Jumpstart Our Business Strength (Jobs) Act
Mr. President, I admire my dear friend from Nevada, but I have to take issue with him with regard to if this bill is pulled down it is not their fault. Let's be honest about it; the overtime regulations have been put out for comment. They…
Mr. President, I admire my dear friend from Nevada, but I have to take issue with him with regard to if this bill is pulled down it is not their fault. Let's be honest about it; the overtime regulations have been put out for comment. They are not in place. They are not regulations that are going to bind anybody.
They are put out for comment so people can write in and say what is wrong with them. I am sure every word that has been said by my friends on the other side is going to be taken into consideration by not only the Secretary of Labor but the whole Department of Labor.
Correct me if I am wrong, but as I understand some 81,000 comments have already come in either for or against this proposed set of regulations. Now, what our friends on the other side want to do is amend the FSC/ETI bill, which is a jobs bill, parts of which we have worked on for years in the Senate Finance Committee. I, in particular, have worked on the international provisions for years. It is being worked on in the House, led by Chairman Thomas. We know if this overtime provision is added to this bill there is no way the House is going to take it. The House will refuse to take it for very good reasons, the best being the rules are not even put in place at this point. What they want to do is rigidify and tell the Department of Labor, which is the expert in this area, what rules to put in place and to do it all on a one-sided basis without taking into consideration jobs, the economy, other people's jobs, and the unfairness of aspects of the system, all of which are being considered during this comment period.
So by trying to add this provision to this bill, they basically are killing a bill that would, over the years, amount to hundreds of thousands, if not millions, of jobs. So it will be their fault if the jobs bill fails, and anybody who does not understand that is in grave error.
This is a cheap vote for those on that side because they do not care what the Department of Labor does as long as it is more and more regulatory in favor of the trade union movement. I do not want the trade union movement hurt. There has to be a delicate balance, but they are consistently working to try to upset that balance. This is a perfect illustration of how that works. If this amendment is added to this bill, assuming we pass this bill, the House will not take it. That means the House will pass its FSC/ETI bill and not take ours. If the House passes its FSC/ETI bill and they do not take our bill, then there is another game being played by the other side, and that is they are being very selective as to which bills they will allow conferees to be appointed by the Senate so they can work with conferees from the House and come up with a conference report on which both Houses can vote.
So if we want to talk about fault, it is easily laid at the feet of those on the other side, and I think rightly laid there.
All this holy war on jobs that they have been raising, which is nothing but Presidential politics--and I think I can make that case in just a few seconds--they are basically undermining jobs in this country by not allowing this jobs bill that not only would save us $4 billion in unnecessary tariffs by the European Union--$4 billion that we can save for our benefit, which would create jobs, by the way--but also is preventing a bill that would create jobs, especially manufacturing jobs, which we are gradually losing because we are not competitive because we have not passed this bill.
Now they can make all the arguments they want about how important overtime pay is. I think sometimes those are good arguments. I think sometimes we ought to give consideration to the good arguments that are made, but we ought to do it after the regulatory process is completed and see what the Department of Labor does with the comments they are receiving, which is the way the real system works. The other side understands that.
So this is a political game during a political year, scoring what I think are ridiculous points on jobs, against a jobs bill that will make a real difference. They know that if they put this provision on this bill, it is going nowhere, and over time it is going to cost the American taxpayers at least 4 billion unnecessary dollars and a loss of hundreds of thousands, if not millions, of jobs.
So do not give me this business that we must do something about these overtime regulations right now because those regulations are not permanent or final, as far as I can see.
Right now we have one of the lowest unemployment rates that we have had in many years. I remember during the Clinton administration when unemployment was 5.6 percent, which is what it is today. They on the other side controlled the floor of the Senate, and they knocked out unemployment compensation benefits. They took them away because they knew 5.6 percent is close to full employment because when we count those who cannot work, those who will not work, and those who would not take a job if you offered it to them, we have a lot of the American people who make up the unemployment rolls.
Having said that, let me be fair to my friends on the other side. There are pockets of high unemployment in this country where people are suffering. There is no question about it. There are some of our bigger industrial States where people are suffering, where there is a job problem, where manufacturing jobs have been leaving. I would like to suggest a few reasons why.
No. 1, we have not passed this bill because the other side keeps playing around with it and would not even let it go to cloture today, filibustering even the motion to recommit. We have learned this on judges. We have learned this on innumerable pieces of legislation. Once they decide to go ahead and be obstructive, unless we can make some sort of deal with them, then they will try to add amendments to the bill they know the House will not take. They know if we want to go to conference because the House passes a different bill, then we cannot get Senate conferees appointed under the guise that they are not being consulted when it comes to conferences.
