[Congressional Record (Bound Edition), Volume 159 (2013), Part 4]
[Senate]
[Pages 5664-5670]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    UNANIMOUS CONSENT REQUEST--S. 16

  Mr. REID. Madam President, I ask unanimous consent that the Senate 
proceed to Calendar No. 19, S. 16, the Inhofe-Toomey bill on 
flexibility, with an amendment that reflects the current changes for 
sequestration; that the bill be read three times and passed, as 
amended, with no intervening action or debate.
  The PRESIDING OFFICER. Objection is heard to the prior request.
  Is there objection to the following request?
  Mr. REID. I object.
  The PRESIDING OFFICER. Objection is heard.
  The majority leader.
  Mr. REID. Madam President, earlier this year the Senate voted on 
dueling responses through the sequestration. Democrats had a balanced 
plan--half revenues, half spending. Republicans tried giving 
flexibility with, of course, no revenues whatsoever. The Senate voted 
both of these down. We know these plans won't work so there is 
absolutely no need to repeat what has already failed. So let us try to 
solve the problem.
  I appreciate the mini lecture of my friend from Oklahoma, but it is 
wrong. It is good to go back and talk about what has happened. When 
President Bush took office--and I hate to keep bringing this up; his 
library is going to be dedicated in a few days--he had a surplus over 
10 years of $7 trillion. When he left office, he had a debt of almost 
$2 trillion. Why? Was it because government got bigger? Well, it got 
bigger because we had two wars, paid for with the $7 trillion that 
should have been surplus, but it was all borrowed money. All borrowed 
money.
  During the Clinton years, when Bush stepped into office, President 
Clinton had created 22 million jobs in 8 years. During President Bush's 
8 years, we lost 8 million jobs and lost our entire surplus. So of 
course those two wars and the tax cuts that were unpaid really created 
some problems.
  The Senator from Oklahoma complains about government is larger than 
it was 2 years ago. Well, I have talked about that. But one thing my 
friend fails to acknowledge is Simpson-Bowles. By the way, he voted 
against that--is that right?
  Mr. COBURN. I voted for it.
  Mr. REID. That is right. You were with Senator Durbin and voted for 
that. Most Republicans voted against that. My liberal friend Dick 
Durbin voted for that.
  The reason I mention that is because Simpson-Bowles wanted to arrive 
at a savings of $4 trillion, as I understand it. We have already done 
$2\1/2\ trillion. It is not as if we haven't done anything.
  I would also talk about my friend from Oklahoma. I know he is smart, 
and I understand that, but just because you are smart doesn't mean you 
are always right. We have a situation where this country has been 
driven by the tea party for the last number of years. When I was in 
school, I studied government and I learned about the anarchists. They 
were different from the tea party because they were violent. But they 
were anarchists because they did not believe in government at any 
level, and they acknowledged that. The tea party kind of hides that. 
They do not say we are against government, but that is what it amounts 
to. They are not doing physically destructive things to buildings and 
people directly, but they are doing everything they can to throw a 
monkey wrench into any form of government, whether it is local, State, 
or the Federal Government. That is what it is all about. So anything 
they can do to throw a monkey wrench into the wheels of government, 
they are happy doing that. And I am sorry to say my friend from 
Oklahoma is helping them, maybe not directly but indirectly, and that 
is wrong. Government is not inherently bad. Government is inherently 
good. That is why we have a Constitution, and we direct the activities 
of this government based upon that Constitution.
  We have a situation here that is not good. We have programs being cut 
all over America. Rather than doing things with a meat cleaver, as my 
friend from New York said, we should be doing it with a scalpel--doing 
things that are fine-tuning and working to eliminate these programs.
  My friend asks why doesn't the FAA cut other programs? Listen to 
this: He wants to cut airport improvement programs. These are job 
creating. They create jobs at airports--runways, terminals. These are 
programs that create jobs. Essential Air Service may not mean much to 
him, but we had a program where--I don't know if it was my friend from 
Oklahoma but some Republican Senator offered an amendment to get rid of 
Essential Air Service. One of the places they indicated should be cut 
is Ely, NV. I said okay, too much per passenger, I will go along with 
that. I could have stopped that but I didn't do it.
  We have had this debate previously. Essential Air Service has been 
whacked on a number of occasions. There are places in America where 
Essential Air Service is just what it says, it is essential, to give 
those rural communities the ability to have an airplane come in there 
once in a while.
  The Congressional Budget Office would give us credit--it wouldn't be 
toward the deficit--to do something for 5 months and take a little 
money out of Overseas Contingency Operations. We are going to cut money 
from that. We are not going to spend all that money that has been set 
aside to take care of the wars in Iraq and Afghanistan.
  It is too bad we are right here with competing unanimous consent 
requests and the American people are going to continue to suffer--
whether it is some little kid not able to go to a Head Start Program or 
some senior citizen who will miss his Meal on Wheels or the other 
programs--in addition to the devastation that is going to take place at 
airports.
  Mrs. BOXER. Will my friend yield for a question?
  Mr. REID. Sure.
  Mrs. BOXER. Madam President, I appreciate Senator Reid taking the 
leadership here, and as I understand it--and I want him to confirm it--
what he has done is he has suggested the cuts that are hurting so many 
of our American citizens be restored and he is paying for that. He is 
not putting it on a credit card. He is paying for it by taking funds 
from the overseas account because we are winding down wars. Am I 
correct that what the Senator is doing

