Congressional Record, Volume 159 Issue 57 (Wednesday, April 24, 2013)

[Congressional Record Volume 159, Number 57 (Wednesday, April 24, 2013)]
[Senate]
[Pages S2926-S2955]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

MARKETPLACE FAIRNESS ACT OF 2013

The PRESIDING OFFICER. The clerk will report the bill.
The legislative clerk read as follows:

A bill (S. 743) to restore States' sovereign rights to
enforce State and local sales and use tax laws, and for other
purposes.

The PRESIDING OFFICER. The majority leader.

Amendment No. 741

Mr. REID. Madam President, on behalf of Senators Enzi, Durbin, and
others, I have an amendment at the desk and I ask the clerk to report.
The PRESIDING OFFICER. The clerk will report the amendment.
The legislative clerk read as follows:

The Senator from Nevada [Mr. Reid], for Mr. Enzi, Mr.
Durbin, Mr. Alexander, and Ms. Heitkamp, proposes an
amendment numbered 741.

The amendment is as follows:

Beginning on page 2, line 10, strike ``if the Streamlined''
and all that follows through page 11, line 5, and insert the
following:
if any changes to the Streamlined Sales and Use Tax Agreement
made after the date of the enactment of this Act are not in
conflict with the minimum simplification requirements in
subsection (b)(2). A State may exercise authority under this
Act beginning 180 days after the State publishes notice of
the State's intent to exercise the authority under this Act,
but no earlier than the first day of the calendar quarter
that is at least 180 days after the date of the enactment of
this Act.
(b) Alternative.--A State that is not a Member State under
the Streamlined Sales and Use Tax Agreement is authorized
notwithstanding any other provision of law to require all
sellers not qualifying for the small seller exception
described in subsection (c) to collect and remit sales and
use taxes with respect to remote sales sourced to that State,
but only if the State adopts and implements the minimum
simplification requirements in paragraph (2). Such authority
shall commence beginning no earlier than the first day of the
calendar quarter that is at least 6 months after the date
that the State--
(1) enacts legislation to exercise the authority granted by
this Act--
(A) specifying the tax or taxes to which such authority and
the minimum simplification requirements in paragraph (2)
shall apply; and
(B) specifying the products and services otherwise subject
to the tax or taxes identified by the State under
subparagraph (A) to which the authority of this Act shall not
apply; and
(2) implements each of the following minimum simplification
requirements:
(A) Provide--
(i) a single entity within the State responsible for all
State and local sales and use tax administration, return
processing, and audits for remote sales sourced to the State;
(ii) a single audit of a remote seller for all State and
local taxing jurisdictions within that State; and
(iii) a single sales and use tax return to be used by
remote sellers to be filed with the single entity responsible
for tax administration.
A State may not require a remote seller to file sales and use
tax returns any more frequently than returns are required for
nonremote sellers or impose requirements on remote sellers
that the State does not impose on nonremote sellers with
respect to the collection of sales and use taxes under this
Act. No local jurisdiction may require a remote seller to
submit a sales and use tax return or to collect sales and use
taxes other than as provided by this paragraph.
(B) Provide a uniform sales and use tax base among the
State and the local taxing jurisdictions within the State
pursuant to paragraph (1).
(C) Source all remote sales in compliance with the sourcing
definition set forth in section 4(7).
(D) Provide--
(i) information indicating the taxability of products and
services along with any product and service exemptions from
sales and use tax in the State and a rates and boundary
database;
(ii) software free of charge for remote sellers that
calculates sales and use taxes due on each transaction at the
time the transaction is completed, that files sales and use
tax returns, and that is updated to reflect rate changes as
described in subparagraph (H); and
(iii) certification procedures for persons to be approved
as certified software providers.
For purposes of clause (iii), the software provided by
certified software providers shall be capable of calculating
and filing sales and use taxes in all States qualified under
this Act.
(E) Relieve remote sellers from liability to the State or
locality for the incorrect collection, remittance, or
noncollection of sales and use taxes, including any penalties
or interest, if the liability is the result of an error or
omission made by a certified software provider.
(F) Relieve certified software providers from liability to
the State or locality for the incorrect collection,
remittance, or noncollection of sales and use taxes,
including any penalties or interest, if the liability is the
result of misleading or inaccurate information provided by a
remote seller.
(G) Relieve remote sellers and certified software providers
from liability to the State or locality for incorrect
collection, remittance, or noncollection of sales and use
taxes, including any penalties or interest, if the liability
is the result of incorrect information or software provided
by the State.
(H) Provide remote sellers and certified software providers
with 90 days notice of a rate change by the State or any
locality in the State and update the information described in
subparagraph (D)(i) accordingly and relieve any remote seller
or certified software provider from liability for collecting
sales and use taxes at the immediately preceding effective
rate during the 90-day notice period if the required notice
is not provided.
(c) Small Seller Exception.--A State is authorized to
require a remote seller to collect sales and use taxes under
this Act only if the remote seller has gross annual receipts
in total remote sales in the United States in the preceding
calendar year exceeding $1,000,000. For purposes of
determining whether the threshold in this section is met, the
gross annual receipts from remote sales of 2 or more persons
shall be aggregated if--
(1) such persons are related to the remote seller within
the meaning of subsections (b) and (c) of section 267 or
section 707(b)(1) of the Internal Revenue Code of 1986; or
(2) such persons have 1 or more ownership relationships and
such relationships were designed with a principal purpose of
avoiding the application of these rules.

SEC. 3. LIMITATIONS.

(a) In General.--Nothing in this Act shall be construed
as--
(1) subjecting a seller or any other person to franchise,
income, occupation, or any other type of taxes, other than
sales and use taxes;
(2) affecting the application of such taxes; or
(3) enlarging or reducing State authority to impose such
taxes.
(b) No Effect on Nexus.--This Act shall not be construed to
create any nexus or alter the standards for determining nexus
between a person and a State or locality.
(c) No Effect on Seller Choice.--Nothing in this Act shall
be construed to deny the ability of a remote seller to deploy
and utilize a certified software provider of the seller's
choice.
(d) Licensing and Regulatory Requirements.--Nothing in this
Act shall be construed as permitting or prohibiting a State
from--
(1) licensing or regulating any person;
(2) requiring any person to qualify to transact intrastate
business;
(3) subjecting any person to State or local taxes not
related to the sale of products or services; or
(4) exercising authority over matters of interstate
commerce.
(e) No New Taxes.--Nothing in this Act shall be construed
as encouraging a State to impose sales and use taxes on any
products or services not subject to taxation prior to the
date of the enactment of this Act.
(f) No Effect on Intrastate Sales.--The provisions of this
Act shall apply only to remote sales and shall not apply to
intrastate sales or intrastate sourcing rules. States granted
authority under section 2(a) shall comply with all intrastate
provisions of the Streamlined Sales and Use Tax Agreement.
(g) No Effect on Mobile Telecommunications Sourcing Act.--
Nothing in this Act shall be construed as altering in any
manner or preempting the Mobile Telecommunications Sourcing
Act (4 U.S.C. 116-126).

SEC. 4. DEFINITIONS AND SPECIAL RULES.

In this Act:
(1) Certified software provider.--The term ``certified
software provider'' means a person that--
(A) provides software to remote sellers to facilitate State
and local sales and use tax compliance pursuant to section
2(b)(2)(D)(ii); and
(B) is certified by a State to so provide such software.
(2) Locality; local.--The terms ``locality'' and ``local''
refer to any political subdivision of a State.
(3) Member state.--The term ``Member State''--
(A) means a Member State as that term is used under the
Streamlined Sales and Use Tax Agreement as in effect on the
date of the enactment of this Act; and

[[Page S2927]]

(B) does not include any associate member under the
Streamlined Sales and Use Tax Agreement.
(4) Person.--The term ``person'' means an individual,
trust, estate, fiduciary, partnership, corporation, limited
liability company, or other legal entity, and a State or
local government.
(5) Remote sale.--The term ``remote sale'' means a sale
into a State, as determined under the sourcing rules under
paragraph (7), in which the seller would not legally be
required to pay, collect, or remit State or local sales and
use taxes unless provided by this Act.
(6) Remote seller.--The term ``remote seller'' means a
person that makes remote sales in the State.
(7) Sourced.--For purposes of a State granted authority
under section 2(b), the location to which a remote sale is
sourced refers to the location where the product or service
sold is received by the purchaser, based on the location
indicated by instructions for delivery that the purchaser
furnishes to the seller. When no delivery location is
specified, the remote sale is sourced to the customer's
address that is either known to the seller or, if not known,
obtained by the seller during the consummation of the
transaction, including the address of the customer's payment
instrument if no other address is available. If an address is
unknown and a billing address cannot be obtained, the remote
sale is sourced to the address of the seller from which the
remote sale was made. A State granted authority under section
2(a) shall comply with the sourcing provisions of the
Streamlined Sales and Use Tax Agreement.
(8) State.--The term ``State'' means each of the several
States, the District of Columbia, the Commonwealth of Puerto
Rico, Guam, American Samoa, the United States Virgin Islands,
the Commonwealth of the Northern Mariana Islands, and any
other territory or possession of the United States, and any
tribal organization (as defined in section 4 of the Indian
Self-Determination and Education Assistance Act (25 U.S.C.
450b)).

Cloture Motion

Mr. REID. I have a cloture motion at the desk.
The PRESIDING OFFICER. The cloture motion having been presented under
rule XXII, the Chair directs the clerk to read the motion.
The legislative clerk read as follows:

Cloture Motion

We, the undersigned Senators, in accordance with the
provisions of rule XXII of the Standing Rules of the Senate,
hereby move to bring to a close debate on S. 743, a bill to
restore States' sovereign rights to enforce State and local
sales and use tax laws, and for other purposes.
Harry Reid, Richard J. Durbin, Heidi Heitkamp, Martin
Heinrich, Amy Klobuchar, Al Franken, Sherrod Brown,
Brian Schatz, Benjamin L. Cardin, Angus S. King, Jr.,
Richard Blumenthal, Sheldon Whitehouse, John D.
Rockefeller IV, Joe Manchin III, Thomas R. Carper, Tom
Harkin, Patrick J. Leahy.

Mr. REID. I ask unanimous consent that the reading of the names be
waived.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. REID. I now ask unanimous consent that the mandatory quorum under
rule XXII be waived.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. REID. Madam President, I now ask unanimous consent that Senator
Donnelly be recognized for up to 20 minutes to give his maiden speech,
and he will proceed as in morning business. Following his speech, I ask
unanimous consent that Senator Durbin, the manager of the bill, be
recognized.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Indiana.

An Opportunity Agenda

Mr. DONNELLY. Madam President, one of the best parts about this job
is getting the chance to talk to Hoosiers here in Washington, back home
in Indiana, and, on those special occasions, a chance to see our
Hoosiers when they are serving our country overseas.
When I was visiting our servicemembers in Afghanistan in Khost
Province in July 2009, I asked our Indiana National Guard members if
there was one thing I could do for them, what would that be? I expected
them to tell me about safety vests or about new trucks. They said, Joe,
we have this handled here. What we need more than anything is a chance
to have a job when we get home. We owe our servicemembers that
opportunity.
From Hoosiers serving our Nation in Afghanistan and around the world
to the communities of Vincennes and Madison and Plymouth and Gary, the
message is the same everywhere. It is about jobs, and the chance to go
to work and take care of your family. So how do we take the Hoosier
commonsense approach, focus on jobs and create the conditions needed
for our people and our businesses to succeed?
I propose an opportunity agenda. Government doesn't create jobs;
businesses create jobs. So let's create the opportunities, help put the
conditions in place for our businesses in Indiana and around the
country to be able to create more jobs, put the programs in place for
all of the American people to be ready to hit the ground running on day
one. Because if we don't have a job, nothing else works. We can talk
about health care, we can talk about climate change, we can talk about
any other issue, but if we don't have the chance to go to work and earn
a living and take care of our family, nothing else works.
That is why earlier this month I conducted a series of roundtable
meetings in eight different Hoosier communities trying to get ideas
from Hoosier businesses, community leaders, and educators, asking one
simple question: How can we help our entrepreneurs, our small business
owners, the men and women who go to work every day, how can we help
them create more jobs? So in creating an opportunity agenda built on
Hoosier common sense, I heard loudly and clearly: The place to start is
with education and with training.
In every community I went to, I heard about the skills gap: jobs that
are currently going unfilled--opportunities that are there for the
taking but we have to have workers who have the skills our employers
need. Getting a job is a two-way street. Both Hoosier companies and
Hoosier workers have responsibilities. We can't expect a good job and
good pay if we don't bring some skills to the table.
I heard from a welding trainer in Gary, IN, from an IT company in
Noblesville, and from rural health care providers in Terre Haute, IN,
and the message was the same, and it resonates across the board and
across the State: Employers need more skilled workers. Good skills
equal good jobs.
That is why I helped introduce the bipartisan AMERICA Works Act,
which modifies Federal training programs to place a priority on those
programs and those certifications demanded by today's businesses and
today's industries.
The improvements in this bill are a benefit for both workers and
employers. Workers would know the time they spend training is more
likely to lead to a good job. For employers, they will be more likely
to hire people they know have the training they need to be productive
the moment they walk in the door.
We also have to make sure our businesses do not get overwhelmed by
regulations. In Fort Wayne I heard about businesses dealing with too
many regulations that don't make any sense for their particular
industry. It is time to get rid of the bureaucratic mess and to keep
what works. Regulations should be like the umpire on the field: Make
sure everyone is playing by the rules, make sure the rules are common
sense, and then stay in the background. Regulations should protect the
health and safety of our families and our workers while not creating
unnecessary burdens for our business owners.
Further, the regulatory system should give businesses the certainty
they need to plan for the future and the ability to compete with anyone
anywhere in the world.
We need to go all-in on American energy. This helps our businesses,
helps our families, and helps national security. I was in Lawrenceburg,
IN, a beautiful town right along the Ohio River. When I was there, I
heard of one of the companies located there, a trucking company, that
is trying to turn their fleet into a natural gas fleet. They are
interested in making that transition, but the front-end costs are high
and the infrastructure isn't in place yet. So developing American
energy sources makes sense for American business, makes sense for our
families, and makes sense for national security.
Let's keep more of our hard-earned dollars in Indiana--or in
Wisconsin, the home State of the Presiding Officer--by investing in
homegrown energy including solar, coal, wind, oil, natural gas,
biodiesel, ethanol, nuclear.
We are blessed with an abundance of energy right here in America. It
makes us stronger, creates jobs, reduces our debt, and gives us a
chance to make our Nation safer.

[[Page S2928]]

I support projects such as the Keystone Pipeline because it creates
jobs, puts people to work, and has significant bipartisan support. That
is an example of a commonsense investment in domestic energy that both
sides of the aisle can support.
These are just a few of the ideas I have gotten from people who are
creating jobs, running businesses, meeting payroll, employing our
neighbors, and growing our businesses all across Indiana.
There is a whole lot more wisdom in Washington, IN, than there is in
Washington, DC. A big reason for this is because Hoosiers, as many
Americans, are focused on just getting things done, working together.
It is not about partisanship, and it is not about politics. In Indiana
it is about common sense and trying to solve the problem. It is about
an opportunity agenda that creates jobs for hard-working people and a
good life for their families. That is what it is all about.
Here is what I am about: taking the best ideas from both parties,
both sides of this Chamber, and getting things done--starting with
jobs. As Hoosiers, we do not care if you are a Democrat; we do not care
if you are a Republican; we care if you are ready to go to work on what
matters most.
We make decisions based on what is best for our families. We take
pride in making the checkbook balance and making tough choices
necessary to make that possible. We expect the same from our
government. Keep taxes low, cut waste, and do not throw more money at
the problem. Just try to solve the problem.
Hoosiers are hard working. We do not want a free lunch; all we want
is a fair shake. We believe respect is earned through the sweat and the
hard work we put in every single day. We do not expect to receive
anything we have not earned.
Hoosier common sense tells us that our families are all better off
when we have stronger communities and more opportunities for businesses
and workers. We take care of our brothers and sisters in need, not with
a handout but by providing them with the opportunity to work hard and
to build a better life.
We have a proud tradition of Senators from Indiana who have embodied
these principles of Hoosier common sense: from Senator Lugar's decades
of leadership in matters of commonsense foreign policy, his leadership
in saving over 100,000 Hoosier auto jobs, and his constant efforts on
behalf of Indiana's farmers, from Lake Michigan to the Ohio River; to
Senator Birch Bayh's tireless efforts to expanding voting rights and
equality for women through his efforts on title IX; to Senator and Vice
President Dan Quayle's bipartisan efforts to pass job training
legislation; to Senator Evan Bayh flexing his independence and his
passion to get our fiscal house in order; and to my current colleague,
Senator Dan Coats, in his efforts to keep our Nation safe.
The people of Indiana expect their leaders to put Hoosier common
sense ahead of partisanship. We expect our Senators not to be the
loudest people in the building but the hardest working people in the
building, and in my case to make my job about making sure I am looking
out for their jobs.
I am honored to be here in this Chamber working every day--not
because I work for anybody here; I work for everyone back home. That is
my mission, that is my job, and I am incredibly privileged to do that.
God bless Indiana. God bless the United States.
Madam President, I yield back.
The PRESIDING OFFICER. The Senator from Illinois.
Mr. DURBIN. Madam President, let me congratulate my colleague from my
neighboring State of Indiana, Senator Donnelly, on his first speech on
the floor of the Senate. I can tell you, as a downstater in Illinois, I
can identify with so many things he said about his State and his pride
in his State and his feelings about his responsibility as the new
Senator from the Hoosier State.
I thank him so much for that comment and look forward to working with
him for many years to come as we represent adjoining States.

Amendment No. 745 to Amendment No. 741

Madam President, I have an amendment at the desk and ask that it be
called up.
The PRESIDING OFFICER. The clerk will report the amendment.
The assistant legislative clerk read as follows:

The Senator from Illinois [Mr. Durbin] proposes an
amendment numbered 745 to amendment No. 741.

Mr. DURBIN. Madam President, I ask unanimous consent that reading of
the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

At the end, add the following:
This Act shall become effective 1 day after enactment.

Mr. DURBIN. Madam President, I would like to explain where we stand
on the pending legislation. This is a bill which has been introduced by
Senators Enzi, Alexander, Heitkamp, and myself. It is S. 743. Pending
now on this bill is the managers' amendment, which we have crafted, and
a second-degree amendment, which is a slight technical change.
The reason we are at this stage is because we are looking for
colleagues to come forward if they have amendments to this bill. We
would like to entertain those amendments. We hope they are germane and
relevant amendments and not far afield from the important subject
matter before us. But I made this announcement yesterday, again this
morning, and I make it now: Any Member of the Senate who is interested
in amending the bill, please come to the floor with your amendment.
Senator Enzi and I will be happy to work with you if we can accept it.
If we cannot, we will at least give an opportunity for debate and a
vote.
We want to finish this bill this week. We are going to stay until we
finish it, so the sooner Members get serious about their amendments the
more likely it is we will be able to leave this week.
So that is the state of play on S. 743.
I have spoken to the substance of this bill several times, but I see
some Members on the floor seeking recognition. At this point I yield.
The PRESIDING OFFICER. The Senator from Iowa.
(The remarks of Mr. Harkin and Mr. Sanders pertaining to the
introduction of S. Con. Res. 15 are printed in today's Record under
``Submitted Resolutions.'')
The PRESIDING OFFICER. The Senator from Illinois.
Mr. DURBIN. Madam President, before I yield the floor to the Senator
from Arkansas, I would like to again make the point I made earlier.
Pending before the Senate is S. 743. This is the Marketplace Fairness
Act cosponsored by myself, Senator Enzi, Senator Heitkamp, Senator
Alexander, and others. This matter is now pending before the Senate,
and we are asking all Members with amendments to please bring them to
the floor. I know the Senator from Arkansas has heard that call, and
that is why he is here. We want to move this forward and have an active
debate on this issue. We are asking our colleagues not to put it off.
If we want to wrap this up in a timely fashion, we need their
cooperation. So I urge all offices, if you have an amendment, please
come to the floor and discuss it with Senator Enzi and me.
I yield the floor.
The PRESIDING OFFICER. The Senator from Arkansas.
Mr. PRYOR. I wish to talk about amendment No. 740, which is an
amendment I am offering with the Senator from Missouri, Mr. Blunt. We
understand there will be an objection to this. I will not ask unanimous
consent to call it up at this moment. Hopefully, one of our colleagues
will arrive in a minute to do that.
Let me say first that I am for the Marketplace Fairness Act. I am a
cosponsor. I believe it is the right thing to do. It is an issue I have
been working on since my time more than 10 years ago in the attorney
general's office in the State of Arkansas when we were trying to set up
a multistate compact about how to collect sales tax on the Internet.
This is taxes on Internet sales on the Internet.
What I am talking about today, the Pryor-Blunt amendment, is
different. We are talking about amendment No. 740, which is sometimes
confused with it, but basically amendment No. 740 deals with the
Internet Tax Freedom Act--sometimes called ITFA, of all things--but
nonetheless, basically it does just a few things.
First, it makes it clear that online retailers will not begin to have
to pay

[[Page S2929]]

additional tax just for doing business online. So the way this works is
that right now States and cities, counties, et cetera, are prohibited
from taxing Internet service. We are not talking about sales tax, we
are talking about Internet service, the Internet service itself. This
is a moratorium that has been around for a long time. Amendment No. 740
is the amendment that would extend this for 10 years.
This is a clean extension. Basically, there are some States that have
been grandfathered under the current moratorium. They will continue to
be grandfathered. We do not cover things such as voice, audio, video.
That is a separate issue. We are talking about just the Internet
itself.
This also does not have any negative impact on the Universal Service
Fund, 9-1-1, e911, and other fees like those. Those are separate. We
have crafted this very carefully to do just a straight and clean 10-
year extension.
We understand there will be an objection to this. Before we hear that
objection, I yield the floor for my colleague from Missouri.
The PRESIDING OFFICER. The Senator from Missouri.
Mr. BLUNT. Let me quickly yield to my friend from Oklahoma for a
unanimous consent request.
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. INHOFE. I ask that at the conclusion of the remarks by the
Senators from Arkansas and Missouri, that I be recognized as if in
morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Missouri.
Mr. BLUNT. As my good friend from Arkansas said and for the benefit
of the Senator from Oregon, we haven't made a request yet for this
amendment to be moved to the front of the line to be debated, but we
are here to say that we would like to have this amendment on this bill.
We are both supporters of the Marketplace Fairness Act for reasons that
I hope we have well established, and I think people, including Members
of the Senate, are beginning to understand that it is a fairness
principle.
But what this amendment does, recognizing the importance of online
commerce, that it has grown dramatically since 1998 when this amendment
first became part of the law, the Internet Tax Freedom Act--and in
1988, it said that you wouldn't tax the Internet itself for use of the
Internet. Unless we act, this law will expire in 2014. This would be a
10-year extension that would simply say that we would continue to
ensure that people's access to Internet services is tax free.
To be clear, the underlying bill we are considering, the Marketplace
Fairness Act, doesn't create a new tax. It doesn't tax consumers' use
of the Internet, and Senator Pryor and I both would oppose taxing use
of the Internet at this point. But this simply adds to the fair tax
collection processes that will be available to States under the
Marketplace Fairness Act by extending current law to ensure without any
question that this is not about taxing the Internet.
In fact, this amendment would extend for a decade the almost 15-year
prohibition on taxing the Internet, the one that goes back to 1998.
So I support the Marketplace Fairness Act. I believe this bill would
be even better if it clarified for the next decade that we continue to
maintain the view the Congress and the Federal Government has had on
the Internet since the Internet first emerged as an avenue of commerce
and would not allow for the taxing of the Internet and prevents those
taxes from being collected.
I yield for my friend from Arkansas.
The PRESIDING OFFICER. The Senator from Illinois.
Mr. DURBIN. Madam President, I wish to ask the Senator from Arkansas
if he would yield for a question through the Chair.
Mr. PRYOR. Be glad to, Madam President.
Mr. DURBIN. Madam President, pending before us is S. 743, the
Marketplace Fairness Act, and this legislation would require Internet
retailers selling into States with sales taxes to collect the sales
tax. The Senator from Arkansas and the Senator from Missouri have
offered a different piece of legislation relating to the Internet. I
would like to ask the Senator from Arkansas if he would please clarify
a few things.
First, is there any tax imposed by this Marketplace Fairness Act on
the use of the Internet?
Mr. PRYOR. No, there is no tax in this amendment. Amendment 740, in
fact, extends the moratorium on taxing the Internet.
Mr. DURBIN. I am asking before your amendment is adopted. The
underlying bill has no tax on access to the Internet.
Mr. PRYOR. That is correct.
Mr. DURBIN. So the Senator is suggesting the extension of protecting
America's right to access the Internet from being taxed; is that
correct?
Mr. PRYOR. That is correct.
Mr. DURBIN. So for those who would come to the floor and argue
somehow this bill is going to inhibit or restrain Americans in the use
of the Internet, it does not, and the Pryor-Blunt amendment, which is
being offered, extends for 10 years this prohibition against taxing
access to the Internet.
I ask the Senator from Arkansas: The last time this was considered,
does the Senator know when and what the disposition of that matter was?
Mr. PRYOR. I am not familiar with the history of that. Would the
Senator from Illinois know that?
Mr. DURBIN. My impression--and I could be mistaken--is it was adopted
by voice vote. The amendment the Senator is offering giving a 7-year
protection against taxes for using the Internet was adopted by voice
vote. It was clearly unanimous--at least there were no objections--on a
bipartisan basis.
So what is being offered by the Senators from Arkansas and Missouri,
on behalf of Internet users all over the United States to protect them
from being taxed on this measure, is over and above anything in this
bill but is consistent with policy we have lived with for 15 years, if
I am not mistaken. I think the Senator from Missouri mentioned it was
15 years. From my point of view, this is a friendly amendment, it is an
amendment which is good for America, it protects our access to the
Internet, and it does not jeopardize--does not jeopardize--the
underlying legislation.
In fact, if I am not mistaken, the two sponsors are cosponsors or at
least have supported the underlying Marketplace Fairness Act.
I thank the Senator from Arkansas for yielding for those questions.
Mr. PRYOR. I see my colleague from Oregon is here, and he has a long
history with this legislation and other legislation similar to it. Let
me make one final point before I try to set aside the current amendment
and bring up 740 to make it pending.
My final point is this: The Internet has been an amazing success
story. It is unbelievable how successful it has been, how diverse, and
how robust. But we think of it as ubiquitous. The truth is, it is not.
In the United States, 80 percent of American households have access to
the Internet, but only 65 percent take it. So only 65 percent of people
in this country actually utilize the Internet and take Internet
service.
I am afraid if we do add a tax, if the State and local governments
add a tax, it will make it less affordable. A lot of people do not take
Internet service because they cannot afford it. So I am afraid if we
allow State and local governments to tax access to the Internet--tax
the service itself--then we will see that effort hurt even more.
I ask unanimous consent to set aside the pending amendment and call
up amendment No. 740 to make it pending.
The PRESIDING OFFICER (Mr. Heinrich). Is there objection?
Mr. WYDEN. Reserving the right to object.
The PRESIDING OFFICER. The Senator from Oregon.
Mr. WYDEN. Mr. President, I do this to have a colloquy with my friend
from Arkansas. I want him to understand that I have stayed off the
floor of this body for well over 1 day for the sole purpose of trying
to see if we can bring both sides together on this issue. I think that
is important, and I have already acknowledged I am willing to look at
how we could bring both sides together, recognizing the Quill decision.
As I have already said, I have looked at compacts between States and
things of this nature, and I have made repeated offers to the advocates
of this bill, offering specifics on paper, and essentially nothing is
offered in return other than: We have the votes and we are going to
coerce you, as Oregonians, to go along with this.

