Mr. Chairman, I raise points of order against section 512, subsections (b) and (c), section 514 and section 525 on the grounds that these provisions change existing law in violation of clause 2(b) of House rule XXI and therefore are…
Mr. Chairman, I raise points of order against section 512, subsections (b) and (c), section 514 and section 525 on the grounds that these provisions change existing law in violation of clause 2(b) of House rule XXI and therefore are legislation included in a general appropriation bill.
Mr. Chairman, I have discussed this with the gentleman from Tennessee. We are uncomfortable, as the gentleman knows, with the reporting requirements just through appropriations. We would want to include the committee which has jurisdiction over Buy- America, which is ours. We cannot rewrite this, but I pledge to work with the gentleman as we move forward on these issues.
Mr. Chairman, I raise a point of order against section 526(b) of H.R. 4567 on the grounds that this provision changes existing law in violation of clause 2(b) of House rule XXI, and therefore is legislation included in a general appropriations bill.
Mr. Chairman, it is section 526(b).
Mr. Chairman, will the gentleman yield?
Mr. Chairman, I appreciate the gentleman's remarks, and I agree with them.
Mr. Chairman, I move to strike the last word.
Let me just respond to my friend from Wisconsin who has raised this issue.
I have struck for the second year in a row these so-called corporate inversion amendments. The appropriate time to take this up in my opinion would have been before the procurement moved forward. Several committees of this House held hearings on the US-VISIT contract. I think if this had been part of the initial contract, then we would not have gone through this process, companies would not have spent millions of dollars, and we could have addressed this earlier in the process.
The difficulty now is that we would delay this process up to 2 years further, and I think it is a needed program.
We have kept the language in section (a) under this going forward for future contracts in the spirit of compromise with the gentleman, but I understand his concerns. I have other substantive concerns with what the gentleman has said, but I think in the spirit of compromise we have tried to get an appropriate balance and allow the contract to move forward.
I yield to the gentleman from Wisconsin.
Mr. Chairman, reclaiming my time, I understand the gentleman's concern. The issue has been addressed in other tax laws, but I understand the gentleman's concerns on this and I look forward to working with him.
Mr. Chairman, I rise in opposition to the amendment.
The gentlewoman is entitled to her strong opinion but not her own facts. She notes that troops overseas need help. The reality is if her amendment passes, this will have to be recompeted and it will push back protecting our borders another 2 years.
A lot of companies invested money in this. Homeland Security invested money in going through these. This will have to start again. The bids of the losers in this particular case will be made public. Everyone will have a starting place. This pushes the outcome to protect our homeland 2 years. So this does not do anything to protect the homeland, number one.
Number two, Accenture, to my understanding, pays an effective tax rate for fiscal year 2004 of 34.8 percent. The two competitors in this pay, in their recent 10-K filings, 31.3 percent and 28 percent respectively.
I ask the gentlewoman where is the tax advantage if they are paying a higher percentage of their taxes? Does she know?
There is no tax advantage.
I yield to the gentleman from Texas.
Yes.
Mr. Chairman, reclaiming my time, obviously it is the usual subterfuge on this. As a primer, they pay taxes on profits. They do not pay taxes on their losses.
But we are talking here about an effective tax rate, not the tax rate itself, which of course would be equal for U.S. income.
All work performed on this contract is performed in the United States. They were awarded this contract and the experts, the career civil servants who looked at this, decided this was the best procurement to protect the homeland. What they would have us do, the author of this would say let us not take the best defense we can get for the homeland, let us take something else. Let us pay a little more, let us get a little bit less because we want to settle the score because the parent company of the U.S.-based company that won this procurement somehow should be punished, even though all the work will be performed in the United States. And Accenture LLP led the SMART Border Alliance, which represents 31 U.S. companies employing 330,000 people in 50 States. Again, the US-VISIT program led the source of selection process here and chose this as the most effective means, not just cost effective but technically effective means, to protect the homeland, and they want to throw that out the window and say we will take second best for some other reason.
The time to address this, frankly, was at the time of the procurement. Congress held hearings on this. We had an opportunity on this procurement before it was let to do something on that in the hearings.
As I noted before, they do not receive a competitive advantage on this. Accenture is not a corporate inversion. This was a global partnership and all of their U.S.-based work of course they pay taxes on in the United States.
The thing I worry about most, though, is retaliation. Right now in information technology we are running an $8 billion trade surplus. This jeopardizes that surplus by inviting retaliation from other countries in the globe where we currently maintain a trade surplus with retaliation against U.S. companies doing business in those different countries, and I think that would be a disaster for the U.S. economy, something that my district in Northern Virginia knows something about, being one of the leaders in this. I do not think we should reduce the safety and security of the U.S. to settle a political score in this particular case.
Why should U.S. taxpayers pay more money and take, in the opinion of the career civil servants, a secondary technical solution to protect our homeland?
I also want to note no jobs are being outsourced. All the work on this contract is being performed in the United States. Accenture I do not even believe has any employees in Bermuda. Every cent of taxes that is earned on this will be paid here. The CEO of Accenture lives in Texas. Their Chief Financial Officer lives in Texas. And the idea that somehow they are not employing Americans or these jobs are going offshore or any intimation of that is patently false.
