Floor Statements

Mr. President, I ask unanimous consent the order for the quorum call be rescinded.

My friend from Iowa came to the floor to speak a bit this morning on a couple of subjects I spoke about yesterday. Let me again say I have very high regard for Senator Grassley. We worked together on a good number of issues. I enjoy working with him. But there are times when you have disagreements on policy, and we certainly have that on an issue I am going to talk about. It is an issue he talked about this morning as well. Actually, there are a couple of tax issues.

Before I do, however, I want to just make a slight correction to the remarks that were made by the Senator from Pennsylvania a few minutes ago. I heard him say the Democrats were holding up this bill on, I guess--I think he said a technicality. I think he said it was a technicality. I think that was the impression he intended to leave, obstruct or holding this up on a technicality.

I guess the technicality is our interest in offering amendments. I know to some that is not a pleasant thing around here, to have people offer amendments and actually debate them and vote on them, but that is the way the system works. The reason there are not amendments offered-- and I would try to offer one right now, but I would be unable to offer one--is because the majority party has done something that is called filling the tree. It is a parliamentary procedure to make sure every branch of this legislative tree is filled so that no one is allowed to offer an amendment.

For example, while this bill is on the floor, under the rules of the Senate, I should be able to offer an amendment. The majority party decided to fill the tree, as it is called, so no one on this side may offer an amendment. So when my colleague from Pennsylvania said the Democratic side of the aisle is using a technicality--whatever, I forget his term exactly--to hold this up, I am sorry that is not what is happening at all.

He made a point that I share. I think it would be great to work together. I think there ought to be less rancid partisanship and we ought to find ways to work together to do the Nation's business. We, after all, represent the same interests. We represent the interests of this country. I hope we represent the interests of the American people. I would like to find areas where we can work together.

In this case, however, let me just say there is no obstruction going on here. The only obstruction is we are obstructed from being able to offer an amendment which in ordinary circumstances the rules of the Senate would permit. I regret that. I wish the majority party would have allowed me. I would have offered the amendment yesterday, in fact, and I would offer it right now. I have an amendment to offer. I guess we will vote on it later because you will have to have a circumstance where we can offer the amendment. I suppose the purpose is to allow amendments to be offered when all time is expired so there is no debate that is allowed. I guess that is probably the purpose. But I did want to disabuse anyone of the notion left by my colleague from Pennsylvania that somehow it is this side that is hanging all of this up.

It may be inconvenient to have people offer amendments in the Senate, but there are a couple of hundred years of tradition of this inconvenience. The inconvenience is to be able to offer ideas, debate the ideas in the form of an amendment, and then have a vote, and the vote determines whether the idea that is offered represents public policy that the full Senate will accept.

Let me just respond to a couple of things my distinguished colleague from Iowa has said. Yesterday, I gave a presentation talking about something called deferral. I know most of these things sound like foreign language around here. Deferral of income tax obligations is what it is. If a company does business overseas, an American company does business overseas and earns income overseas, at some point when it brings those profits, that income back to our country, they will be required to pay an income tax to our country for the income they have earned. They will get a credit, actually, against taxes they paid to a foreign country so they will not be double-taxed. But when they repatriate that income, as it is called, they have to pay a tax.

My colleagues in the Congress, a sufficient number of colleagues who represent the majority, decided that they wanted to have a kind of little sweetheart deal for companies that would repatriate their earnings because many companies park their earnings for a long while overseas and don't bring them back. When they bring them back they have to pay the full tax rate. My colleagues said: Let's create new jobs in America by allowing these companies to bring their income back, and we will give them a special superdeal.

You have heard of blue light specials; this is the blue light special of all specials. It says you bring that money back from overseas, you get to pay not 35 percent, not 30 percent, not 25 percent, not 15 percent or 10 percent--which is the lowest income tax rate that is paid by the lowest income earner who has to pay income taxes--you get to pay a 5.25-income-tax rate. Who is the ``you''? The biggest companies in our country: Ford Motor, for one thing. I mention that because when they announced they are going to lay off 30,000, they also said: By the way, we picked up a quarter of a billion dollars of tax refunds under the Jobs Creation Act. Isn't that interesting? Ford Motor said in the same press release: We are going to lay off 30,000 workers in this country and, by the way, we were able to get a quarter of a billion dollars, a $250 million benefit from the jobs creation tax rate special benefit of 5.25 percent.

The whole purpose was to create jobs in our country and, at least in the most recent job announcement of 30,000 jobs lost, the very company that announces 30,000 jobs gone points out they got a quarter of billion dollars under this provision.

My colleagues seem to suggest the provision really does work, it is helpful. No, it doesn't work. It didn't work. By my calculation, the income that was parked overseas and at some point would have had to have been repatriated to this country, that income would have borne a tax that is about $104 billion more than what was paid under the 5.25 percent.

Is anybody going to have to answer to that? I don't know. Maybe not. Maybe nobody cares--$104 billion. You could reduce the Federal debt, reduce the annual budget deficit. You could probably provide some health care to people who do not have it, perhaps help some kids who are hungry, perhaps provide health care for kids who are sick, improve some classrooms in schools that need improvement--maybe there is a lot of things you could do. But $104 billion, that is a tax break given to the biggest corporations in this country who brought income back to our country and would have had to pay normal income tax rates but were told by this Congress that we are going to give you a superspecial deal that no other American taxpayer has: 5.25 income tax rate.

Wouldn't every American love to pay a 5.25 income tax rate? But they can't. That deal is just reserved by the Congress for some bigger interests.

I didn't vote for that. I didn't support it. I strongly opposed it. My colleague who sat in this chair right here, Senator Fritz Hollings, who is now retired, offered the amendment to strip that out, but we were not successful. So this blue light special, 5.25 percent special income tax rate for big interests who were bringing money back from overseas--it got done and $104 billion, as I calculate it, was saved by those who otherwise would have had to pay regular income tax rates.

I wanted to respond to that because I still think that was one of the goofiest ideas in the world for this Congress to embrace, saying let's provide a 5.25 tax rate because we think it will create jobs. The evidence is all around us. It didn't create jobs. In fact, I have charts saying the largest companies that got some of the biggest benefits--one company got a $14.5 million benefit and laid off 14,500 people--almost complete

and perfect symmetry, wasn't it? Except they were supposed to have hired people if they got this kind of special tax rate. They just forgot and laid them off, I guess.

Let me go to the other point which is what persuaded my colleague to come to the floor and engage on this issue, and that was the point I made yesterday. We have a provision in our Tax Code that says to someone in Iowa or North Dakota or Colorado or Pennsylvania, if you have a manufacturing plant and you are across the street from your competitor and your competitor has a manufacturing plant and you produce exactly the same products but you do something different, you move your jobs to China and manufacture your widgets in China, your competitor across the street stays home and manufactures them here in this country--one thing has happened as a result of that move. We have embedded in this Tax Code a perverse incentive that says: By the way, we will give you a break. You move those jobs to China, close your plant door, get rid of your workers, produce in China, and we will give you a tax break. You are not going to pay as much in income taxes as your competitor across the street who stayed in this country.

I think that is wrong. Going all the way back to 1961 with John F. Kennedy, proposals have existed to change it. Going back to 1987, the House actually passed legislation to change it. But we can't change it any longer because now, of course, the big economic interests that benefit a lot from that--and we have a lot of companies getting rid of American workers, padlocking their doors and shipping the jobs to China. I have spoken about many of them on the floor of the Senate. We have a lot of companies that like this tax break. Why? They like to hire people for 33 cents an hour, produce the product in China, sell it in Cincinnati or Toledo or Pittsburgh, and then run their income through the Grand Cayman Islands, through the Ugland House on Church Street on the island of Grand Cayman, that houses 12,748. It is just an address, of course, but the purpose is to reduce the tax burden.

My point is on four occasions when I offered amendments on the floor of the Senate so we ought to at least decide as a country that we will not provide financial incentives in the Tax Code for those who decide to move their jobs overseas--that ought to be the least we ought to do. That ought to be the baby step in the right direction--but four times we have voted and on four occasions those big interests that really like this and have benefits from it have been able to persuade a majority of the Senate to oppose closing that loophole.

I indicated yesterday I would once again offer that legislation. I would offer it right this moment except I am prevented because the majority has done what is called filled the tree and prevented anybody from offering any amendments. My colleague from Iowa came down this morning and offered what I believe is called the Banana defense. That is what he called it the last time he offered it. It had to do something with bananas.

I don't know, maybe we could debate apricots or tailpipes or bananas. It doesn't matter to me what the product is. We could have a long debate about it. I will just call this the banana debate then. But whatever the product or circumstances, the question remains: Do you believe that our Tax Code ought to provide financial benefits and rewards to companies that have decided to move their jobs overseas? Should Huffy bicycle have gotten a reward for firing all their workers and producing Huffy bicycles in China? Should Radio Flyer little red wagon have gotten a benefit from moving all their jobs overseas? Fruit of the Loom, should they have gotten the benefit?

I could go on at some length. Fig Newton cookies, when they went to Monterrey, Mexico, should they get a benefit? If you think yes, then good for you, and I suppose the benefit will continue to exist in our Tax Code, but we are going to continue to vote on it. I am not deterred. As far as I am concerned we can vote 10 times on it. At some point there will be enough people filling the seats in this Chamber to understand that at a time that we have a crisis, and it is a crisis with substantial numbers of jobs moving outside of this country in search of lower labor costs to produce products to ship back into this country, at a time when we have that kind of crisis and the American people are facing downward pressure on wages, they are facing the stripping away of their pensions, the loss of their health care--at a time when we have that kind of crisis, the question is: Will there be enough people filling the seats in this Chamber to stand up and say let's take the first baby step in addressing it?

The first baby step is to say: Let's not provide incentives in the Tax Code for companies to move those jobs overseas. If we can't do that, we can't solve this problem. But we will have plenty of chances. We will have one more chance now. We had four chances previously.

I respect everybody's ability and interest to vote however they choose in this Chamber. I don't demean their reputation nor diminish their capability. I only say that I feel very strongly that if they support this provision, they are wrong. They are wrong for this country. The right public policy position is at least to have some basic neutrality on the question of whether we want to export jobs and whether we want to have the financial incentives for exporting jobs in our Tax Code.

I regret that we don't have a back and forth. I would love to have a real debate about this because I know there are those who benefit handsomely from this who want to continue it and want it to remain in the Tax Code. But I feel strongly that this provision that is known as deferral--and, incidentally, my repeal of deferral does not go to the John F. Kennedy proposal on repealing deferral. My repeal on deferral is rather narrow. It is those companies that leave this country and ship back into this country.

I think it is a perfectly appropriate thing, especially now given the crisis we face with jobs and opportunities in this country, for us to do that.

I have a right, under the procedures of the Senate, to offer this amendment. I should have the right to offer it at the moment but I am not because there is--I guess the word ``obstruction'' is to be used-- obstruction at the moment is the tree is filled so that no one can offer an amendment. So we are going into some process that is a vote- arama, and I will offer the amendment, and we will have a vote.

Let me finally say it again.

There is not one Member of the Senate that puts on a dark suit every morning and comes to work here that has ever been threatened to have their job outsourced--not one. There is not a person here that is ever going to have their job outsourced. Maybe they do not think much about it. I don't know. We have all of these people in blue suits who come here every day and we talk and we talk, and mostly we talk. We are good at talking.

But the question for most Americans who worry about their jobs and who see their neighbors' jobs moved overseas is, Will their jobs be moved? The question for them is, Will Congress do something about it?

I mentioned a few moments ago the Ugland House in the Grand Cayman Islands, which is a slightly different approach than the Tax Code I have been describing.

I wanted to mention that there is a man from Bloomberg News named David Evans who has done some reporting on this Ugland House. The Ugland House is a house on Church Street in the Cayman Islands. It was, according to news reports, dug out by David Evans, who has done the research. This is a five-story white building that houses 12,748 companies. It doesn't really house 12,748 companies--it is an address. This is a five-story white house address on Church Street in the Cayman Islands. Why would 12,000 companies congregate to have an address in this five-story building? There is only one reason. And, by the way, every one of them are represented by the same law firm. Why? So they don't have to pay taxes, that is why.

They want to access cheap labor in Asia, sell in America, and run it through the Cayman Islands so they don't pay taxes.

That is what this is all about.

Because we have a tax bill on the floor of the Senate, I have another amendment that I will not be offering now for those companies that want to congregate at an address in a tax-haven country, the Cayman Islands. But if you are creating an address to

have a tax haven and avoid taxes, you shall be treated for tax purposes as if you have never left our country. You don't get to claim that you now have an address in the Ugland House, and, therefore, you are running your income through that house. My legislation would say you are going to be treated as if you never left for business purposes.

We can shut that down like that, if Members of Congress have the interest and the will.

Does anybody believe this is anything other than a huge scam, by having a little five-story house with 12,000 businesses congregate there under the umbrella of a law firm that runs their mail through that place in order to avoid paying U.S. taxes?

