, in our hearts when we look at people who earn huge salaries. Somehow, some way that we have now defined those people at $250,000 and $200,000.

I think that is unfortunate because we all benefit--we all benefit-- when incomes increase and people become successful. That is how the economy gets turned around. That is how we have people who are entrepreneurs and they invest and they provide more jobs. When incomes go up and people have more of their own money to spend and invest as they see fit, more businesses are started, expanded, more jobs are created and--guess what--more income comes into the government.

There is a lot of money sitting on the sidelines waiting. If you do not take more money out of people's pockets, you will see, I think, a burst of economic activity that results directly or indirectly to the Federal Government.

I was just reading in the Wall Street Journal an article about that. I intended to bring it over, but I failed to do so. You can just take it from me. When incomes go up and people have more of their own money to spend and invest as they see fit, more businesses are started and expanded and more jobs are created.

To see the harm in raising the top two tax rates, to target those earning over the $200,000/$250,000 threshold, we only have to look at what allowing this tax relief to expire means for small businesses to see the danger in allowing this tax increase to take place.

Because many small business owners pay their taxes on their individual income taxes, if the top two income tax rates are increased as the President proposes, small business owners in these tax brackets will pay those higher income tax rates.

The administration says these higher taxes will affect only 3 percent of small businesses, so we should not be concerned about raising these taxes. If we have heard 3 percent, we have heard that enough over and over and over again: only 3 percent. But those numbers downplay the impact of raising taxes on small businesses.

Let's look at what such a tax hike would mean for America's small businesses. Keep in mind, these are the same businesses that, by the President's own admission, are the Nation's job creators. They create 70 percent of the jobs in this country--70 percent. Yet under the President's proposal, tax rates would increase by at least 17 percent on small businesses.

According to the nonpartisan Joint Committee on Taxation, that means three-quarters of a million businesses--750,000 small businesses--will pay higher taxes.

Allowing the top rates to expire subjects nearly $500 billion-- another $\1/2\ trillion--in small business income to higher taxes. This is a very conservative number. Further, small businesses with between 20 and 299 workers employ about 25 percent of the U.S. workforce. So we are taking action to raise taxes on 25 percent of the U.S. workforce.

These small businesses will have to recover the cost of higher taxes somewhere. It may come from lower wages. Will they lay off workers? Will they reduce benefits or raise the cost of their products? That is dicey, given this kind of environment in regard to consumers and what they are able to do. None are good options.

With unemployment holding steady at over 9 percent, common sense would indicate, that raising taxes on those businesses that are creating jobs is a very bad idea. As small businesses face a significant tax hike come January, workers will inevitably pay the price. By one estimate, an increase in the top tax rate would cost jobs by reducing small business hiring by as much as 18 percent. That is 18 percent we do not need.

Raising taxes on small businesses will also likely slow the already weak economic recovery. We see a lot of headlines saying: The recession is over. But let's talk about the economic recovery we all wish--both Democrats and Republicans, all of us wish--would take place. The National Federation of Independent Businesses, the NFIB, has said the second most cited concern of small businesses is taxes. As a result, small businesses are sitting on the sidelines until they know whether they are going to be facing higher taxes come January 1. That ought to be obvious. Small businesses need certainty about how much they are going to owe in Federal taxes.

Yet, once again, this administration's rhetoric on small business does not match the reality of its proposals. The administration says it wants to help small businesses, and it has touted the recently passed small business bill as proof of that. Yet this same administration pushes through a health care bill that Americans do not want that imposes higher taxes on small businesses. Now it wants to raise taxes even further on these same small businesses by increasing their Federal income taxes.

It seems a bit ironic to watch the majority touting the small business bill that the President is, in fact, signing into law today. They said small businesses needed this tax relief so they could grow, expand, and create jobs. During debate on this bill, they criticized Republicans for holding up important tax relief for these businesses.

So it is curious now, that many in the majority who supported this relatively modest tax relief and who repeatedly stressed the importance of tax relief to small businesses are the same ones who oppose extending income tax relief that benefits small businesses.

Let me make it as clear as I can. The same members of the majority who supported the small business bill and who insisted we must provide them tax relief are the very ones who oppose extending income tax relief that will benefit small businesses. That is a contradiction. That is tough to explain, it seems to me. I am pretty sure a lot of people are simply not going to understand that, especially in the next month or in November.

