[Congressional Record Volume 150, Number 27 (Thursday, March 4, 2004)]
[Senate]
[Pages S2211-S2217]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         JUMPSTART OUR BUSINESS STRENGTH (JOBS) ACT--Continued

  Mr. BUNNING. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           Amendment No. 2686

  Mr. BUNNING. Madam President, I send amendment 2686 to the desk and 
ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Kentucky [Mr. Bunning], for himself, Ms. 
     Stabenow, Mrs. Feinstein, Mr. Levin, Mr. Kohl, and Mr. 
     Rockefeller, proposes an amendment numbered 2686.

  Mr. BUNNING. Madam President, I ask unanimous consent that the 
reading of the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

(Purpose: To accelerate the phasein of the deduction relating to income 
            attributable to domestic production activities)

       On page 71, strike lines 17 through 21, and the matter 
     before line 22, and insert the following:
       ``(2) Phasein.--In the case of taxable years beginning in 
     2004, 2005, 2006, 2007, or 2008, paragraph (1) shall be 
     applied by substituting for the percentage contained therein 
     the transition percentage determined under the following 
     table:

``Taxable years                                          The transition
beginning in:                                            percentage is:
2004, 2005, or 2006.................................................  5
2007................................................................  6
2008................................................................ 7.

                Amendment No. 2687 to Amendment No. 2686

(Purpose: To provide for the extension of certain expiring provisions, 
                        and for other purposes)

  Mr. GRASSLEY. Madam President, I send an amendment to the desk and 
ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  Mr. HARKIN. Madam President, point of order.
  The PRESIDING OFFICER. The clerk will report the amendment by number.
  The assistant legislative clerk read as follows:

       The Senator from Iowa [Mr. Grassley], for Mr. Bayh, Mr. 
     Santorum, Mr. Bunning, Mr. Grassley, Mr. Baucus and Mr. 
     Dorgan, proposes an amendment numbered 2687 to amendment No. 
     2686.

  Mr. GRASSLEY. Madam President, I ask unanimous consent that the 
reading of the amendment be dispensed with.
  Mr. HARKIN. I object.
  The PRESIDING OFFICER. The clerk will report.
  (The assistant legislative clerk continued with the reading of the 
amendment.)
  Mr. REID. I ask unanimous consent that the reading of the amendment 
be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under ``Text 
of Amendments.'')
  Mr. REID. I ask unanimous consent that the Senator from Iowa, Mr. 
Harkin, be recognized to speak for up to 7 minutes before we return to 
Senator Bunning.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered. The Senator from Iowa.
  Mr. HARKIN. Madam President, I thank the Senator. I wanted to alert 
fellow Senators what is going on. It is obvious that the Republican 
side of the aisle does not want to vote on the overtime bill. For some 
reason, they are afraid to confront this issue. I don't want to take a 
lot of time. I would agree to a half hour evenly divided. We have 
debated this issue before. But make no mistake about it, the Department 
of Labor is about to issue regulations that will strip overtime pay 
protections from 8 million workers in this country.
  This Senate, last year, on a bipartisan vote, passed my amendment to 
disallow those regulations. The House of Representatives also, on a 
bipartisan vote, voted to uphold what we did in the Senate. And the 
administration stripped it out on the Omnibus appropriations conference 
report.
  They say this is a jobs bill. How about the jobs of people who are 
working overtime in America? How about the men and women who have given 
up their premium time with their families and with their kids, after 
work, on weekends, to work overtime? What about them? These are jobs, 
also. How about the people unemployed right now who would be employed 
but, if employers can work people over 40 hours a week and not pay them 
a cent more, why would they hire anybody else?
  Last, as I said the other day and I pointed out, this is a dagger 
pointed at our veterans. You can look in the old regulations. There is 
nothing in there about training in the military causing you to be 
exempt from overtime pay protection.
  Here, I blew it up on this chart. I am not going to read the whole 
thing, but basically it puts in these words: ``training in the Armed 
Forces.'' What does that mean? It means if you get specialized training 
as a veteran and you come out and go to work, you can be exempt from 
overtime pay protection simply because you got that training in the 
Armed Forces. You aren't called a ``learned professional'' without a 
four-year specialized degree otherwise. But not if you are a veteran. 
The regulations would substitute veterans'

[[Page S2212]]