[[Page 5665]]

is paying a price that equals the amount he is restoring of the 
sequester?
  Mr. REID. That is true.
  Mrs. BOXER. And I also want to say to my friend, I understand we are 
truly suffering in this country. I have examples of people who were 
turned away from cancer clinics. They can't get their chemotherapy. The 
Cancer Society--which is not a government entity--has said this is very 
dangerous.
  Is my friend aware that patients are being turned away and not 
getting the chemotherapy, grants are not being funded? I know he 
mentioned that. But I think the fact that patients who need 
chemotherapy who live--some are being denied this. Is my friend aware 
of that?
  Mr. REID. In addition to that, I say to my friend from California, 
there is research dealing with dread diseases, in addition to cancer, 
which research is being curtailed.
  Mrs. BOXER. I would also say, I wonder if my friend knew--and I take 
just a city from the Midwest. In Cincinnati, 200 children will be 
dropped or denied access to Head Start. Anita Wolf, a mother of two 
special needs children, said she may have to choose which child can 
remain in Head Start enrichment programs.
  I say to my friend, we are here because this is hurting people. This 
isn't about statistics, and I am very disappointed we can't work 
together to restore this. How long does my friend restore these cuts?
  Mr. REID. Five months.
  Mrs. BOXER. I thank the Senator from Nevada for yielding, and I will 
listen to my colleagues from the other side.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. COBURN. Madam President, the reason patients can't get their 
chemotherapeutic treatments has nothing to do with the budget. It has 
everything to do with the administration's CMS and payment recognition. 
I have been working on this issue for 3 months. It has nothing to do 
with the sequester. It has to do with what the CMS has ruled in terms 
of appropriate payments.
  The majority leader is a wonderful man. He has a different view of 
what it takes to get our country back in shape. He has actually split 
with the President this afternoon, because the President said the only 
way he would, in fact, turn off sequester is with a tax increase, and 
the only way this can be considered a tax increase is spending money we 
weren't ever going to spend anyway and acknowledging we are going to 
charge it to our children. So, in essence, it will be a tax increase--
just not on us. It will be on every child.
  It doesn't have to be this way. The President could agree for 
flexibility. His Secretaries could ask for reprogramming authority. But 
they have not done that. Why have they not done that? Because, in the 
President's own words, he wants sequester to hurt.
  What a position for the CEO--the leader of this country--to say: I 
want to teach you a lesson. I am not going to use judgment and 
prioritize and categorize things that are most important and find 
things that are least important; I am going to reject all attempts at 
flexibility.
  I wish to make one other point. The President keeps saying we have 
saved $2.5 trillion. The majority leader just said the same thing. What 
the American people ought to know is $1.2 trillion of that ``savings'' 
is for increases that were planned that aren't going to happen.
  Let me say that again: $1.2 trillion of the savings is for spending 
increases that were planned that aren't going to happen.
  Everybody who runs a family budget or runs a business knows that is 
no savings. You didn't save any money that you were going to spend but 
then didn't spend. It wasn't saved because you never spent it. But it 
is a wonderful way Washington accounts that is different than the way 
the rest of us have to live our lives.
  So let's go back and review.
  We as Republicans agree we ought to fund the most important functions 
of our government, and we believe there ought to be priorities to that. 
But we also believe we ought to save the future for our children.
  The answer to that problem we found ourselves in--sequestration--is 
to give the administration the flexibility for making priority choices 
just like the rest of us do. If they don't want to use it, then they 
don't want to use it.
  But the fact is we will not pass that. The same tools that we would 
all use ourselves, we will not pass that. Why is it we will not pass 
that, to order things in priority, to do what is most important first?
  I would tell you the conferences and the amount of travel for which 
the FAA spends are a low priority compared to keeping controllers 
working. We haven't seen any cut in those programs--none. As a matter 
of fact, the President's budget recommended taking $800 million out of 
the airport improvement program--if you will read his budget. That was 
the President's recommendation. So now we are really at odds with the 
President because he says we can save that $800 million.
  It is flabbergasting to think there is absolutely no common sense in 
Washington and that we will not do the things that are in the best 
long-term interests for the people of this country. So what we do is we 
create a situation that is going to tremendously impact our Nation--
both the business and the common citizen who is traveling--and we do it 
for political gain to prove a point, not because we have to--because we 
are going to make sequester hurt.
  The security the American people want is to know the future is OK. 
The future isn't OK with us operating the way we are operating. I know 
government isn't easy and I know it is messy, but there are some 
absolute truths. The absolute truth is we can't spend our way out of 
debt and we can't borrow our way out of debt, and we are taking $88 
billion over the next year out of the $3.7 trillion budget. If we are 
not capable of doing that, none of us should be here, either party.
  What we fail to recognize is what the real risk is for our country; 
and the risk is that we are running out of time and the ability to 
continue to borrow in the world. The only reason we look good today is 
because everybody else looks worse. We are the only rose in the bud 
vase that is not wilted right now, and that is going to change. When it 
does, the consequences for our kids, for our families, for our economy, 
for our GDP is going to totally change.
  If we went back to historical interest rates today, when we quit 
printing money--which we will eventually have to do--it will add 
another $650 billion a year to our expenses. It does nothing for 
anybody.
  So this small 4.5 percent that the administration refuses to even 
work on to make it less painful to the American public shows what kind 
of trouble we are in.
  I am disappointed, as is I know the majority leader, that we can't 
work out a way to solve this problem. But there are two totally 
competing philosophies; one ensures a productive, successful America, 
the other shows an America drowning in debt. There has to be a point in 
time when we say: Can't we run this government more efficiently, more 
effectively, and do it in a way that preserves the future for our 
children?
  I yield the floor.
  Mr. REID. Madam President, there are a number of people on the floor 
who have been here for some time, and I thought I would try to add a 
little order to this.
  I think Senator Manchin got here first. How much time does the 
Senator from West Virginia wish to take?
  Mr. MANCHIN. I have no more than 15 minutes.
  Mr. REID. How much time for the Senator from Alabama?
  Mr. SESSIONS. I think 10 minutes would be sufficient.
  Mr. REID. And Senator Boxer, 15 minutes, I understand.
  Mr. SESSIONS. If I were allowed to go first, I would do 5 minutes.
  Mr. REID. We have a deal. I ask unanimous consent that the Senator 
from Alabama be recognized for 5 minutes, the Senator from California 
be recognized for 10 minutes, and the Senator from West Virginia for 
whatever time he needs.

