[Congressional Record Volume 157, Number 187 (Wednesday, December 7, 2011)]
[Senate]
[Pages S8415-S8417]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. COLLINS (for herself and Mrs. McCaskill):
  S. 1960. A bill to provide incentives to create American jobs; to the 
Committee on Finance.
  Ms. COLLINS. Mr. President, I rise today, along with my friend and 
colleague Senator McCaskill, to introduce legislation we believe is 
essential to restoring growth and creating jobs in our economy.
  Our bipartisan bill is comprised of proposals in four general 
categories. First: taxes--we would protect American workers from 
payroll tax increases and preserve and provide new tax incentives for 
small business job creators to help spur job growth.
  Second: infrastructure--we propose restoring and expanding funding to 
rebuild our nation's crumbling roads, bridges, and water treatment 
plants, adding jobs now and ensuring that the critical infrastructure 
needed for long-term economic growth is properly maintained.
  Third: sensible regulatory reform--we focus on cutting the tangle of 
red-tape that is holding businesses back from expanding and adding 
jobs.
  Fourth: job training--we propose fundamentally reforming the hodge-
podge of Federal jobs training programs to focus on what really works. 
We also propose extending the charitable deduction for books and 
computers.
  We would offset the cost of these proposals with a 10-year, 2 percent 
surtax on those with incomes of a million dollars or more, but with a 
``carve out'' to protect small business owner-operators: our nation's 
job creators.
  Let me discuss these proposals in further detail. With respect to 
taxes, Senator McCaskill and I believe that action must be taken 
quickly to extend the two percent payroll tax cut for employees that is 
scheduled to expire at the end of this month. Unless we do so, 159 
million Americans will face a tax increase of up to $2,000 at a time 
when the economy is still weak. With so many American families 
struggling to make ends meet, the last thing we ought to do is to allow 
an automatic tax increase to take effect in less than a month.
  But keeping taxes steady won't be enough to get the economy going 
again. If we want more jobs, we must do more. That is why Senator 
McCaskill and I are proposing that the two percent payroll tax cut be 
extended to employers, too, on the first $10 million of payroll. This 
targets small and medium-sized employers who have historically been the 
source of our nation's job growth.
  We also extend bonus depreciation and Section 179 expensing at the 
current level, to encourage businesses to use this tax benefit to 
invest in the tools American workers need to remain the best in the 
world.
  In the global competition for jobs, American workers go head-to-head 
with workers from China, India, and other countries, who are paid far 
less than Americans, and whose working conditions would rightly be 
viewed as unacceptable here in the United States.
  The middle-class, the source of America's economic strength, was 
built by making sure American workers had the best tools in the world, 
so they would be the most productive workers in the world. Productivity 
and tools go hand-in-hand, and in the global competition for jobs, the 
worker with the best tools wins.
  The provisions I have described will help businesses invest and keep 
the American worker ahead of the global competition.
  There are several other tax benefits in our package. One is an 
innovative proposal that originated with Senators Mark Pryor and Scott 
Brown to generate investment in new high-tech companies. We all know 
how dynamic these young companies can be--a decade ago, Google was a 
fledgling search engine and Facebook didn't even exist. Today, Google 
executes billions of searches every week, and Facebook has 800 million 
members, and growing. Both are valued at more than $100 billion, but 
most important, both employ thousands of American workers.
  But without the right investment at the right time, these two 
companies would not exist. Nor would many other companies in the high-
tech field, or the millions of jobs they have created. The tax credit 
we propose will help the high tech firms of the future get the support 
they need to get off the ground, and become a part of the American 
story.
  It is also important to help established companies stay on the 
cutting edge by extending the Research and Development tax credit.
  Before I go on to describe the other provisions of this bipartisan 
jobs bill, I would like to explain further the small business ``carve 
out'' we built into our offset. Many on my side of the aisle have 
voiced the concern that a surtax would fall on small businesses. I 
share that concern. Most of our nation's small businesses are 
structured as ``flow-through'' entities, such as ``subchapter S'' 
corporations. These flow-through entities do not pay taxes directly, 
but instead distribute their income to their owners, who then pay tax 
on that income on their individual income tax returns.
