[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
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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
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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.
____________________