Asset Forfeiture Responsibility Act of 2011

Madam President, we are going to be foregoing a July 4 break to go back home to visit with our constituents in order to stay here, ostensibly, to work on the problem of the accumulating budget deficit and huge debt that the United States has taken on and the need to do something about that, in conjunction with the President's request that we raise the national debt ceiling.

What I would like to briefly address today is what seems to me to be an obsession on the part of the President to raise taxes. In fact, he is so fixed on this, it is so important to him to raise taxes, that he is willing to risk an economic crisis knowing that Congress will not raise taxes as part of this debt ceiling increase. And we should not. Not because we are trying to protect somebody but because higher taxes on an already weak economy would just make things worse.

Now, we can point to a lot of what the President has done since he took office that has made things worse, but I do not know of a single economist who believes that American businesses will be more likely to hire people, will be more likely to create jobs, if they are faced with paying higher taxes.

They will not. Everyone knows that. So when the President talks about raising taxes, he is talking about killing jobs, and I would like to speak about the three specific taxes that he has talked about. I know because I was the Senate Republican delegate in the meetings with the Vice President at which this was discussed.

I am not going to break the commitment that we all made to each other to not discuss things that the President has not already made public. So I will not discuss the many things the Democrats took off the table. They talk about Republicans taking things off the table, I think they have already made it clear that, for example, they took any changes in ObamaCare off the table. I will not get into that. I will not discuss other things that were a part of our conversations.

But since yesterday the administration's spokesman and the President specifically identified three of the things they did put on the table and wanted to discuss with us, I believe I might as well explain to you why we are not willing to raise these kinds of taxes. They are all job- killing taxes. They would all inhibit growth, which is exactly the opposite of what we should be doing.

What are these job-killing tax increases on small businesses and American families and other businesses? It is not, first of all, just on millionaires and billionaires and corporate jets. President Obama and our colleagues on the other side of the aisle are obviously using poll-tested rhetoric about only raising taxes on millionaires and billionaires and corporate jets. That sounds good. They want ordinary Americans to believe they will not be affected by the President's tax increase proposals. But the truth is, the provisions they put forward during the debt limit meetings with Vice President Biden would target small businesses and other job creators and many Americans who are far from being millionaires or billionaires.

I should mention right off the top that they never discussed with us in these meetings anything having to do with corporate jets. So I have not gone to look to see how many American workers are employed in the general aviation business.

I note that it was on a list that they gave us, but they never checked--I suspect that is more in the realm of political rhetoric since it does not, even under their proposal I have seen, raise very much money. But in any event, what have they actually discussed with us?

Well, the first thing they discussed was repealing something called LIFO. LIFO is a term--last in, first out--that is used by accountants as one of the methods of inventory accounting. For years there has been a question--and more than one-third of American businesses use this particular method of accounting. It is perfectly appropriate and legal and so on. But there has been some talk: Well, should we have everybody use the same standardized method of accounting? There have been proposals to do that in the past.

The problem is, what the Obama administration wants to do is not just to conform everyone to the same type of accounting but to actually go back and retroactively tax the businesses that have been using this accounting practice, which is perfectly legal, totally recognized by the IRS, and nothing is wrong with it. But they are going to go back and say: Because we are interested in rasing revenue, we are going to put a retroactive tax on all of you who have been using this method of accounting.

They are more interested in getting money than in tax fairness, and that is why we are opposed to this. It would represent a retroactive tax increase on the 36 percent of American businesses that use this perfectly legal method of accounting.

Now, who uses it? Mostly it is people in retail businesses and manufacturers, many of whom are small businesses, I might add. To show what the impact of this would be--by the way, we first talk about creating jobs in the retail sector where consumers come in and buy things and in the manufacturing sector where they are made. These are the very folks who use this method of accounting.

Here is the effect that it would have on small businesses. In September 2009, the Small Business Administration's Office of Advocacy--which is under the Obama administration--wrote to the Tax Reform Subcommittee of the President's own Economic Recovery Advisory Board that repealing LIFO ``would result in a tax increase for small businesses that could ultimately force many small businesses to close.''

