[Congressional Record Volume 157, Number 96 (Thursday, June 30, 2011)]
[Senate]
[Pages S4265-S4268]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                               The Budget

  Mr. NELSON of Florida. Mr. President, the negotiation over this 
deficit

[[Page S4266]]

reduction and the debt ceiling package has hit the critical stage. It 
is beginning to come into the consciousness of the country and most of 
the people around here. Those people have in some cases wanted to push 
it off, in other cases have said: Oh, the debt ceiling? That is not 
such a big deal.
  It is baffling that people would say that. The economic chaos that 
would reign in this country and the world financial markets if the 
Federal Government was not able to pay all of its bills would be 
catastrophic. How can any person in a responsible position say that?
  But it is also baffling that there are so many people--and you know 
who they are--who have decided to draw a line in the sand on any 
deficit reduction and say: It is going to be my way or no way. That is 
part of the problem of what is going on in this country right now. This 
is a big, broad, diverse, complicated country. The very principle of a 
body such as this is that you respect the other fellow's point of view. 
When you have differences of opinion, you try, as the Good Book says, 
to say, ``Come, let us reason together'' and to hammer out a workable 
solution. Yet you hear the rhetoric--it is going to be their way or no 
way, so no matter whether you talk about closing corporate tax 
loopholes--no. That has to do with tax revenue. It sure does, but 
certain people are not paying their taxes due to loopholes.
  Two weeks ago, we acted on one of those tax loopholes overwhelmingly. 
This Senate voted to get rid of one of those tax loopholes. It was for 
corn ethanol, the big subsidy. It was multibillions of dollars per year 
that was a tax credit--in other words, lost tax revenue. The Senate 
finally realized that was not worthwhile.
  Why are we saying we should not put that in as a part of the package 
on deficit reduction? A dollar of deficit reduction is a dollar of 
deficit reduction regardless of where it comes from, whether it comes 
from actually whacking Federal spending or whether it is cutting some 
of the special tax breaks for some of this country's most profitable 
multinational corporations. The objective is to bring down the deficit.
  What is a deficit? You have income coming in the form of tax revenue, 
you have outflow going out in the form of expenditures, and when the 
two are equal, that is a balanced budget. When I came into the Senate 
11 years ago, we had 4 years of this. Tax revenue was above annual 
expenditures, and for 4 years, we had a surplus. But this is what has 
happened: The expenditures are up here and the tax revenue is down 
here.
  If you are going to get the budget eventually in balance over the 
course of a decade, you have to do this. That doesn't mean just tax 
increases. It can be done by eliminating tax expenditures. Over the 
next 10 years, tax expenditures in the existing Tax Code are $14 
trillion. You don't have to get rid of all of them. Some of them we 
don't want to get rid of because they are good tax policy, they are 
good public policy. But you can sure get rid of some of them.
  But we have the other side over there who will not even talk about 
some of these tax loopholes we ought to be cutting. They say that is 
increasing taxes. Now, the truth be known, it is because most of them, 
whether they like it or not, on that side of the aisle have taken a 
pledge to a fellow named Grover Norquist and said they will not vote 
for any new taxes, and it is being interpreted that tax expenditures--
in other words, tax deductions, tax credits, or tax exclusions--that if 
you close those tax loopholes, that is going to be new taxes. Well, 
that is tax revenue that is not coming into the U.S. Treasury because 
some special interest is getting preferential treatment that we ought 
to question. A good example of this is what we just voted on in the 
removal of the tax subsidy for corn ethanol.
  At the end of the day, for Americans, this debate is going to matter 
hugely. If we have to do something by just cutting expenditures and not 
remove the tax loopholes, then in order to address the deficit--
remember, this is the deficit, this is expenditures, and this is tax 
revenue, and if we have to bring that into balance by only moving down 
the expenditures, we are going to have to take it out of the hide of 
retirees, out of the hide of hospitals, schools, what Senator Hutchison 
and I were just talking about, the space program, the coastal 
preservation programs, our national parks, and the Federal prisons. Are 
we going to put an end to the narrow tax breaks for the well-connected 
