[Congressional Record (Bound Edition), Volume 160 (2014), Part 6]
[Senate]
[Pages 7804-7809]
[From the U.S. Government Publishing Office, www.gpo.gov]




                             CLOTURE MOTION

  The PRESIDING OFFICER (Mr. Schatz). Pursuant to rule XXII, the Chair 
lays before the Senate the pending cloture motion, which the clerk will 
state.
  The assistant 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 the motion to 
     proceed to Calendar No. 332, H.R. 3474, an act to amend the 
     Internal Revenue Code of 1986 to allow employers to exempt 
     employees with health coverage under TRICARE or the Veterans 
     Administration from being taken into account for purposes of 
     the employer mandate under the Patient Protection and 
     Affordable Care Act.
         Harry Reid, Ron Wyden, Robert Menendez, Patty Murray, 
           Barbara Boxer, Jon Tester, Debbie Stabenow, Maria 
           Cantwell, Bill Nelson, Thomas R. Carper, Patrick J. 
           Leahy, Brian Schatz, Mark R. Warner, Charles E. 
           Schumer, John D. Rockefeller IV, Benjamin L. Cardin, 
           Martin Heinrich.

  The PRESIDING OFFICER. By unanimous consent the mandatory quorum call 
has been waived.
  The question is, Is it the sense of the Senate that debate on the 
motion to proceed to H.R. 3474, an act to amend the Internal Revenue 
Code of 1986 to allow employers to exempt employees with health 
coverage under TRICARE or the Veterans Administration from being taken 
into account for purposes of the employer mandate under the Patient 
Protection and Affordable Care Act shall be brought to a close?
  The yeas and nays are mandatory under the rule.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. CORNYN. The following Senator is necessarily absent: the Senator 
from Arkansas (Mr. Boozman).
  The yeas and nays resulted--yeas 96, nays 3, as follows:

                      [Rollcall Vote No. 143 Leg.]

                                YEAS--96

     Alexander
     Ayotte
     Baldwin
     Barrasso
     Begich
     Bennet
     Blumenthal
     Blunt
     Booker
     Boxer
     Brown
     Burr
     Cantwell
     Cardin
     Carper
     Casey
     Chambliss
     Coats
     Cochran
     Collins
     Coons
     Corker
     Cornyn
     Crapo
     Cruz
     Donnelly
     Durbin
     Enzi
     Feinstein
     Fischer
     Franken
     Gillibrand
     Graham
     Grassley
     Hagan
     Harkin
     Hatch
     Heinrich
     Heitkamp
     Heller
     Hirono
     Hoeven
     Inhofe
     Isakson
     Johanns
     Johnson (SD)
     Johnson (WI)
     Kaine
     King
     Kirk
     Klobuchar
     Landrieu
     Leahy
     Levin
     Manchin
     Markey
     McCain
     McCaskill
     McConnell
     Menendez
     Merkley
     Mikulski
     Moran
     Murkowski
     Murphy
     Murray
     Nelson
     Paul
     Portman
     Pryor
     Reed
     Reid
     Risch
     Roberts
     Rockefeller
     Rubio
     Sanders
     Schatz
     Schumer
     Scott
     Sessions
     Shaheen
     Shelby
     Stabenow
     Tester
     Thune
     Toomey
     Udall (CO)
     Udall (NM)
     Vitter
     Walsh
     Warner
     Warren
     Whitehouse
     Wicker
     Wyden

                                NAYS--3

     Coburn
     Flake
     Lee

                             NOT VOTING--1

       
     Boozman
       
  The PRESIDING OFFICER. On this vote the yeas are 96, the nays are 3.
  Three-fifths of the Senators duly chosen and sworn having voted in 
the affirmative, the motion is agreed to.
  The Senator from Tennessee.
  Mr. ALEXANDER. Mr. President, does the Senator from Massachusetts 
wish to address the Senate at this time?
  Mr. MARKEY. Mr. President, I ask that the Chair recognize the Senator 
from Tennessee.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. ALEXANDER. Mr. President, I thank the Senator from Massachusetts.
  I ask unanimous consent that the junior Senator from Tennessee and I 
be permitted to engage in a colloquy, and I ask for the attention of 
the Senate.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senate will be in order. Senators will please take their 
conversations out of the well.
  Mr. ALEXANDER. Thank you, Mr. President.