Thanks to David Evans for the work he has done. But in many ways, I think this is the tip of the iceberg. There is substantial tax avoidance going on. Some of it is legal. The first description I made today was the description of the avoidance of what I think is about $104 billion in taxes under the 5.25-percent special tax deal.

The other one I mentioned, deferral for those who move their jobs overseas, that is in law. I am not criticizing companies for following the law. I am criticizing the Congress for not changing the law and doing what we should do--stand up for American jobs.

I was thinking I had actually done plenty yesterday to either aid or injure my cause, however one views these issues. But when I heard my colleague from Iowa come to the floor today, I at least wanted to respond to that. As I was coming over, I heard my colleague from Pennsylvania say someone else was obstructing, I guess, the work of the Congress over what I think is a technicality, and the technicality was we wanted to offer amendments.

I say to my colleague, there is never a technicality when someone wants to offer an amendment. If the rules allow us to offer amendments, just have the amendments, have a little debate, vote regular order, and let it go. When it is done and the dust is settled, we decide what we decide, and everybody is responsible for the vote they cast.

My colleague from Pennsylvania said he wished we would be a little less partisan. So do I. I think we need to find ways to make this a little less partisan. A good step in that direction would be, for example, for somebody to right now come out and say: We have a bill on the floor, let us have regular order. If amendments are, by the way, allowed, let us go ahead and offer them. Will you give us a time agreement? Sure. Vote, act the way legislators should act, and at the end of the day, we will all feel better about that.

That is what the Senate ought to be about when we call this the greatest deliberative body in the world. It has slipped a bit. We can regain that status if we only decide amendments are good and not bad things. Debate is good--not bad. The noise of democracy coming from the Senate is welcome noise for the American people, if we are engaged in constructive debate about issues that matter.

I yield the floor. I suggest the absence of a quorum.

Mr. President, on behalf of Senator Schumer, I ask unanimous consent that Tovah Calderon, a detailee from the Department of Justice, be granted the privilege of the floor during today's session.

I thank my colleague from Delaware.

Mr. President, the issue that is going to be debated now and voted on later today and perhaps tomorrow is the revenue piece of the reconciliation bill. I know that sounds a little like a foreign language to some people, but we have a process here called reconciliation. One part of that is spending, and the other part is revenue. This is the revenue side.

For all of us, the question is, As we legislate here, are we gaining ground or losing ground? Are we moving our country ahead, or are we falling behind?

I listened attentively last night to the President's State of the Union Address. He described some of these issues, although he did not describe domestic policy in much detail. The first half hour or so was about foreign policy. There is no question that Iraq is very important. The war on terrorism and national security are issues that are very important to our country. But I also believe it is important as well to begin taking care of things here at home, and we have a lot to take care of.

I have told my colleagues before about a wonderful man in North Dakota called the Flying Farmer from McCody. McCody is a town of about 80 people. The Flying Farmer from McCody goes out to county fairs and State fairs and he takes an old car he fixed up--he works in a machine shop--then he puts up a ramp and jumps other cars; a daredevil kind of thing. The Flying Farmer from McCody. He jumps cars at county fairs.

But he is also in the Guinness Book of Records. John Smith, the Flying Farmer from McCody, is in the Guinness Book of Records. He is in there because he drove a car in reverse 500 miles, averaging 36 miles an hour. I don't know who would want to drive a car in reverse 500 miles or who would want to set a record for a reverse speed of 36 miles an hour for 500 miles, but he owns the record.

That is probably a perfect metaphor for the U.S. Congress--setting records for going backward. The question for us is, Can we move forward? Can we take this country forward, move ahead, and advance this country's interests?

As we talk now about the revenue side of reconciliation, we are talking about taxes. So let me talk a bit about the tax system and where we are.

In recent days, we have had an announcement by Ford Motor Company that they are deciding to cut 30,000 more jobs. They cut 10,000 last year. They are going to cut 30,000 more workers. This follows on the heels of General Motors. General Motors announced it was going to cut 30,000 workers.

By the way, the top guy in General Motors who is in charge of acquiring parts called all the suppliers of General Motors together, some 300 of them, the CEOs of the parts companies, and said to them this last year: You need to start outsourcing your parts production to China to bring your costs down. The parts for General Motors, Ford-- shut down the jobs, move jobs to China. Is our country moving ahead or backward when we see these things?

The reason I mention this Ford announcement is Ford announced that at the same time it was cutting 30,000 jobs, from the Washington Post, Ford said:

Repatriation of foreign earnings pursuant to the American

Jobs Creation Act of 2004 resulted in a permanent tax savings

of about $250 million.

Let me describe that in English. What Ford said is they picked up a quarter of a billion dollars in tax breaks under the act Congress passed that they called the American Jobs Creation Act. They announced that same day, we are cutting 30,000 people. How is it that Congress passes something called the American Jobs Creation Act and the company that announces it gets a quarter of billion dollars of benefit under that act at the same time tells us it got that benefit that it cuts 30,000 jobs? How does that work? Does that make sense to anybody? Do people who pass this kind of legislation and call it the Jobs Creation Act, do they seem embarrassed when they see this?

It is not just Ford Motor. I should not pick on Ford Motor. But Hewlett-Packard brought $14.5 billion back from abroad and cut 14,500 workers. Colgate Palmolive, Motorola--I could go on.

What was this little scheme called the 2004 American Jobs Creation Act? Here is what it was. It said for those companies which have parked income overseas and have not repatriated their income yet back to this country--which when they do, they will owe on it with a credit for foreign taxes paid--we will give you a special deal under this Jobs Creation Act. If you bring your money back to this country, you can pay a 5.25 tax rate. That is one half the tax rate of the lowest income American who pays income taxes. So we said to the biggest companies in the world: If you bring your income back, we will give you a deal--5.25 percent. That is the income tax rate you pay.

We now know they repatriated somewhere around $350 billion. By my calculation, this Congress--not with my vote by the way awarded those companies $104 billion in tax breaks.

I don't know of anybody who actually stands up and boasts about that here on the floor of the Senate. They do it because they believe in this sort of thing, but they don't want to brag about it. But I hope those who talked on this issue, when this American Jobs Creation Act was passed, would come to the Chamber and recite for us what they said then and what we know now.

They said if we give these biggest companies huge tax breaks, it will create jobs in this country. Now what we know is--and Ford is the best example of it--they announced: We got a quarter of a billion--thank you, Congress--and we are going to cut 30,000 workers. It is right on down the line. I could spend some time talking about these companies. I will not do that, only to say those who believed this was a jobs creation act now should be disabused of that notion.

We talk about our Tax Code and suggest what is the best way to use our money. They decide the best way to use our money would be to go to some of the largest corporations in America that are doing business overseas and say to them: If you bring that money back, you can pay the lowest income tax rate in America--yes, it is lower than your neighbor, lower than the person down the street, lower than the person up the block, lower than the person out on the farm. You get to pay the lowest tax rate in America. That is almost unbelievable. It is stranger than fiction. But that is exactly what the majority in this Congress did. One would think it should be profoundly embarrassing when we see the results.

Let me also say that this is not just about providing big tax cuts to companies. It is a situation where, with these kinds of tax policies, when we say, Put up a slice of bread here and let us slather some butter all over it, what we are saying to these companies is, We want to encourage you to actually take jobs and move them overseas. We want to tell you that, if you will fire your American workers, padlock the front gate on your American manufacturing plant, and move it all to China or India or Sri Lanka or Bangladesh or Vietnam, we will give you a tax cut. I know people must listen to that and say: That cannot be true. That would be absolutely nuts; you cannot possibly be accurate. But I am. I am. We actually offer a tax cut for companies that get rid of their American workers, outsource their production, and then ship the production back into this country for sale on our store shelves in Toledo and Pittsburgh and Los Angeles and Fargo. Produce it in China, sell it back here, and we will give you a tax break.

I want to draw a circle around all this because it all relates. I want to show a picture of a building. I want to show you what is happening because this relates to taxes and jobs.

This building is a little five-story building in the Cayman Islands. It is a white building. It is called the Ugland House. According to Bloomberg News, this building on Church Street in the Cayman Islands is the official address of 12,748 companies. Let me say that again because someone would say that is kind of crowded. That would be crowded if they were all there. They are not there, of course. This is just their address. 12,748 companies claim this little white building as their official address in the Cayman Islands on quiet Church Street. Why would that be the case? I will tell you why. Because companies these days want to do the following: They want to produce in China by paying people 30 cents an hour, working them 12 to 14 hours a day, 7 days a week; they want to ship the products to the store shelves of the United States of America to sell to American consumers because that is where the money is; and they want to run their income through the Ugland House in the Cayman Islands so they can avoid paying U.S. taxes on their profits. It is perfect symmetry, isn't it?

Of course, it doesn't involve saying the Pledge of Allegiance. You can't really say the Pledge of Allegiance and do this: say, I want all America has to offer, all the protection of our country, the ability to be chartered in America as an American corporation, the ability to be protected by American military might, the ability to be protected by American laws and courts, but I also want this for my company: I want to be able to produce in China, sell in Cincinnati, and run my money through the Cayman Islands. I am telling you, you don't say the Pledge of Allegiance when you do that. You weaken this country. You pull the rug out from American workers. And you also weaken those who are not leaving this country and who are deciding to continue to manufacture here.

There are some wonderful companies that do stay here and do manufacture here. I have told stories of a number of them. I will not do that today. This is not a broad-brush of all companies, but it is increasingly the activities we see in some very large companies that no longer think of themselves in any terms of economic nationalism. They are world enterprises, citizens of the world who want to produce where it is cheap, sell into an established marketplace in the United States, and run their income through a tax haven country. It does not work, in my judgment, in the long term. What do we do about all that?

In addition to talking about the Ugland House, I wish to make sure people understand, from other speeches I have given, that these companies which are leaving America are real companies.

This company, by the way, was a company in this country for over a century. For over 100 years, this company made little red wagons, and I guarantee most American kids have sat in a little red wagon called Radio Flyer. Radio Flyer wagons were originally created by a guy in Chicago, an immigrant. The ``Radio''? That was after

Marconi. He was so enthused about Marconi. And the ``Flyer''? That is because he loved flying. So he built a little red wagon called Radio Flyer, and I bet every kid in this country at one time has seen it, and most of them have ridden in one.

After 100 years in this country, the Radio Flyer is gone. This is gone. They don't make Radio Flyers in America anymore; they make them in parts of the world where you can pay 30 cents and 40 cents an hour for labor. So the company that makes Radio Flyers still aspired to sell them in the United States, it is just that they don't make them here anymore.

I could go through a list of dozens and dozens of companies that represent exactly the same story.

We have all seen these ads over many years, the guys who are dressed as grapes--you know, green grapes, red grapes. They dance and they sing. What a playful bunch of people. Who on Earth thought you could do a little television commercial with a bunch of people singing dressed like grapes? Fruit of the Loom underwear.

Now Fruit of the Loom underwear is gone. It is all gone. They are in other parts of the world where you can produce shorts and t-shirts and underwear for much less cost. The people who used to work for Fruit of the Loom used to have good jobs, the same as the people who worked for Radio Flyer. They worked there for a lifetime, loved their jobs, but then they were told: You cannot compete with 30 cents an hour. So long. See you later. Yet the grapes still sing, and the workers weep for their jobs.

I only point out Huffy bicycles because Huffy bicycles just announced it was becoming Chinese in nationality, which was, in fact, just a formality because they don't make Huffy bicycles here anymore; they have been making them in China. All the people in Ohio lost their jobs making Huffy bicycles. They lost their jobs because they were told they make $11 an hour plus benefits, and that is way too much money, and we are going to make Huffy bicycles at 33 cents an hour in China, for people who work 7 days a week, 12 to 14 hours a day.

The last job, by the way, for the folks in Ohio was to put this decal on. This is a decal of the globe. This used to be a decal of the American flag, when Huffy bicycles were made by Americans here in America. They changed that because all the Huffy bicycles workers were fired. Huffy bicycles are made in China, and now the flag decal was the last job those workers performed before losing their jobs and having to drive out of that plant for the last time. They put the decal of the globe on it.

So if you want to buy a Huffy bicycle at Wal-Mart, Kmart, or Sears, understand they used to be made by people in this country making $11 an hour. No longer. It is all in China. And incidentally, this company also decided it cannot pay the retirement benefits that were owed to the workers, so now the American taxpayer is going to pay that.

The company declared bankruptcy. Now they have announced it is going to be a Chinese company, a Chinese brand and style of Huffy. It is still a Huffy, of course.

One last thing: Lest some think this doesn't matter, the people at Huffy, I was told by someone who on the last day of work, when they left their parking space, those workers who lost their jobs making Huffy bicycles, on the last day in their jobs, those workers left a pair of shoes in the space where their cars used to park. It was their way of sending a message to the company that you can move our jobs to China but you are not going to fill our shoes. It is what those jobs meant to those people.

It is going on all over this country.

When you hear that Ford is going to lay off 30,000 workers, you don't think much; you think 30,000 jobs is not much; it is too big to understand. But the fact is think this country is losing jobs all over, and they are being replaced by jobs that pay less with fewer benefits.

