Floor Statements

Mr. President, I would like to announce for the information of the Senate and the public that the Permanent Subcommittee on Investigations of the Committee on Homeland Security and Governmental Affairs has scheduled a hearing entitled, ``Offshore Profit Shifting and the U.S. Tax Code.'' The Subcommittee will examine the shifting of profits offshore by U.S. multinational corporations and how such activities are affected by the Internal Revenue Code and related regulations. Witnesses will include representatives from the Internal Revenue Service, the Financial Accounting Standards Board, multinational corporations, and an accounting firm. A final witness list will be available Tuesday, September 18, 2012.

The Subcommittee hearing has been scheduled for Thursday, September 20, 2012, at 2 p.m., in Room G-50 of the Dirksen Senate Office Building. For further information, please contact Elise Bean of the Permanent Subcommittee on Investigations at (202) 224-9505.

Over the August recess, I had the pleasure of attending a 90th birthday party for a remarkable Michiganian, Stan Ovshinsky. I would like to share with my colleagues some of my remarks from that event.

The word ``visionary'' is over used, but surely it applies to Stan Ovshinsky.

His vision for decades has been a world freed from its dependence on fossil fuels. One in which we create good jobs and a growing economy on the strength of green ideas. One in which science lights the way to a brighter future, and in which justice and fairness prevail.

He has worked for that vision every day of his 90 years, beginning in the machine shops of Akron, OH.

The science behind what Stan has accomplished might be incomprehensible to most of us, even though Webster's New World Dictionary tries to make it simple. Webster's defines the word ``ovonic,'' from the name Ovshinsky, as ``designating, of, or utilizing various glassy, amorphous materials that undergo electronic or structural changes, act as semiconductors when subjected to voltage, light, etc., and are used in computer memory elements, electronic switches, etc.'' That may still be pretty hard to understand for many of us.

But we certainly can understand the impact these innovations have had on the world. Through his work on advanced batteries, solar cells, hydrogen power and more, Stan is one of the people who has brought us closer to breaking our dependence on energy sources that endanger our environment, our economic well-being, and our national security.

We can also understand Stan's passion. Spend a few minutes talking to him about his vision, and you see the world as it could be, a world in which American innovators pioneer the technologies that power a new economy and create good jobs.

So his vision isn't just that of a scientist. It is the vision of a patriot.

Stan knows that the visionary's path is not an easy one. Those who seek to change the world embark on a lifetime of ups and downs.

He never attended college, but lack of formal education didn't stop him. As Edison showed us, humankind's creative juices aren't always meant for the more confined spaces of academia.

Two centuries ago, a Frenchman, Alexis de Tocqueville, toured our brandnew Nation, traveling from its major cities to the raw frontier of places such as Detroit and Saginaw.

Reflecting on the American character, de Tocqueville wrote that the average American was ``above all an innovator. . . . Nothing prevents him from innovating. Everything leads him to innovate.''

Stan is proof positive that the American spirit of innovation de Tocqueville described is alive and well.

Many others joined me in celebrating Stan's accomplishments. I would like to share with my colleagues the remarks of two distinguished guests: those of Hellmut Fritzche, the former chairman of the Physics Department at the University of Chicago; and of Harley Shaiken, the chair of the Center for Latin American Studies at the University of California-Berkley. I ask unanimous consent that their remarks be included in the Record.

Madam President, I am very pleased that the Senate is now taking up the nomination of Gershwin Drain to be a judge on the Eastern District Court of Michigan.

Judge Drain has an impressive legal career. He graduated from the University of Michigan Law School and then went on to earn a master's of judicial studies degree in 1991. He has served with distinction as a trial judge for over two decades in all three of our trial courts, from the lowest court, which is a so-called district court, to the recorder's court and the circuit court.

He has demonstrated a career-long dedication to helping the people understand how our legal system works. As a longtime columnist for the Michigan Chronicle newspaper, he has explained often-complex legal issues in language accessible to lay readers, broadening understanding of and appreciation for our courts. Beyond his writing, Judge Drain has been very active in the community, including membership on the education committee of the Southfield Christian School Board.

It is important to note that the confirmation of Judge Drain would help to remedy the judicial emergency in the Eastern District of Michigan. Vacancies and caseloads in the Eastern District meet the Federal judicial system's definition of an emergency. These judicial emergencies lead to delays and, even worse, to the risk of rushed judgments that could deprive Americans of the impartial justice that is so much a necessary component of our democratic system of government.

Judge Drain was asked about some of his past writings and statements during his confirmation hearing at the Judiciary Committee on such issues as capital punishment and mandatory minimum sentences. He indicated that some of those views--some of them decades ago--have evolved. He was candid in saying where they have changed. I don't agree with everything Judge Drain said 20 years ago, but nonetheless, without the slightest hesitancy, Senator Stabenow and I have recommended him to be a judge on the Eastern District Court for Michigan.

The test of his fairness has been shown by the fact that he has served with distinction for over two decades on trial courts. Another test of his fairness is how the legal community feels about Judge Drain.

Senator Stabenow and I have appointed a judicial advisory commission to make recommendations to us for the judicial positions we have on the Federal district courts. His nomination was the result of an examination by and consideration of a host of people interested in being Federal court judges in the Eastern District. His competition was great. There are literally dozens of qualified people whom we considered--more accurately, our judicial advisory commission considered--to recommend to the President for nomination. He was one of the persons they recommended. This is a commission we have appointed in order to remove the nominees whom we recommend to the President, as much as we can, from partisan politics and to

put them instead under consideration to be a judge with great objectivity. We have a broadly based commission. I think the best test of his fairness and objectivity and his ability to judge people not based on anything other than the merits of the case in front of him is testified more than anything to by the fact that the broadly based judicial advisory commission recommended his nomination to us as one of the people to be considered, and we recommended him to the President.