                       Remembering Harlan Mathews

  Mr. President, a few days ago we lost a prominent Tennessean, Harlan 
Mathews. He was 87 years old, and he lived a long and distinguished 
life.
  Harlan Mathews served in the Senate seat in which I now have the 
privilege of serving. When Senator Al Gore was elected Vice President 
more than 20 years ago--Harlan Mathews took his seat and then retired 
from the Senate after serving two years of his appointment.
  But that was, by a long shot, not a description of his public 
service. Yesterday Senator Corker and I were at

[[Page 7805]]

his funeral and memorial service in Nashville, which was a beautiful 
service, a simple service, as he would have imagined. The theme that 
kept coming through again and again was what a fine mentor and 
unselfish public servant Harlan Mathews had been in our State for 60 
years. He was a World War II veteran, came to Vanderbilt University, 
and in 1950 met a young Governor whose name was Frank Clement--a rising 
star in national politics. He became his assistant and served in a 
variety of State government positions with very little interruption 
until he was appointed by Governor McWherter to serve for 2 years in Al 
Gore's seat. Twenty years ago Harlan Mathews decided not to run for 
reelection and has lived the past 20 years in Nashville. We were there 
with his wife Pat, his sons, and a host of friends.
  What I think about Harlan Mathews is that other than his great friend 
former Governor Ned McWherter, no one had more friends around the State 
capitol than Harlan Mathews did.
  So today we pay tribute to him and to his family for a life well 
lived, for his service to the State of Tennessee, and for being a man 
who has mentored as many young public servants of our State as anyone I 
can think of.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. CORKER. I too rise to talk about our friend and former colleague 
to many in this body, Senator Harlan Mathews.
  It was touching yesterday to be at a funeral service where so many 
people he had mentored stood and talked in conversation around the 
gathering we attended about the great mentorship he provided. There is 
no greater legacy any of us can provide than to set an example for 
other people and to create opportunities for other people coming along.
  I want to join the senior Senator, who I know served with him while 
he was Governor. I had the great opportunity to get to know him as a 
new and young commissioner of finance in our State, an appointed job, 
and no one--no one--was kinder to me than former Senator Harlan 
Mathews, who has been involved in so many great things that have 
happened in our State.
  His wife Pat complimented him in an extraordinary way, saying I think 
one of his greatest attributes was his constantly saying: You know, so 
much can happen in this world if no one cares who takes the credit.
  I think he was a quiet force for good in our State and a quiet force 
for good in our country. So many of the things that caused him to be 
the kind of person he was are things that many of us could emulate and 
cause the Senate and our country to function much better than it does 
now.
  I join the senior Senator, for whom I have so much respect, in making 
sure the Senate record records the great work of Harlan Mathews--
Senator, Deputy Governor, treasury leader in our State but also 
commissioner of finance. He is someone who provided years of great 
public service, years of great mentorship, and someone who has a legacy 
of people who served with him and under him who have gone on to do 
wonderful work for our State and country.
  I yield the floor with great gratitude toward a wonderful public 
servant, Harlan Mathews.
  Mr. ALEXANDER. I thank the Senator from Tennessee. Harlan was known 
for working quietly, and being modest. The service was only about 40 or 
45 minutes to reflect that.
  He would have been a terrific Senator if he had been here for 25 
years because of what we know about him. He wasn't out front. He was 
behind the scenes. He worked to get things done. He was always results-
oriented, and he didn't mind who got the credit. Sometimes there is a 
shortage of that in the Senate--then and now today. He had those rare 
skills of the public servant that are always valuable and always 
needed.
  I know his wife Pat, his sons Stan and Les, and his granddaughters 
Katie and Emily miss him deeply. We do as well, and we join them in 
admiring his life and his example.
  I ask unanimous consent to have printed in the Record the obituary of 
Harlan Mathews detailing his public service.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:


                                obituary

       Harlan Mathews, an accidental Tennessean born in Sumiton, 
     Alabama, who advised five Tennessee governors and served in 
     the U.S. Senate, died today at the age of 87, his family 
     confirmed.
       Mathews, who recently was diagnosed with a brain tumor, 
     died peacefully at Alive Hospice today at 6 a.m. with his 
     wife Pat at his side.
       Services honoring Mathews and celebrating his life are 
     being scheduled at this time.
       After serving in the U.S. Navy in WWII, Mathews received 
     his B.A. degree from Jacksonville State University under the 
     G.I. Bill. He arrived in Nashville in 1949 to attended 
     Vanderbilt University. He would subsequently obtain a 
     master's degree in public administration. Shortly after 
     enrolling at Vanderbilt, Mathews took an entry level job with 
     the State Planning Office, not knowing that serving the 
     people of Tennessee would become his life's work.
       In 1950, the 24 year-old Mathews met 30 year-old Frank 
     Clement. Two years later, Mathews was the top assistant to 
     the new Governor, a close friendship that continued until 
     Clement's death in 1969. In 1961 Mathews was appointed 
     Commissioner of Finance by Governor Buford Ellington. He held 
     the post for 10 years, one of the longest tenures in state 
     history.
       In 1971, Mathews briefly left state government to work in 
     the private sector in Memphis, but returned in 1973 to serve 
     as the legislative assistant to longtime state comptroller 
     William Snodgrass. The Tennessee General Assembly elected 
     Mathews state treasurer in 1974 when his predecessor, Tom 
     Wiseman, opted to run for governor.
       Mathews remained state treasurer until January 1987 when he 
     resigned to become deputy governor to Ned McWherter.
       As deputy governor, Mathews was a low key yet forceful 
     advocate of McWherter's legislative agenda and continued, as 
     he had done as state treasurer and finance and administration 
     commissioner, to protect the state's sound financial footing.
       Upon U.S. Senator Al Gore's election to the vice 
     presidency, McWherter appointed the most dedicated public 
     servant he knew to fill the vacancy. Harlan Mathews was sworn 
     in on Jan. 3, 1993, to represent Tennessee in the U.S. 
     Senate.
       Mathews never sought election to political office, 
     preferring to serve the people of this state behind the 
     scenes as a frugal manager and mentor to dozens over the four 
     decades of his public career.
       Upon leaving the U.S. Senate in December of 1994, Mathews 
     joined the Nashville office of the law firm of Farris, 
     Mathews, Bobango PLC. He remained active in the legislature 
     and politics, serving as an informal advisor and fundraiser 
     for Gov. Phil Bredesen.
       Throughout Mathews' career, he never took for granted the 
     people he served and the responsibility he held. He was known 
     as a soft spoken but tough negotiator who made sure state 
     employees were paid good wages, and that the state's 
     retirement system was sound, the debt low and the bond rating 
     strong. He was a demanding boss who also made sure that his 
     employees had a warm coat in cold weather. He was a leader, a 
     statesman and a friend to all that knew him and to all of 
     Tennessee.
       Mathews is survived by his wife Pat, sons Stan Mathews 
     (Sandy) and Les Mathews (Pam) and granddaughters Katie Zipper 
     and Emily Mathews. He was preceded in death by his son Rick 
     Mathews.
       Honorary pallbearers include Steve Adams, Tom Benson, Carl 
     Brown, Tom Cone, Nancy-Ann DeParle, John Faber, Jim Hall, Don 
     Holt, Carl Johnson, Dr. Joe Johnson, Jeremy Kane, David 
     Lillard, JW Luna, David Manning, Raymond Marston, Mike 
     McWherter, Clayton McWhorter, John Morgan, William Nichols, 
     Roy Nix, Parker Sherrill, Arnold Tackett, Bo Roberts, Pete 
     Sain, Dale Sims, Captain Bobby Trotter, David Welles, Bill 
     Whitson, and ``Harlan's Girls''--Estie Harris, Adrienne 
     Knestrick, Katy Varney and Beth Winstead.
       The family would like to give special thanks to his caring 
     doctors--Dr. Craig Weirum, Dr. Chris Hill, Dr. Rentz Dunn, 
     Dr. John Thompson and Dr. Robert Faber.

  Mr. ALEXANDER. I thank the Senator from Massachusetts for his 
courtesy.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. MARKEY. I seek recognition to speak for 5 minutes.
  The PRESIDING OFFICER. Without objection.


                        Energy and Tax Extenders

  Mr. MARKEY. Mr. President, two things happened yesterday:
  First, the Shaheen-Portman energy efficiency bill collapsed--at least 
for now. It would have created 190,000 new jobs. It would have cut 
carbon pollution by 22 million automobiles on the

[[Page 7806]]

