[Congressional Record Volume 157, Number 96 (Thursday, June 30, 2011)]
[Senate]
[Pages S4246-S4249]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MORNING BUSINESS
The PRESIDING OFFICER. Under the previous order, the Senate will be
in a period of morning business until 12 noon, with Senators permitted
to speak therein for up to 10 minutes each, with the time equally
divided and controlled between the two leaders or their designees, with
the majority controlling the first hour and the Republicans controlling
the second hour.
The Senator from New York is recognized.
Mr. SCHUMER. First, Mr. President, I thank my colleague from Oregon.
Once again, he is forthright, he is courageous, he is on the money, and
people should listen to him because he says a lot of good things about
a lot of subjects, including this one. I appreciate what he has said.
After weeks of stops and starts, we are now approaching crunch time
in the debt ceiling talks. I believe a grand bipartisan bargain is
possible but only if my colleagues on the other side of the aisle take
off their partisan blinders. Neither side can afford to cling to their
ideological positions any longer.
To get the economy humming on all cylinders again and avoid a default
crisis, we need to say goodbye to a few sacred cows. Yet, mere weeks
after voting to repeal ethanol subsidies, the other side's leader, the
Senator from Kentucky, has drawn a line in the sand against including
any and all revenue changes in the debt deal. He has said that repeal
of special interest tax breaks is ``politically impossible.'' Well,
that is a curious idea given that the Senator from Kentucky and 33 of
his colleagues are on record as supporting the end of ethanol
giveaways. It seems Leader McConnell would rather end Medicare as we
know it and force cuts to Pell grants and cancer research than
institute a little shared sacrifice.
On this side of the aisle, we want to repeal tax breaks that have no
purpose whatsoever other than to bloat our budget deficit.
Today, I want to highlight one of the most egregiously wasteful
loopholes in the Tax Code: the tax break for yacht owners. Yes, believe
it or not, Uncle Sam subsidizes the purchase of sprawling, luxurious,
72-foot Viking yachts. As long as your yacht has a place to sleep and a
place to--how shall I put it--relieve yourself, you can classify it as
your ``second home'' and claim the mortgage interest deduction. That's
right. The deduction Congress helped create for middle-class families
to realize the American dream of home ownership is helping millionaires
and billionaires get a 35-percent discount on their yachts. In fact,
how-to books on tax avoidance advise readers that ``if you're paying
for your yacht in cash, you're paying too much.'' Millionaires who
would otherwise write a six-figure check for their yacht without
batting an eye instead take out a loan so they can claim the mortgage
interest deduction. The IRS's only requirement is
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that the yacht owner provide proof that they spend 14 days a year on
the boat. If only Gilligan and the Skipper had taken a 14-day trip
instead of a 3-hour tour, they could have expensed the cost to the S.S.
Minnow.
There are tough choices ahead as we seek to achieve our dual goal of
creating jobs and reining in the deficit. But repealing this insane tax
break for yacht owners is not tough at all--not by a mile or, to put it
in terms our nautical friends would understand, not by a league.
I want to make clear that I have nothing against yacht owners. God
bless them. They are doing well for themselves, and in America we
celebrate success and say: Enjoy your success. That is a great thing.
But at a time when the government is tightening its belt and we are
grappling with painful cuts to vital programs, it boggles the mind to
continue to give boaters a tax break they do not need and never should
have had in the first place.
It is a question of priorities. Both sides are for deficit reduction.
If our side dug a line in the sand and said: No cuts to programs, we
would be regarded as way off the deep end and not really wanting to
compromise. Well, the mirror image is exactly true. Just as we must
endure program cuts we consider painful, the other side must endure
cuts they may consider painful on the tax side.
We will not get anywhere unless both sides compromise, and what we
are doing here today--the Senator from Oregon, the Senator from Rhode
Island, the Senator from Illinois, myself, and many others--is we are
showing that there is plenty of room on the tax side--these are small;
there are larger ones--there is plenty of room on the tax side to
eliminate waste, just as there is plenty of room on the spending side
to eliminate waste, and we will not come to a compromise unless--we
will not be able to raise the debt ceiling and get our fiscal house in
order unless both sides give.
Lines in the sand do not help this country. I would plead with my
colleagues, no more lines in the sand. There are just as many wasteful
tax expenditures as there are program expenditures.
I yield the floor.
The PRESIDING OFFICER. The Senator from Rhode Island is recognized.
Mr. WHITEHOUSE. Mr. President, yesterday afternoon I spoke in this
Chamber, and I quoted former Comptroller General David Walker saying
that we as a country face ``large, known and growing structural
deficits that could swamp our ship of state.'' To get our ship of state
in trim, we need to make adjustments; we need to reduce the deficit and
the debt.
