[Congressional Record (Bound Edition), Volume 151 (2005), Part 20]
[Senate]
[Pages 27290-27291]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         TAX RELIEF ACT OF 2005

  Mr. KOHL. Mr. President, they say that timing is everything. And the 
timing of the Congress's actions these days is indicative of our 
priorities. Yesterday, the House rightly voted against the Labor, 
Health and Human Services and Education appropriations bill that under 
funded job training, education and health care. Last night, the House 
voted to pass a reconciliation spending package that would cut programs 
such as child support, food stamps, and Medicaid. Also last night, the 
Senate passed $60 billion worth of tax cuts.
  What does that say to hard working Americans about the priorities of 
this Government? I want to make it clear to my colleagues that I 
support many of the provisions that are included in this legislation. I 
support tax provisions aimed at helping Gulf States recover from 
Hurricanes Katrina and Rita. I support extending the tuition deduction, 
the research and development tax credit, and a deduction for teacher 
expenses, among others. And I strongly support the extension of the 
increased exemption amounts for the alternative minimum tax.
  In fact, I would support much broader reform of the AMT. More and 
more middle class individuals and families will find themselves 
impacted by this onerous tax if Congress does not act soon to correct 
it. I would also support some capital gains and dividend rate reform. I 
want to make it clear to my constituents that I am not opposed to tax 
cuts--when the time is right--when we are in surplus. In 2001, I 
supported the tax cut legislation, based on the fact that we were 
running a surplus. It stands to reason, then, that during these times 
of record deficits, that we can ill afford the tax package the Senate 
approved yesterday.
  I want to repeat what I just said--I am not opposed to tax cuts. That 
is why I supported the alternative package of extensions offered by 
Senator Conrad. This amendment contained nearly identical extension 
provisions. The amendment even went further on the AMT then the 
underlying bill, ensuring that no more taxpayers pay the tax over 2005. 
The difference? The alternative was fully paid for, through a series of 
offsets.
  It remains a mystery to me why so many of my colleagues chose to add 
to the deficit rather than responsibly extend these important 
provisions. I would have hoped that more of my colleagues that voted 
against this alternative would have come to the floor to give their 
reasoning. Adding $60 billion to the deficit is not something any of us 
should take lightly. When we are cutting fundamental programs in order 
to reduce the deficit, when we are faced with continued costs 
associated with rebuilding after the hurricanes, when costs associated 
with Iraq and Afghanistan continue to mount--is that the time to extend 
tax cuts without paying for them?
  For me, the answer is a resounding no. Timing is everything. When we 
were in surplus, I supported tax cuts. Times have changed, and we can 
no longer afford to adopt tax legislation without paying for it. 
Yesterday, the Senate had a chance to show our constituents that we can 
make difficult budget decisions, just as so many American families do 
every month. But instead, the Senate chose to pass the buck on that 
decision, and add $60 billion to our growing deficit.
  Thank you, Mr. President, and I yield the floor.
  Mr. INHOFE. With this week's consideration of the tax reconciliation 
act, the United States Senate engaged in a heated exchange over the 
reinstatement of the windfall profits tax on American oil. The key 
question in this debate, which my colleagues have not been able to 
answer, is how can a tax increase on oil and gas production reduce 
prices? It can't and history proves it.
  First enacted under President Jimmy Carter in 1980, Congress imposed 
an excise levy on domestic oil production called the windfall profits 
tax. The result was inevitable. According to a 1990 report by the 
nonpartisan Congressional Research Service, the results of Carter's WPT 
were hugely counterproductive: ``The WPT reduced domestic oil 
production between 3 and 6 percent, and increased oil imports from 
between 8 and 16 percent . . .  This made the U.S. more dependent upon 
imported oil.''
  The stakes for Oklahoma are huge considering that oil and gas 
production is our largest single industry. During debate, Democrats 
filed amendment after amendment, nine in total, to penalize and to 
increase taxes by billions of dollars on one of America's most vital 
industries. To Oklahoma's good fortune, and that of the American 
consumer, each of these amendments was either soundly defeated or 
withdrawn.
  Over the past few months, Democrats have fired a barrage of unfair 
rhetoric maligning all those who work in the oil and gas business. With 
one breath they demand Congress reign in the recent high oil prices, 
with the next they insist on tax increases to punish those who they 
claim are responsible. With so many friends, acquaintances, and 
constituents in the business, I find these reckless demands and 
accusations unfair and dangerous for Oklahoma.
  As a teenager, I worked as a tool dresser on a drilling rig for a man 
by the name of A.W. Swift. Many in Oklahoma know his name, but few in 
this Chamber would. Like many who have operated in oil and gas, he ran 
a thrifty and tight operation but was eventually taxed out of business. 
This same man lost his son, Burt Swift, after a rig explosion claimed 
his life but spared mine. Sacrifices, such as his, are often a part of 
the harsh realities faced by many in the oil business.
  Oklahoma would be especially hard hit by a WPT. Currently, well over 
two-thirds of the State's oil production comes from marginal wells. A 
marginal well is typically defined as one which produces less than 10 
barrels of oil or 60 mcf of gas a day. They are called ``marginal'' 
because their profitability is at times just at the margin, depending 
upon production costs and current market prices.
  As oil prices decrease many of these wells become uneconomical and 
are increasingly ``shut in'' or ``plugged and abandoned.'' However, as 
oil prices increase, Oklahoma's independents increasingly drill for and 
produce from marginal wells. The added cost of a windfall profits tax 
drastically harms the economic viability Oklahoma's marginal wells.
  Outside of the damage a WPT would inflict upon Oklahoma, this tax 
would only further harm our Nation's shrinking energy independence. 
America's major oil companies already pay the second highest corporate 
tax rate in the industrialized world. How are they to compete 
internationally with an additional WPT tax? How could Conoco Phillips 
or Chevron Texaco compete with Total (French), BP (British), and Royal 
Dutch Shell (British/Dutch) not to mention government owned and 
operated oil giants like Saudi Aramco, NIOC (National Iran Oil 
Company), Petro China, CNOOC (China National Offshore Oil Corporation), 
Gazprom (Russia), and dozens more. With enactment of a WPT, American 
companies would be hard pressed to effectively compete in the 
competitive global market for exploration and production. The WPT gives 
all foreign owned oil companies a strong competitive advantage.
  With more than 2,100 firms and 60,000 people the oil and gas industry 
is the most critical component of Oklahoma's economy. Many of those in 
the business have in the past lost their business, their savings and 
their livelihood. The industry is cyclical with booms followed by busts 
as we saw most poignantly in the 1980s. For the jobs in Oklahoma and 
the consumers at the pump, let's reject WPT.