roads of the United States in equivalency. That is a big deal. It is 
something that was agreed upon by Democrats and Republicans.
  What happened? Well, too many Republicans wanted to vote on the 
Keystone Pipeline issue. They knew the vote on the Keystone Pipeline 
was going to fail because they don't have the votes in order to be 
successful, so they took a bill that would cut carbon emissions and 
said they wouldn't pass it unless they got a vote on three additional 
amendments to increase global warming emissions:
  No. 1. Stop EPA from cutting emissions on powerplants. They wanted to 
vote to take away EPA authority on that.
  No. 2. Allow massive export of natural gas that will actually 
increase costs to consumers in the United States and move us back to 
coal because the higher the price of natural gas, the more people are 
going to go back to burning goal. They all understand that. That is 
what the game is all about.
  No. 3. Prevent the Senate from considering global warming pollution 
controls in the future. That is right--just have a vote that prohibits 
the Senate from considering global warming pollution levels.
  Obviously, this is a debate about pollution, not about energy 
efficiency, from the perspective of the Republican Party--although I 
give credit to the many Republicans who were working on a bipartisan 
basis with Jeanne Shaheen in order to put together a bill that actually 
accomplished something and showed this institution can work.
  A second event actually happened yesterday as well. Two new climate 
studies were released saying that the West Antarctic ice sheet is 
collapsing and the melting of the West Antarctic is unstoppable. Twelve 
feet of sea level rise is coming.
  Did you hear that? The West Antarctic ice sheet is collapsing, the 
melting is unstoppable, and 12 feet of sea level rise is coming.
  What does that mean? That means Boston, underwater; South Florida, 
underwater; New Orleans, underwater.
  In the Senate, we are moving at a glacial pace on climate change. We 
are frozen. But while we do nothing, the pace of glacial collapse is 
accelerating. The world's ice is melting.
  The Senate has been called the cooling saucer of democracy. But when 
it comes to climate change, it is the warming plate, cooking the Earth 
as we continue our slide into an ocean of dysfunction.
  The next major piece of the West Antarctic glacier that breaks off 
into the ocean should be reserved as an island for all of the climate 
deniers. We will just call it the Island of Deniers. They can all live 
there because there will be plenty of room on this huge, massive body 
of ice that keeps breaking off and heading into the ocean.
  Secondly, we are about to take up tax extenders, and we have a 
fantastic chance to extend the production tax credit for wind in our 
country. Unfortunately, because of the unpredictability of the tax 
breaks for the wind industry, 30,000 people in the wind industry were 
laid off last year. That is not because the wind industry didn't prove 
it could increase the amount of electricity in our country generated 
from wind; it is because--unlike the oil industry, unlike the gas 
industry, unlike the nuclear industry, unlike the coal industry--the 
wind industry has to come in, hat in hand, to beg to continue their tax 
breaks year after year. There is no predictability for that 
marketplace. This gives us a chance to extend those tax breaks.
  So it is a big challenge, but ultimately if the oil and gas industry 
is going to receive $7 billion in tax breaks per year, the wind 
industry should receive the tax breaks it needs. We need a level 
playing field. We need a way to ensure that there is, in fact, a 
fighting chance for these new renewable energy industries. The existing 
industries have received tax breaks going back 100 years. These newer 
industries are there. They are creating jobs at a massive pace, but we 
need to ensure that the tax breaks are there.
  My hope is that we will be able to pass these tax extenders. Again, 
there are extensions for tax breaks that are in there for many 
industries across the board. It is the kind of bipartisan effort that 
deserves support, like the Shaheen-Portman energy efficiency bill. My 
hope is that the institution can work in order to accomplish that goal. 
Civility on matters such as these should not melt away. We need to make 
sure we are, in fact, protected for generations yet to come.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Utah.


                          National Police Week

  Mr. HATCH. I wish to take a moment to say a few words in honor of 
National Police Week. I would like to take this opportunity to honor 
the brave men and women of law enforcement who made the ultimate 
sacrifice and gave their lives in the line of duty while safeguarding 
our communities.
  Since the first recorded police death in 1791, there have been 21,742 
law enforcement officers killed in the line of duty. This year 112 
names will be added to the National Law Enforcement Officers Memorial 
in Washington. We should remember that there are 112 families who 
grieve the loss of a loved one who gave his or her life to protect 
their community and to keep their fellow citizens safe.
  Today I recognize two Utah law enforcement officers who recently gave 
their lives in the line of duty.


                         Sergeant Derek Johnson

  Sergeant Derek Johnson had served with the Draper Police Department 
for 9 years when he was shot and killed while on uniformed patrol in 
the early morning hours of September 1, 2013.
  During his service, Sergeant Johnson was the recipient of many 
awards, including a Life Saving Award and a Distinguished Service 
Award. He was also honored as the 2012 Community Policing Officer of 
the Year.
  We take this time to think about the friends and family who mourn the 
loss of Sergeant Johnson and keep his wife Shante and his 7-year-old 
son Bensen Ray Johnson in our thoughts and prayers.


                          Sergeant Cory Wride

  Another recent tragic loss to the Utah law enforcement community was 
Utah County Sheriff's Office Sergeant Cory Wride.
  Sergeant Wride was shot and killed while on duty on January 30, 2014, 
as he was assisting a stranded motorist.
  Sergeant Wride served with the Utah County Sheriff's Office for 
nearly 20 years and served his community in various roles, including 
patrol and as a member of the department's special operations teams, K-
9 and SWAT.
  Sergeant Wride was married to Nanette, his wife of 18 years. He was 
the father of four boys and one daughter: Nathan, Chance, Shea, Tyesun, 
and KylieAnne. He also had eight grandchildren.
  I wish to extend my sympathy to his family and recognize Sergeant 
Wride for his service, selflessness, and his courage.
  I urge my colleagues to take some time this week to think about these 
men and pay respect to the numerous other fallen heroes who have served 
our communities with professionalism, integrity, and compassion, as 
well as all members of the law enforcement community who watch over and 
guard our streets, protect us, our families, and our communities.