[[Page S2930]]

What I wish to do just for a moment is explain why I have to object.
I think the Senator knows I authored the Internet tax freedom bill in
the Senate back in 1998, and I did it because I thought it was
important to have the defense shield against potentially thousands of
taxing jurisdictions singling out the Internet for these kinds of
taxes. Regrettably, the underlying bill is going to be a targeted
strike on the Internet. It is not going to be a defense shield. It
would, as it stands today, serve as an amendment that would undercut
what we sought to do back in 1998.
As the original author here, I am looking forward to working with the
Senator under any circumstance to reauthorize a law that I think has
worked. All the law says is you have to do offline what you do online.
If we boil it down, it is a nondiscrimination law. This comes up the
next year, and the Commerce and Finance Committees both have interests
in this. We have always worked cooperatively in these areas. I remember
our experience together on nanotechnology.
So I just have to say I am going to have to object at this time, but
I am very interested in working with my colleague, with Senator Durbin,
and Senator Blunt, who was just here, to come up with an arrangement
that goes to the heart of this question; that is, should States such as
Oregon be coerced, required to collect these online taxes for States
that are thousands of miles away. The refrain throughout this whole
discussion has been this is a States rights bill.
I respect that, but what it translates into is folks say they are for
States rights if they think the State is right and the State is willing
to go along with this particular approach that has come out of
Washington, DC, which is they would be coerced into collecting these
sales taxes for jurisdictions from thousands of miles away. In some
cases--New Hampshire and other places have been making this point as
well--it would be discriminatory because the online sector would be
subjected to requirements that were not required of brick-and-mortar
retailers. Again, this undermines our vision for the tech sector, which
has been about bricks and clicks. We want both the brick-and-mortar
retailers and the online people to do well. I know the Senator from
Arkansas agrees with that as well.
So I haven't said anything on the floor of this body on a matter my
constituents feel very strongly about for going on 2 days, until just
now, solely for purposes of working with my friend from Arkansas and
the distinguished leader from Illinois, Senator Durbin, and I will
continue to do that. But at the end of the day, States rights, to some
extent, has to have an element of voluntariness. If States rights has
no element of voluntary judgments by States, it is pretty hard to say a
State has any rights. The State truly is going to be coerced when we
have reached the point, as I would characterize it, where we are going
to say in Washington, DC, we believe in States rights if we think the
State is right and they are going to go along with the approach we have
dictated.
In my part of the world, to show the irony of this situation,
Washington State has a sales tax. Oregon does not have a sales tax.
There are differential tax considerations in both jurisdictions, and we
often make agreements in terms of how we do business. So we have shown
it is possible to deal with this issue, and I want my colleague from
Arkansas and my friend from Illinois to know I am willing to set aside
absolutely everything and work around the clock to see if we can find
some common ground, with my theory being it is hard to say it is a
States rights approach if a State is unable to have any element in the
process with respect to its own judgment, its voluntary judgment, about
what it wants to do.
So I object at this time.
The PRESIDING OFFICER. Objection is heard.
The Senator from Illinois.
Mr. DURBIN. Mr. President, I am disappointed. I am disappointed
because I know this was a good-faith effort on behalf of the Senators
from Arkansas and Missouri to make certain Americans across the board
wouldn't have to pay a tax to use the Internet. That has been policy
for 15 years. We just had an opportunity to extend it for 10 more years
and there was an objection by the Senator from Oregon.
I know in his heart of hearts he didn't want to object because I know
his commitment to the Internet and what a difference it has made in
this country. Here is the problem he faces and the reason he objected,
if I can try to interpret what he just said. There are five States in
America with no sales tax--five States. No State sales tax in Alaska,
Oregon--the home State of the Senator--Montana, New Hampshire, and
Delaware. No sales tax. That means, because that State has decided
there will be no sales tax, the people living in that State who make a
purchase at a store pay no sales tax--visitors as well, no sales tax.
Those who buy things over the Internet in that State don't pay a sales
tax either. That is the State's decision. We don't change that a bit.
If this underlying bill passes, that will continue.
There is no coercion--which the Senator from Oregon uses as his
term--on the State of Oregon to impose any sales tax on their citizens,
on the people buying in their State. It is their State right to decide.
What this bill does impact is the Internet retailer in Oregon selling
products in the State of Illinois. When Nike or Columbia sell products
in the State of Illinois, the Supreme Court told us Congress has to
decide, if they sell a product in the State of Illinois to an Illinois
consumer, do they have to collect the Illinois sales tax. That is what
the bill says. That is all it says.
So at the end of the day, here is the question: If you are Nike and
you are located in Oregon and you decide to do Internet sales--which I
believe they do--but you also decide to have Nike shops available--and
we have seen them in malls--what is the law going to be? You know what
the law is going to be if you are Nike and you want to come and open a
shop in a mall near Chicago--you play by the rules of Chicago and
Illinois.
If we require certain filings with our government, if we require you
pay certain property taxes, if we require you collect certain sales
taxes--rules of the road: If you want to do business in Illinois, you
play by Illinois rules. The same thing holds true if I want to open a
business in Oregon; I play by Oregon rules.
Now the question: If you don't physically locate in Illinois but sell
into Illinois, do you still have to play by Illinois rules? That is
what this bill says. That is not coercion.
Nike can decide they don't want to sell in Illinois because they
don't want to collect the sales tax in Illinois. That is their business
decision. Let it be. But if they want to come and use the customers of
Illinois to make a profit, all we are saying to them is: Collect the
sales tax. Why? Because their competitors in Illinois--the families who
have opened the shops and the stores--are collecting sales tax every
day from their customers. They are finding people who are showrooming,
walking into the running shoe store, trying on all the shoes, and
saying, Just great, let me write something down here, see you later,
and then going to the Internet and buying those shoes over the Internet
without paying the sales tax. What happens to the store they used to
try on the shoes? Eventually, they lose business and sometimes they go
out of business.
We are trying to level the playing field. No coercion. Oregon, make
up your own laws for your own citizens and people who do business
there. We don't change a word of it. But if you want to do business in
another State, we are asking that you collect the sales tax of that
State. In fact, we provide the software free for you to do it.
I am sorry the Senator from Oregon objected to the Internet freedom
bill offered by the Senators from Arkansas and Missouri. It is a good
one. It is one we would have liked to have seen part of this
discussion. I hope before this conversation and debate end that we get
a chance to reconsider.
Mr. INHOFE. Mr. President, point of order.
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. INHOFE. Mr. President, by unanimous consent, I was to be
recognized after the conclusion of the remarks of the Senators from
Missouri and Arkansas. I wish to ask when that would be, because this
is going on and on.
The PRESIDING OFFICER. The Senator from Oregon.

[[Page S2931]]

Mr. WYDEN. Mr. President, I ask unanimous consent to pose a question
to my colleague from Oklahoma.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. WYDEN. Mr. President, if I would be able to engage the Senator
from Oklahoma, with his leave, I could take about 5 minutes or so--no
more--to respond to the points Senator Durbin has made. That would be
the end of my time, and I believe the Senator from Oklahoma would be
next.
The PRESIDING OFFICER. Is there objection?
Mr. INHOFE. Mr. President, I do not object to that, but I would ask
the Senator from Arkansas if he has any objection to that. I want to be
sure to get in the queue sometime here.
Mr. WYDEN. Mr. President, very briefly to respond to comments made by
my friend from Illinois, this legislation has nothing to do with Nike.
Nike of course is a very large company and has stores and trucks and a
physical presence all over the United States. They pay taxes because of
that physical presence under the Quill decision. So the comments by my
colleague from Illinois are very unfortunate, because they misstate
what this debate is all about.
This debate is about the little guy.
Later on this afternoon, Senator Merkley and I are going to come to
the floor of the Senate and actually read accounts from small
businesses here in our State. They are people who don't have a physical
presence all over the country, and they are scratching their heads this
afternoon and they are saying to themselves, How in the world are we
possibly going to be able to comply with this, because in a difficult
economy, we are barely able to make ends meet. We are going to have to
go out and spend time and money and staff figuring out how to do this.
That is what this is about. Are we going to take something like our
current policy--which is the defensive shield against discriminatory
treatment from these tech-based online businesses--and turn it into a
targeted strike on them, which this legislation does, or are we going
to work together, which is what I have tried to do pretty much nonstop
since Monday, to see if we can find some kind of common ground? Part of
the challenge is we have to get some equity even in terms of the
amendments, because it looks as though one side is getting to offer
theirs and another side may be foreclosed.
I am going to continue to try to reach out to colleagues on both
sides of this debate. But I appreciate very much the courtesy of my
friend from Oklahoma, because I had to clarify that this amendment is
about the small, innovation-oriented businesses that we think are the
future and the center of this debate since it got going. I thank my
colleague from Oklahoma for his courtesy.
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. INHOFE. Mr. President, my good friend from Pennsylvania, Senator
Toomey, and I had an amendment that we put forth several weeks ago back
in the time when we did not know for sure whether sequestration was
going to become a reality. We have some comments to make about that.
I will be yielding to the Senator from Pennsylvania in a moment, but
I first want to make an observation here, that anytime a bureaucracy is
forced to cut, they will find the one thing the people of America want
most and that is what they will cut. There is no better example of this
than the FAA. I went around with them for quite some time on the pilots
bill of rights last summer. We were able to get something done. But I
know they are a very powerful agency. There is no question about that.
To give you an example of that, the FAA began furloughing traffic
controllers--and others too--on April 21. This is what is interesting,
and you have to pay attention to this. The cuts that were going to come
to the FAA through sequestration amounted to 5 percent of the FAA's
budget to bring it down to 2010 levels.
The FAA operations budget has grown by 109 percent since 1996. That
has more than doubled since 1996.

On April 22, the first day after furlough took effect, over 400
flights were cancelled and nearly 7,000 flights were delayed. That, my
good friends, is a way of making people miserable to bring them around
to their way of thinking that somehow there is not enough fat in a
bureaucracy that has more than doubled in the last 15 years that they
have to take these drastic steps. The FAA has the flexibility to reduce
the costs, but they have not attempted to do that.
As I said, very clearly, in 1996, the FAA's operating budget was $4.6
billion. In 2012, the operation budget was $9.7 billion. I don't know
off the top of my head of another bureaucracy that has grown that much
in that period of time. The FAA operations budget has increased by $5.1
billion over 14 years. That is 109 percent.
The furloughs of the air traffic controllers are expected to save
only $200 million. I wish I had a chart here to show you what a small
percentage that $200 million is of the increase of $5.1 billion over 14
years. I think it is very important that we talk about that in light of
some of the things we are trying to do with sequestration. That was the
FAA.
Unfortunately, it is our defense system that has been taking all the
hits. Here we have the defense at 18 percent of the budget and they are
taking 50 percent of the hits. This is after the President through his
programs has knocked down spending levels by $487 billion over this 10-
year period, and sequestration would be another $\1/2\ trillion--which
in the mind and the statements of the Secretary of the Defense at that
time, Secretary Panetta, would be devastating, to use his words. So
that is where we are right now.
When the majority leader last night introduced an amendment that
would transfer the overseas contingency operations funds from the
fiscal years of 2014, 2015, and 2016 to offset the sequester impacts in
the current year, I think this is not implementable because he uses
future appropriations to offset current year spending. It is also
dangerous to continue to hollow out our military.
A couple days ago I talked about how we are comparable today in the
hollow force we are approaching to what we were in the 1970s and the
1990s. Now it could actually be worse. In one of the hearings we had,
one of the chiefs of the military made the statement that this would
not be just as bad--it would be worse.
That is what we are faced with right now. I think we need to look
very carefully and make sure we do not allow our warfighters--every
time you cut their money out of the OCO account, that increases risk.
Increasing risk increases lives lost. That is how serious this is.
Now back to our amendment we put together some time ago. This was
back before March 1, which was when the realization appeared that
sequestration was going to be a reality, and it was this: If the whole
purpose of sequestration is to save money out of the budget, and if you
come along with something that says: We will live with the top line
that is dictated by sequestration but we would ask that the chiefs of
the services be allowed to make those decisions as to where the cuts
would be. I had occasion to call all five service chiefs, and it has
been reaffirmed in the last 2 weeks by them in public hearings that if
they could take this top line that would be so devastating to their
service--and this was the Army, Navy, Marines, and Air Force. If they
could determine where some of that was, would it be less devastating,
No. 1? No. 2, would you be able to do it? The answer was yes and yes.
I think the Senator from Pennsylvania and I had a very good idea, and
we are here today to talk about that.
With that, I yield for my friend from Pennsylvania.
The PRESIDING OFFICER. The Senator from Pennsylvania.
Mr. TOOMEY. Mr. President, I want to thank the Senator from Oklahoma
for his leadership and work, and say a few words, and then I am going
to make a unanimous consent request in this regard--but first a little
bit of context here.
This Federal Government has doubled in size in the last 12 years.
Total spending is up 100 percent in a little over a decade. What the
sequester amounts to is 2.5 percent of this gigantic bloated
government. But it is actually less than that in a very meaningful way,
because the 2.5 percent we referred to--the sequestration, this cut--

[[Page S2932]]

is a reduction in the permission to spend. We call it budget authority.
What it is is permission for the government to spend money. It actually
takes a while for the government to get around to spending the money
that is authorized in any given year. So the actual reduction in
spending, the real reduction in cash that will go out the door in this
fiscal year if the sequester goes into effect is a little over 1
percent, about 1.25 percent. That is what we are talking about.
Our friends on the other side of the aisle say, This is impossible;
you can't do it; it will be devastating. They predicted all kinds of
calamity if a government that has grown by 100 percent has to find 1
percent to trim over the next 6 months.
Here is another point we ought to keep in mind. If the cuts and
sequester hold, if we achieve the savings that were signed into law,
that were voted on by both Chambers, and that the President of the
United States agreed to by virtue of his signature--if we do, then
total spending this year will still be greater than last year. And we
are told that is somehow a Draconian austerity program.
What we are talking about is a modest reduction in the rate at which
this Federal Government grows. That is all we are talking about here.
And we are told that is not possible; there is no way you can do it.
That is simply not true. One of the things that is maddening to me is
the administration--and the President is responsible for this. They are
willfully choosing to make the cuts in the most disruptive way they
can, because they have got so much invested in this idea that we can't
cut any spending. Because they predicted such dire consequences and
such disaster, they can't very well allow reasonable and manageable
cuts to take place which would be easily attained. So we have this
extremely irresponsible set of cuts that are completely unnecessary.
Let me zero in a little bit on the FAA budget itself. The sequester
is in effect now. If it holds--if it is fully implemented--the FAA
budget will, as a result, be larger than the President asked for in his
budget submission.
Does anybody think when the President submitted his budget request he
was intending to shut down air traffic control operations? I can assure
you he didn't tell us that at the time.
The fact is there are plenty of places where we can achieve this
savings. The administration knew this day was coming for over 1 year.
There has been plenty of time to plan for this and to prioritize.
The Senator from Oklahoma points to the huge growth in the FAA's
budget. That is wildly disproportionate to any growth in flights. There
are plenty of opportunities to achieve the savings, as evidenced by the
fact that the President never asked for all this money.
Let me give a few examples of places where the President, within the
FAA budget, could be tightening belts so we don't have to furlough air
traffic controllers.
For instance, the FAA spends $540 million a year on consultants. That
is nice. I am not sure all of that is as important as keeping planes
flying in the air. The FAA operates a fleet of 46 aircraft. That costs
$143 million a year--very nice indeed. Probably not as important as
making sure planes are coming and going from La Guardia and Kennedy and
Newark and Philadelphia and Pittsburgh and across the country. The FAA
budget includes $1 billion more in grants for airport improvements. I
am a pilot. I fly in and out of lots of airports and it is great when a
nice little airport has a new taxiway, terrific, but is it truly as
important as keeping our air traffic controllers there on the job?
These are the kinds of tradeoffs we ought to be making.
My Republican colleagues and I have been offering a wide range of
solutions. Senator Blunt had the idea that maybe we ought to treat
Federal workers, in this context, the context of the sequestration, the
same way we do in other emergencies and designate essential workers.
That makes some sense to me. I think that would make a lot of sense.
Jerry Moran has another idea for how we could address this.
Senator Inhofe and I introduced a bill before the sequester went into
effect. What we said was let's give the President the maximum
flexibility--right? The reason they say they have to lay off or
furlough air traffic controllers is because they do not have any
choice, the law requires it--except they did not want the change in the
law which would have given them the choice. Senator Inhofe and I had a
bill that would give the administration complete flexibility.
I say this because I pointed to a number of areas in the FAA's budget
where I think they could find the savings, avoid furloughing air
traffic controllers, but under the approach Senator Inhofe and I
suggested, they would not be limited to finding the savings within the
FAA budget; they could look anywhere in the government for the lowest
priority spending, the most wasteful spending, the least necessary
spending or perhaps redundancy and duplication.
I will give just another few examples. The GAO has discovered that
throughout the Federal Government we have 47 different job training
programs. Does anyone truly think we need 47 of these and that by
consolidating them maybe we could save some overhead, some
administrative costs? Maybe some of them don't work so well.
How about the fact that we have 94 different green building
programs--94 programs--679 renewable energy programs. This is all over
government because we have never bothered to scrub this and come up
with the savings we could have achieved.
Senator Coburn from Oklahoma has offered all kinds of ideas, Senator
Lee from Utah. There are all kinds of places we can save. The fact is,
especially in a government that has grown this big, we absolutely can
find the little, tiny savings that are required in the sequester so we
do not have to do it in a disruptive way.

Unanimous Consent Request--S. 799

That is why I ask unanimous consent that the Senate proceed to the
immediate consideration of S. 799. I ask unanimous consent the bill be
read a third time and passed, the motion to reconsider be considered
made and laid upon the table.
The PRESIDING OFFICER. Is there objection?
Mr. DURBIN. Reserving the right to object.
The PRESIDING OFFICER. The Senator from Illinois.
Mr. DURBIN. Mr. President, I listened to the Senator from
Pennsylvania. I have heard his arguments. I know he is convinced of his
arguments.
There are several things he did not mention. The sequestration we are
currently going through was a bipartisan decision. Both parties agreed
to do it. In fact, the leadership on the Republican side and the
leadership on our side voted for it. It was to be the outcome if we did
not reach an agreement on the budget, and we did not. So now we are in
sequestration.
When he suggests it is only 1 percent of government spending, I would
add a couple of facts. We have exempted a long category of Federal
spending so it will not be subject to these cuts. For example, we have
said we will not cut the pay for our military 1 penny, so we exempted
that part. When we take all the exemptions out, it is not 1 percent of
our budget. For the agencies affected, it is closer to 5 percent on an
annual basis. Since there are only 6 months left in the year, it turns
out to be closer to 10 percent that they have to cut to make the cuts
for the remainder of the year, so 1 percent does not quite tell the
whole story.
Also, in terms of the number of people working for the Federal
Government, the largest increase in Federal employment in the last 10
years has been in the Department of Defense. Why would that be? Two
wars, that is why. When they talk about the increased number of people
working for the Federal Government, don't overlook the fact of the
Department of Defense effort and our effort to make sure the men and
women in uniform were safe and came home safe. So when they talk about
that increase, that is part of it.
Here is what we have suggested. Instead of just shifting the
furniture around in the room, let us avoid what we are facing. We are
facing the reality of 6,800 flights a day in America being delayed
because air traffic controllers are being furloughed 1 out of every 10
days. We should avoid that--if not just for convenience, certainly for
safety. I agree.
When it comes to cutting 70,000 children, little kids, out of the
Head Start

[[Page S2933]]

Program, let's agree we should not be doing that. We get one chance at
those kids to have a good education and a good life. Don't blow it
because of a sequestration problem.
Shall we cut $1.8 billion out of the National Institutes of Health
medical research money? $1.8 billion? No. This Senator believes that is
stupid--shortsighted and stupid. If we don't put money into medical
research, we are not thinking. America leads the world in medical
research. The sequestration should not put us further behind.
What I am going to make a unanimous consent request to do is use the
overseas operations contingency account, an account set aside for
future war which we will not need because this President is bringing
our troops home from Afghanistan as he did in Iraq.
I will object to the consent request of the Senator from Pennsylvania
and I will make my own after that. I object.
The PRESIDING OFFICER. Objection is heard.

Unanimous Consent Request--S. 788

Mr. DURBIN. I ask unanimous consent the Senate proceed to
consideration of Calendar No. 64, S. 788, a bill to suspend the fiscal
year 2013 sequestration and offset with funds from overseas contingency
operations; that the bill be read three times and passed, the motion to
reconsider be laid upon the table with no intervening action or debate.