I also discussed that when Republicans demand that all ``revenue
raisers'' be taken off the table in our discussions about how we reduce
that deficit and that debt, as the Republican leader has done just this
week, what they are really defending is tax subsidies for profitable
big oil companies; what they are really defending is corporations that
dodge their U.S. taxes by setting up phony business locations in the
Cayman Islands and elsewhere; what they are really defending is ultra-
high-income individuals--the highest 400 income earners in the
country--paying a lower actual tax rate than ordinary working
Americans, in some years lower than truckdrivers, in some years as low
as a hospital orderly.
Just last month, Republicans filibustered a measure that would have
ended $21 billion in completely unnecessary subsidies for the largest
oil companies. We know those oil companies are enjoying record
multibillion-dollar profits, the highest, in some cases, profits any
corporation has ever made, and they do not need continued support from
the American taxpayer--they just do not, not when these other cuts are
being thought of. But our Republican friends went to bat for the big
oil companies, and they fought back our attempt and they protected that
bill oil subsidy.
To keep our ship of state afloat, Republicans are willing to end
Medicare, kick children out of Head Start early education, knock down
Pell grants, and eliminate PBS. But they will fight to protect special
subsidies and tax breaks for big corporations and billionaires.
Today, I rise to discuss one such unjustifiable tax giveaway--a tax
break for private jets for the use of CEOs and other top corporate
executives that has no public policy benefit whatsoever.
The way this works, under current law companies that buy private
jets--planes which can cost upward of $50 million each--can deduct the
value of that jet from their taxes over 5 years. There is a 5-year
depreciation schedule. Airline carriers, on the other hand, the folks
who carry 99 percent of the American public through the air, must
depreciate the value of their planes over 7 years--2 years longer than
for the private executive jets. Now, this may sound like a minor
accounting anomaly, and I am sure that is what the corporate lobbyists
who got this through and stuck into our Tax Code said when they got it
done, but this is one that may cost the government $3 billion in lost
tax revenue over the next decade.
The special treatment of corporate jets, its advantage relative to
jets that regular people fly on when they take to the air, is just one
more example of a Tax Code that is riddled with custom-made provisions,
earmarks in the Tax Code that benefit corporations and the wealthy.
While middle-class families struggle to make car payments and face ever
higher prices at the gas pump, our Tax Code subsidizes the private jet
travel of millionaires and billionaires.
In a time of austerity, when we are being asked to cut education,
when we are being asked to cut science, when we are being asked to cut
health care, it is no time to be protecting a private jet subsidy that
ordinary taxpayers have to make up for through their own taxes, and we
should repeal it as part of a package to lower our budget deficits. I
was disappointed when Senate Republicans rejected our attempt to repeal
Big Oil giveaways, and I hope they will not do the same when we bring
up a corporate jet loophole repeal for a vote.
As we continue to debate ways to close the budget gap, I hope my
Republican colleagues will rethink their determination to defend tax
loopholes for corporations and the wealthy while they are trying to get
rid of Medicare. That is a terrible set of priorities. It is simply
unconscionable for them to talk about cutting education and research
and health programs while they are fighting on the floor to protect, at
all costs, special interest tax subsidies that are on the books.
I yield the floor.
The PRESIDING OFFICER. The assistant majority leader.
Mr. DURBIN. Mr. President, I thank my colleague from Rhode Island.
So people understand this debate, we have a deficit problem--serious.
We borrow 40 cents from other countries for every $1 we spend. We
cannot sustain that. Our economy may be the strongest in the world, but
it is being called into question every day. Look what is happening on
the streets of Athens, Greece, and in Portugal and in Ireland because
they went too far, they crossed the point beyond which their creditors
would not go. They were so deeply in debt that their creditors
basically said: We are not going to loan you any more money unless you
change dramatically the way you run your country.
That is the pain that is going through these countries today. We want
to avoid that pain in the United States. To do it, we have to address
the deficit honestly. We have to take a look at this debt we have and
deal with it in honest terms.
Most people have forgotten the fact that 10 years ago--10 years ago--
we were running a surplus in the Federal budget. The last 3 years of
the Clinton administration were surplus years, and now we are in the
deepest debt we have ever been as a nation. We are generating about
$1.4 trillion of additional debt every year.
How did we reach this point? Well, there are a lot of explanations.
When you fight two wars and do not pay for them, it adds to the
national debt. When you pass programs and do not pay for them, it adds
to the debt. When you are already in debt and you give tax breaks to
the wealthiest people in America, it makes your debt worse. Those,
incidentally, were the three policies of the previous administration,
which led us to the point where a surplus, in 8 years, became the
biggest deficit in American history. So now we have to address it.
