[Congressional Record Volume 143, Number 102 (Thursday, July 17, 1997)]
[House]
[Pages H5450-H5451]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  1545
                         DON'T GIVE UP THE SHIP

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Tennessee [Mr. Duncan] is recognized for 5 minutes.
  Mr. DUNCAN. Mr. Speaker, John Paul Jones, the great American naval 
officer, once said, ``Don't give up the ship.'' But unfortunately, it 
looks like that is exactly what the United States is doing. Foreign-
flag cruise lines are abusing American taxpayers by not paying taxes on 
billions of dollars of business from Americans and are slowly driving 
our domestic ships out of business.
  Now, these same foreign-flag cruise lines are calling for repeal of 
the Passenger Services Act. This repeal would be horrible for the 
domestic cruise line industry. It could result in the loss of thousands 
of American jobs and millions, if not billions, of dollars in tax 
revenues.
  The Passenger Services Act requires that all passenger vessels in the 
United States and the U.S. trade must be 100 percent American. They 
must be built and registered in the United States, owned by U.S. 
citizens and crewed by American seamen. If a vessel servicing a U.S. 
port fails to meet these standards, it must stop at a foreign port 
before it brings its passengers back home.
  Mr. Speaker, almost every cruise line operating out of the United 
States today skirts the requirements of the Passenger Services Act by 
registering its ships in foreign countries like Panama and Liberia and 
docking in foreign ports before coming to America. As a result, these 
foreign cruise vessels can use poorly-trained, low-paid, Third World 
crews even though 90 percent of the passengers on their ships are 
Americans. Instead of repealing the Passenger Services Act, we should 
be talking about a very different question: Should foreign-flag cruise 
ships be allowed to unfairly compete with U.S. flag vessels?
  I realize that we live in a world economy, and I certainly do not 
oppose free trade. Our trade with other nations has produced many jobs 
for Americans, and I have nothing whatsoever against people from other 
nations. But I also believe very strongly that our trade laws should be 
fair, and quite simply, Mr. Speaker, in the vacation cruise line 
industry the current trade rules are not fair to domestic or American 
cruise lines.
  For example, foreign-flag operators generate billions of dollars in 
revenue from American travelers, but pay no U.S. corporate income tax. 
Let me repeat that. Foreign-flag operators generate billions of dollars 
in revenue from American travelers, but pay no U.S. corporate taxes.
  Currently, the largest cruise line in the world reported nearly $2 
billion in revenues in 1995, primarily from North American vacationers. 
How much U.S. corporate income tax did Carnival pay on those earnings? 
Zero. That is right, zero on $2 billion in revenues.
  What about labor costs? Foreign-flag cruise lines employ Third World 
labor and pay Third World wages. In the

[[Page H5451]]

process they avoid immigration and labor laws that their U.S. 
competitors must obey.
  In addition, foreign operators benefit from foreign government 
subsidies designed to encourage capital investment overseas and provide 
employment for their citizens.
  The real issue at stake in the proposed repeal of the Passenger 
Services Act is who gets the American vacation dollars; a U.S. or a 
foreign business? No one would dream of letting Toyota, Sony, or some 
other foreign corporation set up shop within our boundaries and escape 
U.S. taxes, immigration and labor laws, but this is exactly what we are 
allowing in the vacation cruise line industry.
  The U.S. passenger vessel industry deserves our support. There are 
some 3,600 passenger carrying vessels in the U.S. fleet, 20 or more of 
which are in overnight service. These U.S. passenger vessels employ 
thousands of Americans and make a significant economic contribution to 
their local communities. In addition, the owners of these vessels obey 
U.S. laws, pay U.S. taxes, and employ Americans. Instead of repealing 
the Passenger Services Act, we should be exploring ways to increase the 
viability and the strength of the American cruise line industry.
  I would propose that we put an end to our practice of subsidizing 
foreign cruise lines. Mr. Speaker, Americans are sick and tired of 
paying over half of their income in taxes and then letting big foreign 
corporations get tax breaks and other preferential treatment.
  The truth is that the foreign cruise lines have powerful lobbyists 
who have been able to get their ships favorable treatment for many 
years, but the American people deserve a change, they deserve better.
  It is not going to be easy to fix all of our problems and close tax 
loopholes like this one. Opponents will throw up every roadblock they 
can, but the duty of the Congress is clear.

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