training for university education, at least to take their overtime 
away.
  What it does is it makes a veteran who got specialized training in 
the Armed Forces less eligible for overtime pay than his or her 
counterpart who never served in the military who otherwise has the same 
education. That is why we feel so strongly about disallowing the 
proposed regulations of the Bush administration that will strip these 
overtime pay protections from 8 million workers.
  Make no mistake about it, the Department of Labor is about to issue 
these regulations. They say they are going to issue them this month. 
Perhaps that is why the Republican side doesn't want to vote on them. 
They want the Department to issue the regulations, get them in force 
and effect. Then they know it is harder to overturn them, once those 
rules and regulations are out there.
  I hope the working men and women around America are paying attention 
to what is happening on the floor of the Senate right now. The other 
side has known full well; they were told earlier on if they were going 
to call this a jobs bill, we ought to be allowed to offer our amendment 
for an up-or-down vote on whether the administration ought to be 
allowed to issue these regulations stripping overtime pay, regulations 
on which they have never had one public hearing, not one. Yet the other 
side is not letting us even vote on it. Not even vote on it. That is 
the charade. That is the game that is going on around here.
  Are we stopping this bill? We are not stopping this bill. I heard 
someone say if the Harkin amendment on overtime pay is adopted it will 
kill the bill. Why, I ask, would it kill the bill? This is a jobs bill. 
We are trying to protect jobs in America.
  At some point we will vote on this amendment. Maybe not on this bill, 
because I can see the writing on the wall now. They are going to keep 
second-degreeing this amendment to death. Then they are going to go off 
the bill and go onto the budget.
  But I will be back. I don't want to quote the Governor of California, 
but, ``I'll be back.'' I will be back and I will be back and I will be 
back. Whenever there is an opportunity for this Senator to offer this 
amendment to stop the taking away, the stripping of the rights of our 
working people in this country to overtime pay, I will be here. If 
there is an opportunity on this bill, I will do it, but I can see what 
is happening. The other side does not want this brought up for a vote, 
and they will do everything they can to preclude me from bringing it 
up.
  I say to the other side: I will be back.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. I ask unanimous consent, without the Senator from 
Kentucky losing his right to the floor, if I could have 60 seconds to 
say where we are right now.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. The obvious thing going on here is that my colleague 
from Iowa wants to go out of turn and jump ahead of the line. We have 
an agreement lining up amendments. We did this yesterday morning. The 
overtime amendment is in that line, and it is just a matter of waiting 
until that sequence comes and that opportunity is going to be there. 
That is the fair way of doing business around here. As the manager of 
the bill, I am going to make sure we do this in a fair way.
  I did offer an amendment to the Bunning amendment. That one part of 
the amendment that was just read is something that is very important to 
Iowa. We are going to have the largest wind energy generating project 
in mid-America in Iowa, if we can get the wind energy tax credit 
extended.
  This is an amendment that extends a lot of the provisions that have 
run out. Wind energy is one of those. This gives an extension to all of 
these extenders that have run out. One of those is for wind energy, 
which affects the entire country, of course. But one of the largest 
wind energy projects ever is going to be in Iowa. If we can get this 
wind energy tax credit extended----

  Mr. HARKIN. Will my colleague from Iowa yield for a question?
  Mr. GRASSLEY. If it is OK with the Senator from Kentucky, yes, I will 
yield.
  Mr. HARKIN. I wanted to ask if the other side would be willing to 
have a time agreement on the Bunning amendment and the Grassley 
amendment that was added thereto. Then maybe we can get to the overtime 
amendment.
  Mr. GRASSLEY. Those are things that are being discussed. I think it 
is fair to say it ought to be OK if I don't have an answer to that 
right now for the simple reason that yesterday, and even earlier today, 
we tried to get agreements from the other side on some votes, and we 
weren't able to get them. But those are things that are eventually 
negotiated, as the vote we just had, and the same thing may happen on 
other amendments.
  The PRESIDING OFFICER. The Senator from Kentucky is recognized.
  Mr. BUNNING. Thank you, Madam President.
  I rise today to offer an amendment which is cosponsored by the 
Senator from Michigan and the Senator from Wyoming, Mr. Thomas.
  I first want to compliment my chairman and ranking member for putting 
together the very good bill that we have before us today.
  While no piece of legislation is ever perfect, the current situation 
in which we find ourselves as a result of the WTO decisions in the FSC 
and ETI cases presents this Congress with quite a challenge.
  I supported this bill in the Finance Committee, and I think it does 
an admirable job in balancing the variety of interests at hand. 
However, I think the amendment at hand makes a good bill better.
  Job creation and the economy is the top priority for Americans today. 
I think we have turned the corner and the economy is recovering, but we 
still lag in creating jobs.
  We have an opportunity today to get behind manufacturing and make 
sure that high-paying American jobs stay in America for American 
workers. We can make ``Made in the USA'' mean something again.
  Because we are forced to repeal the ETI, we are taking away an 
important export incentive from our country's manufacturers. The effect 
is to raise their taxes just as our recovery is gathering steam.
  We have a responsibility to protect our domestic manufacturers and 
give them the ability to compete in the global marketplace. The 
manufacturing tax deduction contained in the bill before us today is 
designed to foster job creation and reverse the declines in the 
manufacturing sector employment levels.

  It will reduce the tax burden on all domestic manufacturers, small 
and large.
  As currently drafted, the bill before us phases in this important 
manufacturing tax provision over a number of years so that companies do 
not receive the full tax break--the equivalent of a 3-percent tax rate 
reduction on income generated by manufacturing inside the United States 
until 2009.
  This amendment will phase in this rate reduction at an accelerated 
pace. As a result of the amendment by myself and the Senator from 
Michigan, U.S. manufacturers will have a tax rate decrease of 1\1/2\ 
percent in 2004, compared to the one-third of 1 percent provided in the 
underlying bill for 2004.
  Due to the repeal of the ETI, American manufacturers are being asked 
to shoulder a tax burden that could stifle the recent job growth we 
have seen.
  Our manufacturers shouldn't be saving for a tax increase. They should 
be hiring American workers and expanding their business.
  In my State alone, manufacturing contributes $31 billion to the State 
economy, and manufacturing firms employ 293,000 Kentuckians.
  The workers of our States demand our support. This amendment and this 
bill are aimed at strengthening this important sector of our economy.
  My amendment reaffirms our commitment to American manufacturing and 
will attract jobs to the United States.
  I urge my colleagues to support this important amendment.
  I yield to my friend from Michigan.
  The PRESIDING OFFICER. The Senator from Michigan is recognized.
  Ms. STABENOW. Madam President, I appreciate the opportunity to join 
my colleague from Kentucky on a very important amendment. I also 
appreciate Chairman Grassley and our ranking member, Senator Baucus, as 
well, for their leadership and their support in working with us on this 
important amendment.