They should have gone back to those years when there were 62 Democrats and only 38 Republicans and we were never consulted unless we were the liberal Republican Senators. Yes, then they would not ignore the Jacob Javits of this world or some of the others who were extremely liberal, who were as liberal if not more so than they were, but discount any conservative being considered for any ideas or any conferences. It was run lock, stock, and barrel with an iron-handed rule. I was here. I lived through that.
We did not mouth off and whine and moan and groan every step of the way like we are getting on this particular important bill. Nor did we always come up with phony amendments that basically should not be considered until the rule comes into being.
If there are, in fact, 81,000 comments about the rule, the Department of Labor is going to take those comments into consideration, modify the rule, and hopefully make it work for the benefit of mankind, for the benefit of this country, and for the benefit of jobs.
So to stand here and say we will not give them a vote on this very premature amendment, which we know would kill this bill, is disingenuous at best. I get tired of this. I have been here 28 years, and I have never seen it worse than it is right now. These are little stupid games that are being played. I have seen it played by both sides, and I think it is despicable. But
that is what is going on. Frankly, we have had nothing but that since we have taken over. There is a feeling on the other side that President Bush was not even legitimately elected, even though he was. I can make the best case for why we need the electoral college and did make it back when others thought they were going to pass the so-called election reform constitutional amendment. It lost overwhelmingly because when people understand the great nature of our system, they are not going to take some of these two-bit solutions that would change our Constitution in ways that literally undermine everything for which it stands.
This JOBS Act is an essential component in the agenda to accelerate job creation. American exports are being jeopardized by European tariffs. I have mentioned that. In January of 2002, the World Trade Organization authorized the European Union to impose tariffs on nearly 100 types of U.S. exports if a tax provision known as FSC/ETI was not repealed.
That is what this is all about. We have worked our guts out on the Finance Committee to repeal FSC/ETI so it is acceptable to the EU and to the WTO, so we don't suffer trade sanctions and all the jobs losses that go with that. People wonder why we are losing our manufacturing establishment. It is because of high taxes. It is because of more Government regulation. It is because of ridiculous arguments we hear from the other side on elements like this, where this amendment is so premature.
The punitive tariffs started at 5 percent on March 1 of this year, and they are scheduled to go up 1 percent each month until reaching 17 percent in March of 2005. The net effect of the new tariff would be to raise taxes on exports by 3.8 percent, jeopardizing $4 billion of U.S. exports and, I might add, job after job after job, which the other side claims they are for--jobs, that is. They are undermining one of the most important jobs bills in the last 15 years.
Among the U.S. sectors facing retaliation if we do not repeal the offensive FSC/ETI tax provisions are agriculture and food, wood and paper, textiles and apparel, glass and precious metals, iron and steel and manufacturing.
The Joint Committee on Taxation says 89 percent of FSC benefits go to manufacturing companies. You wonder why some of these bigger States are having problems? It is because of ridiculous approaches to legislation such as we are going through right now. That is what you have committees for, to work their guts out and try to get these problems solved in a bipartisan way. The JOBS bill is a bipartisan solution. I know; I helped to write the bill, as have, of course, the distinguished chairman and so many others, including the ranking member on the committee and others on the Finance Committee whose names deserve to be stated.
The remedy is Jumpstart Our Business Strength, or the JOBS Act. This act brings U.S. exports in line with the WTO, saving American businesses the European Union tariff of $4 billion over time. It creates a new phased-in deduction that would allow corporations, primarily those involved in manufacturing, to permanently deduct as much as 9 percent of their U.S. income from their taxable profits. That is equivalent to lowering their top tax rate from 35 percent to 32 percent. That will help keep our manufacturing jobs here.
It makes the deduction available to all businesses that manufacture in the United States, regardless of size or type. It targets tax shelters, and punishes the relocation of corporate headquarters to Bermuda and other offshore tax havens--something we have heard a lot of discussion about in these last couple of months from people on the other side of the floor. This helps accomplish what they have said must be accomplished. It imposes an excise tax on wealthy individuals who renounce their U.S. citizenship. It is about time we did that. This bill does it.
I have heard nothing but mouthing off from the other side. Here they have a chance of getting some of the things they would like to have. It is not in the wordage they want, which is more and more pro-union and less and less pro-jobs.
The JOBS bill is an important part of the jobs agenda, but Senate Republicans are looking into creating more jobs with a number of tools. The Senate Republicans' accomplishments are helping to put our people to work. I have to say in supporting this bill it is not just Senate Republicans, it is also a number of Democrats, Senators from the other side, who have been willing to open up and do what is right here, led by the distinguished ranking member on the Senate Finance Committee, Senator Baucus, who I hope will stand strong on this bill.