The PRESIDING OFFICER. Is there objection?
The Senator from Pennsylvania.
Mr. TOOMEY. Mr. President, reserving the right to object, I would
like to explain what this amounts to. Let's be very clear. There is no
money in the overseas contingency operation fund. This is barely an
accounting device. Do you know what this really is? The proposal is
that we do away with the sequester and we thereby spend more money and
we just pretend it is offset. But the fact is, some time ago, this
administration made a decision about the level of our involvement in
Afghanistan that had nothing to do with this sequester. That has
nothing to do with the sequester. The fact that we are no longer at war
there does not allow us to spend money we do not have.
Let me give an analogy. I could come down to the Senate floor and
suggest I think it should be the policy of the United States that we
absolutely not invade Canada and we not have a war with Canada. Imagine
the money we could save if we do not go to war with Canada.
So, with all that savings, let's go out and spend it because we have
this terrific savings. This proposal is absolutely no more meaningful
than if I were to make that suggestion, which obviously everyone
understands is ridiculous.
So I object.
The PRESIDING OFFICER. Objection is heard. The Senator from Illinois.
Mr. DURBIN. Mr. President, I just want to make one postscript. When
Paul Ryan, the Republican candidate for Vice President and the chairman
of the House Republican Budget Committee, wrote his 2011 budget, he
included the very fund which the Senator from Pennsylvania refers to as
the Canadian invasion fund. So it was a good idea when Paul Ryan had to
write a budget. It is a bad idea when we are trying to avoid the pain
of sequestration.
The PRESIDING OFFICER. The Senator from Vermont.
Mr. SANDERS. Mr. President, I also agree we should not invade Canada.
I live right near there. It would be terrible.
What we are hearing and what we have heard now for a number of months
is a discussion about deficit reduction, about how we proceed and how
we address the fact that this country has a $16.6 trillion national
debt. That is a serious issue.
I think as we contemplate how we address this issue, we have to put
it into a broader context as to what is going on in the United States.
What is the best way forward in terms of deficit reduction at a time
when the United States has by far the most unequal distribution of
wealth and income of any major country on Earth. In other words, we
cannot talk about how we proceed with deficit reduction, we cannot say
it is OK to cut Social Security or Medicare or Medicaid or nutrition
programs when the middle class of this country is disappearing, poverty
is extremely high, while at the same time the wealthiest people and the
largest corporations are doing phenomenally well. Any serious
discussion about deficit reduction has to include those issues.
Let me bore you for a moment with some interesting statistics. This,
in fact, came out just yesterday from the Pew Research Center. What
they said is that all the new wealth generated in this country from
2009 to 2011 went to the top 7 percent of the American households. All
the new wealth went to the top 7 percent of American households, while
the bottom 93 percent of Americans saw a net reduction in their wealth.
The Pew Research Center found that from 2009 to 2011, the mean net
worth of American households in the top 7 percent rose by 28 percent,
while the mean net worth of the bottom 93 percent of American
households went down by 4 percent; in other words, the people on top
are doing very well, everybody else is not doing well.
Over this same time period, the top 7 percent of American households
saw their wealth increase by a combined $5.6 trillion--the top 7
percent, $5.7 trillion in wealth increase; the bottom 93 percent saw a
wealth decline of $600 billion. That is what the Pew Research Center
reported just yesterday.
Today, when we talk about distribution of wealth and income, the
wealthiest 400 individuals in this country own more wealth than the
bottom half of America. Four hundred people have more wealth than the
bottom 150 million Americans. Today, one family, the Walton family--
owners of Walmart--own more wealth than the bottom 40 percent of the
American people; one family has more wealth than the bottom 40 percent.
Today--and this is truly a remarkable fact which of course we do not
talk about too much--the top 1 percent of Americans own 38 percent of
all financial wealth. Let's guess what the bottom 60 percent of the
American people own. The top 1 percent own 38 percent of the wealth.
The bottom 60 percent own 2.3 percent of the wealth in America. That is
a rather remarkable and disturbing fact.
Today, as Warren Buffett has pointed out, the 400 richest Americans
are now worth a recordbreaking $1.7 trillion, more than five times what
we were worth just two decades ago. Meanwhile, according to a June 2012
study from the Federal Reserve, median net worth for middle-class
families dropped by nearly 40 percent from 2007 to 2010. That is the
equivalent of wiping out 18 years of savings for the average middle-
class family.
That is distribution of wealth. That is incredibly unequal,
incredibly unfair, and getting worse and worse. That is something we
might want to keep in mind when we talk about how we do deficit
reduction.
Then when we talk about distribution of income, what we earned last
year, that is even worse than distribution of wealth, as bad as that
is. If you can believe it, the last study we have seen on this
subject--this is quite amazing--showed that from 2009 to 2011, all the
new income created during that time period went to the top 1 percent
while the bottom 99 percent actually saw a decline in their income. All
the new income created in that time period, 2009 to 2011, went to the
top 1 percent. Real unemployment today is not 7.6 percent, it is 13.8
percent if we count those people who have given up looking for work and
those people who are working part-time. The youth unemployment rate is
just horrendous, and it is even higher than the general average.

Very interestingly, a new poll came out by Gallup that was done just
a few days ago--April 17, 2013. I find the results of that poll very
remarkable. This poll deals with an issue that very few people in
Congress are even prepared to talk about, let alone act upon.
Here is what the poll from April 17, 2013--this week--said: About 6
in 10 Americans--about 60 percent--believe money and wealth should be
more evenly distributed among a larger percentage of the people in the
United States, while only one-third of Americans think the current
distribution is fair.
So when my friends want to cut programs for the middle class and give
tax

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breaks to the rich, they should understand that about 60 percent of the
American people already believe that we have an unfair distribution of
wealth in America. What is even more interesting, according to this
Gallup poll from a few days ago--and they do this poll every year--is
that a recordbreaking 52 percent of the American people believe ``that
our government,'' i.e, the Congress, ``should redistribute wealth by
heavy taxes on the rich.'' Again, that is 52 percent of the American
people who believe that.
How many Members of the Congress get up and come close to reflecting
what a majority of the American people want? The American people know
that the middle class is collapsing. They know poverty is unacceptably
high. They know the wealthy and large corporations are doing
extraordinarily well, and they want us to do something about it. But
around here, forget doing something about it. We cannot even talk about
what the American people want us to do.
The American people are frustrated with Congress for a whole lot of
reasons, and certainly at the top of the list is how we are ignoring
the economic reality facing the middle class of this country and the
growing wealth and income inequality. They want us to do something
about it, and I think it is high time we did.
So instead of cutting programs for the middle class, they are giving
more tax breaks for those people who don't need it. Maybe we should do
what the American people want and ask the wealthy and large
corporations to start paying their fair share of taxes and protect
working families.
Interestingly enough, we hear from the wealthiest people in this
country and from their organizations. What we hear from them is not:
Hey, we are doing really well. We know this country has a whole lot of
problems, and we are prepared to pitch in; we are prepared to help out
with deficit reduction. By the way, for those who are on Wall Street,
remember that it was the American people who bailed out Wall Street.
Instead of hearing how they are prepared to reciprocate now in
America's time of need, unfortunately what we are hearing is quite the
contrary.
Lloyd Blankfein is the CEO of Goldman Sachs, and this is what he said
on November 19, 2012, to CBS:

You're going to have to undoubtedly do something to lower
people's expectations--the entitlements and what people think
that they're going to get, because they're not going to get
it.

Blankfein and his friends at the Business Roundtable recently came
out with a report. Now, the Business Roundtable is the organization
representing the CEOs of the largest corporations. All of them make
millions of dollars a year in salary or benefits. All of them have very
generous retirement benefits. Some of them are worth hundreds of
millions of dollars.
These people, the Business Roundtable, which consists of Wall Street
and other large corporations that are doing phenomenally well, came
forward and said to Congress: You should raise the eligibility age for
Social Security and Medicare to 70 and cut Social Security COLAs by
adopting the so-called chained CPI. The wealthiest people are doing
phenomenally well, Wall Street gets bailed out by working families all
over this country, and then these guys come back to Congress and say:
Raise the retirement age for Social Security and Medicare to 70 years
of age.
Needless to say, my views are a little bit different than Mr.
Blankfein's or the Business Roundtable. I believe the way to do deficit
reduction is not by punishing people who are already hurting and
struggling to keep their heads above water. We don't punish the sick,
the kids, the elderly, or disabled veterans. We need to ask those
people who are doing very well to start paying their fair share of
taxes.
Now I will talk about what I think we should be doing and why we
should be doing it. In 1952, 32 percent of all of the revenue generated
in this country came from large corporations--about one-third of all
the revenue. Today just 9 percent of Federal revenue comes from
corporate America. In 2011, corporations paid just 12 percent of their
profits in taxes. That is the lowest percentage since 1972.
In 2005--the last figures we have--one out of four corporations paid
no Federal income taxes at all even though they collected over $1
trillion in revenue during that 1-year period.
In 2011, corporate revenue as a percentage of GDP was just 1.2
percent lower than any other major country in the OECD, including
Britain, Germany, France, Japan, Canada, and many other countries. Each
and every year corporations and the wealthy are avoiding more than $100
billion in U.S. taxes by sheltering their incomes in the Cayman
Islands, Bermuda, and other offshore tax havens.
So the point is: How do we do deficit reduction? Do we say to an
elderly woman in the State of Vermont who is trying get by on $14,000
or $15,000 a year that we are going to cut her Social Security?
Do we say to a disabled vet: Thank you for your service and your
sacrifice for this country, we are sorry you lost your legs, but we are
going to have to cut your benefits?
Do we say to a struggling low-income family trying to survive on one
or another nutrition program: Sorry, but you may have to go hungry and
not get dinner on Wednesday?
Do we say to working people who have lost their jobs: We are going to
have to cut your unemployment compensation which will make it almost
impossible for your family to survive?
Is that our approach or do we go to corporate America, which is
enjoying recordbreaking profits?
One out of four corporations pays nothing in taxes. Do we say to
them: You know what, it is time you helped us with deficit reduction.
I hear a lot of my Republican friends and the President talking about
how we need tax reform, but we are going to do it deficit neutral. No,
I beg to differ. We do need tax reform. We do need to end the absurdity
of losing huge amounts of money because of the tax havens in the Cayman
Islands and Bermuda and elsewhere, but we also have to raise revenue
when we do tax reform. It is not simply lowering tax rates.
I will give some examples about how absurd the current situation is
and why--before we cut Social Security and before we attack programs
that the middle class and working families of this country depend
upon--we have to end these absurd loopholes corporate America is
enjoying.
I have just a few examples. Bank of America is one of the financial
institutions that was bailed out by the American people when their
recklessness and greed almost resulted in the collapse of our financial
system. In 2010, Bank of America set up more than 200 subsidiaries in
the Cayman Islands, which, of course, has a zero percent tax rate to
avoid paying U.S. taxes. Bank of America set up 200 subsidiaries in the
Cayman Islands. In 2010, not only did Bank of America pay nothing in
Federal income taxes, but it received a rebate from the IRS worth $1.9
billion that year. Bank of America paid nothing in taxes.
In 2010, JPMorgan Chase operated 83 subsidiaries incorporated in
offshore tax havens to avoid paying $4.9 billion in U.S. taxes. They
avoided paying $4.9 billion.
Goldman Sachs is one of the largest institutions in the country. In
2010, Goldman Sachs operated 39 subsidiaries and offshore tax havens to
avoid an estimated $3.3 billion in U.S. taxes.
Citigroup, which is another financial institution that was bailed out
by the taxpayers of this country, has paid no Federal income taxes for
the last 5 years. That is not bad. Many people who are out there
watching this are saying: That is pretty good. How did they avoid
paying income taxes when they are one of the largest corporations in
America for a 5-year period? That is pretty good.
During the last 5 years General Electric made $81 billion in profit,
which is not too shabby. Not only has General Electric avoided paying
Federal income taxes during these years, it received a tax rebate of $3
billion from the IRS. GE has at least 14 offshore subsidiaries in
Bermuda, Singapore, and Luxembourg for the purpose of avoiding U.S.
income taxes.
Does anyone still want to know why the American people are cynical
about what is going on in Washington? Does anyone want to know why the
Congress of the United States has an extremely low level of support or
favorability? It is because the American people know they are getting
ripped off. They are

[[Page S2935]]

working 50 or 60 hours a week, and they are paying their taxes. General
Electric makes $81 billion, and over the last 5 years they have paid
nothing in taxes. Does anybody vaguely think that is fair?
We have some people who say: We want to do tax reform, but we want to
make it revenue neutral. We don't want any new income in order to help
us with deficit reduction. Let's cut Social Security, Medicare,
Medicaid, education, but, no, we cannot get new revenue from large
corporations.
During the last 5 years Verizon made over $48 billion in profits. Not
only has Verizon avoided paying Federal income taxes during those
years, it received a $535 million rebate from the IRS--not too bad.
From 2008 through 2010, not only did Honeywell avoid paying Federal
income taxes, it received a $34 million tax refund from the IRS.
Merck is a pharmaceutical company. In 2009 not only did Merck pay no
Federal income taxes, it received a $55 million tax refund from the
IRS. On and on it goes: Corning, Boeing, Microsoft, Caterpillar, Cisco,
Dow Chemical. I have example after example of large profitable
corporations where CEOs make millions and millions of dollars, and they
say to the American people: We support cuts in programs for you--Social
Security, Medicare, Medicaid, you name it--but don't ask us to pay more
in taxes.
This Senate has a decision to make: Do we occasionally--I am not
asking for much--stand up to the lobbyists, campaign contributors, and
big money interests and ask the large corporations and the wealthy who
are doing phenomenally well to help us with deficit reduction or do we
continue to stick it to the working families and the middle class of
this country? That is the challenge and the issue we face. I hope we
have the courage to do the right thing.
With that, I yield the floor.
The PRESIDING OFFICER. The Senator from Maine.
Mr. KING. Mr. President, I ask unanimous consent to speak in morning
business for 20 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.

National Challenges

Mr. KING. Mr. President, I rise today with some humility because I
rise in the footsteps of one of Maine's greatest Senators, Olympia
Snowe. I am fortunate enough to succeed her in this seat. In the midst
of the campaign a year or so ago, I also realized I was not only
succeeding Olympia Snowe but George Mitchell and Ed Muskie, who are two
of the greatest legislators of the 20th century. So it is with some
trepidation to be standing on the shoulders of those great Members of
this body.

Most speeches we hear in this Chamber are on a topic of the day--
taxation, gun control, fairness of the marketplace--but I think in
order to understand the issues we are debating, the issues coming
before us on a continuous basis, we have to have some context. We have
to look back to the history of this body and the history of the
country.
My favorite quote from Mark Twain--and there are lots of them, but my
favorite is: History doesn't always repeat itself, but it usually
rhymes. And in this case I believe that is true.
Let's start with a very basic question: Why do we have government at
all? Why are we here? Why do we have this grand edifice? Why do we have
the rules and laws and this panoply of the Constitution?
Well, it is all about human nature. Unfortunately, part of human
nature is conflict. Often it is conflict that is resolved by violence.
Hobbes, the British philosopher, said: ``Life is nasty, brutish, and
short.''
A few years ago, Bill Moyers, whom I believe is one of the wisest
living Americans, spoke at the graduation of one of my sons. I was at
the graduation because I wanted to see what $100,000 looked like all in
one place at one time. Now it would be $200,000. But Moyers had a very
profound observation, and he talked about the propensity of people to
be mean to each other, to resolve disputes by violence. He used a
phrase that has stayed with me, and I think it is very profound:
``Civilization,'' Moyers said, ``is an unnatural act.'' Civilization is
an unnatural act. It takes work to maintain civilization from one
generation to the next. The world around us today gives us evidence of
this. All one has to do is open the paper: North Korea, the Middle
East, and, Lord help us, the Boston Marathon or two little boys in a
sandbox with one truck. Conflict is part of our human nature.
So the basic function, the basic necessity that brings forth any
government throughout history is to provide security to our citizens,
internal and external, and, of course, the Constitution says this in
the Preamble: to ``ensure domestic tranquility''--that is Al Capone--
and ``provide for the common defense''--that is Hitler or al-Qaida.
But, then, the paradox is once we create a government, we are handing
over power to other people, and there is always the danger the
government itself will become abusive, and that has been true
throughout human history.
The ancient Latin quote is, ``Who will guard the guardians?''
Governments are about power--power we give up in order for governments
to serve us. But, again, human nature raises its head. Lord Acton, the
19th century British philosopher, again had a very profound
observation: ``Power corrupts, and absolute power corrupts
absolutely.'' That is true of all people in all times and in all
places. Power corrupts and absolute power corrupts absolutely.
So these two questions--why have a government and how do we control
the government once we create it--encompasses all one needs to know
about political science. Our Constitution is the best answer ever
provided to these two questions. It is the best answer, and the Framers
knew exactly what they were doing.
Madison, in the 51st Federalist--and I have to apologize to my female
Senator friends because Madison only talked in terms of men, but when
we hear ``men,'' we think ``men and women.'' He meant that, he just
didn't say it. But in the 51st Federalist, here is what he said: ``If
men were angels, no government would be necessary.'' We wouldn't need
it. Then he said:

If angels were to govern men, neither external nor internal
controls on the government would be necessary, either. In
framing a government which is to be administered by men over
men, however, the great difficulty lies in this: You must
first enable the government to control the governed; and in
the next place, oblige it to control itself.

That is the whole deal. That is what the Constitution is all about.
How did it do it? I think the best analogy for the U.S. Constitution is
the homely Vegematic. Remember Billy Mays: It slices, it dices, it
purees. The Constitution is the Vegematic of power. It slices and
dices. It lays it out. It divides it between the people and the
government, between the Federal Government and the States and the
localities, and within the branches of the Federal Government. Power is
separated, and that was the theory of the Framers; that this division
of power--ambition combating ambition--was the structural solution to
the danger of the government abusing its own people.
Then, finally, they weren't satisfied, and in the ratification of the
Constitution was adopted the Bill of Rights. The Bill of Rights is
nothing more than a sphere of protection around each of us as
individuals that says even if the government follows all these arcane
rules and all these Rube Goldberg procedures and a law comes out at the
other end, if it violates free speech, it is no good. If it violates
the right to bear arms, it isn't valid. If it violates people's right
to be secure in their persons and possessions, it is off limits. So the
Bill of Rights is the last sword, shield, and buckler that protects us
from an abusive government.
The tension between effective government and controlling government
has never been resolved in this society. Many of the arguments we are
having now about gun control, the Federal budget, financial regulation,
health care, climate change, and environmental policy are all
manifestations of this age-old debate we keep having.
What I think is amazing is that the arguments and even the rhetoric--
the words themselves--always seem to be about the same. On the
Federalist side, we always hear about the necessity of national
solutions to national problems, universal principles, appeals to
fairness. On the other side, we hear allegations of tyranny,
nullification, references to Jefferson's famous quote, that
``occasionally the tree of Liberty

[[Page S2936]]

must be watered with the blood of Patriots and Tyrants.'' The 10th
amendment, States rights, and hints of secession, the rhetoric is the
same. In fact, the current divisions in this Congress between
traditional Democrats and a Republican Party largely driven by the
anti-Federalist sentiments of the tea party is at least the 10th time
this same issue has arisen in American history.
The American Revolution itself, No. 1, was a populist revolt against
concentrated power far away. Second, the drafting of the Constitution
arose out of the weaknesses of the Articles of Confederation. Many of
us--all of us--sort of feel this government has been what it is
forever. For 7 or 8 years, between the end of the Revolution and the
drafting of the Constitution, we were governed by something called the
Articles of Confederation, which was too weak. It didn't concentrate
power enough, and that gave rise to the Constitutional Convention in
1787.
Then, the ratification of the Constitution and the Bill of Rights was
itself a manifestation of this argument--the argument that the
wonderful terms ``Federalist'' and ``anti-Federalist'' describe the
division in the country which we are fighting over to this day. I think
of Harry Reid and Dick Durbin as Hamilton and Adams and McConnell and
Cornyn are the pre-1803 Jefferson and Madison. I say pre-1803 because
Jefferson was the apostle of States rights, but he became President and
somehow found in the Constitution the heretofore unknown right to buy
Louisiana. We are glad he did.
The Alien and Sedition Acts of 1800, which were the PATRIOT Act of
the day, passed by President John Adams to get at what they thought
were seditious activities in the country. Jefferson, when he was Vice
President, secretly wrote a resolution for the Kentucky legislature
saying that the Alien and Sedition Acts were null and void in Kentucky
and were a violation of the constitutional principles.

The tariff of 1828, known as the Tariff of Abominations, was a tariff
that protected northern manufacturers, but it prejudiced the South and,
lo and behold, South Carolina wanted to nullify it and, in fact, in
1832 voted to do so. The nullification crisis of 1832 was only averted
by the election of Andrew Jackson and a compromise tariff that was
passed in 1834.
That is five times already.
This is an interesting one. The fugitive slave laws in 1850 were
passed by the Federal Government and it says if a slave escaped into
your State, even if it was a free State, your legal enforcement
community had to cooperate and return the slave to its master. The
Supreme Court of the State of Wisconsin in 1854 declared that law
unconstitutional, void, and of null effect in the State of Wisconsin.
Again, it was the tension between the power of the Federal Government
to remedy national problems and the rights of the States and the people
to make their own decisions.
Of course, tragically, the most dramatic manifestation of this was
the Civil War, but the Civil War itself was about this very question.
Wrapped up in States rights and slavery, it was a question of what are
the powers of the Federal Government and what are the powers reserved
to the States and to the people. We all know the tragedy of that event
and what happened.
I think one of the most interesting results of the Civil War is a
change in English usage of the term ``United States.'' Prior to the
Civil War, people in the United States referred to the United States as
a plural noun: the United States are; they are. The United States, they
are doing this or that. In other words, they referred to themselves as
a collective, as a group of States. After the Civil War, the usage
which we have until today is that the United States is a singular noun,
one country: It is. That is an amazing development. There was no law
passed, but that showed how the people's view of what their country was
all about changed.
In the early part of the last century, the New Deal and the two
crises of depression and war--particularly the Great Depression--the
issue then was fought out in the Supreme Court, and the U.S. Supreme
Court at first said the New Deal laws were unconstitutional. They went
too far. The commerce clause wouldn't stretch that far. Then, of
course, there was a lot of politics and discussion. The case went
back--I believe it was the ``sick chicken'' case--and the Supreme Court
said: Well, maybe the commerce clause does stretch that far. Historians
refer to that as ``the switch in time that saved nine.''
The civil rights movement was happening as I was growing up, and
States rights was the rhetoric again. What are the powers that we have
in this city versus the communities and the States.
Here we are, No. 10: The tea party and the urge to shrink government.
The resistance to the Affordable Care Act. I was always surprised that
summer when people were getting red in the face about a health care
bill. It wasn't the health care bill; it was the perception that
Washington was somehow taking over something that should have been left
to them.
Gun control is a classic example which we were debating last week,
and the irony and the difficulty of gun control is the problem is
largely local and particularly in urban areas, but the solution is
national because the guns being misused in urban areas come from all
over the country. That is why, in my opinion, we need national
legislation; at a minimum background checks and trafficking regulation.
Regulation itself is an expression of governmental power, and it is
resisted in many parts of the country.
Budgets--finally, budgets. I shouldn't say finally. My wife says I
say ``finally'' too much and it gets people's hopes up. Budgets. A
budget fundamentally reflects policy. It fundamentally reflects what we
believe about ourselves and about the government. The budget passed by
the House--the so-called Ryan budget--is a classic political document.
I don't mean that in a negative sense. It espouses a philosophy of what
this government should be. It is one more step in this discussion.

I do not believe the Ryan budget is about debt and deficits. It is
about shrinking government. That is what the policy is: to reduce the
size of the government to a place where it is much smaller.
Federal spending is not out of control. Nondefense discretionary
spending today is the lowest it has been in 50 years. Defense is about
the same. What is out of control is all of our spending on health care.
That is what is driving the Federal deficit. It is not about debt and
deficits, it is about shrinking government.
So where does this leave us? An interesting history lesson.
I hope something more.
First, I think it provides us with a way of understanding what
separates us. If we understand what is going on here in this Chamber, I
think it helps us.
Second, I think it is important, for me anyway, to believe there is
no right answer to this question. There is no right answer. It cannot
be all one or the other. Neither side has exactly the right response.
We should not be an uncontrolled, central government, and we should not
be a government that is so dispersed that we cannot do anything. The
tension is hard-wired into our system, but I think it helps us find
balanced policy.
We need a national government--we need a strong national government--
for the same reasons as in 1789: to solve national problems, problems
that cannot be solved at the local level either because of the scope of
the problem itself--global terrorism: I am sorry, the Brunswick Police
Department cannot deal with all the terrorism--or because piecemeal
solutions will not work. Environmental protection has to be done
locally, but it also has to be done nationally. Air moves. Polluted
water moves.
Or immigration. It has to be a national solution.
I am sorry, but strangling government in the bathtub is even less
feasible today than it was in 1789.
Gridlock, which is, if you think about it, gridlock is total victory
for the anti-Federalists. Gridlock is not the answer. The Framers knew
the government had to work. It may be slow and cumbersome, but,
ultimately, it had to be functional. Madison recognized this, and so
did the preamble: ``to form a more perfect Union''--``a more perfect
Union''--than that which had been formed by the Articles of
Confederation.

