Jumpstart Our Business Strength Act

JUMPSTART OUR BUSINESS STRENGTH (JOBS) ACT

Mr. GRASSLEY. Madam President, I know the Senator from Wyoming wants to speak. I will not give a long speech at this point on the vote that just occurred. I wish to take a second to respond to the partisanship aspect of this debate. I cannot speak for anybody but this Senator.

It would be one thing if the overtime amendment were the only one that we had to deal with, but we have seen lists, I think, of up to maybe 10 nongermane amendments that may have been potentially part of this debate. So you can understand, there may be 10 legitimate issues that are nongermane to this debate which ought to be discussed on the Senate floor, as per the right of every Senator, as expressed by the Senator from Nevada; but they don't all have to be discussed on this very important bill before the Senate.

This is a very important bipartisan bill before the Senate. It is one thing to deal with an overtime amendment; it is quite another thing to deal with an environment in which the minority may be expecting us to deal with vast numbers of nongermane amendments. That is very difficult and it is that sort of environment which brings about a cloture vote.

As my friend from Montana has stated, I hope we do get this behind us. The germane amendments will take very little time and we can then move past this bill. This bill will pass overwhelmingly when we get it up for a vote.

I yield the floor.

Mr. GRASSLEY. Mr. President, prior to our cloture vote on the FSC/ETI bill, I read a list of some products that, if they are going to be shipped out of the United States and exported to Europe, are going to have, right now, a 5-percent tariff added to them because of European retaliation against the United States because we have not passed this legislation yet. That is going to cause jobs to be lost. That tariff is going to go up, over the course of the next 12 months, 1 percent every month, to 17 percent.

I will be a little bit more specific in how some of those products and the manufacturers of those products, or the producers of those products, will be affected.

In jewelry manufacturing, we would have $2 billion in annual exports being jeopardized. Ninety-five percent of jewelry manufacturers are small businesses, so obviously it would have a huge potential impact on jobs. Folks such as Stamper Black Hills Gold in South Dakota are targeted, as one example of jewelry manufacturing.

Racehorses: The average value of U.S. exports of racehorses is about $100,000. At 5 percent, that is an extra $5,000 cost to our exports. By the end of the year, it will be an extra $14,000 on average. For high-value horses, it will be several times more. These sanctions would impact States such as New York, California, Florida, and Maryland. In the area of dairy, we will have sanctions on cheese exports impacting States such as Wisconsin, Vermont; fruits and vegetables, California; citrus fruits, peppers, Florida, and tomatoes, as an example.

I could go on and on, but I will include for the RECORD a list beyond what I have just referred to. We have over 500 items that have been targeted already with sanctions on them. I ask unanimous consent to print that information in the RECORD.

Mr. GRASSLEY. We just had a cloture vote on the bill. I have spoken before about that not being my preferred route for moving a strongly bipartisan bill, but leadership decided to do it. Obviously, I want to get to finality, so I voted to close debate and move on.

The JOBS bill is a bill to create manufacturing jobs. It should not have required a cloture vote to get it passed. But politics have stepped in the way, and that seems to be the rule of the day.

I wanted to act on this bill last year because I was fearful that elections this year and the politics connected thereto would get in the way of the Senate's ability to do its job. It looks as though I may have been right after all. The procedural shenanigans when we first brought up the bill confirmed my worst fears. Senator Baucus and I had an agreed order of amendments that would have improved the bill and brought important relevant issues forward. Many of those issues included in this amendment by Senator Baucus and I were at the request of a lot of people who voted against cloture.

The agreement we had was undermined by the Democratic leadership. They would prefer to turn a bipartisan bill into a political football. That is inexcusable because we have worked hard throughout this process to make sure everyone's concerns, Republican and Democrat, were incorporated in the bill.

You should not play political games with a bipartisan bill that preserves the jobs of manufacturing workers across the land, and probably greatly increases the number of manufacturing jobs.

I would like to repeat points I made yesterday about the bipartisan aspects of this legislation. The construction of the JOBS bill began when Senator Baucus was chairman of the Finance Committee. He held a hearing in July 2002 to address the FSC/ETI controversy within the World Trade Organization. We heard vital testimony from a cross-section of the industries that would be adversely affected by repeal of the Extraterritorial Income Act. We also heard from U.S. companies that were clamoring for international tax reform because our tax rules were hurting their competitiveness in foreign markets. Their foreign competitors were running circles around them because of our international tax rules. That is what we were told during the hearing.