If it is so important to provide tax relief to small businesses in this bill, why isn't it equally important to extend other small business tax relief? We will not get our economy back on track until small business begins hiring, period, and they are not going to hire if they have to pay more taxes in January on top of what they have already been burdened with in the health care bill. Yet that is precisely what the administration's proposal will do.

Why would our colleagues on the other side of the aisle want to allow income taxes to go up at the end of this year for hundreds of thousands of small businesses? Why are we having a vote tomorrow on proceeding to another bill that could be very hurtful in regard to our competitors overseas. How does that aid the economy? How do higher taxes help put unemployed Americans back to work? How does a higher tax burden allow a small business to grow and expand? How do higher taxes on small businesses aid the economy?

The answer is pretty straightforward. Small businesses are hurt by higher taxes. They cannot hire new workers and they cannot buy equipment or a new building or make other investments that can help their business grow.

This approach by President Obama and the majority is absolutely the wrong approach to take if we want to ensure job creation and grow our economy. We need to continue the tax relief passed in 2001, by a big bipartisan majority, that has lowered income tax rates for all taxpayers and encouraged families to save and businesses to invest. Continuing this tax relief, rather than more spending, will help get our economy back on track.

What I usually hear from my friends--and I want to comment on it--on the other side of the aisle, especially when you talk about tax cuts-- you say: tax cuts, and then, bingo, for the rich, for the wealthy. We are beating a dead ``class warfare'' horse, it seems to me. But that simply is not an accurate picture of the massive tax increases that are facing American families next year.

The majority has been in power for nearly 4 years. They have had plenty of time to address this issue, plus estate tax reform, plus the AMT, plus all the other things we say we are going to do as members of the Finance Committee. I am privileged to serve on that committee. Yet, similar to a child who has not done his homework, they have put this off until the last minute, creating enormous uncertainty for families and small businesses.

They try to justify these massive tax hikes by saying this bipartisan tax relief contributed to the Nation's current fiscal problems.

The popular refrain Americans have heard from the President and his supporters in the Congress is that they inherited the current deficit, and that it is a result of the tax relief we passed, again, on a bipartisan vote, in 2001.

But the numbers do not add up. Did you know the Federal deficit decreased as the 2001-2003 tax relief took effect? The deficit stood at $412 billion in 2004 but dropped to $161 billion in 2007. That is the year the majority took control of the Congress. I was here. I know. I could list Senators on both sides of the aisle who made tremendous progress in regard to reducing that deficit from $412 billion in 2004 down to $161 billion in 2007--tough to do. We had Katrina,

had all sorts of problems, Iraq, two major wars, but we did that.

Three short years later, the deficit has more than quadrupled and this year is estimated to come in at approximately $1.3 trillion--not billion, trillion. ``Trillion'' has become the watch word of the day; not billion, trillion.

That is a direct result of the massive spending agenda the President and his supporters in Congress have undertaken, including a failed stimulus bill, bailouts of failed companies, and a health care bill that a majority of Americans do not want--growing by the day when they find out the details of the bill.

What is particularly ironic about all of this is that the President has seen no reason to offset the billions in Federal Government spending that he and his supporters have put in place--billions in new Federal spending on a failed economic stimulus program and billions to failed companies, billions that have contributed to the largest deficit in this country's history.

Further, the President has already said he doesn't plan to pay for the cost of extending about 74 percent of the expiring tax relief--that is about $2 trillion--that benefits lower and middle-income taxpayers. I am for that. Everybody here is for that. And that number is actually expected to go higher. Yet the remaining 26 percent of the tax relief-- that tax relief that in part benefits small businesses--the President doesn't want to extend. Why not? Here is the kicker. He says we can't afford it.

We can't afford it? This, from the same President whose spending spree has driven up the deficit to unprecedented levels? The same President who spent well over $700 billion on last year's failed stimulus program? The same President who handed out billions in Federal tax dollars to failed businesses? That is right. The President says we can't afford to extend income tax relief for small businesses to help them create jobs, grow, and continue to employ more than 20 million Americans who work for small businesses.

