[Congressional Record Volume 141, Number 196 (Monday, December 11, 1995)]
[Senate]
[Pages S18311-S18312]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        THE BUDGET NEGOTIATIONS

  Mr. DORGAN. Mr. President, I came to the floor today to talk just for 
a moment about the budget negotiations, not so much to talk about what 
might or might not happen in the negotiations, but to suggest that this 
is going to be a very important week with respect to the question of 
whether we are able to make progress in trying to reach two goals--
first, balancing the Federal budget. That is an important goal and it 
is one we ought to reach in the interest of our country. Second, 
balancing the Federal budget while we meet some of the priorities in 
doing so. Balancing the Federal budget without injuring the Medicaid or 
Medicare Program, so that someone who is elderly in this country and 
who is sick will not understand that they have to pay more for Medicare 
and get less as a result of our balancing the budget. We can balance 
the budget and do it the right way, retaining the priorities in 
Medicare and Medicaid and education and agriculture and the 
environment. It does not mean you cannot cut spending in all of those 
areas. It just means you cannot cut spending sufficiently so that you 
injure these programs at the same time that you have decided in the 
budget bill to provide a very significant tax cut. That represents the 
question of priorities.
  I want to back up just for a moment and refer to something I read 
yesterday in a newspaper that I thought was an interesting piece. It 
was written by Jim Hoagland in the Washington Post. I commend Members 
of the Senate to read it; it is called ``Surrender to the Money Men.''
  He starts out discussing something I have discussed previously on the 
floor of the Senate--that the stock market in America is at a record 
high, corporate profits are at near records in this country, 
productivity of the American work force is up. We are told the American 
economy is the most competitive in the world, but while all of these 
things are happening, wages in America continue to go down, and job 
security in our country continues to be diminished.
  We hear about downsizing and layoffs, surplusing workers, being more 
competitive; we hear about all of those things and then understand that 
it causes an enormous amount of anxiety among American workers because 
they feel somehow they are now surplus and they are the lost part of 
this economic equation called ``globalization'' in which in our 
economic enterprises' interest in being more competitive, they decide 
to produce elsewhere and ship back here. A corporation, international 
corporation, can become more competitive, they think, by deciding to 
produce shoes and shirts and belts, or trousers and cars and television 
sets, in foreign countries where labor is very inexpensive and then 
ship those back to our country for sale.
  I understand why big corporations think it is in their interest to do 
so. It is something called profits. If you can get someone to work for 
50 cents an hour and not be bothered by the issue of polluting water 
and polluting air and by the difficulties of the prohibition against 
hiring child labor, if you can get rid of those kinds of meddlesome 
difficulties by moving and producing offshore, you can make more 
profits if you can produce offshore and sell here.
  Well, the result of that kind of strategy has created another kind of 
deficit in this country that no one is talking about. We are talking 
about the budget deficit every single day. Already today, I have been 
to two meetings dealing with the budget deficit. I will spend much of 
this week, I assume, in negotiating sessions with other negotiators 
talking about the budget deficit.
  There is not even a whisper in this Chamber or in this Congress about 
the other deficit, the trade deficit. We will, this year, have a 
merchandise trade deficit that is larger than our budget deficit. What 
does the merchandise trade deficit mean? It means that jobs have left 
our country. It means that our country has an economy that has weakened 
because we measure economic progress in this country by what we consume 
rather than what we produce.
  It seems to me that we ought to start worrying about the twin 
deficits in our country--the budget deficit and the trade deficit. The 
budget deficit, one can make the economic argument, is the deficit we 
owe to ourselves but for the fact that it is unequally distributed; it 
causes problems in that regard. One can make the argument that it does 
not require a reduced standard of living to pay the budget deficit in 
this country. You cannot make the similar argument about the trade 
deficit. Inevitably, repaying the trade deficit will mean a lower 
standard of living in our country, and that is why this year, we will 
have the largest merchandise trade deficit in our history, and it is a 
very serious problem for our country.
  I hope that at some point soon we start talking here in the Senate 
about the twin deficits, the budget deficit and the trade deficit. The 
trade deficit, as I indicated, relates to the budget deficit because 
there are things in the reconciliation bill here in the Congress that 
would make it even easier for those who want to move jobs offshore and 
to produce elsewhere and, therefore, it meets our trade deficit or 
makes it easier to do so.
  I have shared with my colleagues on another occasion a provision in 
the so-called Balanced Budget Act in the reconciliation bill. I want to 
do that again today. It is a small provision that deals with tax law 
and the product called ``deferral,'' deferring income tax obligations 
on foreign subsidiaries owned by domestic corporations that earn money 
overseas in their foreign subsidiary and do not have to pay taxes on it 
until it is repatriated to our country. Well, in 1993, we passed a law 
that tightened up on that and said that does not make sense. This is an 
incentive that says let us move the factories overseas and take 
American jobs and move them abroad.
  What we have now is a provision by the majority party that says, ``By 
the way, we will take this little provision that is an insidious 
incentive to move jobs overseas by multinational corporations and tell 
the multinational corporations we like this tax incentive so much, we 
want to increase it for 

