[Congressional Record Volume 141, Number 162 (Thursday, October 19, 1995)]
[Senate]
[Pages S15313-S15315]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       CLOSE TAX BREAK LOOPHOLES

  Mr. WELLSTONE. Mr. President, today I rise before the Senate to 
comment on some of the provisions of the legislation to be reported out 
of the Senate Finance Committee.
  I want to start out by asking a simple question: Why are we reducing 
revenue and investment in Medicare and medical assistance and higher 
education and other programs, which are critical to communities and 
people in Minnesota and all across the country, before going after some 
of the tax breaks for special interests that have been embedded in the 
tax code for decades?
  If we are serious about deficit reduction, it seems to me that all 
these loopholes and deductions and giveaways ought to also be on the 
table.
  Mr. President, what kind of priorities are these that are reflected 
in this bill? They are certainly not the priorities of the people I 
represent, who understand the value of having funding available to take 
care of elderly people, understand the value of taking care of 
vulnerable people who are in nursing homes, of boosting kids' chances 
to go to college, of helping struggling families enter the middle 
class, of ensuring that elderly people can afford health care, of 
making sure that children have adequate nutrition. It makes no sense at 
all, Mr. President.
  After days of closed-door meetings, this week Republicans on the 
committee announced their proposal for a $245 billion tax cut. Taken as 
a whole, this proposal includes serious reductions and cuts in Medicare 
and Medicaid and, in addition, includes some enormous new tax breaks 
for wealthy corporations and others, further worsening our budget 
crisis.
  Mr. President, instead of scaling back billions of dollars in tax 
breaks, it provides billions for firms with high-powered tax lobbyists 
and almost nothing for working families.
  In fact, by slashing the earned income tax credit for working 
families by over $42 billion, this legislation will greatly increase 
the tax burden on millions of citizens throughout the country.
  In my State of Minnesota, there will be an increase of taxes for 
172,740 Minnesota taxpayers. Mr. President, these are low- and 
moderate-income families that are trying to work their way into the 
middle class.
  At the same time, the bill makes only a tiny, token effort to 
partially scale back a few loopholes in the Tax Code. And the proceeds 
from these modest changes are, in turn, used to subsidize new and much 
bigger tax breaks precisely for those taxpayers in the Nation who least 
need them.
  For example, it relaxes the alternative minimum tax that was 
established in 1986. What was the idea back then? The idea was that 
large and profitable corporations, often multinational corporations, 
after taking a variety of different deductions and credits and 
exclusions, still are going to have to pay some minimum tax. It is a 
part of fairness. Now what we have is a provision to scale that back. 
That provision ought to be struck from this piece of legislation. It is 
truly outrageous.
  If you ask people in the country, ``Do you believe that tax cuts 
should be a priority while at the same time we are trying to reduce the 
deficit?'' most would say--and the polls bear this out--``No.'' If you 
ask people, ``Do you believe that tax breaks for large, profitable 
corporations ought to be expanded rather than scaled back?'' virtually 
every single Minnesotan would say, ``No.'' Even so, that is exactly 
what the Finance Committee is about the business of doing.
  I offered an amendment on the budget resolution earlier this year to 
require that the Senate Finance Committee close $70 billion of tax 
loopholes over the next several years. That amendment was defeated. 
Next week, or the following week when we take up the reconciliation 
bill, I intend to have specific proposals and amendments on the floor 
to close tax loopholes, with up-or-down votes.
  If we are going to have the deficit reduction, if we are going to pay 
the interest on the debt--all of which we agree on--there ought to be a 
standard of fairness. And rather than focusing so much on the cuts in 
Medicare and medical assistance, rather than focusing on cuts in 
benefits for veterans, rather than causing great pain for children and 
the most vulnerable in our country, it seems to me it is not too much 
to ask that large corporations, wealthy corporations, pay their fair 
share. That is why we ought to plug some of these narrowly focused tax 
breaks and loopholes which allow the privileged few to escape paying 
their fair share, focusing on other people and forcing other people to 
pay higher taxes to make up the difference. This is a question of 
fairness. If you are going to have sacrifice, it ought to be equitable 
sacrifice.
  Let me make a point here that is often overlooked. We can spend money 
just as easily through the Tax Code, through tax breaks, as we can 
through the normal appropriations process. Spending is spending, 
whether it comes in the form of a Government check or whether it is a 
tax break for some special purpose like a subsidy, a credit, a 
deduction, accelerated depreciation--you name it. Some of these tax 
expenditures are justified, they ought to be kept. But it does seem to 
me that, in a time of tight budgets, in a time when we are focusing on 
deficit reduction, in a time when we are cutting into nutritional 
programs for children and higher education and health care and 
environmental protection, why in the world are not the tax subsidies 
for the large pharmaceutical companies and oil companies and tobacco 
companies and insurance companies and you name it, why are they not on 
the table?
  Various groups, from all ideological perspectives, from the National 
Taxpayers Union to the Cato Institute to the Progressive Policy 
Institute to Citizens for Tax Justice, have prepared a list of tax 
loopholes and other subsidies which they believe should be eliminated. 
But, despite the logic of their approach, which is a Minnesota standard 
of fairness, my colleagues on the other side of the aisle have chosen 
the path of least political resistance: Slash the programs for the 
vulnerable elderly, slash the programs for the vulnerable poor, slash 
the earned-income tax credit, slash the programs for child care, slash 
the programs for middle-income people. But when it comes to these 
large, multinational corporate interests who march on Washington every 
day, the big players, the heavy hitters, people who have the lobbyists, 
for some reason, we do not ask them to tighten their belts at all.
  It is only fair that this be a part of the agenda. So I want to just 
outline very briefly some of the areas on which I want to focus the 
attention of my colleagues next week. Let me give but a few examples.
  I already talked about the minimum tax. The effort is to scale that 
back for certain corporations. That's wrong. Everybody ought to pay 
some minimum tax.
  Second, let me talk about expensing for the oil and gas industry. 
This has been a special break for this industry. They get to expense 
their oil and gas exploration costs, instead of depreciating them over 
time. It is an expensive tax benefit for this industry. Why should the 
oil and gas industry receive special treatment in the Tax Code which is 
not generally available to other companies and industries? It is a 
simple question. If we are about the business of deficit reduction, we 
ought to close this loophole.
  Or take section 936, the Puerto Rico tax credit that has been debated 
in some detail in recent years. The Finance Committee has finally 
acknowledged there ought to be some change. But what it does is it 
repeals this over a fairly long period of time, 7 years or so, with 
generous transition benefits for corporations in the interim period. If 
we are going to repeal it, I think what we have to do is move as 
quickly as possible. It simply makes no sense. For those who support a 
flatter tax or a fairer tax or tax justice and think we ought to make 
the cuts and ought to do the belt tightening, this ought to be on the 
table. 

