[Congressional Record Volume 149, Number 60 (Saturday, April 12, 2003)]
[Extensions of Remarks]
[Page E778]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       JOB PROTECTION ACT OF 2003

                                 ______
                                 

                         HON. CHARLES B. RANGEL

                              of new york

                    in the house of representatives

                         Friday, April 11, 2003

  Mr. RANGEL. Mr. Speaker, I am very pleased today to be joining my 
good friend, Philip Crane, in introducing the Job Protection Act of 
2003. I am very pleased both with the substance of this bill and the 
bipartisan cooperation exhibited by everyone in its development. This 
bill is a model for how we should be addressing national issues in this 
Congress.
  The bill responds to the recent World Trade Organization ruling that 
held that our export-related tax benefit, the FSC/ETI provision, 
violates our trade agreements. I believe that it is necessary for this 
country to comply with its international agreements. But I believe that 
the response to the ruling must be designed in a way that preserves 
jobs in the United States.
  The FSC/ETI provisions currently benefit companies manufacturing and 
producing goods in the United States. One company executive described 
the beneficiaries of FSC/ETI as companies ``doing business the old-
fashioned way,'' producing goods in the United States and selling them 
overseas.
  Merely repealing FSC/ETI without returning the revenues to companies 
producing in the United States could result in further job losses in 
the United States. This would be unacceptable, particularly now when 
there has been a steady erosion in U.S. manufacturing jobs.
  Our bill will comply with the WTO ruling by repealing the FSC/ETI 
benefit, but it also will provide a permanent effective rate reduction 
for U.S. manufacturers that is consistent with our trade agreements. It 
will create positive incentives for companies to expand their 
operations in the United States, not overseas. It will preserve, not 
threaten U.S. jobs.
  Mr. Speaker, we have had similar challenges to our export-related 
benefits in the past. We always have responded in a bipartisan, 
bicameral basis. Such a response is appropriate because that type of 
challenge is not a partisan issue. It is a legal dispute between our 
country and our foreign competitors. In that dispute we all represent 
the same client, the United States. We should proceed just like a group 
of lawyers representing the same client, perhaps disagreeing in 
private, but never sharing those disagreements or competing legal 
briefs with our opponent.
  Attached is a summary of the provisions of the bill.
  The proposal would repeal the FSC/ETI benefit effective on date of 
enactment. The proposal would include binding contract transition 
relief and general transition relief. The general transition relief 
would be based on the company's FSC/ETI benefit for 2001. The company 
would receive a deduction of 100% of its base period amount for 2004 
and 2005, 75% for 2006 and 2007 and 50% for 2008, with no general 
transition relief thereafter.
  As the general transition relief phases out, a new permanent benefit 
for U.S. manufacturers would be phased in. The new benefit would reduce 
the effective corporate tax rate on income attributable to U.S. 
production activities. Purely domestic companies would receive an 
effective rate reduction of 3.5 points (reducing the 35% rate to 
31.5%). Companies with operations offshore would receive a smaller rate 
reduction based on the value of their U.S. and world-wide production. 
That adjustment would create positive incentives for companies to keep 
operations in the United States.

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