Well, we have a saying for this in Dodge City. It sort of resembles a lot of what we have in our Dodge City feedlots, but I am not going to go into that.

A recent observation by Kevin Hassett and Alan Viard with the American Enterprise Institute writing in the Wall Street Journal sums this up very nicely:

The administration is right to view the deficit as a

serious issue, but this sudden commitment to fiscal

responsibility is bizarrely inconsistent. The administration

professes deep concern about the $700 billion revenue loss

from extending the tax cuts at the top, but apparently views

the revenue loss of nearly $2 trillion from extending the tax

cuts for the middle class as too inconsequential to mention.

I repeat, again, we are all for that.

They continue:

Nor has the administration's concern about the deficit

driven it to reduce federal spending.

That is the key. It seems to me it is disingenuous for this administration to say we cannot afford to provide tax relief that helps small business and gets our economy moving in the right direction when the same administration has pursued failed policies of unrestrained spending that do little but grow the deficit.

We can and should provide tax relief to all taxpayers, and that should be the business of the day, not a live quorum call or a bed check and then go out this week and then come back in a lameduck Congress to debate that. Then it would be, what, 40 days before the ax would fall in regard to every American paying more taxes.

I ask unanimous consent for 30 seconds.

Thank you. We can and should provide tax relief to all taxpayers--tax relief that helps families keep more of their hard- earned dollars and tax relief that provides certainty to small businesses so they can make investments and create jobs without the fear that their taxes will go up. We need to extend this tax relief that keeps money in the hands of families and small businesses rather than putting it in the pocket of Uncle Sam.

I yield back the remainder of the time that the distinguished Presiding Officer granted me.

Mr. President, I am a little under the weather, so if my voice fades in and out, I will do my best to muscle through it. It has been a tough three against one in a battle like I will have to do for the next half hour.

I enjoyed the signs. I didn't bring one. Maybe I can borrow that sign because I agree, it should be made in America. How are we going to do that when we make America uncompetitive, when we don't give America the tools and the resources businesses need to be competitive worldwide? This is not a U.S. economy solely where we just sell to Americans; we have to sell and compete worldwide.

I know I have said this before, but I am the new guy. I am the second newest guy here now. What I have observed is that there is plenty of blame to go around. We talk about President Clinton and everything wonderful he did. Yes, he did some great things, but he did it with a Republican Congress and their help as well. It was a bipartisan effort to solve problems. Unless I am mistaken, the majority party has been in the majority for the last 5 years, with the Presidency for almost 2 years. You don't hear about the problems we have had since that happened. I say there is plenty of blame to go around. Quite frankly, the rhetoric is white-hot. We should try to solve problems instead of pointing fingers at each other and saying that back then this happened or back then that happened and we should do it this way or that way. We have to focus on today, what is happening today.

Right now, we are not competitive. To think this effort to so-called close a corporate loophole is going to help--have you actually gone out to businesses and asked: Will this help you? Are you in favor of this?

It doesn't work unless we also lower the corporate tax rates to make them competitive worldwide; otherwise, if we keep the corporate tax rate the second highest in the world, we are just

going to chase huge amounts of jobs overseas. We are going to exacerbate the problem we are experiencing now.

I often wonder, why does it take the Chinese less than a year to build, say, a 500,000-square-foot building? I have experiences with shopping malls, just to put on an addition, and it takes years, the siting, the permitting, the regulation at the local level, the harassment businesses get. If you are a business or a corporation, the mentality is that you are evil, that you are not good. We should be embracing businesses for employing. What is a corporation? Last I heard, it is a group of individuals forming together to take advantage of protections and opportunities to expand and be competitive globally. Since when did being a corporation become a bad name in Washington? Am I missing something? How do you think we are going to get out of this economic mess? It is not going to be by hammering corporations and small mom-and-pop businesses and raising taxes in the middle of a 2- year recession. Are you kidding me? It makes no sense. High taxation, overregulation, reregulation, siting, permitting--take the municipal laws and regulations, couple them with State laws and regulations and Federal laws and regulations, then throw in the EPA just for the heck of it, or any other agency--the National Labor Relations Board; just pick an agency--then throw in the taxation levels at the city and town levels, State levels, the Federal level. Why do you get out of bed to turn on the lights? Are you kidding me? What is the incentive for people to actually keep jobs in the United States of America?