[[Page S 15314]]

  Or consider the special exclusion for foreign-earned income that has 
been in this code for decades. This little gem will cost taxpayers 
between $8 and $9 billion over the next 5 years. If you are a U.S. 
citizen living abroad, you get an exclusion of taxation for the first 
$70,000 you make. You get an exclusion of taxation on the first $70,000 
you make. So, if you make $170,000, you do not pay anything on $70,000 
of that. Again, let us talk about a standard of fairness and let us 
make some of these cuts, not just based upon the path of least 
political resistance, but on the basis of a path of some fairness.
  The PRESIDING OFFICER. The Chair will advise the Senator from 
Minnesota that his 10 minutes have expired.
  Mr. WELLSTONE. Mr. President, I ask unanimous consent that I have 3 
more minutes to conclude my remarks.
  The PRESIDING OFFICER. The Senator is recognized for 3 additional 
minutes.
  Mr. WELLSTONE. Mr. President, there is a provision right now on some 
of the corporate-owned life insurance that has generated some 
opposition from the insurance industry and large employers. Frankly, it 
had been abused. I refer my colleagues to an article by Allan Sloan, 
``Companies Find a Premium Way To Take an Unjustified Tax Break.'' He 
talks about Wal-Mart taking out this insurance on virtually all their 
employees. The money does not go to their employees as beneficiaries, 
but Wal-Mart gets to take a deduction on whatever money they put into 
the insurance for every single employee. Again, we are talking about 
losing billions of dollars over the years. I am going to be talking 
about this at some great length when we finally get down to the debate 
on this reconciliation bill and when we finally get down to the point 
where the rubber meets the road.
  These are about four or five examples. I intend to come to the floor 
with at least some of these specific provisions. What I am going to be 
saying to my colleagues is: Look, eliminate them. Because what happens 
is, when these companies or these citizens who do not need this 
assistance get these kind of breaks, other citizens end up having to 
pay more taxes. It is not fair. It is not tax fairness. And, in 
addition, it is an expenditure of Government money that we can no 
longer afford. That is what it amounts to.
  If we are going to do the deficit reduction, we ought to do it on the 
basis of a standard of fairness. I ask the question one more time, by 
way of conclusion today. How come we are focusing so much on the 
elderly? How come we are focusing so much on the children? How come we 
are focusing so much on health care? How come we are focusing so much 
on working families, low- and moderate-income families? How come we are 
stripping away environmental protection? How come we are stripping away 
some basic consumer safety provisions that are important to all of the 
citizens of this country, but at the same time, when it comes to some 
of this corporate welfare, some of these outrageous breaks that go to 
some of the largest corporations in America and throughout the world 
that are just doing fine and can afford to tighten their belts, they 
are not asked to be a part of the sacrifice?
  These votes next week will be a litmus test of whether or not 
Democrats and Republicans are serious about deficit reduction based 
upon a standard of fairness. I look forward to the debate.
  Mr. President, in the absence of any colleagues here, I ask unanimous 
consent that morning business be extended for an additional 7 minutes.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered. Without objection, morning business is extended for an 
additional 7 minutes.
  Mr. WELLSTONE. Mr. President, I also want to speak on one other 
matter that I think is very important to the country.
  The PRESIDING OFFICER. The Chair will advise the Senator that his 
previously granted time has expired. Does the Senator wish additional 
time?
  Mr. WELLSTONE. Mr. President, I ask unanimous consent for an 
additional 7 minutes to speak as in morning business.
  The PRESIDING OFFICER. The Senator from Minnesota is recognized for 
an additional 7 minutes.
  Mr. WELLSTONE. Mr. President, I also rise today to strongly oppose 
drilling in the Arctic National Wildlife Refuge [ANWR]. This has been 
an issue that I have been involved in from the time I first came to the 
Senate. There was a filibuster over ANWR that I led when I was here 
just a short period of time and now ANWR is back again. The Energy 
Committee has voted, over the objections of a large bipartisan group of 
Senators, to open up ANWR for drilling and to use the revenue to meet 