American workers are now discovering downward pressure on wages because this strategy doesn't pull American workers up. It pushes Americans workers down as it exploits foreign workers.

We are in a situation where we have the largest trade deficit in history--$740 billion last year, we believe. That is $2 billion a day, 7 days a week above that which we export from other countries. We are selling America. Every single day, we sell $2 billion worth of this country to foreigners with this insidious trade strategy.

The people who listen to me talk about this will say this is another protectionist, xenophobic, isolationist stooge who doesn't get it. What I get is the need to stand up for the economic interests of this country.

I support trade, the more the better. But it must be fair trade. If it is not fair trade, and if this country doesn't have the guts to require other countries to pull their standards up, then all we are inevitably going to do is continue do push standards down in our country. That is not what we should aspire to in the long term in this country.

It is my intention to offer an amendment that will once again deal with this perverse tax break that pays people to actually shut American plants down and move their jobs overseas. I hope to do that on this bill.

Let me also say I have offered that amendment four times. Members of the House and Senate decided they wanted to continue a tax break for those companies that ship their American jobs overseas.

I hope that one of these days there is a big, old klieg light that shines on all of these votes so people have to answer to those votes. At the very least, we ought to have some sort of neutrality. We ought not be giving tax breaks or benefits to those companies that decide to ship their jobs outside of this country.

If I may make one final point, I talked a bit about these tax issues and running income through the Cayman Islands. We ought to shut that down.

By the way, I have introduced a bill that says if your purpose for setting up operations in a tax-haven country is for the purpose of avoiding taxes, we are going to treat you for tax purposes as if you never left this country. You have a responsibility to pay taxes in this country. We can shut all of that down very quickly, if we have the guts to do it.

If you can't take the first baby step in the right direction to shut down tax breaks for people who are getting rid of American jobs and shipping their jobs overseas, how can you do something more complex?

We will have another vote on that. It will be the fifth vote on that. If some have not seen the light, they can perhaps feel the heat and change at some point.

I have described all of this not in terms of Democrats or Republicans. All of us, I think, want this country to do well. I want the President to do well. I want this country to do well. I want there to be less partisanship. I want there to be more cooperation. But I also want us to take a look at public policy that is wrongheaded and change it.

If we say we have a jobs creation act out there and we give $100 billion in tax breaks and we see fewer jobs as a result of it, something is wrong with that. We ought to understand it.

I want to make one final point about the tax issue. One of the things hanging up the revenue side of the reconciliation bill is the issue of dividends and capital gains, and a 15-percent top tax rate for both dividends and capital gains income.

There are some people who look at the issue of taxation and they think this: We have the opportunity to levy taxes on several different things. We can tax work. We all know what work is. That is when somebody gets up in the morning, puts on a pair of shoes, and clothes, and goes to work. We can tax work. We can tax investment, we can tax rents, and so on. We have people who have decided with respect to dividends and capital gains, that investment income, dividends and capital gains should have a much lower tax rate than tax on work.

Ask the question: Where do you stand on taxation? Some of them say, Well, you know what I think we ought to do. We ought to tax work and exempt investment.

Say you have two people living side by side. One is a multimillionaire who makes all of his or her money on dividends and capital gains. The other one lives next door and wears steel-toed boots and goes to work every day. He

works hard, sweats, comes home and feels he has earned a good day's income. We have people in this Chamber who believe the way that ought to be taxed is the person who works should be taxed, the person who earns it only in capital gains and dividends should have no tax. I know. It is 15 percent. But there are a lot of people in here who would like it to be zero.

We have a circumstance where we say let us tax work, and let us give a benefit to investment. I don't know, what value system is that? Is investment worthy? Of course it is, absolutely. There is no question that people who are investors are good people. They help run this economic engine. I understand that. What value system is it that says work ought to be taxed higher than investment? Work reflects the labor of the American people. I will not go through the list, but it was, I think, in 1943 when Stalin turned to Roosevelt when he was meeting with Roosevelt and Churchill, and he pointed out that we wouldn't have a chance to win this war without American manufacturing. He was talking about the productivity of the American worker. ``The Glory and The Dream'' by Manchester describes what this country did, what American manufacturing did to turn out massive products in the form of liberty ships, airplanes, tanks, and trucks; unbelievable. The American worker is an unbelievable force in this country.

When we come to the side of taxation, tell me the value system that says, by the way, let us tax work but let us exempt investment. There is a fairness issue here that this Congress has a requirement to confront, in my judgment. I know this issue is actually hanging up this bill between the House and the Senate. The House is insisting no, no, no, you have to substantially extend this lower tax rate for investment income. I do not know.

Who is standing up here on the floor of the Senate saying I am standing up for work, for the people who earn a wage? I am standing up for the person who has to shower after work, people who sweat, work hard, earn an honest day's pay?

Finally, let me say this. Part of this is all about the noise of democracy, about debate, about coming to the same point from several different intersections and different perspectives. I feel passionately and strongly about my perspective about trade. Our trade is way off balance. It is going to injure this country. We are going to become a nation of sharecroppers. Warren Buffet makes that point. He is absolutely dead right. Our fiscal policy is way off track.

People say the budget deficit is only $340 billion next year. Nonsense. We will borrow $650 billion in additional debt. That is what our obligation is to our kids.

Trade is out of balance and our fiscal policy is way off track. I am not suggesting there has to be a Republican or Democratic way to fix it. I am just suggesting that we ought to look truth right in the eye, the President and the Congress, and say we have trouble here and we need to fix it. Let us find a way to come together to fix it, get together with what everybody has to offer, that works for each, but find a way to move this country forward.

I am pleased we are having this discussion today about our fiscal policy, and I wanted to come over at least briefly today and weigh in on some thoughts that I think are very important on trade and fiscal policy, about the economic direction of this country, about the direction we are headed, about things we can do--we, the President and Congress--all of us together can do to fix them so we have a brighter future and a future of expansion, of opportunity not just for some but for all Americans.

I yield the floor.

Mr. President, I will be brief. I had thought I agreed to the unanimous consent request in exchange for 10 minutes to speak on this nomination, but if that time does not exist, I will truncate my remarks.

Mr. President, in that case, let me compliment the chairman and ranking member, which I would have done in any event. Let me spend more time complimenting them for their work.

The Banking Committee is very important in the Senate. It takes a very serious view of these issues and I know did a very thorough job in the hearings held late last year on this nomination for Chairman of the Federal Reserve Board. I thank the chairman for his courtesy, and I thank the chairman and the ranking member for their work, not just on this nomination but on so many important issues.

I don't come to the Chamber to oppose Mr. Bernanke's nomination. That is not my purpose. I wish him well. I want him to succeed. He is going to be confirmed almost unanimously today by the Senate.

Chairman Greenspan and I have had very significant differences over a long period of time. But I wish him well. I want to thank him for his service to our country, even if we have different views about monetary policy.

I know people will talk about big shoes to fill. Whenever someone leaves, there are big shoes to fill. I don't know if the shoes are big, little, Ferragamos or Payless--but they are shoes. We have someone else answering to the call of public service, in this case someone well qualified.

Mr. Bernanke has served at the Federal Reserve Board dealing with monetary policy and at the White House dealing with fiscal policy for President Bush. The Senate will confirm him today, and he will go back to the Federal Reserve Board as Chairman.

What I wanted to say today is that we have the twin issues of fiscal policy and monetary policy, and there needs to be some responsibility to understand how they work together to improve this country's future. I am very concerned about this country's economic future for reasons that Senator Sarbanes touched on a moment ago. I wish to describe it to my colleagues.

I think the Federal Reserve Board for some long while--and, yes, it was under Chairman Greenspan's stewardship--has been providing green lights saying, It is OK, go right ahead, to a series of fiscal policy moves which has put us deep in debt. It is not just in budget policy where we have these deep and abiding long-term deficits and, therefore, increases in the Federal debt. We also have large trade deficits. In about a week and a half, we will have an announcement about last year's trade deficit. My expectation is it is going to be about $750 billion, the highest in history. That debt is devastating to this country. It is unsustainable. At the same time, in fiscal policy, the Federal debt will increase in this fiscal year somewhere around $650 billion.

I wish to put up a chart that shows what is happening. This is the wall of debt in fiscal policy. You will see year after year after year, going from 2006 to 2011, up to $12 trillion in fiscal policy debt. Extend this another 5 years, and you get to $16 trillion. This is a relentless wave of bad news in fiscal policy that we cannot continue. This is just fiscal policy. The trade policy debt looks even worse. Its growth is even more dramatic. Of course, that relates to the issues of jobs.

Last week, we heard Ford Motor say: Oh, by the way, we are going to cut 30,000 workers. Several months ago, it was General Motors saying: By the way, we are going to cut 20,000 to 30,000 workers. Four months before that, it was General Motors calling in the heads of the companies that provide the General Motors' parts, 300 people in a room, and the person in charge of parts for General Motors said this to them: You need, when making parts for General Motors cars, to outsource those jobs to China to get the costs down.

Where is all this heading? Ford, General Motors, parts to China, $750 billion trade deficit in a year? It is headed in the wrong direction, and we are today selecting one person who is going to be in a position of very significant influence in our Government about the direction of this country. Mr. Bernanke will play a significant role in determining the amount of economic growth and opportunity that will exist in the future, what kind of good jobs we will have, and how many.

Our fiscal policy, judged by anyone soberly looking at the facts, is seriously off track. I don't blame Mr. Bernanke for that, although he most recently worked at the White House in the fiscal policy arena. It is not a question of blame, it is a proposition that all of us, Republicans and Democrats, liberals, conservatives, moderates, must finally come together to say this is unsustainable.

Our country is off track in fiscal policy and trade policy. This debt will have consequences. And in the construct of monetary policy, it is critically important that Mr. Bernanke understand these messages and not do as has been done in most recent years and put up a big old green light and say to friends in Congress: Oh, by the way, go ahead, it will all work out; be happy. Fine. That is exactly what has happened in recent years, with a couple of exceptions.

The Federal Reserve Board is a strong central bank that is largely accountable to no one. I know, go back to the nineteen-teens when the Federal Reserve Board was created, and it was said on the floor of the Senate, we are not creating a central bank, we are not creating a strong central bank, and we are not for certain creating a strong central bank accountable to no one, but that's exactly what happened. You can make the case over a long period of time that things have gone pretty well with monetary policy here, fiscal policy there.

My colleague from Maryland talks about economic stabilizers. You can talk about some successes. Our recessions have been less deep in recent years because of economic stabilizers and some thoughtful approaches to dealing with monetary policy and fiscal policy. But I believe it is very important for us to understand where we are. If you don't understand where you are at the moment, it is pretty hard to figure out where you are going.

As we consider the nomination of one of the most important people in this country with respect to economic policy, a new Chairman of the Federal Reserve Board, I call attention once again to the fact that we have very serious, abiding, long-term economic problems which, unless resolved, will injure this country's long-term opportunity to remain a world economic power. It is that serious.

One final point. There is a little fund down at the Federal Reserve Board to which I also wish to call attention. I assume Mr. Bernanke knows of it. It is a fund in which $12.9 billion exists. It is a fund at the Federal Reserve Board which is called a surplus account. The Federal Reserve Board, I remind everyone, effectively creates money. It does not need a rainy-day fund because it will never lose money. It has not suffered an annual loss in some 90 years. And yet the Federal Reserve Board has a rainy-day fund, a surplus fund, which has grown now to $12.9 billion.

I believe the Fed and the Congress ought to take a hard look at that and ask themselves, given the fact we are choking on debt these days, is there any reason that the Federal Reserve should continue to have a surplus fund of $12.9 billion? The Fed wants a fund apparently because it might lose money someday. The Fed makes money. The Fed creates money. The Fed does not need $12.9 billion in a surplus account.

So as Mr. Bernanke receives his approval of the Senate today, my hope is he might, with Members of Congress, take a look at that issue. Senator Reid and I and others asked for a GAO report on that 10 years ago now--and the Fed blithely ignores the consequences of any of that and does what it wants to do. In fact, at that point, the reserve or surplus rainy-day fund was $4.5 billion. Not only did the criticism of that fund not deter them, it has grown now to nearly triple that amount, in a rainy-day fund in a climate where it never rains. I am sorry, but Mr. Bernanke should take a good, hard look at that, and so should the Congress.

Having said all that, pointing out especially that we have very abiding and serious fiscal policy problems and trade policy problems, my hope is that Mr. Bernanke, in seizing the reins of our monetary policy in this country as Chairman of the Federal Reserve Board, has a successful tenure. I wish him well. I want him to do well. I want our country to do well. I come to the Chamber only to ask that all of us finally join together, including the Chairman of the Federal Reserve Board, to see where we are and where we must be if we want a strong America in the future, one that grows and finds opportunities for our children and grandchildren.

I again thank my two colleagues for the time. I yield the floor.

Mr. President, I suggest the absence of a quorum.

We work on many important issues here in the Congress, but none more important than choosing a Justice to serve on the Supreme Court.