[[Page 5666]]

  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Alabama.
  Mr. SESSIONS. Madam President, the proposal of my friend the majority 
leader--and I know he has a tough job--is how the Nation goes broke, 
how the Nation loses the confidence of the people we serve.
  In August of 2011, this Nation agreed to the Budget Control Act. My 
friend Senator Reid said the Budget Control Act was as good as a 
budget. It is not, but it has some teeth to it. What it did that is 
indisputable, it limited the growth in spending.
  We said we would raise the debt ceiling $2.1 trillion immediately, 
which has already almost been spent--we have run up that much debt 
since August 2011, another $2 trillion--but in addition, we would 
reduce spending over 10 years by $2.1 trillion.
  The sequester involved $1.1 trillion of that if the committee didn't 
reach an agreement that would have specified cuts across the board. 
They are not wise cuts. We shouldn't have done it that way, but it was 
a reasonable amount of money for sure. So in the Budget Control Act 
that was passed, spending would have gone up from a flat $37 trillion 
over 10 years to $45 trillion over 10 years instead of going up to $47 
trillion over 10 years. So the growth would be from 37 to 45 and not 37 
to 47. That is not a real cut in spending. It is a reduction in the 
growth in spending.
  Now the sequester comes along, and we have proposed many solutions 
where we could alter these cuts and give flexibility to the cuts so 
they are not as sharp and as unwise as the sequester called for, so 
long as the spending stays within that level.
  We also agreed--and the President signed it and it was passed by both 
Houses and Democrats and Republicans and the leader voted for it--it 
had no tax increases. It was simply an agreement that would reduce 
spending a little bit over 10 years and that we would raise the debt 
ceiling by an equal amount. There were no tax increases in that.
  Then the President submits a budget, and he wants to do away with the 
sequester and pay for it with tax increases. That is what the 
Democratic Senate budget did also. It had increases in taxes and 
increases in spending and a chunk of that was wiping out the sequester 
we just agreed to.
  We told the American people: Look, we made a little reduction in the 
growth of spending, American people. Forgive us for raising the debt 
ceiling. A lot of people didn't want to raise the debt ceiling at all. 
But we promised we had done something good. We were proud of ourselves.
  Before the ink was dry, the President in January submitted his budget 
on 2012 that wiped out those cuts and spent more money, and his budget 
and the Senate Democratic budget this year does the same thing.
  How can we possibly ever get spending under control if we don't 
comply with what we promised?
  The majority leader has said: The war costs are coming down in the 
future. We will just score that as savings and, therefore, we don't 
have to raise taxes. We will not have the sequester take effect. We 
will just spend all that money, and we will pretend we saved it by not 
fighting a war 10 years from now.
  Let me tell you what experts have said about this gimmick.
  Maya MacGuineas, with the Committee for a Responsible Federal 
Budget--and they worked very hard in a bipartisan way to deal with 
these issues--said this: ``This is such a glaring gimmick at such a 
serious moment.''
  Robert Bixby of the Concord Coalition out of New Hampshire, a long-
time respected bipartisan group, said this: ``The mother of all budget 
gimmicks.''
  To pretend we are saving money because we are not spending emergency 
money on a war that ends, we could still be saving money on World War I 
at that rate.
  Washington Post reporter Lori Montgomery said:
  ``Counting money not spent on wars that the nation is already 
planning to end is widely viewed as a budget gimmick.'' And it 
certainly is.
  The PRESIDING OFFICER. The Senator has used 5 minutes.
  Mr. SESSIONS. Madam President, I ask unanimous consent for 1 
additional moment.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SESSIONS. Basically our colleagues say: We cannot even reduce 
spending growth, even that much. We cannot stand any of that. We refuse 
to lay out alternatives to make the cuts less painful. We want them to 
be as painful as possible so we can attack those and oppose even modest 
reductions in the growth of spending, and we are going to punish the 
American people because they dared to reduce the growth of spending.
  They basically say, the Government is saying: It is not our fault we 
have a problem. It is yours, American people. You didn't send enough 
money. You send more money. You send more money. We refuse to reduce 
the growth of spending.
  I yield the floor and thank Senator Coburn for objecting to the 
proposal of the majority leader.
  The PRESIDING OFFICER. The Senator from California.
  Mrs. BOXER. Madam President, I worked with my colleague from Alabama 
on a lot of issues. We do work together on occasion.
  Mr. SESSION. We do.
  Mrs. BOXER. But on this particular issue we see the world very 
differently, which is to be respected, and it is with full respect that 
I say this sequester is not necessary. These across-the-board cuts were 
put into place to be so difficult and so painful that both parties 
would come together and come up with a solution. The President has 
tried and tried. He said to both parties: Why don't we meet in the 
middle? Let's replace the sequester, these mindless cuts, with other 
cuts that make sense and are not painful, and the other half with tax 
reform, doing away with subsidies, tax loopholes such as the billions 
of dollars a year oil companies have been getting that don't make 
sense, since they are the most profitable companies probably in the 
world.
  But Republicans' answer to that: We are not going to look at taking 
away these tax breaks from big companies. We are going to not look at 
trying to see whether millionaires or billionaires can pay anymore. We 
want to replace the sequester with more cuts.
  I know it is a fast-moving country we live in. Lord knows you have 
gone through some difficult times in Massachusetts and I thank the 
Presiding Officer for her leadership. But we do not have that short a 
memory. We remember this awful recession that almost turned into a 
depression. We know because it is basic--I am an economics major; it 
was a long time ago--but there was a basic understanding that when 
times are tough the government doesn't turn to austerity. The 
government helps us by saying: You know what, maybe this is a good time 
to fix those bridges, to build those highways, to do the things we need 
to do because a great country needs an infrastructure and this is the 
time to do it--because we need the jobs, too.
  We have no partners over there. Now Senator Reid comes up with a very 
sensible plan and here is the plan: For the next 5 months we restore 
the sequester. We take away those mindless cuts, get us back to 
normalcy, try to find another solution, a long-term solution, but in 
the meantime, pay for stopping the sequester by cutting from an 
overseas war funding account. As we bring home our soldiers from 
Afghanistan and Iraq, we have an account that can be drawn down. So 
when our colleagues say Senator Reid is raising taxes to do this, he is 
not raising taxes No. 1. He is cutting spending by taking savings out 
of this overseas war account.
  It makes a lot of sense. The American people want to see the 
Afghanistan war come to an end. The American people want to see the 
Iraq war totally completed. We are saying take that money and how about 
spending it here?
  Their answer today, which is so astounding, from Senator Coburn who 
objected to this very important bill--Senator Coburn said he has the 
answer. It is called flexibility. What does