What we are trying to do is encourage entrepreneurship. We have done it by passing a strong small business administration bill. We are trying to improve infrastructure and create jobs through the highway bill. We are introducing new worker training incentives with the workforce investment bill. We have initiated a blueprint for responsible spending by passing a budget in the Senate, the earliest passed budget in history. We have extended unemployment benefits for the jobless and we have kept taxes low, created jobs, and we have grown savings and investment by enacting the jobs and growth bill.
On the ``to do'' list we are working on, we are working to prevent future tax increases on the marriage penalty, the per-child tax deduction, and the 10-percent low-income tax bracket. We want to stop those increases that would occur if these provisions expire. We want to create and protect American jobs by passing an energy bill which has been stymied by filibuster--again, another one. We want to create jobs and defend against junk lawsuits by passing class action reform. We have 62 votes for that, and we had 3 Democrats agree to support that bill--which means against all amendments, unless those who made the deal agree otherwise. Now we are finding they are not living up to that.
We have always had around 58 or 59. The last time we voted, we had 59 votes in the Senate--again, another filibuster stopping a jobs bill.
One of the most important ones is class action reform. We want to protect jobs, pensions, and shareholders, by passing an asbestos reform bill, but we have been told that will be filibustered as well because the unions don't want it, even though they are going to be the major beneficiaries of that bill the way it is outlined. We have written it that way, giving their workers the benefit of the doubt.
We are trying to create jobs by passing the Homeland Investment Act to encourage foreign reinvestment in the United States, and we are trying to create jobs by passing a strong economic development agency bill.
I can go on and on, but let me tell you, this filibuster of the JOBS bill is mind-boggling to me. We worked so hard. We worked in a bipartisan way. There is no reason any Democrat should say we haven't been fair to them. They may disagree with certain provisions, as some of them undoubtedly will, but overall it is a bipartisan bill.
I am very unhappy we were unable to get cloture today. When this bill first came to the floor it appeared to me the Senate leadership on both sides recognized the urgency and the importance of addressing this matter as soon as possible. Unfortunately, we quickly became mired in unrelated and partisan amendments. As many of our colleagues know, the European Union this month, as I said, began assessing 5-percent trade sanctions on certain U.S. exports because we have not yet been able to repeal the Foreign Sales Corporation, or FSC, and Extraterritorial Income Exclusion, or ETI, provisions that are in the Internal Revenue Code. So we are dealing with a matter of real urgency here.
This bill was reported by the Finance Committee last October. I believe it is important to note the strong bipartisan support this bill received in the Finance Committee. I congratulate Senator Grassley, the chairman of that committee, along with Senator Baucus, its ranking Democrat, for their bold leadership in insisting this bill be bipartisan from its inception. This is a key attribute, because it is clear to me anything less than a bipartisan approach in the Senate will not result in success in passing this bill during this election year.
This bill represents the solution to a very difficult situation in which the United States finds itself. By successfully challenging the U.S. in the World
Trade Organization, first on the Foreign Sales Corporation provision, and subsequently winning another victory on its replacement, the Extraterritorial Income Exclusion, the European Union has put us in a very tight spot. I think most, if not all, of us believe we must honor our obligations under the World Trade Organization. After all, we were present at drafting of the WTO rules. WTO rules overwhelmingly manifest principles of commerce and trade we have advanced, and embody a system that benefits us. As a result, most rulings in response to appeals before the WTO have been decided in our favor.
Yet few of us, if any, are eager to raise taxes on our exporting companies. Because any kind of solution that merely replicates the tax benefits of the FSC and ETI provisions will be ruled as another impermissible trade subsidy by the WTO, we are in the uncomfortable position of having to create winners and losers among U.S. companies.
However, because of the trade sanctions that are already upon us, which are scheduled to increase by 1 percentage point each month that these provisions remain in our Tax Code, we have little choice but to repeal them. The choice we do have, I believe, is to choose to repeal them in a way that leads to the greatest potential for future growth in our economy--future growth in jobs, if you will, which is what this bill is all about.
One might say that in this situation, the Europeans have handed the U.S. and its economy a bushel of lemons. However, I am pleased to say that the bill before us does a pretty good job of turning those lemons into lemonade.
It does so by taking this opportunity to put forward provisions that would improve tax incentives for manufacturing activities in the United States. And it does so by putting forth provisions to reform and improve the tax rules that govern international trade.
Is this bill perfect? No. It isn't. Anytime you make lemonade, something has to get squeezed. In this case, there is unfortunately not enough revenue raised by repealing the FSC/ETI provisions to make everyone who loses those benefits whole. This is because we are forced to spread the benefits of the tax provisions we improve in this bill over a wider group of companies than those who have been benefitting from the export provisions.