Providing a lifetime appointment to the U.S. Supreme Court is a very serious matter for both the President and the U.S. Senate. Our choice will impact

our country well beyond the term of office for the President and for most of the Senate.

Those nominations are also very important to the citizens of our country and my State of North Dakota, many of whom--on both sides--have contacted my office and whose counsel I have heard and valued.

This is the second nomination for the U.S. Supreme Court that has been sent to the Senate by President Bush in the span of a few short months.

During consideration of the nomination of Judge John Roberts to become Chief Justice of the Supreme Court, I studied his record carefully. I reviewed the hearing records of his appearance before the Senate Judiciary committee as well as his record as a Federal judge on the Circuit Court.

And in the end, I voted to confirm Judge Roberts. I concluded that he was very well qualified, and I also felt after meeting with him that he would not bring an ideological agenda to his work of interpreting the U.S. Constitution.

In short, I felt he would make a fine Chief Justice.

The Supreme Court nomination we are now considering is that of Judge Samuel Alito.

This has been a difficult decision for me.

Judge Alito has substantial credentials. His education, work history, and his 15 years of service on the Circuit Court are significant.

However, in evaluating Judge Alito's rulings, writings, and his responses during his nomination hearings, I have been troubled by several things.

First, he has a clear record over many years of a tendency to favor the big interests over the small interests. That is, when an individual is seeking justice in the courts by taking on the government or a large corporation, Judge Alito's rulings are often at odds with the rulings of his colleagues on the Court and tend to overwhelmingly favor the government or the big interests.

People who live in small States like North Dakota have, over many years, found it necessary to use the courts to take on the big economic interests. Whether it is taking on big corporations, the railroads, big financial interests, or the U.S. Government, as farmers have had to do in recent decades, I think it is important that a Supreme Court Justice be someone who will give the people a fair hearing.

Judge Alito's rulings on the circuit court have, I believe, tilted heavily on the side of the big interests.

One of the key questions for me about a new Justice for the Supreme Court is ``will this person interpret the Constitution in a manner that expands personal freedom and liberty, or will this person interpret it in a way that restricts personal freedom and liberty?''

I believe Judge Alito's record is one that leans in the direction of restricting the freedom and liberty of individual citizens.

I am also concerned by Judge Alito's view of what is referred to as the unitary executive. This is an issue about Presidential power in our form of government. The judicial branch of Government is designed to be a check and balance on the expansion of Presidential powers. I believe Judge Alito's answers in the Judiciary Committee to questions about the unitary executive tilt toward showing deference toward expanded and unchecked Presidential authority. His views on this issue concern me.

For all of these reasons, I have decided to cast my vote against the nomination of Judge Samuel Alito. I take no joy in opposing his nomination, but for the reasons I have mentioned above, I am not comfortable voting to confirm him for a lifetime appointment on our Nation's highest Court.

Over the years, I have supported about 97 percent of the nominees for the Federal court sent to us by President Bush. My record has been one of substantial support for the President's nominees.

But for me, a nomination to the Supreme Court carries much more weight and greater potential consequences for the country.

Judge Alito is replacing Justice Sandra Day O'Connor on the Court. Justice O'Connor has been a key swing vote on so many issues that have been decided by a 5-to-4 vote in recent years.

I believe that Judge Alito's nomination, if approved by the Senate, would tilt that Court in a direction that will restrict personal freedoms, strengthen the role of government and corporations in our lives, and allow the expansion of power of the Presidency.

For those reasons, I have decided to vote no on this nomination.

Mr. President, the conference report on the Defense appropriations bill contains $29 billion in disaster relief funding related to hurricanes Katrina and Rita. As part of that emergency package, $49 million is being made available to the National Park Service and the U.S. Fish and Wildlife Service to reimburse cleanup costs and facility repair and restoration costs arising from the hurricanes. As the ranking member of the Interior and Related Agencies Subcommittee, which has jurisdiction over these agencies, I fully support this appropriation. There are, however, two aspects of the funding provision which concern me.

First, the $49 million being provided is less than a quarter of the $220 million in damages suffered by our gulf coast parks and refuges. But not funding these expenses does not make them go away. What I fear will end up happening is that every other park and

every other refuge in the Nation is going to have its 2006 budget reduced as a way of making up the $170 million Congress is not providing. Every park superintendent and every refuge manager in this Nation is struggling to keep up with fixed costs and working to address the maintenance backlog. Taking more money away from them is simply not helpful.

Secondly, I strongly disagree with the instructions that are being given to the National Park Service and the Fish and Wildlife Service with respect to how these funds are to be spent. The funding in this bill is provided through each Agency's construction account. Under Federal law, that is the only purpose for which those funds can be used. They cannot legally be spent on operational expenses, which are funded through different accounts. However, the Statement of Managers, which is the report that accompanies the bill and explains in detail how all of the appropriated dollars are to be spent, explicitly says that the money is available for ``un--reimbursed overtime [pay] and operational costs.''

I think it was a mistake for the administration to forgo asking for reimbursement of operational expenses. Both agencies have incurred substantial costs in that area that must be paid for. But the administration's error should not be compounded by having Congress encourage a Federal agency to violate the law. We could have very easily divided the funding between the operational accounts and the construction accounts, which would have allowed the agencies to properly and legally repay some of their operational costs. But that idea was soundly rejected by the majority in the House of Representatives. And so we are left with a situation where we are explicitly encouraging Federal agencies to use appropriated dollars for purposes other than what they were intended. That, Mr. President, is simply the wrong thing to do.

Mr. President, I ask unanimous consent under our allocation of time to speak until 2:15.

I ask unanimous consent that under our allocation of time I be allowed to speak until 2:15 p.m.

Mr. President, there is a lot happening in the final days of this Congress. One might ask, What on Earth are we doing here days before Christmas? We are doing the work that should have been done in March, April, May, June, July, and August, work that wasn't done then for a number of reasons. But now we come to a number of important issues and this is reconciliation, budget cuts, and we have a tax cut bill ricocheting around. We have the PATRIOT Act that my colleague just described. We have the Defense appropriations bill. That has now

been burdened with an amendment that calls for drilling in ANWR.

It is an interesting time, but one that is frustrating for some of us in the Senate. I will give you a description of that frustration.

On Sunday, we met at 12 o'clock--this past Sunday--on a conference, a very large conference dealing with the Defense appropriations bill. I was a conferee. We started at 12, and I left at 5 or 5:30 in the afternoon. We finished the work on that conference report. I opposed a number of things that happened on Sunday. The Defense appropriations bill was before us. They added drilling for oil in Alaska, the ANWR provision, having nothing to do with the bill. They added it because they thought they had the votes to add it.

Well, we finished the conference, and I left here at 5:30 on Sunday, and I discovered they added another provision. There wasn't a conference still going on at that point. A bunch of folks got in a room and decided what they were going to stick in the conference report.

I told my colleagues I grew up in a small town of about 350 people. When I was a kid, I used to go and watch the blacksmith. We had a blacksmith in my hometown. It was kind of fun to go and watch the blacksmith work. He would take a piece of metal, put it in a tong, stick it in heat, in hot coals until it turned white hot, and then he would put it on an anvil, take a big old hammer and beat it. That is how he shaped metal. Heat it and beat it with an old hammer. I watched that guy with dirty clothes, sweating all day long. He would heat that metal and beat that metal. Some people think apparently that is the way the Senate should work--heat it and beat it. Get hold of a big old hammer and pound ANWR through here. It doesn't matter the rules don't permit it; pound it through here. In fact, change the rules if they get in your way. It doesn't matter. Don't like the rules? Change them.

I am usually an optimist. They say a pessimist is someone who smells flowers and looks around for a casket and a body, and an optimist is someone who sees a manure pile and looks for a pony. I am an optimist, usually, looking for good things in what we are doing and where we are heading. But this notion that we live in a special place on this Earth and somehow we don't have to care about nurturing it to make sure it remains special, that it will all work out is a notion devoid of leadership.

The fact is, we are off track in this country. We are No. 1 in exports in waste paper. Did my colleagues know that? The largest volume of export in America is waste paper to China. Unbelievable. Yes, we are No. 1 in exporting waste paper.

And, oh, by the way, in the last 4 years, we also sent about 3 to 4 million jobs to Asia, mostly to China. We have the largest trade deficit in the history of humankind. This past year on the budget deficit, we will borrow $550-plus billion, nearly $570 billion. So we have a budget deficit that is way out of control, a trade deficit that is way off the charts, and we are shipping jobs overseas. Our No. 1 export now is waste paper, and you think things are going great. Suck it up, they say, it is a great place, things are going fine.

I don't think things are going fine. The question is where is the leadership here? David McCullough wrote a book about Adams. It is a wonderful book. He is a great historian. He wrote this book about Adams. I have told this story before. In this book, he described John Adams as representing this country's interests in Europe. Adams would write back to his wife Abigail as they were trying to put this new country together, and he would say: Where will the leadership emerge to help frame and start this new country of ours? Then he would say: There is really only us. There is me and there is Thomas Jefferson and there is George Washington and there is Ben Franklin and there is Madison and there is Mason. There is only us.

Now, of course, we know in the rearview mirror of history that the ``only us'' is some of the greatest human talent ever assembled, and they built a very extraordinary place, a very special country, with a Constitution that says ``We the People.'' The first 3 words, we the people.

But the current leadership in the White House and Congress says we don't have to worry too much about deficits. We are going to cut some spending but, oh, by the way, even though we are up to our neck in deficits, we want to cut taxes, and, oh, by the way, we still want to cut taxes mostly for upper income people. The second part of this reconciliation document is still in the House of Representatives, the tax side. It is very important to say that capital gains and dividends, normally called unearned income, capital and dividends--be given preferential tax rates. That is the most important thing. Warren Buffett, the world's second richest man, said when all this is phased in, he will pay a lower tax rate than his receptionist in his office. Tax work, they say, tax work but exempt investment. That is the mantra around here.

What is the most important thing? Drive down the taxes on dividends and capital gains; drive them down. It doesn't matter, we don't need the revenue. Deficits don't matter, Vice President Cheney said. Deficits don't matter.

They now come to the floor of the Senate with a proposal that says, by the way, let's cut some spending. Guess whose spending is going to get cut. Is it a surprise that the most vulnerable among us get cut? Is it a surprise the proposal is to decide there should not be enough money in Medicaid, that which delivers health care to America's poor, to provide the kind of funding that is necessary in Medicaid?

It is said by some, and I believe it, that budgets are moral documents as well. Someone once asked the question: If you were required to write an obituary for someone you had never met and the only information you had was that person's check register, what would it tell you about the obituary you would write?

What if all you knew about this country was its Federal budget and that is all the information you had as a moral document, but what was important? What mattered to this country? What did this country believe represented the most important areas of investment, expenditure to build on the successes of this country? Would it be, for example, that you decided tax cuts for wealthy Americans are the most important?

Let me show you a picture. I showed it yesterday, but I think it is important. This is a picture of a five-story building on Church Street in the Cayman Islands. Some people would just as soon you didn't this picture. But On Church Street in the Cayman Islands, there is a five- story building called the Ugland House. Do you know what is inside this building? This building is the official address for 12,748 corporations. Impossible, you say? No, it is not impossible. It is not impossible. We are running an economy now and, by the way, with the advice and consent of those in the Congress and in the Senate who voted for it--we are running one that says to businesses: Go ahead, get rid of your American jobs, move them to China, ship the products back to this country to sell them, and run your business through a mailbox in the Grand Cayman Islands so you don't have to pay taxes. That is what this building is about. And, oh, by the way, many of the companies that have this building as their address in the Cayman Islands to avoid paying U.S. taxes got a gift from this Congress--not with my vote--that is the equivalent of a $60 billion tax break--a $60 billion tax break.

In the past year and a half, a bill was passed called the JOBS Act to create new jobs. Of course, it didn't. It cost jobs. It gave a very fat tax break to the largest corporations in our country that do business here and overseas. It said, if you repatriate your income from overseas, because some day you are going to and when you do, you have to pay the 35-percent corporate rate, if you do it now, we will give you a special deal that we won't give to any other Americans: You pay a 5.25-percent tax rate. There is not one American living in Ohio, North Dakota, Oklahoma, or any other State represented in this Chamber who is told in law that they get to pay an income tax of 5.25 percent.

This Congress told the largest companies in this country, we will give you a 5.25-percent tax rate. That was a priority. My colleague who sat in this desk behind me, Senator Fritz Hollings, offered the amendment to strip it. I voted for it. I spoke for it. But, no, we could not strip that out because too

many Members of this Congress believed it was important, a priority, to provide a big fat $60 billion tax break to the largest corporations in this country, with a 5.25-percent tax rate.

Compare that to the proposition we are offered today by people who come to the floor breathlessly saying we have to cut spending to reduce the deficit. Did they care about reducing the deficit when they gift- wrapped a $60 billion tax cut package for the biggest companies by giving them a 5.25-percent tax rate? No. It did not matter. It did not matter then. They just promised that it would create new jobs.