[[Page S2213]]

  Our amendment, as my colleague indicated, speeds up the tax cut for 
all U.S. manufacturers to address the current manufacturing crisis.
  This particular amendment would increase the tax relief in 2004--five 
times more than in the underlying bill--and, in fact, would provide 
about $6.5 billion in relief to manufacturers and small businesses over 
the next 5 years.
  My colleague has gone into the specifics of a lot of this amendment. 
What I would like to do is spend my time talking about why this is so 
critical.
  We have a crisis in manufacturing in this country. Nowhere is that 
more evident than in my home State of Michigan where last year we had 
the largest number of jobs lost in the country and the highest 
unemployment rate. This is an issue that is my top priority.
  When we look at what has happened in terms of manufacturing jobs over 
the last number of decades, we see that we are back now to the lowest 
point since the Depression and when Herbert Hoover was President of the 
United States.
  We have seen huge drops in jobs. My great concern is that even though 
we are seeing an increase as it relates to the stock market and 
positive indications, we have not yet seen that translate into jobs. I 
believe that is for many factors that relate to the pressures on 
manufacturers in a global economy.
  When we look at the fact that the United States has lost over 2.8 
million manufacturing jobs in the last 3 years, this is a crisis.
  Let me speak specifically to a couple of examples I have talked 
about.
  When we look at this number in Michigan compared to other States, 
there is a 19-percent job loss. We have seen literally, every single 
day, headlines in the papers about people losing their jobs, plants 
closing and going to other countries, the exporting of jobs, and 
layoffs occurring all around Michigan; not only in manufacturing, I 
might add, but when we look at the outsourcing issue, we are looking to 
white-collar jobs, technology jobs, engineers, health care workers, a 
wide variety of jobs. But we know in our country--and I believe very 
strongly coming from Michigan--that we have to have a foundation, a 
manufacturing base to have a strong economy and a strong middle class.
  In Michigan, I am very proud of the fact that we make products and we 
grow products. That is the basis of our economy. Frankly, it has been 
the basis of the U.S. economy since the beginning of our country.
  We are seeing a huge drop--on down to 2003--in what has happened in 
terms of jobs in Michigan.
  One example I talked about earlier today is a plant called Electrolux 
in Greenville, MI, a community of 9,000 people in the western rural 
part of the State, where 2,700 people are employed to make 
refrigerators, Frigidaire, in fact, through Electrolux. They have added 
a third shift and the company says they are making a profit. But they 
have also indicated they could make a bigger profit if they moved to 
Mexico and paid $2.50 an hour and no health benefits. So they are 
closing. We have Michigan residents here today to speak at a hearing 
tomorrow about the devastation this loss of jobs will create.

  We have to do everything possible to provide incentives and support 
for manufacturers to remain in the United States and keep our jobs 
here.
  There are a lot of factors, when we look at what is happening with 
Electrolux and when we look at what is happening in Steelcase in Grand 
Rapids, MI, cutting 77 of its skilled workers.
  Wohlert, in Lansing, MI, has laid off 245 workers because of the bad 
economy and overseas competition; Easton, in Marshall, MI, indicates 
they would be cutting 185 of their 285 jobs and moving plants to 
Mexico; Federal Mogul in St. Johns and Greenville, MI, Lear Corporation 
in Traverse City, Gidding & Lewis in Menominee, Straits Steel in 
Ludington. The stories go on and on.
  There are many reasons for that. We know we need to be smart about 
trade policies where we are encouraging the creation of a middle class 
and raising the standards around the world, raising standards in Mexico 
and in China and other places, where we are competing and finding our 
jobs are moving, and by raising that standard of living. Instead of 
losing or exporting our jobs, we can export our product and they will 
have a middle class so they can buy our products.
  I indicated to the folks that Electrolux may be able to move the 
plant to Mexico and pay $2.50 an hour with no health benefits, but the 
question I had was, who was going to buy the refrigerators? Certainly 
not citizens if they make $2.50 an hour with no health benefits.
  We have to be doing everything possible to create a race up instead 
of a race down. This amendment is a very important part of the equation 
to do that. We need to make sure we are providing incentives and tax 
relief for manufacturers which create jobs in the United States. This 
amendment, in fact, will do that.
  We also know we need to tackle issues such as currency manipulation, 
where China, Japan, and other countries basically create a tax for our 
manufacturers. When a Michigan manufacturer sells a product into China 
they have to sell it at a higher price. It can be up to 40 percent 
equivalent of a tax into China. When Chinese businesses sell in the 
United States, they can artificially lower their prices. Why do they do 
that? They want us to move the plant to China instead of selling our 
goods to China. We need to tackle that. If the Secretary of the 
Treasury would simply certify that, in fact, currency manipulation is 
occurring, there are actions we can take to level the playing field. 
That needs to happen as well.
  Senator Schumer has a bill--in fact, I am a cosponsor--and I hope in 
addition to the amendment today and the legislation before the Senate, 
we would pass that very important legislation to level the playing 
field for our businesses and our workers in America.
  We also need to address health care costs. We need to do it in a way 
that addresses the fact that our manufacturers have health care costs 
tied to employment in this country as part of doing business and in 
other countries they do not. We need to tackle that in a way that does 
not cost our workers in terms of their health care coverage or increase 
their costs. We can do that.

