[Congressional Record Volume 143, Number 44 (Tuesday, April 15, 1997)]
[Extensions of Remarks]
[Pages E658-E659]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          INTRODUCING THE CORPORATE RESPONSIBILITY ACT OF 1997

                                 ______
                                 

                        HON. PETER J. VISCLOSKY

                               of indiana

                    in the house of representatives

                        Tuesday, April 15, 1997

  Mr. VISCLOSKY. Mr. Speaker, today I am introducing legislation that 
will cut an estimated $35.3 billion in corporate welfare over the next 
5 years. My bill, the Corporate Responsibility Act of 1997, eliminates 
or reforms 12 Federal programs that currently use billions of taxpayers 
dollars to subsidize corporate America.
  I am introducing this legislation because I am extremely concerned 
about the hundreds of billions of taxpayer dollars spent every decade 
on special interests and Fortune 500 corporations. Estimates of current 
total corporate welfare expenditures range from $200 billion to $500 
billion over 5 years, money that would go a long way toward balancing 
the budget and investing in our future. Last year, the Congress passed 
important legislation to reform the welfare system. It is time to 
reform the corporate welfare system by getting dependent companies off 
the Government dole.
  In the 104th Congress, I introduced similar corporate welfare 
legislation. That bill, H.R. 3102, took aim at seven of the worst 
corporate welfare programs in the Federal budget, including the Market 
Promotion Program, the U.S. territorial possessions tax credit, and the 
Export Enhancement Program. I was extremely pleased when legislation 
was signed into law last year, Public Law 104-188, that eliminated the 
territorial possessions tax credit. Eliminating this program, which 
gave companies a tax break for sending good U.S. job abroad, will save 
taxpayers $10.6 billion over the next 10 years.
  While the premise of my new bill remains the same--to reduce 
corporate welfare--I have expanded the scope of my legislation, and 
added a lockbox mechanism to ensure that all savings and revenue go 
directly toward deficit reduction. This bill would save $35.3 billion 
over 5 years by ending eight corporate welfare programs and reforming 
four others. Because I've limited this legislation to the most 
egregious examples, my bill is a litmus test for anyone is serious 
about ending corporate welfare. In short, this bill puts a balanced 
budget, jobs, education, and a clean environment ahead of handouts to 
Fortune 500 companies and special interests.
  The legislation I am introducing today represents an important step 
in the effort to end wasteful spending and balance the Federal budget. 
I urge you and my other House colleagues to cosponsor and support the 
Corporate Responsibility Act.
  The Corporate Responsibility Act of 1997 would:
  Eliminate the Export Enhancement Program [EEP]: The U.S. Department 
of Agriculture [USDA] subsidizes the export of agricultural commodities 
by paying exporters cash bonuses to export agricultural products. Since 
its inception in 1985, EEP has paid out more than $7 billion in 
bonuses, mostly to giant agribusinesses. Taxpayers should not be asked 
to hand out these corporate giveaways or subsidize the purchase of food 
products by foreign consumers. Estimated savings: $2.1 billion over 5 
years.
  Eliminate the Market Access Program [MAP]: USDA subsidizes foreign 
advertising costs of multinational and U.S. corporations, such as 
McDonalds and Wrangler. MAP--formerly known as the Market Promotion 
Program--funds consumer-related promotion of products through trade 
shows, advertising campaigns, commodity analysis, and training of 
foreign nationals. Taxpayers should not be asked to pick up the tab for 
the advertising costs of large companies that can afford to advertise 
on their own. Estimated savings: $350 million over 5 years.
  Overhaul the 1872 Mining Act: Allowing foreign companies to buy 
public land for $2.50 per acre and pay no royalties on the valuable 
minerals extracted is a license to steal that should be revoked. Many 
of the mining interests that benefit from this system are not even U.S. 
companies. My bill would establish a leasing system and require these 
companies to pay an 8-percent royalty on the valuable