[[Page S2937]]

On the other hand, on the other side of this argument, though,
Federal solutions all the time are not the answer either.
There is a grave danger that we all face because our job here is
making laws; and the problem is, if the only tool you have is a hammer,
every problem looks like a nail. If the only tool we have is laws, then
we are inclined to try to solve every problem. I believe States rights
are important. I think States have an important role to play in our
system, and I think they are the best places to solve a lot of the
issues that are facing our country.
One of them is education. I remember sitting at home and watching the
debate between George W. Bush and Al Gore in 2000, and they were
arguing what size the classroom should be and how big the school should
be, and I turned to my wife Mary and said: These guys think they are
running for superintendent of schools.
This is not a Federal issue. The Federal Government has a
responsibility in education: to fund, to do research, and to help, but
not to guide.
Overreaching regulation, in my view, is a problem. I believe in
structural solutions. I was not a Member of this body, but had I been,
I suspect I would have opposed Dodd-Frank and supported the restoration
of the Glass-Steagall Act. I think that is a structural solution
because regulatory solutions always end up being burdensome.
A friend of mine in Maine sent me a picture of him sitting next to a
stack this high of regulations at a community bank as a result of Dodd-
Frank that they are going to have to abide by. This is a community
bank. Bangor Savings Bank did not cause the financial crisis of 2008,
yet they are having to bear the burden of these regulations, which are
expensive, which are drying up credit for their customers, and which I
do not believe are going to contribute to a solution.
Another point on this, on the anti-Federalist side, is that deficits
do matter. Deficits do matter. We cannot continue to burden our
children with the costs of government.
In a hypercompetitive world, it seems to me that every tax dollar
counts and every regulation must be smart and minimally intrusive. This
is a new world we are in. We are competing not just with companies
around this country but with companies all over the world, and they
want our jobs.
Understanding these differences and this age-old argument, we have to
understand that we cannot be enthralled to this debate. We cannot be
locked into it. But we do have national challenges. They have to be met
with national solutions. Challenges such as cyber threats, research,
infrastructure, gun crime, terrorism--and, Boston, by the way, is an
example of coordination between levels of government that I think
worked very effectively.
Our failure to act is a disservice to those who built what we have
inherited. Calls to cut government spending are fine, but they must be
matched with specifics. You cannot just talk about government spending
and not talk about FAA towers or our intelligence community or our
defense capability.
We have to understand that each generation must meet its own
challenges and redefine this question with its eyes open to practical
effects, without blinders on of absolutism or ideology.
As I look back on history, the great accomplishments of the body, the
great accomplishments of this government, have rarely if ever been
victories for one side or the other. Instead, they have been based upon
hard-fought battles and grudging compromise, recognition of national
needs along with local interests, and a willingness to honor our most
basic charge: to form a more perfect union.
I hope in a small way to contribute to this, to contribute to the
search for solutions that are practical and effective. I am caucusing
with the Democrats, but I agree with Enzi and Alexander on the
Marketplace Fairness Act. I agree with Enzi and Alexander on the
Marketplace Fairness Act, but with Blumenthal and Kaine on guns. I
agree with Blumenthal and Kaine on guns, but I agree with Coburn on
duplication and regulation. And I agree with Coburn on duplication and
regulation, but I agree with Murray on the budget.
We face serious challenges--defense, budget, and constantly changing
circumstances. We live in a time of accelerated change.
Almost exactly 150 years ago, our greatest President sent a message
to Congress in the midst of the greatest crisis this country has ever
faced. His message was about change and about how to deal with change
and was to try to shake Congress out of the lethargy of politics as
usual because we were in the midst of the Civil War.

I cannot argue that the crises we face today collectively or
individually equal the Civil War, but they are pretty serious. I have
been in hearings in the last 2 weeks in the Intelligence Committee and
the Armed Services Committee, and every single one of the top
professionals in both defense and intelligence have said this is the
most dangerous and complicated period they have experienced in their
35, 40, or 50 years in this business. So we are facing some serious
challenges.
I want to share with you what I believe is the most profound
observation about how we deal with change that I have ever encountered.
December 2, 1862, President Lincoln sent the message, and here is how
it ended. Here is what Abraham Lincoln said:

The dogmas of the quiet past, are inadequate to the stormy
present. The occasion is piled high with difficulty, and we
must rise--with the occasion. As our case is new, so we must
think anew, and act anew.

And here is the key line:

We must disenthrall ourselves, and then we shall save our
country.

We must disenthrall ourselves, think in new and different ways, and
then we shall save our country.
Thank you, Mr. President.
I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Coons). The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. DURBIN. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

Commending Senator King

Mr. DURBIN. Mr. President, let me salute my colleague from Maine for
an extraordinary maiden speech on the floor of the Senate. It was a
great lesson in history, and those of us who continue to study history
realize he has an insight into this Nation which we all should hear and
share. I thank him for being here and for sharing his thoughts with us,
and particularly for being part of the solution to America's challenge.
As I said to him when I went up to him, you will never get in trouble
with me if you quote somebody from Illinois; he quoted Abraham Lincoln,
and did it in an extraordinary way.
So I thank him and commend him for his fine statement.
Pending on the floor is the Marketplace Fairness Act. It is a bill
which has been before this body now for almost a week. It is 11 pages
long. It is not a new concept. Members have had ample time to review
it. We have had three successive votes on the issue--on the budget
resolution, on cloture on the motion to proceed, and on the motion to
proceed--and the outcome of those votes were 75, 74, and 75. That is an
extraordinary majority in this Chamber and indicates a willingness to
tackle this problem and pass this bill.
I have invited my colleagues, as has Senator Enzi, to come to the
floor. If you have something you wish to offer to this bill, bring the
amendment to us. It is not that we are going to accept every amendment,
but that is not what the process is about. Some of these amendments
will be offered for a vote, as they should be, and debated.
So far, there has only been one amendment that has actually been
offered on the floor, and it was objected to by the Senator from
Oregon, Mr. Wyden. The amendment Senator Wyden objected to was called
the Internet Freedom Act, and it basically said we would renew our 15-
year commitment that we will not tax Americans for access to the
Internet. I think that is good policy, the Internet Freedom Act. So I
invited Senator Pryor to offer that on the underlying bill, and it was
objected to by the Senator from Oregon. Make no mistake, the
Marketplace Fairness Act that Senator Enzi and I and Senator Alexander
and Senator Heitkamp bring to the floor is not at war with the Internet
at all. We value it. It is an important part of our economy, an
important part of our lives. We support the notion of Internet freedom
from taxes.

[[Page S2938]]

What we are trying to achieve, though, is the appropriate role for
the Internet when it comes to retail sales. The Marketplace Fairness
Act levels the playing field between businesses on Main Street or in
shopping malls and businesses on the Internet. It says, if the business
in Chicago, IL, on Michigan Avenue has to collect sales tax on sales
over the counter, then Internet retail sales into the State of Illinois
face the same sales tax. That is it. It is not that complicated. No
Federal tax, no new tax; only the collection of existing State sales
taxes. That is all we are asking for.
Our opposition comes from several quarters, but primarily from no-
sales-tax States such as Oregon, Montana, New Hampshire. Those Senators
from those States where they pay no sales tax whatsoever would not even
require their Internet sellers to collect sales tax on sales made in
other States.
At the end of the day, if Marketplace Fairness passes, the citizens
of Oregon will not pay 1 penny in sales tax more they pay now, nor will
the citizens in Montana, New Hampshire, Delaware, or Alaska. The State
law prevails. We do not change it at all. But to suggest you could sit
in Oregon as an Internet retailer and sell into our States at a
disadvantage to the local businesses and not collect sales taxes is
unfair.
What we are trying to achieve here is fairness and balance. We have
obviously the major retailers across America supporting this, but more.
We have units of government that are now not receiving the sales tax
receipts from Internet sales they could. Of course, we have others
interested--developers, Realtors, labor unions, business groups. It is
the most amazing coalition backing the Marketplace Fairness bill.
Senator Enzi and I urge every Senator with an amendment to this bill,
come to the floor now. Do not wait until tomorrow, and certainly do not
wait until Friday. We want to bring up those amendments. I hope those
opposing this bill will not continue to object to them, as the Senator
from Oregon did earlier. But if you have an amendment, please bring it
to the floor. Members get squirmy on Thursday night and Friday morning.
They want to get back home. I understand that. But if you want to reach
that deadline and do it in the appropriate, timely way, please bring
all amendments to the floor now. We urge our colleagues to do that.
I yield the floor.
Mr. ENZI. Mr. President, I want to congratulate the Senator from
Maine on his speech. It was a tremendous history lesson. I have enjoyed
getting to know him a little bit since he got here. I had quite an
interesting surprise yesterday. He came to my office and he brought an
American flag, all framed. The way he got it, there was a desk his
great-aunt had. The desk was probably made in the 1860s. But behind one
of the drawers they found this flag. It was a flag with 44 stars.
Wyoming was the 44th State. So he presented this framed flag to me.
Incidentally, that was only the flag of the United States for a 6-year
period. Then some other States came in and we added them. It has an
interesting arrangement of stars on it too, because the 44 stars do not
fit in a nice even pattern unless you did four rows with 11 in a row.
That changes the dimensions of the flag considerably.
I appreciate his consideration on that. I appreciate the
consideration he has given to pieces of legislation that I have seen
him work on. We do not agree on all of those pieces of legislation, but
it is nice to have the concern and the thought and the process for
getting things done that he brings to the Senate. That is very nice.
I too want to encourage my colleagues if they have amendments to
bring them down. That is what we say this process is about. This is an
amendment process on the floor, which everybody has asked for. We are
doing it. So we need the amendments. A number of people have talked to
me about different parts they had a potential concern about. I hope we
solved their concern by actually looking at the wording in the bill.
This is not a very difficult bill to read. Sometimes we do ones that
are a couple of thousand pages. This one is 11 pages. I do not think
there is anybody who will not be capable of reading the bill. Unlike
most of the bills, this is in pretty normal language, rather than some
of the conforming language that sometimes results around here.
I think most of the problems retailers should have with this have
been taken care of. One that the nonsales-tax States talk about, and
the Senator from Illinois, Mr. Durbin, also mentioned, the people in
those States still will not pay a sales tax. But if you happen to be
one of the people selling into other States, and you sell a tremendous
volume into other States, then under this bill you will be expected to
collect and remit the sales tax, as any retailer in the States that
have sales tax.
There is an exemption. The Senator from Oregon, Mr. Wyden, asked us
to have a compromise. That is why we have the exemption in there. It is
a compromise. We started with it in the Senate as being a $500,000
exemption. The House folks convinced us--as I mentioned, this is a
bipartisan, Republican and Democrat, bicameral, House and Senate
effort. The House convinced us that $1 million was a more reasonable
figure, and they gave some good reasons for it. Now $1 million would
give any small businessman quite a few years, perhaps--I hope it is a
short period of time, but it should give them quite an amount of time
before they had to adjust to this, because they have to sell $1 million
on line in a year before they have to start collecting the tax the next
year.
In a State where there is a sales tax and the people are selling in
the brick-and-mortar store which we are trying to help out with this
bill, they collect from every person from the first dime of sales. So
we have given a little bit of a break to particularly the nontax
States, and to those working on line that are small businesses to
continue this effort to grow the Internet.
Of course, we are hoping a lot of our businesses in our States will
get to that million-dollar mark. But here is the status on the million-
dollar mark. We are told that if we reduced that to $150,000 it would
only affect less than one-quarter of 1 percent of the businesses in the
United States--not very many. They are starting to be a relatively big
business when they are doing $1 million on line. This does not count
their in-store sales. This is just their on-line sales. So I hope the
other States that have had some difficulty with that will realize that
is a pretty liberal mark we have gone to.
Of course, I know a lot of people are getting a lot of correspondence
from eBay. eBay, in the 12 years I have been working on this bill, has
consistently opposed it, even though they appeared almost up to the
time we were ready to do the bill to be in agreement with some of the
things that were in the bill.
Incidentally, that is when we had a considerably bigger bill. It was
about 80 pages long. This one we changed. The main difference is now
there are States rights, which there should have always been. That is
the way it is in the Constitution. This is a States rights bill. That
reduces the length of it considerably.
The million-dollar proposal is to give people time to adjust and
collect. Incidentally, there is kind of a phase-in in this. Some people
say, why don't we have kind of a phase-in? Well, we have 90 days. We
agreed to do 6 months so people could gear up for it.
Besides that 6 months, the States are going to have to provide free
software to be able to do the tax, so that when they put in a ZIP Code
for where they are sending the product, they will automatically know
the tax. They talk about 9,600 tax jurisdictions. Well, in this there
are only 46 different tax jurisdictions. Nevertheless, they put in that
ZIP Code and they will know what the tax is and have no liability
whatsoever because that falls on the people who provided them with this
free software. This makes a huge difference to States, counties, and
municipalities.

I used to be a mayor. I was a mayor of a town that tripled in size
during the 8 years I was mayor. Had it not been for sales tax, we would
have been broke. I checked around to see how much towns and
municipalities rely on the sales tax for their source of revenue. I was
shocked. About the minimum that I run into is 30 percent. There are
quite a few more than I ever thought that rely on sales tax for 70
percent of what they do.
So what does a municipality do with its money? Well, let's see, a lot
of them have schools they have to take care of,

[[Page S2939]]

they have law enforcement they have to take care of, they have
firefighters they have to take care of, some of them have ambulances.
So it is all of the first responders essentially they have to take care
of.
If you are in the northern States, as I was, you have to do it for
snow removal. People are really particular about snow removal.
Incidentally, Wyoming is still having a little bit of winter. Let's
see, today is Wednesday, so that is typically our spring. We have a lot
of snow, even in April. That is when most of our moisture comes. We get
snow in January too, but that is a real dry snow. In fact, we are such
a dry climate that I often tell people that even our rain is only 80
percent moisture. Of course, a lot of it gets sucked up by the air as
it falls. A long rainstorm in Wyoming might be 5 minutes. We get a
total of 13 inches a year. So we rely on that snow. But if you are a
mayor and it snows, you have a major problem, because people expect to
be able to get around. I found out that if you plow it to the center,
then they cannot make left-hand turns. If it is left on the ground very
long and that freezes, then you really have a problem getting it up. If
you plow it to the sides, you block in people's driveways and people's
cars. That usually upsets them too.
I remember when I was mayor, every once in a while I would get a call
from a disgruntled citizen who would complain that I just plowed their
driveway back in after they had gotten it open. They wanted to know
what I was going to do about it. I would tell them to give me a few
minutes. I would get in my car, which always had a snow shovel in the
trunk. I would go to their house and start digging it out. Usually when
they noticed me, they came running out and said: Oh, no, we did not
intend for you to do that. I said: Well, everybody else is doing snow
removal. I never got two calls on that. But that is another use for
sales tax money. There are many more.
All of the charities in a town usually go to the city council. They
say, we have this valuable project. We need some money. Anybody who
says they cannot fight city hall probably never tried. A lot of those
requests are granted.
But if the sales tax continues to shrink--that is what is happening
with it now, State sales tax, county sales tax, local sales tax is all
shrinking. If that continues to shrink, they are going to have to start
cutting back on things they do. Of course, probably some of the charity
things will be some of the first ones to go. It is always hard to tell
what the net effect will be. But if they do not have any ability to
increase the revenues they have--and most of the towns in Wyoming do
not have a chance to increase the taxes they receive. Property taxes
are limited by very specific sorts of things, such as how much you can
levy for the cemetery, and how much you can levy for a library, and how
much you can levy for fire. Those things do not begin to cover the cost
of the service that is rendered.
So to the people who are protecting the Internet, I would say it is
pretty hard to flush your toilet on the Internet. Sometimes those
utilities come into play with these things too. Those taxes are very
important to almost all of the communities across the United States, in
46 States. The other four do not have a sales tax.
One of the things people have said is, if they get this extra sales
tax, why don't they bring down some of the taxes they currently have?
Some of the States and some of the municipalities and counties will do
that. I have had several of them tell me that if we could get a little
bit more in sales tax, we would do that.
But let me tell you a little problem we have in the Federal
Government. We are out of money, so we are cutting back. And one of the
ways we cut back was through the sequester.
The way some of that is worded, some of these things are considered
tax expenditures. For instance, the Federal Government promised to pay
a property tax in lieu of real taxes. In other words, the municipality
does not tax them, the county does not tax them. But the Federal
Government says: Yes, we own property. If you can sell that property at
a private sale, the private entity would have to pay property tax on
that. So it is only fair that the Federal Government pays taxes in lieu
of taxes. They have been doing that for a number of years.
The value of the properties, of course, has gone up considerably,
particularly in cities where there are Federal buildings, but also in
the forests. I have people who know the value went up because they are
able to lease some cabin land in national forests. Their payments have
more than doubled in the last 3 years. That is a 100-percent increase.
I guess this year it is even a more dramatic increase. But the Federal
Government, while it is charging more for the property, is not paying
more in property taxes, which would be the normal thing. This year,
they are taking 5.3 percent out of every bit of that tax. Of course, I
say to people: Wouldn't it be nice if when you file your Federal income
taxes you could have taken 5.3 percent out of there? It is sort of the
same thing. It is what the government said they would pay in taxes.

There are a number of reasons these sales taxes are extremely
important and getting more important. If you had Federal mineral
royalties, you lost 5.3 percent of that too. That is because the States
collect--half the money from the minerals in the State are supposed to
be for the State and half are supposed to be for the Federal
Government. The half the Federal Government received they considered to
be revenue. The half that is supposed to stay with the States or go
back to the States is considered a tax expenditure. Again, it was hit
by 5.3 percent.
One of the reasons this is 5.3 percent this year in the sequester
instead of 2.3 percent--which is what it was across the board for the
.3 percent--is we don't have any months left to revise those
expenditures, but these are one-time payments. The time for condensing
them has not expired, so at the most it should have been 2.3 percent.
That is a different problem that I will handle in a different bill. I
am hoping people will not try to gum this up with a whole bunch of
nongermane or irrelevant motions. If we stick to relevant ones where we
are really trying to improve this bill, I am in favor of it. If we are
trying to do some other peripheral ones, in light of the tremendous
support this bill has, I am hoping people will stick to the bill and
try to perfect it. We can have votes on that.
I see my friend from Tennessee is here.
I yield the floor and reserve the remainder of my time.
The PRESIDING OFFICER. The Senator from Tennessee.
Mr. CORKER. I wish to thank the Senator from Wyoming for his
outstanding leadership on this issue. I know it is something he has
worked on for a long time, and finally we have it on the floor for
debate.
I am a strong supporter of the Marketplace Fairness Act. I thank all
involved on both sides of the aisle for getting it to this place. As
the Senator just mentioned, I do hope we will have an amendment process
soon which will allow people to improve the bill as the will of the
body sees fit.
I come from a State, the State of Tennessee, where we have no income
tax. We generate funding for education and health care through a sales
tax. That is the way our citizens like it.
What we found in the State over time is that more and more sales are
coming into Tennessee residents over the Internet. In many cases what
is happening is people are going into the brick-and-mortar stores that
are all part of the fabric of our community. They are going into brick-
and-mortar stores where people have made investments in land,
buildings, roofs, and operation. They go in and try on goods, see how
it looks, and then they order it on the Internet.
Obviously, those sales proceeds, the sales tax that normally would
come with that, are therefore bypassed. What we have done over time
because of the tremendous success, which I am thankful for, of the
Internet is, there is actually a system that has been created to get
around State laws that exist all around our country. This bill has
nothing to do with imposing any kind of new tax or revenue generator.
This law allows States that already have laws on the books to carry out
their implementation.
Again, our citizens have no income tax. If the country and if society
continues as is and sales tax continues to

[[Page S2940]]

erode because of Internet sales coming in from other places, what
eventually could happen in our State is we will have to move to an
income tax.
Our citizens like it the way it is. I am glad this legislation is
where it is. I hope it is going to become law because I believe it is
something that creates fairness, if you will, in the marketplace so all
of those who are creating and selling goods in the State of Tennessee
and other places are treated exactly the same.
I have heard some arguments from my friends in the financial
community talking about this opening the door to some kind of financial
transaction tax. I deal with a lot of these individuals. I am on the
Banking Committee, and we discuss a lot of issues relative to financial
institutions and transactions. I know of no reason anybody should have
any fear of that.
There is nothing in this bill that creates a different arrangement
within State or local governments that allows them to do something
different than they already are doing. I don't know of any precedent
that has been set in State and local governments as it relates to
transactions regarding financial activities. I don't know of anything
in this bill that should cause people fear of that occurring down the
road.
Typically, when a piece of legislation such as comes up, we have all
kinds of groups who come forward to try to poke holes in it. Some of
them, by the way, are legitimate. Hopefully, the amendment process we
have will help address some of the issues people may be concerned
about.
A lot of times there is just fear generated to keep anything that may
exist from changing. I hope when we have a debate, when we actually
begin having amendments on this issue, what we will do is stick to the
substance, as was mentioned, and that we will try to improve this bill
in a meaningful way.
As it sits, again, I wish to thank the Senator from Wyoming. I wish
to thank the senior Senator from Tennessee, Lamar Alexander, whom I
know has worked very closely with the Senator. I am an original
cosponsor of this bill. I think it is an issue whose time has come. I
hope the Senate will pass this piece of legislation after our debate
concludes. I hope the House of Representatives will do the same.
To me, this is about fairness, fairness in the marketplace so those
people who are involved in sales transactions, whether they are brick
and mortar or whether they are Internet and being shipped out of
someone's garage or shipped from a warehouse, I hope we will achieve a
balance that is appropriate for our country and fair to all those
involved.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Wyoming.
Mr. ENZI. I thank the Senator from Tennessee for his comments. He is
very involved in the Banking Committee. He understands the transaction
taxes that they are talking about, and I appreciate his learned opinion
on that.
Mine comes from section 3, called ``Limitations,'' and in general it
says: Nothing in this act should be construed as subjecting a seller or
any other person to franchise, income, occupation, or any other types
of taxes other than sales and use taxes.
I hope we stick to that and make sure it just says ``sales and use
taxes.'' I have worked on this for 12 years, so it is tough enough to
extend it beyond that. I know there are lots of things people would
like and to open this up.
I appreciate the one amendment that was presented but was objected
to, which was an amendment which would have continued to ensure--we
already have a provision that says you cannot tax the Internet. You
cannot tax the Internet. They wanted to extend that another 10 years,
and it doesn't expire for another couple of years.
I thank the Senator for all of the effort he has gone to on this bill
and all the ways he has helped us. I appreciate his plea for people to
come forward with their amendments.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. SESSIONS. I ask unanimous consent that the order for the quorum
call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SESSIONS. I would further ask unanimous consent that I be allowed
to speak as in morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.

Immigration Reform

Mr. SESSIONS. Mr. President, we have had a long-standing problem in
the enforcement of immigration laws in the United States. The Secretary
of Homeland Security, Secretary Napolitano, has regularly and
sophisticatedly issued policy directives that have adversely impacted
the ability of law enforcement officers to do the job that is required
of them by law. It has caused quite a bit of a problem.
The ICE officers association, the union, voted a couple of years ago
unanimously no confidence in John Morton, the Director of that agency.
He should already have been removed, in my opinion. In addition,
morale, according to a government survey in the ICE officers
department, is one of the very lowest in the government.
I asked Secretary Napolitano in 2011 had she met with these officers
and discussed the problems. The answer was no. I asked her Tuesday,
yesterday, had she met with them. She said no.
I raised the point that these ICE officers are not complaining about
pay, not complaining about working conditions, and not complaining
about things that often enter into employment disputes. What they are
saying is that the Secretary and Mr. Morton are denying them the right
to follow the law of the United States, denying them the right to
enforce the law they are required to enforce, and they charged that
they are refused the right to carry out plain directives from the
Congress that said under certain circumstances they shall commence, for
example, removal proceedings against someone. The Secretary just says:
No, we are not going to do that anymore.

Well, here is a very unusual development, I would suggest. I started
out as a young Federal prosecutor in 1977, and I have never heard of
this occurring. The ICE officers sued Secretary Napolitano and Mr.
Morton, and they raised the suggestion they were placed in an untenable
position where the law required them to do one thing and they were told
by their superiors to do something contrary to law. The case was heard
in Federal Court.
In the hearing yesterday, I raised this with the Secretary. And my
friend, the chairman of the Judiciary Committee, Senator Leahy,
laughed. He said: Well, a lot of people file lawsuits, but it is
another thing to win one of these lawsuits.
That is true. It is unusual to see some of these lawsuits that are
filed actually reach a situation in which Federal officials are
directed to do something. But it appears that is exactly what the
Federal judge did yesterday. He said the Secretary doesn't have the
ability to direct agents not to do what Congress has explicitly
required them to do. They have a right to have certain policies and
procedures--although those are pretty dangerous as it is because
setting prosecutorial guidelines and procedures can create a
circumstance in which effective law enforcement is neutered. But to go
forward and actually dictate that mandated statutory requirements not
be enforced, this Federal judge suggested, was not acceptable.
One ICE agent testified at the hearing that agents have witnessed
large numbers of criminal aliens in jails telling each other how to
evade immigration laws because word has gotten around that ICE agents
are required to take their verbal claims at face value. If they say
they have been here and came here as a child, that must be taken at
face value, without verification, and ICE agents must then release them
instead of putting them on a path to removal.
Another officer, Chris Crane, the president of the 7,600-member
association, testified in court the administration's policies put
officers in the untenable position of releasing illegal aliens from
custody who have been identified as a result of their criminal behavior
simply because word has gotten around they do not have to be deported
if they claim to qualify for the President's administrative amnesty.
It is a remarkable development, that a Federal judge has concluded
that law enforcement officers in America are being directed not to
follow plain law.