  We also need to be addressing a number of issues that deal with 
trade.
  The reality is, the place to start right now is with this bill. This 
amendment provides $6.5 billion more in tax relief and assistance to 
manufacturers who create American jobs.
  I have another amendment I will offer that will add to what I believe 
is a very important part of the picture. That is, this tax deduction 
phases out over the next 10 years and is then available to all 
manufacturers, not just domestic manufacturers. I believe that is a 
mistake and we ought to make sure it remains only for those creating 
jobs in America. I look forward to debating that even further.
  I am pleased today to be sponsoring this amendment with my colleague. 
I should also indicate I have legislation I had introduced last fall 
with my colleague from South Carolina, Senator Graham, on this very 
subject that included both the manufacturing tax credit and eliminated 
the phaseout so that those dollars and the tax credit would be focused 
on our domestic manufacturers.
  What we see today is not only an issue that affects major employers. 
It is important to say this is a small business issue as well. The 
majority of manufacturing establishments are small businesses. The vast 
majority of them have 20 employees or less. This is not only an issue 
for our major manufacturers--and certainly in Michigan we are very 
proud of our large manufacturers; they are part of our auto industry 
and our high-tech industry, and we are very proud of our furniture 
industry and all of the other industries we have in Michigan--but this 
is very much a small business issue, as well.
  Let me finally say as we help manufacturers, we are also helping our 
economy and our families in terms of standard of living. When we look 
at the average service-sector salary and a manufacturing-sector salary, 
we see a major difference. Within our families, our workers are able to 
have a good manufacturing job, they are able to have dollars in their 
pocket to care for their families, to buy that house, to send the kids 
to college, to be able, in Michigan, to buy that snowmobile or the 
cottage

[[Page S2214]]

up north and able to have the quality of life we all want for ourselves 
and our families.
  The way to stimulate this economy, the way to keep consumer 
confidence moving and to keep all of the economic indicators moving in 
the right direction is to support our manufacturing sector in our 
country. That is what the bill does; that is what this amendment does.
  I hope my colleagues will join together in a bipartisan way to 
support this particular amendment which will add significant support 
for our manufacturers. It will do it immediately this year because they 
need help now.
  The PRESIDING OFFICER (Ms. Collins). The Senator from Montana.
  Mr. BAUCUS. Madam President, I give my compliments to the yeoman 
efforts of the Senator from Michigan. She has done a wonderful job. She 
has many times come to me and asked: Max, can't we do more? I have an 
amendment to accelerate the deduction and many times it will be 
explained how important it is, particularly for her people in the State 
of Michigan.
  I compliment the Senator very much for her terrific work. Those in 
Michigan ought to know, she is persistent and steady in coming to this 
Senator and saying we have to do more; let's do this. And the same with 
the Senator from Kentucky, Senator Bunning. I have heard from him. But 
I must be honest and seek a full disclosure and say the Senator from 
Michigan has been very consistent and done a superb job. I also 
compliment her on the charts. They are good charts, explaining the 
situation very well.
  I thank the Senator for her statement. She is on target. Most Members 
in the Senate will vote for this amendment offered by the Senator from 
Kentucky and the Senator from Michigan. It is very important to do what 
we can to create and to retain jobs in America.
  The underlying bill goes a long way to accomplish that objective, but 
this amendment goes further; and that is, I think it costs about $6-
point-some billion and accelerates the deduction, meaning that 
companies can get that deduction earlier. They can plan earlier. And it 
is for all size companies, not just big business, but all size 
business.
  We all know, as the Senator from Michigan pointed out, half of all 
employees in America work for small businesses, and three-quarters of 
all new jobs in America are created by small businesses.
  We often say small business is the backbone of America. Why do we say 
that? Because it is true. Small business is the backbone of America. A 
lot of these big companies can go offshore--and it is one of the 
problems we are trying to address--but the small business cannot go 
offshore in the main. If a big business goes offshore and takes 
contracts away, often small business bears the brunt of it. So it is 
very important we do what we can to keep jobs in America.
  This clearly is a complex problem; that is, offshoring, outsourcing. 
It requires a very dedicated, concentrated effort to solve it. It is 
quite complex. There are various ramifications, various parts of this. 
The Senator from Michigan mentioned a good number of them, including 
the high cost of health care in this country.
  One of the problems we are facing, too, is currency manipulation by 
various countries, including China and Japan, countries with huge 
reserves in currencies and having a great effect on the American 
economy; and it is not always good.
  In addition to that, it is trade policy. We are reaching trade 
agreements with minuscule economies--Morocco, Bahrain. Well, that is 
fine. Morocco is a great country, as is Bahrain, but the point being, 
those are small economies. Rather, there are huge economies where we 
are not enforcing trade agreements already reached. One is China, this 
WTO, another is India.
  We hear all the time about call centers moving to India. We do not 
hear about American companies selling to India, for a very good reason. 
India is a very closed country. It is very difficult to sell in India.
  If we, as a country, were to use much more of our efforts to enforce 
trade agreements and open up huge markets--that is India and China--
rather than using our efforts to reach trade agreements with smaller 
countries, we would be doing a much better job to help keep jobs in 
America. That is just one of the various things we can and should be 
doing.
  Ms. STABENOW. Will my friend yield?
  Mr. BAUCUS. I am happy to yield. I yield the floor, Madam President, 
so my good colleague can have the floor.
  The PRESIDING OFFICER. The Senator from Michigan.
  Ms. STABENOW. Madam President, I want to take a moment, first, to 
thank my colleague for his kind words and for his leadership. Secondly, 
I do want to indicate cosponsors on our side of the aisle to the 
amendment: Senators Levin, Feinstein, Kohl, and Rockefeller. I very 
much appreciate their support.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Madam President, I am just saying, we have a huge 
challenge here to help create jobs and to keep jobs in America and to 
retrain people who lose jobs.
  This phenomenon of job loss is huge. As the chart by the Senator from 
Michigan shows, we have lost about 3 million jobs since 2001; that is 
net loss. Those are manufacturing jobs; a net loss of 3 million 
manufacturing jobs in America. We have also lost a good number of 
service jobs, but on a net basis, not near as many service jobs lost as 
manufacturing jobs. Manufacturing just pays significantly more than 
service.
  I might also say, this is not just an American phenomenon. It is 
happening in countries worldwide. It is happening in virtually every 
country. The one country where it is not happening as much is Japan, 
interestingly. But it is happening in every other country. Why? I 
daresay part of the reason is due to just natural phenomena--not 
natural, but phenomena that are occurring worldwide, due largely to 
globalization, advances in technologies, communications technologies, 
which are forcing countries worldwide to compete even more 
aggressively, to cut their costs as much as they can, and producing 
wherever they can to get the best rate of return they possibly can.
  That is why it is happening worldwide, not just in America. It is 
happening worldwide. Part of that is because of increases in 
productivity. Obviously, as productivity increases, more products are 
produced with fewer employees per product.
  Just to state the problem does not mean we stop right there. We have 
to start finding answers to the problem; that is, how to get more 
employees, more workers, more Americans working in more good-paying 
jobs. One way is with this bill. This bill will help reduce the cost of 
production; that is, by deduction. This bill actually creates a 9-
percent deduction for the cost of domestic manufacturing. That is 
important.
  For example, take a small business whose income tax would be $200,000 
on domestic manufacturing, the 9-percent deduction calculates to 
roughly about a 3-percent reduction in the rate, so that is a $6,000 
reduction in that company's income taxes. That helps. That is not a 
small matter to reduce one's income taxes by that amount. So that is 
one partial solution to job loss in America this bill addresses.
  Second, we adopted an amendment to this bill already. It is the 
Hatch-Murray amendment. Senator Murray very much knows, as does Senator 
Hatch from Utah, that Washington State is a State that a few years ago 
was called the ``Silicone Forest'' with all the sort of higher-tech 
companies developing in Washington State. The Washington Seattle Port 
trades a lot. Salt Lake City is not a huge seaport, by any stretch of 
the imagination, although they have the great salt lake--it is not 
small--but the point is, Senator Hatch from Utah also knows the 
importance of extending the research and development tax credit. It is 
a measure, frankly, he and I have introduced jointly many times over 
the years. But that provision now is also adopted as an amendment in 
this bill.
  The more we can encourage research and development, the more we are 
going to create jobs and keep jobs. We know, too, that where the 
research is, is where the jobs tend to be; that is, where the products 
develop is where the jobs tend to be. This is a research tax credit for 
American research and

