[Congressional Record Volume 150, Number 133 (Thursday, November 18, 2004)]
[Senate]
[Pages S11454-S11456]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      INTERNATIONAL TRADE DEFICITS

  Mr. DORGAN. Mr. President, I would like to, on another subject, speak 
for just a moment about the area of international trade.

[[Page S11455]]

  Yesterday, the Senate approved an increase in the debt ceiling by 
$800 billion. That is the fiscal policy debt, that is the amount of 
money that is spent over that which is collected in revenues. That 
means our kids and grandkids assume this responsibility. It is Federal 
debt.
  The budget deficit is the highest in history. This is a completely, 
thoroughly irresponsible fiscal policy. There is no question about it. 
Oh, I know people say we have had economic slowdowns or recessions or 
wars or terrorism and this and that and the other thing.
  Look, we have had that for a century. But we have never had the size 
of the deficits we have now had in times like this. As far as I know, 
we have never before decided to fight a war with borrowed money and ask 
generations that come after us to pay for it.
  But I want to talk about another debt that is growing, and it is 
larger than the fiscal policy indebtedness that we have. And that is 
the foreign debt, which arises from trade deficits. This chart goes 
back to 1998. I could go further. It shows that we have the largest 
trade deficits in history, by far. Last month, it was $54.1 billion, 
the third highest in history. You can see where it is going. It is 
growing and growing and growing.
  Last month alone, the trade deficit with China--just one country--was 
$15 billion. Now, nobody talks about this. Nobody seems to give a rip. 
Some people apparently think this will have no consequence for this 
country or its long-term prognosis. But they are wrong. This trade 
deficit is dangerous and will be debilitating to the country's economy 
unless we do something about it.
  Month after month after month we see these reports. And on this 
chart, this red ink has everything to do with jobs, which define the 
quality of life in this country. There is no social program in this 
country that is as important as a good job that pays well, that gives 
someone an opportunity to go to work, have some security, have 
benefits, and take care of their family and have a good life. The 
expansion of jobs and opportunity in this country will determine what 
kind of a country we have, what kind of opportunity exists for our kids 
and our grandkids. And jobs are leaving the country.

  Yesterday, I had a call from some American workers. I will not 
describe the company. They are workers for a company that produces a 
great product. They want to sell that product in China.
  Now China has a $15 billion monthly surplus with us this past month. 
They ship us their shirts, their shoes, their trousers, their trinkets. 
They ship it all to us, and we buy it. But can we get our products into 
China?
  These workers say they've been told that to have their product be 
sold in China, it has to have a 40- to 50-percent Chinese content, 
otherwise you cannot get it in. So, therefore, the workers are 
concerned that the company is now going to begin processing operations 
in China. Why? Because China insists on it.
  Well, look, that violates the World Trade Organization.
  That does not come as a shock, of course. There is a systematic 
violation all the time, by these countries that decide they want to 
ship all of their products to the United States, but they want to keep 
their markets closed to us. That means our good jobs are leaving, not 
coming.
  There are a lot of reasons for it, one of which is we have had 
incompetent trade negotiators under Republican and Democratic 
administrations, completely incompetent. They think their job is to 
negotiate agreements, the more the better, and they don't care what's 
in them. If they don't get an agreement, they think they fail. So they 
negotiate an agreement, and give away the store.
  We just negotiated a bilateral trade agreement with China. Do you 
know what our negotiators agreed to? On automobile trade, they agreed 
to this: After a phase-in, China can impose a 25-percent tariff on U.S. 
automobiles sold in China, and we will impose a 2.5-percent tariff on 
any Chinese vehicles sold in the United States. Let me say that again. 
Our negotiators agreed with China that we would allow them to impose a 
tariff 10 times higher than the tariff we would impose on them in 
reciprocal automobile trade.
  Now, what on earth would possess negotiations to result in that, with 
a country with whom we have a very large trade deficit?
  We know China is ramping up an automobile industry and an export 
automobile industry, and we now have a trade agreement with them where 
our negotiators said it is all right to have an imbalance that is 
tenfold in reciprocal automobile trade.
  What does that mean? To strip all the varnish from it, it means it is 
all right with our negotiators for American jobs to be obliterated and 
Chinese jobs created on automobile trade. That might be all right with 
some unnamed trade negotiator, but it is not all right with me. Whoever 
negotiated that was fundamentally incompetent.
  We have some companies these days that are not American companies. 
Oh, they are American in terms of charter. They get a charter, a 
corporate charter, that allows them to become an artificial person, be 
able to sue and be sued, and to contract and be contracted with. They 
have all the rights of people, except they don't die. They can go 
broke, but they will never die. These artificial people are responsible 
only to their shareholders.
  These companies have decided they would like to have all the benefits 
of doing business in the United States as American companies, and all 
the protection that exists from that, except they don't want to have 
the obligation of paying taxes in the United States. Therefore, they do 
business through a mailbox in a tax haven country. They can set up a 
business in the Grand Cayman Islands or the Bahamas. In some extreme 
cases, they have even decided they want to renounce their American 
citizenship to avoid paying their tax obligation to the United States, 
in what is known as an inversion.
  In addition to that, we now have company after company--and all you 
have to do is open up the Wall Street Journal every day to see it--
doing something called outsourcing. That means taking American jobs and 
moving them somewhere else in the world, where it is cheaper. Instead 
of doing business in America, paying American workers $10, $15 an hour, 
they can perhaps do it in Sri Lanka, Bangladesh, Indonesia, or China. I 
have described at length on the floor of the Senate the fact that Huffy 
Bicycles decided to do that, and the little red wagons, Radio Flyer 
wagons--that firm was in America for 100 years. They decided to move 
production elsewhere. Why? Because they can pay sub-minimum wages. 
Huffy Bicycles used to pay $11 an hour to American workers. They got 
fired because they were too expensive. You can make them for 30 cents 
an hour in China, and you can work those people 7 days a week and 12 
hours a day.
  So we have what is called outsourcing. American companies are 
outsourcing jobs. That is a fancy term that describes the firing of 
American workers, in most cases, and employing overseas workers to do 
the same job at a fraction of the price.