Interestingly enough, the very companies repatriating income to take advantage of this bargain basement tax rate are cutting jobs. This is not just me saying it. This is from the Wall Street Journal and other newspapers that describe exactly what is happening.

So today we have the breathless chant about let us cut funds for the Child Support Enforcement Program, which, it is estimated by the Congressional Budget Office, will result in $2.9 billion in child support going uncollected. Let us cut funding $12.7 billion for the student loan programs. Let us cut funding from family farmers--by the way, many of whom faced some disaster this year; the worst drought since 1895 in Illinois, Missouri, Iowa. One million acres could not be planted in North Dakota.

Those farmers are not going to get disaster help, but the leadership had no reservations about allowing a situation where 12,748 corporations establish their address in one five-story building in the Cayman Islands, for the purpose of not paying taxes in this country. It is all perfectly legal because this Congress believes it ought to continue to happen.

We have had vote after vote on my amendment to try to shut this down. Cannot do it. So in terms of priorities I think it is important to ask the question, on whose behalf are we legislating? I happen to believe we ought to cut the deficit. In fact, in January and February I am going to be offering a very specific set of plans on how you cut spending in a real way. We have very large agencies in our Government, and unlike businesses that have overhead expenditures and then direct expenditures there is no distinction between our overhead expenditures. In fact, they cannot even separate out overhead expenditures.

The first thing one should cut back on is overhead and travel and those kinds of things, but it cannot even be separated out in these agencies. We ought to take a whack at that. I am going to propose that.

I support some of these issues, but let me mention a number of issues that are attendant to this as well. There is a provision buried in this huge reconciliation bill, as is always the case in these things that come to our desk--my colleagues can see the size of this legislation. There is a provision repealing something called the Byrd law that I want to talk about just for a moment.

When American enterprises, American companies, are the victims of unfair trade--and there is a lot of it--our government sometimes imposes antidumping and countervailing duties. The Byrd amendment, which I supported, says that U.S. producers who have been injured by unfair trade should receive those duty revenues.

But the WTO stepped in and said: Well, it is not right that you would recompense your victims of trade who have been injured by unfair trade. So the WTO ruled against us, and we have our colleagues in the Senate and in the House who have been very anxious to overturn the Byrd rule. Sure enough, they do it in this bill.

They cannot run to the bank fast enough, in my judgment. Those who want to do this sort of damage to us cannot run to the bank fast enough to deal with all of these issues. We have the biggest trade deficit in history. We have jobs flowing out of this country. We have a country that does not have the spine, the backbone, the will to stand up for our producers on unfair trade. Those who have been victimized, those who have been hurt by unfair trade, ought to receive the benefits of the tariffs. Now the majority says that is not true; we are going to take it away.

I do not understand that. I do not have the foggiest idea where the Senate's priorities are.

We are right at the end of the session, a couple of days left, and the Defense appropriations bill was not passed this year. Now it is about to be passed, except they load on one of the most controversial issues called drilling for oil in ANWR. Under any other circumstance, one would be laughed out of the Chamber for that. Yet we have people come here--I heard a colleague of mine yesterday say: Well, let us all be bipartisan.

I am all for being bipartisan. Let us also be fair and let us legislate the right way. Let us not stick these unrelated issues on this legislation and then say: By the way, it does violate the rules, but we will change the rules and we will change it only for this purpose and change it right back, and never mind.

Do they think that we cannot see, hear, or think? Is that what this arrogance is born of? I do not understand it. We are close enough to the end of this session, and this country is in deep enough trouble with trade and budget deficits and a range of other issues that we ought to find a way to work together.

This is not about bending steel. This is about compromise, working together to do the right thing for this country. There is no Republican or Democrat way to go off track on trade or on the budget. It just hurts our country. Together, we ought to be able to do better for America.

I yield the floor.

Mr. President, I ask the Senator from Oklahoma if he would mind if I take a minute and half off our side to respond, at which point the Senator from Oklahoma will be recognized.

Mr. President, let me say my colleague from New Hampshire, while interesting and articulate, stops a couple of pages short of good research. First, my colleague talks at length about the WTO. I am not sure which direction we would be required to bow to the WTO. Is it the east or the west? The WTO, of course, does not run or manage American public policy and trade.

But I do want to say this with respect to the Byrd law. My colleague said ``just a few companies'' benefit from it. The fact is, well over 700 companies benefit from it. So, when one talks about misrepresentation, I will ascribe that, I guess, to a mistake.

No, I only have a minute and a half. Several hundred companies have benefited, not just a few.

If one wants to run America's trade policy exclusively through the sieve of the World Trade Organization, I will say get a big armchair, sit back, have a good time, and say: Whatever you want, WTO.

That is not my belief. My belief is we ought to invest in this country's strength. When American companies are victimized by unfair trade, we ought to in my judgment have the good sense, as we have in this legislation we call the Byrd law, to use the tariff to recompense them.

It is not a treaty.

Mr. President, I have been working closely with Senator Mike Enzi of Wyoming for several years now on Federal legislation that encourages and rewards State and local governments that radically simplify their sales tax systems by granting them authority to require large sellers to collect taxes on remote sales after substantial simplifications are implemented. This year we have delayed reintroducing related legislation that we cosponsored in the last Congress, S. 1736, primarily due to concerns that some parties have raised about the bill's small business exemption language.

After months of negotiation, there's still disagreement among the stakeholders about how the bill should define small remote sellers who would be exempted from the bill's sales tax collection requirements. Regrettably, the small business exemption issues have not been resolved to the satisfaction of all parties and Senator Enzi is re-introducing essentially our same proposal from the 108th Congress as he promised. I certainly respect his right and decision to do so.

However, I have been working on small business language that I think is a fair approach and will greatly improve the odds that this bill will become law.

The bill I am introducing today is identical to the bill that Senator Enzi is introducing today in every respect--except one. Instead of putting a small business exemption in the bill with a specific dollar threshold, my proposal sets up a process that I believe will help us get to the right answer. Under my proposal, the Small Business Administration (SBA) is required, after considering all relevant factors and soliciting input from the Treasury Department, the Streamlined Sales Tax Governing Board and others, to develop a rulemaking and propose to Congress a definition of those small sellers, including small businesses, which would not be required to collect and remit sales and use taxes. My bill provides

for the expedited consideration of SBA's proposal by the U.S. House and Senate and takes steps to ensure that a small sellers' exemption will ultimately be approved by Congress. States would be allowed to require impacted remote sellers to collect sales taxes only after federally mandated simplification is accomplished and a small business exemption is approved by Congress.

All of the other parts of my bill are identical to those included in Senator Enzi's bill. These provisions also deserve our immediate attention. There are over 7,000 tax jurisdictions across the country that rely on sales taxes to fund a range of local activities, from education and fire suppression to police protection and road construction. But billions of dollars in needed sales tax revenues go uncollected year after year in many jurisdictions due to a ruling by the U.S. Supreme Court in 1992 that said current State and local sales tax systems impose an undue burden on sellers without a physical presence in each State.

Internet and catalog sellers have argued that collecting and remitting sales taxes for thousands of different tax authorities is exceedingly complex. This is a legitimate complaint. And I understand why the U.S. Supreme Court in its Quill decision said that States and localities could not require sellers to collect sales tax on remote sales until the States and localities have first dramatically reduced the complexity and burden of collecting sales taxes.

The States and localities have stepped up to the challenge outlined in the Quill decision. For five years now, the States have been working with the retail community and local governments to develop a streamlined and uniform sales tax system agreement that will alleviate the burden of sales tax collection on local retailers and remote sellers.

The Streamlined Sales and Use Tax Agreement, which was approved by 34 States and the District of Columbia in November 2002, requires participating States to comply with dozens of stringent simplification requirements that streamline how State sales and use taxes are identified and collected. By early next year, 19 States will have enacted legislation to bring them into compliance with the Agreement and will be members of its Governing Board.

By harmonizing their State sales and use tax rules, bringing uniformity to definitions in the sales tax base, significantly reducing the paperwork burden on retailers, and incorporating a seamless electronic reporting process, compliance with the Agreement will result in a significantly reduced tax collection burden on all sellers.

As the volume of remote on-line retail sales grow, states are losing more and more sales tax revenues. An estimated $15 billion in sales and use taxes will go uncollected in 2005. This threatens the future ability of states and localities to make critical investments in even the most basic community services, while forcing local retailers who are required to collect sales taxes today to compete with large remote competitors who are not. Senator Enzi and I are determined to address this problem.

I think that the legislation I am introducing today strikes a reasonable balance between the interests of consumers, local retailers, remote sellers and the states. Having said that, I will be working with Senator Enzi early in the next session to see if we can put together a single approach that would address any remaining concerns about the small business exemption and help us move this legislative effort forward in the next session.

We will also have an opportunity to more fully examine some issues raised by the representatives of local governments and some Indian tribes about the impact of our initiative on their constituencies.

Mr. President, I have been working closely with Senator Mike Enzi of Wyoming for several years now on Federal legislation that encourages and rewards State and local governments that radically simplify their sales tax systems by granting them authority to require large sellers to collect taxes on remote sales after substantial simplifications are implemented. This year we have delayed reintroducing related legislation that we cosponsored in the last Congress, S. 1736, primarily due to concerns that some parties have raised about the bill's small business exemption language.

After months of negotiation, there's still disagreement among the stakeholders about how the bill should define small remote sellers who would be exempted from the bill's sales tax collection requirements. Regrettably, the small business exemption issues have not been resolved to the satisfaction of all parties and Senator Enzi is re-introducing essentially our same proposal from the 108th Congress as he promised. I certainly respect his right and decision to do so.

However, I have been working on small business language that I think is a fair approach and will greatly improve the odds that this bill will become law.

The bill I am introducing today is identical to the bill that Senator Enzi is introducing today in every respect--except one. Instead of putting a small business exemption in the bill with a specific dollar threshold, my proposal sets up a process that I believe will help us get to the right answer. Under my proposal, the Small Business Administration (SBA) is required, after considering all relevant factors and soliciting input from the Treasury Department, the Streamlined Sales Tax Governing Board and others, to develop a rulemaking and propose to Congress a definition of those small sellers, including small businesses, which would not be required to collect and remit sales and use taxes. My bill provides

for the expedited consideration of SBA's proposal by the U.S. House and Senate and takes steps to ensure that a small sellers' exemption will ultimately be approved by Congress. States would be allowed to require impacted remote sellers to collect sales taxes only after federally mandated simplification is accomplished and a small business exemption is approved by Congress.

All of the other parts of my bill are identical to those included in Senator Enzi's bill. These provisions also deserve our immediate attention. There are over 7,000 tax jurisdictions across the country that rely on sales taxes to fund a range of local activities, from education and fire suppression to police protection and road construction. But billions of dollars in needed sales tax revenues go uncollected year after year in many jurisdictions due to a ruling by the U.S. Supreme Court in 1992 that said current State and local sales tax systems impose an undue burden on sellers without a physical presence in each State.

Internet and catalog sellers have argued that collecting and remitting sales taxes for thousands of different tax authorities is exceedingly complex. This is a legitimate complaint. And I understand why the U.S. Supreme Court in its Quill decision said that States and localities could not require sellers to collect sales tax on remote sales until the States and localities have first dramatically reduced the complexity and burden of collecting sales taxes.

The States and localities have stepped up to the challenge outlined in the Quill decision. For five years now, the States have been working with the retail community and local governments to develop a streamlined and uniform sales tax system agreement that will alleviate the burden of sales tax collection on local retailers and remote sellers.

The Streamlined Sales and Use Tax Agreement, which was approved by 34 States and the District of Columbia in November 2002, requires participating States to comply with dozens of stringent simplification requirements that streamline how State sales and use taxes are identified and collected. By early next year, 19 States will have enacted legislation to bring them into compliance with the Agreement and will be members of its Governing Board.

By harmonizing their State sales and use tax rules, bringing uniformity to definitions in the sales tax base, significantly reducing the paperwork burden on retailers, and incorporating a seamless electronic reporting process, compliance with the Agreement will result in a significantly reduced tax collection burden on all sellers.

As the volume of remote on-line retail sales grow, states are losing more and more sales tax revenues. An estimated $15 billion in sales and use taxes will go uncollected in 2005. This threatens the future ability of states and localities to make critical investments in even the most basic community services, while forcing local retailers who are required to collect sales taxes today to compete with large remote competitors who are not. Senator Enzi and I are determined to address this problem.

I think that the legislation I am introducing today strikes a reasonable balance between the interests of consumers, local retailers, remote sellers and the states. Having said that, I will be working with Senator Enzi early in the next session to see if we can put together a single approach that would address any remaining concerns about the small business exemption and help us move this legislative effort forward in the next session.

We will also have an opportunity to more fully examine some issues raised by the representatives of local governments and some Indian tribes about the impact of our initiative on their constituencies.

Madam President, I ask unanimous consent that the order for the quorum call be dispensed with.

Madam President, my colleague from the State of Washington just discussed an issue that is going to be a recontested issue this week; that is, drilling in ANWR and an amendment that allows the drilling in ANWR in Alaska attached to the DOD appropriations bill.