In Massachusetts, the NFIB and AIM, Associate Industries of Massachusetts, have deemed Massachusetts the worst business climate in decades. That feeling is around the country. When I got elected, they sent a very powerful message. They were tired of business as usual in Washington, the disconnect when we deal with taxes and regulation and debt and spending. You don't seem to have learned the lesson.

We are going to do something right now where we are going to offer a little piece of candy by offering a potential tax break for closing a corporate loophole. The majority party is apparently protecting Main Street. Isn't that nice. Apparently, I, the new guy here, am protecting Wall Street, apparently, and big corporations. I didn't know that. I thought I was fighting for the people of Massachusetts to get this body working together to solve real problems.

Enough of the rhetoric. Enough of the blame. Enough of the posturing for the upcoming November elections. How about just solving problems? How about getting our country moving again and get us competing globally?

We just can't wave a magic wand and all of a sudden the tax policy in the United States is competitive with the world. If we do this, if we move this forward, we will be in deep, deep trouble, especially if we don't mirror it with a corporate tax rate reduction to counter the moves that will absolutely happen almost overnight.

If you think that by doing this, jobs are going to come flooding back--if you fire a foreign worker and hire a U.S. worker, you get a tax credit. Oh, that will really work. How about if you do this, you get a payroll tax reduction. Correct me if I am wrong, I made that offer about 3 months ago, a payroll tax reduction paid for by unallocated stimulus dollars. I got four votes.

Want to talk about jolting the economy and giving money to people? Want to talk about helping corporations and businesses stay competitive? How about making the R&D tax credits permanent. How about fixing that 1099 mess? How about accelerated deappreciation for small and medium-size businesses to give them incentives to create jobs? Do you know how much money is on the sidelines? I have done my homework. In this position, I have to be prepared or else. Do you know how much money is actually on the sidelines?

Corporations and businesses are saying: You know what, the health care bill, that is going to cost me about $440 million.

One corporation in Massachusetts, one of the biggest employers, has the market on a device that saves people's lives; hires, I guess, about 25,000 people throughout the world. If we do this, if we close this loophole, so-called, those jobs that were in Massachusetts in the United States are going. So let me see, it costs them $200 million because they are a medical device company. Then with the implementation of the health care bill, that is another $240 million. So that is $440 million. So where does that come from? R&D, employees, expansion? Why would they hire or even talk about hiring workers? Why?

That is just one effort, one thing that has been passed by this Congress and this administration to crush jobs. It crushes Massachusetts' businesses and jobs. We already had 98 percent of our people insured. Now we are getting lesser coverage, potentially longer lines, $\1/2\ trillion in Medicare cuts. Give me a break. There is no end in sight. The true numbers are coming out.

So why would a corporation or a mom-and-pop business or anybody who is even thinking of starting a business make that effort? Why would they even bother to open the door? There is the high cost of doing business, transportation costs, energy costs. They are concerned about cap and trade. They are concerned about maybe card check. They are concerned about a whole host of things that are keeping them on the sidelines. To take this and throw this in, forget about it.

The one thing I didn't hear and I thought I would was that Main Street--you know, you guys in the majority party, you are protecting Main Street. I didn't hear that I am protecting corporate America. I hear it in everything else. It is usually Wall Street. Up until this year, I have never been on Wall Street. I think I walked through it once. I am fighting for the people of this country, the people of my State, to get us financially viable, to get us to solve problems.

Sometimes I am the 41st Senator. I am. When it comes to debt and spending and taxation, I am going to be the guy who is going to hold it up to make sure we don't go further in debt. When I got here, $1.95 trillion was the national debt. It is over $13.2 trillion now, in 7 months.

I have been blessed. I am so honored to be here. You can't even imagine my life. I am the most honored guy to be here in this Chamber. I have been honored to visit the troops in Afghanistan. I went to Pakistan, Dubai, Israel, Jordan in that 7-month period. The thing that was fascinating to me was, from the kings and queens and prime ministers and leaders all over those regions, all they talked about was jobs. That is all they talked about: jobs so al-Qaida would not infiltrate their youth, to get produce to market, to secure the region so we can leave--jobs, jobs, jobs.

