[Congressional Record Volume 150, Number 120 (Wednesday, September 29, 2004)]
[House]
[Pages H7749-H7757]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
APPOINTMENT OF CONFEREES ON H.R. 4520, AMERICAN JOBS CREATION ACT OF
2004
Mr. THOMAS. Mr. Speaker, I ask unanimous consent to take from the
Speaker's table the bill (H.R. 4520) to amend the Internal Revenue Code
of 1986 to remove impediments in such Code and make our manufacturing,
service, and high-technology businesses and workers more competitive
and productive both at home and abroad, with a Senate amendment
thereto, disagree to the Senate amendment, and agree to the conference
asked by the Senate.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from California?
There was no objection.
Motion to Instruct Conferees Offered by Mr. Neal of Massachusetts
Mr. NEAL of Massachusetts. Mr. Speaker, I offer a motion to instruct
conferees.
The Clerk read as follows:
Mr. Neal of Massachusetts moves that the managers on the
part of the House, on the disagreeing votes of the two Houses
to the Senate amendment to H.R. 4520, be instructed as
follows:
1. The House conferees shall be instructed to include in
the conference report an effective rate reduction for income
from production activities in the United States, and such an
effective rate reduction--
A) shall be provided in the form of a deduction as in the
Senate amendment, and shall not be provided in the form of a
corporate rate reduction, as in the House bill,
B) shall be available to all businesses (including farmers,
farm co-operatives, subchapter S corporations, and other
unincorporated businesses) engaged in U.S. production
activity as in the Senate amendment,
C) shall include the provisions of the Senate amendment
that adjust the size of the effective rate reduction based on
the respective portions of the taxpayer's business in the
United States and overseas in order to provide the largest
effective rate reduction for businesses that have not moved
operations offshore, and
D) shall include the provisions of the Senate amendment
(not included in the House bill) that ensure that the rate
reduction will not be available for income attributable to
cost savings resulting from purchasing imported parts or
outsourcing labor overseas.
2. To the maximum extent possible within the scope of
conference, the House conferees shall be instructed to not
include any increase in tax benefits for the overseas
operations of multinationals.
3. The House conferees shall be instructed to develop a
conference report that will not increase the federal deficit
in either the short or long term. In doing so, the House
conferees also shall be instructed:
A. To include in the conference report the provisions of
the Senate amendment that eliminate tax benefits for
companies that reincorporate overseas, and the provisions of
the Senate amendment that restrict corporate tax avoidance
transactions, including codification of the economic
substance doctrine and the provisions directly targeted at
transactions utilized by the Enron corporation, and
B. Shall drop the provision of the House bill that provides
for private collection of Federal tax liabilities.
4. The House conferees shall, as soon as practicable after
the adoption of this motion, meet in open session with the
Senate conferees, and the House conferees shall file a
conference report consistent with the preceding provisions of
this instruction at a time permitting passage before the
adjournment before the election.
Mr. NEAL of Massachusetts (during the reading). Mr. Speaker, I ask
unanimous consent that the motion to instruct be considered as read and
printed in the Record.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Massachusetts?
[[Page H7750]]
There was no objection.
The SPEAKER pro tempore. Under rule XXII, the gentleman from
Massachusetts (Mr. Neal) and the gentleman from California (Mr. Thomas)
each will control 30 minutes.
The Chair recognizes the gentleman from Massachusetts (Mr. Neal).
Mr. NEAL of Massachusetts. Mr. Speaker, I yield myself such time as I
may consume.
I am pleased that the House Republican leadership has finally seen
fit to appoint conferees to resolve the foreign sales corporation or
extraterritorial income issue that the World Trade Organization found
to be an illegal export subsidy. I note that the appointment of
conferees today comes more than 2 months after the Senate appointed
their conferees. This delay by the House Republican leadership has only
resulted in more trade sanctions on many of our industries.
Today I am offering a motion to instruct that I believe should be the
framework for the conference report. First, the motion to instruct
offers a requirement that House conferees include an effective rate
reduction for U.S. businesses manufacturing or producing goods in the
United States. This benefit for U.S. producers is the appropriate
replacement for today's export benefit which was enjoyed by U.S.
manufacturers and producers. The replacement benefit should also apply
to U.S. manufacturers and producers. This motion requires that all
businesses, including farmers, farm cooperatives, subchapter S
corporations, and other unincorporated small businesses should enjoy
the benefit of the new rate reduction. I have never understood the
opposition of the House Republican leadership to permitting small
businesses to be eligible for the new benefit. I have always agreed
with the gentleman from Illinois (Mr. Manzullo), chairman of the
Committee on Small Business, in his insistence that small businesses be
eligible.
This motion also requires that businesses that are purely domestic
receive the largest benefit, as included in the Senate amendment. We
should reward companies for keeping their operations in the United
States. This motion also requires the inclusion of Senate provisions to
ensure that companies do not receive benefits for income attributable
to cost savings from purchasing cheap imported parts or outsourcing
labor. Again, I do not understand why the Republican House bill
encouraged outsourcing of parts and labor offshore.
Second, this motion requires that the conference report not further
increase tax incentives for companies to move operations offshore. We
have had ample opportunity in this House for the better part of 3 years
to do something about an issue that I think causes great concern to the
American taxpayer and to the American worker. Our current tax laws
already provide incentives for companies to invest and move operations
offshore. There is no reason to provide additional tax benefits that
could result in further U.S. job losses.
The Bermuda issue has never been debated vigorously in this House,
and we should take that up perhaps as a separate issue down the road;
but we sure could include it with this motion to instruct. We should be
focused on increasing incentives for U.S. jobs, not incentives to
create jobs overseas.
Third, this motion requires that the conference report be revenue
neutral. We already are experiencing deficits of historic size, and
there is no reason to further increase the deficit in this legislation.
I would remind the consuming audience today that what began as a $4.5
billion problem now looks as though it will have a $130 billion
solution. In making this bill revenue neutral, the motion also requires
the House conferees to take the following specific actions:
First, the House conferees shall include the Senate provisions
preventing corporations to avoid U.S. tax by merely reincorporating in
a tax haven overseas. I have yet to meet anybody who believes that Tyco
is a Bermuda-based company. I have never understood why House
Republican leaders insist on defending companies that move to tax
havens to avoid paying their fair share of tax, particularly at a time
when we are engaged in combat overseas. Patriotism should never take a
back seat to profits.
Second, the House shall include the Senate provisions addressing
corporate tax avoidance transactions, including provisions targeting
tax avoidance transactions utilized by the Enron Corporation. At one
time we were prepared to give them, as we repealed the corporate
alternative minimum tax, a $250 million tax break. These transactions
are purely paper transactions that have no purpose other than tax
avoidance. The House has resisted action in this area for years,
permitting corporations to continue to avoid their responsibilities. It
is time to close and stop those transactions.