I was a member of the conference committee that met yesterday starting at noon. I believe we finished close to 5 o'clock yesterday afternoon. We had a pretty aggressive and contentious discussion about this issue.

I just want to say that while I believe we need to produce more energy, I supported the Energy bill. I was a member of the Energy Committee and am proud to support the Energy bill. It does mean that we need to produce more oil, coal, and natural gas; produce more renewable forms of energy; move toward a different energy construct, such as hydro and fuel cells; have more efficiency and conservation. I support all of that.

But I said then, and I believe now that opening the most pristine area of our country that has been set aside ought to be a last resort, not a first resort. Deciding to open that now and getting oil from it 10 years from now makes precious little sense to me especially when there are alternatives. But even more importantly, adding this controversial issue to the Defense appropriations conference report that is going to come to the Senate really makes no sense at all. It adds a very controversial provision to a bill that basically is to fund the actions of the Defense Department and support our troops. I do not, for the life of me, understand why this is being done.

In order for this to be accomplished, there will have to be a debate in this Chamber. When the conference report comes to the floor of the Senate, which I assume is going to be Wednesday, the debate will ensue, and those who oppose adding this unrelated, extraneous, highly controversial issue to the Defense appropriations bill will make a point of order that it violates the rules of the Senate, and it does. There is no question about that. This is violative of rule XXVIII of the Senate. My guess is, from what I hear, the proponents of doing this will then, after the Parliamentarian and the Chair would rule that this violates rule XXVIII of the Senate, ask that the ruling be overturned and have a vote on appealing

the ruling of the Chair--in effect, changing the rules of the Senate in the middle in order to accomplish doing something that otherwise would violate the rules of the Senate.

Well, they are going to do that the Wednesday before Christmas, do it on a Defense appropriations bill. I, for the life of me, do not understand how they think that is justifiable. But as I indicated, it will be controversial and difficult this week as we go through this.

One of my colleagues who is pursuing this says he has a right to pursue it. Right; indeed, he does. He has a right to pursue it, but it will require, in my judgment, the violation of the rules of the Senate, and therefore the changing of the rules of the Senate in the middle of this process. Doing it not only upholds his right but violates the rights of others in the Senate, in my judgment. It abrogates other rights that exist in the Senate.

I know this is all inside baseball to a lot of people, and foreign language to people if they do not understand the rules of the Senate, but rules are rules. There are rules established for the way the Senate works for a very good purpose. If, in this circumstance, we decide that in this conference we can take anything, totally unrelated, anything, and stick it on this conference report, bring it to the well of the Senate in a way that is violative of the rules, but then simply by majority vote decide to appeal the ruling of the Chair, it violates the rules and changes the rules and changes them back in a minute. There is kind of an arrogance there that, in my judgment, does not befit the Senate. We will have that discussion at some point later.

I wanted to say that I also was a member of the conference yesterday in which we discussed the issue of Katrina relief; that is, relief for Hurricanes Katrina and Rita that hit the gulf coast. I said the Senator from Mississippi, Mr. Cochran, who comes from that region and who has pushed very hard to represent the gulf region in a very substantial way has been successful in doing that.

Disaster Relief

The one piece that yesterday bothered me, and I indicated so and offered an amendment on it, was a piece that the Senate had, with the leadership of Senator Cochran, previously represented to the House of Representatives, and that was there are many farmers who were devastated by these hurricanes in the gulf. These hurricanes came rushing through and destroyed all the crops, and farmers were devastated. So there is about $404 million in the disaster package that will help those farmers in the gulf.

The point I made was--and I know the Senator from Mississippi had previously supported this point because the Senate position was that we should provide disaster relief not just for those farmers in the gulf-- they, in fact, should have disaster relief, but there are others in this country who had weather-related disasters, and they ought to, as well, be people who would be eligible for disaster assistance.

In my State, for example, torrential rains in the spring meant that 1 million acres of land were not planted, a million acres were not able to be planted. If you are a farmer and your acreage is in that million acres, you are done. You are in huge trouble. So they ought to also qualify for disaster aid. I offered the amendment yesterday afternoon to add the $1.6 billion to the package that would have allowed us to be fair to all of the rest of the farmers in this country who have been hit with weather-related disasters, and the Senate conferees passed my amendment. We sent it to the House conferees, and they rejected the amendment. So now we have a circumstance where there is no disaster relief for those who have been hit by this disaster and weather-related disasters in other parts of the country.

Family farming is probably easy for some to forget, but family farming is very important to our country. These are families who live out under the yard light, in many cases far from town working to try to make a living against all the odds, against the potential of a grain market collapsing, against the odds that there may be disease in their crops or hail or too much rain or too little rain, all kinds of natural disasters. And we, generally speaking, reached out to those family farmers to say we want to help you because we want to be able to keep family farms on the land in this country.

Yesterday's action by which the House of Representatives rejected that aid, the disaster assistance, is, in my judgment, a huge mistake. We have had severe drought in Illinois, Missouri, parts of Iowa, and other States. As I indicated, we had torrential rains in some disaster areas in my State earlier this year, and there are other parts of the country in which family farmers suffered the same fate. I think it is wrong for this Congress to decide that some will get assistance and others will not, if all have--in terms of the groups who would be affected, if all of them were affected by weather-related disasters. I just think that is wrong.

The House of Representatives rejected that because they said the $1.6 billion was above the agreement, and the President and the White House would not support it.

I want to just talk a little about our fiscal priorities. Because something is seriously wrong here.

Last year, we had a provision in this Chamber that provided a very significant tax cut, and it was a tax cut for the largest corporations in our country.

I objected to it, standing at this desk, but it got through the Congress, and it is now law. I want to talk about that tax cut just for a minute because it is not just on the order of $1.6 billion we could have used to help family farmers struggle through a tough time, it is about a $60 billion tax cut to the biggest corporations in our country. It was something that had nothing to do with the substance of the bill. It was called the JOBS Act that was run through the Congress, the JOBS Act.

Presumably, it was titled the JOBS Act because those who offered it said it would create new jobs.

In fact, I will read a couple of comments from my colleagues. One of my colleagues says the idea is for 1 year to reduce the tax burden and bring those profits back into this country, to invest them in ways that help your business, and this creates new jobs.

Another of my colleagues said, well, this is insourcing. This insources jobs to the United States. This will create a lot of jobs in the United States.

Another of my colleagues said if you are interested in creating jobs, it has been estimated on a conservative basis this proposal will create 660,000 jobs.

What was this tax proposal? It was to say to the largest corporations in this country, do business here and overseas, if you have earned income overseas, at some point you expect to bring that income back to this country to your headquarters and to your stockholders, and when you do that you would be paying corporate income taxes.

We have a corporate income tax rate of 35 percent, and when you repatriate earnings, as they call it, from your overseas operation, you pay income taxes in this country.

But there is a special little deal that has been in law for decades and decades--in fact, the first person who tried to get rid of this special deal was John F. Kennedy. That tells you how long it has been there. It is called deferral. Do business overseas, move your plant, move your jobs, do business overseas and, by the way, you get a tax break. You don't have to pay taxes on those earnings from overseas until you bring them back to this country. So that has been around for a long time.

That tax break anticipates, though, at some point, even though you can defer paying taxes, you are going to have to bring the profits back when you do business overseas, and you are going to have to pay taxes in this country on those profits. It would be at the corporate tax rate of 35 percent, except a year ago this Congress said the following: We would like to create a great, big old dessert tray for the biggest corporations in the country. When you bring your profits back in the next year, we will tax them at 5.25 percent--no, not 35 percent, 5.25 percent.

Do people around this county have that right? Is there a Johnson or an Olson family, that brings their profits back or pays income tax at a 5.25-percent tax rate? No, no, no. Real people pay taxes at rates far in excess of 5.25 percent. But now some of the biggest corporations in the country are repatriating profits to this country and paying 5.25 percent in income taxes--5.25 percent, a fraction of what the lowest income people in this country are

paying. And, oh, by the way, they are also cutting jobs at the same time.

Now, let me just show a picture of a building in the Cayman Islands because it is part of the puzzle. This is a picture of a building in the Cayman Islands. This is a five-story building on Church Street in the Cayman Islands. It is called the Ugland House. This five-story white building on Church Street is the official address for 12,748 corporations.

Now, you may ask, how can that be? It is just an address. It does not mean anything. All it means is they set up an address in the Cayman Islands so they can run their profits through the Cayman Islands and avoid paying taxes in the United States.

Madam President, 12,748 companies run income through this building in the Cayman Islands. It is just an address.

Now, the folks who push this bill on the floor of the Senate, that has now cut taxes by $60 billion--$60 billion it costs this country in lost tax revenue from the biggest corporations in the country that are now repatriating income at tax rates that are a fraction of what every other American pays--those folks said this is going to create jobs. Well, really? Let's just look at that. I will just give you a couple examples. I could bring over a lot of charts.

Hewlett-Packard, they are bringing back $14.5 billion they made overseas, and they are going to pay a 5.25-percent income tax rate. They also announced they are going to cut 14,500 jobs.

Motorola, $4.4 billion they are bringing back in repatriated taxes, paying a 5.25-percent income tax rate. They are cutting jobs.

Colgate Palmolive, they are cutting jobs.

The list is pretty substantial, actually.

Merck Corporation is cutting jobs, and repatriating earnings.

So to my colleagues who are on the floor pointing out that if we just pass this $60 billion tax cut, in 1 year--$60 billion tax cut for the largest companies in our country that do business overseas--they would create more jobs at home, I wonder, now, how they will come to the floor of the Senate and answer the question: If you actually see the repatriation of about $200 to $220 billion, and companies using a substantial portion of that to buy back their stock, and other companies repatriating it and cutting jobs, how do you, then, justify having given a $60 billion tax cut to the biggest corporations in this country? There will not be much of an answer to that.

I think of the quote from Will Rogers when I think of the wool that was pulled over the eyes of the Congress, or perhaps it was not. Perhaps the Congress is controlled by a majority who just find it important every day to get up to see how you can give big tax breaks to the biggest corporations or the highest income earners. Perhaps that is just an advocation that is now natural for those who control this Congress.

Will Rogers once said: It is not what they know that bothers me, it is what they say they know for sure that just ain't so. That is the case with this $60 billion tax cut, in 1 year, that affects the largest corporations in this country.

Here are some of the editorials and notices about it. October 16 of this year:

It shouldn't escape Americans' attention that U.S.

companies have disclosed plans to repatriate $206 billion in

foreign profits this year under a one-time tax break allowed

by Congress on the grounds--you guessed it--that such a big

tax break would ignite a strong spurt in job growth. The

upshot, of course, is that no such job spurt appears to be

materializing.

Some have even announced plans to cut operations and jobs.

Colgate Palmolive repatriated $800 million in foreign

profits, planning to cut 4,450 jobs and a third of its plants

over the next 4 years.

Interestingly,

Even the primary advocate for the special, one-time tax

break, economist Allen Sinai, is now soft pedaling his

prediction of 660,000 new jobs over 5 years. He now says the

efficacy of the tax break will be hard to prove.

The Chicago Tribune, August 11: Motorola disclosed Wednesday it will bring $4.4 billion in profits back under the controversial Federal tax law that was passed, and announced Wednesday it will cut 500 more workers than previously announced.

Hewlett-Packard is going to bring back $14.5 billion. And, by the way, they get to pay at a 5.25-percent income tax rate. Wouldn't every American like to pay an income tax rate of 5.25 percent? But it is not so. Just the big shots do. They pay 5.25 percent, bring back $14.5 billion, and lay off 14,500 workers. Almost perfect symmetry, isn't it? You bring back $14.5 billion, pay a bottom-rate tax rate that nobody else gets, and you lay off 14,500 workers.

It is not only this technique that is bothering me but many others these days. There was a story recently in the Wall Street Journal about some of the largest technology corporations that are setting up buildings in other countries. This one is in Ireland. You set up a building in Ireland--a tiny little quiet building, on a quiet street, in Dublin, Ireland--and then move your intellectual property, programming, and software and so on to a wholly-owned subsidiary in that country, and then license it back in other countries where you are selling it, and run billions of dollars--billions of dollars--through that little address in Ireland.

What is the purpose of that? Avoiding taxes. So you do not have to pay taxes. In this case, one of the companies avoided paying $500 million a year in taxes to the U.S. Government by moving its software to Ireland, running the licensing through Ireland, and essentially moving taxes and income away from the U.S. Government.

The question is, When will this stop? We are up to our neck in debt. We have very substantial Federal deficits, the largest trade deficits in history, and we have corporations in this country that have decided they want all the advantages America has to offer. But they do not want the responsibilities to pay taxes. And they have friends in this Congress who will say: Oh, by the way, if you do pay, we will give you a special discount rate, one of these blue light specials. Regular folks are going to pay 20 percent, 30 percent, 35 percent, 36 percent, but, no, you get to pay 5.25 percent.