The American Bar Association has also spoken on this issue. He has been recommended unanimously as qualified for the Federal bench by the Standing Committee on the Federal Judiciary of the American Bar Association.

So we are in a position here where we have a judicial emergency on the Eastern District Court. We have a situation where the delays that result deprive Americans of what they are entitled to. We have a nominee who has been recommended by a broadly based commission that Senator Stabenow and I have appointed. He has been given a unanimous rating of ``qualified'' by the American Bar Association. And I think his commitment has been shown not just by his decades of service as a trial judge but by the way he answered the questions in his confirmation hearing. He said--and he has shown this in practice--that ``my personal beliefs, both past and present, have no bearing on the decisions I make in court.'' The notion that he would insert his own personal judgment in place of the law is contradicted by not just his testimony but by a record of decisions that indicate he abides by the concept of judge as impartial arbiter.

Senator Stabenow and I strongly urge our colleagues to confirm Judge Drain. We hope that can happen in the next hour.

Madam President, I yield the floor and ask that the time between now and the time for voting be equally divided between the majority and the minority.

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

Madam President, I ask for the yeas and nays.

Mr. President, as we gain perspective on the recent horrific shooting in Aurora, CO, our thoughts and prayers are with the victims, their families, and on all those who have been impacted by this tragedy. I, like many Americans, have been uplifted by the many examples of courage and heroism that have emerged from this dark moment. A young woman refusing to leave her injured friend, pulling her out of harm's way. A man giving his life to shield a loved one. A 19- year-old stepping back into danger to rescue a mother and her two young daughters. These stories and the others that will almost certainly emerge as time goes on serve as powerful reminders of the simple decency that makes our Nation strong.

But as we reflect on these stories, it is also important that we begin to understand what caused or contributed to this heinous act. When the alleged shooter burst into the theater, he opened fire on the audience with an AR-15 assault rifle. The AR-15 is a type of military- style assault weapon, built for no purpose other than combat. According to the Congressional Research Service, they were designed in the aftermath of the Second World War to give soldiers a weapon suited for the modern battlefield. Such weapons often use high-capacity ammunition magazines, which allow shooters to continuously fire rounds without reloading. It has been reported that the alleged shooter used an oversized drum magazine, which reports have indicated could fire 100 rounds without reloading.

Between 1994 and 2004, a Federal ban prohibited the purchase of assault weapons. The idea was that if we took lethal weapons with no sporting purpose off the streets, it would make our society safer and protect American lives. Our law enforcement community strongly supported it. And it worked. After the ban was enacted, Brady Campaign studies observed a 66 percent decrease in the number of assault weapons that the Bureau of Alcohol, Tobacco, and Firearms, ATF, traced back to a crime scene. When assault weapons were taken off the market, our Nation became safer. But, unfortunately, Congress allowed the assault weapons ban to lapse in 2004, and repeated efforts to reinstate it have been unsuccessful.

So this past May, when the alleged gunman walked into a local gun shop, he was able to purchase an AR-15 assault rifle. The sale was completely

legal. Two months later, he used that same weapon to open fire on a movie theater, filled with innocent people. The oversized ammunition magazine allowed him to fire continuously. Thankfully, the weapon jammed during the attack, and he was forced to switch to one of the other three firearms he had purchased, legally, in the preceding weeks. He killed 12 and injured 58. Some were fathers and sons, mothers and daughters. They were all individuals with plans and dreams. Some were members of our armed services, who had volunteered to fight for our country.

Mr. President, as elected officials, our greatest responsibility is to protect the lives of the American people. A renewal of the Federal ban on assault weapons would help keep these combat weapons off our streets and out of our neighborhoods. It would prevent them from getting into the hands of criminals who can legally buy them today or who can easily secure a straw purchaser to do so. They aren't used to hunt; they are too often used to kill. I urge my colleagues to reinstate the Federal ban on assault weapons and to take up and pass legislation like S. 32, the Large Capacity Ammunition Feeding Device Act, which would prohibit the sale of military-style ammunition cartridges. We can honor the memory of those who lost their lives in Aurora in many ways--one would be by passing such legislation.

Mr. President, our men and women in uniform sacrifice much to keep our Nation strong and free. They are well-trained, extraordinarily capable and are some of our country's best and brightest. It is with this in mind that I recognize COL Paul W. Bricker as he retires from the United States Army this week. Colonel Bricker has served our country in uniform for more than a quarter of a century, and I am honored to congratulate him on a long and distinguished military career.

COL Paul W. Bricker has served as the Chief of the Army's Senate Liaison Division since May 2011. As a member of the Secretary of the Army's Office of Legislative Liaison, Colonel Bricker was responsible for advising Army senior leadership on legislative and congressional issues, as well as assisting Senators and our staff on Army matters. It is in this capacity that my Armed Services Committee staff and I have worked closely with Colonel Bricker. Throughout his tenure, he has consistently provided important technical expertise and useful insight on the issues, challenges and opportunities that face our soldiers and their families and has exemplified the highest level of professionalism. I also benefited from Colonel Bricker's organizational diligence and military insights on a number of congressional delegation trips over the past year, including to Afghanistan, Pakistan, Turkey and NATO. The success of these trips were due in large part to Colonel Bricker's careful preparation and adaptability in making course corrections on the fly, often literally.

Colonel Bricker has strong Michigan roots. He is a native of northern Michigan and a proud graduate of Michigan State University, where, upon graduation, he was commissioned as a second lieutenant of Aviation. Colonel Bricker has served in a variety of tactical and operational assignments from platoon to corps level in airborne, air assault, light infantry, and motorized units in the United States, Afghanistan, Iraq, and South Korea. He has commanded in combat with the 82nd Airborne Division at both the battalion and brigade level. Additionally, in 2007, he served as the 82nd Airborne Division's Rear Detachment Commander, and from 2005-2006, as the Chief of Aviation for the Multi National Corps-Iraq.