[[Page S2941]]

With regard to the proposed legislation produced by the Gang of 8
that is going to be brought up tomorrow in the Judiciary Committee. It
has hardly been read yet, but we know that law greatly expands the
discretion given to the Secretary of Homeland Security. In many
different places it gives the Secretary the power to do that and waive
some of what would appear to be plain policy goals of the act, at least
according to the people who sponsored it.
This has far-reaching implications for the debate on the reform of
immigration. The bill gives the Secretary an unprecedented amount of
discretion and waiver authority. By some estimates, there are over 200
mentions in this nearly 900-page bill of giving more power to the
Secretary. Five times in the bill it affirms the Secretary's
``unreviewable discretion'' to waive or alter provisions of the
legislation as she sees fit. In fact, the bill essentially codifies the
flawed policies that are now being challenged in this lawsuit. It gives
statutory power to the Secretary to do what she has been doing.
Indeed, illegal immigrants apprehended after the new law goes into
effect would not enter deportation proceedings. Instead, the Secretary
``shall provide the alien with a reasonable opportunity to file an
application'' for provisional legal status provided the immigrant
``appears prima facie eligible, to the satisfaction of the Secretary.''
The bill emphasizes that it is not designed to ``require the Secretary
to commence removal proceedings'' against any illegal immigrant.
We have a Secretary of Homeland Security who is issuing policies that
require sworn law officers not to enforce actions specifically required
by congressional law. A Federal judge just yesterday found that is not
proper, and stated in effect the Secretary is not above the law, which
I think most Americans would certainly agree with. Now we have a
proposed new law that would give more authority to the Secretary to
continue to waive policies in the future and would grant the Secretary
additional discretion in many areas.
This is the problem, colleagues: Congress tells America we are going
to give legal status--amnesty--immediately to some 11 million people
who have entered the country illegally. By definition, that is to whom
this applies. And we say: Trust us, we are going to have the toughest
laws you have ever heard of in the future. Well, first, these laws
aren't that tough. Secondly, it provides multiple waiver authorities to
the Secretary of Homeland Security, and this Secretary has proven she
is not willing to have the laws of this country enforced. She has even
been sued by her own law enforcement officers, who have just won at
least an initial victory in a lawsuit in Federal Court.

This is a dramatic example of the problems I have been hearing from
Federal law officers. They need to be respected and affirmed in their
duties. On a daily basis they are out confronting people who are in
this country unlawfully and violating various laws. They are trying to
remove them from the country, as we have always done--and as every
country does when people violate their laws--and they have been
undermined in that. Their morale has plummeted, and the Secretary
hasn't even talked to them.
I will tell you who else hasn't talked to them--the people who wrote
this bill. Chris Crane, the head of the association, wrote, called,
publicly asked for the opportunity to participate in these discussions
and at least tell them what the real world is like. But, no, they had
the chamber of commerce, they had the agriculture people, they had
certain union officials, they had La Raza. They have all been meeting
and talking but not the people out there struggling every day trying to
make sure we have a lawful system.
That is what the American people are asking for. The American people
are not angry at people who want to come to America. We believe in
immigration. We are going to see immigration continue. No one is
suggesting that is going to end. But the American people are upset with
their politicians and their government leaders who say one thing,
promise one thing, and do the exact opposite. They have been promising
for 30 years that we are going to have a lawful system of immigration.
It hasn't occurred.
We passed a law to have 700 miles of fencing, and everybody
applauded--some of them grudgingly. Yet only 30 miles of a double
fencing, as required by law, has ever been built.
Twenty years ago there was a law mandating an effective entry-exit
visa system. Some of the foreign terrorists came in on 9/11 under the
visa system. Forty percent of the people here illegally, it now
appears, come to this country through the visa system. It hasn't been
fixed yet, but we continue to promise we will do it sometime. Even this
bill, as I look at it, won't close the gaps in the entry-exit visa
system. It will not fix that problem.
So I think the American people are pleading with Congress to do the
right thing, to actually make sure we have a system that serves the
national interest and is fair. No system is fair if people who do the
right thing have to wait and wait and wait and people who do the wrong
thing get rewarded. That is so obvious as to be unmistakable.
So I look forward to going forward with a discussion of what we can
do to improve this system. We certainly need improvement. I certainly
respect my colleagues who worked on it. I think their hearts are right.
I know their hearts are right. We can do some good things. But I do
believe the American people are right to be dubious. The American
people are right to watch this very carefully, and they should not
affirm another one of these situations in which a promise occurs, such
as an immediate grant of legality, with a vague promise of enforcement
in the future. This court case is dramatic proof that enforcement has
not been happening.
I thank the Chair, and I yield the floor.
The PRESIDING OFFICER (Mr. Brown). The senior Senator from Montana is
recognized.
Mr. BAUCUS. Mr. President, I would like to say a few words about the
pending bill before us.
This bill will hurt small businesses not just in Montana, New
Hampshire, and Oregon--non-sales tax States--but all across the
country. The bill will let one State go after businesses in another
State. This bill could give any State the right to make businesses
across the country collect sales taxes for that State when selling
products online. Therefore, businesses could be forced to spend their
time and money collecting taxes for States across the country with no
benefit to them.
I am repeating that this bill has not been through regular order. The
Finance Committee has not had a chance to improve this bill or address
the many unanswered questions about its provisions. The floor of the
Senate is no place to try to improve upon the bill and make the bill
work.
Years of work have been put into the issue of State sales taxes, and
I commend Senators Durbin and Enzi for it. Unfortunately, that work is
not reflected in the bill on the floor today.
For years, the concept of allowing States to require out-of-State
sellers to collect sales taxes on their behalf was done through a
compact known as the Streamlined Sales and Use Tax Agreement.
After over a decade of work on streamlining, only 24 States adopted
the required simplification measures. The remaining States refused to
join the compact. Why? Because they didn't want to meet the
requirements for simplification.
To break the logjam, Senator Enzi introduced the Marketplace Fairness
Act in November of 2011. This new bill is nothing like the streamline
bill. They are totally different bills with different legislation.
This new bill says a State can require out-of-State sellers to
collect sales taxes on their behalf simply by meeting six or so
simplification requirements. But these simplification requirements were
ones chosen that the States could easily or already meet. They are
window dressing.
First, the bill says a State must provide software free of charge
that calculates sales taxes due. What that means to the business owner
is 45 different pieces of software. What kind of software is it going
to be? Could it be a single Microsoft Excel file buried deep in a
State's Web site? How would a business make this software workable? The
bill does not say.
Let's say a business thinks the software provided by a State isn't
good

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enough--that it isn't workable. Now this business will be forced to go
to court in that State and prove the State didn't meet the
simplification requirements. What kind of fees--not to mention time--is
that going to take? A business will have to purchase software or
services from a private company to collect sales taxes owed for
multiple States. This won't be free. Businesses will also have to pay
for the ongoing service of collecting and filing taxes.
Second, one of the most confusing issues a business ever faces with
State tax issues is whether it has what is called nexus. In tax jargon,
that means sufficient connection to the State. If the business has
nexus, it has to collect sales taxes on sales into the State right
now--whether or not this pending legislation is passed. This bill does
nothing to solve the confusion on nexus. Even if it passes, businesses
will still grapple with the issue of whether they have nexus in other
States.
Why does this matter? This matters because the bill sets up rules
only for those out-of-State sellers with no nexus--termed the remote
sellers. Does this sound complicated? It is. It is very complicated.
This bill creates one set of rules for sellers that have nexus prior
to the Marketplace Fairness Act, and another set of rules for remote
sellers. What does the small business owner do who isn't sure where his
business falls--into one category or the other? If you get it wrong,
that business may be exposed to additional penalties.
Third, even if the business is clearly a remote seller, the so-called
simplification requirements are in no way simple. Streamline--that is
the other legislation that was worked out between about 24 States--was
book length. Here, instead, we have a bill that is only 11 pages.
The bill's sponsors have thoroughly compromised with 100 different
factions on this, and what they came up with may look simple on the
outside but is total chaos underneath. Remember, too, a business still
could be forced to file sales tax returns in 50 different
jurisdictions. Some of these returns are due monthly. A business will
be subject to all those different jurisdictions' definitions of what is
or is not taxable. It varies by State. In addition, small businesses
will be exposed to audit, collection, and enforcement by 50 different
States.
This bill carves out businesses with less than $1 million in remote
sales. That threshold is too low. Retailers have notoriously low profit
margins, and small businesses can easily surpass that threshold with
sales. In committee we could actually look at data to see what makes
sense. We could bring experts in to talk about what a real small seller
exception should look like, rather than arbitrarily picking a number.
I know Senator Durbin has invited Senators to come down to the floor
and offer amendments. Other Senators are offering amendments on
different State tax issues, such as the Internet Freedom Act. But the
floor is not the right place to mark up a complicated statute, let
alone tack additional legislation onto the bill. This bill needs to be
reviewed in a comprehensive and thoughtful manner through regular
order.
I repeat: This bill is not thought through. It is bad for Montana,
and it is bad for small businesses all across our country, and not just
nonsales-tax States.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The senior Senator from Texas is recognized.

Sequestration

Mr. CORNYN. Mr. President, amid complaints from the White House about
the FAA furloughs, we need to keep at least one thing in mind: The
sequester was President Obama's idea in the first place. His
administration created it; he signed it into law on August 2, 2011; and
he knew the date it would go into effect. And yet, as the deadline
approached, earlier this year the President and his administration
traveled the country to stir up anxiety, concern, and fear over the
imposition of the sequester, warning that the sky would fall like a
modern-day Chicken Little.
It has been almost 2 months since the sequester took effect, and the
administration's claims that the sky would fall have each proven to be
false.
First, we had the Secretary of Education Arne Duncan claiming the
school teachers were already getting pink slips. But that wasn't true.
Then President Obama declared that U.S. Capitol janitors were getting
a pay cut. But on further examination, that proved not to be true.
Customs and Border Protection initially told their employees--
including border agents--that they might be furloughed. However, a
month into the sequester, Customs and Border Protection walked back
that claim and decided to make better use of departmental resources.
The Director of the National Park Service said the sequester might
lead to cancellation of Washington, DC's cherry blossom festival. But
as all the visitors who flocked to DC can tell you, the festival went
on as planned, and Washington's Metro reported one of its highest
ridership days in its history.
With all of these bogus claims, it seems the administration is
desperate to prove it wasn't crying wolf after all.
For example, we are learning that the Federal Aviation Administration
is now deliberately engineering flight delays--deliberately engineering
flight delays, just as families gear up for their summer travel. It is
a bizarre, almost surreal experience. All across America, businesses
work hard to take care of their customers because they know their
livelihood depends on their ability to satisfy their customers' needs.
But when it comes to the administration and the Federal Government, the
FAA and this White House are deliberately trying to make it harder on
their customers--the people who use the airways and fly airplanes.
Last week the head of the FAA acknowledged that, like other
government institutions, his agency has the discretion to fund high-
priority projects--over low-priority projects not a particularly
remarkable statement in and of itself. But we know now that instead of
using that discretion, the FAA has announced it plans to furlough
employees for the remainder of the budgetary year, potentially leading
to flight delays all across this country.
The FAA's Director claims he has used all the flexibility allowed to
him under the law--even though his agency spends $541 million on
consultants, $179 million on travel, and $134 million on office
supplies.
By comparison, the sequester cuts the FAA budget by $637 million--
less than 4 percent of the agency's 2012 budget. I don't know any
business in America that can't manage a 4-percent cut in their income.
But the FAA apparently can't, without disrupting the air-traveling
public, inconveniencing them, and even creating a hardship which is
completely unnecessary.
We have already seen the FAA exercise discretion to one small extent,
and that is by delaying the closure of air traffic control towers until
June 15, after announcing as many as three previous final dates for
implementation.
Much like the proposed tower closures, this recent round of furloughs
is being driven not by the necessity of budget cuts but by political
calculations and sheer incompetence, along with the administration's
desire to apparently maximize the pain on American taxpayers because of
their refusal to take our fiscal health seriously. It boggles the mind.
We have offered legislation that would give the President and this
administration the necessary flexibility to administer the cuts imposed
by the sequester--which the President, again, knew was coming since he
signed it into law on August 2, 2011. But our friends across the aisle
blocked that legislation, which would give the FAA and the executive
branch discretion, and the President's administration sent out a
statement of administration policy saying that if we passed it, he
would veto it.
This morning I joined with Senator Hoeven, our colleague from North
Dakota, to cosponsor bipartisan legislation that would direct the FAA
to eliminate the flight delays it has imposed on air travelers. In
order to meet this directive, the bill would give the Secretary of
Transportation the additional authority to transfer funds within the
Department's existing budget. This legislation represents just one of
the many proposals that are designed to ensure that the sequester is
not used as an excuse to endanger public safety and security, or
inconvenience or create hardships for the air-traveling public.

[[Page S2943]]

Unfortunately, between the cancellation of the White House tours and
now the FAA furloughs, the administration has repeatedly shown it is
more interested in finding ways to inconvenience the American people
than it is in looking for real solutions to our fiscal problems.
The American people, it would seem obvious, deserve more and better
from their government. I urge the FAA, No. 1, to take another look at
its budget, take a look at those piles of money that might be available
to move around to help avoid the furloughs and avoid the inconvenience
and disruption to the public or, 2, to use the flexibility that we
would be glad to give the FAA, if it needs additional authority, to
make commonsense decisions.
We don't need another round of scare tactics. We need a serious
conversation about our country's priorities, and a budget that reflects
them.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The senior Senator from Wyoming is recognized.
Mr. ENZI. Mr. President, I thank the Senator from Texas for his
comments.
There is definitely a problem. We had people miss votes on Monday
night because the supposed furlough that the air traffic controllers
had to have in effect delayed some planes for more than 1\1/2\ hours. I
looked at some of the numbers, and I don't think that had to happen.
Even within areas, there is enough flexibility to do better things.
I noticed some of the sequester things in Wyoming that came out and
made calls about them, and found out that people actually could change
within their own budgets some things they were concerned with and make
sure it didn't affect the customer.
That is just good management.
One of the things was closing down some of the visitors centers in
Yellowstone and Grand Teton. They are not open yet because at this time
we are just getting the snow cleared out. I called and asked about
keeping them open and they said we don't have enough personnel.
You have a gift shop there. That is a profit center. You are supposed
to be making money on that.
They said the money goes to the general fund.
I said: Where do you think your money comes from?
The gift shop should operate, and if they have a problem with
personnel, all they have to do is the person who runs the gift shop
opens the door, does their day's sales, and in the evening as they are
ready to leave, I hope they would look up and down the street and see
if another customer was coming, but if they were not, go ahead and lock
the door and leave. That is just good business. That is the way they
could operate. It is my understanding those gift shops and visitors
centers will now be opened.
There are ways that could be handled. To go back to the bill----
Mr. DURBIN. Will the Senator yield for a question?
Mr. ENZI. I yield the floor.
Mr. DURBIN. I would like to engage the Senator in a dialog, if I can,
through the Chair.
The PRESIDING OFFICER. The Senator is recognized.
Mr. DURBIN. The Senator from Wyoming and the Senator from Tennessee
and I, along with the Senator from North Dakota, have brought this
measure to the floor and invited our colleagues to file amendments. We
are starting to get a response. I can give this general report, kind of
general observation, because we have to decide how to move forward.
So far there are about 13 amendments that have been suggested to us.
I would say, off the top of my head, six or seven of those I would move
to table if they are brought to the floor because they all amend the
Internal Revenue Code. They change Federal taxation. Our bill does not
change Federal taxation, and we run into a procedural problem, known as
a blue-slip problem, if we amend the Internal Revenue Code in the
Senate and send that measure over to the House.
So I urge, and I hope my colleagues will join me, colleagues who want
to change the estate tax, gift tax, whatever it may be, please save
that for another day. If they bring it to the floor, if we end up
voting before cloture, I will suggest we table those so we do not go to
the merits of any of those suggestions but simply say that is not part
of this bill.
There are two or three amendments, one is a managers' amendment, one
is a technical amendment on our side. As you can see, we are starting
to get past the halfway point of the amendments currently filed. Then
there are a handful, five or six amendments from Senators from no sales
tax States, and some of them are fairly predictable as to what they
want. One is a carve-out amendment which says don't let the law apply
to our States. I think we are going to have to face that question at
some point and so be it. Let's have a vote on this and move forward.
But I am still going to join my colleagues urging everyone with an
amendment, please bring them forward. Let's get an understanding of
what we are going to do next. Those who have already delivered the
amendments, thank you. I am sorry the Internet freedom amendment
offered by the Senators from Arkansas and Missouri was objected to by
the Senator from Oregon because I think it would have been a good
addition to this bill.
But I yield to my colleagues and ask for their thoughts, where we
stand at this moment.
Mr. ENZI. Mr. President, I appreciate that question. One of the
reasons there is difficulty, there is the blue-slip problem with the
House, but also we have the section on limitations in this bill that
appears on page 7. There are only 11 pages in this bill so it ought to
be fairly easy for people to look through it and see what is included
and what is not included. We have pretty much limited this--not pretty
much, we definitely limit this to sales and use taxes. When they put
other peripheral things in there, then they are opening the bill to go
into a lot of different things. So I hope that would not happen.
Of course, there was some question earlier in one of the speeches by
the Senator from Montana about the real difficulties of being able to
administer this. Again, there are only 11 pages in the bill. Page 4
covers software, free of charge for remote sellers, that calculates the
sales and use tax on that transaction due at the time it is completed.
It also has to provide a way to file the sales and use tax returns, and
it has to be updated for any rate changes that there happen to be.
The responsibility is all on the State to provide the software. I
think the provisions that are in there pretty well specify how
carefully that has to be done. If it is not, there is no liability on
the remote seller. So I think we have covered that.
Yes, it will be difficult to do that software, but that is part of
the provision in here. It can be done. This is a day, as the Senator
from Tennessee points out, that we can put in a ZIP Code and find out
what our sales tax is going to be. That is what this program is calling
for. I think I have that right. I rely on the Senator from Tennessee to
answer that question more specifically.
The PRESIDING OFFICER. The Senator from Tennessee is recognized.
Mr. ALEXANDER. I thank the Senators from Illinois and Wyoming for
their comments. Basically, the Senator from Illinois has said the bill
is ready to be amended. It is here for that purpose. We encourage our
colleagues to bring amendments if they have them.
We could have started the amendments on Monday if the opponents had
agreed to that. But we were forced, through Senate procedure, to go
through Monday and Tuesday and most of today in order to deal with the
filibuster. But we are about to be ready to vote on amendments.
It was unfortunate; some people have said in a misleading way that
this taxes the Internet. Of course, it does not. There is a Federal law
against taxing the Internet. The Senator from Arkansas attempted to
extend that ban on taxing the Internet for 10 years and one of the
opponents to our legislation blocked that. He blocked even having a
vote on that. That is unfortunate.
It is ironic that the Senator from Montana would object to the fact
that this is an 11-page bill. I don't want to relitigate some of the
other bills we have passed around here, but there was a big hue and cry
when Senators got a 2,700-page bill that dealt with health care and it
was complicated and hard to read. We have gone in a different
direction. We have an 11-page bill that is the result of work that has
gone on

[[Page S2944]]

since 2001 by the Senator from Wyoming, that was introduced in 2011 in
substantially this form, on which there was a full hearing in the
Commerce Committee in 2012 and a partial hearing in the Finance
Committee in 2012. It has been introduced with exactly these 11 pages
since February of this year. So everybody can read it. It is not
complicated. It is plain and simple. It is about States rights. I think
it is good that we have an uncomplicated 11-page bill we all can read
and we have had plenty of time to read it.

Of course, we would have preferred to have it reported by the Finance
Committee, but they would not report it. So the only choice we had was
to bring it to the floor. Now it is open for amendment so I hope we
will do that.
The only other point is it was said there is no benefit to an out-of-
State seller from, say, selling into Tennessee, if someone from Wyoming
is selling into Tennessee. Of course there is a benefit. We are buying
that business's goods. All we want to be able to do is to have the
right to say: Mr. Wyoming, if you want to sell into Tennessee, you are
going to play by the same rules the Tennessee businesses have to play
by. That is all we want to do. The equal protection clause of the
Constitution guarantees we cannot do anything worse to you. But if you
want to sell to us, you do what we do.
We think that is fair and we think that not allowing States to
consider that is forcing States to play ``Mother May I'' with Members
of Congress about matters which should be within their own sovereign
jurisdiction and keeping States from doing what they think is fair.
I thank Senators Durbin and Enzi for their leadership.
Mr. ENZI. Mr. President, I suggest the absence a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. WYDEN. Mr. President, I ask unanimous consent the order for the
quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. WYDEN. Mr. President, I think for the next half hour Senator
Merkley and I are going to have the opportunity to outline specifically
how this affects small businesses in the real world. That has always
been our concern. One of the proponents of the bill earlier today
talked about big businesses and big businesses getting a free ride.
That is not what this debate is all about if you are from Oregon or
Montana or New Hampshire. What you are concerned about are your small
businesses.
These are innovators. They are people without lobbies and political
action committees. They are small businesses. Someday they would like
to be big, but they are trying to compete in a nationwide marketplace
and they are overwhelmingly in opposition to this bill and for
understandable reasons.
They hear this is all about States rights and then they actually look
at what this bill does and this bill coerces them to collect taxes for,
in effect, thousands of jurisdictions around the country.
It has been my interest, and I want to repeat it, to work out a
compromise on this issue. Our side has put down on paper a number of
proposals that we think ought to be the basis for trying to work out a
position that would allow, from our standpoint, at least some semblance
of a right for a State to make its own judgments and not be coerced
into just going along with a piece of legislation that forces our small
businesses to collect these taxes for everybody else. The way I have
compared it, whenever the proponents of the bill say they are for
States rights, what I have said is they are for States rights if they
think the State is right.
I am going to now read some examples because my colleagues have said
they want to hear specific instances. Here is what we heard from the
Oregon Nurserymen. These are not big businesses. These are not
businesses with 500 people. These are businesses with five, seven or
eight employees. Senator Merkley and I are very proud of our Oregon
nurseries. They produce an extraordinarily high-quality product, ranked
one, two or three in every category of nursery products.
The reality is those are products that are being sought out by
Americans in every nook and cranny of the Nation. That is how free
markets are supposed to work. The seller of high-quality goods wins
sales over those supplying lower quality goods.
What this bill is going to do, as outlined by the small businesses
Senator Merkley and I represent, the Oregon Association of Nurserymen,
this bill is going to add substantial costs to Oregon retailers and
make it more difficult for them to compete with lower quality sellers
in other parts of the country.
Here is a letter, and I will quote from it, from the Oregon
Nurserymen. They are the growers and sellers of plants and trees. They
are the prototypical small business and the backbone of our economy.
This is a quote:

It is my view that this legislation would force small
businesses to spend precious time generating endless sales
reports for government instead of tending to customers,
selling plants and trees, and creating traded sector jobs.
Oregon growers are far away from their markets and we need to
look to knock down barriers to sales of our green goods.

There are fewer than five people at these firms. Here is another
quote from a small business:

Let's call the bill what it is--a transaction tax. As the
legislation stands now, the bill will impact the
marketplace--to the detriment of the small business and their
ability to conduct commerce. Congress taxes things it wants
to go away.