[[Page S2215]]

development. It is not overseas, but it is in America. So that, too, is 
going to help.

  Now we come with this amendment, the amendment offered by the 
Senators from Kentucky and Michigan. It is an additional stimulus 
because it accelerates the deduction very significantly. That is going 
to help. It is going to go a long way.
  There are lots of other things we need to do. I am not going to spend 
all night talking about them, but one is to adopt the second-degree 
amendment offered by the chairman of the committee; that is, the 
extenders provision. That is very important.
  Madam President, you know, as well as anyone in this body about the 
importance of predictability, the importance of certainty, as much as 
possible, that any businessperson may have or may not have--or, to 
state it differently, the uncertainty they may have. Every 
businessperson abhors uncertainty. You almost don't care what the 
problem is so long as the problem is pretty certain. If you know what 
the problem is, you can work around it. If the problem is always 
changing, it is pretty hard to work around it.
  We have had something called tax extenders, and they have been for 
very good purposes, as the Senator from Maine well knows. I think the 
Senator from Maine, as I recall, has one on education for teachers. It 
is to help teachers get their deduction for the supplies they purchase 
to help their students. That has expired.
  Well, if I am a teacher with very low pay--it would be a great job, 
actually, in many respects; that is, to be a teacher--I would want to 
know if that deduction is still available or not. So far, it is not 
available. It has expired. But in the extenders package we are adopting 
here, we are going to extend that deduction so teachers will know, at 
least until the end of 2005--18 months roughly; they are going to have 
that.
  There are a lot of other extenders, too. Senator Bayh, for example, 
is interested in the work opportunity tax credit and other similar tax 
credits which enable employers to get people off of welfare and hire 
people so they are doing work, so they can earn a living for themselves 
and their families. That tax credit has expired. Senator Santorum is 
also interested in extending that tax credit. We have that here in the 
extenders.