From 2008 to 2010, Colonel Bricker commanded the 82nd Airborne Division's Combat Aviation Brigade and led them to war on short notice as part of the Afghanistan surge. He assumed no-notice responsibility for the DoD Consequence Management Response Force Aviation Brigade while simultaneously executing Department of the Army Pilot Reset. Once in Afghanistan, his brigade supported more than 40,000 coalition troops in Regional Command-South with lift, reconnaissance, MEDEVAC, and attack aviation. They executed the largest air assault in our nation's history without error or incident, a testament to his exceptional leadership. Colonel Bricker's brigade was commended by the ISAF Joint Command Deputy Commander for his exceptional maintenance and safety record under the most trying combat conditions.

We know that our military personnel don't shoulder the stress and sacrifice of military service alone, and Colonel Bricker is no exception. His wife, Katie, and their three children, Jacob, Jesse and Sophia, have proudly stood by his side, sacrificing time with their husband and father while he fulfills his military commitments.

As he retires, Colonel Bricker leaves behind an impressive record of military service and his counsel, professionalism and expertise will surely be missed. Throughout his service to our Nation, Colonel Bricker has been a shining example for the people of Michigan and the United States, and for this, we offer him our heartfelt thanks. I know my colleagues join me in wishing Colonel Bricker and his family all the best as he begins the next chapter in his life.

Mr. President, for the Committee on Armed Services I report favorably the following nomination lists which were printed in the Records on the dates indicated, and ask unanimous consent, to save the expense of reprinting on the Executive Calendar that these nominations lie at the Secretary's desk for the information of Senators.

Madam President, many of our Republican colleagues argue that we can't extend tax relief for middle-class families unless we also extend tax cuts for the wealthiest. They argue without tax cuts for the wealthiest 2 percent, we will harm job creators and slow the economy. Their arguments rely on faulty assumptions, mistaken beliefs, and misleading statements. Let's get to the facts.

It is a fact that every American taxpayer would receive a tax cut under our bill on the first $250,000 of their income. It is a fact that compared to the middle-class tax cut act now before us, the plan the Republicans have put forward would increase the deficit by $155 billion. It is a fact that the bill Republicans have put forward, despite their professed support for tax cuts, would raise taxes on the middle class by failing to extend the 2009 tax cuts for middle-class families, including the American opportunity tax credit and credits that help families with children.

What is unfolding on the Senate floor now is the culmination of a rigid Republican adherence to tax cuts for the wealthy as the supreme goal of public policy. Republicans have demonstrated a willingness to risk government shutdowns. They have demonstrated a willingness to risk grave economic damage, to risk rising taxes on the vast majority of Americans in pursuit of their highest priority: lower taxes on the wealthiest 2 percent of us. They want to risk all of that in service to an idea that has already proved a failure.

When historians look back at the Republican dedication to the tax cuts for the wealthy, they will find it remarkable that so many fought so long and so hard to go back to a failed policy. Income for the typical American family peaked in the year 2000, not coincidentally just before the Republican tax-cuts-for-the-wealthy mania reached its zenith.

A June study by the Federal Reserve found that the average middle- class family's net worth had fallen by 40 percent from 2007 to 2010. In 2010, the bottom 99 percent of income earners reaped just 7 percent of total income growth while 93 percent of all growth flowed to the top 1 percent.

As David Leonhardt of the New York Times reported on Monday:

The top-earning 1 percent of households now bring home

about 20 percent of total income, up from less than 10

percent 40 years ago. The top earning 1/10,000th of

households--each earning at least $7.8 million a year, many

of them working in finance--bring home almost 5 percent of

income, up from 1 percent 40 years ago.

Perhaps this vast accumulation of wealth would arguably be acceptable if it had resulted in faster economic growth that produced new jobs and helped average Americans prosper. Indeed, since the time of President Reagan, America has been told that the rising tide lifting up the wealthy would lift all boats, and that the benefits would trickle down to all Americans. Our Republican colleagues today argue that we must continue the President Bush tax cuts for the wealthy or risk harm to the ``job creators.''

But the Republican emphasis on policies that are more and more generous to the wealthiest have utterly failed to spark economic growth or create the jobs we need. Their experiment failed.

The Bush tax cuts coincided with the slowest rate of job growth in American history. Economic growth, even before the financial crisis, nearly sent our economy into depression and was woefully short by historic standards.

The failure of the Bush policies to spur economic growth and job creation underlies the failure of another promise from supporters of tax cuts for the wealthy, the promise that those cuts would pay for themselves. Republicans backing the tax cuts of 2001 and 2003 painted those grand scenarios that grow so rapidly that it would yield increased tax revenue. But instead of growing Federal coffers, we got a flood of red ink.

So the policy of tax cuts for the wealthy failed as a fiscal policy. It added to our deficit. It failed as an economic policy, coinciding with weak growth and economic output and job creation, and it failed as a vital test of public policy in a democratic society because it failed the fairness test. Instead, it facilitated massive accumulations of wealth for a fortunate few while most Americans have struggled just to tread water.

Yet our Republican colleagues persist in their pursuit of their failed policy--persist, in fact, to the point that they are willing to force a tax increase on more than 90 percent of taxpayers and potentially send our economy tumbling back into recession in adherence to that failed policy.

We are not arguing against this policy of tax cuts for the wealthiest because we seek to denigrate success or to stoke class warfare, as some Republicans allege. We are arguing against these policies because they are broken, they have failed, and they are unfair. We should reject them lest they do even more harm. We should reject the Republican pursuit of tax cuts for the wealthy at all costs, every other consideration be damned. We should allow middle-class families to keep a few of their hard-earned dollars and pass the Middle Class Tax Cut Act. At a minimum we should vote tomorrow to overcome the filibuster threat and proceed to debate this singularly important issue.

Madam President, I yield the floor.