[[Page 5667]]

that mean? It means all of these cuts, these billions and billions of 
dollars in cuts, we will then tell the agency: Figure it out. You 
figure out where to fix it.
  For example, in the FAA they have an airport improvement fund. They 
are saying we do not have to fire these air traffic controllers. Let's 
not do that. Take the money from the airport improvement fund.
  If you know anything about the airport improvement fund, it is not an 
idle fund. It is a fund that is paid for by taxes that people pay so 
their airports will be improved, hence it is called the airport 
improvement fund. Whether it is making sure the runways are safe or 
making sure the terminals are secure--this is why we have airport 
improvement funds. You cannot rob Peter to pay Paul.
  I want to say to my friend--he left the floor--and he is my friend, 
Senator Coburn: Flexibility is not the answer. If somebody comes to me, 
a colleague, and says: Senator Boxer, I left my wallet home and I am 
starving, can you lend me $10? And I say flexibility--what flexibility? 
He left his wallet home. Flexibility does not pay for air traffic 
controllers. Flexibility does not pay for teachers. Flexibility does 
not pay for FBI agents. If we ever learned anything from the horror in 
Boston, it is the unbelievable first responders in addition to the 
citizens who rushed toward the blast. The people there, the 
professionals, the doctors who happened to be there--we pay those 
people.
  Earth to the Senate: Not everybody lives off a trust fund.
  People need to get paid. Flexibility does not do it. I cannot say, if 
I get a call from an air traffic controller: Oh, why don't you just 
volunteer on your day off? He will probably tell me he is going to 
figure out a way--on his day off that he is forced to have, his 
furlough--to make some money for his family.
  Sometimes I wonder if we are in ``Alice in Wonderland'' around here. 
Nothing could be more true than today.
  I want you to know that I have people in Los Angeles who are stuck on 
runways for hours and miss very important functions. How about one of 
my people in Los Angeles--I have his name. It is not important. He said 
he missed a funeral on Monday because his incoming flight was delayed. 
``We had to cancel our whole trip because the funeral is tonight and we 
are not going to make it.''
  Flexibility is not the answer. The answer is to restore the money 
from sequestration. The FAA announced plans to close 149 airport 
control towers nationwide, including many in my State.
  How about people who are getting turned away who need chemotherapy 
and the American Cancer Society Action Network said that because of 
sequestration ``funding for cancer research and prevention programs are 
taking a dangerous hit.'' Again I say to my Republican friend, this is 
from the private sector on what is happening around here.
  The National Breast and Cervical Cancer Early Detection Program will 
provide 32,000 fewer breast and cervical cancer screenings this year to 
women who have no other option for affordable, lifesaving screenings. 
These are lifesaving screenings. Do you want to tell that woman: 
Flexibility? That is not the answer. The answer is restore the funds 
from the sequester.
  Head Start, about to lose 70,000 of its 1 million slots for children. 
Let me tell you, in Cincinnati, 200 children will be dropped or denied 
access to Head Start.
  Anita Wolfe, a mother of two special needs children, said she may 
have to choose which child can remain in Head Start's enrichment 
program. This is a bad situation.
  In Oakland, the housing authority is losing $11 million, and expects 
800 to 900 fewer families will get housing assistance.
  In Indiana Head Start programs in two towns resorted to a lottery 
system last month to determine which kids could remain in the program.
  Riverbend Head Start in Illinois has had to cut its school year by 2 
weeks, leaving its staff unemployed and its participating families 
without childcare for those two weeks.