or are we just going to whack all of those programs?
  The view of this Senator is that if you really want to get a package 
that is going to be serious and that is real money, that is not smoke 
and mirrors and budgetary sleight-of-hand, then you are going to have 
to get a package of about $4 trillion in 10 years of deficit reduction.
  There is no reason, if you are going to be serious about budget 
reduction, that special benefits for oil companies, for pharmaceutical 
companies, hedge funds, and other special interests should be a sacred 
cow and not to be touched. What message does it send to the everyday 
American about their government and whom that government represents if 
we just take it out of the hides of people such as those I just 
mentioned, like retirees?
  Basically, I suggest you take a page from one of our illustrious 
former President, President Reagan. In 1984, the Federal Government was 
confronted by deficits as far as the eye could see. I was a young 
Congressman at the time. President Reagan understood that it was 
appropriate to close those tax loopholes as part of the deficit 
reduction process, and the Deficit Reduction Act of 1984 included more 
than 60 provisions aimed at shutting down tax shelters and ending 
abusive special interest tax breaks. That 1984 bill targeted foreign 
investors who sought to use the offshore havens to dodge U.S. taxes, 
and it targeted Wall Street's use of financial derivatives to evade 
U.S. income tax, and it included a provision targeting the windfall 
profits for oil companies.
  That brings me to an example I want to discuss in some detail. For 
decades, oil companies have been enjoying the generous tax subsidies of 
the American taxpayer by using their ample resources to get tax 
benefits very generously given from the Federal Government. Oil and gas 
companies are experts at figuring out the narrow tax break, and it 
benefits their interest, and it does so particularly with regard to 
offshore drillers.
  The largest of all the dedicated oil and gas tax breaks is the 
ability of the oil companies to immediately expense intangible drilling 
costs. These costs include drilling and development work completed 
before a well begins production. Oil companies are able to deduct--in 
other words, to write off as an expense--those costs and do so 
immediately.
  The tax break for intangible drilling expenses is going to cost the 
American taxpayer $12.4 billion over the next decade if it is not 
repealed. The President has proposed its repeal. Several of us in the 
Senate have proposed the repeal and have filed a bill to do it. The 
repeal of this tax break on intangible costs for oil companies ought to 
be included in a deficit reduction package. Remember, it is a choice: 
Are we going to cut people like retirees and the space program and 
educational expenses and the environment and the Federal prisons or are 
we going to get tax revenue from special tax breaks like these?
  For several years, oil companies working offshore have been devoting 
significant resources toward complex tax schemes to avoid paying taxes 
to Uncle Sam. Let's take a closer look.
  Transocean, that is a name that ought to ring familiar. They were the 
ones, remember, who operated the defective blowout preventer, the one 
that did not work, that was supposed to jam the two cylinders together 
and cut off the oil flow when there was an explosion on the Deepwater 
Horizon oil rig.
  Let's look at the record. In 1999, Transocean moved its place of 
incorporation from Delaware to the Cayman Islands. In 2008, it moved 
from the Cayman Islands to Switzerland. This tax-avoidance operation, 
referred to as ``corporate inversion,'' had no real effect on where 
Transocean does business. Even after it moved to the Cayman Islands, it 
continued to be, in fact, managed and controlled from Houston, TX. It 
continues to have substantial drilling activities in American waters. 
And by changing its legal domicile from Delaware to a tax haven in the 
Caribbean, Transocean was able to cut its tax bill nearly in half. 
Martin Sullivan, a former economist at the Joint

[[Page S4267]]

Commission on Taxation, estimates that Transocean's offshore tax scheme 
saved the company $1.9 billion from 2002 to 2009. That is an example of 
one of these tax subsidies that ought to be eliminated. Congress shut 
down those corporate inversions in 2004 but only on a going-forward 
basis. Until Congress gets serious about taxing U.S.-managed companies 
that deceptively claim to be foreign corporations, Transocean and 
others will continue to benefit. Transocean is not alone. We know of at 
least five oil companies involved in offshore drilling that moved their 
legal domicile to a tax haven in the Caribbean in order to avoid paying 
U.S. income tax.