  To impose a surtax on this income as if it were the owners' personal 
income would be a mistake--we would be raising taxes on our nation's 
job creators at the exact same time we are trying to get our nation's 
job engine started again.
  If we ignore this reality, we risk taxing small businesses as if they 
are ``the wealthy.'' They are not.
  We cannot impose higher taxes on flow-through income without taking 
money out of small businesses--money that is needed to help those small 
businesses invest and add jobs. That is why Senator McCaskill and I are 
proposing to ``carve out'' owner-operator small business income so it 
is not subject to the surtax.
  The way we would accomplish this is to separate ``active business 
income'' from ``passive business income,'' tracking the passive 
activity rules of Section 469 of the tax code. Basically, this

[[Page S8416]]

means that business owner-operators who ``materially participate'' in 
the running of their businesses will be protected from the surtax, 
while those who are passive investors will pay higher rates.
  This is as it should be. Owner-operators are actively engaged in 
running their small businesses. They are on the front lines of our 
economy, and of the communities in which they live. The pass-through 
income that shows up on their tax returns is critical to their ability 
to finance investment, and grow their businesses. Left in their hands, 
this income will lead to more jobs and buy the tools that make American 
workers more productive.
  Let me turn now to the other provisions of our bill.
  With respect to infrastructure, our bill would provide $10 billion to 
capitalize the U.S. Department of Transportation's State Infrastructure 
Bank program. These banks are revolving loan funds established and 
administered by State DOT's to complement traditional funding by 
providing loans, loan guarantees, and other forms of non-grant 
assistance that leverage private dollars. This one-time infusion would 
allow states to voluntarily utilize this additional funding, while at 
the same time ensuring that there is sufficient oversight, reporting 
and public disclosure requirements.
  Additionally, my bill would provide $25 billion in supplemental 
appropriations for existing highway and bridge formula programs. This 
funding is meant to supplement and not replace the approximately $40 
billion appropriated annually under the current Surface Transportation 
authorization for similar transportation programs. According to the 
Federal Highway Administration's most recent estimates, every $1 
billion spent on highway construction supported approximately 30,000 
jobs.
  It is essential that we rebuild our nation's deteriorating 
infrastructure. According to the American Society of Civil Engineers, 
it would cost more than $200 billion annually to substantially improve 
the conditions of our nation's roads and bridges--far more than current 
levels of national investment. Our legislation will not only create 
jobs but also bolster important road and bridge investments throughout 
the United States.
  I am pleased to hear that the American Association of State Highway 
and Transportation Officials, AASHTO, a nonprofit, nonpartisan 
association, supports what we have proposed in our bill. These 
investments not only create jobs now when they are needed most, but 
they also address our nation's aging infrastructure, a daunting but 
essential task.
  There is also no shortage of sewer and drinking water infrastructure 
needs in states and communities across the nation. The American Society 
of Civil Engineers' latest infrastructure report card gave the nation's 
water infrastructure a D-, and the Environmental Protection Agency 
estimates $187.9 billion in wastewater needs and $334.8 billion in 
drinking water needs over the next 20 years.
  To help ensure the provision of safe water, we propose providing $800 
million in additional funding to the Clean Water and Drinldng Water 
State Revolving Loan Funds, CWSRF and DWSRF, to help ensure these 
critical infrastructure programs are funded at the fiscal year 2010 
levels of $2.1 billion for CWSRF and $1.387 billion for DWSRF. Water 
infrastructure investments provide significant environmental, economic, 
and public health benefits in our states and communities.
  Investment in water infrastructure also creates jobs. The National 
Association of Utility Contractors, for example, estimates that one 
billion dollars invested in water infrastructure can create over 26,000 
jobs.
  As I meet with businesses, a chief complaint is that regulations and 
red tape are preventing them from growing and adding jobs. Our bill 
also contains important reforms to our regulatory system by 
incorporating provisions I offered earlier this year as the CURB Act, 
which stands for Clearing Unnecessary Regulatory Burdens. These 
provisions are designed to force Federal agencies to cut the red tape 
that impedes job growth.
  All too often it seems Federal agencies do not take into account the 
impacts to small businesses and job growth before imposing new rules 
and regulations. The bill we are introducing today obligates them to do 
so in three ways: first, by requiring Federal agencies to analyze the 
indirect costs of regulations, such as the impact on job creation, the 
cost of energy, and consumer prices.