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What we are saying to our friends on the Republican side of the aisle
is, for goodness' sake, to end a deficit, you cut spending, right?
Right. But to end a deficit, you also cut wasteful tax subsidies. If
you listened this morning to my colleagues, you heard them describe a
few.
The Senator from Oregon talked about in the Tax Code a tax subsidy
for people who raise thoroughbred horses. I love horses. I like going
to race tracks. But to think we are going to subsidize them at the
expense of Medicaid recipients, the poorest children in America, makes
no sense.
Then my colleague from New York, Senator Schumer, talked about tax
subsidies for people who own yachts. For goodness' sake, if we cannot
float the boat of Middle America, help working families across this
country survive, why in the world are we giving a tax subsidy to yacht
owners?
My friend from Rhode Island came and talked about corporate jet
deductibility. I am sorry, I ride jet planes, but they are commercial
jets. The fact that United Airlines and American and the rest of them
do not enjoy the same preferential tax treatment as the wealthiest
businesspeople in America and their yachts is just plain wrong. It is a
subsidy we cannot afford. We should not be subsidizing highfliers in
America when the Republican budget is calling for us to end Medicare as
we know it. It makes no sense.
There is one other provision in the Tax Code I really find troubling.
We literally subsidize American companies that want to ship jobs
overseas. We give them one of the biggest tax breaks in the Tax Code to
leave America, put their production facilities overseas.
So what is happening? Take a look at what has happened since the year
1999 and the number of foreign employees of U.S. multinational
corporations. It goes up every single year--now up to 10 million
foreign employees of American corporations. Now take a look at the U.S.
employees of these same multinational corporations over the same period
of time. Since the year 2000, the number of American employees of U.S.
multinational corporations has continued to go down, almost without
exception.
It is not just a matter of companies saying if they build a
production facility overseas it is the right economic judgment for
their business. It is a matter of the U.S. Tax Code that rewards them
if they do it. What is wrong with this picture? Why are we not
rewarding patriotic American corporations whose owners stay in this
country, employ our people, pay a decent wage with benefits, and want
to prosper here? Should that not be our highest priority rather than
encouraging companies to move production overseas by giving them tax
breaks?
Well, it is an issue I feel strongly about. I want to end the subsidy
to ship American jobs overseas. At a time when we are facing
unemployment in record numbers in some parts of our country, we should
have a Tax Code that helps companies create and save jobs in America. I
ask my friends on the Republican side of the aisle: Do you want to
stand for the subsidies that ship American jobs overseas or do you want
to stand by American workers and patriotic American companies that want
to stay right here at home and create jobs?
Those are the choices. Anyone on the other side of the aisle who
argues that to eliminate tax subsidies is to raise taxes--come on. What
we are doing is giving a tax earmark, a tax special favor to those who
are benefitting, whether they own yachts, racehorses, or whether they
are trying to ship jobs overseas. These are the folks I think have to
be willing to step up and sacrifice so we can reduce our deficit and do
it in a meaningful way.
I see my colleague from Maryland is here.
I yield the floor.
The PRESIDING OFFICER. The Senator from Maryland.
Ms. MIKULSKI. Mr. President, I come to the floor today to talk about
the crisis America is facing. We are facing two crises. We are facing a
significant debt crisis, and we are facing a political leadership
crisis. We need to deal with both. We need to be sure all things are on
the table and all people are at the table trying to find sensible,
pragmatic solutions to be able to move our country forward and
stabilize our economy so we can grow our economy.
Now, I am going to talk first about the debt crisis. Then I am going
to talk about what we need to do to act like Americans. I am for a more
frugal government. We have been voting on cuts in discretionary
spending. I supported the ban on discretionary spending earmarks. You
were a reformer in that area, and I joined with you in that area, Mr.
President.
I also voted for $41 billion in cuts in the continuing resolution. In
April I voted for $78 billion more in cuts. I wanted to avoid a tea
party shutdown and work for this more frugal government. But now we
have to lift the debt ceiling, and in order to do that we need to have
a path forward dealing with both the deficit and debt. In order to do
that, we need to, just as we cut the earmarks on discretionary
spending, cut the tax break earmarks, those tax break earmarks that
have gone to the well connected but who are disconnected from how we
can help our economy grow.
I never thought a budget deal would be easy, but I believed we could
agree on a few key principles. Well, we have not. The Republicans want
to close Social Security Offices. I want to close tax loopholes. They
want to get rid of teachers. I want to get rid of sacred cows. That is
why I voted last week to end the tax break on ethanol production. Wow.
Talk about a tax break earmark. It is ethanol. It has serious
consequences to our budget. It also artificially raises the cost of
corn. So what does that mean to Barb Mikulski?