  There are a good number of others. For example, Senators Clinton and 
Schumer are very concerned about the liberty bonds for the development 
of New York City. That has expired. That is jobs. The more we can 
continue these extenders and get them back in the law, the more it 
enables those people in New York and others related to it to know 
whether or not they can depend upon those bonds and continue the 
reconstruction from the damage caused by 9/11.
  In addition, there are some provisions that help the District of 
Columbia. We don't have any Senators here representing the District of 
Columbia. We all are, in a certain sense. But those, too, are going to 
be available.
  I mentioned the one the Presiding Officer is interested in. What 
about computers in schools? We have a provision for companies to donate 
computers to schools. That has expired. I would think we would want to 
extend that. That is going to help kids, help companies. It is going to 
help America. It provides jobs.
  After that, there are a few others. I won't go into great detail. 
There are incentives for jobs, for health care, to clean up pollution 
and more.
  Essentially, we have a responsibility to pass these extenders. We 
have been derelict over the years. Everybody likes these provisions. 
Everybody wants them. They last maybe a year, a year and a half, then 
they expire. We let them lapse sometimes for 6 months, sometimes 7, 
sometimes 8. Sometimes we go back and reenact them retroactively. 
Sometimes we don't. It is just nuts. They are yo-yo extenders. How in 
the world are people going to be able to plan if we are yo-yos?
  We as Senators should put them permanently in the law because we 
always reenact them. My hope is over the not too distant future we will 
be able to do that.
  Another temporary extension is in the bill. That is going to help 
address some of the job loss this country is facing.
  I yield the floor.
  Mrs. FEINSTEIN. Madam President, I come to the floor today to support 
the Bunning-Stabenow-Feinstein amendment which will immediately 
implement a manufacturing tax deduction that offers much needed 
assistance to our ever diminishing manufacturing base in this Nation.
  I applaud the leadership of Senators Bunning and Stabenow in reaching 
out to a bipartisan group of Senators and urge my colleagues to support 
this amendment.
  Simply, this amendment would adjust the underlying bill to require an 
immediate implementation of the new manufacturing deduction and would 
result in an immediate benefit to our Nation's manufacturers by 
beginning the process of cutting their tax rate by 3 percentage points.
  So if you produce manufactured goods in the United States, you will 
see a phased-in reduction of your tax rate from 35 percent to 32 
percent by 2009.
  This provides a competitive incentive for manufacturers to produce 
jobs by reducing their tax burden immediately.
  Critically, this amendment not only includes heavy manufacturing, 
which is so important to our State and national economies, but also the 
production of software, film, video, and sound recordings. I do not 
have to tell anyone in this Chamber how important this is for 
California and the Nation.
  The movie, television and home video industries, which are based in 
California, are a tremendous economic engine of growth. The industry 
accounts for nearly 5 percent of the U.S. gross domestic product and is 
one of the largest employers in the country, having doubled its 
workforce over the last 25 years to a total workforce today of over 4.7 
million workers.
  I am working with Senators Grassley and Baucus to make sure that 
these industries are able to take full advantage of the tax benefits 
that we are proposing here and I am confident that we will come to an 
agreement to do that.
  But why single out manufacturing? Why not offer a tax cut to all 
businesses equally? The answer is clear. We have seen a dramatic 
decrease in our Nation's manufacturing base and a stimulus directed at 
this sector of our economy is long overdue.
  Since January 2001 this Nation has lost 2.8 million manufacturing 
jobs. My home State of California, has lost more than 300,000 
manufacturing jobs over that same period. That is a 16 percent decrease 
in California's manufacturing employment base in just 3 years.
  It is time to stop the bleeding and this amendment will give 
manufacturers important tax relief so they may grow jobs here at home.
  As has been pointed out by the National Association of Manufacturing: 
manufacturing accounts for nearly one fifth of the Nation's GDP; 
provides 15 million high paying jobs; supports another eight million 
jobs in other sectors; and is the seedbed of innovation in our economy, 
accounting for 62 percent of all research and development.
  It is far and away our pacesetter in productivity gains, and accounts 
for the bulk of U.S. exports.
  Manufacturing in the State of California contributed more than 26 
percent to our State's domestic product--more than one quarter of my 
State's economic base.
  But, the overhead costs of taxes, health and pension benefits, and 
rising energy prices add 22 percent to the price of U.S. production 
relative to our foreign competitors.
  The erosion of high paying manufacturing jobs has continued unabated 
for years and we now see the phenomenon exacerbated by so many other 
factors, including outsourcing.
  This amendment will help on both counts. It will reduce taxes on 
manufacturers and foster an environment for job growth in this 
important sector.
  I urge my colleagues to support this amendment and bring an immediate 
pro-growth stimulus to an important part of our economy.
  Mr. SMITH. Madam President, I rise today in strong support of the 
deductibility of private and government mortgage insurance premiums. 
Last year, my Finance Committee Colleague Senator Lincoln and I 
introduced the Mortgage Insurance Fairness Act, S. 846. Today 19 of my 
Senate colleagues join me in supporting this proposal. We are 
introducing this important legislation as an amendment to the JOBS

[[Page S2216]]