That is what these nurserymen, whom Senator Merkley and I represent,
are saying about this bill. They are saying the way they read this--
where they would have to collect taxes for people in thousands of
jurisdictions across the country--is that it is the motivation of
Congress trying to make these businesses go away.
Let me just say categorically, I have known Senator Durbin and
Senator Enzi for a long time. They are not interested in an Oregon
business going away or anybody else's business going away. That is not
their intent. Regrettably, that is the effect. I just outlined how a
small businessperson describes the nature of free markets.
We are very proud of what we do in the nursery industry in Oregon. We
like the fact that we are selling high-quality goods, and we are
winning those sales over those supplying lower quality goods. However,
I know this is going to add substantial costs to Oregon retailers, and
in their own words they have said this would put them at a disadvantage
in tough global competition.
I also want to say this--particularly since the Senator from Illinois
is here--because I hope it indicates my desire to try to work something
out for purposes of passing this bill. I made an enormous concession
for purposes of an agreement. This bill clearly gives a foreign
retailer a leg up over an Oregon retailer or Montana retailer or
anybody else because it doesn't apply to those foreign retailers.
One of my and Senator Merkley's constituents, Fire Mountain Gems--
located in Grants Pass, OR--is competing in a tough global market. And
what is going to happen is this bill--because it will not affect their
foreign competition--is going to cause them to spend time and money
that their foreign competitors would not have to do. They sell all over
the country in scores of jurisdictions. This bill gives a big advantage
to foreign retailers because it does nothing to, in effect, level the
playing field between the small merchants and the businesses that
Senator Merkley and I represent and their foreign competitors.
For the purpose of a good-faith effort, we have made a concession to
try to work this out. At this time I am not pressing to have that flaw,
which is an enormous flaw. It gives a significant advantage to foreign
retailers over American business.
I see the distinguished President of the Senate here, and he has been
so eloquent in standing up for the rights of American businesses. We
have a feature in this bill that actually gives a huge windfall to the
foreign retailers at the expense of American business.
I am not asking for that to be corrected in this legislation, even
though I think it is enormous discrimination against American business.
The Senator from Wyoming and I both serve on the Finance Committee. I
chair the Finance Subcommittee on Global Competitiveness. It is awfully
hard to be globally competitive if we give an advantage to foreign
retailers. But in the

[[Page S2945]]

interest of trying to work this out, I said we will not insist on that
being addressed in this bill. We will have to come back to the Finance
Committee and look at that.
So what our side has said is--Senator Merkley, the Senators from New
Hampshire, the Senators from Montana--just give us the opportunity to
be able to tell our constituents: You are not going to have this pushed
down your throat. You are not going to be coerced into collecting these
sales taxes from thousands of jurisdictions around the country.
I don't see how we can have States rights if a State loses its
ability to make any judgments at all about areas where it wants to make
its own priorities. Its priorities are being determined right here in
Washington, DC, with this legislation with respect to the collection of
sales taxes. Those priorities are being made here.
When Oregon small businesses are being coerced by State governments
located thousands of miles from Oregon's borders, I think that is too
much. I think adding a layer of bureaucracy to the large and growing
national marketplace fostered by the Net in the way this does attacks
our most competitive small businesses.
I also want to highlight--because the only amendment I have objected
to so far today has been the one with respect to the Internet Tax
Freedom Act that I authored back in 1998 in the Senate--the reason I
had to object is the text of this legislation directly undercuts the
Internet Tax Freedom act, and I will be specific.
The law we wrote prohibits discriminatory taxes on electronic
commerce. It is section 1101 of the Internet tax bill. It prohibits
discriminatory taxes on electronic commerce. Under the text of the
bill, in effect they could require an Internet company in one of these
States, such as New Hampshire, to collect sales taxes for the
Massachusetts government. However, if somebody drives from
Massachusetts to another one of these States, such as New Hampshire,
the brick-and-mortar store doesn't have to pump the perspective
customer for all kinds of information about where they are from or
where they are going and the like.
So the reason--with great reluctance--I had to object to adding this
legislation to this bill that I am the original author of in the Senate
is because this bill in its current form directly undercuts the essence
of the Internet Tax Freedom legislation.
At this time I will yield to my colleague, Senator Merkley. I just
want to make a special note that Senator Merkley has made a whole host
of important contributions in the Senate, and I have been especially
pleased he has been a persistent advocate for small business. I know
the Senator from Illinois brought up big businesses in Oregon. The
grief we have here is what this is going to mean to those small
businesses, those nurserymen--the Oregon Association of Nurserymen--
with 5, 8, or 10 people. Those are the people for whom Senator Merkley
and I are advocating.
I am happy to yield the rest of my time to Senator Merkley.
Mr. MERKLEY. Mr. President, how much time remains?
The PRESIDING OFFICER. There is no time agreement.
The Senator from Oregon.
Mr. MERKLEY. Mr. President, I compliment the senior Senator from
Oregon who has come to this floor and very clearly laid out what is
felt in the heart of Oregonians across our State, and that is this bill
tells Oregonians they have to be the collection agents for folks from
45 other States and hundreds of local jurisdictions. This is not just
an expense mandate, it is an offensive intrusion into the rights of the
citizens of our State.
In that regard, I want to just engage in a few questions and thoughts
with my colleague from Oregon and try to highlight some of the concerns
and issues we have.
I ask through the Chair the senior Senator from Oregon: As he reads
this bill, does he see in it any compensation for the time and effort
that the businesses in Oregon will have to spend collecting the tax for
hundreds of jurisdictions across this country?
Mr. WYDEN. I really don't. I know the sponsors of the legislation
keep talking about how this is not going to be a burden, for example,
to the businesses my colleague advocates for, and that there is going
to be software, computers, and technology. I think my colleague's
question is pivotal.
There is a little bit of interesting history I think my friend from
Wyoming knows more about than anyone else. For years there has been an
effort at the State level to try to remove some of the hassles and the
costs that my colleague has talked about. I think the official name--
and my colleague probably knows this--is the State streamlined sales
tax project or something along those lines.
If it were so simple, and if this was something that didn't have the
kind of costs for small businesses that my colleague is so concerned
about, I think we would have already seen it put into effect by the
proponents of the bill.
The reason we are on the Senate floor talking about it--and talking
about Oregon businesses being forced to do this against their will--is
that it is not without costs, it is not without hassle, and the
technology and all of the marvels of software and computers that we
have heard about for the proponents is not there. They have not been
able to do it through that kind of approach--which is essentially
voluntary--so now they are on the Senate floor to force States such as
Oregon to do it.
Mr. MERKLEY. The Senator makes a great point. If States have not
voluntarily entered into compacts where they get to collect their own
sales tax for other States where it is a mutually beneficial
relationship, then it is very strange to have to be compelled--even
those 45 States that have sales tax obviously were not so excited about
forming such a structure. They also seem determined to pull into this
involuntary structure States that find the sales tax abhorrent. If they
find a tax abhorrent--and just a little bit of background there. I
believe our State has voted nine times on a sales tax. Largely the vote
has been on heavy majorities defeating it. Many of those votes are 70
to 30.
Some of those reasons for that is because it is an extremely
regressive tax. Another reason is that it is an expensive tax to
collect; therefore, it is much less efficient and much more government
waste.
Now we have all these Senators who are champions of government waste
not only forcing an extension of their own State's wasteful tax system,
but imposing it upon the small businesses of Oregon. Then we come to a
whole series of concerns that any small business is going to have in
this situation.
A small business is told they must participate, and basically
anything beyond a single-person shop is pulled into this bill. Then
they are subjected to--I think it is over 800 tax jurisdictions--having
to call them and say: We are not sure you gave us the right amount.
Is there anything in this bill that says those hundreds of tax
jurisdictions out there cannot call and basically challenge whether
they have the right amount of money?
Mr. WYDEN. The Senator is right that certainly those jurisdictions
could challenge Oregon. It goes to the question, again, of how the
systems are not in place, so let's just force Oregon to do it even
though the systems have not been available. There are actually more
than 9,000 separate taxing jurisdictions.
What we have been told by the proponents of the bill is that they are
going to get this down to a smaller number of systems than 9,000.
Again, that is why it ought to be possible--if the Senator from
Illinois and the Senator from Wyoming will negotiate with us--to work
something out.
We have given them on paper several proposals to try to find some
common ground where our constituents--folks in Oregon especially, but
they are in New Hampshire and Montana and other States that have made
their own judgments--would have the ability to shape some of our own
decisions. As my colleague knows, Washington State has a sales tax. We
don't have a sales tax. So our region alone shows that if we could
allow States to come together and make their own voluntary judgments,
it is pretty clear that folks in Washington believe they made some of
the right decisions for their economy and individuals and we have made
our own. The fact that a State with a sales tax and a State without a
sales tax coexist--and quite peaceably--right next to

[[Page S2946]]

each other is a pretty good argument why Senator Durbin and Senator
Enzi should work with us to have some kind of a voluntary situation.
Mr. MERKLEY. Mr. President, I think about the small businesses that
would be subject to so many jurisdictions that they now have a tax
relationship with and the responsibility to collect for and the
possibility of having to basically call them and say: Well, you didn't
do it right; you didn't use the right amount or the right software or
this or that.
I can't imagine any small business wanting to be exposed to, as my
colleague pointed out, 9,000--and even if it is consolidated into 800,
that is still a lot of people to deal with. If we have to deal with
five or six, that is overwhelming. But then the question becomes
whether those States have the power to audit the Oregon small
businesses as collectors of a tax, just as they might audit any other
group that was collecting sales tax for their State.
Mr. WYDEN. Again, it sure looks as though those are going to be the
kinds of burdens our States--the ones without a sales tax--are going to
be subjected to.
The proponents say: That is not going to happen. There is going to
magically be all of this software and all of this technology, so if
anybody wants to come back and look later, this is not going to be hard
to respond to.
I just know, looking at all of the businesses that have been in touch
with us--including A to Z Wineworks, for example. We have clothing
stores, such as Queen Bee, a quintessential small business that is
employing eight skilled staff members who all help to bring the designs
to life at the Hive on North Williams Street in Portland. The Senator
and I know them. Their goods are locally crafted in Portland. Rebecca
Pearcy there said she--I will quote her:

Building, running, and maintaining a Web site is expensive
and complicated enough. I can't imagine having to include the
additional infrastructure of charging and paying sales taxes
to States outside of Oregon.

These are real businesses with six, eight people who, when they hear
that they are going to have to pay, that they are going to run the risk
of having these kinds of audits and the like, and that maybe there is
going to be software and computers for them to take care of it, they
say: You have to be kidding. We can't put our business at risk on the
promise of that kind of hope and a Washington promise.
Mr. MERKLEY. Well, I appreciate the Senator expanding on that.
On page 6 of this bill, there is a line that starts out very
promising: ``Relieve remote sellers and certified software providers
from liability to the State or locality for incorrect collection and
remittance . . . '' Well, that sounds OK. That sounds as though you are
not subject to an audit. But then it goes on to say, only from
basically an error in the software provided by the State. In other
words, if a mistake is made, a business owner is subject to all of the
same things as if their efforts were inside the State of New York, and
that means subject to the State organizations inside the government of
New York, that means audits, that means fees. It could include court
actions.
So we are talking about, as the Senator put it, 9,000 jurisdictions
that now can make life completely unmanageable. It would only take 2 or
3 to make it unmanageable, but 9,000 can make it unmanageable for a
small business in Oregon.
Now, my colleague from Illinois has said it is OK for small business
because we put in an exemption for selling $1 million online. That is
no kind of an exemption at all. Let me explain. Let's say a small
business is selling $1 million online and they have a 5-percent margin.
That means they are making $50,000 a year. After they basically
recognize that a person is working for themselves--they have no
benefits separate from that--that is a very modest, middle income. That
is one person. So this has an exemption for only a business of one--a
modestly successful business of one--which means every other business
in the State that is engaged online is subject to this provision.
So while others may feel comfortable telling their home State small
businesses--and this would include those in the 45 sales tax States--
that they are subject to audits and fees and court action from 9,000
other entities, I am certainly not comfortable telling the small
businesses of Oregon they are going to be facing this type of
incredible bureaucracy created by some of the folks who come to the
floor and say they are all about small business.
Now, they want small businesses to be audited and fee'd and asked to
turn up in some other State for a hearing. That is an outrageous attack
on small business, not to mention our States that do not have a sales
tax. It is an outrageous overplay attacking States rights.
Mr. WYDEN. Mr. President, I couldn't say it any better than Senator
Merkley. I think he has characterized what this legislation is all
about better than anybody I have heard on the floor of the Senate.
I have been in this debate for quite a while here. It is about
coercion. It is about putting those small businesses Senator Merkley is
talking about through sort of the equivalent of bureaucratic water
torture. I have explained how the text of it in its present form
directly violates the prohibition in the Internet Tax Freedom Act of
discriminatory taxes.

Again, to the sponsors of the legislation, I wish to repeat that I
and Senator Merkley and Senator Shaheen, Senator Ayotte, the two
Montana Senators--we have put down on paper--on paper, I say to my
colleagues--specific offers to try to work this out. Senator Merkley
and I understand the votes that have been cast. We can count. That is
part of how one gets to be a Senator. But the Senator from Illinois has
not responded in writing to any of the offers we made.
We would like to walk through this process and find a way to have
some opportunity to tell our constituents--particularly the ones
Senator Merkley correctly identified as being small and going through
all of these bureaucratic water torture drills--that they are going to
be able to shape their own future.
Washington has a sales tax. Oregon doesn't. The Senator from Illinois
keeps talking about how Oregon is going to be some huge haven if we get
an opportunity to initiate a voluntary compact. That hasn't happened
today. When we have one State and another that are borders--as my
colleagues know, we are very close. We have kept the peace. We can work
out these approaches.
To have Senator Merkley and I concede on the major point, which is
the provision that gives a foreign retailer a leg up in this bill--
which I think is a very serious defect, and I think a lot of Senators
who vote for this bill, when they see that it is going to be a huge
advantage for foreign retailers, they are going to have some real
misgivings about that--we gave that up for purposes of this. We have
made concessions. We can't even get an offer in writing about something
to negotiate that would incorporate a way to protect our States from
the kinds of features Senator Merkley has correctly described.
I especially appreciate him going through the specifics, as he always
does. Senator Merkley cited the fact that this legislation has a
provision to basically compensate people for errors, which suggests to
me that they think there are going to be a bunch of errors and the
reason they think so is because they are right, as my friend from
Wyoming knows, because they sought in the effort to try to sort this
out during the streamlined sales tax discussions that have gone on for
so many years.
I wish to yield to Senator Merkley for the last word. It is a
pleasure to partner with Senator Merkley on so many issues, and he has
described it today as well as anyone has in this discussion. I thank
Senator Merkley for all of his leadership, and I yield to him for
closing it up, as our small businesses in Oregon, such as the Oregon
Association of Nurserymen, have been talking to us about.
Mr. MERKLEY. I thank my senior Senator for his championing and his
leadership and his longtime defense of the Internet as a place of fair
transactions for small businesses and large, as a tax-free zone. I hope
this Chamber is not engaging in a course that is going to change that
dramatically, as it seems so intent on doing at this moment.

[[Page S2947]]

I am very struck by the correct point my colleague made about foreign
companies. Here we have a company in Canada that is not subject to this
bill. We have a company in Mexico that is not subject to this bill. For
that matter, we have a company in Nigeria or anywhere else in the world
not subject to this bill. So when American businesses say we should
maintain a level playing field to keep business in America, allow us to
play on a level playing field, they are certainly hoping we won't pass
something such as this that gives such an enormous advantage to other
nations.
I must say that constituents have been weighing in on this issue. I
don't think it would surprise anyone to know that they don't like it.
Ninety-eight percent are writing in to us to say: We don't like it. We
don't like the idea of other States auditing our businesses. We don't
like being asked to be a tax collection agency for another State.
Oregon is not asking anyone else to do that unless they have a State-
to-State compact, which is exactly the way this could have been done
and should have been done but hasn't been done because the States
couldn't agree, even though they were sales tax States. That tells us
quite a lot.
They don't like the idea of being subject to bureaucrats or the
potential for legal action where they might have to travel to another
State, and they don't like the idea that there is absolutely no
compensation for the enormous imposition this bill places on the small
businesses of Oregon. That is quite a lot not to like. So, of course,
it is 98 percent against this bill.
I thought I would read one such letter:

Please do not support the Marketplace Fairness Act. It is
not fair to businesses like mine that other States could tax
my Oregon-based company. The voters of Oregon have
continually voted down sales taxes as a method of collecting
revenue within our State. It should not be imposed on us by
other States. If these States have problems with their
collection, they should figure it out with the help of their
local populace . . .
My company is an Internet retailer and we are able to
compete and create jobs on a level playing field.
The dynamics of this fight will have consequences for mid-
sized retailers like mine, especially companies based in
Oregon. Big retailers are fighting to limit our ability to
compete with them. Their goals are to have local footprints
and employees across the country in major metropolitan
markets. They should pay those local taxes and fees where
they are a burden. Companies like mine, that have not chosen
to be in that model, should not.
Please continue to support the Internet's free market.
Please protect Oregon business and maybe even create some new
opportunities.

That is what we should be doing in the U.S. Senate--creating new
opportunities for Oregon small businesses to succeed in this tough
economy. That is what this business owner in Oregon believes, and I
will repeat that sentence since the writer made that point: That is
what we should be doing in the U.S. Senate--creating new opportunities
for Oregon small businesses to succeed in this tough economy. But that
is the opposite of what we are doing here. Maybe that is why Oregonians
are overwhelmingly opposed to this bill.
I think it is clear that there are some ideas for which, if someone
passionately believes in them, they are willing to try them out, they
are willing to develop a pilot project before they impose it on the
entire Nation.
Certainly out of the 45 States, since so many have come to the floor
representing their States passionately, saying this should be done, why
don't they have a pilot project among their States and demonstrate that
this is not going to be a burden in which there are audits and fees and
court appearances and phone calls from the some 9,600 jurisdictions my
senior colleague has pointed out? Why don't they demonstrate that first
before they decide to run an attack on the success of small businesses
in the State of Oregon and, for that matter, across this Nation? How
about that? That is a fair proposal. Run a pilot project.
If you love this idea so much, do it among yourselves and demonstrate
it and bring the report back to this Chamber for further conversation.
But the idea of coercing my citizens of the State of Oregon to do your
work, with enormous imposition and uncertainty, when they are trying to
succeed as small businesses--and when small businesses are the power of
creating jobs in this country--that is wrong.
So for those who speak about the heavy hand of government, those who
speak about the power of small businesses, those who speak about
bureaucracy and imposition, then live your words in action and kill
this vicious attack on small businesses across this Nation.
Thank you, Mr. President.
The ACTING PRESIDENT pro tempore. The Senator from Illinois.
Mr. DURBIN. Mr. President, I understand the passion of my colleagues
from Oregon. Oregon is one of five States with no sales tax. I know
they have voted down a sales tax by statewide referendum repeatedly, by
margins of 2 to 1, I am told. So it is clear they have a passionate
feeling about no sales tax in Oregon.
Here is the good news. The bill Senator Enzi and I have introduced
and want to pass in the Senate will not impose one penny of sales tax
obligation on anyone living in Oregon. Whether they are purchasing over
the counter or they are purchasing over the Internet--not one penny of
sales tax liability. Their States rights are protected. Their passion
against sales tax is honored. And the same is true in Alaska, Montana,
New Hampshire, and Delaware--all the other no-sales-tax States.
But this is what it really gets down to. This is not about the people
in Oregon paying a sales tax. It is about the businesses--the Internet
businesses in Oregon that want to sell into other States and not
collect the sales tax owed to that State. That is it. We are not
forcing them to sell in Illinois or Wyoming. That is a business
decision they are making. We are just saying: If you sell, collect the
sales tax required by Illinois law, Wyoming law, Connecticut law. That
is what it comes down to.
Why is it important? It is important because businesses in our
State--small businesses--are competing with Internet retailers that get
an automatic discount when they do not collect the sales tax.
I listened to the explanation given by one of my friends from Oregon
here, and he said that I am defying the natural forces of the free
market system, where good-quality goods are chosen over lower quality
goods. Well, I cannot argue about the pine trees that are grown in
Oregon because I do not know if they are better than the pine trees
grown in Washington or some other place. But we are dealing in many
instances here with identical goods--the Nike running shoes that you
can buy at Chris Koos' sporting goods store in Normal, IL, or buy over
the Internet with no sales tax. It is not a question of good quality
versus bad quality; it is a question of sales tax or no sales tax.
So what the Oregonians have suggested to us is what they consider to
be a perfect solution: Remove any requirement for their Internet
retailers to collect sales tax from anybody. Therefore, there would be
no Federal mandate.
Well, let me remind them, there is no Federal tax in this bill. There
is no new tax in this bill--State, local, or Federal. All we are asking
for is the basics. If Oregonians want to sell in an adjoining State
such as California, they will collect the sales tax owed to California
and pay it back.
Then I listened to them describe how onerous this would be. Right
now, eBay, which is no friend of this bill, offers a service available
to businesses that they can buy that will tell them the exact sales tax
to be collected based on your ZIP Code and address, and that service
costs--listen to this onerous cost--$15 a month. It is $15 a month. If
you want to go to the highest Cadillac version, it is $140 a month--
less than $2,000 a year.
Incidentally, in our bill we require the States that are asking for
the collection of sales tax to provide, free of charge, software to
every Internet retailer so they can collect this without any expense to
their business.
This is not onerous. It is not unfair. It is just basic leveling of
the playing field.
I want to yield the floor to my friend from Wyoming, my cosponsor of
this measure.
The ACTING PRESIDENT pro tempore. The Senator from Wyoming.
Mr. ENZI. Mr. President, Senator Brown was here earlier, and I had
wanted to be able to speak briefly. So if, when I finish my remarks, he
is here, I ask unanimous consent that he be recognized to speak.

[[Page S2948]]

The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. ENZI. I want to talk about what we have just heard here and an
implication that we are not champions of small business.
I was in small business. I had shoestores, retail shoestores, so that
is why I know some of these problems. I know about the people coming
in, trying on the shoes, getting exactly what fits, having all of the
service of looking through all of the styles and that sort of thing,
and then leaving and making a purchase on the Internet.
Talking to other retailers now, that is not the biggest irritation.
They buy it on the Internet, the product has a problem--and every
product has the potential of having some problem--and they bring it
back to the store where they got the free service, where they did not
buy the shoe, and they ask for it to be replaced. I hope people can see
the inequity in that.
But we are not talking about the small business like the shoestore I
had. We are talking about small businesses that are selling online and
are doing over $1 million a year in sales. I do not think people would
consider that to be a really small business--$1 million in sales. If
they are doing $1 million in sales, you can pretty much guarantee that
they are automated. They are automated in their manufacturing, they are
automated in their sales. That means they have a computer. Not many
businesses today function without a computer. If they have a computer,
you would be amazed at some of the things those computers will do.
I go back to Wyoming almost every weekend, and I visit businesses. I
visit businesses so they can tell me what kinds of problems the Federal
Government is causing for them. I am amazed at the automation they
have. I am amazed at what they are able to do. And most of it is
because of computers. Now we are saying--and I think computers kind of
started out on that coast--that computers just do not have the
capability to do these kinds of things. To be able to figure a sales
tax? All you have to have is a ZIP Code, and it eliminates the 9,600
jurisdictions we are talking about here. That computer can figure that
sales tax, and at the end of the month, that same computer will have
kept track of all of this stuff, and it will do the reports that are
necessary electronically. It can probably do that with about five or
six key taps, maybe less than that. I am sure they could actually be
set to send the report on the last day of the month at a specific hour.
That is how computers work.
So an argument that this cannot be done--I do not think anybody will
buy that. And the States would not be willing to provide those programs
free of charge and then put in the protections from liabilities and
errors if they were not sure they could do it. The reason they put in
those protections for the retailer is because they are sure it can be
done.
I was fascinated by the audits. If they are using that computer
program, how could they vary from what they actually take in to
actually sell? The program takes it in, the program holds it, and the
program sends it out with the report. There is not a lot of room for
error.
Then they say they are going to be running around auditing those
firms. They are going to audit the firm that looks as if it is shipping
everything everywhere and not reporting at all. That is what
accountants do. They figure out the high risk. They are not going to go
in and look for pennies here and there. They go in and look for enough
to at least cover the cost of the audit. If you are not doing probably
10 or 20 times the value of the audit, you are not going to be hired to
do many of them.
So those that are complying, using the program, they are not going to
have any problem.
But this exempts all the businesses that are doing less than $1
million online in a given year. Until you do $1 million online in a
given year, you are exempt from it.
I would imagine that a lot of those nurseries do not hit the million-
dollar mark. They would like to hit the million-dollar mark, and I
would like them to hit the million-dollar mark, and if they got to that
million-dollar mark, I think they would be so overjoyed, they would
say: I am automating on the computer. I will be happy to do it because
maybe I can sell $2 million worth of sales if that is the case.
Now, comments on the streamlined sales tax. My State was one of the
first ones to get into it. So was South Dakota, so were Nebraska and
another 20, 21 States besides those. The comment was that you cannot
streamline this. What kind of incentive has there been for them to
streamline it more? The purpose of the compact is to streamline it
more, but at the moment they are having to protect their sales within
their State to make sure they are not losing the revenues they were
already counting on.
They knew there was this little Supreme Court case that is now 20
years old that challenged us to fix it. That is what we are trying to
do here--fix it. If that fix goes in, I am betting that a lot more
States will join the streamlined sales tax and it will streamline more
than what we envisioned. But even if they do not, there are
requirements in here that keep it uniform enough. And with the
computers, we can show examples of how people already do this sort of
thing on the computer. That should take care of a lot of their
problems.
I yield the floor under the previous order for Senator Brown.
The ACTING PRESIDENT pro tempore. The Senator from Ohio.
Mr. BROWN. Mr. President, I thank Senator Enzi, the senior Senator
from Wyoming, for his good work on this legislation and for his always
courteous demeanor.
Mr. President, I ask unanimous consent to speak as in morning
business for up to 8 minutes.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.