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

Madam President, 1 week ago yesterday was a fairly typical day in the Senate. The Congressional Record shows Senators used the word ``jobs'' more than 150 times. The following day, a week ago today, the word ``jobs'' appears in the Record 131 times. Just this Monday, a few days ago when the Senate came in at 2 o'clock, ``jobs'' appears in the Record 36 times.

So we are talking--and talking a lot--about jobs. Today, Senator Stabenow's bill offers a chance to do more than talk; we can act.

The legislation addresses a fundamental flaw in our tax law. At a time when Americans desperately want us to defend American jobs and to give employers the incentives and support they need to hire new workers, our tax law perversely rewards employers for moving jobs to other countries. Today, an American corporation can decide to close a factory in this country, build a new one in another country, claim a tax break for the expense of moving those jobs out of our country, and pay no U.S. taxes on the income that foreign factory earns as long as they leave that income overseas.

Our Tax Code, in effect, tells employers: Here is a tax deduction to help you cut your American workforce and move those jobs offshore. That is the effect of our Tax Code. American employers have responded, unhappily. Statistics released in April by the Bureau of Labor Statistics show that since 1999, U.S.-based multinational corporations have reduced employment in the United States by about 1 million workers but they have added more than 3 million workers overseas.

A recent Gallup Poll found that only 13 percent of Americans believe this trend of shipping jobs overseas is good for our economy. Almost 8 of every 10 Americans believe it does harm. In a poll for the Alliance for American Manufacturing, 83 percent of respondents said they disapprove of companies that move jobs to countries such as China.

The people in Michigan and every other State can no longer afford to watch their tax dollars subsidize shipping their jobs overseas.

Earlier this spring, along with Senator Conrad, I introduced the Cut Unjustified Tax Loopholes Act or the CUT Loopholes Act. Our legislation would cut several loopholes that enable tax avoidance, which adds to the deficit

and to the tax burden of those who pay the taxes they owe. Our bill would cut offshore tax loopholes that allow corporations and individuals to avoid paying taxes by concealing their income and assets in offshore tax havens. One provision of the CUT Loopholes Act would ensure that companies aren't taking a tax deduction for the expense of moving jobs overseas. Under our bill, companies couldn't take a deduction for the expense, for instance, of moving a U.S. factory to another country until that company pays U.S. taxes on the income generated by that foreign factory.

Senator Stabenow's Bring Jobs Home Act takes a similar approach, ending the taxpayer subsidy that helps firms to move American jobs overseas. In addition, it would offer a 20-percent tax credit to companies that move production back to the United States.

Surely it makes sense for us to offer employers a tax cut if they bring jobs back to the United States. Surely it makes sense to reform a law that adds insult to injury, that forces our taxpayers to watch companies move their jobs abroad with the assistance of our taxpayer dollars.

We have already seen the enormous benefits to our economy and our workers when American companies make the decision to return jobs to our shores. Ford Motor Company is returning thousands of offshore jobs to Michigan and other States. Companies such as Whirlpool are making the decision to hire American workers for work they once did abroad. American manufacturing has built great momentum in the last 3 years, adding thousands of jobs. We should add to that momentum and adopt the Bring Jobs Home Act. We should end existing tax incentives to export American jobs, and we should provide a tax break for companies that bring jobs back to American workers.

Madam President, I yield the floor and suggest the absence of a quorum.

Madam President, I thank the Senator from Illinois for his leadership in dealing with the offshore tax haven problem.

This is not a new issue. It is not a new issue for me. In fact, my Permanent Subcommittee on Investigations has been exploring the damage the secrecy of offshore tax havens has caused for the nearly two decades we have been looking at this issue trying to change the situation that exists, and it is not a new issue for Senator Durbin. He has been on this issue a long time. Indeed, when President Obama was a Senator, he joined in an effort to bring tax haven abuses to light.

Then-Senator Obama, in 2007, was an original cosponsor of the Stop Tax Haven Abuse Act, which I introduced with our Republican colleague Senator Coleman, and he said the following:

There is no such thing as a free lunch--someone always has

to pay. And when a crooked business or a shameless individual

does not pay its fair share, the burden gets shifted to

others, usually to ordinary taxpayers and working Americans

without access to sophisticated tax preparers or corporate

loopholes.

It was a bipartisan bill aimed at preventing the loss to taxpayers that results from tax-avoidance schemes that use secret tax haven jurisdictions, such as the Cayman Islands.

Those words I quoted remain just as true today as they were in 2007. There is indeed no free lunch. In 2006, our Permanent Subcommittee on Investigations estimated that tax havens cost the Treasury in the neighborhood of $100 billion a year, and though we have had some successes in the battle against tax havens since then, tax dodgers and avoiders have continued to exploit every offshore loophole and tax haven they can find.

This has significant consequences to the rest of us. Offshore tax evasion and avoidance takes money out of the hands of our military, takes money out of programs that millions of Americans rely on for good schools, roads, health care, protecting the environment or securing our borders. When money is lost to these tax havens that belongs in our Treasury, it adds to our deficits and debt. Ultimately, the rest of us are forced to pay more on our tax bills to make up for those who shirk their tax-paying responsibilities.

As I said, we spent years in my subcommittee exploring this problem. In 2001, we heard testimony from the former Cayman Islands banker who said 100 percent of his clients were avoiding or evading taxes. In 2006, we reported on some brothers from Texas, who, over the course of 13 years, stashed more than $700 million in offshore tax havens in a massive tax evasion scheme.

When a company incorporates in the Cayman Islands or another tax haven, with a mail drop as their only physical presence in that country, they most likely have one purpose: avoiding taxes. In 2006, we explored the history

of the Ugland House, a small building in the Caymans that, remarkably, is listed as the headquarters for nearly 20,000 different corporations. In 2005, we showed how a Seattle securities firm called Quellos devised a scheme of faked stock trades between two offshore companies, creating phantom stock losses used to avoid taxes on billions of dollars in income. In 2001 and 2002, we explored how Enron used offshore tax havens--dozens of them--as part of its deceptive schemes.