  What's even more nuts is that our tax code provides incentives for 
outsourcing. That's right, when a company wants to outsource, when a 
company wants to shut down their plant in South Carolina or in Ohio, 
and do that production in China, we say to that company: We have a 
treat for you. Get rid of your American workers, shut down the plant, 
move the whole thing to China and you can get a special tax break.
  I happen to think that is absolutely nuts. What kind of a country 
provides a tax incentive for its companies to get rid of American 
workers and employ foreign workers? What kind of a country's tax system 
does that? This country's tax system does it. Yes, we voted on that. I 
offered an amendment to close that insidious loophole, that perversion 
in the Tax Code. Guess what. I lost in the Senate.
  Here's something else. In a recent bill, the Senate Finance 
Committee, in conference, decided that U.S. companies who have foreign 
controlled subsidiaries and have not repatriated their overseas 
earnings to the United States will be able to repatriate that income at 
a tax rate of only 5.25 percent. Well, I have a lot of constituents who 
would love to have that tax rate. Wouldn't that be a wonderful thing? 
If it is good enough for the biggest companies, which outsourced jobs, 
it ought to be good enough for all Americans.

[[Page S11456]]

  Ma Ferguson was Governor of Texas once and was involved in a debate 
about the English-only language back in the 1930s. She had a press 
conference and held up a Bible and she said, ``If English was good 
enough for Jesus, it is good enough for Texas.'' It is the good-enough 
theory, I guess. The 5.25-percent tax rate is good enough for 
corporations that moved American jobs overseas. Why is a 5.25-percent 
tax rate not good enough for people named Johnson and Olsen? Why is 
5.25 percent not good enough for everybody?
  Why is it that this Congress, when it looks at these issues, won't 
even take a baby step in the right direction? We are hemorrhaging good 
jobs in this country. This is a race to the bottom. We fought for a 
century about important things. We fought for a century about the right 
of workers to organize. It is a very important right in America. It was 
a similar fight that lit the fuse that caused freedom all over Eastern 
Europe. Lech Walesa led that fight, the right to organize. People died 
in the streets on that issue--the right to say that we are not going to 
have 12-year-old kids working down in a mine, or in a factory. Child 
labor laws, safe workplace laws--a whole range of issues. We fought for 
a century to create safe workplaces, child labor laws, minimum wages, 
the right to organize, all of these issues, which have, in my judgment, 
made this a better place.
  The fact is, there are American companies now that simply pole-vault 
over the issues and say we don't have to worry about that, about hiring 
kids. We can hire kids, we can hire 12-year-olds, work them 12 hours a 
day, pay 12 cents an hour, and we don't have to worry. How do we do 
that? We hire them overseas, hire them elsewhere. That means those who 
have to compete in this new world order have to compete with countries 
that have decided they are going to make it illegal for workers to 
organize. You have to compete with 12-year-old kids who are paid 12 
cents an hour.
  If you wonder whether that is happening, I can show you stories. 
There is one about a woman named Sadisha, who is making tennis shoes 
for 16 cents an hour. This is an hour and a half of labor in a pair of 
tennis shoes that comes to our store shelves for $80 a pair, and 
Sadisha's pay is 24 cents for making the tennis shoes.
  You think that doesn't happen? It does. I can tell you stories about 
the kids in India who were making carpets, who came to this country and 
testified before the Congress about the conditions in which they 