                             Tax Inversions

  Last week I came to the floor to talk briefly about the news reports 
we have all been seeing about the proposed merger between Pfizer and 
AstraZeneca and the legislative proposals we are seeing from Members of 
Congress in response to the merger.
  As you know, one of the key details in this merger is that when 
Pfizer--a large American company--acquires AstraZeneca--another large, 
but somewhat smaller UK company--they plan to incorporate the new 
merged company in the United Kingdom, not here in the United States.
  As I said last week, I was as concerned to learn of these plans as 
were many of us here in Congress. After all, Pfizer is an iconic 
American company, with over 100,000 employees. It ranks in the top 200 
of global companies by revenue, according to the Fortune Global

[[Page 7807]]

500 list. It would be a great loss to our country to see it 
incorporated offshore.
  Still, it is difficult to blame them for this decision. According to 
sources, a desire to escape the high U.S. corporate tax is part of the 
motivation for this merger. This type of transaction, where a U.S. 
corporation merges with a foreign entity and incorporates elsewhere to 
escape the U.S. tax net, is sometimes referred to as an inversion.
  Inversions are a growing problem here in the United States. Indeed, 
large companies are leaving our country at an alarming rate. If you 
count the number of American corporations in the worldwide list of 
Fortune 500 companies, you will see the number has declined 
dramatically over the past decade, which is very unfortunate. This 
decline means less capital and less investment in the United States. It 
means a smaller U.S. tax base. Most importantly, it means more jobs 
that could be created--that should be created--here in America are 
being created elsewhere. So make no mistake. Inversions are a big 
problem, and the problem seems to be growing every day.
  As I mentioned on the floor last week, there are, broadly speaking, 
two different ways Congress could act to address this problem. The 
first way would be to make it more difficult for a U.S. corporation to 
invert. That is the approach my friend the chairman of the Senate 
Finance Committee endorsed a few days ago in an op-ed in the Wall 
Street Journal.
  As the chairman noted in his opinion piece, current law requires 
companies moving overseas to have at least 20 percent new ownership to 
avoid some very bad tax consequences. His proposal--the one he outlined 
in this article--would be to increase that benchmark to 50 percent for 
all inversions taking place after May 8 of this year. That means his 
proposed restriction would be retroactive for all inversions that 
happened between last Thursday and the date his proposal may be signed 
into law.
  Of course, this is hardly a new idea. President Obama included a 
similar proposal in his budget. Given the amount of hand-wringing we 
have seen over just the Pfizer-AstraZeneca merger and the subsequent 
erosion of the U.S. tax base from my friends on the other side, you 
would think a proposal like the one the chairman floated in his op-ed 
would raise a significant amount of revenue. However, if you think 
that, you would be wrong.
  All told, his proposal would raise roughly $17 billion over 10 years. 
That is about $1.7 billion a year. That is not really an insignificant 
sum, but it does demonstrate the scope of the problem is hardly worth 
the draconian solution some of my friends want to impose in order to 
solve it.
  Let me be clear. I share my colleagues' concerns about the number of 
inversions that have taken place over the last few years. However, I do 
not believe that imposing confusing and arbitrary retroactive 
restrictions on U.S. companies is the answer. There is an alternative 
approach which brings us to the second way Congress could act to 
prevent more inversions.
  The second way to address the problem of inversions is to make the 
United States a more desirable location to headquarter businesses. 
While it would require a lot of work and compromise, this is by far the 
better approach.
  This approach, of course, means lowering the corporate tax rate. It 
also means replacing our antiquated worldwide taxation system. Under 
current law, U.S. corporations are taxed on their worldwide income, but 
foreign corporations are subject to tax only on income arising from the 
United States. In other words, we subject our corporations to a 
worldwide tax system, while subjecting foreign corporations to a 