  The Santa Clara County Housing Authority has lost $21 million in 
funding and is considering pulling housing assistance vouchers from 
some of the 17,000 households it serves. Local resident and mother of 
two Alicia Diaz fears that she may become homeless as a result.
  The Sacramento Housing and Redevelopment Agency expects to lose $13.9 
million, affecting housing assistance to 1,700 families.
  Many of the 24,000 Los Angeles families relying on Section 8 vouchers 
could lose all or part of their housing subsidy before the end of this 
year.
  Customs and Border Patrol has furloughed 60,000 agents nationwide and 
restricted overtime. This is causing delays in cargo processing at the 
Ports of Hueneme, Long Beach and Los Angeles, which rely heavily on 
overtime because they are extremely busy ports.
  More than 100 dockworkers in Port Hueneme were idled due to delays, 
and shipments had to wait to be inspected. Every minute of delay costs 
money for businesses receiving their products late. Customs and Border 
Patrol estimates that delays could become as long as 5 days.
  We are seeing delays in our ports. We are seeing dock workers idled. 
With these delays, says one of my people, ``I have to hire the labor 
and pay them while I wait for Customs to clear the vessel.'' It is 
having an impact on our economy.
  Just to finish up, Senator Reid took the leadership today. I am so 
proud to stand with him. He found a place to get the money to put the 
funds back in and avert the sequester, stop the pain at the airports, 
stop the pain at the clinics, restore Meals on Wheels to our seniors--
all the things I talked about, and he paid for it by going to the war 
fund that is winding down, and making sure we can fix this problem for 
5 months.
  It is shocking that my Republican friends would object to this when 
their constituency is feeling the same pain as the rest of us.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from West Virginia.
  Mr. MANCHIN. Mr. President, I ask unanimous consent to speak up to 15 
minutes.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.
  Mr. MANCHIN. I rise today to speak in support of the Marketplace 
Fairness Act. I was a cosponsor of this important legislation in the 
112th Congress and I am proud to be a cosponsor in the 113th Congress, 
because this is truly a matter of fairness. The Marketplace Fairness 
Act will allow local Main Street--we call them brick and mortar, but 
they are basically businesses, little stores with real people in them, 
working hard to make a real living. It will provide much-needed 
financial relief to State budgets that have been cut to the bone in 
recent years and are facing even more cuts in Federal assistance thanks 
to what we were just discussing here, the disastrous sequestration with 
the Draconian cuts.
  This bill is not a Washington handout to businesses. It is not a 
special treatment. It is not a new tax. It is leveling the playing 
field. It is a leveling of the playing field. Every day we do not act 
to pass the bill is another day we risk another small business closing 
its doors--not only in West Virginia but all across this country.
  There is always a lot of talk in Washington about helping small 
businesses, and rightly so, because small businesses, as you know in 
your State, account for more than 60 percent of all the private sector 
jobs. It is the small businesses, not the large businesses.
  The Marketplace Fairness Act is a chance to do more than just talk 
about it for once. We have a chance to do something to show we care 
about small businesses. It levels the playing field and gives our Main 
Street businesses a fighting chance competing with Internet vendors 
that are not required to collect sales tax.
  Let me give an example in a small rural State such as West Virginia. 
We are expanding, working very hard on the Internet, broadband high 
speed, trying to get to every little holler, up and down every nook and 
cranny. We are trying to help the people, and that

[[Page 5668]]