I think it was Tom Paxton who used to sing that song ``I'm changing my name to Poland,'' after Poland got a Government loan some years ago. Perhaps there are American families who might want to change their name to Hewlett-Packard or Motorola or Merck. Perhaps American families would like to pay a 5.25-percent income tax rate. And maybe American families would like to set up an address on Church Street in the Cayman Islands so they can run their income through the Cayman Islands and avoid paying taxes. But maybe not.

Most American families say the Pledge of Allegiance, believe in this country and its promise, understand we have things to do together. We have a Defense Department to fund. We build roads. We have the National Institutes of Health to fund. We do so many things together in Government. We educate our kids. We have security on the streets in the form of law enforcement.

Maybe most Americans know that is what we do together, and the responsibility is to pay taxes. Do we like it? Not necessarily. Do we understand it? Sure. But not everybody apparently understands it, because some decide to run their business through this five-story building for the purpose of avoiding taxes.

Our domestic individual tax rates are 10 percent, 15 percent, 25, 28, 33, and 35. Those are the tax rates for individuals who file individual tax returns. There is only one tax rate I know of that is lower than that, and that is the tax rate the largest corporations will pay when they bring $220 billion back that this repatriation provision allows. So they will pay half the rate of the lowest rate the lowest income Americans will pay. That is unbelievable. It was pushed through this Congress with the promise that it would produce more jobs.

Most of us said that is nonsense. We knew it wasn't going to happen. But it was pushed through the Congress. At this desk right here, Senator Fritz Hollings--now not in the Senate; he retired--offered the amendment to strip this provision out of that tax bill. Those who wanted this provision would hear none of it. They wanted it. They got it. So now we have some of the highest income enterprises in the world paying a 5\1/4\-percent tax rate on the repatriation of profits.

When I mentioned the building on Church Street in the Cayman Islands, Senator Levin and I had the General Accounting Office do an evaluation of who is running operations through these tax haven countries. Fifty- nine of the 100 largest publicly traded Federal contractors--companies that contract with the Federal Government, that have tens of billions of dollars in contracts with the Federal Government--had established hundreds of subsidiaries in overseas tax havens. In other words, they want to do business with the Federal Government, make income from doing so, but want to run it through tax subsidiaries in tax havens to not pay taxes to the Federal Government. It is unbelievable.

The point is, we sat yesterday in conference discussions for 4 hours and talked about all kinds of funding issues. There wasn't $1.6 billion to help family farmers through tough times, but there was $60 billion this year given to the largest corporations to repatriate their profits with the promise that they would produce new jobs. The fact is, those jobs don't exist. This was an unforgivable gift, a giveaway that made no sense. It is one more example of doing the wrong thing at the wrong time and pledging that somehow it is going to help advance the interests of our country.

A man named Uwe Reinhardt from Princeton University probably captures all of this best in terms of priorities, warped priorities, wrong priorities. In a piece he had written talking about tax cuts and health insurance, he wrote a memo at the start of it: Dear God, we had to decide between health insurance and a tax cut, and we took all the money as a tax cut. We hope that pleases you. A grateful nation.

This is, after all, about priorities, what makes our country stronger, what improves our country. We have a very substantial Federal budget deficit. Yet we will now, I believe this week, see the reconciliation bill with additional tax cuts that will substantially benefit upper income people. On top of the Federal budget deficit, we will see additional tax cuts benefiting upper income people. We have a substantial trade deficit, well over $700 billion a year, and a huge movement of American jobs overseas, especially to China. Any worry about that? Not much. You can't find much around here. I have spoken at length about it. We actually have the incentive, the perverse, obscene incentive that says to a company today, on Monday, anywhere in this country: If you fire your workers, put a padlock on the front door of your manufacturing plant and move the whole thing to China and hire Chinese workers, we will give you a deal. You get yourself a tax break.

That is unbelievable, but it is in the law. Get rid of your manufacturing workers. Shut down your American plant. Move the jobs to China, Indonesia, Sri Lanka, Bangladesh, we will give you a tax break.

We have tried four times to shut down that tax break, and unbelievably, there is a majority of Senators who believe that tax break should continue to exist, a tax break that says: On tipping the balance, we believe we ought to provide incentives to move American jobs elsewhere, get rid of American jobs in search of 30-cent labor with 1 billion people around the world who are willing to work that way and companies who are interested in finding places where you can hire people for 30 cents an hour. You can dump the chemicals into the rivers and the air. And by the way, you don't have to have a safe work plant. And importantly, if somebody tries to organize because they don't like the working conditions, you can fire them. In some countries, they will put them in jail for you.

We say: Want to get rid of your American workers, want to find cheaper labor someplace, get rid of all the encumbrances? We will give you a tax break if you want to do it.

That is unbelievable, but it is part and parcel of this whole story about a five-story building with 12,748 companies calling it home for the purpose of getting a tax break by running income through the Cayman Islands. Once again, companies that want all of the opportunities that come with being American but seem to want to avoid some of the significant responsibilities; that is, to pay taxes to support this Government.

We will, in the next 24 or 48 hours plus, have a robust and aggressive debate on the issue of attaching ANWR to the Defense appropriations bill. When that occurs--I assume on Wednesday--my hope is we will come to the right solution. The right solution is to pass legislation that will fund the troops, fund the needs of the Defense Department. We have considered and will consider the issue of ANWR in the future. There are other mechanics and other approaches by which that should be considered and will be considered in the Congress. I believe this is an inappropriate approach.

I yield the floor.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, my understanding is that the Senate is taking up the free-trade agreement with Bahrain. Of all the priorities that exist in our country dealing with the subject of trade, somewhere close to last would be a trade agreement with Bahrain. Nothing against the country of Bahrain. I am sure it is a wonderful place. I have not actually visited there. But I believe the total trade between our country and Bahrain is somewhere in the neighborhood of $700 million, less than $1 billion on both sides of the ledger.

There are all kinds of trade problems our trade officials ought to be working on. But a free-trade agreement with Bahrain would not rank right near the top. Let me tell you what would rank near the top.

We are deep in debt with respect to international trade. This country is in desperate trouble with respect to trade. We are now experiencing a trade deficit of over $700 billion a year. That means every single day, 7 days a week, we buy more from abroad than we sell in exports, $2 billion a day every day 7 days a week. How long can a country sustain that?

We have lost 3 million jobs in this country in the past 4 years--3 million jobs--going to China, to Vietnam, Bangladesh, Indonesia, and more.

So what is all of this about? It is about a new strategy, a strategy developed in the past two to three decades, but accelerated now more recently. It is a strategy that says we are a global economy, and because it is a global economy, enterprises, corporations, and others should take a look around this world and find out where these 1 to 1.5 billion people are who will work for pennies an hour, employ them, shut down your U.S. manufacturing plant, hire the employees in China or Bangladesh, for example, and it will all work out because they will work for 30 cents an hour, and they will build bicycles and wagons and produce textiles and other things. And then you can ship it to a big box retailer in this country, and someone can walk through the front door of that big box retailer and buy a cheap product.

I noticed last year at Christmastime there was a woman from Texas who decided she was going to buy her children some presents, and she wanted to make a point of buying American made products. So she started shopping, and she discovered she could not purchase one present for her children that was made in the United States.

What does it mean? It means our country is changing and our country is, in my judgment, being hollowed out. Jobs are being lost, the middle class is shrinking because we have been told now American workers must compete with others around the world who are willing to work for 30, 40, 50 cents an hour, work without health insurance, without a retirement, and work under the threat, in many cases, if they would like to organize as workers, of being sent to prison.

I can actually give names of people now sitting in prison in China whose transgression was deciding to try to organize workers because the conditions in those plants were awful. So there are people who tried to organize workers, were arrested, and now are sitting in prison. Those are the conditions under which we are now trading.

One-third of our trade deficit, incidentally, is with the country of China. Last month, we sold China $3 billion worth of American goods--$3 billion. And we purchased from China $23 billion in goods.

China has almost 1.4 billion people, and we are told this is going to be a huge market for American production. The creation of a middle class in China is going to be terrific for our country because we will be able to produce and sell into the Chinese marketplace.

It is not working out that way, of course. What is happening is China sells us $23 billion worth of goods produced in China, and we sell them only $3 billion worth of goods produced in America, $20 billion-a-month trade deficit with China. On an annual rate, that is a $240 billion deficit with China in a year. That is unbelievable. And this Congress is perfectly content to dose through it all; in fact, probably a very satisfactory sleep for most because they still are willing to stand on street corners and chant about this so-called free trade that is not free at all.

Some will say, and I think perhaps most who have studied economics will say, that this is unsustainable. This country is headed toward some whitewater rapids with these kinds of trade deficits. We are not only losing American jobs because American workers are being told they cost too much money, and we are going to produce elsewhere, but we are also up to our neck in debt.

Incidentally, the trade deficits are financed by selling part of our country. Every single day we sell another $2 billion worth of our country to foreigners. That is the way the trade debt is financed.

In most recent months, one of General Motors' top executives called in about 300 of the top executives of the companies they buy parts from and said this to them: You are the companies from which we buy automobile parts. We want you to begin producing those parts in China. You need to move those parts to China. Get your production done in China. We are about driving down the costs.

Then we see Delphi, which was formerly part of General Motors and then spun off as the largest automotive parts producer, going through bankruptcy, and Delphi says to the public: The problem is we have people making $20 to $30 an hour. That is up to $40,000, $50,000, $60,000 a year. What we want to do is get to a point where we have people making $8 to $10 an hour. In fact,

what we want to do is move most of our production offshore to China and elsewhere so we can pay 30 cents an hour. And then the jobs that are retained, we want to pay $8 to $10 an hour.

I ask this question of, yes, General Motors, IBM, and all of these companies engaged in this activity, and virtually all of them are: Who will be your future customers if your job is to lay off American workers so you can produce elsewhere where it is cheap in order to sell back into this established marketplace? Who is going to buy your laptop computers and your automobiles?

If we were going to do something representing a priority today for me on trade, I would deal with China first. But there are all kinds of bilateral trade problems with a number of major trading partners. Let me give you some examples.

I have mentioned many times that in the past year we will have shipped in well over 600,000 automobiles from Korea into this country. In return, we were able to send about 3,900 American vehicles to be sold in Korea. Sound fair? Sound reasonable? Sound like a thoughtful deal for America? The answer is clearly no.

What this means is shifting American jobs elsewhere, produce the cars in Korea, ship them to the United States, and if you start selling any U.S. vehicles in Korea, shut it down. That is what has happened. Incidentally, the Dodge Dakota pickup truck became a little bit popular for a couple of months in Korea. They saw that and shut it down just like that. They do not want American vehicles sold in Korea. They just want to sell their cars here.

China has 20 million cars on the road. It is estimated that by the year 2020 they will have 120 million cars on the road. They are gong to add 100 million cars because they want to start driving in China, even in the rural areas of China. General Motors says a Chinese company has stolen the production blueprints for one of its small cars. They have actually filed a legal action against the Chinese company for stealing what they call the production blueprints for a vehicle.

So a company in China called Chery, which is only one letter away from Chevy, is going to be producing a car called the QQ. The QQ is a car that will be produced in China with what General Motors alleges are the production blueprints that were stolen from General Motors.

Recent Wall Street Journal reports say that the Chinese are gearing up for a very substantial automobile industry, and they want to export around the world.

I ask unanimous consent for an additional 5 minutes.

They want to export those vehicles around the world so very soon. Unless something changes, China will be exporting automobiles as Korea is doing. Does anyone think China wants to take American vehicles into China? No, no. What they want to do is accept the American marketplace as a sponge for all that they produce.

I have spoken at great length on the Senate floor about the people who have lost their jobs in this country when their plants closed down. I talked about Pennsylvania House Furniture. In fact, I talked to the Governor of Pennsylvania about this. Pennsylvania House Furniture, the description of that for almost a century was using the finest Pennsylvania wood and producing high-end furniture, and when people bought Pennsylvania House furniture, they knew they were getting a real piece of furniture.

Well, La-Z-Boy bought that furniture company. After a couple of years, La-Z-Boy decided, we want to produce that furniture in China. The Governor of Pennsylvania and others tried to put together a financing package to keep the jobs in Pennsylvania, to do everything to see if they can keep in this country the Pennsylvania House Furniture Company that had been around a century.

The answer was no. La-Z-Boy said: Those jobs are going to China. Now what they do is ship the wood from Pennsylvania to China and pay the Chinese workers pennies on the hour to put the wood together in furniture and then send the furniture back to our country to be sold. Yes, it is Pennsylvania House furniture but not made in Pennsylvania. So those workers lost their jobs. Is it because they were not good workers? No, they were craftsmen. In fact, the very last piece of furniture they made in Pennsylvania they turned upside down and those craftsmen who made that furniture all signed their name on it, the last piece of furniture that company made in America by American workers. La-Z-Boy, which owned Pennsylvania House Furniture, decided, as so many others have, that those jobs had to go to China because they can pay pennies on the hour, they can work kids if you want to, they can dump the pollution into the sky and into the water, and they will not have anybody worrying about whether they are going to form a union because it will not be allowed. That is not fair trade. That is not something we should continue to allow in this country, stand by and thumb the suspenders and whistle a little bit while Americans lose those jobs and those jobs go to China and then come back to a big-box retailer to be sold at discount prices. Who ultimately is going to buy those products?