territorial tax system. On top of that, most of our major trading 
partners tax companies domiciled in their own countries on a 
territorial basis as well, unlike our country.
  Long story short: Our system of worldwide taxation places us at a 
competitive disadvantage and makes the United States a less than 
optimal place for companies to locate their businesses. That being the 
case, as important as it is to get the corporate tax rate down, no 
matter how low we get that rate, we still need to scrap and replace our 
outdated worldwide tax system.
  That is why tax reform is so important. It is just one of the 
reasons, of course, but it is a really important reason. Tax reform, if 
it is done right, will get at the root problem rather than simply 
dealing with symptoms.
  I should note that inversions are only one symptom of our 
dysfunctional international tax rules. Other types of transactions 
further illustrate why the entire system we have is problematic.
  For example, there are strong incentives currently for a U.S. parent 
company to sell its foreign subsidiaries to foreign corporations in 
order to escape the U.S. tax net. There are strong incentives to set up 
a startup business as a foreign corporation. Neither of these 
transactions are inversions, but they do show the point that it is, for 
tax purposes, often better not to be a U.S. corporation or to be 
controlled by one. While these other sorts of transactions don't grab 
the headlines, as inversions do, they are nonetheless indicative of 
real problems in our Tax Code.
  That being the case, a proposal to restrict or eliminate inversions 
would really only go after one particular type of problem, leaving the 
rest of the fundamental flaws in our tax system firmly in place.
  Proposals to restrict inversions or to impose some sort of management 
and control test are like trying to plug the dyke with your finger to 
keep capital and jobs from flowing overseas. These proposals are not 
long-term solutions. They are not even good short-term fixes.
  Another example of business activity flowing overseas that really 
comes to mind is the problem we are facing with the medical device 
industry. We are losing our innovative medical device companies because 
of our stupid tax system and the 2.3 percent tax on sales or gross 
income of our medical device companies--many of which haven't made a 
profit yet. They would be taxed, even though they are not making 
profits, but will make profits if they can keep going with their 
innovative and good ideas.
  We know, thanks to ObamaCare's medical device tax, that some of 
America's most innovative companies in an industry that is vital to our 
health care system are moving jobs overseas. Yet where is the call from 
the leadership on the other side to do something about this? In fact, 
there is nothing but stalling of legislation to solve this problem, 
which I think almost any intelligent person would want to do.
  As it stands, it appears not to alarm my friends on the other side 
when business activity flees the country as a result of punitive taxes 
under ObamaCare. Yet, if a company with a large revenue base takes 
taxes into account when considering mergers and acquisitions, the alarm 
bells sound and legislation is put forward in no time. I would say 
there is a bit of inconsistency on the part of some of my colleagues 
who claim they want to keep jobs and business in the United States. If 
they do, why aren't they doing something about this stupid tax on 
medical device companies?
  We had a vote on this earlier in the year, on a bill that didn't go 
through both Houses--and the leadership knew it wouldn't go through--
where we had 79 votes in favor of abolishing this tax. There is wide 
bipartisan support to get rid of it. What is wrong with the other side 
that we have to continue to fight to get rid of something that 79 
people in the Senate voted to get rid of? And by the way, I believe if 
we brought it up true blue, in and of itself, it would pass here with 
probably 95 votes, if people give any consideration to American 
business, American ingenuity, solving the problems of health care, 
bringing health care costs down, which medical devices can do, and 
saving lives. It is no small reason why some of these medical device 
companies are moving overseas where they are treated far better than we 
treat them here. We had 79 people who voted to get rid of that stupid 
tax. Yet the leadership of this body won't allow it to be brought up 
freestanding or on some bill that basically has a chance of passage 
through both Houses of Congress.