Just yesterday, in our subcommittee hearing on a global bank called HSBC and money laundering, we saw how the secrecy of tax havens, such as the Caymans, so often used to conceal income, can also be used by criminal enterprises to conceal and launder the proceeds of their crimes. HSBC's Mexican affiliate had an office in the Caymans with thousands of U.S. dollar accounts. The bank had no client information on 41 percent of those accounts, and internal documents, our investigation discovered, showed the bank was aware the accounts were being used by drug cartels and were subject to ``massive misuse . . . by organized crime.''

These tax havens have been a pervasive problem for our Treasury and for our economy and for our security.

We can stop them. When it comes to tax avoidance, our Federal fiscal situation demands we stop them. In the past, addressing offshore tax evasion was not a partisan issue. In 2004, Congress stopped companies from taking advantage of what was called inverting. When a company inverts, it will shift its headquarters, on paper, to a low-tax or no- tax country. It is just on paper, though. It was decided we were not going to allow that game to be played by American companies, and we stopped that practice. Since then, every year I have worked with Senator Durbin and colleagues of both parties to ensure that these inverted companies are prohibited from receiving government contracts. If these tax dodgers cannot see fit to pay their taxes, we shouldn't be giving them our tax dollars.

Much more needs to be done. We could pass the Stop Tax Haven Abuse Act, which I have introduced again in this Congress, to address some of the worst offshore tax abuses and end the use of these tax havens that cost American taxpayers. We could pass the CUT Loopholes Act, which Senator Conrad and I introduced earlier this year, which includes a number of provisions aimed at stopping offshore tax evasion and closing loopholes that allow companies to dodge their taxes.

The Senate, earlier this year, passed one important provision of the CUT Loopholes Act. This provision is known as the special measures provision. This would have given the Justice Department the same tools to combat tax haven abuses they now have to combat money laundering. Unfortunately, the House of Representatives succeeded in stripping this commonsense provision from the surface transportation bill to which it was attached in the Senate. That vote by the House allows the wealthy and powerful to continue dodging the taxes they owe, increasing the tax burden on American families who abide by the law and by their tax obligations.

The bill Senator Durbin offered is another way we can combat tax havens, and I thank him for this effort. Simply put, his legislation would bring much needed daylight to the use of offshore tax havens. It would require that officeholders and candidates for public office disclose their financial interests located in tax haven countries. Perhaps there are some who believe individuals and corporations should be allowed to continue concealing their income and their assets overseas, adding to the deficit and forcing the rest of us to carry their own share of the burden and that of tax dodgers as well. But surely we can all agree the American people deserve to know when their public officials are using offshore tax havens. Senator Durbin's bill would ensure that Americans know when their elected representatives and candidates for office are taking advantage of the offshore tax havens.

This is not about a political campaign; this is about years of effort to make visible those who shortchange their fellow citizens by concealing their finances abroad and to argue for reforms that make our tax system more fair for the vast majority of hard-working Americans who pay what they owe.

I yield the floor.

Mr. President, first, let me commend Senator Whitehouse, Senator Shaheen, and all those who have worked so hard with them to bring this cause to the public forum.

The genius of our Founding Fathers was to establish a system of government in which the governed determine who represents them. It is easy for us, more than two centuries removed from their achievement, to lose sight of just how remarkable that achievement was. They overturned untold centuries of human history during which those with wealth and power made the decisions and everyone else had little or no chance to influence how they were governed.

The remarkable system the Founders created has endured through war, crisis, depression, and doubt. But we should not mistake that endurance for automatic permanence. Democracy requires that we maintain the vital connection between the people and their elected representatives. It must be the voters and not the influential few who choose our Nation's leaders. If the people begin to doubt their central role in our government, it will be corrosive to democracy.

In recent months, there has been reason for just such doubt. A Supreme Court ruling has opened our system to a flood of unlimited and secret special interest money. Inexplicably, a one-Justice majority of the Court decided in the Citizens United case that such unlimited, anonymous donations ``do not give rise to corruption or the appearance of corruption.''

Many of us believed from the moment that decision was handed down that the Court's majority was badly mistaken. But events since that day have left little doubt. We have, in recent months, seen the dangerous consequences of the Court's ruling: a deluge of unregulated funds that has threatened to upend the election campaign for our Nation's highest office, a flood whose organizers vow will upend congressional campaigns across the Nation this summer and fall.

Through super PACs and through supposedly regulated but, in fact, actually unregulated nonprofit organizations, the conduits through which this flood of secret money flows, millionaires and billionaires already have made massive donations to fund a barrage of attack ads, drenching and smothering the voices of those who are to make the decisions in our democracy--the people.

According to the Center for Responsive Politics, an independent watchdog group, as of mid-July, these super PACs have raised more than $244 million to influence elections. Individuals and corporations can make unlimited donations to these super PACs whose donations are supposed to be disclosed. But the Court's decision opened the door not just to individuals and corporations seeking to influence elections with unlimited contributions, this ruling, combined with the IRS's failure to strictly enforce our laws on the operation of nonprofit groups organized as social welfare organizations under section 501(c)(4) of the Internal Revenue Code, allows them to seek this influence with spending that is not only unlimited but is also secret because there is no requirement that donations to those 501(c)(4) organizations be disclosed to the public.

Donors can seek to influence an election with huge sums of money and can do so now without even having to disclose their involvement. They do so covered by the figleaf that the nonprofit groups to which they donate are dedicated to ``social welfare,'' rather than partisan politics. That fiction dissolves the moment one looks at these social welfare attack ads that the IRS is, so far, blind to.

According to an analysis of TV ad spending data by the Campaign Media Analysis Group, two-thirds of all ad spending by outside groups so far during this election cycle has come from nonprofits subject to no Federal public disclosure rules. Much more is on the way as election day approaches this fall.