[[Page S18312]]
you. We want to boost this tax incentive. We want to make it more 
generous if you will take your jobs and move them overseas.''
  I am thinking I ought to have a scavenger hunt to find out who in the 
U.S. Senate decided it was a good idea to propose that multinational 
corporations ought to have more of a tax incentive for moving their 
jobs overseas.
  I ask any of my colleagues in the next couple of days, as we are 
working through this reconciliation bill, who authored this? Who 
thought it was a good idea? Who believes we ought to change our Tax 
Code to make it more attractive to move American jobs overseas? Who 
thinks we ought to increase the tax incentive to shut down the American 
plant, move it offshore?
  It makes no sense to me. This will increase our trade deficit. This 
will not solve our fiscal policy deficit. This will weaken our country.
  Mr. MURKOWSKI. I wonder if my friend from North Dakota would yield 
for a question?
  Mr. DORGAN. I am happy to yield to the Senator.
  Mr. MURKOWSKI. I was moved by the reference to the increase in trade 
deficit, and I ask my colleague if he would not agree that nearly half 
of that trade deficit is the cost of imported oil?
  Obviously, as a Senator from the State producing the most oil from 
the standpoint of domestic production, would it not be in our national 
energy security interest to try to relieve our dependence on imported 
oil, hence reduce the deficit balance of payment by developing some of 
our resources, if we can do it in a way that is compatible with the 
environment and ecology?
  I am particularly speaking of potential relief that we might find if, 
indeed, there are substantial reserves of oil in the Arctic oil reserve 
as part of ANWR.
  It would seem to me this would alleviate a concern both the Senator 
from North Dakota and I have inasmuch as oil does make up just about 
half of our trade deficit.
  Mr. DORGAN. My own view about our oil import situation is that we 
ought to have an oil import fee. I have always felt that. I think an 
oil import fee solves a series of problems for us. It would stimulate 
more domestic production, first; reduce the trade deficit, second; and 
provide revenue by which you eliminate or reduce the fiscal policy 
deficit as well.
  The Senator from Alaska has been an articulate and forceful supporter 
of opening ANWR. He and I share one goal, and that is I think we ought 
to reduce our dependence on foreign oil. I would like to start with a 
first step of an oil import fee which I have advocated for some long 
while. I have authored them, and I have offered them in the House Ways 
and Means committee when I served there. I think that would be a 
productive first step.
  In any event, we must, it seems to me, begin addressing this trade 
deficit. The failure to do so--even if we solve the budget deficit 
problem--the failure to address the trade deficit problem is going to 
be a crippling problem for this country.
  The point I made with this tax provision is--and I am thinking of 
suggesting we have a rule in the Senate similar to the one they have in 
the House--that if you propose a provision like this in the budget 
system, you have to disclose who it is that is offering this, who 
thinks it makes sense to provide a more generous circumstance in our 
Tax Code to say to somebody, ``Move your jobs overseas. Move your plant 
out of here. Hire your workers in a foreign country.'' Who thinks that 
make sense, to increase a tax subsidy to do that?
  There ought to be, first of all, no subsidy. We ought to completely 
eliminate the insidious tax incentive that exists now to say, ``By the 
way, you have a factory. Close it here. Move the jobs overseas to a tax 
haven and make the same product. Ship it back here and we will give you 
a tax break.''
  It ought to be completely eliminated. This provision, stuck in the 
reconciliation bill, opens it wider and says, ``By the way, this is a 
good idea, we should do more of it.''
  This week, if I can find the Member of the Senate who thinks this is 
a good idea, I would like that person to identify himself or herself, 
and I would like to spend a while on the floor debating that. So I 
invite whoever it is, give me a call, come to the floor and talk about 
this kind of tax policy and whether it makes sense for our country.

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