  Currently, Federal agencies are not required by statute to analyze 
the indirect cost regulations can have on the public, such as higher 
energy costs, higher prices, and the impact on job creation. However, 
Executive Order 12866, issued by President Clinton in 1993, obligates 
agencies to provide the Office of Information and Regulatory Affairs 
with an assessment of the indirect costs of proposed regulations. Our 
bill would essentially codify this provision of President Clinton's 
Executive Order.
  Second, our bill obligates Federal agencies to comply with public 
notice and comment requirements and prohibits them from circumventing 
these requirements by issuing unofficial rules as ``guidance 
documents.''
  After President Clinton issued Executive Order 12866, Federal 
agencies found it easier to issue so- called ``guidance documents,'' 
rather than formal rules. Although these guidance documents are merely 
an agency's interpretation of how the public can comply with a 
particular rule, and are not enforceable in court, as a practical 
matter they operate as if they are legally binding. Thus, they have 
been used by agencies to circumvent OIRA regulatory review and public 
notice and comment requirements.
  In 2007, OMB issued a Bulletin which contained a provision closing 
this loophole by imposing ``Good Guidance Practices'' on Federal 
agencies. This requires agencies to provide public notice and comment 
for significant guidance documents. Our bill would essentially codify 
this OMB Bulletin.
  Third, our bill helps out the ``little guy'' trying to navigate our 
incredibly complex and burdensome regulatory environment. So many small 
businesses don't have a lot of capital on hand. When a small business 
inadvertently runs afoul of a Federal regulation for the first time, 
that first penalty could sink the business and the jobs it supports. 
Our bill directs agencies to search their files to determine whether a 
small business is facing a paperwork violation for the first time, and 
to offer to waive the penalty for that violation if no harm has come of 
it. It simply doesn't make sense to me to punish small businesses the 
first time they accidently fail to comply with paperwork requirements, 
so long as no harm comes from that failure.
  One example of a planned onerous regulatory action by the 
Environmental Protection Agency is the Maximum Achievable Control 
Technology standards for boilers and incinerators, known as Boiler 
MACT. While currently being reworked by the agency, these rules could 
cost manufacturers billions of dollars, and potentially lead to the 
loss of thousands of jobs, especially in some of the hardest hit areas 
across the Nation. According to a recent study commissioned by the 
American Forest and Paper Association, implementing the rule as 
previously drafted could cause 36 pulp and paper mills around the 
country to close, putting over 20,000 Americans out of work--18% of the 
industry's workforce. For this reason, our legislation includes the EPA 
Regulatory Relief Act, which currently has 40 bipartisan cosponsors, to 
guarantee the 15 months the EPA itself requested, to provide the agency 
with the testing data needed for achievable rules and provide 
manufacturers with the time needed for the capital planning to comply 
with these very complex and expensive rules.
  Maine has lost more than a third of its manufacturing jobs during the 
past decade, and I am wary of imposing costly new regulations that 
could lead to more mill closures and lost jobs. I remain committed to 
working with my Senate colleagues and the EPA to help ensure that the 
Boiler MACT rules are crafted to protect public health without harming 
the forest products industry, which is the lifeblood of many small, 
rural communities.
  We must also act to reform our Federal jobs training programs. In our 
current fiscal climate, we need to ensure that our Federal dollars are 
being used

[[Page S8417]]

as efficiently and productively as possible. The Collins-McCaskill bill 
requires OMB to study the consolidation of duplicative job training 
programs and make legislative recommendations to Congress that 
contemplate consolidating job training programs under a single agency. 
Of the savings that result from this consolidation, half will be 
devoted to classroom, field, and hands-on training, and the other half 
will be be used to reduce the deficit.
  In closing, Senator McCaskill and I believe this is the first 
comprehensive bipartisan jobs bill to be introduced in the Senate since 
the President's speech before the Joint Session of Congress in 
September. With the end of the year just three weeks away, we must take 
action now to protect the American public from a tax increase that will 
occur automatically on January 1. We must also work together to help 
grow the economy and add jobs. In achieving these goals, I would ask my 
colleagues to consider the approach Senator McCaskill and I have 
proposed in this bipartisan jobs legislation.
                                 ______