The organizations now spending millions of dollars to influence elections were set up for that explicit purpose, to campaign for candidates they favored and against candidates they opposed. Yet they preserve their nonprofit status and their secrecy by relying on a contradictory regulation and guidance from the IRS.

This is how it works. In order to keep their tax-exempt status and keep donor names and donation amounts secret, organizations are set up as ``social welfare'' organizations under 501(c) of the Internal Revenue Code.

For example, 501(C)(4), which is a very popular section of the Code for these organizations to claim, requires that an organization be operated ``exclusively''--I repeat--``exclusively for the promotion of social welfare''. Yet in the regulation implementing this statute, the IRS says: ``An organization is operated exclusively for the promotion of social welfare if it is primarily engaged in promoting in some way the common good and general welfare.''

Under this regulation, according to the IRS, to qualify as ``exclusively'' dedicated to social welfare, you need only be ``primarily'' interested in social welfare. That does not fit any reasonable definition of ``exclusively'' that I know of.

I have expressed my concern to the IRS about this. I pointed out to the IRS that the IRS took a stand on this issue once before. In 1997, it denied nonprofit status to an organization called the National Policy Forum. The IRS position then was that ``partisan political activity does not promote social welfare.''

Yet the IRS's determination of a group's tax-exempt status can take 1 year. Therefore, even if the IRS determines that these organizations are not

legitimately ``social welfare'' organizations, it will likely be too late. The secret money will have already been donated and spent. The elections will be over.

The contradiction in the IRS regulation is reflected in IRS literature designed to guide the operation of nonprofits. IRS officials pointed me to information on the agency's Internet that states: ``The promotion of social welfare does not include direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate.''

But in the very next sentence on that same Web site, the guidance says, ``A social welfare organization may engage in some political activities, so long as that is not its primary activity.'' So that contradicts the plain assertion in the previous sentence that ``social welfare advocacy does not include campaigning.''

It also then leaves open the question of the definition of ``primary'' activity. An IRS publication on nonprofit organizations contains the same contradiction. It says:

Promoting social welfare does not include direct or

indirect participation or intervention in political campaigns

on behalf of or in opposition to any candidate for public

office. However--

It goes on to say--

if you submit proof that your organization is organized

exclusively to promote social welfare, it can obtain an

exemption [from taxes] even if it participates legally in

some political activity on behalf of or in opposition to

candidates for public office.

That makes no sense. If partisan activity does not meet the IRS definition of ``promoting social welfare,'' how can an organization that participates in partisan activity possibly be ``organized exclusively to promote social welfare''? So rather than providing clarity, the IRS is perpetuating ambiguity. It should promptly end this ambiguity.

We also have a responsibility to act. The Senate and the Congress should act to prevent these organizations from continuing to benefit from their tax-exempt status and hide their donor information. They should be required to disclose the donor and contribution information and stop hiding behind their nonprofit status. The facade of these TV ads not being partisan politics needs to be swept away. It is that simple.

We have seen repeatedly the corrosive effects of secret money on the political process. We need to look to history, including modern history--the Watergate scandal, a single incident in U.S. modern history that most damaged public confidence in honest government involved burglaries----

I ask unanimous consent for an additional 2 minutes.

Mr. President, the Watergate scandal, which is the single incident in modern U.S. history that most damaged public confidence in honest government, involved burglaries and dirty tricks that were paid for using secret campaign donations. Even by the weak standards of the time, much of the secret money was illegal.

More than 20 corporations and organizations were fined and some executives went to jail because their secret payments to the Nixon campaign violated the law. Now a donor can make such secret donation dedicated to who knows what nefarious purpose and spend unlimited amounts in secret with what has, to this point, been the acquiescence of the IRS.

Post-Watergate history warns us as well. We are all familiar with the revelations about former Senator John Edwards. His personal failings got most of the media attention, but let's not forget the financial heart of his problem: While running for President, he sought and received secret amounts of cash from a major campaign donor in order to conceal embarrassing facts that might damage the campaign. Yet huge secret payments to campaigns at this moment in our history are rife.

We need to look no further than this capital city in which we work to see the dangers of secret money. The residents of Washington, DC, have learned in recent weeks that the current mayor benefited from what Federal prosecutors have called a ``shadow campaign'' of huge secret donations from a major city contractor. The chief Federal prosecutor has said: ``The 2010 mayoral election was corrupted by a massive infusion of cash that was illegally concealed from the voters of the District.'' If true, these charges mean that a campaign donor with a major financial interest in city government decisions sought to influence the election of the city's mayor using huge secret payments that concealed his involvement.

Do any of us doubt that individuals and corporations with a vested interest in Federal Government outcomes are spending huge sums of money to influence those outcomes without ever having to disclose their involvement to the public? People may go to jail for such spending in the Washington, DC, election. Yet secret spending is common practice in campaigns for the highest offices in our country.

This is not the democracy that men and women have fought to protect throughout our history. It's not the democracy the Founders adopted in our Constitution. As Adlai Stevenson once put it: ``Every man has a right to be heard; but no man has the right to strangle democracy with a single set of vocal chords.'' Yet this torrent of unregulated money threatens to strangle the voice of the people.

Mistaken though it may have been, the Supreme Court's decision stands until it is reversed. We are committed to uphold the rule of law even when we disagree with the Supreme Court's interpretation of the law. But we must be equally committed to the fight for a vibrant, open, representative democracy, one in which elections are determined not by the secret spending of billionaires, but by the will of the people.

The bill we seek to vote on would take an important step toward mitigating the damage of the Citizens United decision. The DISCLOSE Act of 2012 would help shine the light of day on what has been, since the Court's ruling, an underground sewer flow of hundreds of millions of dollars. It would require nonprofits engaged in partisan political activities to disclose their major donors and their expenditures. It would not stop the flow of unlimited money, because we cannot under the Citizens United ruling, but it would at least ensure that the people know who is trying to influence elections.