  I will conclude by saying, unlike Transocean, BP has never been an 
American corporation. But it has no problem in reaping the benefits of 
our porous Tax Code. We learned soon after the $20 billion claims 
facility was announced that BP would be writing off the entire expense 
for tax purposes, writing off all of that expense for the oil that was 
spilled that hurt so many of our residents in Florida and all up and 
down the gulf coast. They are going to write that off as a tax 
deduction, and, therefore, pay less taxes. We estimate this will reduce 
the tax burden by nearly $9 billion for BP. Several of us have 
introduced legislation to shut down this abusive tax break as well, and 
it is another that we ought to put in this deficit reduction package.
  I conclude by saying these corporate tax loopholes for oil companies 
should be part of any deficit reduction package, and this Senator is 
going to continue to stand up and fight to ensure they are a part of 
that deficit reduction package.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. What is the pending business before the Senate?
  The PRESIDING OFFICER. The Petraeus nomination. The Senator from 
Arizona is recognized.
  Mr. McCAIN. Mr. President, I ask unanimous consent to engage in a 
colloquy with the Senator from South Carolina.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. McCAIN. In a few minutes we will be casting, I am sure, a 100-0 
vote to confirm General David Petraeus as the new Director of the 
Central Intelligence Agency, and obviously his nomination is supported 
by all Members of the Senate, and I am sure all Americans, especially 
those, such as the Senator from South Carolina and myself, who have had 
the great privilege and honor of knowing General Petraeus for many 
years and watching him lead the men and women serving in our military 
in a fashion that I have never seen surpassed. The Senator from South 
Carolina has had the unique privilege and responsibility to serve under 
General Petraeus in uniform, because, as most of our colleagues know, 
the Senator from South Carolina also serves as a colonel in the South 
Carolina National Guard and in the legal corps as a JAG officer.
  The Senator from South Carolina has worked with General Petraeus both 
in Iraq and Afghanistan on many of the important issues concerning 
detainees as well as other issues. Before I ask the Senator from South 
Carolina for his comments, I wish to repeat what I said before. I don't 
believe that in my life, which has been blessed to know many 
outstanding military leaders of all branches of the service, I have 
ever quite encountered a military leader or civilian leader, for that 
matter, with the combination of charisma and intellect General Petraeus 
possesses. The Senator from South Carolina, the Senator from 
Connecticut, Senator Lieberman, and I had the unique opportunity, among 
many visits we made to Iraq and Afghanistan, one Fourth of July in 2007 
to be present at a reenlistment ceremony that took place in the palace 
in Baghdad. There were a couple of thousand spectators and there were 
well over 200 young men and women who had agreed to reenlist, to 
continue to serve in Iraq when they could have fulfilled their 
commitment they made to serve in the military and gone home to their 
families and a grateful nation. Instead, they chose to reenlist, to 
stay, and continue the fight. Part of that ceremony was to administer 
the oath of citizenship to over 75 people who were not born in the 
United States of America, who were not citizens, who were green card 
holders, who were legally in the United States as green card holders 
but had joined the military in order to serve and to achieve an 
accelerated path to citizenship.
  What struck me at that ceremony was that in the front row there were 
three empty seats with boots on them of individuals who were green card 
holders who were scheduled to take the oath of citizenship and who had 
been killed in the previous few days in action, serving their country 
in Iraq.
  I was privileged to speak. The Senator from South Carolina spoke. The 
Senator from Connecticut spoke. But when General David Petraeus spoke 
to those assembled men and women who are serving their country, it was 
very obvious of the not only respect but admiration every one of those 
young Americans felt for the inspirational leadership General Petraeus 
had provided them. I might point out it was a time when most experts 
and many politicians and Members of this body predicted the surge would 
fail. Well, I think what they didn't take into account was the 
incredible leadership and implementation of a strategy that was 
embodied by GEN David Petraeus and the young men and women who are 
serving.
  So I am confident as we continue the fight against al-Qaida and the 
radical Islamic extremists who want to attack and destroy our country, 
that now General Petraeus, soon to be Director of the CIA, will provide 
our Nation with the very best strategy, tactics, thought, and action to 
keep our Nation safe.
  I don't very often come and talk about nominees and spend the 
Senate's time, but I know I express the appreciation and affection of 
all those men and women, both serving now and in the past, who had the 
great honor and privilege of serving under General Petraeus and to wish 
him a well done and smooth sailing and following winds as he assumes 
his new responsibilities which will continue to keep America safe.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. GRAHAM. I think our American military will be studying the 
Petraeus tactics and strategy that he implemented in Iraq and 
Afghanistan for generations to come. In January of 2007 when the surge 
was announced, I had had the pleasure of being over in Iraq in April, 
but I remember a letter issued by General Petraeus to all those under 
his command and it was basically entitled ``Hard is not Hopeless.'' He 
explained in great detail in the letter how we would move forward as a 
nation, that it would be difficult, it would be hard, but not hopeless. 
I have seen the inspiration he provides to our men and women in 
uniform, and I cannot tell you how much this country owes General 
Petraeus and his family. He has been deployed almost continuously since 
2001, but what he was able to accomplish in Iraq with the help of those 
under his command, he will be the first to say, they deserve the 
credit.
  And now Afghanistan. He came into Afghanistan under very difficult 
circumstances, losing a commander in the field. The progress in the 
last year has been stunning. The Taliban in the south has been knocked 
down hard. There is a 90,000 increase in the Afghan national security 
forces. We have a new training program to train Afghan security forces, 
and I think it will pay great dividends.
  To the President, you have chosen wisely in picking David Petraeus to 
be the Director of the CIA.
  I am confident Director Petraeus will do as good a job for the 
country as General Petraeus, and that is saying a lot. Following Leon 
Panetta, who did a great job, we are in good hands as a nation. I don't 
believe any single person understands the threats America faces better 
than General Petraeus. At the CIA he will have a chance to take the 
fight to the enemy in a different way. We will not have available 
forever 100,000 troops to be used in theaters of battle.
  We are going to bring our troops home from Iraq and Afghanistan. I 
hope we do it smartly based on conditions. But this fight is morphing 
into other countries, Yemen, Somalia, the Horn of Africa, and the 
Nation is playing a more crucial role in our Nation's defense than at 
any time in the history of the CIA. We will be blessed to have