Also during the hearing, Senator Bob Graham of Florida and Senator Hatch expressed concerns about how our international tax laws were impairing the competitiveness of U.S. industry.

In response, at that particular time, still in 2002, Senator Baucus formed an international tax working group with Senator Graham, Senator Hatch, and this Senator. It was open also to any other member of the Finance Committee who wanted to serve and had an interest in this issue. This bipartisan Finance Committee working group formed the basis for the bill that is now before us. We directed our staff to engage in an exhaustive analysis of international reform proposals to glean the very best ideas from many different sources, and as many as possible. Senator Baucus and I also formed a bipartisan, bicameral working group with the chairman and ranking member of the Ways and Means Committee in an effort to find some common ground on dealing with repeal of the Foreign Sales Corporation extraterritorial income language in our law that had been declared contrary to our international treaty obligations.

After that effort failed, working with the Ways and Means Committee, Senator Baucus and I continued to work with our Finance Committee colleagues on bipartisan development of the repeal of that language and also to expand and improve the international tax reform package. We continued our bipartisan efforts when I became chairman last year.

In July 2003, following on the impetus of the Baucus hearings, we held two additional hearings on FSC/ETI and the international reform issue. These two hearings concluded our final bipartisan effort in reviewing all of the policy options for creating the bill now pending before the Senate. Let me emphasize that there is not one provision in this JOBS bill that was not agreed to by both Republicans and Democrats. We have acted in the best faith to produce a bill that protects American manufacturing jobs and makes our companies globally competitive. And we did this in a fully bipartisan manner, which is what the American people expect us to do on such an important issue as manufacturing jobs and our Nation's economic health and also because, quite frankly, nothing gets done in the Senate that does not have a bipartisan approach.
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But these efforts toward bipartisanship and all the other efforts that went into it do not seem to be enough for some. I believe some people don't want this bill to pass. I will bet those very same people will end up voting for it anyway, if we ever get to that point, because I don't think they can openly oppose it. That would be bad form, considering all the talk there has been in this body about outsourcing and offshore manufacturing. Instead, these people who might not want to see this bill pass would try to destroy the bipartisan product with amendments on controversial issues that are what we call "not germane" but are also totally unrelated to the JOBS bill.

That is why we found ourselves facing the cloture vote today. The cloture motion did not get the 60-percent supermajority. Consequently, we are in a position of limbo on this legislation.

I am speaking because I want people to reconsider their position, particularly in light of all of the products that I have read that are going to have a 5-percent tariff on them, making our manufacturing less competitive and consequently losing jobs to a greater extent. When I think about efforts, for political reasons, to destroy this bill, I can quote, at least, from a Washington Post article that quoted a Democratic tax aide as saying-and this person is not named in the article-

There's not a lot of incentive for us to figure out this problem-

Meaning the FSC/ETI problem. This Democratic aide went on to say:

Allowing the extra-territorial income controversy to fester would yield increased sanctions that could benefit the Democrats in November.

Well, that is exactly what is accomplished by not getting the supermajority of 60 to stop debate and to move on. This is, in fact, festering. Now, all of this, to me, is an appalling statement, whether it comes from a Member or whether it comes from a top staffer of a Democratic Member, because this debate should be about policy, not about petty politics.

Today, Democrats said no to cloture; Republicans said yes to cloture. The Democrats are on record opposing the provisions in this bill. Some of those provisions, if we don't get beyond where we are now, will be killed because of this morning's vote. This bill will end $4 billion a year of European Union tariffs against U.S. exports. These sanctions are already being imposed against many U.S. products. I named over 500 of them. They fall into the category of grain, timber, paper, and various manufactured goods.

Those sanctions started on May 1. They increase 1 percent each month we fail to act, adding up over 12 months to 17 percent. They will be 13 percent by the end of this year. That is too politically tempting for some to let pass.

We could have ended the $4 billion in sanctions with this bill, but the Democrats said no. The Congressional Budget Office says we have lost 3 million manufacturing jobs since the middle of the year 2000-6 months before President Bush became President-when a depression in manufacturing set in. The JOBS bill provides $75 billion of tax relief to our manufacturing sector to promote rehiring in U.S.-based manufacturing. But the Democrats said no.

The Democrats claim they are worried about the scope of proposed overtime regulations-regulations that are not even out yet, not final. But how can you worry about overtime if you don't have a job in the first place? You have to have a job to earn overtime. We need to address the manufacturing job loss right now by voting for the bipartisan JOBS bill.