The Supreme Court has consistently maintained that requiring disclosure is constitutional. Even in the Citizens United case, the Court's majority said, ``Disclosure permits citizens and shareholders to react to the speech of corporate entities in the proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.'' Indeed, the majority's reliance on disclosure is key to their argument that unlimited spending from corporations would not create corruption or its appearance. The same Supreme Court that has allowed this flood of money has said Congress can require it to be disclosed. We should do so, and so promptly.

It is difficult to understand why Members of the Senate could oppose these simple, straightforward disclosure requirements. It is difficult to imagine that we would be comfortable telling our constituents that we voted to uphold the veil of secrecy that now shields this flood of money from public view. And it is even more remarkable that some of us would vote, not just to maintain that secrecy, but to prevent the Senate even from debating it. The filibuster of this legislation, if successful, will signal shocking acquiescence to a system in which the wealthy, fortunate few can seek to shape the outcome of elections in secret, without the Senate even voting on whether to continue that secret system.

There are those in this body who defend the flood of secret cash in our politics. It is hard for this Senator to understand how those Senators explain to their constituents that they do not deserve to know who is spending millions to influence elections. But it is doubly difficult to accept the refusal of my colleagues to allow us to vote on this bill by filibustering the motion intended to let us proceed to that vote.

Mr. President, I extend a hearty congratulations to J. Carl Ganter, director and founder of Circle of Blue in Traverse City, MI, on receiving the 2012 Rockefeller Foundation Innovation Award. Innovation and collaboration are two components critical to solving the challenges we face as a State and as a nation. Organizations like Circle of Blue are leading the charge, helping to inform our discussions and to guide us on a path toward lasting, comprehensive solutions.

Circle of Blue has focused its efforts on the global freshwater crisis for more than a decade and has successfully united an international network of leading journalists, scientists, and data experts to shed light on this issue and to illuminate a better path forward. This work has spurred meaningful, dynamic, and workable processes and information that are helping to solve real and pressing problems for communities in need.

Through this effort, Circle of Blue has put forth enlightening reports on the nexus between water, food, and energy. Conducted both in China and the United States, this integrated, cross-cutting work demonstrates that current practices are not only environmentally unsustainable, but can be economically disruptive. In both instances, Circle of Blue has utilized this innovative approach to build broad collaborations and solutions-focused processes that are charting a course toward a brighter future.

There is little doubt we live in a deeply interconnected world, and the fundamental economic, social, and environmental challenges we face are linked. Under Ganter's able leadership, Circle of Blue has built a breakthrough model of data collection, design, reporting, and convening that places an emphasis on these linkages holistically. By facilitating collaboration between policymakers, scientists, academics, businesses, and the general public, this organization is on the cutting edge of developing processes to creatively implement these solutions. As Mr. Ganter recently stated, ``We are listening better. We are becoming more nimble in how we work and collaborate. We are empowering people at all levels with better information to make better decisions.''

By discerning emerging trends, highlighting solutions, and facilitating meaningful collaboration, Circle Of Blue is a powerful partner in a number of areas. The Rockefeller Foundation Innovation Award is a tremendous honor, one this organization richly deserves. What is most clear to me is that the best has yet to come, and I look forward to the fruits their work will surely bear in the future.

Mr. President, I would like to announce for the information of the Senate and the public that the Permanent Subcommittee on Investigations of the Committee on Homeland Security and Governmental Affairs has scheduled a hearing entitled, ``U.S. Vulnerabilities to Money Laundering, Drugs, and Terrorist Financing: HSBC Case History.'' The Subcommittee hearing will examine money laundering and terrorist financing vulnerabilities created when a global bank uses its U.S. affiliate to provide U.S. dollars, U.S. dollar services, and access to the U.S. financial system to high risk affiliates, high risk correspondent banks, and high risk clients, using HSBC as a case study. Witnesses will include representatives from HSBC and the Office of the Comptroller of the Currency. A witness list will be available Friday, July 13, 2012.

The Subcommittee hearing has been scheduled for Tuesday, July 17, 2012, at 9:30 a.m., in Room 106 of the Dirksen Senate Office Building. For further information, please contact Elise Bean of the Permanent Subcommittee on Investigations at (202) 224-9505.

Mr. President, the provision in question simply accelerates a study of invasive species such as the destructive Asian carp, a study essential to protecting the Great Lakes, a resource that is vital to the health, safety, and livelihoods of millions of Americans.

The study was included in the Water Resources Development Act of 2007 that authorized the Army Corps of Engineers to conduct a feasibility study to prevent the spread of aquatic nuisance species between the Great Lakes and Mississippi River basins.

Since that time, Congress has provided over $13 million to the Corps to conduct this study. The Corps maintains that the study cannot be completed until the end of 2015.

The provision included in the conference agreement before us today would accelerate this study and require its completion within 18 months.

We should not minimize the threat of the destructive Asian carp entering the Great Lakes.

If Asian carp got into the Great Lakes, they would not only pose a very serious threat to the environment but would have a devastating effect on thousands of local jobs and a $7 billion fishing industry.

Accelerating this study would put us on a better track to protect one of our Nation's greatest treasures and the thousands of jobs that depend on it.

Mr. President, the bill before us today takes several important steps in several policy areas to move our Nation forward. It prevents a pending student loan interest rate hike that would make college less affordable for American students and their families. It makes important investments in our roads, bridges, and other transportation infrastructure, investments that will put Americans to work today and make our economy more competitive for years to come. It reauthorizes the Flood Insurance Program that provides security to millions of Americans, while making the program more efficient and more fair to States such as Michigan that for too long have paid more in premiums than they receive in benefits. While this legislation does not include everything I had hoped for or supported, it makes significant progress on issues our constituents need us to address.

Millions of Americans will be relieved that this bill avoids a looming increase in student loan interest rates. On July 1, those interest rates are scheduled to double, an increase that Americans already struggling to pay for higher education simply cannot afford. Extending the current 3.4 percent interest rate for another year lifts a significant burden, financial and emotional, from students and their families who were looking to us for aid.