worked. The people they worked for took gunpowder and lit the gunpower 
on the children's fingertips to create scarring, so these little kids 
could be employed to sew these carpets. And the carpets were sent to 
our store shelves so we could buy them, and congratulate ourselves on 
the low prices.
  Is there an admission price to the American marketplace? Is there? 
Are there some basic set of standards, or is this a race to the bottom 
to have us compete with that sort of situation?
  I held a hearing not too long ago with some young women from Honduras 
working in a sweatshop making designer shirts, for a very prominent 
American label. They were working under incredibly abusive conditions. 
The story is the same all over.
  People talk about this being free trade. Look, this is simply a sea 
of red ink, a trade deficit that is weakening this country, and we have 
not paid any attention to the rules of trade that would begin to stop 
this. We had better wake up and decide that our interest is to be 
protective--and, yes, I use that word even though it is a pejorative 
word these days--protective of the economic interests of this country. 
We must do that.
  I spoke of Lech Walesa. Let me describe his speech to a joint meeting 
of the Congress, one of the most remarkable moments I recall in my 
service here.
  He told us about a Saturday morning in a shipyard in Gdansk, Poland, 
when, having been fired as an electrician in that shipyard, this 
unemployed electrician was leading a strike against the Communist 
government demanding rights for the labor movement in Poland.
  He said they grabbed him that Saturday morning and began to beat him. 
The Communist secret police grabbed him and beat him severely and threw 
him over the barbed wire fence at the edge of the shipyard. He laid 
there, having been beaten severely, face down, bleeding in the dirt. He 
said he wondered while laying there, this unemployed electrician having 
been beaten severely, what to do next. Well, he picked himself up, and 
climbed right back over the barbed wire fence, right back into the same 
shipyard, to continue the fight. Ten years later this unemployed 
electrician was announced at the door of the U.S. House of 
Representatives as the President of his country, the President of 
Poland.
  This was not an intellectual, not a scholar, not a diplomat, not a 
soldier, but an unemployed electrician with uncommon courage. He said 
this to us: We didn't have any guns. The Communists had all the guns. 
We didn't have any bullets. The Communists had all the bullets. We were 
armed only with an idea, a powerful idea: People ought to be free to 
choose their own destiny. And then he said: Ideas are more powerful 
than guns.
  There was a lot of applause that day, and appropriately so--applause 
of courage, the progress towards freedom and labor rights in Poland. 
But around here, we seem to have short memories. We are trading away 
our hard-won rights.
  The first baby step we should have taken in this Congress we decided 
not to take. I offered an amendment, and it was defeated, to stop the 
perverse and insidious tax breaks that incentivize American jobs going 
overseas. Let's not reward companies that move our jobs overseas. Stop 
it; stop it now. It is a baby step to decide to shut down that tax 
incentive.
  We did not get it done this time. I lost that vote. But I am 
relentless, and I will again be on this floor the minute we return in 
January demanding once again an opportunity to debate and to vote on 
this issue. This is about American jobs. It is about hope and 
opportunity in this country. It is about expanding this great American 
experiment, and this issue, I assure you, will not go away.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Oklahoma.

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