The JOBS bill gives a 3 percentage point tax rate cut on all income derived from manufacturing in the United States. This will not benefit manufacturing offshore. So you can see this is tilted toward encouraging manufacturing in the United States, creating jobs in the United States. This reduction in taxes starts as soon as the President signs this bill. This manufacturing rate cut applies not only to big corporations but to sole proprietors, partnerships, farmers, individuals, family businesses, multinational corporations, and foreign companies that set up manufacturing plants in the United States and hire workers here. This should keep the Government out of their pocket while they try to recover from the economic downturn by lowering this tax and also because it is an incentive to expand production here rather than overseas. But on that vote we had about 2 hours ago, the Democrats said no.

The JOBS bill extends the research and development tax credit through the end of 2005. This credit is a domestic tax benefit that incentives research and development, translating to good, high-paying jobs for Americans here in America, not overseas. But the Democrats said no today.

There are other important provisions in this bill. The bill extends for 2 years tax provisions that expired in 2003 and 2004. This includes items such as the work opportunity tax credit and the welfare-to-work tax credit. Why did the Democrats say no to these measures that are meant to help lower income people and young people get into the workforce to work their way up the economic ladder-particularly to move people off welfare into the world of work, because in the world of welfare, you are going to be in a life of poverty. If you move people over here and give them an opportunity to move up, quite frankly, they are going to be able to improve themselves, enhance their opportunities, enhance their livelihoods.

There are also in the bill enhanced depreciation provisions to help the ailing airline industry. There are new homestead provisions for rural development. These provide special assistance for businesses in counties that are losing population. It provides incentives for newly constructed rural investment buildings, for starting or expanding a rural business in a rural high outmigration county. But the Democrats said no when they voted to continue the debate rather than reach finality on this bill.

We have a provision that allows payments under the National Health Service Corps loan repayment program to be exempt from tax. This is also for rural development-again, responding to a lot of Senators who support that because they are concerned about having high quality health care in rural America.

The JOBS bill includes brownfields revitalization. The bill waives taxes for tax-exempt investors who invest in the cleanup and remediation of qualified brownfield sites.

It includes a mortgage revenue bonds provision. That proposal would repeal the current rule that mortgage revenue bond payments received after the bond has been outstanding for 10 years must be used to pay off the bond rather than issue new mortgages. There are 70 Senate cosponsors of that bill. But the Democrats said no today on the cloture vote.

We allow deductions from private mortgage insurance for people struggling to afford a home. The no vote on today's cloture motion was a vote against homeowners.

We have extended and enhanced the Liberty Zone bonds for the rebuilding of New York City because of September 11. We included $100 million in tax credits to be used on rail infrastructure projects in the New York Liberty Zone. The Democrats actually tied up funding for the Liberty Zone to prove a political point on a Labor Department overtime regulation that isn't even finalized. Well, we tried to help some Senators with that provision. Yet they voted no.

There is a lot here to help economic development. We have increased industrial development bond levels to spur economic development. We have bonds for rebuilding school infrastructure. We have included tribal bonds, which allow Native Americans to obtain bond financing for reservation projects in the same manner as State and local governments.

We have a new tribal new markets tax credit. This would add $50 million annually in new markets tax credits dedicated to community entities serving Native Americans.

The JOBS bill provided $500 million over 3 years in the Federal tax credits to States for intercity passenger rail capital projects, and for so-called short-line rail service.

Was it worth killing off these important priorities by voting against an unfinished regulation? But that is what the Democrats did with this cloture vote.

We also have a special dividend allocation rule for the benefit of farm cooperatives. We have provisions that help cattlemen when drought, flood, and other weather-related conditions-all beyond the control of the individual farmer-might wipe out their livestock.
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We have a provision to benefit rural letter carriers.

The JOBS bill enhances a broadband expense so people in rural America can have a quality of life through IT, the same as those people in urban America.

We have included the Civil Rights Tax Fairness Act so people who win lawsuits actually get benefits from them because we have some people winning lawsuits and by the time they pay their taxes and pay the lawyers, they do not have anything left. So what good does it do to win a civil rights lawsuit?

Our bill includes a tax credit for employers for wages paid to reservists who have been called to active duty. There is a lot of that now because of the war.

The Democrats voted against cloture and killed all these measures. All these benefits are being held hostage because the other side is pushing for a vote on a nongermane amendment.