Why on Earth would we impose a tax retroactively on folks who probably--at least according to the President's own Small Business Administration--would ultimately have to close their business as a result of the imposition of this tax? Why would we do that? Should that not at least be taken into account before you propose something such as this or are you so obsessed with finding somebody to raise taxes on or getting revenue that it does not matter?

With unemployment at 9.1 percent, we should not raise taxes on America's job creators.

Here is the second one they discussed: capping itemized deductions. They proposed capping itemized deductions for upper income taxpayers either at the 28 or 35 percent level. Obviously, this reduces the ability of taxpayers to buy homes, to make gifts to charity, to pay medical expenses, all of the things for which deductions are taken.

As the Wall Street Journal editorialized on June 29:

The political point of this exercise is to raise marginal tax rates without appearing to do so.

That is exactly what would happen. That editorial points out that President George H.W. Bush agreed to a similar proposal as part of his 1990 budget agreement that broke his ``read my lips'' promise not to raise taxes. But the fact is, half of all small business income falls into the top two brackets. So the ability of small businesses to grow and create jobs would obviously be harmed by this proposal.

The fact is, most high-income taxpayers--individual taxpayers-- already lose the benefit of tax deductions and credits at their income level because of what is called the alternative minimum tax. Each year we eliminate the effect of the alternative minimum tax except on those making, I believe it is above $250,000. So the very people who would be capped are already capped under the AMT. Who would get hurt?

Well, we know 50 percent of the taxes paid by small businesses are paid by these two upper brackets because they pay individually. It is those folks who cannot take this that would get hit by this because they have to take the deductions as part of their businesses. They would end up having their deductions capped and be unable, therefore, to invest that in hiring more people. Moreover, the tax increase would hit a much larger segment of American families than just millionaires and billionaires.

According to the IRS, in 2008, the last year for which we have numbers, only 319,000 tax returns showed income of $1 million or more. But in that same year, the number of returns falling in the 33- and 35- percent brackets, which are the brackets most affected by this proposal, numbered more than 3.6 million. In other words, more than 10 times the number of filers would be hit if only millionaires and billionaires were affected.

So while the President likes to claim he only wants to tax millionaires and billionaires, the fact is his proposal would hit small businesses and millions of Americans who are not millionaires. But as I said, most importantly, it affects job creation because the people who would be hit by this are the people who are small business entrepreneurs, who pay their taxes under these provisions, and would no longer be able to deduct their business job expenses.

Why, with economic growth at just 1.9 percent in the last quarter, would Congress want to raise taxes on small businesses and on American families? It just does not make sense.

Finally, oil and gas. It is always popular to talk about attacking Big Oil. Of course, millions of Americans and retired Americans own stock in oil companies, and raising taxes would have the effect of both reducing what they get in their pensions and so on, as well as undoubtedly result in higher gasoline prices because most of these kinds of taxes are passed right on through to the consumer.

So they want to raise taxes on U.S.-based oil and gas companies--not foreign-owned companies--U.S.-based oil and gas companies. Obviously, this tax could result in higher gas prices which contradicts the reason for releasing oil from the Strategic Oil Reserve. Why do that if it is going to get canceled out by imposing a new tax?

It could, obviously, hurt job creation because this industry supports over 9.2 million American jobs. It does not just target oil companies because they get some kind of special benefit. What these provisions do is eliminate a tax provision applicable to all businesses--any manufacturing business, for example, has the benefit of these particular three tax provisions.

So why single out one particular group of taxpayers, only about five in number, who would no longer be able to take advantage of provisions that every other American business can take advantage of? They are broadly available to American businesses in one form or another. They are three specific things: First, the so-called section 199 deduction available to all manufacturers. Second, the U.S.-based businesses are generally able to prevent double taxation. When they have to pay taxes abroad, those taxes are then credited against their American tax burden. Third, most businesses can expense their research and development costs.

These are the three things that would be taken away just from oil companies, the folks who find American oil so that we can drive our cars and conduct our businesses. So raising the cost of producing American oil would help our foreign competitors and make us more dependent on them, ship high-paying jobs offshore, increase our dependance on foreign oil, cause gas prices to rise, and hurt American families already suffering with high food and energy costs.