[[Page 7808]]

  Now, there is, of course, bipartisan legislation that would correct 
the problems we face with the medical device tax; namely, a bill 
introduced by Senator Klobuchar and myself. And I commend Senator 
Klobuchar. She has had a lot of guts plus a lot of ability in working 
on this bill. Sadly, the Senate Democratic leadership has thus far 
refused to allow an up-or-down vote on the measure, even though we know 
it has broad bipartisan support, as I have heretofore mentioned.
  My hope is this will change with the upcoming debate over tax 
extenders, but I am not holding my breath. Given our ongoing experience 
with the medical device tax, I have to say I am a little skeptical when 
my colleagues on the other side of the aisle say they are concerned 
about American companies moving addresses and operations out of the 
country. Indeed, if they were really so bothered by this, we would have 
repealed this medical device tax a long time ago.
  Finally, I would just like to give a brief aside on the topic of 
retroactive changes to our tax laws. In my view, stability and 
predictability are bedrock principles of the law. When it comes to our 
tax code, we have gotten away from that over the years. Restoring these 
principles to our tax system should be one of our main goals of tax 
reform.
  Put simply, retroactive changes to the law--the kind envisioned by my 
colleague's op-ed--are the antithesis of stability and predictability 
and will only make tax reform that much harder. No matter how well 
intentioned, and no matter how large the short-run revenue gains are to 
be had from retroactive changes, I believe the long-term affects are 
harmful and, in my opinion, such proposals should be viewed with a 
healthy dose of skepticism. I know my colleague is very sincere in 
making the points that he has, but I have to rebut those points, and I 
believe I have done so effectively.
  Once again, the effort to prevent tax-motivated inversions can be 
boiled down and separated into two basic camps: One side would have us 
simply address the problem and impose arbitrary and perhaps costly 
restrictions on American businesses to prevent them from leaving the 
country.
  The other side would make the United States a better place to do 
business, preventing companies from wanting to leave in the first place 
and inviting new ones to form and prosper here.
  Only one of these approaches will actually fix the problem. Only one 
of these approaches will help create jobs and grow the economy, and 
only one of these approaches will put our Nation on a path to greater 
prosperity. That approach is, of course, comprehensive tax reform. That 
is what is needed, and that is where our focus should be.
  As I said last week, as the ranking member of the Senate's tax-
writing committee, my focus, when it comes to the problem of 
inversions, is to fix the underlying problems, not to tinker on the 
edges, focusing on the symptoms. I hope eventually that is the approach 
we take.
  I thank the Chair, and I yield the floor.
  The PRESIDING OFFICER (Ms. Heitkamp). The Senator from Maryland.
  Mr. CARDIN. Madam President, first I want to thank Senator Hatch. I 
deeply respect his views. He is one of the most effective Members of 
the Senate. He has deep views and reaches across party lines to try to 
get things done, which I think is very important, and I respect him 
greatly.
  I want to agree with the conclusion of Senator Hatch. The problem 
with corporate inversion is best fixed if we do comprehensive tax 
reform. I believe he is right. We have two paths we can take. One is to 
try and reform our current tax structure, which I think will not work, 
and I will give my reasons why; or we can look for a competitive tax 
structure that is fairer to the American people and makes measures such 
as corporate inversions something that would not be happening in our 
communities.
  Pfizer and AstraZeneca are looking at a merger. AstraZeneca is a 
British company. They own major operations in my State of Maryland, 
affecting thousands of workers. We would think a merger between a 
British company and an American company would mean more jobs in 
America, but we know Pfizer has made certain commitments to the British 
Government about maintaining and expanding jobs in Great Britain, which 
we worry is at the cost of American jobs and jobs in my home State of 
Maryland.
  We have heard one of the reasons for the merger is corporate 
inversion. What do we mean by that? It means Pfizer, an American 
company, will merge with a British company and then use that to 
transfer its revenues, which are legitimately earned in America, many 
as the result of intellectual property developed in America, and then 
attribute that income to foreign sourced, rather than to domestic 
sourced, trying to avoid U.S. taxes.
  Our Tax Code should not encourage that action. Several Members of the 
Senate and I are working within our current Tax Code to make sure that 
doesn't happen here in America. Our Tax Code should not encourage 
companies to take their income offshore. They should pay their fair 
share of taxes in the United States.
  But as Senator Hatch pointed out, and I agree, we need a more 
competitive Tax Code. We need a Tax Code that would allow for better 
competition for American companies, for our manufacturers, for our 
producers, for our farmers, that will allow easier capital formations 
so we could raise in America more of the capital we need and be less 
dependent upon foreign-sourced investment, although foreign-sourced 
investment is certainly helpful to our country and something we 
encourage.
  We need a Tax Code that is fair, that people believe they are being 
treated fairly with their neighbor, which is not the current situation. 
Most Americans cannot figure out the income tax code and don't know 
whether they are being treated fairly with other taxpayers, and we need 
a code that is much more efficient.
  So one path we could pursue and that Senator Hatch was alluding to is 
to try to reform our current income tax codes--our corporate income tax 
code and our personal income tax code.
  We have an example of that. Congressman Camp has come up with a 
comprehensive proposal in the House of Representatives. I must say I 
don't think Congressman Camp's proposal adds up from the point of view 
of producing the revenue we produce today, let alone the revenue we 
need in order to pay our bills and not be dependent upon borrowing 
money from other countries. But putting that aside, I think we see the 
difficulty in the Camp proposal, which causes major disruptions among 
different industries, and we are hearing from those industries that it 
would create major problems for competitiveness for the United States.
  I think the most fundamental flaw with trying to reform our current 
Tax Code is we tried that once before in 1986, and it was comprehensive 
and it did spread the burden and it did reduce the rate. It lasted for 
less than 1 year before Congress continued to change the Tax Code.
  Today we have tens of thousands of changes since the 1986 tax reform 
and we have many temporary provisions. That is why we have the bill 
before us right now to deal with these expiring tax provisions. I don't 
think there is any way of getting around these types of problems moving 
forward under our current Tax Code.
  I will point out a fact I don't think most Americans have understood. 
If we look at all the OECD countries--the industrial countries of the 
world, countries that we like to compare ourselves to, countries that 
we want to be competitive with--of all the industrial nations of the 
world, the United States is near the bottom in regard to their reliance 
upon government services. In Europe they have much stronger government 
services in health care and housing and income support-type programs 
than we do in the United States.
  If we rely less on governmental services, wouldn't that mean we 
should have the lowest competitive tax rates among the industrial 
nations? Instead, as Senator Hatch pointed out, we have the highest 
marginal tax rates among