Third, the House conferees should be instructed to drop the House
provision that authorizes private collection of Federal tax
liabilities. We debated that issue years ago in the Committee on Ways
and Means, and I thought that the evidence that was presented would
have offered substantial support for the position as outlined in our
motion to instruct.
Finally, this motion requires that the conference meet in open
session and file its report before the House leaves for the elections.
There is no reason that this issue should have taken so long to
resolve. The bill that the gentleman from Illinois (Mr. Crane) and many
of us introduced last year provided that it was possible to have a
prompt bipartisan solution to the World Trade Organization decision.
Instead, it has been decided to use this issue to provide more tax
benefits overseas.
Essentially, it has been recommended that a tax increase on U.S.
producers fund a tax decrease for offshore operations of U.S.
multinationals. It is that decision and the decision to use this bill
for narrowly targeted tax benefits that have caused trade sanctions to
be imposed on some of our industries. This motion to instruct
essentially rejects those decisions and provides a reasonable framework
for properly completing the conference on this bill. I also would
suggest that this motion to instruct urges the House to instruct the
conferees on behalf of U.S. workers.
It is pretty simple. We provide benefits to manufacturers,
particularly small businesses. We do not provide more tax incentives to
move jobs overseas. And our legislation is revenue neutral.
Mr. Speaker, I reserve the balance of my time.
Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
Just as we began taking up going to conference in this motion to
instruct, a number of Americans were not watching C-SPAN. They were
watching other television programs which showed a private enterprise
effort to go into space. Burt Rutan from Mojave in my district has
built a spaceship called SpaceShipOne. It was launched earlier today.
It reached an altitude unofficially, yet to be confirmed, of more than
100 kilometers, or 62 miles. It has returned safely and landed. The
first private effort to enter space has succeeded. This is part of a
competition stimulating private enterprise in an area that formerly was
totally government-controlled.
He will now have a clock ticking in which 2 weeks will expire and
prior to the second week, he will have refurbished SpaceShipOne, sent
it back into space, achieved a second time an altitude of more than 100
kilometers; and, if he is successful in doing that, he will win the X
Prize. It happens to be a $10 million reward for the first privately
financed space vehicle to achieve those parameters.
I cannot help but see how striking this initial part of the
achievement is to the reward that in part led Charles Lindbergh to fly
across the Atlantic in 1927.
{time} 1145
That achievement sparked the initial age of commercial aviation. This
is the beginning of commercial space aviation, and I find it somewhat
ironic that, while people are pushing the barriers of man's involvement
with minimal or no government involvement, that we are here on a motion
to instruct that plows old ground, that does not yield any harvestable
crop other than pure political rhetoric.
The motion to instruct indicates that the conference, which we are
all anxious to begin, and I accept any criticism about how long this
has taken to achieve but we are now ready to go, and yet there will be
continued delays based on political rhetoric that has no merit
whatsoever. How can I make a
[[Page H7751]]
sweeping statement like that? The gentleman indicated that the House
bill contained international tax provisions which will send jobs
overseas. A pretty inflammatory statement. But I think it might be
worthwhile to examine those areas of the House-passed bill and the
Senate-passed bill that are identical.
Interestingly enough, the single biggest area in which the House and
the Senate bill are absolutely identical are the international tax
provisions, the very provisions the gentleman from Massachusetts said
drives jobs overseas. It might be useful to examine the way in which
the Members of the Senate voted on this measure, which, if they
supported it, would obviously mean they are also interested in driving
jobs overseas.
This measure was presented in the Finance Committee, and a Member of
the Finance Committee is the Senator from Massachusetts, Senator Kerry.
Senator Kerry voted for the international corporate tax provisions.
Following the logic of the gentleman from Massachusetts, his own
Senator, the Democratic nominee for President, apparently supports
sending jobs overseas, since those two provisions are identical in the
House and the Senate bills.
Who else would support this outlandish position which we will hear
repeated time after time after time on this motion to instruct? Let us
see. On both the Graham amendment and the Hollings amendment, which
were to remove these provisions which the gentleman from Massachusetts
purports drives jobs overseas, willing to keep these measures in the
bill on the Senate side was minority leader Senator Daschle, who voted
in favor of keeping these provisions. Senator Baucus, who is the
ranking Democrat on the Finance Committee, voted. I could obviously go
down the list of Democratic Senators who apparently are interested in
putting jobs overseas.
Point of Order
Mr. McDERMOTT. Mr. Speaker, point of order.
The SPEAKER pro tempore (Mr. Aderholt). The gentleman will state his
point of order.
Mr. McDERMOTT. Mr. Speaker, is it appropriate to quote the votes of
Senators in the other body in the midst of a speech?
The SPEAKER pro tempore. Under clause 1 of rule XVII, it is
appropriate to quote Senate proceedings on matters under debate in the
House of Representatives for the purpose of establishing legislative
history on such matters.
Mr. McDERMOTT. In the other body, Mr. Speaker?
The SPEAKER pro tempore. If it is under debate here in the House of
Representatives.
Mr. McDERMOTT. Mr. Speaker, so anything that has occurred in debate
on an issue that is in the body here that has been debated in the
Senate, we can bring in the Senate debate?
The SPEAKER pro tempore. Quotations from Senate procedures are
permitted. Only quotations from the Senate proceedings for the purpose
of making legislative history can be included.
Mr. McDERMOTT. Mr. Speaker, so if a speech has been made by a Senator
on an issue that we are discussing here, we can use it verbatim from
the Senate?
The SPEAKER pro tempore. For the purpose of making legislative
history, quotations can be included.
Mr. McDERMOTT. I thank the Speaker for his answer.
Mr. THOMAS. Mr. Speaker, I thank the gentleman for his inquiry.
Obviously, what I am quoting is the voting record which was
established in the Senate on this measure. I can understand why my
colleagues on the other side would not want to hear the list of
Democratic Senators who supported the international tax provisions
because it pretty well demolishes their argument, and what they want to
do is continue this fantasy argument that the provisions in the House
bill ship jobs overseas.
These provisions, as I said, were identical in both the House and the
Senate versions. In fact, the vote on the Graham amendment was, yes,
let us eliminate the tax provisions, 22; no, 77. On the Hollings
amendment, it was yes, 23; no, 74. By 75 percent or better, the Senate
said, let us keep these international provisions. A significant number
of those were members of the gentleman's own party, and, as I said in
committee, his own party's nominee for President voted in favor of
those provisions, and those are the provisions they are arguing they
are shipping jobs overseas.
I would hope that that part of the argument on the side of my
colleagues on the other side of the aisle would now end because it is
pretty obvious they do not ship jobs overseas because the Democratic
Senators would protect jobs here at home, and hopefully, they would
vote to enhance jobs here at home. As a matter of fact, the rejection
of the Graham and the Hollings amendments did just exactly that, i.e.,
they support the international tax provisions that are identical in
both the House and the Senate bill. They do not ship jobs overseas.