Why would we want to do this except to demagogue a political issue? Because it sounds good to punish success. America has never been about punishing success. America has been all about creating opportunities, and this President's ideas of raising taxes as the sine qua non of an agreement to achieve an increase in the debt ceiling, as he has proposed, would be absolutely contrary to what we are all trying to do right now--which is to help our economy get healthy so that it can create more jobs, so we can reduce this

tremendously high unemployment rate that we have right now, put Americans back to work, and help our families ironically, by getting healthier economically, making more money, and producing more revenue for the Federal Government to tax under our existing taxes. So if we want economic growth, improvement in the economy, the last thing we should be doing when our economy is ailing now is imposing a higher tax burden on it.

Why the President is so obsessed with this, I do not know. But I will tell you one thing: Republicans will resist these job-killing tax increases, not because we are trying to protect somebody--except the American people--but because we know that it is bad for our economy, for our families, for our businesses, and for job creation.

I ask unanimous consent that the Wall Street Journal editorial to which I referred be printed in the Record.

I yield the floor.

Mr. President, I rise to introduce legislation to help address one of the glaring issues our domestic nuclear industry faces-- what to do with the used nuclear fuel being stored at over 100 sites across the country. I am pleased to be joined by Senator Mary Landrieu in introducing this bill.

Typically, a nuclear power plant stores its used fuel in a spent fuel pool located within the reactor site's exclusion zone. When there is no more room in the pool, and the used fuel is sufficiently cooled, the fuel can be moved to dry cask storage nearby the plant in what are called independent spent fuel storage installations.

Although there are 104 nuclear reactors producing power across the United States, not all have been in operation long enough to fill their spent fuel pools and require dry cask storage. So at present, the are 63 independent spent fuel storage installations at 56 sites in 33 States. Of those, 7 sites are from decommissioned plants. Two decommissioned plant sites still have fuel in their spent fuel pool. That means there are 9 sites, from 10 decommissioned reactors, with 2,800 metric tons of used fuel that is being stored and guarded, whether in dry cask or fuel pools, but no operating power plant nearby. These are orphan sites, and but for the remaining spent fuel the land could be used for other purposes.

Under the Nuclear Waste Policy Act of 1982, the Federal Government is contractually obligated to take title to spent nuclear fuel from commercial nuclear power plants starting in 1998. Our Government has not fulfilled that requirement and as a result we face continuous lawsuits from the utilities operating those commercial power plants to cover the costs of storing the spent fuel on-site.

According to the Department of Justice, as of June 24, 2011, $1.12 billion has been paid out in settlement of these lawsuits, with an additional $220 million paid in judgments. Another $157 million is authorized, but has not yet been paid in settlement. And $937 million in outstanding judgments remains on appeal or remand. So, the total authorized payment level, so far, is roughly $1.5 billion, with close to another $1 billion dollars in payment going through the legal process. These are not lawsuits that go away once they are settled. Every year that the Government is in breach of its contractual obligation, the same company can bring a similar lawsuit as had been previously settled. As more nuclear power plants fill up their spent fuel pools and turn to dry cask storage, more lawsuits for breach of contract will be filed. The Department of Energy estimates that even if the Government starts to accept the spent fuel by 2021, the total cost of the lawsuits will be $13.1 billion.

While the Government anticipates a liability of $13.1 billion, utilities estimate the final tally could exceed $50 billion. But both the DOE and private sector estimates were developed before the Administration took steps to withdraw the Yucca Mountain application. More recent estimates suggest a cost of $100 billion.

I take special note of what our future liability could be. The Department of Energy expects the Federal Government's liability to increase by $500 million annually if waste is not accepted by 2021--10 years from now. It took us 30 years to get this far on Yucca Mountain. If we are to begin the search for a permanent repository anew, as it appears the Administration would like us to do, it seems increasingly likely the Government's liability costs will greatly exceed the earlier $50 billion estimate. At a time when we are already racking up trillions of dollars in debt for future generations, the administration has freely chosen to incur additional future taxpayer liability in terms of tens of billions of dollars by withdrawing the Yucca Mountain repository license application.

