[Congressional Record Volume 142, Number 36 (Friday, March 15, 1996)]
[Senate]
[Pages S2178-S2179]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               THE TRADE DEFICIT AND JOBS IN OUR COUNTRY

  Mr. DORGAN. Mr. President, I want to just speak briefly about two 
issues. One is a jobs issue and the other is a crime issue. Both, I 
think, are important to this country. I introduced a bill on one 
subject last week, and I am going to introduce a bill on the other next 
week. I just talked about the budget deficit. That has been coming down 
some in recent years. It is still too high, but it has been coming 
down.
  Nobody talks about the trade deficit. The trade deficit has been 
going up. Last year was a record. The fact is the trade deficit goes up 
because we are exporting manufacturing jobs out of this country. It 
means fewer jobs and fewer opportunities and less income for too many 
of the American people who need a good job with good income.
  How do we deal with the jobs issue? I do not have all the answers. I 
know we have to deal with the trade deficit. Nobody here talks about 
it. The trade deficit is going to be repaid ultimately with a lower 
standard of living in this country. So we have to deal with that.
  One thing we ought to do, just for starters, relates to a bill I 
introduced in the Senate last week. It is very simple. The bill simply 
says, let us stop providing tax loopholes or tax incentives for those 
people who move their plants and their jobs overseas. I bet there are 
not many people here who know that is what goes on in this country.
  We have in our Tax Code in this country a provision that says, if you 
have a manufacturing plant in America, and you have 100 jobs or 1,000 
jobs or 10,000 jobs in America, we will give you a deal, you close up 
that plant, fire those workers, move them overseas, and you get a tax 
break. You get a tax break.
  You get two plants sitting side by side across the street from each 
other, and they make the same product, hire the same number of workers, 
and one of them closes up and moves overseas and the other one stays 
here. Guess

[[Page S2179]]

what the difference is? Our Tax Code says the one that moved overseas, 
you do not have to pay taxes to this country even though you 
manufacture the same product and ship it back to sell in Pittsburgh or 
Denver or Fargo. You do not have to pay taxes. The company in a State 
pays taxes out of its income, but you do not pay taxes out of your 
income because, as long as you move the company overseas, you can keep 
the income over there tax free until you are repatriated back. Most do 
not repatriate back, so they get a fat, juicy tax incentive for moving 
their plants overseas and closing their plants in this country.
  It does not take smelling salts to get people clear-headed enough to 
understand that this is a fundamentally goofy provision in our tax law. 
If you cannot start with the first step in deciding that we are going 
to stop providing incentives for people to ship their jobs out of 
America and move their jobs overseas, then we do not have a ghost of a 
chance of solving our problem in this country with fewer jobs that pay 
well.
  Why do I say that? People say there are more jobs in our country. 
Yes, there are more jobs. The fact is, there are also more people in 
our country, and the more jobs we are getting are not the kind of jobs 
that pay well. Too often they are service industry jobs that do not pay 
very well. Guess what kind of jobs are leaving? The manufacturing jobs 
that used to pay well with good benefits. What we need to do is shut 
the loophole that says move your jobs overseas and we will pay you to 
do it. Shut it and shut it immediately.
  The piece of legislation I introduced last week, which I hope to have 
a number of votes on in the Congress, some hearings on, is very simple. 
There are two provisions in it. One says, shut the insidious loophole 
that says we will pay you if you move your jobs overseas. Just shut it 
down. End it. Just be done with it.
  Second, you take the money from that, a little over $2 billion, and 
you use it to provide tax credits for those who create new net jobs in 
our country. Those who create new jobs, more jobs now than they did 
over the previous couple-year base of their employment, they get a 25-
percent tax credit on their payroll taxes, 25-percent tax credit for 2 
years for the new jobs they create.
  Let us use the savings by closing the loophole that exists to move 
jobs overseas and use those savings to provide an incentive to create 
jobs over here.
  What could be more sensible than that? It is very simple: Yes or no, 
do we want to close the loophole that exists to send jobs overseas? Of 
course we do. We ought to. I had a vote here on the Senate last year 
and 52 Members voted to keep the loophole open. I will give them a 
chance to redeem themselves a couple of times this year. Should we 
close the loophole? Of course we should. Should we provide incentive to 
keep jobs in this country? Of course we should.
  This is a very simple proposition. This does not go into a big school 
to learn. This is not advanced math. You give people an incentive for 
moving their jobs, they will move them; provide people incentive to 
create jobs, you will have more jobs here.
  Mr. President, S. 1597 is a piece of legislation--and I hope my 
colleagues will become acquainted with it because we will vote on it a 
number of times this year. I hope that enough colleagues will 
understand their constituents have an interest in it and will approve 
this. I would like to see one Member of the Senate go to one town 
meeting in one community in this country and stand up, and in the first 
sentence of the town meeting say, ``By the way, I have a new idea. My 
idea is this: We should put in our Tax Code a little incentive that 
will reward companies who shut down their plants in America and move 
their jobs overseas.'' I think they would get booed out of the room 
before they get to the second sentence. That is what our Tax Code does. 
I am determined that we will shut that perverse, insidious incentive 
down, and we will do it soon.
  That relates to the issue of jobs. Will that fix our jobs problem? 
No, but it will help. At least doctors understand to save the patient 
the first thing you do is stop the bleeding. That is what this bill is 
about.

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