Senator Kerry would not vote for that. Senator Daschle would not vote
for that. They voted to keep jobs here at home and strengthen America's
economy. We should not hear another argument on the other side of the
aisle about shipping jobs overseas.
Just let me say, if we do, one, it does not make any sense if one
takes a look at what occurred in the other body in rejecting the
attempt to remove these provisions; but, two, it does create an
opportunity to sow seeds of dissent about the fact that, when we try to
strengthen the private sector, create more jobs, it just does not fit
their rhetorical pattern. So I think it is fairly ironic that, at the
very time they are misrepresenting assisting private sector in
enhancing the economy, that a private entrepreneur with private dollars
has achieved for the first time reaching the edge of space. I would
rather look with Burt Rutan up toward the stars and enhance our ability
to create jobs at home than to argue a position which even members of
their own party rejected on the Senate side and, wisely, the House
rejected as well. Let us see if this argument is not made again during
this debate. It should not be. Let us see if it is.
Mr. Speaker, I reserve the balance of my time.
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore. The Chair would like to clarify that, while
it is in order to include in debate quotations from Senate proceedings
for the purpose of establishing legislative history on a matter
currently under debate in the House, Members may not characterize
Senate action, as by parsing votes of particular Senators.
Mr. NEAL of Massachusetts. Mr. Speaker, could the Speaker clarify
that further? Was the gentleman from Washington (Mr. McDermott) correct
in what he said?
The SPEAKER pro tempore. To the extent that remarks include Senators'
quotations outside of Senate proceedings, they are not in order.
Mr. NEAL of Massachusetts. Mr. Speaker, I thank the Chair for the
ruling.
Mr. THOMAS. Mr. Speaker, will the gentleman yield?
Mr. NEAL of Massachusetts. I yield to the gentleman from California.
Mr. THOMAS. Mr. Speaker, my understanding of that interpretation is
that I am not permitted to characterize the vote, and I believe I did
to a certain extent. And, therefore, what I would like to do is to
simply emphasize that one of the votes was a rejection of 77 to 22 and
the other one was a rejection of 74 to 23, and people can reach their
own conclusion on those votes rather than my presenting a conclusion,
which was, I thought they were overwhelmingly rejected. I am not
allowed to say ``overwhelmingly rejected,'' but 77 and 74 can be
concluded by anyone on their own.
To that extent, Mr. Speaker, I certainly want to correct the record
in emphasizing that it was overwhelming rather simply make sure that
the vote of 77 and 74 noes is on the record.
Mr. NEAL of Massachusetts. Mr. Speaker, I yield myself such time as I
may consume.
I thank the gentleman from California (Chairman Thomas) for that
clarification as well. I hardly think that it is inflammatory rhetoric,
by the way, which sometimes we are not as good at as some people on the
other side when it comes to addressing some of these issues, but I
hardly think it is inflammatory rhetoric to stand in the well of this
House and to ask the following question: How did a $4.5 billion
[[Page H7752]]
problem become a $130 billion solution? That is really the point of
much of the debate that is going to follow.
Mr. Speaker, I yield the balance of my time to the gentleman from
Michigan (Mr. Levin), ranking member of the Trade Subcommittee of the
Committee on Ways and Means, and I ask unanimous consent that he be
allowed to control that time.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Massachusetts?
There was no objection.
Mr. LEVIN. Mr. Speaker, I yield 5 minutes to the gentleman from
Washington (Mr. McDermott).
(Mr. McDERMOTT asked and was given permission to revise and extend
his remarks.)
Mr. McDERMOTT. Mr. Speaker, it is rather amusing to hear the chairman
of the Committee extolling the virtues of the other body. It is a very
unusual occurrence here on the floor of the House in that we should
always follow what the Senate does. That should not be, I think, our
goal.
The gentleman from New York's (Mr. Rangel's) motion is among the most
important votes that this body will take this year. In fact, it may be
the most important proposals that we have considered since the
resolution that authorized the President to send people to war in Iraq.
The legislation that passed out of this House and will be taken up in
the conference committee aims to raise taxes on domestic companies and
lower taxes on firms that move oversees. Mr. Speaker, it is wrong to
raise taxes on U.S. exporters and lower taxes on U.S. firms with
overseas operations.
The gentleman from New York's (Mr. Rangel's) motion will instruct our
House negotiators to make certain that tax incentives that exist for
corporations moving overseas are not increased. What is wrong with
that? I mean what is wrong with that?
I am told, Mr. Speaker, that you instructed Republicans to vote
against this proposal. You cannot be serious.
Our trade deficit reached an all-time high this year. Our country is
selling fewer things to foreigners than we buy from them, which
explains why the government data says we lost at least 1.5 million jobs
due to foreign trade and outsourcing since Mr. Bush took office.
Why do the Republicans respond to this news by increasing tax
incentives for U.S. firms to move overseas? I mean, I know that the
President indicated that outsourcing is good, but does the Congress
believe that? Does the House believe it? The Senate voted
overwhelmingly. Well, that fixes it.
{time} 1200
I guess we have got to go along with that. Get your rubber stamp,
because if you vote against this motion, we are rubber-stamping the
Bush outsourcing policy.
U.S. firms are continuing to set up overseas operations because our
Tax Code and the Bush administration encourage it. Republicans would
have us believe that high taxes, government regulation, and labor
unions are making the United States a less attractive place to do
business. That assertion is bogus.
First, the Congress's Joint Committee on Taxation says that the
overall tax burden and the corporate tax burden in the United States
are among the lowest in the developed world. Corporate U.S. income tax
revenue as a percentage of GDP is smaller than nearly every other
developed country on the planet, and it is the lowest level since the
Second World War.
Now, although corporate profits surged last year, the corporations
paid significantly less taxes. The United States is simply the tax
haven of the developed world.
Second, the World Bank issued a report 3 weeks ago entitled ``Doing
Business: Benchmark Business Regulation.'' It compares how regulations
affect businesses in different countries. The report shows that the
ability to obtain credit, acquire capital, register property, hire and
fire workers and enforce contracts, in other words, to start and
maintain a successful business, is easier in the United States than any
other developed country, including India and China.
But, nonetheless, Mr. Speaker, the U.S. firms are relocating overseas
to save money. Why? It is simple. The Tax Code encourages it. It
provides tax incentives to U.S. firms who set up any kind of operation,
from establishing a mailbox in Bermuda or building a factory in China
overseas.
Take, for example, the article that appeared in Tax Notes on Monday.
It shows that companies are using the Tax Code to justify shifting
profits offshore. The U.S. pharmaceutical industry, who we gave a huge
bonanza to in this body, has alone, since Bush has taken office, their
offshore profits have surged 35 percent. I hope the old folks are
listening to that. But their offshore activities and assets did not
really change.
What does this mean? It means that at a time when our country faces
the challenge of our generation, at a time when the costs of war are
mounting, the Republicans are protecting a Tax Code that rewards
corporations for moving profits and jobs offshore.