I am sorry, Mr. President. If I faint, will you save me? Thank you. I felt it was that important to come and make my point that I have been here about 7 months, and we have spent 10 days talking about jobs. Am I on a different planet or something? We should be talking about jobs every single day we are in session. We have spent 4 days, 3 or 4 days talking about the DISCLOSE Act. Give me a break. Do you think the 15 million, give or take, unemployed people throughout the country are concerned about the political content of political ads in the middle of an election season to give one party a tactical advantage or are they concerned about jobs? I know the people I speak to in Massachusetts and throughout the country want to talk about jobs.

How can we do it immediately? We can talk about the R&D tax credit and making that permanent. That 1099 bill--there is no reason we can't take that separately and put it forth in a bipartisan manner, clean up- and-down vote to protect the small businesses that are getting crushed through paperwork. There is no reason we should not be able to fix that. If we can't do that, we are in deep trouble. Accelerated depreciation, an across-the-board payroll tax reduction, a freeze on Federal hires, a freeze on Federal pay increases--I know it is not popular, but we have to look at these things. We have to look at entitlements. We have to collect moneys owed to us from contractors whom we overpaid or through fraud and abuse. Common sense, folks.

The thing I kind of get sad about--I know it wasn't popular in some circles for me to work on the financial reform bill. I got a lot of heat. But I looked at it, and I said: That doesn't include Fannie or Freddie. I know that. Do we

do nothing? We do nothing, right? We don't fix the regulations that have potentially been outdated for 50 years? We don't prohibit the closing of an entire industry overnight? We allow dentists and doctors and people who are going to finance the fillings in your teeth to be all encompassed in this thing? We are going to allow that? I am not going to allow it. I knew they had the votes anyway, but I took the time to work it through. I will tell you what. Since I have been here, that is the most proud I have been to work across the aisle with people for what we did--11 weeks, I think, working with every thinker and leader in this country when it dealt with financial issues.

I have to admit, I learned a lot, sleeping 5 hours a day maybe, slept in my office trying to figure it out and do it right. I was the most proud to work on that bill in a bipartisan manner. I am part of history. Is it the best bill? No. Is it going to get better? I hope so. Can we fix it after November? I hope so. Did we close TARP? Yes. Did we stop too big to fail? Yes. Did we stop the bank tax? Yes. Did we do a lot of things people are concerned about? Yes. Did we do some things wrong? Yes. But--do you know what--ever since we got back after July it is as though we do not talk anymore. We are just filing bills with no hope of them passing.

The Defense authorization bill--give me a break. I remember being in committee on the Defense authorization bill. I was sitting there in the Armed Services Committee, all eager, ready to go, being someone who was in the military. ``Gosh, I am going to make a difference. I am going to make a difference, everybody.'' You get there, and it was an invigorating process. We worked our tails off. The chairman said: ``You know, Scott, the things you are concerned about that affect Massachusetts and the New England area, we will do it on the floor.'' ``Oh, good.''

I find out when it gets to the floor the amendment tree is filled. We were offered 20 amendments. That is not good enough. The process is about just scoring points, political points for November. I think the American people are fed up. They are tired of the rhetoric. They are tired of the finger pointing. They are looking for leadership. They are looking for somebody to say: Do you know what? Sometimes I am going to be the 41st Senator, but other times when it comes to getting this country moving, I am going to be the 60th Senator. I do not care if I get reelected or not, but while I am here, I am going to fight every single day to get this country moving again because we are in deep trouble, folks. And if you do not recognize it, by doing this piece of legislation--this is helpful? It is not helpful on its own. They say: Well, it is the first step.

Do not come to me with a first step. Come to me with a real plan, one that is comprehensive and can actually work and that can get some full support from your own party. Tell me you have every member of your party and I will say you are not being truthful. And then try to blame us as the party of no. With all due respect, since I have been here that has changed. But do you know how many times the majority party has voted with me? Zero. OK. So the party of no thing, I will tell you what, it is getting a little old--from the administration and the majority party, a little old. The numbers do not speak for themselves on that one.

I do not want to seem like a downer, Mr. President, because you are a good man. I respect you greatly, and I respect the people who spoke prior to me. Being here and being in this historic Chamber--are you kidding me? To be part of this process is like the greatest honor in the world. Aside from my marriage and the birth of my kids, this is it. And to think we are wasting this amazing opportunity, this amazing opportunity to get our country competitive again and to get us firing on all cylinders.