Working Families Tax Relief Act

Mr. BROWN. Mr. President, this week Senator Durbin and I are
introducing the Working Families Tax Relief Act with a majority of my
Democratic colleagues on the Senate Finance Committee.
For a number of years, one area of bipartisan agreement in Washington
has been on the need for comprehensive tax reform. Tax reform can clear
the Code of wasteful carve-outs and special interest loopholes.
Senator Enzi was part of a bipartisan meeting that the Finance
Committee is wont to do, sitting around a table talking about these
issues, just last week.
We understand that comprehensive tax reform can place American
companies on an even footing with foreign competitors. It can reduce
the deficit. It can provide a shot in the arm to economic
competitiveness and growth. On that there is agreement.
What comprehensive reform should not do--and there is general
agreement on this also--is undermine the earned-income tax credit and
the child tax credit. These credits are the single most effective
incentive to increase low-income parents participating in the workforce
and reward work and promote family formation--all goals which we, I
believe, all seek. That is why support for these programs in the past
has been broad-based and bipartisan.
President Reagan and former Representative Jack Kemp--the former
running mate of Senator Dole in a Presidential election--were champions
of the modern earned-income tax credit. When it was expanded in 1986,
President Reagan said it is ``the best antipoverty, the best pro-
family, the best job creation measure to come out of Congress.'' He was
right.
In Ohio some 1 million households received the EITC--the earned-
income tax credit--and 665,000 households received the CTC--the child
tax credit--on average in the 3 years of 2009, 2010, and 2011.
That is why this week Senator Durbin and I, along with most of our
Democratic colleagues, are introducing the Working Families Tax Relief
Act. Our bill would make permanent the 2009 levels for the earned-
income tax credit and the child tax credit. It would index the child
tax credit for inflation. It would allow workers without children to
access the full earned-income tax credit. It would reduce the full
earned-income tax credit access age to 21. It would simplify the filing
process to reduce fraud because there is some acknowledged fraud in
this program, as

[[Page S2949]]

there is throughout the tax system. And I have pledged to many of my
colleagues on both sides of the aisle, as this bill moves forward, to
work to reduce that fraud.
The Recovery Act of 4 years ago expanded access and refundability for
both the EITC and CTC. It was meant to respond to the great recession
but also to ensure the country's finest antipoverty programs keep up
with the times. Making these credits permanent at the current level is
critical to fighting poverty.
In 2011, the EITC and CTC lifted 10 million people, including 5
million children, out of poverty. The EITC has helped nearly half a
million single mothers enter the workforce. These credits do not just
reward work, they provide lifelong benefits to children. We know from
studies that it improves health outcomes, it increases earning
potential for children in low-income families, because those families
pulled out of poverty can give advantages to those children that pay
off later in life they could not give to those children in those
families if their incomes were below the poverty line.
Expectant mothers who receive the EITC are more likely to receive
prenatal care. These are not opinions; they are fact. Newborns are more
likely to experience birth indicators, such as low weight and premature
birth. Behind all of these statistics are real people, people whose
lives and opportunities are improved because of these credits.
Let me share a story. Michelle Eddy, a Cleveland native, is a single
mother who works hard to support her two daughters. One is 9, the
younger is 4. This year the Neighborhood Housing Services of Greater
Cleveland helped Ms. Eddy prepare her tax return. She was able to use
the credits she received from Earned Income Tax Credit and Child Tax
Credit to pay for school supplies, uniforms, and daycare for her two
daughters.
She has worked in a retail store as a shift manager for 5 years. She
recently, though, started a new job as a restaurant server so she can
spend evenings and weekends with her daughters. Without EITC, without
CTC, she would almost certainly have to work a second job to make ends
meet, leaving her children at home without her far too often. The EITC
and the CTC are not what make Michele Eddy a good mother, but they
enable her to be there with her children when they need her most.
Right now, some 30 percent of children under the age of 3 are in
families with too little earnings to qualify for full CTC. Even worse,
nearly 13 percent of children under 3 are in families with no earnings,
and as such get into CTC or EITC. We know the Child Tax Credit is not
indexed for inflation. By the end of the decade another 1 million
children will be forced to grow up in poverty.
The CTC needs to be more robust. We need to reform the Tax Code now.
I am very hopeful that Senator Baucus in his last year and a half in
the Senate, with Ranking Member Hatch and leaders from that committee
such as Senator Wyden and Senator Enzi and others, can reform the Tax
Code, can put measures in place to prevent fraud.
As we introduce the Working Families Tax Relief Act, I remain hopeful
our colleagues across the aisle will work with us to make these credits
a part of tax reform.
I yield the floor.
The ACTING PRESIDENT pro tempore. The Senator from Tennessee.
Mr. ALEXANDER. Mr. President, I have enjoyed the discussion on the
Marketplace Fairness Act. It is nice to have a good debate and I am
looking forward to voting on amendments that are here.
I wish to address two or three points that have been made during the
debate. The first is about what we call here regular order. What we
mean by that is that the bill was introduced, it goes to a committee,
and the committee reports it to the floor, and we bring it up on the
floor, and we have a debate and then we vote on it. We want to see more
of that around here.
Well, the problem with this bill is that the Finance Committee would
not act on it. Let's be straightforward about it. This bill has been
around a long time. The Finance Committee chairman is the only one who
can schedule a hearing and cause it to be acted on. He did not want to
do that, despite the fact that we asked him to do it. So as a result,
the majority leader used a procedure that brings the bill to the floor.
To underscore that, let me ask unanimous consent to have printed in
the Record a timeline for the Marketplace Fairness Act. It details the
steps we have taken since 2001.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Marketplace Fairness Timeline

107th Congress (2001-2002)

S. 512, Internet Tax Moratorium and Equity Act, Senator
Byron Dorgan--introduced 3/9/2001, Referred to: Senate
Finance, Finance Committee hearing--8/1/2001.
S. 1542, Internet Tax Moratorium and Equity Act, Senator
Michael Enzi--introduced 10/11/2001, Referred to: Senate
Commerce.
S. 1567, Internet Tax Moratorium and Equity Act, Senator
Michael Enzi--introduced 10/18/2001, Referred to: Senate
Commerce.
Senate Amdt. #2156 to H.R. 1552, Motion to table amendment
was agreed to--57 to 43 on 11/15/2001.

108th Congress (2003-2004)

S. 1736, Streamlined Sales and Use Tax Act, Senator Michael
Enzi--introduced 10/15/2003, Referred to: Senate Finance.

109th Congress (2005-2006)

S. 2152, Sales Tax Fairness and Simplification Act, Senator
Michael Enzi--introduced 12/20/2005, Referred to: Senate
Finance.
S. 2153, Streamlined Sales Tax Simplification Act, Senator
Byron Dorgan--introduced 12/20/2005, Referred to: Senate
Finance.
Senate Finance Subcommittee on International Trade hearing
on sales tax fairness and other state/local tax issues--7/25/
2006.

110th Congress (2007-2008)

S. 34, Sales Tax Fairness and Simplification Act, Senator
Michael Enzi--introduced 5/22/2007, Referred to: Senate
Finance.
Senate Commerce Committee hearing on ``Communications,
Federalism, and Taxation'' where it was discussed--5/23/2007.

111th Congress (2009-2010)

No bill introduced.

112th Congress (2011-2012)

S. 1452, the Main Street Fairness Act, Senator Dick
Durbin--introduced 7/29/2011, Referred to: Senate Finance.
S. 1832, the Marketplace Fairness Act, Senator Michael
Enzi--introduced 11/9/2011, Referred to: Senate Finance.
11/30/2011--House Judiciary Committee hearing on
``Constitutional Limitations on States' Authority to Collect
Sales Taxes in E-Commerce.''
1/31/2012--Official letter signed by 12 bipartisan Senators
requesting Finance Committee hearing on S. 1832.
2/1/2012--Letter sent by 208 national, state and local
organizations and companies requesting a hearing on S. 1832,
the Marketplace Fairness Act.
4/25/2012--Senate Finance Committee hearing on state and
local tax issues, including S. 1832, the Marketplace Fairness
Act.
7/11/2012--S. Amdt. 2495, the Marketplace Fairness Act,
filed to the Small Business Jobs and Tax Relief Act.
7/25/2012--Official letter signed by 16 bipartisan Senators
requesting a Finance Committee markup on S. 1832, the
Marketplace Fairness Act.
7/24/2012--House Judiciary Committee hearing on H.R. 3189,
the Marketplace Fairness Equity Act of 2011.
8/1/2012--Senate Commerce Committee hearing on
``Marketplace Fairness: Leveling the Playing Field for Small
Business.''
11/29/2012--S. Amdt. 3223, the Marketplace Fairness Act,
filed to the National Defense Authorizations Act. Amendment
was blocked from getting a vote.

113th Congress (2013-2014)

S. 336, The Marketplace Fairness Act, Senator Michael
Enzi--introduced 2/14/2013, Referred to: Senate Finance.
2/14/2013--Official letter signed by 16 bipartisan Senators
requesting Finance Committee hearing on S. 336, the
Marketplace Fairness Act.
3/21/2013--S. Amdt. 578 (Enzi 2nd Degree S. Amdt. #656)--
Deficit Neutral Reserve Fund enabling Congress to pass the
Marketplace Fairness Act. Senate Record Vote #62--Enzi
Amendment agreed to 75 to 24.

Mr. ALEXANDER. To summarize some of these steps, this began in the
107th Congress in 2001. Now Senator Enzi started even before that, I
think, with Senator Dorgan. They introduced the Internet Tax Moratorium
and Equity Act in 2000 and 2001. Then in 2003, the Streamlined Sales
and Use Tax Act was introduced by Senator Enzi. That is 10 years ago.
Then again in 2005 and 2006 Senator Enzi and Senator Dorgan. Then
again in 2007 and 2008, Senator Enzi. In the 111th Congress no bill was
introduced. But now we are getting to a little more recent history.
Last Congress, 2011 and 2012, Senator Durbin introduced the Main Street
Fairness Act. Senator Enzi joined him in that. It was referred to the
Senate Finance Committee.
So for all of that time, the Finance Committee has had an opportunity
to work on this legislation in the way

[[Page S2950]]

they thought it should be. There were hearings in the Senate Commerce
Committee in August of 2012 on essentially the same 11-page bill that
has been introduced here today and that we are acting on.
There was a partial hearing in the Senate Finance Committee during
that year. But that was all. Then, in this year, in February, on
Valentine's Day, Senator Enzi introduced the Marketplace Fairness Act
we are debating here, this 11-page bill. There was a letter from 16
Senators, Republicans and Democrats, asking the Finance Committee to
hold a hearing and to deal with it. But it has not.
I respect the decision of the chairman to be opposed to the bill and
not to hold a hearing and not to report the bill to the floor. But if
he does that, then I would suggest he should respect the right of the
majority leader to bring the bill to the floor and allow the Senate to
debate it.
As far as the regular order goes, a week should be long enough to
consider this bill, which has been in one form or another around since
2001. We could have begun debating amendments on Monday. That is when
the bill came to the floor. But the opponents filibustered it. This was
not a Republican or a Democratic filibuster, it was both sides, from
opponents. And what that deprived us of was an opportunity to vote and
debate amendments on Monday and Tuesday.
Then we had another vote. So we have now had three votes, one during
the budget session, one on cloture on the motion to proceed, and then
one on the motion to proceed itself. We have gotten 74, 75 votes each
time. It is a majority of the Democratic Senators, it is a majority of
the Republican Senators. This does not happen all the time, that we
have such strong majorities on each side of the aisle, saying in three
successive votes of 74 and 75 votes: We favor an important piece of
legislation.
I would hope the better course would be to come to some agreement
that we can take the amendments we have here from Democrats and from
Republicans, bring them up, table them, vote on them, debate them, and
act on this and bring this to a conclusion this week.
Then there is substantial support in the House of Representatives for
this. The bill could then go to the House. The House could do whatever
the House wishes. There could be a conference and we could get a
result. Every attempt has been made by the sponsors of this legislation
since 2001 to bring this through the regular order, which means take it
through the committee. The opponents of the idea have chosen first in
the Finance Committee to not allow there to be a markup of the bill,
and then on the floor to not allow us to debate amendments.
For example, some people say this legislation taxes the Internet. Of
course, that is 100 percent wrong, because there is a Federal law
banning State taxation of the Internet. Senator Pryor of Arkansas
sought to extend that ban for 10 more years today. The opponents of the
bill objected even to a vote on taxing the Internet. This is very
disappointing. That is the information about the timeline I wanted to
put in.
Here is some more information that I ask unanimous consent to have
printed in the Record at this point.
There being no objection, the material was ordered to be printed in
the Record, as follows:

U.S. Senate,

Washington, DC, February 14, 2013.
Hon. Max Baucus,
Chairman, Committee on Finance, Dirksen Senate Office
Building, Washington, DC.
Hon. Orrin Hatch,
Ranking Member, Committee on Finance, Dirksen Senate Office
Building, Washington, DC.
Dear Chairman Baucus and Ranking Member Hatch: We urge the
Finance Committee to markup the Marketplace Fairness Act of
2013 at the earliest date possible. This bipartisan
legislation would allow States to collect the sales and use
taxes on remote sales that are already owed under State law.
Since the 1992 Supreme Court decision, Quill Corporation v.
North Dakota, States have been unable to collect the sales
and use taxes owed on sales by out-of-state catalog and
online sellers. Congress has been debating solutions to
assist States for more than a decade, and some States have
been forced to take action on their own, leading to greater
confusion and further distorting the marketplace.
Today, 18 bipartisan Senators introduced the Marketplace
Fairness Act of 2013, which would give States the right to
decide for themselves whether to collect--or not to collect--
sales and use taxes on all remote sales. Congressional action
is necessary because the ruling stated that the thousands of
different state and local sales tax rules are too complicated
and onerous to require businesses to collect sales taxes
unless they have a physical presence (store, warehouse, etc.)
in the state.
Today, if an out-of-state retailer refuses to collect sales
and use taxes, the burden is on the consumer to report the
tax on an annual income tax return or a separate state tax
form. However, most consumers are unaware of this legal
requirement and very few comply with the law. Across the
country, states and local governments are losing billions in
tax revenue that is legally owed. On average, States depend
on sales and use taxes for 20 percent of their annual
revenue. According to the National Conference of State
Legislatures, this sales tax loophole will cost states and
local governments over $23 billion in avoided taxes this year
alone. At a time when State budgets are under increasing
pressure, Congress should give States the ability to ensure
compliance with their own laws.
The Quill decision also put millions of local retailers at
a competitive disadvantage by exempting remote retailers from
tax collection responsibility. The ``physical presence''
standard means that local retailers in our communities are
required to collect sales taxes, while online and catalog
retailers selling in the same state are not required to
collect any of these taxes. In effect, this tax loophole
subsidizes some taxpayers at the expense of others and some
businesses over others.
State and local governments, retailers, and taxation
experts from across the country are urging Congress to pass
the Marketplace Fairness Act of 2013 because it gives states
the right to decide what works best for their local
governments, residents, and businesses. Given the fiscal
constraints all levels of government are facing, we should
allow states to enforce their own tax laws.
The Finance Committee held a hearing last Congress titled,
``Tax Reform: What It Means for State and Local Tax and
Fiscal Policy,'' on April 25, 2012, which highlighted the
growing demand to close this particular loophole. Two
witnesses, Kim Rueben and Sanford Zinman, expressed the need
for better federal polices to allow the collection of sales
and use taxes from online sales. In fact, Dr. Rueben called
passing legislation similar to the Marketplace Fairness Act
of 2013 a ``no-brainer.'' We appreciate your willingness to
address this issue and would request an additional forum to
further discuss the impacts of this legislation on the U.S.
economy.
The Finance Committee is in the best position to address
the collection of sales and use taxes on remote sales. We
urge the Committee to hold a markup on the Marketplace
Fairness Act of 2013 at the earliest date possible. Thank
you, in advance, for your consideration of this request.
Sincerely,
Senator Michael B. Enzi; Senator Dick Durbin; Senator
Lamar Alexander; Senator Heidi Heitkamp; Senator John
Boozman; Senator Tim Johnson; Senator Roy Blunt;
Senator Jack Reed; Senator Bob Corker; Senator Sheldon
Whitehouse; Senator Amy Klobucher; Senator Al Franken;
Senator Ben Cardin; Senator Dianne Feinstein; Senator
Mary Landrieu; Senator Joe Manchin.
____

U.S. Senate,

Washington, DC., January 31, 2012.
Hon. Max Baucus,
Chairman, Committee on Finance, Dirksen Senate Office
Building, Washington, DC.
Hon. Orrin Hatch,
Ranking Member, Committee on Finance, Dirksen Senate Office
Building, Washington, DC.
Dear Chairman Baucus and Ranking Member Hatch. We urge the
Finance Committee to hold a hearing on The Marketplace
Fairness Act (S. 1832), bipartisan legislation to allow
States to collect sales and use taxes on remote sales that
are already owed under State law. For the past 20 years,
States have been prohibited from enforcing their own sales
and use tax laws on sales by out-of-state, catalog and online
sellers due to the 1992 Supreme Court decision Quill
Corporation v. North Dakota. Congress has been debating
solutions for more than a decade, and some States have been
forced to take action on their own leading to greater
confusion and further distorting the marketplace.
On November 9, 2011, five Democrats and five Republicans
introduced The Marketplace Fairness Act, which would give
states the right to decide for themselves whether to
collect--or not to collect--sales and use taxes on all remote
sales. Congressional action is necessary because the ruling
stated that the thousands of different state and local sales
tax rules were too complicated and onerous to require
businesses to collect sales taxes unless they have a physical
presence in the state.
Today, if an out-of-state retailer refuses to collect sales
and use taxes, the burden is on the consumer to report the
tax on an annual income tax return or a separate state tax
form. However, most consumers are unaware of this legal
requirement and very few comply with the law. Consumers can
be audited and charged with penalties for failing to pay
sales and use taxes.

[[Page S2951]]

Across the country, states and local governments are losing
billions in tax revenue already owed. On average, States
depend on sales and use taxes for 20% of their annual
revenue. According to the National Conference of State
Legislatures, this sales tax loophole will cost states and
local governments $23 billion in avoided taxes this year
alone. At a time when State budgets are under increasing
pressure, Congress should give States the ability to enforce
their own laws.
The Quill decision also put millions of local retailers at
a competitive disadvantage by exempting remote retailers from
tax collection responsibility. Local retailers in our
communities are required to collect sales taxes, while online
and catalog retailers selling in the same state are not
required to collect any of these taxes. This creates a tax
loophole that subsidizes some taxpayers at the expense of
others and some businesses over others.
State and local governments, retailers, and taxation
experts from across the country are urging Congress to pass
The Marketplace Fairness Act because it gives states the
right to decide what works best for their local governments,
residents, and businesses. Given our fiscal constraints, we
should allow states to enforce their own tax laws and make
sure that state and local governments and businesses are not
left behind in tax reform discussions. The House Judiciary
Committee's hearing on this single issue on November 30,
2011, demonstrated the growing demand to close this loophole,
and your committee would provide the best public forum for an
open debate in the Senate on the merits of this important
policy issue.
The Finance Committee is in the best position to shape the
discussion on state and local taxation this year,
particularly on sales and use taxes on remote sales. We urge
the Committee to hold a hearing on the implications of The
Marketplace Fairness Act at the earliest date possible. Thank
you in advance for your consideration of this request.
Sincerely,
Michael B. Enzi, Lamar Alexander; John Boozman; Roy
Blunt; Bob Corker; Jeff Bingaman; Richard Durbin; Tim
Johnson; Jack Reed; Sheldon Whitehouse; Mark Pryor; Ben
Cardin.

Mr. ALEXANDER. These are letters from Senators to the leaders of the
Finance Committee. The first letter is dated January 31, 2012, last
year, at the beginning of the year. It was from five Democrats and five
Republicans who introduced the Marketplace Fairness Act. It asks for a
hearing, asks for the committee to act. That is the first letter.
The next letter came this year, on February 14, from 16 Senators,
both parties, to the Finance Committee, asking the Finance Committee to
act on the Marketplace Fairness Act.
Then there is a letter to the leaders of the Finance Committee from
the National Governors Association, signed by the Democratic Governor
of Washington and the Republican Governor of Tennessee, asking the
Finance Committee, on behalf of the States, to consider this
legislation and act on it. The Finance Committee elected not to do
that.
This information will be part of the Record.
Finally, there is also a letter dated April 22 of this year from the
National Governors Association urging Senators Reid and McConnell to
pass this legislation. I ask unanimous consent that it be printed in
the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

National Governors

Association,

Washington, DC, December 11, 2012.
Hon. Max Baucus,
Chairman, Committee on Finance, U.S. Senate, Washington, DC.
Hon. Orrin Hatch,
Ranking Member, Committee on Finance, U.S. Senate,
Washington, DC.
Dear Chairman Baucus and Senator Hatch: Never before has
the need for legislation to grant states the authority to
collect sales taxes on remote sales been greater. The
continued disparity between online retailers and Main Street
businesses is shuttering stores and undermining state
budgets. Congress has the opportunity to level the playing
field for all retailers this year by passing S. 1832, the
``Marketplace Fairness Act.''
Years ago, the Supreme Court ruled that state sales tax
laws were too complex to require out-of-state sellers to
collect sales taxes on catalog sales. As a result, states are
unable to collect more than $23 billion in sales taxes owed
annually from remote sales made through catalogs over the
Internet. It also creates an artificial price disparity
between goods bought from the corner store and those bought
online. It is in essence an unwarranted yet growing subsidy
to Internet sellers at the expense of brick and mortar
stores.
Failure to act now will only exacerbate state losses and
harm local businesses that are losing sales to online
sellers. According to a leading Internet analytics firm, 2012
holiday online sales are up 14 percent from last year. (Wall
Street Journal, Real-Time Economics, Dec. 5, 2012.) Cyber
Monday was the heaviest online spending day on record at
$1.47 billion. The firm attributes the growth to broad
strength in the e-commerce sector and the fact that more than
half of those who use the Internet have already made an
online purchase this holiday season.
The Marketplace Fairness Act restores fairness by providing
states the authority to collect if they are willing to
simplify their tax systems to make it easier to do business.
It also provides protection to truly small businesses in your
state through a small business exception. This common sense
approach will allow states to collect taxes they are owed,
help businesses comply with different state laws, and provide
fair competition between retailers that will benefit
consumers and protect jobs. Furthermore, passage of the bill
will serve as the equivalent of a $23 billion stimulus to
state and local governments helping to speed recovery and
grow the economy.
Best of all, the Marketplace Fairness Act will accomplish
these goals without raising taxes or increasing the federal
debt.
We understand that you would prefer to take up the
Marketplace Fairness Act next year in the context of wide-
ranging, comprehensive tax reform. Frankly, our Main Street
businesses and states cannot afford to wait. This is our best
chance to pass this important legislation and we urge your
support for enacting S. 1832 this year.
Sincerely,
Governor Chris Gregoire,
Washington.
Governor Bill Haslam,
Tennessee.
____

National Governors

Association,

Washington, DC, April 22, 2013.
Hon. Harry Reid,
Majority Leader, U.S. Senate,
Washington, DC.
Hon. Mitch McConnell
Majority Leader, U.S. Senate,
Washington, DC.
Dear Senator Reid and Senator McConnell: On behalf of the
National Governors Association (NGA), we urge the Senate to
pass S. 743, known as the Marketplace Fairness Act (MFA), as
soon as possible.
Just last month, during Senate consideration of its FY14
budget resolution, the Senate voted 75-24, in support of the
MFA. This overwhelming, bipartisan vote stands in stark
contrast to those who oppose this common-sense legislation.
Never before has the need for legislation to grant states
the authority to collect sales taxes on remote sales been
greater. The continued disparity between online retailers and
Main Street businesses is shuttering stores and undermining
state budgets. The Senate has the opportunity now to level
the playing field with 21st Century rules for all retailers.
Opponents call this legislation a new tax. Of course, this
is not a new tax, nor is it a tax on the Internet or on
business. It is merely a means of collecting taxes owed on
the sale of goods and services over the Internet.
From the viewpoint of the states, if a company is doing
business, selling goods and soliciting customers in their
state, that company should have to play by that state's
rules. If a state has a sales tax on specific goods, then
everybody selling those goods there should have to collect
and remit it. This philosophy is not only fair, it also
promotes competition, which is good for consumers, good for
tax equity, and good for business by leveling the playing
field and creating certainty--all accomplished without
affecting the federal budget.
NGA urges the Senate to take decisive bipartisan action and
pass S. 743.
Sincerely,
Governor Tom Corbett,
Chair, Economic Development and Commerce Committee.
Governor Steven Beshear,
Vice Chair, Economic Development and Commerce Committee.