You are not only protecting the current Tax Code, Mr. Speaker, but
unless the House votes to adopt the motion offered by the gentleman
from New York (Mr. Rangel), the Republican Congress will worsen the Tax
Code by making offshoring and outsourcing more lucrative.
Get out your clippers, Mr. Speaker, because this body is considering
fleecing American workers and American firms that do business the old-
fashioned way, that produce here to export overseas.
If John Kerry were President, we could save us from this Congress. He
has the plan to remove the tax incentives that reward companies that
move overseas. If he were President, he would veto this legislation
that this body proposes. But we have got to wait for another 34 or 35
days. I cannot wait until the 2nd of November.
Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, perhaps the gentleman from Washington knows his nominee
better than I do, but the fact that he voted ``yes'' in Finance
Committee and he suggests that he would veto it if he became President
would certainly continue the pattern of first he voted yes, then he
voted no. So I have no evidence to quarrel with him, that once again
Senator Kerry will again be on both sides of the issue. It is just that
he will change venues. The behavior does not change. Where he
continually flip-flops, of course, would.
The gentleman from Washington also said that unless we pass the
motion of the gentleman from New York's (Mr. Rangel) motion to
instruct, we will do something.
Oh, come on. Everybody knows motions to instruct are not binding. It
has no influence whatsoever on the conference, unless the conference
wants to.
Now, the measures that they are arguing, ``Oh, by the way, did I tell
you that, notwithstanding the fact the Senate supported overwhelmingly
the international corporate provisions, and I assume that they believe
that they will not ship jobs overseas or they would not have voted the
way that they did, and they probably should not be mentioned again in
this debate,'' but the very next speaker not only mentioned them, but
made it the core arguments of his position, that if in fact there are
23 Senators, 10 of whom are Democrats, they are members of the Finance
Committee, save for 2, which passed these provisions out of the Senate
Finance Committee, 19 to 2. And I do not believe they have any
intention of reversing their position, even if this ludicrous motion to
instruct were to pass.
So, I just want you to forbear. We will go through, the time will be
used up. We will vote down the motion to instruct, and we can then get
on with the conference. And I can assure you, the senatorial members of
the conference and a clear majority of the House members of the
conference intend to support those provisions that will strengthen jobs
here at home, and they will dismiss, for the obvious reasons, the
argument that continues to be made by those individuals, even
encompassing a denial of the Senate's minority leadership's decision-
making ability indicating that we should not listen to them.
I happen to believe that you should take each issue on its merits and
not dismiss them by stereotyping, and on this issue, I believe the
Senate got it right, just as the House got it right.
[[Page H7753]]
Announcement by the Speaker Pro Tempore
The SPEAKER pro tempore (Mr. Aderholt). The Chair would remind
Members not to characterize positions of Senators.
Mr. THOMAS. Mr. Speaker, I would inquire of the Chair, characterizing
a current Senator who is running for another office and what he would
or would not do would fall under that same admonition?
The SPEAKER pro tempore. Senators who are nominated as candidates for
President--
Mr. THOMAS. Who are still Senators, and how they would behave, does
that fall under the same admonition?
The SPEAKER pro tempore. Nominated candidates for President are
judged by the standards applicable to that office.
Mr. THOMAS. I will accept the nonresponsive answer.
Mr. Speaker, it is my pleasure to yield 3 minutes to the gentleman
from Texas (Mr. Brady), a member of the Committee on Ways and Means.
Mr. BRADY of Texas. Mr. Speaker, I thank the chairman for yielding me
time.
Mr. Speaker, it is clear I think to the listeners today that we are
nearing Election Day. This is one of those ``scare America'' type
motions that is designed to appeal to voters in the hopes that perhaps
they do not understand the issue and you can just scare them by yelling
``outsource, outsource, outsource.'' But I think American voters are
smarter than that.
What we have done here in the House, our frustration is that we have
one of the greatest and most productive work forces in the world. But
our Tax Code works against our companies and our workers and really
forces people to have to compete somewhere else in the world.
We are convinced that we can create jobs here in America. So the
approach we have taken is pretty simple and direct: We lower the tax
rate for companies and workers that manufacture in America, and we keep
a higher tax rate for companies that manufacture overseas. Lower if you
produce in America; higher if you do it overseas. That way we encourage
American companies and workers to keep the jobs right here.
For farmers and our agriculture community, we lower the rate if they
produce here in America; we have a higher rate to tax them if they go
overseas. That way we keep agriculture-producing income here in
America.
For small businesses, rather than take money away from them and bring
it up here to Washington, we want them to keep dollars back at home so
they can create jobs and buy that new computer and do the things to
keep small businesses in business these days in a competitive
workplace.
That is what the American jobs bill does, and that commonsense
approach is what the Senate, including majority and minority Members,
overwhelmingly supported. They united to lower taxes if you produce
here in America and have higher taxes if you produce overseas, a
commonsense approach to American jobs here.
Let me say this, too. Our problem with trade is not so much that we
are buying from overseas, it is the fact we are not selling enough
products overseas. What this does is make our products far more
competitive.
What we do is we do not chase American companies overseas anymore,
and we get a chance, a real direct chance, to take out the job killers
in our Tax Code and create American jobs here.
That is what this bill does, and I think every American who really
studies it, and I think American voters are smart, will see that we
want to encourage jobs here with a lower tax rate and a higher tax rate
for companies that try to move overseas. That is what this bill does.
A final point: If you really want to tackle outsourcing, one of our
problems is that we have so many job killers in our business climate.
For example, lawsuit abuse is a huge cost to American businesses. It is
a bigger cost annually than the cost of Iraq.
Lawsuit frivolous abuse, because we are the lawsuit capital of the
world, we outsource our jobs, we drive up health care beyond reach, we
chase good doctors out of practice. If you really want to stop shipping
jobs overseas, I would invite my Democratic colleagues to join me in
ending frivolous lawsuits that drive our jobs overseas, and instead
work with us to keep them here in the United States.
Mr. LEVIN. Mr. Speaker, I yield 3 minutes to the distinguished
gentleman from Maryland (Mr. Cardin), my colleague on the Committee on
Ways and Means.
Mr. CARDIN. Mr. Speaker, I thank the gentleman from Michigan (Mr.
Levin) for yielding me this time.
Mr. Speaker, there is a real question as to whether the legislation
that has moved through this body would encourage the outsourcing of
U.S. jobs and exporting of jobs or correct a problem in the Tax Code
that needs to be corrected.
This is a very serious issue. The Foreign Sales Corporation Act that
was enacted was an effort to level the playing field for U.S. producers
versus our trading partners, particularly in Europe. For, you see, we
have a different corporate tax structure than the Europeans have and
the Foreign Sales Corporation Act was an effort to level the playing
field.
The problem is that the World Trade Organization that we belong to
declared that to be unlawful and opposed imposed retaliatory tariffs
against U.S. exports. That tariff is now 11 percent. It will grow to 14
percent by the end of the year and 17 percent by next March.
