Mr. President, I rise today in support of the FSC/ETI bill that will end tariffs on our manufactures. But also, it will finally bring much needed relief to the tobacco growers of my State. The bill before the Senate today addresses many…
Mr. President, I rise today in support of the FSC/ETI bill that will end tariffs on our manufactures. But also, it will finally bring much needed relief to the tobacco growers of my State.
The bill before the Senate today addresses many important tax issues that face American companies, both at home and abroad.
The many international provisions that are contained in the bill are important changes to a badly outdated part of the Tax Code.
The centerpiece of this bill, of course, is a provision to expand tax incentives to America's manufacturing sector. During debate on this bill, I was pleased that we adopted the bipartisan amendment that I offered with Senator Stabenow.
Under our amendment, America's manufacturing companies--small and large--will see their tax rate decline by almost 1.5 percent this year. That is compared to the rate cut this year of only one-third of 1 percent that was previously contained in the bill. It is imperative that we get this relief to our U.S. manufacturers as quickly as possible.
We were also able to include in this bill my amendment to extend the net operating loss period to 5 years rather than the 3-year period included in the original bill. This important provision, which will allow companies facing financial challenges to see increased cash flow to assist them in investing and hiring, is one that Senator Conrad and I have worked on together in committee.
The WTO ruling on the FSC-ETI regime authorized the European Union to start imposing sanctions of over $4 billion on U.S. exports. During the first month of tariffs we have seen products from apparel to paper hit with penalties approaching 10 percent. Many other products important to my State, such as horses, are on the initial retaliation list and will also face this tariff.
They have a list of over 1,600 U.S. products from nearly every part of the
U.S. economy that will be penalized because we have not repealed the FSC/ETI regime.
But most importantly, this amendment will help my tobacco growers.
Since Daniel Boone first came through the Cumberland Gap, farming has been both the economic and cultural backbone of the Commonwealth. The family farm is the basis of Kentucky culture and it has been based around tobacco.
For years we in Kentucky have tried to diversify from the tobacco crop.
We have had some success, vegetables, beef cattle, cat fish, corn, chicken and other crops have been quite successful, worm farms and other have not been as successful. But nothing brings as much as a return as tobacco.
Most of the tobacco farmers in my State are not full-time tobacco farmers. They either have an off-farm job, or primarily raise other crops or raise livestock.
But the money they get from tobacco, pays their mortgage, or puts their kids through school or allows them to keep farming. Outside of the western part of Kentucky, we do not have tens of thousands of acres of flat land. We need a crop that grows on rolling hills and that thrives in our climate. Tobacco does that.
But a number of things have conspired against tobacco in the last few years.
The previous administration declared war on tobacco and by extension, tobacco farmers. The Asian economic crises have hurt exports. The Master Settlement Agreement and State tax increase have dramatically raised the price of cigarettes. And although American tobacco is still superior, the companies have invested so much overseas that the gap has narrowed between American tobacco and cheap foreign tobacco.
As I am sure most of my colleagues know, there are no direct payments to tobacco farmers, but we do have a price support and production control program. Growers own quota which they can buy, sell, or lease. The government administers this program to make sure it runs effectively and that growers only sell what they are allowed to under the quota system. If you grow too much, you can't sell it.
But the quotas have lost 60 percent of their value since 1998. Not many businesses would be around if they lost 60 percent of their income in 5 years, and we have lost a lot of growers. We have many who are barely holding on. They need help, we can give that to them and get the government out of the tobacco business at the same time.
We don't have big tobacco in my State. The last big tobacco company pulled out a few years ago.
What we have is little tobacco. We have over 30,000 tobacco growers. We also have over 100,000 tobacco quota owners. Many of those are elderly who can no longer work their land, so they lease their quota and that income becomes a major part of their retirement security.
That quota is tied to the land. It has a direct effect on the property taxes Kentuckians pay.
Those taxes build and fund schools, provide clean water, pay for emergency services, pave roads and help fund every community in Kentucky. If we don't help my growers get relief, we face the very real prospect of having ghost towns in Kentucky.
The amendment we have before us today will buy out the tobacco program.
We will give our growers relief and end the federal price support program. We will also let many growers, whose average age is 62, retire and get out of the business. Dr. Will Snell, of the University of Kentucky, estimate 70-75 percent of tobacco growers will get out of the business with a buyout. We will allow growers to pay off their debts and enjoy their retirement.
The amendment also has FDA Authorization of tobacco. This is a dramatic increase in the regulatory authority of the FDA.
I am not comfortable with it. I do not want the FDA inspecting my growers' crop.
FDA regulation is a bad idea. My growers are in dire straits. They desperately need help. FDA regulation is a very steep price to pay for a buyout, but if it is the only way to get my growers relief, this Senator will vote for it.
Make no mistake about it, the program will end. The only question is whether we end it on our terms or big tobacco terms. Please, please support the tobacco growers in this country and give them an equitable solution for the little tobacco growers all across this country.
I yield the floor.