Fortunately for the administration, I have a solution. The Nuclear Fuel Storage Improvement Act of 2011 that I am introducing seeks to establish up to two interim used nuclear fuel storage facilities to centralize the used fuel spread across this nation, end the lawsuits against the Federal Government, and help the domestic nuclear industry, and the communities that host nuclear power plants, partially resolve the long-standing problem of what to do with the used nuclear fuel stored on-site.

The bill would provide financial incentives to a local unit of government, as well as the state in which that unit of government is located, to serve as a host of an interim used nuclear fuel storage facility. The facility itself would be privately owned and operated, and licensed by the Nuclear Regulatory Commission, but the host entity would be entitled to financial payments from the Federal Government for its willingness to locate the storage facility within its jurisdiction. Up to two locations would be eligible for the financial agreement, funds for which would come from the Nuclear Waste Fund set up by the Nuclear Waste Policy Act of 1982.

Importantly for the Federal Government, under the legislation the Secretary of Energy can contract with the private entity operating an interim storage facility to store used fuel from civilian nuclear power plants. Priority of acceptance is given to the used fuel being stored at plants that have been permanently shut down and decommissioned--the orphan sites. The Secretary is then authorized to enter into an agreement with those which it has contractual obligations to under the Nuclear Waste Policy Act, to settle all claims and liabilities for the Government's failure to take title of the used nuclear fuel, thus saving the Government, and future taxpayers, billions of dollars.

I want to be clear. In no way shape or form does this legislation diminish or replace the need for a permanent repository. I have been, and continue to be, supportive of using Yucca Mountain for that purpose. Until such a repository can be opened, however, we have a responsibility to put a plan into action

that will consolidate the used fuel sitting at all of these sites across the nation, as well as settle the Federal Government's liability for its failure to take title to that spent fuel, costing the American taxpayer millions of dollars each year. I believe this legislation moves us in that direction.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I rise to speak about overregulation--something that is really putting a wet blanket on many businesses throughout our country, and especially in Massachusetts. That is why I am introducing a bill to reform the National Oceanic and Atmospheric Administration's--or NOAA's--asset forfeiture fund.

The fund, as you may know, is authorized by the Magnuson-Stevens Fishery and Conservation Act and allows NOAA to retain fines and penalties collected as a result of enforcement actions for legitimate enforcement purposes.

As the Department of Commerce inspector general's excellent work revealed, NOAA has mismanaged that fund for many years, wasting taxpayer funds on exorbitant foreign travel and unauthorized purchases of vehicles. As a matter of fact, they purchase more vehicles than they actually have employees. So that speaks for itself. They also purchased a $300,000 luxury boat with the funds collected in that forfeiture fund.

The reason I am standing on the floor of the Senate today is because the way the fund has been implemented has actually corrupted the relationship between the fishermen and the regulators. Fishermen have complained for years about the arbitrary fines, overzealous enforcement, and violations of their due process rights when it comes to dealing with NOAA. After decades of such complaints, mostly in the Northeast, the Department of Commerce appointed a distinguished retired judge to serve as a special master and investigate enforcement actions and abuses by NOAA.

In one case, a New Bedford, MA, fisherman lost his livelihood and a farm that had been in the family since the 1640s. He was forced to sell due to punitive NOAA penalties. Incredibly, the Commerce Department's own special master concluded that the perverse incentive to fill the asset forfeiture fund with funds was a motivating factor in how NOAA handled that case. Larry Yacubian got not only a check but an apology from Washington because of those abuses, but he will never get his home back.

That is why in my role as ranking member of the Federal Financial Management Subcommittee, I, along with my dear friend, Senator Tom Carper of Delaware, held a field hearing in Boston on June 20 to identify a lot of these longstanding problems and identify the problems with the asset forfeiture fund itself.

Unfortunately, the hearing revealed that while NOAA has instituted some reforms to its management of the asset forfeiture fund, including auditing the funds for the first time in nearly four

decades, it still intends to utilize the seized assets of fishermen to pay for foreign travel, which is inappropriate.