Mr. Speaker, it is unconscionable that we have not corrected this
situation prior to this time. We had a bipartisan proposal that would
have fixed the problem. As my friend from Massachusetts pointed out, it
was a relatively simple matter to fix the problem and to level the
playing field for U.S. producers so that we can compete fairly
internationally. But, instead, this legislation has become a Christmas
tree for every conceivable tax provision, and it has been delayed and
delayed and delayed, and our producers that manufacture products right
here in America have paid a heavy price because of that delay.
The motion to instruct deals with the underlying issue. First, it
asks for us to immediately resolve this issue, rather than further
delays. Read the motion, paragraph 4.
It also says that the relief should be targeted to U.S. producers.
That is the problem. The Foreign Sales Corporation Act was for U.S.
producers who produce their products here in America. It is not for
those who produce their products overseas. It should be targeted,
because that is what the problem is.
That is what we are trying to do, is level the playing field. We are
trying to respond to the World Trade Organization. It is right for us
to target this relief to those who produce their products right here in
America. That is the problem we are trying to deal with, and that is
spelled out in the motion.
Then lastly, Mr. Speaker, we are saying that we should not be adding
to the deficit of this country. We had a bipartisan solution that did
not increase the national debt, but the legislation that passed this
body certainly did that.
{time} 1215
Again, it was another opportunity to show that we can be fiscally
irresponsible.
We should pay for our tax cuts, and we can so that we do not add to
the deficit; and this motion urges us to do that.
Mr. Speaker, I urge my colleagues to support the motion.
Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 3 minutes to the
gentleman from Florida (Mr. Shaw), a senior member of the Committee on
Ways and Means.
Mr. SHAW. Mr. Speaker, I thank the gentleman for yielding me this
time.
Mr. Speaker, first of all, I think people listening to this debate
are somewhat totally confused. In reading the motion, I can understand
why there is confusion on both sides of the aisle.
To begin with, the Democrat motion to instruct the conferees to
strike provisions that move jobs overseas, this instruction is
absolutely meaningless, because H.R. 4520 does not include any
provision that would move jobs overseas. As a matter of fact, quite to
the contrary. We lower rates for people or companies that manufacture
here in the United States.
Let me just take one provision of the motion to instruct. It says:
``shall include the provision of the Senate amendment not included in
the House bill to ensure that the rate reduction
[[Page H7754]]
will not be available to income attributed to cost savings resulting
from purchasing imported parts for outsourcing labor overseas.''
Now, how in the world are companies going to be able to operate in
trying to segregate exactly what that means? Does that mean for the
purchase of the agreement, the purchase of the parts? What if those
parts are not even available here in the United States, and it is a
question of just shopping the world market to find these parts? And
then, is it going to include the effect of installation of those parts
in the final product? It is totally unreasonable.
We need to fight in this Congress for simplified rules, simplified
rules that are fair and understandable. And for us to adopt accounting
procedures that are going to make compliance almost impossible does not
bring credit upon this body.
What we need to do is to work forward and look in the mirror when we
start saying, why are jobs moving overseas? Perhaps we are the problem.
Perhaps the United States Congress and the Tax Code is the problem. We
need to simplify the code. We need to move forward. We need to have a
code that is friendly to those who would provide jobs in this country.
This motion to instruct does not make a bit of sense, and I would
urge all of the Members to vote against it.
Mr. LEVIN. Mr. Speaker, it is my pleasure to yield 2\1/2\ minutes to
the distinguished gentlewoman from Connecticut (Ms. DeLauro).
Ms. DeLAURO. Mr. Speaker, I rise in strong support of this motion. It
provides all American business enterprises, large and small, with an
across-the-board rate reduction from income derived from work done here
in the United States. To pay for it, it would curtail tax incentives
that would encourage companies to move operations offshore.
With 2.5 million manufacturing jobs lost in the last 3 years,
including nearly 40,000 in my State of Connecticut alone, many
outsourced to other countries like China and Singapore, we all
understand that steps must be taken to revive what is the very backbone
of America's economy.
Let me just talk about what the business model of the Bush
administration and the Republican leadership is, because government, in
fact, is not in the business of creating jobs; but government is about
creating an environment in which jobs can be created.
The business model is as follows: assisting companies in sending the
jobs offshore, technology offshore and, in many instances, allowing
companies not to pay their fair share of their taxes to the United
States Government, and then these companies can come around and get
Federal contracts. That is the business model for this administration;
and, quite frankly, it does not create jobs here in the United States.
But by clinging to the idea that we should be rewarding companies who
send jobs overseas, this majority has delayed action on this issue for
more than a year. As a result, many manufacturers are now paying 11
percent tariffs on 1,600 American-made products, tariffs that could be
as high as 14 percent by the end of the year.
What manufacturers need from this body is not more incentives to send
jobs abroad; they need bold vision, recognizing that our Federal Tax
Code could work for them, not against them, and by favoring those
companies who keep their jobs here. That is exactly what my colleague's
motion would do. American companies should not have to resort to
transferring jobs to countries where workers make less and have fewer
benefits to stay competitive.
Americans understand outsourcing. It is eroding our workforce; it has
threatened every middle-class family in this country. It ought to end
with helping our manufacturers here at home become more productive,
more innovative; and if we want to boost sales, investment in
modernization and employment, the House should pass the Rangel motion.
As I said, the American public understands outsourcing. I believe
they are going to outsource some folks on November 2, people who do not
understand what it means to have their jobs gone, to leave, when we
could be providing this country's manufacturers with the opportunity to
be able to stay here, invest in our technology, invest in our workers,
and promote economic development in the United States.
Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I am impressed with the gentlewoman's argument; and, in
fact, her argument will be sustained if Members vote ``no'' on the
motion to instruct and we can get on to conference.
Mr. Speaker, it is my pleasure to yield 3 minutes to the gentleman
from Illinois (Mr. Crane), the ranking Republican on the Committee on
Ways and Means and the chairman of the Subcommittee on Trade.
Mr. CRANE. Mr. Speaker, I thank the gentleman for yielding me this
time.
I would like to stress the fact that H.R. 4520 does not include any
provisions that would move jobs overseas. It does contain provisions
that would foster economic growth and create jobs here in the United
States.
The bill reduces the corporate tax rate to 32 percent only for
domestic producers, farmers, small corporations, and manufacturers'
activities within the United States. Manufacturing that occurs overseas
or offshore would not get the lower rate.
The bill extends enhanced section 179 expensing for small businesses
and provides accelerated depreciation for leasehold improvements and
offers other tax benefits for businesses. Companies with a lower tax
burden have more resources to expand their business and to create jobs
in the United States.
U.S. exporters are getting clobbered by penalty sanctions. Lower
exports mean a smaller economy and less employment. H.R. 4520 will end
the sanctions imposed on the exporters, allowing them to expand and
hire more workers.
Mr. Speaker, I urge my colleagues to reject the motion to instruct.