[[Page E659]]

minerals extracted from Federal land. Estimated savings: $300 million 
over 5 years.
  Eliminate the subsidy for the Tennessee Valley Authority [TVA]: TVA 
receives $106 million each year in a direct Federal subsidy. In this 
era of power deregulation and deficit reduction, the Government can no 
longer afford to subsidize the TVA in this way. Even TVA's chairman, 
Craven Crowell, has said that his agency can make due without its 
annual appropriation. Estimated savings: $500 million over 5 years.
  Reform irrigation subsidies: Under current law, USDA gives farmers--
often large agribusiness--Freedom to Farm payments along with 
irrigation subsidies for the same crops on the same land. My bill would 
end this double dipping by requiring recipients to pay for irrigation 
costs if they are already receiving Freedom to Farm subsidies. 
Estimated savings: $500 million-$1 billion over 5 years.
  Eliminate the Tobacco Program: The Federal Government aids producers 
of tobacco through a combination of marketing quotas, price-supporting 
loans, and restrictions on imports. Tobacco is the sixth largest cash 
crop in the country and most of the price-supports and marketing quotas 
benefit huge companies like Phillip Morris and RJR Nabisco. Estimated 
savings: $200 million over 5 years.
  Eliminate the Advanced Technology Program [ATP]: ATP gives away 
nearly half a billion dollars a year in research and development grants 
to huge high-technology firms like Caterpiller, General Electric, and 
Xerox to help develop new products. These companies are very well 
financed and should be using their own money for R&D. Estimated 
savings: $1.1 billion over 5 years.
  Reform process for developing timber roads in national forests: 
Timber companies profit tremendously from the use of roads in national 
forest lands, but they pay virtually none of the cost of building them. 
My bill would stop subsidizing the construction of roads which are 
mainly used by timber companies go gain access to timber. Estimated 
savings: $250 million over 5 years.
  Reform the U.S. role in the General Arrangements to Borrow: The 
General Arrangements to Borrow [GAB], part of the International 
Monetary Fund [IMF], are intended to prevent any future internal 
monetary crisis caused by developing countries that are unable to pay 
their bills. We are bailing out these countries--and the banks that 
support them--despite the fact that they have enough capital to spend 
vast amounts of money on money-losing State-sponsored industries, huge 
bureaucracies, and large militaries. My bill would prevent increased 
U.S. participation in the GAB. Estimated savings: $3.5 billion over 5 
years.
  End special tax treatment of alcohol fuels: Manufacturers of gasohol, 
a motor fuel composed of 10 percent alcohol, received a tax subsidy of 
54 cents per gallon of alcohol used. Archer-Daniels-Midland--which 
produces most of the country's gasohol--has made billions of dollars 
from this tax break. These subsidies have a dubious balance of public 
versus private benefits, and they are an inefficient use of our energy 
resources. Estimated savings: $2.4 billion over 5 years.
  Eliminate the Foreign Sales Corporation [FSC] tax break: The Tax 
Code's FSC provisions permit U.S. exporters to exempt 15 percent of 
their export income from U.S. taxation. This encourages U.S. companies 
to form subsidiary corporations in a foreign country--which can just be 
a mailing address--to qualify as an FSC. A portion of the FSC's own 
export income is exempt from taxes, and the FSC can pass on the tax 
savings to its parent company because domestic corporations are allowed 
a 100-percent dividends-received deduction for income distribution from 
an FSC. Estimated savings: $7.5 billion over 5 years.
  Eliminate the ``title passage'' tax break: Companies can treat sales 
income as foreign source income--therefore realizing a tax break--by 
passing title to the property sold offshore even though the sales 
activity may have taken place in the United States. The title passage 
rule allows a company with excess foreign tax credits to classify more 
of its income as foreign source, then the company receives an implicit 
tax subsidy. My bill would put an end to this practice by closing this 
tax loophole. Estimated savings: $16.6 billion over 5 years.
  Total estimated savings: $35.3 billion over 5 years.
  Deficit reduction lock box: This bill includes a deficit reduction 
lockbox to ensure that all savings/revenue go directly toward deficit 
reduction and are not used to finance other programs.

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