is great. But it really puts more pressure on small businesses, because 
now, with the convenience, people will not travel. They may not go to 
the store. But if they want the service and they know the price is the 
same, there is no unfair advantage, there is a level playing field, the 
small businesses still have a chance. That is all we are asking for.
  Business owners in West Virginia tell me all the time how unfair it 
is to watch their online competitors offer low prices on the exact same 
products. We have heard a lot of talk about that today. That is called 
showrooming and that is basically people shopping. They used to go 
shopping in the old days. They would go to one store and compare and 
then go to another store and compare and they worked back and forth and 
figured out where they had the best deal or where they thought they had 
the best deal with the best service. That does not happen on line.
  First of all, in my State they have a 6-percent advantage because our 
State tax is 6 percent in all our counties, so that is a 6-percent 
advantage from the get-go, and in these hard economic times price is 
the driving force.
  That is why this bill has so much bipartisan support: 74 votes. Mr. 
President, you have been here a short period of time, but you are very 
observant. You know that. You have watched and seen very few times that 
we have gotten that type of broad bipartisan support on anything, and 
that is what is refreshing to see. With all of my friends who come from 
States that do not have the taxes, and friends on both sides--my own 
colleagues on the Democratic side and Republican side--what I 
understand, and what I know will happen, is first of all they do not 
collect the tax of in-State residents. If they buy it on the Internet, 
they will not collect that tax because they do not have a sales tax. If 
they say it is unfair because they are collecting it for me in my 
State, even though someone in West Virginia might buy from a State that 
doesn't have a sales tax but they have an Internet business, that is 
not going to cause undue pressure, I don't believe, or unfair 
competition in any way, shape, or form. They still need to use all the 
services in my State while selling their product in a State where they 
don't have a sales tax. They are going to use the roads to deliver that 
product to the customer in my State, they are going to use the people 
who have been educated through the school system in my State, and all I 
am asking for is the fair share: the fairness--we charge our own 
customers and our own businesses collect for us in our State--for those 
who are using my State as their business to do the same. I don't think 
that is unfair. I really don't. I think the majority of businesses 
don't think that is unfair, and a majority of Americans don't think 
that is unfair.
  This is not a complicated piece of legislation. It is only 11 pages. 
It is pretty short compared to most of the bills we see around here. 
Basically, it just does what we said: It allows the States to collect 
sales tax on out-of-State sales, provided these States streamline their 
tax codes.
  There are some restrictions that come with this. They must either 
voluntarily adopt the measures in the streamlined sales and use tax 
law, which 24 States have already done, including my little State of 
West Virginia--do my colleagues know we were the No. 3 State in the 
Nation to join in this fairness movement many years ago. And when I was 
Governor, we worked very hard to work with the other States, and we 
built up to 24 States that basically were acceptable toward tax code 
fairness. That is really what it is about. Or a State can meet five 
mandates. There are five mandates they can meet. They can notify 
retailers of rate changes, they can create a single organization for 
collecting sales tax, they can establish a uniform tax base, or they 
can use destination sourcing for sales tax rates and provide free 
software and hold harmless protection for retailers.
  To simplify, what that means is some States might have different tax 
codes in different counties. Some counties have different taxes they 
add on to their State tax or they have a municipal tax, so they are 
saying there will be 9,600 different tax codes, which is almost 
impossible. For anyone to participate in this piece of legislation, 
they have to make a decision on one of those five criteria I just 
mentioned. That brings the tax code down to 46. It simplifies it. So 
that argument doesn't hold either, the complication of 9,600 
jurisdictions I heard being used by my good friend from New Hampshire.
  The beauty is if a State without a sales tax doesn't want to 
participate, they don't have to. That is the beauty of it. They don't 
have to. They don't have to participate. They don't have to collect the 
sales tax from their people, as I said earlier, so they have that 
option. I know all the arguments against the legislation, but, again, I 
will say they are just wrong.
  Some critics say this is a tax increase. That is wrong. If I am 
paying 6 percent in West Virginia when I go to a store in Fairmont, 
Charleston, Huntington, Martinsburg, Greenbrier, or Lewisburg--wherever 
I go it is the same, 6 percent. The only thing we are saying is if a 
consumer buys on the Internet, the consumer will be charged the same 6 
percent. It is not an increase. It is the same.
  I think that makes it pretty simple also. It really does give our 
little stores, owned by the people who basically are the same people to 
whom we go to participate, give donations and contributions to the 
Little League--how many times do we see an Internet company giving to 
the Little League in our hometown or contributing to the chamber of 
commerce in our hometown, giving to any of the different fund drives 
there might be, such as the volunteer fire department. What we are 
saying is we have to do everything we can to keep them alive and 
healthy.
  Some critics say online services don't use the local services that 
are paid for by the sales taxes, and they should be required to declare 
the sales taxes. That is wrong also, and I think we just talked about 
that. They also say whatever product a customer orders online--let's 
say it is a book from Amazon or shoes from Macy's or towels from 
Target--if it was delivered, it still has to get to the customer. It 
still has to use the infrastructure the State is responsible to invest 
into, and that is our sales tax.
  Sales taxes, in all States that collect them, go into general 
revenue. General revenue supports a cadre of things--anything we can 
imagine--from schools to roads to programs people need to supporting 
senior citizens. The taxes support every aspect of life in the State.
  When we look at the whole overall bill, including the fact that the 
little stores and online retailers sell identical products and use the 
same infrastructure to deliver those products, and collecting taxes 
owed on a purchase at the point of sale, whether they are relying on 
consumers to pay that tax voluntarily, as some critics have proposed, 
would mean $23 billion that is going uncollected. That is just the 
fairness we are adding to it. Just the fairness. But $23 billion is 
needed revenue in States that are having difficult times.
  We have heard a lot of people give testimony here today that if their 
little State gets the amount of money it would get by having a fair, 
level playing field in their taxes, they could reduce their taxes. 
Well, that is a good opportunity in these difficult times. If West 
Virginia could have collected sales tax on out-of-State sales during 
fiscal year 2012 only--not new taxes, just those already owed to the 
State--if we took the sales done over the Internet, we could have put 
$103 million more in our State's budget--$103 million more. Our budget 
is around $4 billion. That is a good chunk of money.
  We could have used it to do a couple of things. Let me give an 
example of what we could have done. With that extra money from Internet 
sales, we could have built 412 miles of new roads--412 miles. We could 
hire 2,000 schoolteachers with that money we didn't receive. We could 
have built 5 high schools. We could have built 7 middle schools or 10 
new elementary schools.
  Now, we talk about jobs. We talk about infrastructure. We talk about 
basically investing back into the State,