Mr. LEVIN. Mr. Speaker, it is my pleasure to yield 5 minutes to the
gentleman from California (Mr. Becerra), a member of the Committee on
Ways and Means.
Mr. BECERRA. Mr. Speaker, I thank the gentleman for yielding me this
time.
Mr. Speaker, what we are talking about in this motion to instruct is
what we should do: send to President Bush a bill to try to help
American companies create jobs. Secondly, we want to help American
companies create jobs, some of us at least do, in America, not
overseas.
What we are seeing today is a wholesale shipping-out of American jobs
so that today, when you buy a product, if you look at your home and
take a look underneath that dish or if you take a look at that chair,
if you take a look at the curtains and find out what that label says
about where it was made, chances are it will not say ``made in
America.''
It used to be that toys were manufactured here. It used to be that
your furniture was manufactured here. It used to be that just about
everything in your home was made in America. Today, virtually nothing
that you have in your home is made in America. Not only is it the case
that what was manufactured is no longer made in America, but today, we
are talking about all sorts of things from data entry, word processing,
transcription, phoning services, product design, architecture, movie
production. X-rays are being analyzed overseas for Americans who go to
see a doctor to find out whether or not there is a particular condition
or illness they are suffering from. X-rays are being exported for
analysis today. That is where we are.
Is it bad? It sure is. Every hour America loses 127 manufacturing
jobs overseas. That means that there are 3,200 jobs that will be lost
today as we speak. At the end of the year, 1.2 million American jobs
will have left.
My colleague, the gentleman from Texas (Mr. Brady), said this is an
effort to scare America. My God, if those figures and those facts do
not scare America, then we are in trouble, because we have to wake up,
wake up to the fact that we are losing jobs to others overseas, and we
are giving incentives as a government for us to see American companies
send those jobs overseas.
Now, every company has a right, and we should try to help every
company make a profit; otherwise, they will not be around. But my God,
if we have an opportunity to use the government to help incent
companies to keep those
[[Page H7755]]
jobs in America or create new jobs here in America for American
workers, then let us do it.
So why are we here? The bill that stands before us would actually
give $60 billion worth of incentives to companies who ship those jobs
from America to overseas.
Let us change that. This motion to instruct simply says, you will get
a tax break, you will get that incentive from the government, from the
people, the 280 million Americans who pay taxes, if you create that job
not in some other country, but here. That is pretty simple. And by the
way, this also says, this motion to instruct also says, let us do this
in a way that does not increase the size of the Federal deficit. We
have a $440 billion deficit, the largest this country has ever known;
and this is going to spend money to give incentives to companies, this
bill will give money to companies through incentives to send jobs
overseas. That is crazy at a time when we do not have money to begin
with, and we are losing jobs by the hour.
If we are going to continue hemorrhaging jobs in America then, by
God, we should be scared about what is going on. We should not hide the
facts. We should not try to deceive Americans. We should do everything
in our power to help the private sector create the jobs that we need.
The Bureau of Labor Statistics, the Bush administration Bureau of
Labor Statistics recently revised its prediction on the growth of the
number of high-tech jobs, white-collar jobs here in America that we
would have, somewhere between 2002 to about 2012, over that 10-year
period. They have revised that figure. Not up; they are not saying they
are going to create more jobs; they are saying 70 percent fewer jobs.
This is not some left-wing think tank saying we are going to lose jobs;
this is the Bush administration's Bureau of Labor Statistics saying,
folks, we made a mistake. When we told you a few years ago that we
thought we would be expanding the number of high-tech, white-collar,
good-paying, for the most part, $70,000-and-above-paying jobs, we were
wrong. Today, guess what? We have to revise that figure down by about
70 percent.
Other analyses recently have told us that America is in jeopardy of
losing a total of about 14 billion jobs into the future if we do not
stop the hemorrhaging now. Between 300,000 and 500,000 jobs were lost
in the U.S. since 2001, having gone overseas. That figure, by the way,
did not come from another left-wing think tank; that came from none
other than Goldman Sachs. You can go to Wall Street in New York and
talk to them there, because those are the folks that told us that
between 300,000 and 500,000 jobs have been lost, simply since 2001
overseas.
It is a crisis. Let us deal with it. It is not a scare tactic; it is
real. Let us pass this motion to instruct.
Mr. THOMAS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I would tell my friend, the gentleman from California,
that I am a little concerned, because he has admitted that his own
private purchasing choices are that he buys foreign products, but he is
here on the floor trying to change the law of the U.S. to not allow
that to happen. It seems to me that if you are going to be here
expounding a position of not sending jobs overseas, that your purchase
pattern should reinforce it.
A choice that people make in terms of their private purchasing is a
choice that they control, and he did indicate that in his home there
are a number of imported products. People have a choice. My hope would
be that our private behavior corresponds to our public positions,
because not only does the American Tax Code put us in the current
position, which we are trying to correct with this legislation, but our
own private behavior as well.
Mr. BECERRA. Mr. Speaker, will the gentleman yield on that point?
Mr. THOMAS. Not on my time. If the gentleman wishes to seek more
time, I would certainly respond to him.
Mr. BECERRA. Mr. Speaker, I just want to mention that I have no
choice, Americans do not have a choice. We cannot buy American products
for our home.
Mr. THOMAS. Regular order. You always have a choice.
The SPEAKER pro tempore (Mr. Aderholt). The gentleman from California
controls the time.
Mr. BECERRA. Show me the store that sells American products, and I
will buy them. Show me the store that sells American products for my
home, and I will buy them.
The SPEAKER pro tempore. The gentleman from California controls the
time.
Mr. THOMAS. Mr. Speaker, perhaps it requires a little bit of endeavor
and search, but that is what life is about.
{time} 1230
Mr. Speaker, it is my pleasure to yield 2 minutes to the gentleman
from New York (Mr. Houghton), an honored member of the committee.
Mr. HOUGHTON. Mr. Speaker, I thank the gentleman from California (Mr.
Thomas) for the time.
I have got to approach this issue from the standpoint of somebody who
was in business for 35 years. This is a bill whose time has come.
International commerce is always a balancing act, a balancing act
between expanding markets overseas and protecting our job base. We did
not ask for this fight. Europe did, and a man called Pascal Lamy forced
it.
The concept in our tax situation, whether it was DSC or FSC or
whatever, my colleagues want to call it, ETI, was to neutralize the
differences in the tax system, the regional value-added tax versus our
income tax, and it was accepted. We did a good job, and we flourished
under this.
Then there were grumbles, and then, all of a sudden, Europe came back
and challenged our position. We should have challenged theirs, but we
did not, but then we tried to make an accommodation with the World
Trade Organization, not once, not twice, but three times. It did not
work.
So this is the only way it seems to me that we can accommodate the
European community. It is a good bill. It is not perfect. It does not
shift jobs abroad. It allows American companies to produce abroad as it
allows people abroad to produce here in this country, but basically, it
firms up our economy, and that means it firms up our job base.
