[Congressional Record Volume 155, Number 159 (Thursday, October 29, 2009)]
[Senate]
[Pages S10878-S10880]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         UNEMPLOYMENT INSURANCE

  Mr. BAUCUS. Mr. President, these days, the economy is foremost on the 
minds of Americans, and well it should be. Two out of five Americans 
say the economy should be our top priority. That is more than twice as 
many as cite any other issue--two times that the economy is much more 
important.
  The unemployment insurance bill before us today helps to address the 
economy in several ways. In several ways, our legislation would help 
Americans to get and keep good jobs. First, our bill would extend much 
needed unemployment benefits. This unemployment insurance relief would 
get money into the hands of people who need it--need it desperately. I 
might say, there are about 15 million Americans out of work chasing 
about 3 million jobs. There are many more people unemployed looking for 
work.
  When we help unemployed Americans, let's also remember we help our 
communities, not just the individuals who receive unemployment 
benefits--and they have earned those benefits--but also the communities 
are helped by payment of those benefits. When we help our unemployed 
neighbors, we also help to keep open the neighborhood grocery store and 
the neighborhood gas station. When we help our unemployed neighbors, we 
also help to keep houses out of foreclosure. When we help our 
unemployed neighbors, we also help our economy; we help ourselves.
  According to officials in my home State of Montana, if we do not pass 
this 14-week extension, then at least 7,000 Montanans will lose their 
unemployment benefits. That is a significant number when we consider 
the population of my State, which is just a little bit over 900,000 
total.
  A report prepared in June for the Montana Manufacturing Center showed 
that nationwide manufacturing employment fell from 13.8 million workers 
at the end of 2007 to 12.4 million workers at the beginning of 2009. 
That is a 10.5-percent drop in little more than a year--a 10.5-percent 
drop in workers in just more than a year. The decline nationwide was 
echoed in Montana, where manufacturing employment fell 8 percent.

[[Page S10879]]

  In south central Montana, logging and milling have slowed down in the 
Bozeman area, just as they have elsewhere in the State. That means 
workers in the logging and milling industries have been losing their 
jobs.
  It is absolutely essential we get this aid to those in need so they 
can continue to put food on the table while they continue to look for 
work.
  A second integral part of this legislative package is the extension 
of the home buyers tax credit. This tax credit has already helped 
nearly 1.5 million Americans to achieve the dream of owning a home. 
Without this tax credit, many of these first-time home buyers would 
have remained on the sidelines. They would have been unable to buy a 
home in these challenging economic times.
  The home buyers tax credit provides up to $8,000 for millions of 
Americans to purchase their first home. The credit has helped to reduce 
the excess supply of homes on the market and, in doing so, the credit 
has helped to stabilize the housing market.