There are several ways this difficult situation could have been addressed. The easiest way would have been to merely repeal the FSC and ETI provisions and not tried to replace them. Of course, this would have resulted in a $56 billion tax increase on our economy, and one specifically targeted to American companies that are selling U.S.-made goods overseas.
I don't think anybody in their right mind would want to do that but that is what is going to happen if our friends keep playing games on the other side of the aisle.
Just as the tax cuts of 2001, 2002, and 2003 have been greatly beneficial to our economic growth, this tax increase would have been greatly detrimental to economic growth. I am happy to say that this bad idea was simply not an option considered in the Finance Committee.
Another approach might have been to repeal the export provisions and replace them with an across-the-board corporate income tax rate cut. This was an option brought up in the Finance Committee and we shall likely be seeing a floor amendment to do the same, if we can ever get back to this bill. While this idea has some merit and enjoys the virtue of being simpler to compute and administer, I believe it diffuses the tax benefits over too many businesses.
Such an idea, in my view, would create an undue hardship for many of the users of the export tax benefits in the current law. At a time when our U.S. manufacturers, who are, of course, our main exporters, are just recovering from a most difficult downturn, I do not think it is wise to hit them any harder than we have to with a net tax increase. Therefore, I will vote against any amendments to convert the tax benefits of this bill into a net corporate tax rate cut.
The situation handed to us by the Europeans also presents us with a rare opportunity to reform, in a limited way, some of the worst of the broken provisions that make up our international tax rules. These rules are badly outdated and are often harmful to U.S. companies engaged in an ever-increasingly global economy.
By enacting even a limited amount of reform, we can improve the rules and help all U.S. companies that face unfair tax competition with firms from other nations. Increasingly, even many small U.S. companies can and even must export their products. Therefore, many of the same companies that will be losing the FSC and ETI benefits under this bill will be gaining an increased ability to better compete internationally under the international tax reforms included in the bill.
I recognize that there are some Members of this body who do not readily recognize the need for this bill to improve the international tax rules. I have even heard some people intimate that improving these rules could encourage companies to move jobs offshore. I believe this is a phony argument based on a lack of understanding of the business world today.
In reality, business is done on a worldwide basis. Our firms are in competition with companies headquartered all around the world. We cannot close our eyes to this fact. To limit the ability of our U.S. businesses to compete fairly in the global marketplace might, at first glance, seem to some to add security for domestic jobs.
In the same sense, an ostrich sticking its head into sand might seem to think it has found security from danger. But, like that ostrich, a U.S. company that is effectively kept from competing in the global market will find itself far more vulnerable to danger, and could lose everything, including 100 percent of its jobs.
Our job is to do everything we can to help our U.S. companies succeed. We cannot change the fact that more and more of them compete in a worldwide market. So we should recognize it and help them deal with it. This means we must bring our tax rules up to date. Those who are unwilling to do so in the name of protecting U.S. jobs are just fooling themselves and failing to deal with the real world.
In conclusion, it is a tragedy that progress on this bill has been stopped. This is important legislation. It is too important for these political games that are being played on it. While there are many legitimate amendments that could and should be brought forward, we cannot afford to bog this issue down and stop progress on it. This bill is important for U.S. jobs. This bill is important for eliminating those trade sanctions that are even now pinching some U.S. industries and costing us sales and production. And, this bill is important for our long-term economic growth. I hope my colleagues on the other side will re-think their obstructionism and let us go forward with this important bill.
Let us be understanding. If the Department of Labor issues regulations and allows for a period of comment, we ought to at least allow that period of comment to finish and allow them to make the necessary changes the comments suggest--at least the good changes the comments suggest. We should not be playing political games here on the floor of the Senate on a bill we simply must pass because it will cost jobs not to pass this bill. In the end, it would be detrimental to our economy and our society at a time when we need help, at a time when we need jobs, and at a time when we are losing manufacturing jobs. This particular bill will help. It will help greatly, and it will help keep the United States of America at the forefront as the premier nation in the world on jobs and economic growth.
To have our colleagues refuse to even allow debate to end on the floor by not invoking cloture just shows how far they will go to use the filibuster rule as they have on countless bills and judges through the years to stymie what really should be done in this very important body.
I think we ought to get rid of political games and start working on this bill in a way that will improve it, if we can, but not muff it so the House won't take it; and then we have to worry about whether we are going to even be able to get to conference, assuming we have two different bills from the House and the Senate.
I hope our colleagues on the other side of the aisle will not do that in this case, but we have seen it done in other
cases, and I suspect it could be done here, too, if the politics are right. I think that is what is driving an awful lot of the crap that goes on in this body. I hate to use that kind of language, but I don't know what else to call it other than crap.