[[Page 27291]]


  Mrs. MURRAY. Mr. President, I rise to speak about the tax 
reconciliation bill before the Senate today.
  Today, Americans are saddled with more than $8 trillion in national 
debt, an obligation being passed on to our children and grandchildren. 
And our Nation's expenditures--because of the War in Iraq, the global 
war on terrorism, Hurricane Katrina and other natural disasters, and 
countless other challenges our Nation is confronting are far 
outstripping our tax receipts.
  The current administration has placed passing tax cuts for the few 
ahead of targeted tax cuts for the middle class and to grow business 
and has made us less able to address other important priorities, 
homeland security, paying for the war in Iraq, our nation's 
infrastructure, health care, and education.
  I believe we need a tax system that is fiscally responsible, helps 
business grow, and provides maximum relief to the middle class. That is 
why I support tax policies that work to achieve those goals, and that 
is why I voted for the Conrad substitute amendment, which would have 
fully paid for the cost of targeted middle class tax relief.
  Mr. President, I am deeply concerned about passing a $60 billion tax 
cut bill at a time when we are cutting Medicaid, food stamps, student 
loans, and other domestic programs that will spur economic growth and 
help all Americans. Just 2 weeks ago, the Senate Republican leadership 
brought a spending cut to the floor to cut $35 billion from areas like 
healthcare and education. The budget that passed this body contains the 
wrong priorities. It imposes painful cuts on working families, as I 
said at the time.
  Mr. President, too many working families in American don't feel 
secure. They are worried about high gas prices and how they are going 
to heat their homes this winter. They are worried about how they will 
pay for their health insurance and their prescription drugs. And they 
are worried they won't be able to afford a home or college tuition for 
their children.
  Given all this, why would the Congress pull the rug from under these 
working Americans at exactly the time they need our support? The answer 
is before us today to make room for more tax cuts. Now, some of the tax 
cuts contained in the tax reconciliation bill are certainly helpful. 
The research and development tax credit, the deduction of State and 
local sales tax, and the deduction for teacher's expenses are all 
important provisions and should be extended. I have voted for and 
cosponsored bills that extend or make permanent some of these 
provisions. In fact, I voted to extend these tax provisions and all 
those expiring at the end of the year when I voted for the Conrad 
substitute amendment. That amendment fully paid for the tax cut 
extensions and the Hurricane tax relief over 10 years and did not cost 
the Federal Treasury a dime.
  I oppose cutting critical services to pass unbalanced tax cuts that 
primarily benefit the wealthy. The capital gains and dividend tax cut 
extensions, which primarily benefit those making more than $1 million, 
are not in the current version of this bill. But I know that when the 
tax reconciliation bill comes back from conference, it will have those 
provisions. We all heard Senate Majority Leader Frist when he said, and 
I quote ``I will not bring a conference report to the Senate floor that 
does not include this extension.''
  So, Mr. President, we have a choice to make: will we invest in 
priorities like health care, education, transportation and job training 
that spur economic growth and keep families out of poverty, or will we 
continue to conduct business as usual and pass tax cuts in a fiscally 
irresponsible way? Based on the vote 2 weeks ago to cut $35 billion in 
critical help for Americans in the most need, it appears that the 
Republican-controlled Congress has chosen the latter.
  I understand the importance of a responsible Federal budget. Our 
nation's annual deficit is more than $300 billion. Foreign owned debt 
has increased by more than 100 percent over the last 5 years, and we 
will soon be asked to increase the country's debt ceiling by another 
$781 billion. At a time when we are facing such tremendous spending 
pressures and an increasing deficit, I think it would be wise to heed 
the words of Federal Reserve Chairman Alan Greenspan, who said during 
testimony before the Budget Committee last year:
  ``If you are going to lower taxes, you should not be borrowing 
essentially the tax cut. That over the long run is not a stable fiscal 
situation.''
  Unfortunately, the tax reconciliation bill before us will increase 
the deficit and borrow money to do so. The Senate was presented with 
the option to extend the tax provisions expiring at the end of this 
year and pass the hurricane tax relief in a fiscally responsible 
manner. Unfortunately, the sound Democratic alternative we offered 
failed on a party line vote.
  Mr. President, these are very challenging times for our country and 
our people. Working families don't feel secure about their jobs, their 
health care, their pensions or their future. Many Americans are making 
tremendous sacrifices by serving in our military. We need to show that 
we are on their side. We need to help make America strong again. The 
way to do that is to invest in our people invest in their education, 
their job training, and their future. The Republican budget does just 
the opposite it cuts out those critical investments so that they can 
reduce taxes for a few at the top. Those are the wrong priorities. I 
believe America can do better, and America deserves better, and 
therefore I will vote against this misguided budget.

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