[[Page 5669]]

that is money we weren't able to do that with, and that would have 
helped us.
  When we talk about the e-commerce growth, if we look at the growth of 
business being done online versus business being done in retail stores, 
we will see quite a disparity, and it is going to continue to grow and 
put more pressure on businesses. We think this is not going to 
interfere with the Internet sales, and the reason we say that is 
because of our busy lifestyles. If that is the way a person wants to 
shop, that is fine. But they just would not be able to say, well, I can 
save money because I don't have to pay the sales tax. It might make 
somebody think they might go down to John's Hardware Store. I know 
them, and they do a heck of a job. They have a fighting chance now. I 
want to stay in my local community. They have a fighting chance now.
  Trust me, we would not put any Internet businesses out of business. 
That will not happen. In 2000, the U.S. economy supported $27 billion 
in e-commerce, which constituted only 9 percent of all retail sales. 
Over the next 12 years, e-commerce grew tenfold, totaling $224 billion, 
which is equal to 7 percent of all retail sales: Seven percent now of 
all retail sales, 10 years ago, 1 percent. One market analysis projects 
that online retail sales in the United States will grow by 10 percent 
annually through 2017--10 percent annually. So when we look at that, 
from $224 billion in 2012, that will be over $370 billion in the next 4 
years.
  I will just told my colleagues in 2012 what our little State lost and 
what we could have done with it. Think of all the missed opportunities 
we are going to have not just in my State but in States all over the 
Nation.
  So just look at how the Internet use has soared in the United States 
since 2000. Some 240 million Americans are online today compared to 
half that amount when the century began. So a little over 10 years ago 
we only had about 120 million. We are going to have full integration of 
our Internet, which is good. I think it is good. I just want to make 
sure it is fair, that is all, just fair.
  As broadband speeds grow, home and mobile Internet mobile users will 
spend more time online, and that means more time online shopping. That 
is fine too. They just will not be able to say: I am going to save 6 
percent. They can't say that upfront. That means they are going to shop 
around a little bit more, and that means we have a chance. If I have a 
little store in Farmington, WV, where I came from, I have a chance to 
survive. It gives me a chance. I don't start out in the hole. I don't 
start out with my hands in my pocket and 6 percent behind to begin 
with.
  Google researchers have found that already 97 percent of Americans 
look for local products online. So, clearly, the businesses back home 
are at a huge disadvantage in competing with online retailers if tax 
requirements are unequal. This makes sense. State governments are 
losing billions of dollars in uncollected sales taxes that could build 
the infrastructure we all need.
  I have heard from so many businesses back home in West Virginia, and 
I can tell my colleagues there is overwhelming support for this 
legislation, and there has been from day one, since we became one of 
the first States to enter into this streamlined compact. That was in 
2003. It started with three States, up to 24 States now, and we have a 
pathway for all the States to have equalization.
  ``I own a small business that encourages local people to support 
local West Virginal artists.'' This is what a lady who wrote to me 
said. She is a small business owner. Her name is Parween Mascari. She 
says:

       I own a small business that encourages people to support 
     local West Virginia artists. Because we sell from a physical 
     storefront, we must collect and remit sales tax from our 
     customers. Online merchants do not currently have to collect 
     or remit a comparable tax on sales they make online. That is 
     not only fundamentally unfair, but seriously impairs our 
     ability to be competitive in the market when we have to 
     charge our customers a tax that they don't have to pay when 
     they shop online.

  I wish to commend Senator Durbin and Senator Enzi and my senior 
Senator Rockefeller for taking leadership on this important issue and 
for introducing the Marketplace Fairness Act. I am a proud cosponsor of 
it because I believe it is fair and good for America. I believe this 
legislation restores fairness and balance to our tax system and 
strengthens our businesses and revitalizes our downtowns. It creates 
jobs and helps States struggling to provide the services their citizens 
expect.
  This measure has broad support in both parties, as we have seen by 
the votes we have already taken. It is backed not only by mom-and-pop 
stores and Main Street merchants, but also by giant online retailers 
such as Amazon. I urge Senators to act without any further delay.
  I thank my colleagues and, again, I say this is a matter of fairness. 
It is a matter that I think restores the fairness in American retail.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from New Hampshire.
  Mrs. SHAHEEN. Mr. President, my friend from West Virginia says this 
bill is important for his State. I understand that, but this is a bill 
that doesn't work for my State of New Hampshire. His suggestion that if 
States don't like it they have the option not to participate just 
doesn't work because the businesses in my State of New Hampshire are 
going to be affected.
  This is a proposal that fundamentally violates State sovereignty. It 
enables one State to impose the enforcement of its laws on the 49 other 
States and territories without their approval. This legislation would 
impose new burdens on small businesses not only in New Hampshire but 
actually across the country.
  I represent a State that does not have a sales tax. There are still 
some States in this country that don't have sales taxes. So my 
colleagues can understand why I oppose this measure, because this 
legislation will hurt small, online, family-owned businesses in New 
Hampshire--businesses that have no experience collecting sales taxes 
whatsoever.
  The proponents of this legislation have said small businesses will 
not be affected, thanks to the exemption for businesses with less than 
$1 million in revenue. That is just not true. This legislation creates 
a disincentive for Internet firms to grow and create jobs for American 
workers. We know that the margins for so many small online retailers 
are very slim. I will give you an example.
  I have heard from a small business owner in Hudson, NH. Hudson is 
down along the border of Massachusetts. I know the Acting President pro 
tempore knows it well. This small business owner's business is 
approaching $1 million in revenues, and he has about six employees--
just six employees.
  Now, under the Internet sales tax legislation before us, this company 
would be considered a large business--revenues over $1 million--because 
they are almost there. But if this legislation passes, the company's 
plans to grow will be in doubt. They are going to be forced to 
reconsider whether they are going to continue to grow, continue to hire 
more employees, because this arbitrary threshold creates a real 
disincentive for them to grow.
  Now, e-commerce has been a real boon to small businesses in New 
Hampshire and across the country. It has helped companies find new 
markets. It has helped them add new revenues. But for companies looking 
to grow through online sales, this legislation represents a real 
ceiling for growth.
  That is why I have joined with a number of my colleagues to call on 
the Senate to rethink this legislation. We need to think through its 
unintended consequences. Small businesses across the country--not just 
in non-sales tax States, such as New Hampshire, but small businesses 
across the country--will see their tax burdens increase. I want to give 
just a few examples of the new burdens that are going to come with this 
legislation.
  First, as I mentioned, each State has different sales and use taxes, 
so businesses would need new software to figure out how to collect and 
remit the right taxes. It is my understanding