My point is this does not work. Instead of dealing with a range of issues, yes, with China, Korea, Canada, Mexico, Europe, with whom we have very large trade deficits and growing trade deficits, I might add, instead of dealing with that, talking about it, responding to that, trying to deal with this country's challenges in trade, we are on the Senate floor talking about the free trade agreement with Bahrain.

Where is the energy to do something real? Once again, it is a small moment to do a free trade agreement with Bahrain. It is a very small country in the middle of the Middle East. Our total trade with them, on both sides, is $700 million a year. We cannot get trade officials in this country, this administration or this Congress, to look truth right in the eye on these kinds of problems, the huge deficits, year after year, that are shipping jobs overseas. There is another corollary to this as well. The same companies that decide that they should not hire Americans, they should shut down the American plant and, by the way, do so with an encouragement by this Congress because this Congress gives them a tax break--and we voted I think four times on my amendment to shut down the tax break that subsidizes jobs going overseas, but, no, this Congress still wants to provide a tax subsidy to those companies that shut down their American plant and move jobs overseas. But this new environment in which companies do not say the Pledge of Allegiance any more but they are an international corporation, they want to produce where they can produce for pennies, they want to sell into this marketplace where they can get high-end consumers to buy it, and then at the same time, by the way, they want to run the income, if they can, through a mailbox in the Bahamas or the Caymans.

I want to mention that there is one building that is a five-story building in the Cayman Islands located on Church Street. I have brought a photo of it to the Senate floor previously, and I should do that again at some point. That building is the official residence and address for 12,748 corporations.

Now, one might ask, how is it 12,748 corporations can share a residence or an address in a 5-story white building in the Cayman Islands? Simple. It is nothing more than an address.

What is the purpose of having an address in a 5-story white building in the Cayman Islands? So that one does not have to pay taxes to this country. Money can be moved through a tax haven and avoid paying U.S. taxes. So one is a U.S. company, they are chartered probably in Delaware, have all the advantages of being an American, but now the new economics tell them they should produce in China, sell in this marketplace and set up an address in a 5-story white building mailbox in the Cayman Islands, so that they can have all the opportunities that come with being an American, except the responsibilities to hire American workers or to pay American taxes. That is what is happening.

People say, well, that is just an anticorporate rant. It is not. I think there are some wonderful corporations in this country, some terrific corporations with inventive people, creative

people, who have advanced this country, have produced wonderful, breathtaking products, but I think there is a culture in this country, with respect to trade and corporate responsibility, that has gone off the track. In this Congress, we cannot get anybody to talk about trade, except perhaps to come and stand around to talk about the Bahrain trade agreement on a Tuesday. Would it not be wonderful if we were talking about this full-blown crisis of $2 billion a day to date, $2 billion that we purchase from abroad more than we sell to abroad, and therefore today someone off the shores of this country owns $2 billion worth of this country. We are selling this country piece by piece.

A budget deficit in this country is financed in the traditional way, but a trade deficit is financed in a very different way. When we purchase those foreign goods, the trade deficit puts American currency in the hands of foreigners. They then use that currency to purchase real estate, stocks, bonds, to purchase part of this country. Every single day we are selling part of this country with an incompetent trade strategy, a jingoistic trade strategy that chants about free trade that has long ago been discredited. We ought to be describing circumstances of requiring fair trade. As a country, we ought be a leader in deciding, yes, let us expand trade in open markets, but it must be fair, and if it is not fair then this country is obligated to take the lead to insist on and demand fairness.

Our job ought to finally be to pull others up, not to push us down. What has happened more recently is we are pushing American workers down, pushing incomes down, the standard of living down in this country and seeing jobs exported, opportunity exported, and exporting part of our future. That is not satisfactory to me. I regret we are here talking about this free trade agreement when in fact we should be talking about the center, the bull's-eye of the target dealing with trade that is causing this hemorrhage of red ink and the loss of American jobs day after day after day.

I yield the floor.

Mr. President, reserving the right to object, my understanding is that we have 15 minutes equally divided on the Dorgan- Dodd amendment, and that was to start at 3 o'clock. My recommendation would be that if there is 10 minutes now allocated during that period we simply move the vote to 3:40 so that we will have the 15 minutes equally divided--30 minutes equally divided.

Mr. President, how much time remains?

Mr. President, first, I thank my colleague from Connecticut for his support on this amendment.

I want to spend a little time responding to some of the opponents who have completely mischaracterized the amendment, which is everyone's right on the floor of the Senate. It is important for everyone to hear the facts.

We did hear last evening a colleague say he was sick of populism, just sick of populism. When the little guy gets hurt, and the little guy is getting rich at the same time, populism means you stand up for the little guy. And I would say, get used to it. If you are sick of it, get used to it, because this Senate floor is where you stand for people who don't have the capability to stand for themselves.

In this case, what is happening in our country is unfair, just unfair. The oil giants, larger because of mergers, are recording record profits, the highest in the history. Here are what the profits look like, unbelievable profits, the highest in the history of corporate America, and the consumers experience all the pain. They wonder, as they see the headlines, ``Big Oil's Burden of Too Much Cash,'' ``High Energy Prices Lift Profits at ConocoPhillips by 89 Percent.'' I could go on and on. ExxonMobil, $9.9 billion in the third quarter. I could go on.

The consumers wonder, as they fill their tanks, about these headlines. They wonder about these headlines as they try to heat their home this winter and pay 40, 50, 60 percent more to do it. They wonder out on the farm someplace about these headlines when they try to figure out, How am I going to be able to buy a tank of fuel?

This proposal is very simple. This proposal says that for oil over $40 a barrel price, we would impose a windfall profits tax, except that no company would pay it if all their profits are being invested into the ground to search for more energy or above ground to build more refineries. If that is what they are doing with profits, this doesn't affect them. They don't have to worry.

We have had all kinds of folks coming out to the floor with talking points. If I was the oil industry, I wouldn't like what we are doing either. I understand that. It is perfectly logic. The talking points say if this amendment is passed, we are going to see less production of oil and gas. That is total rubbish, complete nonsense. In fact, the most significant incentive for the increased production of oil and gas in this country would be the prospect of having to pay a 50-percent excise tax on profits if you don't use them for that purpose.

We say: If you do use them to expand supply of energy and therefore reduce price, you are exempt. Don't worry about this. Let me show what BusinessWeek says:

Why Isn't Big Oil Drilling More? Rather than developing new

fields, oil giants have preferred to buy rivals--drilling for

oil on Wall Street.

If you are buying back stock, drilling for oil on Wall Street, or if you are not using the money to expand the supply of energy, then you risk being hit with a windfall profits tax, the entire purpose of which would be to provide rebates to consumers, not to bring money into the Federal Treasury, but instead to provide a recapture and provide rebates to consumers. It is painfully simple.

Again, I say, as my colleague from Connecticut has, I think profits are fine. It is what makes our businesses work. But these are profits the likes of which we have never seen. Last year, the average price of oil was $40 a barrel, and the industry had the highest profits in history. This is unfair in this country, and we need to do something about it.

I have quoted before Bob Wills and the Texas Playboys, but what he said in that song in the thirties certainly does apply to this:

The little bee sucks the blossom, but the big bee gets the

honey.

The little guy picks the cotton and the big guy gets the

money.

And so it goes. At this point, using energy is not a luxury. Using energy for every American is a necessity. The question is, should the oil giants, made larger by blockbuster mergers, be showing record profits and then using the money to drill for oil on Wall Street, hoard cash or buy back their stock at the same time average Americans are trying to figure out how on Earth do I pay this fuel bill? Our amendment tries to solve that.

How much time remains?

I reserve my time. If there are speakers on the other side, I prefer they use their time.

Mr. President, I yield myself 2 minutes. That was about as good a presentation supporting windfall profits as could be made. These charts of an 89-percent increase, the highest profits in the history of corporations, and so on, it is a pretty hard case to make on the floor of the Senate that these profits don't exist or this industry somehow isn't very profitable.

My colleague talks about the long run. The problem is you don't heat your home in the long run, you heat your home tonight. And if you are stuck with a 50-percent increase to heat your home tonight, you don't worry about the long run; you have to figure out how you do it now.

My constituents and his, when they order a load of fuel to be delivered to their farm and ranch, they are not going to pay for that in the long run; they are going to pay for it now.

My point is this: This notion of the marketplace functioning--I would love to have a debate about the marketplace. This is so far from the free marketplace, it is unbelievable. There is no free market here. You have OPEC ministers sitting around a table deciding supply and price. There are the biggest oil companies, much bigger because of mergers, that have more raw muscle in the marketplace, and then there are the futures markets which, instead of providing liquidity, have become grand casinos of speculation. Now we call it the marketplace. Too bad for the consumers.

Somebody ought to probably stand on the side of the consumers--that is the point of all of this--to say that this is not fair. This marketplace does not work for everybody. It works to provide the biggest profits in history for the oil companies.

My colleague says: Well, they are just doing a really good job. Yes, they are. BusinessWeek itself says what they are doing is drilling for oil on Wall Street, not drilling for oil underground.

Our point is simple: No major oil companies will pay this windfall profits tax if they are doing the right thing. And if they are not, we will recapture it and send rebates to consumers. If my colleagues are against that, vote against the amendment, and I understand it.

I reserve our time.

Mr. President, pursuant to section 904 of the Congressional Budget Act of 1974, I move to waive the applicable sections of that act for purposes of the pending amendment, and I ask for the yeas and nays.

Mr. President, I am pleased to join Senator Domenici in introducing the Border Security and Modernization Act of 2005.

Senator Domenici and I represent border States, but the bill we are introducing today is not one of merely regional importance. Border security is an issue that affects our country as a whole. We cannot have homeland security without strong and effective border security.

The Administration has signaled that it wants to have a vigorous debate on border security and immigration issue early next year. Our bill does not attempt to change immigration law, but it squarely addresses the border security issue.

I began working on border security long before the attacks of September 11, 2001. The Northern border is over 4,000 miles long. In the past, almost all of our resources in this country were targeted at the Southern border. It used to be that we had ports of entry at the Northern border where, at night, the only barrier was an orange rubber cone in the middle of the road. The polite people crossing at night actually stopped and removed the cone before they came across the border. Those who were not so polite would run over it at 60 miles an hour.

In 2001, before the September 11 attacks, I proposed something called the Northern Border Initiative. That bill added hundreds of Customs officers to the Northern border, and it became law. I also worked to replace the orange cones with hardened gates. But we clearly have to do much more.

The legislation we are introducing today, which Senator Domenici has described in detail, would devote significant new resources to our border security. Among other things, this legislation would authorize the hiring of an additional 1,000 Customs and Border Protection inspectors and Immigration and Customs Enforcement officers a year for the next five years. It would authorize the Department of Homeland Security to work with States to use National Guard and a volunteer force of retired law enforcement officers as resources to help monitor the borders. And it would have the Federal Government reimburse State governments for the cost of detaining undocumented aliens while decisions are made regarding possible deportation.

This bipartisan proposal is not about immigration. It's about border security. We need to do a better job of securing our borders, and we need to do so on an urgent basis. We hope our colleagues will join us, on a bipartisan basis, in supporting this legislation.

Mr. President, I am pleased to join Senator Domenici in introducing the Border Security and Modernization Act of 2005.

Senator Domenici and I represent border States, but the bill we are introducing today is not one of merely regional importance. Border security is an issue that affects our country as a whole. We cannot have homeland security without strong and effective border security.

The Administration has signaled that it wants to have a vigorous debate on border security and immigration issue early next year. Our bill does not attempt to change immigration law, but it squarely addresses the border security issue.

I began working on border security long before the attacks of September 11, 2001. The Northern border is over 4,000 miles long. In the past, almost all of our resources in this country were targeted at the Southern border. It used to be that we had ports of entry at the Northern border where, at night, the only barrier was an orange rubber cone in the middle of the road. The polite people crossing at night actually stopped and removed the cone before they came across the border. Those who were not so polite would run over it at 60 miles an hour.

In 2001, before the September 11 attacks, I proposed something called the Northern Border Initiative. That bill added hundreds of Customs officers to the Northern border, and it became law. I also worked to replace the orange cones with hardened gates. But we clearly have to do much more.

The legislation we are introducing today, which Senator Domenici has described in detail, would devote significant new resources to our border security. Among other things, this legislation would authorize the hiring of an additional 1,000 Customs and Border Protection inspectors and Immigration and Customs Enforcement officers a year for the next five years. It would authorize the Department of Homeland Security to work with States to use National Guard and a volunteer force of retired law enforcement officers as resources to help monitor the borders. And it would have the Federal Government reimburse State governments for the cost of detaining undocumented aliens while decisions are made regarding possible deportation.

This bipartisan proposal is not about immigration. It's about border security. We need to do a better job of securing our borders, and we need to do so on an urgent basis. We hope our colleagues will join us, on a bipartisan basis, in supporting this legislation.