The years of NOAA's mismanagement and abuse of the asset forfeiture fund have bred mistrust among fishermen and Federal officials, and it can only be broken by removing the fund from NOAA.

It is for these reasons that today I am introducing the Asset Forfeiture Responsibility Act of 2011, which will hopefully end this sad chapter in Federal financial management by this agency by replacing the existing funds with a new fisheries investment fund. Funds will be kept--like most every other fund--at the Treasury Department for the benefit of regional councils and NOAA, and the fund will be audited for the next 3 years to make sure they are getting their act together.

The fishing investment fund will direct monies from those fishermen who break the rules toward assisting fishermen with the ever-growing costs of regulatory compliance and to reimburse the legal fees incurred by fishermen whose fines were remitted by the recommendation of the Special Master.

Currently, appropriated funds assist fishermen with the costs of compliance, but in these difficult fiscal times this funding is actually at risk. This legislation would provide a more reliable source of funds to offset the increasing cost of compliance, while allowing the fishing councils the flexibility to address other priorities, such as preparing fishing impact statements and addressing other priorities to rebuild or maintain the fishery and the fishing stocks.

As I have always said, since I was elected and got involved in this issue, all the fishermen want is to have a level playing field and an assurance that those who break the rules will be caught and they will be fined appropriately. That is why I have maintained funding for NOAA's legitimate law enforcement responsibilities.

However, in the end, we should be focused, quite frankly, in this Chamber on bettering the economic security and ability of the American people to make an honest living. This bill will bring back jobs to the hard-working men and women of the American fishing industry while restoring their trust in government. It is the right thing to do.

Mr. President, I rise to speak about overregulation--something that is really putting a wet blanket on many businesses throughout our country, and especially in Massachusetts. That is why I am introducing a bill to reform the National Oceanic and Atmospheric Administration's--or NOAA's--asset forfeiture fund.

The fund, as you may know, is authorized by the Magnuson-Stevens Fishery and Conservation Act and allows NOAA to retain fines and penalties collected as a result of enforcement actions for legitimate enforcement purposes.

As the Department of Commerce inspector general's excellent work revealed, NOAA has mismanaged that fund for many years, wasting taxpayer funds on exorbitant foreign travel and unauthorized purchases of vehicles. As a matter of fact, they purchase more vehicles than they actually have employees. So that speaks for itself. They also purchased a $300,000 luxury boat with the funds collected in that forfeiture fund.

The reason I am standing on the floor of the Senate today is because the way the fund has been implemented has actually corrupted the relationship between the fishermen and the regulators. Fishermen have complained for years about the arbitrary fines, overzealous enforcement, and violations of their due process rights when it comes to dealing with NOAA. After decades of such complaints, mostly in the Northeast, the Department of Commerce appointed a distinguished retired judge to serve as a special master and investigate enforcement actions and abuses by NOAA.

In one case, a New Bedford, MA, fisherman lost his livelihood and a farm that had been in the family since the 1640s. He was forced to sell due to punitive NOAA penalties. Incredibly, the Commerce Department's own special master concluded that the perverse incentive to fill the asset forfeiture fund with funds was a motivating factor in how NOAA handled that case. Larry Yacubian got not only a check but an apology from Washington because of those abuses, but he will never get his home back.

That is why in my role as ranking member of the Federal Financial Management Subcommittee, I, along with my dear friend, Senator Tom Carper of Delaware, held a field hearing in Boston on June 20 to identify a lot of these longstanding problems and identify the problems with the asset forfeiture fund itself.

Unfortunately, the hearing revealed that while NOAA has instituted some reforms to its management of the asset forfeiture fund, including auditing the funds for the first time in nearly four

decades, it still intends to utilize the seized assets of fishermen to pay for foreign travel, which is inappropriate.

The years of NOAA's mismanagement and abuse of the asset forfeiture fund have bred mistrust among fishermen and Federal officials, and it can only be broken by removing the fund from NOAA.

It is for these reasons that today I am introducing the Asset Forfeiture Responsibility Act of 2011, which will hopefully end this sad chapter in Federal financial management by this agency by replacing the existing funds with a new fisheries investment fund. Funds will be kept--like most every other fund--at the Treasury Department for the benefit of regional councils and NOAA, and the fund will be audited for the next 3 years to make sure they are getting their act together.