I think it is something we ought to encourage, we ought to support,
and we ought to defeat the motion to instruct.
Mr. LEVIN. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from
California (Mr. Becerra).
Mr. BECERRA. Mr. Speaker, I thank the gentleman for yielding me time,
and I want to apologize to the chairman for trying to have him yield me
some time.
I just want to make the case I am willing to stay on this floor if
the gentleman can name me an American product from my home that I can
purchase, I will look to buy it, but I have looked. Whether it is an
electronic product, whether it is dishes, whether it is curtains, tell
me, and I will look to buy it.
There is no reason why we cannot try to give incentives to American
companies to be able to produce here at home. If it is a little bit
more expensive, I guarantee my colleagues the American consumer would
say, if I have to pay a little bit more for that product, but it is
made by American hands, I will do so.
The difficulty is that we have no right using taxpayer dollars to
help companies ship jobs abroad. That is my point. When we have an
administration that has actually had a net job loss of the last 3 or 4
years of close to a million jobs; and by the way, if we did not include
the government-sector jobs that have been created under a Republican
administration, that would actually rise to over 1.5 million jobs that
have been lost. Almost 3 million of those jobs that have been lost have
been in the manufacturing sector. So if it were not for government jobs
created, we would have a massive job loss. We do not even create today
the number of jobs we need just to keep pace with the new people who
are entering into the system.
So it becomes very difficult when we are trying to do something to
see that we are spending $60 billion which will, for the most part,
help companies who may be American companies, who may have some of
their operations here, but are still sending jobs abroad. Again, they
have got to remain competitive. That is not a battle we want to fight.
What we want to fight, though, is to give incentives to companies who
are willing to commit to Americans here.
Mr. THOMAS. Mr. Speaker, I yield myself such time as I might consume.
[[Page H7756]]
I suggest the gentleman take a trip to North Carolina, take a look at
the furniture they have there, made in America, American products,
American labor. Looking for curtains? There is still a cotton industry
left. We produce flat goods. Carpets, you want to buy a carpet? They
make them in Georgia. You want to buy cars? Take a look at American
cars. You want to buy a radio or a CD player? An area where pretty
obviously people say we do not have a choice, Bose makes an excellent
quality American-made radio/CD. China? Glassware? I can go on and on.
There are products made in America. If you take the time to do it,
you can help in your private life instead of arguing you are compelled
to buy foreign products, and you come to the floor and demand that we
change the laws to stop you from your private behavior.
Mr. Speaker, it is my pleasure to yield 2 minutes to the gentlewoman
from Washington (Ms. Dunn), a member of the Committee on Ways and
Means.
Ms. DUNN. Mr. Speaker, I thank the gentleman very much for the time.
Mr. Speaker, I rise in opposition to the motion to instruct, and I
urge my colleagues to vote against it.
The jobs bill before us is urgently needed. We need it to remove the
international sanctions put upon our United States products by the
European Union that are hurting sales of U.S. goods overseas and are
jeopardizing jobs here in the United States.
We need the jobs bill to help promote job creation here in the United
States by reducing taxes on United States manufacturers.
We need the jobs bill to update provisions in the tax code that are
decades old and penalize American companies and keep them from
competing with foreign companies.
We need the jobs bill to move forward in the spirit of the bipartisan
progress that has already occurred and has been made on these issues.
The provisions that some are contesting here on the floor right now
won bipartisan support in the other body and also here on the House
floor. This bill is not about moving jobs overseas. It is about
creating incentives to keep jobs right here in the United States.
We need to move the jobs bill to conference, and we should do it
without delay. For these reasons, I urge my colleagues to reject the
motion to instruct, to support going to conference so that we can bring
back a conference report that everybody can support.
Mr. LEVIN. Mr. Speaker, I think we have the right to close, and the
gentleman from New York (Mr. Rangel) is not here, and I am not sure he
will be here. We would have divided the balance of the time. He is not
here because of the memorial service for our distinguished, and if I
might say, beloved former colleague Frank Horton. So, therefore, under
those circumstances, I reserve the balance of the time and I will
close.
Mr. THOMAS. Mr. Speaker, I thank the gentleman, and all of us who
served with the gentleman from New York, Frank Horton, certainly feel
saddened by his passing.
I will tell the gentleman from Michigan, I have two additional
speakers, and he has the right to close. We will conclude, and the
gentleman from Michigan can then close.
Mr. Speaker, it is my pleasure to yield 3 minutes to the gentlewoman
from Connecticut (Mrs. Johnson), the subcommittee chair of the
Subcommittee on Health of the Committee on Ways and Means.
Mrs. JOHNSON of Connecticut. Mr. Speaker, I thank the chairman for
the time.
Let us look at this issue of outsourcing. Last year, foreign
investment in America doubled. That means that other countries
outsourced jobs to America at twice the rate they had the preceding
year. We need them to keep doing that!
Next, in the 1980s, I worked hard with some of my colleagues on the
other side of the aisle to force Japanese companies producing cars in
America to buy American parts; not just hire American people, buy
American parts. We forced them to do it because we did not want
``screwdriver'' plants.
Well, when we produce airplanes in other countries for those
countries, when GE gets a contract to produce locomotives in Russia and
rehabilitate all the Russian locomotives, do my colleagues not think
Russia wants some of those jobs? Do my colleagues not think Russia
wants some of those parts bought in Russia? Of course, they do, but
expensive, high-value parts come from New York State and have kept our
ability to produce locomotives as one of the foremost capabilities in
the worldwide market.
So, yes, outsourcing is a worldwide phenomenon, and we are the
beneficiaries far more often than we are the losers. In net, we are by
far the winners.
Secondly, competitiveness, absolutely, top in communications, top in
medical technologies. Take the Department of Commerce's list of the 18
top technologies, and we are the highest quality producer and the
lowest cost producer in two-thirds of them. So, yes, we are driving the
economic forces of America into the international market, but we must
do more. We must help our companies compete.
We must pass this legislation to eliminate the retaliatory tariffs
that have been put on American goods, thereby increasing their price
abroad 10 percent and soon to be 15 percent.
We must reduce taxes on our manufacturers that compete
internationally. We must do what we do in this bill, make it cheaper
for them to invest in machinery and equipment and hire more people, and
yes, we must go further.
We are going to have to do something to control and reduce health
care costs so they can compete internationally. We are going to have to
eliminate frivolous litigation and all the costs that that imposes on
our industry and particularly on manufacturing, driven by pure greed.
So let us get with it. Let us pass this bill, and then let us go
right down the agenda of the things we need to do to make American
manufacturing more competitive in the international global market, but
let us not pretend that outsourcing is the villain here. It is
something we need to be able to do fairly and receive from other
countries, and I urge opposition to this motion.
Mr. THOMAS. Mr. Speaker, how much time is left on my side?