I am pleased Senate and House conferees have come to an agreement on a transportation reauthorization. Reauthorization of our Nation's transportation programs is long overdue.

Investing in transportation infrastructure creates jobs and improves our international competitiveness. We create more than 35,000 jobs for every $1 billion in Federal funds we spend on transportation infrastructure. The bill will create or preserve an estimated 3 million jobs nationwide. In Michigan, the bill will provide more than $2 billion over the next 2 years for road projects and another $261 million over the next 2 years for Michigan transit projects. Funding transportation infrastructure improvements at robust levels is one of the most obvious things we can do to help boost the U.S. economy.

The conference report extends Federal surface transportation programs at current levels, with a small adjustment for inflation, through September 2014. Given the difficult budget climate, this has to be viewed as a victory. Our State transportation agencies need to be able to do long-term planning. This bill helps that cause and is surely better than the short-term extensions we have been living under. Given the negative budget climate and the difficulty we had finding the revenue to offset the highway trust fund shortfall, a 2-year bill is what is possible, although I would have preferred a longer term bill.

I am pleased the agreement includes a provision that would direct the Corps of Engineers to accelerate its feasibility study of preventing the inter-basin transfer of aquatic invasive species, such as the destructive Asian carp, between the Mississippi River and the Great Lakes basins. While the Corps is planning to produce an interim report at the end of 2013, this provision would require a full feasibility report that would also include a recommendation for implementing preventative measures. Accelerating this study will put us on a better track to protect our $7 billion Great Lakes fishery that supports thousands of jobs.

The conference agreement includes a provision regarding harbor maintenance that is based on an amendment to the Senate Transportation bill. This is the first time we have addressed harbor maintenance in a transportation bill, and including this language will help elevate this important issue and strengthen momentum to use trust fund receipts for harbor maintenance.

I am disappointed, however, that the provision in the conference agreement does not include the strong enforcement language I urged conferees to include that would ensure that appropriators actually include funding for harbor maintenance that is collected for this purpose.

Navigation infrastructure is a vital link in the transportation system, one our economy depends upon. Maintaining our harbors and ports is vital to our economic competitiveness. I will continue to work to ensure that we provide sufficient Federal funds to properly maintain our harbors.

The conference agreement also extends for 1 year mandatory PILT funding, or payments in lieu of taxes, that will provide about $4 million to Michigan local governments to help offset losses in property taxes due to nontaxable Federal lands within their boundaries. These payments can help support a variety of infrastructure and educational needs. I had urged conferees to include this provision in the bill, and I am pleased it was included in the final agreement.

The conference report should provide some much needed equity to Michigan and other States through a 5-year reauthorization of the National Flood Insurance Program.

Michigan residents have paid more than six times more in premiums than they have received in payouts from the National Flood Insurance Program. We must correct this disparity, and the conference report takes some steps to do so in requiring that premiums be more reflective of the true risk of flooding.

The conference report will phase out subsidies for repetitive-loss properties that continue to be rebuilt in high-risk areas. It will also phase out subsidized rates for vacation homes and businesses located in high-risk areas, many of which have received subsidized rates for more than 30 years.

This bill will clarify the law to allow property owners to purchase flood insurance from a private insurer, rather than the Federal Government, if they so choose. This means private companies can compete with FEMA to offer consumers a better price.

Finally, I am very disappointed that the conference report removes an offshore tax provision that I authored with Senator Conrad to fight against tax evasion. This provision, which was included by voice vote in the Senate bill and is similar to a provision I introduced as part of a broader offshore tax bill, was scored as raising over $1 billion over 10 years and could have helped pay for transportation programs or reduced the deficit. I am disappointed that Congress has yet again missed an opportunity to fight offshore tax evasion, which robs billions of sorely needed dollars from our Treasury each year.

The legislation before us today does not include everything I had hoped for or supported, but it is necessary, and we should pass it without further delay.

Mr. President, the International Bridge at Sault St. Marie stands as an enduring, visible reminder of the connection Michigan has with our neighbor to the north. This nearly 2-mile expanse, quite literally, brings communities in Michigan and Canada closer together, forging a mutually beneficial partnership in the process. To commemorate the construction of the bridge, a new, patriotic lighting scheme will be introduced on the American side of the bridge this week.

Thousands of vehicles cross this bridge each day. In fact, in 2007 alone, nearly 2 million cars traversed this roadway. This bridge is a pathway for commerce and trade; it is a convenient way for families separated by a short distance, but still a Nation apart to visit; and it supports recreation and tourism, which are central to the economies of many of Michigan's communities. Designed by Dr. Carl Gronquist, this sprawling structure has buoyed a number of industries important to Michigan, including steel, paper and forestry.

Before the International Bridge opened to traffic on October 31, 1962, Michiganians crossed the St. Mary's River either by car ferry or by railway. The need for a more efficient means to connect Sault Ste. Marie, MI and Sault Ste. Marie, Ontario was evident. In response, in 1940, Congress approved an international crossing in Sault Ste. Marie, and in 1955, the Canadian Parliament established the St. Mary's Bridge Company to facilitate and oversee an international crossing. The $16 million construction project that ensued lasted nearly 2 years and gave way to the structure we enjoy today.

Connecting Sault Ste. Marie with a city of 75,000 in Ontario that also serves as an important international trade crossing in Northwestern Ontario has been very beneficial. The theme of this celebration--Celebrating 50 years of International Friendship--speaks powerfully to this point. I also would like to recognize the work of the Sault Ste. Marie Bridge Authority and the International Bridge Administration for their tremendous work and dedication. The work that is done each day to ensure an efficient and steady flow of traffic across this bridge has positively impacted the lives of Michiganians and countless businesses for the last half century. As we look toward the future, it is important to preserve and maintain the International Bridge for future generations.