You cannot tell me we cannot find one thing to agree on. The leaders cannot get together and find one thing? Take the Energy bill. You are telling me we cannot do one thing, take the easiest thing everybody agrees on and do one thing, make it clean and get it through, and send it over to the House and make sure it comes clean and not filled with a substitution bill and comes back clean? Can we do one thing--just one? Am I the only one who believes this?

I get that the bill on the floor tonight is important to the majority party, and I respect that. I do. I get it. And pollsters, if you listen to them--which I tend to not--when they talk about companies that ship jobs overseas, I get that too. I understand that is bad. But it is what is in play now. If we change this one thing and not change and reduce the corporate tax rate to make them have an incentive to staying, it is not going to work.

I believe without a doubt this bill will cause real harm to the economy, and that job creators are united in their opposition to this legislation. I guess it is bad to make money in America, to pay the bills. I am in favor of corporations making money. I am in favor of the employees making money. I am in favor of free trade and free enterprise. I am also in favor of government regulation. It has its place. But the government needs to know when to get out of the way too and to stop overregulating. There is a role for government, absolutely. But government needs to know when to get out of the way, to let free enterprise, free market--you cannot regulate every single thing. You cannot do it.

I have gone around. I have tried to do my research. As I said, I have to. The major employers in Massachusetts whom I have talked to--and we have a tremendous amount, thank goodness. They are not hiring, but they are there. They are not going to expand because of health care and regulation and taxation and the uncertainty of the business world.

I remember I read it or I heard it, Senator Baucus, chairman of the Finance Committee, said he was worried that this bill would put the United States at a ``competitive disadvantage.'' Those words are his, not mine. This bill puts the United States at a ``competitive disadvantage.'' I believe that in my heart. Again, echoing his words, this bill will make American multinational companies less competitive. So it is not just Republican Senators. My colleague, whom I have great respect for on the other side of the aisle, is questioning also the wisdom of this legislation.

Having the second highest corporate tax rate--I notice my colleagues who spoke earlier said--well, I do not want to characterize how they speak. But the companies that are going overseas, yes, they are taking advantage of lower tax rates. Absolutely. But you would believe, in listening to them, that there are also lower labor costs as well. Yes, in some countries that is absolutely true. But in places such as Belgium and Ireland, I respectfully disagree. Companies are doing this to get a good solid workforce, paying good wages, but taking advantage of the 11-percent, 12-percent corporate tax rate versus a 35-percent corporate tax rate.

But I have to take exception to the statement that everybody is going overseas to take advantage of the tax rates.

Well, yes, this is a global economy. We are fighting a battle here. And when China can do the things they are doing and basically provide-- well, let's step back. I remember growing up, and you would look at space exploration, roads and bridges, and teachers, and all that, R&D tax credit money, all that great stuff we would use to lure businesses from other parts of the world here. Do you know where that is now? It is all debt service to China. So when I see and when I speak to the companies back home in Massachusetts, and they say: We need A, B, C, and D, I am like, we have no money. It is all in debt service to China right now. I would love to give it to you.

So how do we get our financial situation moving forward? We are not going to do it by having the tax cuts expire. We need to address the tax extenders. We cannot play games and push it off and push it off. How about the death tax? Oh, my God, how many billionaires have died and we have not gotten a penny? Good for them. One over on the government. But is it good for the Federal Government to not get a piece? I am all for people getting money, but we have not even addressed the death tax.

I remember in my first caucus, when I went in, we were talking about it, and in the second caucus, the third caucus, the fourth caucus, and on and on. It is time to kind of come together to solve some real problems so tax planners and

families can kind of get their planning done. It is all about uncertainty. The reason we are in part of this mess is because of the financial uncertainty associated with the continued overregulation, the fear of more taxation, the fear of governmental interference, and the things we are trying to do. You can go on and on and on.

So as I said, what is the point? Why even bother getting out of bed?

Mr. President, may I ask, how much time do I have?

Six minutes 20 seconds.

Mr. President, I am fading fast, and I would ask if my colleague wishes to take the remaining part of my time.