[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.

[[Page S4248]]

  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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