Mr. ALEXANDER. Now, finally, I ask unanimous consent to have printed
in the Record the names of the Governors and former Governors who
support this legislation.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Robert Bentley, R-Alabama; Bob McDonnell, -R-Virginia;
Chris Christie, R-New Jersey; Nikki Haley, R-South Carolina;
Brain Sandoval, R-Nevada; Terry Branstad, R-Iowa; Dennis
Daugaard, R-South Dakota; Paul LePage, R-Maine; Tom Corbett,
R-Pennsylvania; Mike Pence, R-Indiana; Bill Haslam, R-
Tennessee; Rick Snyder, R-Michigan; C.L. ``Butch'' Otter, R-
Idaho; Jan Brewer, R-Arizona; Bobby Jindal, R-Louisiana; Rick
Scott, R-Florida; Nathan Deal, R-Georgia.
Lincoln Chafee, I-Rhode Island.
Steven Beshear, D-Kentucky; Neil Ambercrombie, D-Hawaii;
Mike Bebee, D-Arkansas; Jerry Brown, D-California; Mark
Dayton, D-Minnesota; John Hickenlooper, D-Colorado; Martin
O'Malley, D-Maryland;

[[Page S2952]]

Dannell Malloy, D-Connecticut; Jay Nixon, D-Missouri; Deval
Patrick, D-Massachusetts; Patt Quinn, D-Illinois; Earl Ray
Tomblin, D-West Virginia.

Former Governors-

Mitch Daniles, R-Indiana; Jeb Bush, R-Florida; Christine
Gregoire, D-Washington.

Mr. ALEXANDER. I do that with a little bit of obvious bias as a
former Governor. I think it is important that the country know what the
Governors think, because the legislation we are talking about today is
a States rights bill. It is an 11-page bill. It is a very simple,
straightforward bill. It simply says that Tennessee, Alabama, Virginia,
New Jersey, any State, has the right to decide for itself whether it
wants to collect taxes that are already owed from some of the people
who owe the taxes or all of the people who owe the taxes. That is it.
That is it. That is all it does.
The Governors who supported it are the Governor of Alabama, Virginia,
New Jersey, South Carolina, Nevada, Iowa, South Dakota, Maine,
Pennsylvania, Indiana, Tennessee, Michigan, Governor Otter of Idaho,
Arizona, Louisiana, Florida, Georgia, Rhode Island, Kentucky, Hawaii.
I just read a bunch of Republican Governors. Now I am into the
Democrats: Kentucky, Hawaii, Arkansas, California, Minnesota, Colorado,
Maryland, Connecticut, Missouri, Massachusetts, Illinois and West
Virginia. The former Governors include Mitch Daniels, Jeb Bush, and the
former Democratic Governor of Washington.
Here we have a bill on the floor that we have voted on three times
already that has a majority of the Democratic Senators and a majority
of the Republican Senators, and 75 votes three times--74 one time, 75
twice. The bill also has the support of a long list of Republican
Governors--actually more Republican than Democratic Governors. Yet we
have got some people in Washington who say, we do not trust the States
to make these decisions. I wonder if these people have ever read the
Constitution of the United States? I wonder if they know what the 10th
Amendment says? This was a very important part of the creation of this
country.
Sovereign States had reserved to them their powers. They didn't
expect to come to Washington and play ``Mother May I'' to a bunch of
Senators and Congressmen who fly here on airplanes and think they are
smarter than they were when they left Nashville, Memphis or wherever
their hometown is. The purpose of this bill is to leave within the
States the responsibility for making decisions.
Some people up here think they know best. Maybe they do, maybe they
don't. Tennessee doesn't have an income tax. I would like for every
State not to have an income tax, but I am not going to impose that from
Washington just because I am a Senator.
Tennessee has a right-to-work law. I would like for every State to
have a right-to-work law, but I am not going to impose that from
Washington. States have the right to be right, States have the right to
be wrong, and Washington has no business telling sovereign States what
its tax structure ought to be. Washington certainly has no business
standing in the way of States stopping discrimination against taxpayers
and businesses because that is exactly what we are doing if we don't
act.
We are perpetuating discrimination. Most conservatives I know don't
like picking and choosing between winners and losers.
They don't like treating one taxpayer one way and one in a similar
situation another way, one business one way and another one another
way. That is exactly what we are doing if we don't act.
We are discriminating against the shoestore in Wyoming, against the
boot store in Nashville, and against the small store in Maryville, TN.
We are saying collect the tax when you sell something, but if your
competitor from outside your State sells it, he or she does not have
to. That is discrimination.
That is why the leading conservatives such as the chairman of the
American Conservative Union, William Buckley, before he died; and Art
Laffer, the economist who helped President Reagan develop his ideas;
and the Governors such as Mitch Daniels, Jeb Bush, Chris Christie, and
Bill Haslam, that is why these conservatives say they support the bill.
We are not even deciding whether States will collect taxes from out-
of-State sellers. We are just saying States have the right to do it. Of
course they have the right to do it.
That is why I am including this list of Governors. I think it is part
of our job as Senators to respect the sovereign States from where we
come, to respect the rights of the States to not think that just
because we are in Washington we know better. Most Tennesseans don't
like that.
I know when I was Governor nothing used to make me madder than a
bunch of legislators coming up with some bright idea in Washington,
passing it, turning it into a law, holding a press conference, taking
the credit for it, and then sending the bill to me. The next thing you
know they would be home making a speech at the Lincoln Day Dinner or
Jefferson Day Dinner, if they were a Democrat, about local control.
Well, it is about local control.
The idea that people in Washington would say we don't trust the
States to make decisions about how to spend money, look at our record.
We are running up trillion-dollar deficits every year, borrowing 26
cents out of every $1 we spend.
I come from a State that has no State debt on roads. It has to
balance the budget every year. It has a AAA bond rating. I would trust
Governor Haslam, Lieutenant Governor Ramsey, the Speaker of the House,
and the Republican legislature a lot more than I do the Senate and
Congress to make decisions about tax dollars.
I think I know pretty well what they will do if they have power to do
it. I suspect they will say they are not going to pick and choose
winners and losers. I know they are going to say that because the
Governor and Lieutenant Governor told me. I expect what they will say
is this will bring in more revenue so we will lower our tax rate
because we will start collecting money from all the people who owe it
instead of some of the people who owe it.
It is correct that some Governors have already said that. We were
told today that in Ohio they have already said if this bill passes,
they will collect money from everybody who owes it and then they will
lower their income taxes.
Art Laffer said in his column in the Wall Street Journal: That is
precisely what we ought to do to stimulate growth. He said: If we are
going to have a tax, the best tax, said Mr. Laffer, is a tax that
covers the largest number of people at the lowest possible rate.
If that is the case, what we are perpetuating within action is the
worst kind of tax, which is the tax that States are allowed to tax a
smaller range of people at a higher rate. This permits them to tax all
the people who are in a similarly situated place at a lower rate, if
that is what they choose to do.
The arrogance of those in Washington who would say they don't trust
the States to make those decisions, they need to go back to seventh
grade, read the U.S. Constitution and learn a little American history
about where this country came from.
I am very proud of this Senate for, on this important issue led by
Senator Durbin and Senator Enzi, coming up with 75 and 74 votes 3
consecutive times to say we believe in a two-word principle on this 11-
page bill, States rights or 10th Amendment, that we will recognize the
power of States to make their own decisions.
If we don't act, all these claims about what happened to the 9,600
jurisdictions will come true. Some Governor--I know I would do it if I
were still there--the Senate didn't act on this, the Congress didn't
act, I would go right back to the Supreme Court. I would bet that 20
years after the Quill case that Senator Heitkamp brought, back before
there was an Internet, when the Court then said that requiring out-of-
State sellers to collect the tax was burdensome, they would look at the
Internet.
Those Justices know they can find out the weather in their hometowns
by putting in the ZIP Code and putting in the name of the town. They
know that an out-of-State seller could figure out the sales tax from
the ZIP Code of the buyer. They know that.
I will predict that they would hold it is not an undue burden, and
then all

[[Page S2953]]

the out-of-State sellers really would have 9,600 jurisdictions to deal
with. We are simplifying, and we are creating something that will work.
We are following a process that is well tried. There are a great many
out-of-State catalog sellers and online sellers that today do exactly
what the instate sellers do. They collect the sales tax. They do it
through the ZIP Code over the Internet. We are saying everybody should
do that except those who sell less than $1 million a year. They don't
have to do anything under this law.
According to many economists, that takes 99 percent of the online
sellers out of the effect of this bill. We have tried to bring this
through regular order. We are down here trying right now. We have
received substantial support. There have been hearings. There has been
a lot of work in the House, and there is broad support from the
Governors. I am hopeful we will move forward tomorrow, finish this
legislation, send it to the House, and take a step toward recognizing
the Constitutional framework of our country by honoring the sovereign
States rights to make decisions for themselves and stopping this
attitude of requiring Governors and legislators to come to Washington
and play ``Mother May I'' with responsibilities that ought to be
clearly the responsibility of States.
I yield the floor and note the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. WHITEHOUSE. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mr. WHITEHOUSE. Mr. President, I don't think it will take this long,
but I ask unanimous consent to speak as in morning business for up to
15 minutes.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.

Climate Change

Mr. WHITEHOUSE. Mr. President, I come to the floor again to address
climate change, particularly today the change that carbon pollution is
wreaking in our oceans.
Water temperatures are increasing, sea level is rising, ocean water
is growing more acidic, and powerful storms are becoming more frequent
and more intense. It is time to wake up to the threat to our oceans and
coasts posed by carbon pollution.
The rate at which carbon is now being dumped into the atmosphere and
absorbed by our oceans is unprecedented. NOAA estimates almost 1
million tons of the carbon dioxide we dump into the atmosphere is
absorbed into the oceans every hour--1 million tons every hour. We know
with scientific certainty that carbon pollution causes the ocean to
become more acidic. Indeed, we measure that carbon pollution has caused
the global pH of the upper ocean to increase nearly 30 percent--by some
measures nearly 40 percent--since preindustrial times.
In Rhode Island, the Ocean State, coastal activities define our
heritage, our culture, and also our economy. Our coastal waters are
spawning grounds, nurseries and shelters for fish and shellfish, which
we enjoy and from which we profit. Our shores and coastal ponds are
barriers that protect our coastal communities from ocean storms and
that naturally improve water quality. Our oceans and coasts make
coastal States such as ours who we are.
We will continue to take advantage of the ocean's bounty, as we
should. We will trade, we will fish, and we will sail. We will dispose
of waste, we will extract fuel and harness the wind. We will work our
oceans. Navies and cruise ships, sailboats and supertankers will plow
their surface. We cannot undo this part of our relationship with the
sea. What we can change is what we do in return. If we use our best
science and judgment to plan for the uses of our oceans, we will
continue to reap the value they provide.
Carbon-driven changes to our planet will continue and will
accelerate. The faster you are driving, the better your headlights need
to be. Our headlights in this area are scientific research and
planning. As we move ever faster into this uncharted territory, our
headlights had better be working to preserve the valuable ecosystems
upon which our communities and economies rely.
The National Ocean Policy, signed by President Obama in 2010,
provides a commonsense framework for sensible research and planning and
public-private cooperation, as we face the significant challenges
bearing down on our oceans and coasts--on both our ecosystems and our
industries.
Last week, the White House released the National Ocean Policy
Implementation Plan, a blueprint for effective management of our oceans
and the Great Lakes. It is not easy to balance the competing needs of
commerce, conservation, culture, and recreation. More than 20 Federal
agencies oversee our marine industries, governing everything from
fisheries to oil and gas leasing. The implementation plan takes this on
and moves us toward better and more collaborative management of ocean
resources.
The implementation plan gathered the thoughts of a wide range of key
stakeholders: maritime and energy industries, conservation and
recreation interests, academic experts, and Federal, State, local, and
tribal governments. The plan supports economic growth by streamlining
permitting and approval processes, by improving mapping and ocean
observing, and by providing greater access to data and information. The
plan lays out specific actions and timelines to protect and restore
coastal wetlands and reefs and to prevent economic losses and job
losses due to degraded shores and degraded waters.
Our coasts need immediate attention, so the plan could not come too
soon. It states:

Our nation lost nearly 60,000 acres of coastal wetlands
each year between 1998 and 2004. . . . Habitats are being
altered by invasive species that threaten native aquatic life
and cost billions of dollars per year in natural and
infrastructure damage.

The implementation process the administration is pursuing is all
about local needs and concerns. So the National Ocean Policy
establishes voluntary regional planning bodies. Local people can get
together, layer together the relevant data, and promote greater and
more responsible use of their region's ocean resources.
In New England, we have seen the value of this cooperative ocean
planning. Rhode Island's Ocean Special Area Management Plan--a special
area management plan is called a SAMP in the trade--has made ecosystem
restoration and industry interests advance simultaneously. I recently
spent time at the Northeast Regional Planning Body meeting in Rhode
Island and I know our region is excited to move forward with a regional
process.
So let's look at some of the practical results when you get the
information and the affected people in the room together. In Rhode
Island, the wind energy industry, with its vast potential for
manufacturing and maintenance jobs, is rapidly developing wind farms
off of our coasts. Thanks to the groundwork that was laid by the Rhode
Island SAMP, wind developers moved fairly smoothly through the
regulatory thicket and they have avoided interference with marine
highways, critical fisheries, habitats, and naval training ranges.
There is actually quite a good report I commend to all my colleagues
on the ocean SAMP published by the Rhode Island Ocean Special Area
Management Plan. It is a practitioner's guide, and it is a very
effective document that shows how well this worked.

In this process, local people were listened to and they were heard.
When the Federal Bureau of Ocean Energy Management announced this wind
energy area here off of the Rhode Island coast, there was an area named
Coxes Ledge, and the fishermen were concerned. The floor of the ocean
at Coxes Ledge made it particularly rich fishing grounds and they
didn't want it interfered with by having that area put up for wind farm
development. Sure enough, when the map came out, the curve of Coxes
Ledge is going right through the middle of the wind farm area,
protected for the fishermen. They were listened to and they were heard.
So much of this is simple common sense. In Massachusetts, the
endangered North Atlantic right whale, a population of about 450 of
them, feeds in the waters just off of Boston. The whale strikes between
shipping and the

[[Page S2954]]

right whales were becoming a problem. And because the right whale is
endangered, it was becoming a real risk for shipping going in and out
of Boston Harbor. So they found data that showed where the whale
strikes were likely to be and they mapped that data. When they mapped
the data, they saw if they moved the shipping channel out of Boston
Harbor up a little bit they could come through an area that was largely
safe from whale strikes. The cost to the industry was somewhere between
9 and 22 minutes of extra transit time--virtually nothing--while the
number of whale strikes has dropped significantly.
Here is another example from outside of Delaware. The green sort of
neon-colored dots here track the signals coming off cargo ships going
in and out of Delaware Bay. As you can see, there is a pretty solid
track coming out of Delaware Bay right through here. When Delaware
first proposed its wind energy areas, they proposed these light green
blocks as wind energy areas. This one, as we can see here, was planned
right on top of the main shipping channel heading southeast out of
Delaware Bay.
Critics say these kinds of efforts to get the data and the people in
the room together ``zone'' the ocean. That is just plain factually
wrong. The policy brings together people who use our ocean. In this
case, the case of Delaware Bay, simply putting everybody in the room
allowed the wind energy areas to be modified to avoid the conflict. So
the southeastern area comes out and the turbine areas are beside it and
the problem has been solved. That is not zoning, that is what military
officers would call situational awareness; what the military would call
deconfliction. What it really is is common sense.
As Nancy Sutley, the Chair of the White House Council on
Environmental Quality, said:

With increasing demands on our ocean, we must improve how
we work together, share information, and plan smartly to grow
our economy, keep our ocean healthy and enjoy the highest
benefits from our ocean resources, now and in the future.

Our ocean and coastal economy is important. Shoreline counties in
this country generate 41 percent of our gross domestic product. In
2010, 2.8 million jobs were supported by maritime economic activities;
commercial ports supported 13 million jobs; energy and minerals
production supported almost three-fourths of a million jobs. But all of
this activity creates opportunities for conflict.
The National Ocean Policy Implementation Plan is a blueprint to
resolve those wasteful conflicts, to ``deconflict'' intelligently, and
to streamline efforts across the Federal Government to keep our oceans
and our ocean economy thriving. And it lets each region go forward at
its own pace.
Michael Keyworth, recent head of our Rhode Island Marine Trades
Association, helped develop the Rhode Island Ocean Special Area
Management Plan, SAMP, said this:

The National Ocean Policy Implementation Plan will enable
regions like New England to move ahead with this smart ocean
planning by engaging people like me, who live and work on the
water every day, while not forcing planning on other regions
that do not currently want to engage in the process.

Climate change is upon us, and its effects will only accelerate as we
continue to spew megatons of carbon into our atmosphere. Changes are
occurring fast in the oceans. That fact makes it all the more important
that Congress remain vigilant and that we put our full support behind
the commonsense framework of the national ocean policy.
I yield the floor and I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. WHITEHOUSE. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.

Protecting Social Security

Mr. WHITEHOUSE. Mr. President, last month, the Senate approved a
budget that included a blueprint for balanced and responsible deficit
reduction. That budget was skillfully managed by our Budget Committee
chairman, Senator Murray. It would complete the deficit reduction
needed to stabilize our Nation's finances with a mix of smart spending
cuts and revenue from closing wasteful tax loopholes. Top economists
agree we need about $4 trillion of deficit reduction to make our
finances sustainable, and our budget gets us there. Together with the
deficit reduction enacted last Congress, the Senate budget would reduce
the deficit by $4.3 trillion through a nearly 2-to-1 mix of spending
cuts and revenue.
House Republicans took a very different approach with their budget,
making only cuts--drastic cuts--to education, law enforcement, medical
research, and even ending Medicare as we know it for future retirees.
The House budget derives its deficit reduction from cuts that primarily
hurt low-income and middle-class Americans, while refusing to touch a
single tax giveaway to wealthy and well-connected special interests.
Senate Democrats took a middle course; House Republicans produced an
extremist tea party wish list.
In his own budget plan, President Obama included some smart
provisions such as investments in infrastructure and the Buffett rule
for tax fairness. I respect the President's outreach to a compromise
with Republicans, but I cannot support the cuts to Social Security
benefits in his plan. It is simply wrong to place the burden of deficit
reduction on seniors and the disabled. Social Security--one of the
fundamental pillars of the American middle class--has not contributed
and will not contribute to our deficits. Social Security is fully
funded by its participants through payroll taxes and cannot by law add
to the deficit.
Under current payroll tax levels, Social Security will have the funds
to pay 100 percent of benefits until 2033. It is true we do need to
make some adjustments to ensure that full benefits can be paid beyond
that date, but that task has nothing to do with deficit reduction. Even
if Congress did nothing before 2033, the projected shortfall would
force automatic benefit cuts, not deficit spending.
I do look forward to working with Senators of both parties to ensure
that Social Security remains fully solvent for generations to come, but
that discussion does not belong in the unrelated debate on our Nation's
budget deficits.
The Social Security cuts the President has proposed are not just in
the wrong discussion, they are wrong themselves. To reflect inflation,
Social Security recipients each year get cost-of-living adjustments,
what we call COLAs. The President's proposal changes the formula used
to make that determination, shifting to something called the chained
Consumer Price Index or chained CPI. It sounds innocuous, but make no
mistake, it is a benefit cut cloaked in technical jargon.
The argument for a chained CPI is that it is a more accurate measure
of inflation--that it takes into account real-world decisions consumers
make to modify their buying habits as prices fluctuate. As the price of
apples goes up, we buy more bananas, so the overall effect on our
budget is moderated. The result is lower annual cost-of-living
adjustments--about 0.3 percent each year. But let's take a look at how
seniors fare under the existing COLA structure.
In 2010 and 2011, seniors received no cost-of-living adjustment
whatsoever--0.0 percent in 2010, 0.0 percent in 2011. But according to
the existing consumer price formula used by government accountants,
prices didn't rise enough to justify COLAs. That is what the COLA
formula says. But in real life, what did it look like?
According to the Bureau of Labor Statistics, seniors saw food prices
rise 1.5 percent in 2010, medical costs increase 3.3 percent, and they
saw their gas and home heating oil go up by more than 13 percent each,
and the COLA covered zero percent.
The next year, 2011, these costs increased again. Food prices jumped
4.5 percent, medical care jumped 3.5 percent, gasoline jumped 9.9
percent, and fuel oil jumped 14.3 percent, and again the COLA for
seniors was zero.
So 2010 and 2011 add together; they are not included in one another.
So food and beverage is a total of 6 percent, plus, allowing for
compounding, 6.8 percent for medical care, 23.7 percent for gasoline,
and 27.8 percent for

[[Page S2955]]

fuel oil--all with a COLA of zero percent.
The numbers show what Rhode Island seniors know: The problem with the
Social Security COLA is that it is too low, that it doesn't meet the
real costs seniors experience in real life.
Why does this happen? The existing cost-of-living formula considers
prices across the whole economy, including products seniors are not so
likely to buy, such as flat-screen TVs and smart phones and sporting
equipment. Their prices may have fallen, but seniors don't benefit much
from those lower prices.

The problem is that the current system fails to account for seniors'
true costs in these areas. So my position is that we should move on to
a more accurate formula for seniors, one that focuses on food, medicine
and heating oil and gas and the other things seniors actually buy. I
have been proud to support legislation to change the Social Security
COLA formula to one that is geared more toward seniors, and I will
continue to fight for the adoption of that new formula.
Chained CPI takes us in the opposite direction. It assumes consumers
will alter the types of goods they buy as prices rise. But seniors on
fixed incomes have little ability to shift their buying habits away
from these basic expenses, things such as food, medical care, gasoline,
and fuel oil. It is hard to shift away from those. The lower COLAs that
chained CPI would produce will only cut into seniors' already tight
budgets, and force seniors to bear the burden of reducing deficits that
Social Security had no part in creating. A 0.3-percent reduction each
year might sound small, but over time the power of compound interest
makes those benefit cuts significant.
For people currently nearing retirement, these cuts would amount to
annual benefit reductions of $658 by the time they reach age 75, $1,147
by the time they reach age 85, and $1,622 by the time they reach age
95. That same power of compounding makes these cuts even larger for
future generations of seniors. Perhaps $658 or $1,1622 doesn't sound
like much money to some folks around here, but to a senior in Rhode
Island living on Social Security, that is real money.
After getting no COLA for 2 years in a row, Bethany, a senior from
Smithfield, RI, wrote to me:

My health is not the best and it's not easy trying to
survive on my Social Security and the increasing prices of
gas, food, etc. and co-pays for medical. . . . The COLA
calculation for Social Security doesn't work. We need an
increase yearly to stay even with rising premiums and
everyday expenses. Please continue to fight for Social
Security and Medicare.

Deanne from Coventry, RI, wrote to me in February:

I am 68 years old and retired. I cannot work even part time
because of severe Arthritis. My son lives with me who is
permanently disabled due to an accident when he was 9 years
old. He is now 44 years old. We just make ends meet with
Social Security as we have no other income. We wear sweat
shirts and pants to bed and coats in the house during the
winter because we can't pay the high prices of oil. If Social
Security gets cut, I don't know how we will make it. I have
worked all my adult life until the last two years. I NEED my
Social Security. . . . In the face of ever-increasing prices
for health care, home heating, prescription drugs and grocery
bills, asking seniors to give up more and more of their
Social Security benefit as they age when every dollar counts
is just plain wrong.

These are real-life experiences of people who are the kind of folks
chained CPI would affect. Yes, we need to make additional sacrifices to
complete the job of deficit reduction; no, those burdens should not
fall on our elderly and disabled constituents. Our deficits come from
unnecessary Bush-era tax cuts that virtually exclusively benefited the
wealthy, they come from a decade of wars we didn't pay for, and they
come from the worst economic crisis since the Great Depression. They
have nothing to do with Social Security, so don't take it out on the
seniors.
As the Senate budget shows, we can complete the task of stabilizing
our Nation's finances in smart ways, in fair ways, in balanced ways, in
ways that don't put the burden on those who can least afford it.
When I ran for this office, I pledged to the people of Rhode Island
that I would oppose cuts to Social Security, and I will keep that
promise.
I yield the floor and I suggest the absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. WHITEHOUSE. Mr. President, I ask unanimous consent the order for
the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.

____________________