The fishing investment fund will direct monies from those fishermen who break the rules toward assisting fishermen with the ever-growing costs of regulatory compliance and to reimburse the legal fees incurred by fishermen whose fines were remitted by the recommendation of the Special Master.

Currently, appropriated funds assist fishermen with the costs of compliance, but in these difficult fiscal times this funding is actually at risk. This legislation would provide a more reliable source of funds to offset the increasing cost of compliance, while allowing the fishing councils the flexibility to address other priorities, such as preparing fishing impact statements and addressing other priorities to rebuild or maintain the fishery and the fishing stocks.

As I have always said, since I was elected and got involved in this issue, all the fishermen want is to have a level playing field and an assurance that those who break the rules will be caught and they will be fined appropriately. That is why I have maintained funding for NOAA's legitimate law enforcement responsibilities.

However, in the end, we should be focused, quite frankly, in this Chamber on bettering the economic security and ability of the American people to make an honest living. This bill will bring back jobs to the hard-working men and women of the American fishing industry while restoring their trust in government. It is the right thing to do.

Mr. President, today I am pleased to introduce the No Firearms for Foreign Felons Act of 2011. This bill would close a loophole in current law, by ensuring that people convicted of foreign felonies and crimes involving domestic violence cannot possess firearms. We must close this gap in our laws before it is exploited by terrorists, drug gangs, and other dangerous criminals who threaten our communities.

Under current Federal law, people who are convicted in the United Sates of violent felonies like rape, murder and terrorism are prohibited from possessing firearms. But, shockingly, Federal law does not bar criminals convicted of these same violent crimes in foreign courts from possessing guns. This outrageous loophole for foreign convicts is the result of a 2005 U.S. Supreme Court decision in the case of Small v. United States.

In that case, the Court analyzed the 1968 Gun Control Act, which states that anyone who has been convicted of a felony ``in any court'' cannot possess firearms. The Court concluded that the phrase only applied to American courts, despite the fact that the Gun Control Act had been applied to foreign felonies since 1968, the year it took effect.

At the time, the Supreme Court was very much aware that its ruling could have serious consequences. As Justice Clarence Thomas noted in his dissent, ``the majority's interpretation permits those convicted overseas of murder, rape, assault, kidnapping, terrorism and other dangerous crimes to possess firearms freely in the United States.'' But whatever one may think of the Court's ruling, it is now the law of the land.

We must make every effort to close this dangerous loophole and the bill I am introducing today would do just that.

Under this bill, section 921 of Title 18 would be amended to state that ``[t]he term `any court' includes any Federal, State, or foreign court.'' Similar changes would be made in other sections of the Gun Control Act. Where there are references to ``state offenses'' or ``offenses under state law,'' the bill would expand these terms to include convictions of offenses under foreign law.

In other words, the bill would make it clear that if someone was convicted in a foreign court of an offense that would have disqualified him from possessing a gun in the U.S., then they

will be disqualified from gun possession under U.S. law. The only exception will be if there is reason to think the conviction entered by the foreign jurisdiction is somehow invalid.

Under the bill, a foreign conviction will not constitute a ``conviction'' under the Gun Control Act, if either: the foreign conviction resulted from a denial of fundamental fairness that would violate due process if committed in the United States, or the conduct on which the foreign conviction was based would be legal if committed in the United States.

I expect that these circumstances will be fairly rare, but the bill does take them into account and will provide a complete defense to anyone with an invalid foreign conviction. In any event, it is clear that we should not keep in place a dangerous policy which essentially treats every foreign conviction as invalid.

Particularly in these times, America cannot continue to give foreign- convicted murderers, rapists and even terrorists the right to buy firearms in the United States.

With each passing day, we run a risk that foreign felons are exploiting this loophole in our law. This is unacceptable.

Criminals convicted in foreign courts should not be able to have guns when U.S. law forbids those convicted of the same crimes on U.S. soil from possessing guns. We should not wait for lives to be lost before we act to close this loophole.

I urge my colleagues to support this legislation.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.