Well, right now one of the most important industries on my eastern
shore is poultry. Poultry has helped make Maryland great and provided
jobs for thousands of Marylanders, people who work hard, get dirt under
their fingernails, salute the flag.
Well, they want us to act like we salute the flag and work under the
flag. Corn is now $7 a bushel. I have companies that have been around
for over 100 years filing for bankruptcy. Well, I cannot allow that to
go on. We have to get rid of the artificial subsidies and deal with it
and use that money to go into deficit reduction.
So I want part of any agreement that we make to make sure that
eliminating the tax break earmark on ethanol is also in the budget. I
also want to get rid of oil and gas tax breaks. Gas has reached $4 a
gallon in many parts of my State. Yet at the same time, the five
biggest oil companies made $36 billion in profits in the first 3
months--3 months they made $36 billion.
Well, companies making billions in profits should again pay their
fair share. We Democrats voted to end those subsidies and devote $2
billion a year to deficit reduction. Now, the Republicans want to keep
tax break earmarks. I want to get rid of tax break earmarks. But they
refuse to end these giveaways.
There are others. Senator Durbin spoke eloquently about the tax
breaks that send jobs overseas. Those jobs have left. They went on a
slow boat to China, a fast track to Mexico. Other jobs are in dial 1-
800 anywhere but in the USA. We have to have a patriotic Tax Code where
we crack down on the tax cheats and invest the money back here at home.
It is not only the tax cheats, we legally give them money. We take
the money of people who worked in manufacturing, who paid taxes, and
when they paid those taxes, we gave subsidies to send their jobs
oversees. Wow. No wonder people are mad at Congress. They ought to be
mad at Congress.
But I worry about the consequences also of default. When I go around
Maryland, people do not understand what that means. They think when we
raise the debt ceiling it is going to raise their interest rates on
their credit cards, their student loans, or their mortgages in some way
if they have a variable rate. Oh, my gosh. It is just something. We
need to make known in plain English what this means.
The fact that the United States of America might not pay its bills on
August 3 is frightening. It is frightening from the standpoint of
national honor. America should pay its bills. It has always paid its
bills. Also, it is important for our economy. The consequences could be
Draconian, unprecedented, and even well beyond the Armageddon of the
Great Depression. We could, on August 3, not be able to pay our Social
Security benefits. We could
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not be able to pay our veterans benefits.
This is shocking. We cannot allow this to happen. So we have to come
to the table. That is why I said at the opening of my remarks we all
have to be at the table, and all things have to be on the table.
Now, I am going to talk about political leadership. I want to talk
about all of us at the table. I lived through a very serious crisis
when Ronald Reagan was President, and Ronald Reagan, Tip O'Neill, and
Howard Baker provided the political leadership. It was tough. It was
scary.
In 1982, we were scared that we could not meet our obligations, that
our Social Security checks would go out. The trust fund was running on
fumes. America faced the fact that we would go into default with our
senior citizens. President Reagan provided leadership. I did not agree
with everything President Reagan wanted to offer. But he said: We have
to put America first. He called up his friend Tip O'Neill. Tip O'Neill
brought Democrats to the table. Bob Byrd was our party's leader in the
Senate. Those two men stood together as Americans, not as Democrats. We
turned to Bob Dole, chairing the Finance Committee, and Howard Baker.
They came to the table, not as Republicans but as Americans. That is
what we need now. We have to come to the table as Americans.
I love being a Democrat. My family were Democrats. We are going to be
Democrats forever. But what I love more is being an American. I got
into politics as a protester. In other countries they would have thrown
me in prison. Here they put me into politics to stand up for the
people. I would not have been able to go to college; I would not have
been able to pursue the American dream.
I love America and I want America to have a great future ahead of it.
We have to stop acting as if we are the Red Party and the Blue Party.
We have to start behaving as if we are the Red, White, and Blue Party.
Now, I have heard about these pledges to Grover Norquist. But I take
one pledge. I take a pledge to the flag of the United States of
America. One Nation, under God, indivisible, with liberty and justice--
justice--for all. That is what we need to do.
I take an oath on the Constitution to protect and defend the people
and the law that governs it. Let's get real and let's realize whom our
first pledge is to.
So I say to my colleagues on both sides of the aisle: Go back to your
Republican history books. Read what Ronald Reagan did in 1982. Read
what Republican leadership did in 1986. I will do the same for
Democrats. When Tip O'Neill brought us to the table, I had to make
tough votes. We drank strong medicine. But you know what. At the end of
the day we made our obligations. Seniors got their checks, we got the
Social Security trust fund out of that crisis, and we became a stronger
economy and a better America. We can do it. But let's realize to whom
we take our pledge. Mine will always be not to the Democratic Party but
to the United States of America. So let's be at the table and put all
things on the table.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. ISAKSON. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
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