Act, S. 1637. More than 12 million homeowners currently pay private or 
government mortgage insurance. This amendment will allow these 
homeowners an immediate tax savings and will allow an estimated 300,000 
additional families per year to more easily qualify to buy a home. The 
vast majority of these new homeowners will be lower-income, minority 
and veteran households who need mortgage insurance the most.
  The JOB Act is the perfect opportunity to allow hundreds of thousands 
of low-income Americans to qualify for homeownership. Mortgage 
insurance allows moderate income households to buy homes often with a 
down payment of as little as 3 percent. In 2001, mortgage insurance and 
guaranty programs covered 57 percent of mortgage purchase loans made to 
African-American and Hispanic borrowers as well as 54 percent of the 
mortgage purchase loans made to borrowers with incomes below the 
median. Unfortunately, unlike many other costs associated with 
homeownership, mortgage insurance premiums currently are not tax 
deductible. We want to permanently change this fact for taxpayers 
earning less than $100,000 per year.
  If we are successful in adding this amendment, we will have seized a 
unique opportunity to help millions of families receive immediate tax 
relief and hundreds of thousands more realize the American dream of 
homeownership. With supporters like the American Federation of 
Teachers, Americans for Tax Reform, the Mortgage Bankers Association 
and the National Urban League, this amendment brings diverse groups 
together in the common cause of homeownership.
  I am proud to sponsor this amendment and I urge my colleagues to join 
this bipartisan effort to make the American dream of homeownership come 
true.
  Ms. CANTWELL. Madam President. I rise today to express my support for 
amendment No. 2647 that, just yesterday, passed the U.S. Senate 
unanimously. I also thank every one of my colleagues for their support 
for what I believe is one of the greatest mechanisms for job creation 
and industry innovation. The amendment, of course, extends the research 
and development tax credit for 2 years.
  The research tax credit, I believe, has demonstrated that it is a 
powerful incentive for companies to increase research spending. The tax 
credit lowers the cost of doing research in the United States, so it 
encourages companies to continue to make investments in critical R&D. 
And the bottom-line benefit is that research and development creates 
new jobs in the United States--something that is so vital right now for 
our Nation and for my State.
  The current R&D tax credit is set to expire on June 30, 2004. Many of 
my colleagues, here, know we play this annual game of saying the R&D 
tax credit is important, but then not renewing it on a permanent basis, 
thereby denying companies and organizations the certainty they need to 
make these investments. The major investments in nanotechnology and 
biotechnology, in software, and in the computer sciences take several 
years of investments. Without a planning horizon of at lest several 
years, companies just won't put the money into R&D.
  I am fully aware of the budget situation we are confronting, as 
Senator Hatch described yesterday. But, as my friend from Utah, stated, 
``[i]ronically . . . a permanent credit costs no more than one that is 
regularly extended.'' And while I am a cosponsor of this amendment with 
a short term, 2-year extension because I fundamentally believe that the 
R&D tax credit is so imperative, I must also say that permanency of the 
tax credit remains a high priority for me. It is only in the permanency 
of the R&D tax credit that businesses can truly create a strategic 
business plan. As it stands, companies have to take into account the 
fact that Congress could allow the credit to lapse for a few months. 
That causes companies to hedge their bets, spending a little less on 
R&D, and our economy suffers as a result. By contract, permanency helps 
planning; and the sooner we make this permanent, the sooner companies 
can begin to enlarge and expand their research and development units, 
and the sooner their innovations will strengthen economic growth.
  Who has created jobs in the last decade? Who has stimulated our 
economy to move forward? It is a lot of companies that have invested in 
R&D. It is the Microsofts. It is the Amazons. It is the variety of 
biotechnology companies from my state and others making investments 
that have increased the productivity of their workforce, allowing them 
to hire new people as new products and services are delivered.
  The research credit creates jobs. More than 90 percent of the costs 
eligible for the credit are salaries and wages paid to researchers. The 
only way for a company to increase its credit is to increase its R&D 
payroll in the U.S.
  First authorized in 1982, the credit has been reauthorized eight 
times, with a gap from June 1995 to June 1996. As I mentioned, the 
current credit expires in June 2004. However, its effectiveness is 
limited because businesses cannot rely on it in their long-term 
planning, and most R&D projects are long-term. In order to provide 
stability and broaden the reach of this proven incentive, Congress 
needs to make the credit permanent.
  I cannot stress enough how important private investment in R&D is. 
R&D is the engine that brings us new medicines, new medical 
technologies, cleaner manufacturing technologies, advanced weapon 
systems and other tools in the war on terror. Furthermore, growth in 
our high tech economy depends on solid R&D, and there is no good reason 
to delay making the credit permanent. A permanent tax credit will go a 
long way to providing the planners and investors the certainty that 
they need.
  This amendment, having passed unanimously, shows the Senate's strong 
support for R&D. We have taken this one step forward; but let us not 
force these companies that serve as the engine for job creation to come 
back year after year for an extension of the R&D credit. Toward that 
end, I ask that we take this amendment one step further and make the 
research and development tax credit permanent.
  Mr. ALEXANDER. Madam President, today I voted against the Dodd 
amendment for two important reasons. First, it is the wrong policy for 
growing jobs. And second, it tramples on the principle of federalism.
  Nearly 150,000 Tennesseans are employed by foreign companies 
conducting business in Tennessee. As Governor, I helped attract some of 
those jobs and companies to our State--companies such as Nissan, Sharp, 
Bridgestone, Panasonic, and many others. The Dodd amendment could have 
denied them the ability to compete for government contracts. That's not 
right. If the Dodd amendment becomes law, it will discourage these 
foreign companies from investing in our country. In these times when we 
are trying so hard to grow new, high-paying jobs, the Dodd amendment is 
exactly the wrong policy.
  Further, the Dodd amendment ignores the principle of federalism by 
limiting the States' options on granting contracts using Federal funds. 
The whole point in sending money to the States is that they know better 
than the Federal Government how to spend it to meet the needs of their 
citizens. As a former Governor, I know how frustrating it is to have 
the Federal Government tell you how you can or can't spend your money. 
Neither Tennessee nor any other State should have new burdens placed on 
how it spends federally granted funds.
  Mr. SANTORUM. Madam President, I will offer an amendment to extend 
for 2 years the work opportunity and welfare to work tax credits, and 
to make certain improvements to these programs that will make them even 
more effective in helping Americans' transition from welfare to work 
along with other tax extenders. These credits clearly belong in a bill 
whose name is JOBS; I can think of few programs that have created jobs 
and provided basic workplace skills to a segment of the population that 
is badly in need of these resources with the efficiency and low cost of 
WOTC and W-t-W. I can also think of few jobs programs that have as 
positive an impact as these have on scarce state welfare resources. I 
am also pleased that Senator Bayh is joining me as a cosponsor of this 
bipartisan amendment. I would also like to thank Chairman Grassley and 
Senator Baucus for their support of this important initiative.

[[Page S2217]]

  WOTC and W-t-W are also key elements of welfare reform. Employers in 
the retail, health care, hotel, financial services, and food industries 
have incorporated this program into their hiring practices and through 
these programs, more than 2,700,000 previously dependent persons have 
found work.
  A recent report issued by the New York State Department of Labor 
bears this out in economic terms. Comparing the cost of WOTC credits 
taken by New York State employers during the period 1996-2003, for a 
total of $192.59 million, with savings achieved through closed welfare 
cases and reductions in vocational rehabilitation programs and jail 
spending, for a total of $199.89 million, the State of New York 
concluded that WOTC provided net benefits to the taxpayers even without 
taking into account the additional economic benefits resulting from the 
addition of new wage to the GDP or reductions in other social spending 
such as Medicaid.
  In that regard, the New York State analysis concluded that the 
roughly $90 million in wages paid to WOTC workers since 1996 generated 
roughly $225 million in increased economic activity. Perhaps even more 
importantly, the study found that roughly 58 percent of the TANF 
recipients who entered private sector employment with the assistance of 
WOTC stayed off welfare.
  I mentioned the New York State study because it is the first of its 
kind; however, I am certain that similar conclusions would be reached 
in the Commonwealth of Pennsylvania or any of the other 48 states and 
the District of Columbia. These programs work and do so at a net 
savings to taxpayers. In fact, over a 7-year period there were more 
than 110,000 certifications for both WOTC and W-t-W in Pennsylvania 
alone enabling many to leave welfare and find private sector work. The 
legislation is supported by hundreds of employers throughout 
Pennsylvania and around the country.
  WOTC and W-t-W have received high praise as well from the Federal 
Government. A 2001 GAO study concluded that employers have 
significantly changed their hiring practice because of WOTC by 
providing job mentors, longer training periods, and significant 
recruiting outreach efforts.