[[Page 5670]]

that the States, under this legislation, would be responsible for 
providing that software to the businesses in their State. I think this 
creates an unfunded mandate, for the State of New Hampshire to have to 
provide that software for the small businesses in the State that would 
be affected.
  Small businesses would also need to collect personal information from 
each buyer to make sure they are complying with all State and local 
sales taxes.
  These small businesses would also have to deal with audit and 
enforcement actions from out of State. In other words, they would have 
to answer to taxing authorities in places where they have no 
representation whatsoever. And as States and localities consider new 
taxes, these small businesses would have no voice in that process 
because they have no representation in those jurisdictions.
  So these are just a few examples of the many unintended consequences 
this legislation would create.
  I intend to join with a number of my colleagues in filing amendments 
to improve this bill, including ways that we can protect States rights 
and small businesses. If the State of New Hampshire does not want to 
participate because we have no sales tax and we do not think our 
businesses should be forced to collect Massachusetts sales taxes or 
Maine sales taxes or Vermont sales taxes online, then it seems to me we 
ought to be able to opt out of this legislation.
  The citizens and small businesses in New Hampshire that will be 
affected by this legislation deserve a full hearing on these issues, 
and I urge my colleagues to join us in addressing these defects before 
we pass this bill.
  Mrs. FEINSTEIN. Mr. President, I rise today in support of the 
Marketplace Fairness Act. This bill would level the playing field 
between brick and mortar retailers and their online counterparts by 
allowing States the right to collect sales taxes on remote Internet 
purchases.
  The current system of collecting online sales taxes puts brick and 
mortar retailers at a significant disadvantage. Mom-and-pop stores 
invest in office space, inventory, and hire salespeople in order to 
provide service to their customers.
  Increasingly, those efforts are falling victim to a practice known as 
show rooming, where potential customers enter the physical store, take 
up the salesperson's time, then make their purchases at home online at 
a discount because no sales tax is collected.
  I have witnessed this firsthand. Imagine you are in the women's shoe 
department of a nice retail store. An attentive salesperson spends a 
considerable amount of time with a potential customer finding the right 
size, trying several pairs of shoes, and answering the customer's 
questions.
  Then the customer pulls out their phone and orders the same pair of 
shoes online at a lower price, in effect bilking the salesperson for 
the time spent with the customer. Some people are brazen about doing 
this.
  Effectively, brick and mortar retailers are providing services to 
online retailers at no charge.
  This bill simply brings State sales and use tax collection into the 
21st century. When the Supreme Court first considered the issue of 
collecting out of State online sales taxes, it was in the early 1990's 
and there were only a trivial amount of online sales.
  The ensuing two decades have brought sweeping changes to the online 
marketplace and the technology that facilitates online sales tax 
collection.
  Online sales continue to increase relative to conventional retail 
sales. And applications exist that allow retailers to easily collect 
taxes on out of State sales.
  The Marketplace Fairness Act would level the playing field by doing 
the following:
  Allow States the option to collect remote sales taxes; require States 
to set up a streamlined tax collection process in order to simplify 
remittance for online businesses, require States to provide the tax 
collection software to retailers free of charge, and exempt online 
retailers with less than $1 million in remote sales from having to 
collect and remit online sales taxes.
  It is important to note that many States are already moving to 
collect sales taxes on remote sales. Just last year, California came to 
an agreement with amazon.com that required the online sales giant to 
start collecting sales taxes on purchases made in California.
  Furthermore, State laws currently require the collection of online 
sales taxes. However, rather than the retailer being in charge of 
collection, it is up to individual taxpayers to calculate and remit the 
sales taxes they owe on online purchases.
  It is estimated that only 1.4 percent of Californians actually remit 
sales taxes from online purchases, a number roughly in line with other 
States. State and local governments, which rely in part on sales taxes 
to fund local schools and infrastructure, are increasingly burdened by 
their inability to collect sales taxes on online purchases that are 
lawfully owed.
  So this is not a new tax. It is not overly burdensome on small 
businesses. And it accounts for the fact that more and more retail 
sales will be taking place online.
  The Marketplace Fairness Act puts every business on a level playing 
field and ensures that tax loopholes do not create unfair advantages 
for certain retailers. It is time that our tax policy reflects 
fundamental changes in the retail marketplace, and I strongly encourage 
my colleagues to support this bill.
  I thank the Chair.
  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. DURBIN. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.

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