[Congressional Record Volume 149, Number 174 (Tuesday, November 25, 2003)]
[Senate]
[Pages S16006-S16007]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. STABENOW (for herself and Mr. Graham of South Carolina):
  S. 1964. A bill to amend the Internal Revenue Code of 1986 to comply 
with the World Trade Organization rulings on the FSC/ETI benefit in a 
manner that preserves jobs and production activities in the United 
States, and for other purposes; to the Committee on Finance.
  Ms. STABENOW. Mr. President, I rise today to introduce the 
Manufacturing Opportunities to Revitalize our Economy's JOBS Act, or 
the MORE JOBS Act. We are facing a manufacturing job crisis in this 
country, and that is why I am introducing this bill to help our U.S. 
manufacturers to create manufacturing jobs here at home.
  Since January of 2001, the State of Michigan has faced devastating 
losses in the manufacturing sector. While the U.S. has lost 3.3 million 
private sector jobs--2.5 million in the manufacturing sector, Michigan 
has lost 162,300 manufacturing jobs. That is 18 percent of the state's 
manufacturing employment. In other words, 1 in 6 Michiganians has lost 
their manufacturing job in the last 2 years.
  It is an unfortunate fact that Michigan is one of the leading states 
in the country in manufacturing job loss. Indeed, while the U.S. 
employment rate is around 6 percent, Michigan's unemployment rate is 
currently around 7.6 percent. In some parts of Michigan, the 
unemployment rate is as high as 12 percent.
  The people of Michigan and the people of the United States need 
relief to help revitalize our economy. In the midst of these troubling 
times, we are faced with a new challenge: complying with a World Trade 
Organization (WTO) decision finding that our Foreign Sales Corporation 
(FSC) and Extraterritorial Income (ETI) tax code must be reformed to 
meet international trade law requirements. I understand that our 
colleagues on the Senate Finance Committee have been and continue to 
work diligently on this issue. Our country is one that plays by the 
rules and we will ultimately fix our tax code.
  The tax benefits of the FSC and ETI, however, are valued at nearly 
$50 billion over 10 years. We cannot just take away these benefits to 
our American manufacturers without creating new tax relief for them. 
The practical effect of that would be a $50 billion tax increase. And, 
that is why we must create a new tax credit for our U.S. manufacturers.
  The MORE JOBS Act that I am introducing today lays out a vision on 
how I believe we should reform the code. First of all it, it phases out 
the non-compliant FSC/ETI tax code over the next three years.
  Then, to help our U.S. manufacturers, the bill creates a 
Manufacturers' Tax Credit for domestic companies. A company, under my 
proposal, would be allowed to deduct 9 percent of its domestic 
production income before it has to figure its tax liability. In effect, 
this would result in a new tax rate for our U.S. manufacturers that are 
3 percent lower--32 percent instead of 35 percent. And, my bill would 
make this effective immediately, not phased in as others have 
suggested.
  The credit would be extended to a wide array of companies: small 
businesses, large businesses and agricultural cooperatives. So whether 
it is a small furniture manufacturer in western Michigan, a tool and 
die company in Grand Rapids, or one of our automakers in metro Detroit, 
companies will be rewarded for their domestic production. And, our 
farmers will benefit, too.
  I often say that we in Michigan pride ourselves on what we make and 
what we grow. These two activities are vital to a strong economy, and 
our farmers would also benefit under my bill.
  Farmers themselves, if they have at least one employee, will directly 
benefit under my bill, since they qualify for the tax benefit as 
manufacturers. In addition, agricultural cooperatives would also 
receive this tax benefit. Farmers often belong to an agricultural 
cooperative which is covered under my bill. Agricultural cooperatives 
do the processing, handling, storing, and marketing for their members. 
For example, a farmer will sell his specialty crop to the cooperative. 
The cooperative then takes the farmer's crop and puts it with other 
farmers' produce and then stores and prepares the produce for sale to a 
food processing company. The coop passes its profits on to the members 
of the cooperative based on the amount of business each member does 
with the cooperative. So the tax benefits for the cooperative can be 
passed-through to farmer members of the coop.
  Finally, one of the cornerstones of my legislation is that my bill 
would create incentives for companies to keep jobs in the U.S. and to 
bring more jobs to our country. The MORE JOBS Act would encourage 
companies to keep their manufacturing in the U.S. by basing the amount 
of their tax credit on how much of their manufacturing is done in the 
U.S. Companies that have all of their manufacturing in the U.S. would 
receive the full 3 percent tax credit. Companies that have much their 
manufacturing outside of the U.S. would receive a reduced credit in 
proportion to their U.S. manufacturing. While other proposals being 
circulated eventually eliminate this incentive, my bill would make this 
incentive permanent.
  Why would we want to reward companies if they send their jobs 
overseas? We want to reward those who are contributing to our economy 
and putting Americans to work here at home.
  I want to work closely with my colleagues to reform our manufacturing

[[Page S16007]]

tax code. In doing so, we will make our country stronger, our economy 
more resilient, and we can create millions of new good jobs in the 
manufacturing and agricultural sector. But we must do it carefully and 
with a priority on our U.S. manufacturing base. I urge my colleagues to 
support the MORE JOBS Act.
                                 ______