  Mr. President, WOTC and W-t-W are not traditional government jobs 
programs. Instead, they are precisely the type of program that we 
should champion in a time when we need to be fiscally responsible. 
These are efficient and low cost public-private partnerships that have 
as their goal to provide a means by which individuals can transition 
from welfare to a lifetime of work and dignity.
  Under present law, WOTC provides a 40 percent tax credit on the first 
$6,000 of wages for those working at least 400 hours, or a partial 
credit of 25 percent for those working 120-399 hours. W-t-W provides a 
35 percent tax credit on the first $10,000 of wages for those working 
400 hours in the first year. In the second year, the W-t-W credit is 50 
percent of the first $10,000 of wages earned. WOTC and W-t-W are key 
elements of welfare reform. A growing number of employers use these 
programs in the retail, health care, hotel, financial services, food, 
and other industries. These programs have helped over 2,200,000 
previously dependent persons to find jobs.
  Eligibility for WOTC is currently limited to: (1) recipients of 
Temporary Assistance to Needy Families, TANF, in 9 of the 18 months 
ending on the hiring date; (2) individuals receiving Supplemental 
Security Income (SSI) benefits; (3) disabled individuals with 
vocational rehabilitation referrals; (4) veterans on food stamps; (5) 
individuals aged 18-24 in households receiving food stamp benefits; (6) 
qualified summer youth employees; (7) low-income ex-felons; and (8) 
individuals ages 18-24 living in empowerment zones or renewal 
communities. Eligibility for W-t-W is limited to individuals receiving 
welfare benefits for 18 consecutive months ending on the hiring date. 
More than 80 percent of WOTC and W-t-W hires were previously depending 
on public assistance programs. These credits are both a hiring 
incentive, offsetting some of the higher costs of recruiting, hiring, 
and retaining public assistance recipients and other low-skilled 
individuals, and retention incentive, providing a higher reward for 
those who stay longer on the job.
  Program Renewal and Improvement. Despite the considerable success of 
WOTC and W-t-W many vulnerable individuals still need a boost in 
finding employment. This is particularly true during periods of high 
unemployment. There are several legislative changes that would 
strengthen these programs, expand employment opportunities for needy 
individuals, and make the programs more attractive to employers. These 
changes are reflected in legislation which I introduced along with 
Senator Baucus, S. 1180, and these changes are as follows: one combine 
WOTC and W-t-W. The administration's budget proposes to simplify these 
important employment incentives by combining them into one credit and 
making the rules for computing the combined credits simpler. The 
credits would be combined by creating a new welfare-to-work target 
group under WOTC. The minimum employment periods and credit rates for 
the first year of employment under the present work opportunity tax 
credit would apply to W-t-W employees. The maximum amount of eligible 
wages would continue to be $10,000 for W-t-W employees and $6,000 for 
other target groups $3,000 for summer youth. I addition, the second 
year 50-percent credit under W-t-W would continue to be available for 
W-t-W employees under the modified WOTC; two, eliminate requirement to 
determine family income for ex-felons. Under current law, only those 
ex-felons whose annual family income is 70 percent or less than the 
Bureau of Labor Statistics lower living standard during the six months 
preceding the hiring date are eligible for WOTC. The administration's 
budget also proposes to eliminate the family income attribution rule; 
three, raise the WOTC age eligibility ceiling from 24 to 39 years of 
age for members of food stamp households and ``high-risk youth'' living 
in enterprise zones for renewal communities. Current WOTC eligibility 
rules heavily favor the hiring of women because single mothers are much 
more likely to be on welfare or food stamps. Women constitute about 80 
percent of those hired under the WOTC program, but men from welfare 
households face the same or even greater barriers to finding work. 
Increasing the age ceiling in the ``food stamp category'' would greatly 
improve the job prospects for many absentee fathers and other ``at 
risk'' males. This change would be completely consistent with program 
objectives because many food stamp households include adults who are 
not working, and more than 90 percent of those on food stamps live 
below the poverty line.

  I am very pleased that President Bush proposed a 2-year extension for 
these programs in his budget, as well as some useful modifications and 
improvements. The administration along with all of us in Congress are 
eager to continue our efforts to create jobs in America. The amendment 
would provide for a 1-year extension of current law to facilitate a 
transition period and then in the second year implement these important 
changes. I would prefer a permanent extension which would provide these 
important programs with greater stability, thereby encouraging more 
employers to participate, make investments in expanding outreach to 
identify potential workers from the targeted groups, and avoid the 
wasteful disruption of termination and renewal. A permanent extension 
would also encourage the state job services to invest the resources 
needed to make the certification process more efficient and employer-
friendly. Yet the cost is a significant consideration in the current 
budget environment even though this is an excellent use of tax 
incentives which ultimately saves government resources while expanding 
opportunity for Americans.
  Finally, I would urge the Senate to act quickly on this amendment and 
on the underlying vehicle. WOTC and W-t-W expired at the end of last 
year, and even though the extension we propose is retroactive, these 
programs will not be fully effective until they become law. The 
individuals who enter the workforce under these programs, and our 
states, that benefit greatly from the reduction in welfare that these 
programs generate, deserve quick action by the Senate on this 
amendment. I urge all of my colleagues to support this amendment.




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