[[Page 7809]]

the industrial nations, and the reason is quite simple. Of all the 
industrial nations in the world, only the United States does not have a 
national consumption tax. We rely on income tax revenues. Why? Because 
we thought that was the right way to go, and we didn't have to worry 
about international competition. After all, we are America.
  Guess what. We are in global competition today, and the tax rates of 
this country matter in regard to our manufacturers being able to sell 
products overseas.
  One other fact about international competition. International 
competition rules at the WTO were developed based upon consumption 
taxes. So if a company manufactures an automobile in Germany and wants 
to bring it into the United States, the taxes they pay--the consumption 
taxes--are taken off of that product. So basically their autos sell in 
America tax free; whereas, U.S. auto manufacturers that have to pay 
taxes, those taxes still apply to the cost of the product because it is 
not border adjusted.
  Then, to make matters worse, if they manufacture a car in the United 
States and try to sell it in Germany, they not only have to pay the 
corporate taxes here, the income taxes--because they are not taken off 
at the border, they are not border adjusted--when they go into Germany, 
they have to pay the value-added tax, the consumption tax. How do we 
compete under those circumstances? The answer is it is very difficult. 
In global competition today, we have to be smart.
  This is why we should have the lowest marginal tax rates in the 
world. If we did, corporate inversion would not be an issue because we 
wouldn't find a Pfizer trying to pay British taxes when the U.S. taxes 
are the lowest taxes among the industrial nations of the world.
  So I have a proposal called the progressive consumption tax. 
``Progressive,'' what do I mean by that? It means the taxes paid at the 
Federal level will be more reflective of a person's ability to pay than 
our current income tax code is. We make it progressive so it is fair, 
in that they pay according to their ability to pay a progressive 
consumption tax. That consumption tax rate will be the lowest among the 
industrial nations of the world.
  I will give some examples. I will be the first to acknowledge we have 
to get these scored and these numbers can change as we go along, but we 
are looking at a consumption tax rate of about 10 percent. This would 
put us at the bottom of the consumption taxes among industrial nations. 
Individuals who earn under $25,000 and families up to $50,000 would pay 
no consumption taxes. They would get a credit for the consumption taxes 
they otherwise would pay.
  Similar to the current income tax code where they do not pay income 
taxes, they would not pay consumption taxes. It would be immediately 
rebated to them. If they work, it would be rebated under the payroll 
tax payments. If they don't work, they would get a debit card to get 
instant rebates and use it as people use debit cards.
  So we would make it progressive. We would then be able to start the 
income tax rates at $100,000, approximately, of taxable income, and 90 
percent of Americans would pay no income taxes. It would start at 15 
percent. There would be an additional bracket of 25 percent, starting 
at $40,000 of taxable income. So a progressive income tax, simplified, 
with only four deductions, not this complexity today as we figure out 
whether something is deductible and all the complications.
  We would have four deductions for State and local--with respect to 
federalism--State and local taxes: for charitable deductions because 
our charities are critically important to carrying out the important 
work of our country, for real estate and the needs for the real estate 
to reflect--so we don't see destruction of the real estate market, and 
we also allow deductions for employer-provided health benefits and 
retirement benefits. It is simplified, it rewards simplicity, and 
allows for the progressiveness of fairness in our Tax Code that does 
not exist today.
  The corporate tax rate would get down to 15 percent. That is what 
corporate America tells us we need to be competitive in the industrial 
world. This adds up.
  Some say: Gee. Consumption taxes raise a lot of revenue. We put in 
our proposal an automatic adjustment of the rate to make sure it 
doesn't bring in more revenue than we say. So we are fair on the 
progressive side to make sure it is fair from the point of view of the 
ability of middle-class families to pay, and it is fair from the point 
of view of those who are concerned about government growing, in that it 
has a circuit break as to the rate based upon the revenue that you 
need.
  What have we accomplished by this? We have accomplished a much 
simpler Tax Code that people can understand, a fairer Tax Code, one 
that rewards savings. Savings are not taxed. There is a greater ability 
to raise capital in the United States. It is border adjusted, which 
means the taxes come off our exported products so we can compete 
globally in a much easier way. This is what we accomplish.
  So when people talk about fundamental reform, to me, this is what we 
need to do.
  I am going to move this proposal as quickly as I can, but obviously 
it is going to take some discussion and debate. We are hopeful we will 
be able to answer anyone's questions on it. We are very optimistic, but 
in the meantime what do we do? We can't just stand by and allow Pfizer 
to take American jobs overseas because of corporate inversion. So I 
hope we will stand for what is right in our Tax Code, that we have the 
capacity to improve our current Tax Code to avoid the loss of jobs and 
shipping jobs overseas, as well as working to reform our Tax Code and 
provide the type of structure so the country that relies the least on 
government among the industrial nations has the lowest tax rate and has 
a fairer system for all Americans.

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