The SPEAKER pro tempore (Mr. Bass). The gentleman from California
(Mr. Thomas) has 3\1/2\ minutes remaining.
Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 3\1/4\ minutes to
the gentleman from Louisiana (Mr. McCrery), the chairman of the
Subcommittee on Select Revenue Measures of the Committee on Ways and
Means.
Mr. McCRERY. Mr. Speaker, I thank the chairman for yielding me the
time.
Mr. Speaker, this Democratic motion to instruct conferees reflects
what is their increasingly obvious 19th century state of mind. One
would think, listening to the comments of our colleagues on the left,
that we are back in the industrial revolution, or maybe, they have
moved forward to the first part of the 20th century, mid-20th century,
maybe even right after World War II, when the United States was not
only the biggest and baddest bear in the industrial woods but just
about the only bear in the industrial woods. Those times have changed.
This is the 21st century. The market has changed significantly.
One of my colleagues on the Committee on Ways and Means pointed out
that he learned from Goldman Sachs that, over the last couple of years,
we have seen 300,000 to 500,000 jobs outsourced, in other words,
American companies creating 300,000 to 500,000 jobs off our shores in
foreign countries. That is true.
But what he did not tell my colleagues and what he could have found
out at Goldman Sachs or from our own Department of Commerce is that,
during that same period of time, even more than 300,000 to 500,000 jobs
were created here in the United States by foreign companies wanting to
access our market. That is the 21st century market. No longer are we
building infrastructure to transport American made goods from the east
coast to the west coast like we did in the 19th century. Those were
great days, but today, American companies have to build some of their
things overseas to access those markets, to compete with the numerous
companies that are in competition with them today, unlike the 19th
century and mid-20th century.
In today's market, we dadgum better get over there and compete, or we
will
[[Page H7757]]
lose market share, and when we lose market share, we lose income, and
when we lose income, we are not able to invest, and when we cannot
invest, we cannot create jobs.
Get with it. This bill gets with it. It modernizes our tax code. It
says to our American companies, we realize they have got to compete in
the world market, not just in the United States market, and oh, by the
way, if they do produce products here in the United States and sell
them overseas or even here in the United States, we are going to give
them a tax cut.
One of my other colleagues on the Committee on Ways and Means said we
need to target this tax relief to American manufactured goods. Well,
guess what, this bill does that. The tax rate cut for manufacturers
only applies to income derived from the sale of goods manufactured here
in the United States.
So this Democratic motion to instruct basically is a bunch of
hyperbolic language thrown out to scare people, to try to make it seem
like they are the defenders of American jobs when just the opposite is
true. This bill, crafted by Republicans, wants to create jobs here in
the United States, preserve jobs here in the United States.
{time} 1245
Mr. THOMAS. Mr. Speaker, I yield myself the balance of my time.
In history, Mr. Speaker, there are those who opposed change,
modernization. They were called Luddites. Please vote ``no'' on the
motion to instruct. Do not be a Rangelite.
Mr. LEVIN. Mr. Speaker, how much time do I have remaining?
The SPEAKER pro tempore (Mr. Bass). The gentleman from Michigan has
6\1/2\ minutes remaining.
Mr. LEVIN. Mr. Speaker, I yield myself the balance of my time.
Well, my Republican friend from Louisiana talks about the 21st
century market and the chairman talks about modernization. So far,
under those mantras, what has happened is more poverty in America,
stagnant income for families in America under this administration, and
millions of fewer jobs, almost 3 million fewer jobs in manufacturing.
And if you call modernization their Republican tax bills, or if this is
the 21st century market, just reading from the Detroit News, a rather
conservative newspaper, summing up material from the CBO, in 2004 the
average tax cut for the middle-income family is $1,090 and for the
richest 1 percent it is $78,460.
I am for a 21st century market, Mr. Speaker, but not for that kind of
a market. We are for modernization, but not for that kind of
modernization. We cannot go backwards. We need to move forward. And
here is what the bill did that came through here and is reflected in
the dilemma that we have.
We had a $50 billion problem. The WTO ruled FSC inappropriate under
WTO rules. What happened was, instead of passing a bill that was a
bipartisan bill that addressed the manufacturing sector as FSC did, we
ended up with about a $140 billion bill. Three times as large. And it
is really larger than that because some of the provisions were to
expire when they are unlikely to, and there was a delayed phase-in.
So, essentially, once again we are adding to a deficit because so
much of this is not paid for. So we had a $50 billion problem. We now
have a bill three times as large, and it is going to increase the
deficit.
Now, let me point out quickly some of the provisions in this motion
to instruct, because we need to look at the whole document. It says
that we should accede to the Senate amendment so there is a deduction
rather than a corporate rate reduction. That is of importance to many
manufacturing companies in this country. The Senate bill is preferable.
Also, we say that this tax amendment should relate to all the
businesses, not simply limited as in the House bill. We also indicate
that we should accede to the Senate approach so that the rate reduction
really reflects the amount of business done in the United States and
not overseas.
And then we go on to provide a remedy for corporations that move
their businesses in form overseas, called inversions, and say that we
should accept the provisions in the Senate amendment. And we also say
that we should drop the provision in the House bill that provides for
private collection of Federal tax liabilities, a horrendous idea that I
do not think most Americans will accept.
Now, let me say just a few words about the issue of outsourcing, of
moving businesses overseas. The House bill had in it a number of
provisions that will stimulate movement of operations overseas. One of
them is not in the Senate bill. These are complicated provisions, but
they have a simple clear-cut impact. The provision, for example,
relating to tax credit baskets, the House would move it from 9 to 2.
Essentially, this is going to stimulate the investment of companies in
tax havens instead of bringing back the monies to the United States. It
cost $8 billion. It is not in the Senate bill.
Then there are the so-called look-through provisions that are in both
bills. Do not say that this will not stimulate movement of jobs
overseas, because essentially, for a multinational, there will be
encouragement instead of bringing the profits back here and investing
them here to move those profits into a third country, often a tax haven
country. That will stimulate the movement of jobs from here overseas.
When the Senate voted, they voted for this provision as part of a
much larger bill that came to include a provision on overtime. So
members of the Senate were faced with the dilemma of how we attack this
problem of the elimination of FSC. And we need to do that, but focused
on manufacturing. Do we look at the problem of overtime? And because
they did not control the proceedings in the Senate, they were faced
with a dilemma.
So let us be clear. You mentioned furniture. Go to North Carolina. Go
there. China has been taking furniture business away from the United
States unfairly. Overseas movement is a problem. Outsourcing is a
problem. Vote for this motion to instruct.
The SPEAKER pro tempore. The question is on the motion to instruct
offered by the gentleman from Massachusetts (Mr. Neal).
The question was taken; and the Speaker pro tempore announced that
the noes appeared to have it.
Mr. LEVIN. Mr. Speaker, I object to the vote on the ground that a
quorum is not present and make the point of order that a quorum is not
present.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this question are postponed.
The point of no quorum is considered withdrawn.
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