When we are faced with 5-percent sanctions, and next month it is going to be 6 percent and the following month 7 percent and eventually 17 percent after a year, I think in that environment it is fair to call this obstruction and maybe, in the case of this divided vote, political obstruction, partisan obstruction, particularly when this bill was developed in complete cooperation with the Democrats, not only on the underlying bill, but a lot of these amendments that were added by Senator Baucus and me were a direct result of trying to satisfy Democrats as well as Republicans.

That sort of obstruction did not work in 2002, and I do not think it is going to work today. When it was tried in 2002, Mr. President, do you know what happened? That sort of obstruction was supposed to win the Democrats continued majority in the Senate, and it cost them the majority. Do you know why? Because politics is not good policy, but good policy is good politics.

It is inexcusable to hold up a bill that will benefit millions of manufacturing jobs to score political points. We have worked hard throughout this process to make sure everyone's concerns-both Republicans and Democrats-were in this bill. In the committee, we did more to satisfy the Democrats. There were two votes against this bill and those two votes were from Republicans. How is that for a Republican chairman working with the Democratic leader of that committee to get a bipartisan bill to satisfy the Democrats, and in the process I irritate two Republicans? But it is still a bipartisan bill.

We tried to make sure everyone's concerns were taken care of in this bill. We see that concern reflected in the amendments I just listed. Anyone who voted against cloture voted against all those items I just listed because a few on the other side-or maybe I should say all on the other side-wanted to vote on another amendment, an amendment that was not germane. Then we had some people on the other side who were involved in that amendment saying all these amendments I listed are nongermane as well. Every one of them is in the jurisdiction of the Finance Committee, and every one of them is a tax-related item. So tell me tax-related items are nongermane and use that as an excuse to bring up a nongermane amendment that is in the jurisdiction of the Labor Committee. It just does not make sense. It is not true.

I hope somehow there can be some accommodation and get serious about the manufacturing job crisis that is facing America. We need to move this JOBS bill forward. Sooner or later, it is going to move forward because the more we tack on 1 percentage point a month for the next 12 months and get up to 17 percent, there are going to be enough businesses, as well as working people, complaining, and I hope they forward their complaints to the Democratic Party in the Senate because those are the people who voted against cloture.

Mr. ENSIGN. Mr. President, will the Senator yield for a question?

Mr. GRASSLEY. Yes, I will yield for a question.

Mr. ENSIGN. Mr. President, is the Senator aware that within the JOBS package, not only does it stop the tariffs from going into effect and being raised by 1 percent a month, but within this JOBS package, the provision known as the Invest in the USA Act would bring over $300 billion back into the United States to be reinvested to create American jobs? One estimate from a very well-respected economist, Alan Sinai, has said 660,000 jobs would be created by that one provision alone. Is the Senator aware that by killing this bill, at least 660,000 jobs just in that one small provision will be killed along with it?

Mr. GRASSLEY. Mr. President, I am aware of that, and it gives me an opportunity, because I did not highlight it in my remarks, to compliment the Senator from Nevada because he is the brains behind that amendment. That amendment probably will do as much good-or at least almost as much good-as the underlying legislation. It is a part of this bill. It ought to be passed, and I am sure the Senator from Nevada will be constantly reminding people on the other side of the aisle that their voting against cloture has also, at least temporarily, killed this provision as well.

Mr. ENSIGN. If the Senator will further yield for another question, is the fear of the chairman, who has done such great work on this bill-it is my fear and I wonder if the chairman has the same fear-that in the mix of an election cycle, some of these other issues that are being brought up are being brought up to confuse the issue, where they really do not like the underlying bill but they do not want to vote against the underlying bill because they know they are voting against jobs in America; that if they would vote for cloture, we could have a clean bill with only germane amendments and we could actually start creating jobs in America?

Mr. GRASSLEY. Mr. President, the Senator from Nevada is entirely right, 100 percent right. He may have not heard me say this, but I keep referring during this debate to a statement made by the Washington Post describing a Democratic tax aide as saying there was not a whole lot of incentive for the other side to move this bill along because as sanctions come on and people get laid off, that is going to benefit them in the next election. I said to my colleagues and I say to the Senator from Nevada that is politics getting in the way of good policy. I hope the other side realizes that the best politics is good policy.

Mr. ENSIGN. I thank the Senator.

Mr. GRASSLEY. I yield the floor.