reconciliation instructions. I note a letter from former President Bush 
to my distinguished colleague from Alaska, that is on everybody's desk, 
supporting this.
  I am both aware of and respectful of the need to balance the budget. 
That is why I have stood here on the Senate floor and voted for many 
spending cuts.
  But there are other ways and measures that do not balance the budget 
at the expense of our natural resources. Unfortunately, though, all I 
see is big industry, oil companies included, winning big, and our 
natural resources losing big.
  This is poor energy policy, poor environmental policy, and it is 
politics that in many ways I think is profoundly wrongheaded and even 
cynical.
  First, let me talk about energy policy. The argument is that drilling 
in ANWR will lessen our reliance on foreign oil, but we do not really 
know whether there even is oil in ANWR. And if there is, we do not know 
how much. The latest numbers from the U.S. Geological Survey suggest 
that it is, at best, 4 million to 5 million barrels. This is equal to 1 
year's worth of U.S. oil consumption. That is no long-term solution to 
energy dependence, and dependence on foreign oil.
  Furthermore, there is a mixed message. At the same time proponents of 
ANWR say that we ought to lessen our dependence on foreign oil, they 
are pushing to lift the North Slope oil export ban and selling off oil 
reserves in the Strategic Petroleum Reserve.
  I do not see how it is possible to make the argument for drilling in 
ANWR, at the same time that we are exporting some of our oil. It is 
just inconsistent, and it is bad energy policy.
  The discussion about ANWR supplying jobs is also way off the mark. If 
you just look at some statistics from the American Council for an 
Energy Efficient Economy, they estimate that by the year 2010, we could 
generate 1.1 million jobs, by getting serious about saved energy and 
efficient energy use, which makes far more sense.
  Now, let me talk about environmental policy. The Arctic National 
Wildlife Refuge is one of this country's greatest treasures. The 
preservation of this land and its plants and its animals and the way of 
life they support is vital. ANWR contains the Nation's most significant 
polar bear denning habitat on land, supports 300,000 snow geese, 
migratory birds from six continents, and a concentrated porcupine 
caribou calving ground.
  Given all that ANWR has to offer, I am appalled that many of my 
colleagues are willing to drill in ANWR without the usual procedure of 
an Environmental Impact Statement as required by current law. I pushed 
in committee to have such an environmental impact statement but my 
amendment was defeated. When it was being considered, my colleagues 
asked me how it would affect scoring. This points to exactly what is 
going on here: We are selling important environmental protections, and 
we are mortgaging the environment for a momentary short-run budgetary 
gain.
  Mr. President, finally, let me just make a concluding point. For 
thousands of years, the Gwich'in people have relied on the porcupine 
caribou to provide their food and meet their spiritual needs. I have 
heard them speak very eloquently and directly about what oil drilling 
in ANWR would do to their way of life. In fact, many of them may have 
to leave a way of life they have practiced for thousands of years if 
drilling in ANWR happens.
  This is a one-sided battle. People like the Gwich'in want to save the 
environment. But they are not the big oil companies. They do not have 
the money. They do not have the lobbyists, and they do not have the 
lawyers here every day.
  I believe, once again, to open up ANWR to oil drilling through the 
back door of the budgetary process is profoundly mistaken. It is not 
the basis on 

[[Page S 15315]]
which we should make this decision, and I think it would be a huge 
mistake for this Nation.
  Our natural resources are among the most important things we can 
leave to future generations. Those resources are in our care. Our 
children and our grandchildren--we keep talking about our children and 
our grandchildren--deserve more than what this bad energy policy, bad 
environmental policy, and shortsighted politicking would leave them.
  I urge my colleagues to support an amendment to the reconciliation 
bill to strike the provision opening ANWR to drilling. It is time to 
get our priorities right, and if we are serious about doing well for 
our children and our grandchildren, we will make the protection of the 
environment and the protection of ANWR our very highest priority.
  Mr. President, I yield the floor.

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