[Congressional Record Volume 157, Number 10 (Tuesday, January 25, 2011)]
[Senate]
[Pages S152-S153]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WHITEHOUSE (for himself, Mr. Leahy, Mr. Sanders, Mrs. 
        Boxer, Mr. Durbin, Mr. Brown of Ohio and Mr. Harkin):
  S. 45. A bill to amend the Internal Revenue Code of 1986 to provide 
for the taxation of income of controlled foreign corporations 
attributable for imported property; to the Committee on Finance.
  Mr. WHITEHOUSE. Mr. President, from the Recovery Act to the Small 
Business Jobs Act, in the previous Congress we passed a number of 
substantial pieces of legislation to preserve, protect, and create 
American jobs. The Recovery Act alone has supported between 2.7 and 3.7 
million jobs, including 12,000 jobs in my home State of Rhode Island. 
This was vital in stemming the 700,000-per-month job loss rate we faced 
when the previous administration left office. Without the Recovery Act 
and the other fiscal stimulus we passed over the past 2 years, the 
economy would have been much worse.
  While the Recovery Act protected our country from what would have 
been a far worse economic meltdown, the employment market is still weak 
and families are still hurting. Our national unemployment rate was 9.4 
percent in December--an unacceptably high level. And it was higher 
still in harder hit States such as Rhode Island, where we have had an 
11.5-percent unemployment rate in December. As we begin this new 
Congress, our No. 1 priority must remain job retention and creation.
  The manufacturing industry has historically been the engine of growth 
for the American economy. The manufacturing economy has been especially 
important in the industrial Northeast, particularly in my State of 
Rhode Island. From Slater Mill in Pawtucket--one of the first water-
powered textile mills in the Nation and the birthplace of the 
Industrial Revolution--to high-tech modern submarine production at 
Quonset Point, the manufacturing sector has always been central to 
Rhode Island's economy.
  Unfortunately, as American companies have faced rising production 
costs and increased--and very often unfair--competition from foreign 
firms, U.S. manufacturing employment has plummeted. According to the 
Bureau of Labor Statistics, the number of manufacturing jobs declined 
by almost a third over the past decade, from 17.2 million people at 
work in 2000 to 11.7 million people at work in 2010. That is 6 million 
jobs lost. This decline has been felt most sharply in our old 
manufacturing centers, such as Rhode Island. In Rhode Island, the loss 
of manufacturing jobs in the past decade has topped 44 percent. The 
decline of the manufacturing sector is a primary reason why Rhode 
Island has had greater difficulty than most other States in recovering 
from the recent recession.
  Over and over I have traveled around Rhode Island to meet with local 
manufacturers, listening to their frustrations and discussing ideas to 
help their businesses grow. During these visits, I have heard one theme 
over and over: Unfair foreign competition is killing domestic 
industries. One Pawtucket manufacturer I visited last week told me they 
recently lost 8 percent of their business to a Chinese competitor. It 
is clear to me that if we want to keep manufacturing jobs in this 
country and in Rhode Island, we need to level the playing field for our 
manufacturing companies with their foreign competitors.
  Today I will introduce legislation that will remove one homegrown 
incentive to move jobs offshore and help to make competition fairer for 
companies straggling to keep their factory doors open at plants here in 
the United States. The Offshoring Prevention Act, cosponsored by 
Senators Leahy, Sanders, Boxer, Durbin, Brown of Ohio, and Harkin, 
would end a perverse tax incentive that actually rewards companies for 
shipping jobs overseas. Under current law, an American company that 
manufactures goods in Rhode Island or Montana or Maine must pay Federal 
income tax on profits in the year the profits are earned. That is 
standard tax law. But if that same company moves its factory to another 
country, it is permitted to defer the payment of income taxes from that 
factory and declare them in a year that is more advantageous--for 
example, one in which the company has offsetting tax losses.
  If an American company moves a plant offshore, it acquires this tax 
deferral advantage. It makes no sense that our Tax Code allows 
companies to delay paying income taxes on profits when made through 
overseas subsidiaries but charges those profits in the year they are 
made at home. My bill will put a stop to this practice on profits 
earned on manufactured goods exported to the United States. To put it 
simply: Our tax system should not reward companies for eliminating 
American jobs.
  The Offshoring Prevention Act is based on legislation Senator Byron 
Dorgan offered over the past two decades, again and again. We can all 
remember Senator Dorgan coming to this floor here with pictures of 
iconic American goods, such as York Peppermint Patties, Radio Flyer red 
wagons, Fig Newton cookies, and Huffy bicycles, to highlight the fact 
that the production of these American classic products had moved to 
Mexico, to China, and elsewhere. On dozens, if not hundreds, of 
occasions, Senator Dorgan spoke passionately on this floor about the 
decline of American manufacturing. I am grateful to his leadership on 
this critical issue and for bringing our attention to an unfair tax 
advantage that rewards companies for moving manufacturing jobs 
overseas.
  Last year, a version of Senator Dorgan's bill was included in the 
Creating American Jobs and Ending Offshoring Act. While a majority of 
this body--53 Senators--voted to begin debate on the bill, we were not 
able to overcome a filibuster to have a chance to consider and pass 
this legislation. I am sorry we were not able to pass the bill last 
year, and I will do my best to bring it up for a vote in this new 
Congress.
  Mr. President, keeping jobs in America and providing a level playing 
field for American manufacturing should

[[Page S153]]

not be a Democratic or a Republican issue. We all serve here in the 
Senate to represent the interests of our constituents, and our 
constituents want us to keep these good-paying manufacturing jobs in 
America. I hope that all of our colleagues will join me in passing the 
Offshoring Prevention Act to do just that.
                                 ______