  In many places throughout the country, homes are selling and 
inventories are dropping. The Pending Home Sales Index, a leading 
indicator of existing home sales, rose again in September for the 
eighth straight month. Total housing inventory fell 10.8 percent at the 
end of August.
  Home prices also appear to be slowly recovering. The Case-Shiller 
Home Price Index increased 1.4 percent in June after falling for 35 
consecutive months. These encouraging numbers tell us that the home 
buyer tax credit is working. Yet the housing market remains fragile. 
High unemployment has increased foreclosure rates, inventories remain 
well above normal levels, and homes are worth substantially less than 
they were a year ago.
  In May, back home in Montana, I helped with a charity raffle of a new 
home in Billings. During the event, the homebuilders for this home told 
me how well the home buyer tax credit is working. They said it 
definitely helped to boost their sales. The builder made it very clear 
how much the tax credit has helped in Montana.
  Realtors and home builders across Montana have provided examples of 
the tax credit working to get buyers off the fence and into new homes. 
The Billings Gazette recently reported on one development where 30 
homes were sold this year. Home buyers of 17 of those homes used the 
first-time home buyer tax credit when they bought their home. In 
Bozeman, MT, housing starts and home purchases have dropped off, but it 
is clear that the home buyer tax credit has helped to cushion that.
  The success of the American economy is closely tied to the success of 
the housing market. By helping to stabilize the housing market, the 
home buyer tax credit has helped to shore up the economy as it begins 
to recover. It is important that we temporarily extend the home buyer 
tax credit to further support our recovery. That is why we have 
proposed extending the tax credit to April 30 of next year. Because the 
housing market remains fragile, we propose expanding the credit to 
include a greater number of potential home buyers.
  As before, the $8,000 tax credit would be available to those buying a 
principal residence for the first time, but it will also be available 
to home buyers who have lived in their current residence for 5 years or 
more. These home buyers hoping to move up would be eligible for a 
$6,500 tax credit. This strikes a fair middle ground. We would help 
first-time home buyers and we would also help homeowners looking to 
move up to a new home, but we would exclude from the credit speculators 
who may have recently purchased a home intending to flip it for a fast 
profit.
  Our amendment would also increase income limits. This would enable an 
even greater number of potential home buyers to take the credit. Those 
earning less than $225,000 for joint filers and $125,000 for single 
filers would be eligible. Increasing this threshold would further 
stimulate the housing market by bringing a new group of buyers into the 
market. These days, millions of renters earn more than $75,000 a year.
  Our new home buyers tax credit would also include a ``binding 
contract'' provision that would allow anyone who has entered into a 
binding contract to be eligible for the credit, so long as they close 
on the home within 60 days. Also, the extended tax credit would 
continue to allow military personnel to claim their credit for an 
additional year.
  Many more Americans stand to gain from the extension of the home 
buyers tax credit, and with our amendment they would get help buying a 
new home during these tough economic times.
  Homes that are worth more than $800,000 would not be eligible for the 
home buyers tax credit. We need to target the credit toward those 
potential home buyers who need it most, not those buyers who would have 
bought a new home even without the new credit.
  To address concerns such as those raised by the Treasury Inspector 
General for Tax Administration, we have given the IRS additional tools 
to prevent erroneous credits from being paid.
  It is important that this tax credit does not become a permanent 
fixture in the Tax Code. That is very important. It certainly is to me. 
Our amendment would end the credit on April 30 of next year. This 
extension would get us through the winter, traditionally the worst 
season for real estate. Our amendment would jump-start the housing 
market as it enters the summer months in 2010. With the new ``binding 
contract'' provision, we would effectively extend this tax credit for 7 
months, long enough to encourage home buyers to buy homes but short 
enough to remain fiscally responsible. It is a fair approach and it 
would play an important role in getting the housing market back on its 
feet.
  In addition to unemployment insurance and the home buyer credit, our 
amendment would also add needed net operating loss relief for 
businesses. Under current law, corporations may carry back net 
operating losses 2 years. In the stimulus bill earlier this year, we 
were able to increase that carryback period to 5 years, but only for 
small businesses. The carryback provision for small businesses has been 
a great help to struggling small companies. They were able to carry 
back their losses to profitable years, and then they could file quick 
refund claims. This gave them much needed cash to meet payroll, invest 
in new equipment or inventory, or pay for other current expense 
obligations.
  But many businesses did not qualify for the carryback stimulus 
provision that helped small businesses. Many larger companies are also 
hurting during this economic downturn. Senator Snowe and I recognized 
this during our discussions on the stimulus bill. We introduced a bill 
to expand the needed relief to all businesses, and now we are including 
that relief here.
  The great recession, which I heard to date is officially over because 
now the GDP is growing for the first time in I don't know how many 
months--but the great recession has hurt Montana businesses from 
farming to retail to manufacturing. A recent series in the Billings 
Gazette highlights a number of historically profitable Montana 
industries that are facing serious losses as a result of hard economic 
times. The lumber industry provides an acute example.
  Pyramid Mountain Lumber is the oldest surviving family-owned and 
family-operated mill in Montana. Loren Rose, the controller of Pyramid 
Mountain, reports that their mill has faced increased costs on logs and 
fuel and orders have dropped because of the slowdown in home building. 
The owners have invested everything they have in the mill. They are 
terrific operators. I spent a good bit of time at that mill and I am 
very proud of it. They have done a super job. Loren said the lumber 
mills are ``all in'' as far as ownership investment. They have nothing 
left to invest. Other mill owners have had to shut down. Loren said 
that an NOL provision such as that in our bill would ``absolutely'' 
help in ``providing working capital to the small, independent mills.'' 
That is his quote. Our NOL provision would directly help this industry 
and others in Montana that are struggling to survive in these tough 
economic times. Let's expand the help we provided to small businesses 
to all businesses; that is, all businesses that need the cash infusion 
now.
  The questions always arise: How do we pay for these provisions? Our 
amendment pays for them responsibly. In 2004, Congress created a new 
way for American-based corporations to allocate interest for purposes 
of computing their taxes. The implementation of that allocation method 
was to be effective in tax years beginning after 2010.

[[Page S10880]]

Our amendment delays the effective date of that provision until tax 
years beginning after 2017.
  Our amendment also increases penalties for taxpayers who fail to 
timely file partnership and S-corporation returns. These two provisions 
would allow Congress to provide additional incentives for home buyers 
and implement expanded NOL carryback relief for businesses. Both of 
these goals are big steps toward boosting our economy.
  Our amendment, I believe, is the right approach. I urge my colleagues 
to support it. Let us respond to the concern that is foremost on 
Americans' minds, and that is jobs, that is the economy. Let us pass 
this legislation to help unemployed Americans and provide tax relief, 
and let us pass this legislation that will help Americans to get and 
keep good jobs.
  Mr. President, I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mrs. HUTCHISON. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________