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David Petraeus to be Director of the CIA. He understands the threats. I 
think he will be able to marshal the resources of the CIA to keep the 
enemies on their heels and to reinforce to our allies that we are a 
reliable partner and to our enemies there is no place you can hide. 
There is no passage of time that will keep you safe from American 
justice.
  I hope the Congress--I know Senator Chambliss will, the Senate in 
particular--will listen to General Petraeus, who will soon be Director 
Petraeus, about how to make sure the CIA is equipped and funded to take 
on the enemy. In this war on terror, we are fighting an idea. There is 
no capital to conquer, there is no air force to down, there is no navy 
to sink. We are battling an idea. And the way we ultimately become safe 
is to empower those who have the will to fight the terrorists in their 
backyard to provide them with the capacity to let the terrorists 
organizations know we will follow you to the gates of hell, that we 
will never relent. The CIA and the brave men and women who serve in 
that organization are becoming the tip of the spear in this battle. 
What happened in Somalia yesterday, what is going to happen in the 
future in Yemen and Somalia is a direct result of good intelligence and 
national will.
  To Senator McCain and those who have gotten to know General Petraeus, 
I can assure you that President Obama chose wisely. This is the perfect 
job for David Petraeus to take up for the Nation. He has the 
understanding of the threats we face and the CIA is the platform we 
will be using against the enemy more effectively than any other 
platform I know.
  With that, I look forward to casting my vote for Director of the CIA 
David Petraeus, and I hope everybody in this body will provide a vote 
of confidence to General Petraeus. He has earned this. America is in 
good hands with David Petraeus being the CIA Director.
  I yield. I note the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. McCAIN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Under the previous order, the question is on the Petraeus nomination.
  Mr. GRASSLEY. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The question is, Will the Senate advise and consent to the nomination 
of David H. Petraeus, of New Hampshire, to be Director of the Central 
Intelligence Agency?
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from California (Mrs. Boxer), 
the Senator from Vermont (Mr. Leahy), and the Senator from New Mexico 
(Mr. Udall) are necessarily absent.
  I further announce that, if present and voting, the Senator from 
Vermont (Mr. Leahy) and the Senator from New Mexico (Mr. Udall) would 
each vote ``yea.''
  Mr. KYL. The following Senators are necessarily absent: the Senator 
from North Carolina (Mr. Burr), the Senator from Oklahoma (Mr. Inhofe), 
and the Senator from Kansas (Mr. Moran).
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 94, nays 0, as follows:

                      [Rollcall Vote No. 104 Ex.]

                                YEAS--94

     Akaka
     Alexander
     Ayotte
     Barrasso
     Baucus
     Begich
     Bennet
     Bingaman
     Blumenthal
     Blunt
     Boozman
     Brown (MA)
     Brown (OH)
     Cantwell
     Cardin
     Carper
     Casey
     Chambliss
     Coats
     Coburn
     Cochran
     Collins
     Conrad
     Coons
     Corker
     Cornyn
     Crapo
     DeMint
     Durbin
     Enzi
     Feinstein
     Franken
     Gillibrand
     Graham
     Grassley
     Hagan
     Harkin
     Hatch
     Heller
     Hoeven
     Hutchison
     Inouye
     Isakson
     Johanns
     Johnson (SD)
     Johnson (WI)
     Kerry
     Kirk
     Klobuchar
     Kohl
     Kyl
     Landrieu
     Lautenberg
     Lee
     Levin
     Lieberman
     Lugar
     Manchin
     McCain
     McCaskill
     McConnell
     Menendez
     Merkley
     Mikulski
     Murkowski
     Murray
     Nelson (NE)
     Nelson (FL)
     Paul
     Portman
     Pryor
     Reed
     Reid
     Risch
     Roberts
     Rockefeller
     Rubio
     Sanders
     Schumer
     Sessions
     Shaheen
     Shelby
     Snowe
     Stabenow
     Tester
     Thune
     Toomey
     Udall (CO)
     Vitter
     Warner
     Webb
     Whitehouse
     Wicker
     Wyden

                             NOT VOTING--6

     Boxer
     Burr
     Inhofe
     Leahy
     Moran
     Udall (NM)
  The nomination was confirmed.
  The PRESIDING OFFICER (Mr. Sanders). Under the previous order, the 
motion to reconsider is considered made and laid upon the table. The 
President will be immediately notified of the Senate's action.
  (At the request of Mr. Reid, the following statement was ordered to 
be printed in the Record.)
 Mrs. BOXER. Mr. President, I was absent for the rollcall vote 
on the nomination of GEN David Petraeus to be the Director of the 
Central Intelligence Agency. Had I been present, I would have voted 
``yea.''
 Mr. MORAN. Mr. President, today, I was unavoidably absent for 
vote No. 104. Had I been present, I would have voted ``yea'' on the 
nomination of GEN David H. Petraeus to be Director of the Central 
Intelligence Agency.

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