Let us take a look at the procurement itself because I think it is important. It is creating a nationwide entry and exit tracking system for foreign nationals visiting the United States. This amendment delays that for 2 years. I do not think our homeland needs that. I do not think the security in this country needs that. I urge defeating the amendment.
Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, let me just say this is about the best technology to defend the borders. I have a letter from the Chamber of Commerce of the United States made up of American companies in opposition to this amendment. I have a letter from the Professional Services Council made up of American companies in opposition to this amendment.
Mr. Chairman, I yield 3 minutes to the gentleman from Arizona (Mr. Kolbe).
Mr. Chairman, will the gentleman yield?
Mr. Chairman, there are 330,000 American jobs in the contract that is currently being let to Accenture and its American corporate subsidiaries. But the other side would just delay those jobs at least 2 years and the creation of those jobs as they rebid this contract and recompete this contract and keep our borders less safe.
Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, let me correct a couple of statements made. First of all, this is not a company that ever left America. This is a global partnership at one point that as they looked at the new business model, they looked at a place globally in the partnership that had worked across the world.
I will yield on your time. Do you have the time, or are you just trying to interrupt me so I cannot get a stream of thought? You have ample opportunity to rebut me on the time allotted to you.
So they were never an American company, and this is not a corporate inversion under the current law, and the gentleman knows that, and the author of this amendment knows that.
Secondly, Bermuda is a British territory. Britain is a member of the World Trade Organization. To say they are not is fallacious, and I think we ought to at least keep this on a factual level. We have differing opinions, which I respect on this; but let us at least argue from the same basis of facts.
Mr. Chairman, I am happy to yield 4 minutes to the gentleman from Oregon (Mr. Blumenauer).
Mr. Chairman, I yield 4 minutes to the gentleman from Virginia (Mr. Moran).
(Mr. MORAN of Virginia asked and was given permission to revise and extend his remarks.)
Mr. Chairman, I yield 2 minutes to the gentleman from California (Mr. Dreier).
(Mr. DREIER asked and was given permission to revise and extend his remarks.)
Mr. Chairman, I yield 2 minutes to the gentleman from California (Mr. Dooley).
(Mr. DOOLEY of California asked and was given permission to revise and extend his remarks.)
Mr. Chairman, I yield 1 minute to the gentleman from Colorado (Mr. Tancredo).
Mr. Chairman, although I am defending the committee's position in this particular case, my understanding is I do not have the right to close because I am not a member of the committee.
Mr. Chairman, does the gentlewoman have any additional speakers?
Mr. Chairman, how much time do I have remaining?
Mr. Chairman, I yield myself the balance of my time.
Mr. Chairman, I think this amendment is unfortunate. First of all, you are picking on only one homeland security contract where there are literally dozens, more than that, that go to companies that are foreign based. They have singled out one. Perhaps there is a bidder in their State that did not get it. But retaliation on Federal contracting is really not a good thing to be doing on the House floor.
Secondly, we need to be aware that this will cost the government additional money in termination costs, and they are likely to go through this, and delay implementation of this procurement for up to 2 years which means that securing our border and getting the U.S. VISIT program up and running will be delayed. This is a homeland security bill. This is an anti-homeland security amendment in that case.
It is important, once again, to note that the winner of the contract is an American corporation, but their parent is a global company that has a headquarters in Bermuda. They were a global partnership prior to doing that. Although the majority of their stock, I understand, is American-owned, certainly the bulk of their employees are here. But they are global in nature as are so many companies in a changing global economic world, a fact of the matter that some of my colleagues do not want to face up to.
I yield to the gentleman from Virginia.
Well, this throws the procurement basically up in the air and out the window and delays it, I think, at a minimum a couple of years. Worst of all, we know under this contract, Texas gets 35,000 jobs. Those jobs, if this amendment becomes law, are out the window. They may get some back. They may not get any back. We know, for example, in Massachusetts 13,000 jobs come under this. Those jobs are out the windows if this is it. Maybe they will get it under some other bidding, but there is no assurance of that at all.
We know for example in Florida, 14,000 jobs; California, 30,000 jobs; Illinois, 11,000; Arizona, 12,000, on and on; 330,000 jobs at a time when people profess to want job creation. Basically what they are saying is let us put these jobs off 2 years because we do not like the headquarters where the parent company that is putting this together of the winning company, which is an American company, lives. Even though all of the jobs will be performed in the United States, appropriate security clearances will be cleared by American citizens to perform this work.
I would note once again, there are literally dozens, if not hundreds, of
companies around the globe that are doing business with the Defense Department, Department of Homeland Security, that are foreign based. If we cut this off, we are indeed, as one speaker noted, cutting off our nose to spite our face. Because, after all, this is a global economy; and after all, in this particular area we are running an $8 billion trade surplus, trade surplus. And what the proponents of this amendment would do is say, we do not care about a trade surplus in this particular area. We want to settle some other scores. We do not like the global economy. We want to use American dollars only to compete with American companies, only to use American companies even if it may be an inferior technology, even if it may cost taxpayers more.
That is what they are saying, and it is very poor precedent, in my opinion, for protecting the homeland.
I yield to the gentleman from Virginia.
It clearly has to be recompeted, and we will be wrought with protests.
I urge that this amendment be soundly defeated and we send the signal here that we want to protect the homeland first. This is a homeland security bill. It ought to stay that way.