Deficit Reduction Act of 2005--Conference Report

DEFICIT REDUCTION ACT OF 2005--CONFERENCE REPORT -- (Senate - December 20, 2005)

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Mr. DORGAN. Mr. President, there is a lot happening in the final days of this Congress. One might ask, What on Earth are we doing here days before Christmas? We are doing the work that should have been done in March, April, May, June, July, and August, work that wasn't done then for a number of reasons. But now we come to a number of important issues and this is reconciliation, budget cuts, and we have a tax cut bill ricocheting around. We have the PATRIOT Act that my colleague just described. We have the Defense appropriations bill. That has now been burdened with an amendment that calls for drilling in ANWR.

It is an interesting time, but one that is frustrating for some of us in the Senate. I will give you a description of that frustration.

On Sunday, we met at 12 o'clock--this past Sunday--on a conference, a very large conference dealing with the Defense appropriations bill. I was a conferee. We started at 12, and I left at 5 or 5:30 in the afternoon. We finished the work on that conference report. I opposed a number of things that happened on Sunday. The Defense appropriations bill was before us. They added drilling for oil in Alaska, the ANWR provision, having nothing to do with the bill. They added it because they thought they had the votes to add it.

Well, we finished the conference, and I left here at 5:30 on Sunday, and I discovered they added another provision. There wasn't a conference still going on at that point. A bunch of folks got in a room and decided what they were going to stick in the conference report.

I told my colleagues I grew up in a small town of about 350 people. When I was a kid, I used to go and watch the blacksmith. We had a blacksmith in my hometown. It was kind of fun to go and watch the blacksmith work. He would take a piece of metal, put it in a tong, stick it in heat, in hot coals until it turned white hot, and then he would put it on an anvil, take a big old hammer and beat it. That is how he shaped metal. Heat it and beat it with an old hammer. I watched that guy with dirty clothes, sweating all day long. He would heat that metal and beat that metal. Some people think apparently that is the way the Senate should work--heat it and beat it. Get hold of a big old hammer and pound ANWR through here. It doesn't matter the rules don't permit it; pound it through here. In fact, change the rules if they get in your way. It doesn't matter. Don't like the rules? Change them.

I am usually an optimist. They say a pessimist is someone who smells flowers and looks around for a casket and a body, and an optimist is someone who sees a manure pile and looks for a pony. I am an optimist, usually, looking for good things in what we are doing and where we are heading. But this notion that we live in a special place on this Earth and somehow we don't have to care about nurturing it to make sure it remains special, that it will all work out is a notion devoid of leadership.

The fact is, we are off track in this country. We are No. 1 in exports in waste paper. Did my colleagues know that? The largest volume of export in America is waste paper to China. Unbelievable. Yes, we are No. 1 in exporting waste paper.

And, oh, by the way, in the last 4 years, we also sent about 3 to 4 million jobs to Asia, mostly to China. We have the largest trade deficit in the history of humankind. This past year on the budget deficit, we will borrow $550-plus billion, nearly $570 billion. So we have a budget deficit that is way out of control, a trade deficit that is way off the charts, and we are shipping jobs overseas. Our No. 1 export now is waste paper, and you think things are going great. Suck it up, they say, it is a great place, things are going fine.

I don't think things are going fine. The question is where is the leadership here? David McCullough wrote a book about Adams. It is a wonderful book. He is a great historian. He wrote this book about Adams. I have told this story before. In this book, he described John Adams as representing this country's interests in Europe. Adams would write back to his wife Abigail as they were trying to put this new country together, and he would say: Where will the leadership emerge to help frame and start this new country of ours? Then he would say: There is really only us. There is me and there is Thomas Jefferson and there is George Washington and there is Ben Franklin and there is Madison and there is Mason. There is only us.

Now, of course, we know in the rearview mirror of history that the ``only us'' is some of the greatest human talent ever assembled, and they built a very extraordinary place, a very special country, with a Constitution that says ``We the People.'' The first 3 words, we the people.

But the current leadership in the White House and Congress says we don't have to worry too much about deficits. We are going to cut some spending but, oh, by the way, even though we are up to our neck in deficits, we want to cut taxes, and, oh, by the way, we still want to cut taxes mostly for upper income people. The second part of this reconciliation document is still in the House of Representatives, the tax side. It is very important to say that capital gains and dividends, normally called unearned income, capital and dividends--be given preferential tax rates. That is the most important thing. Warren Buffett, the world's second richest man, said when all this is phased in, he will pay a lower tax rate than his receptionist in his office. Tax work, they say, tax work but exempt investment. That is the mantra around here.

What is the most important thing? Drive down the taxes on dividends and capital gains; drive them down. It doesn't matter, we don't need the revenue. Deficits don't matter, Vice President Cheney said. Deficits don't matter.

They now come to the floor of the Senate with a proposal that says, by the way, let's cut some spending. Guess whose spending is going to get cut. Is it a surprise that the most vulnerable among us get cut? Is it a surprise the proposal is to decide there should not be enough money in Medicaid, that which delivers health care to America's poor, to provide the kind of funding that is necessary in Medicaid?

It is said by some, and I believe it, that budgets are moral documents as well. Someone once asked the question: If you were required to write an obituary for someone you had never met and the only information you had was that person's check register, what would it tell you about the obituary you would write?

What if all you knew about this country was its Federal budget and that is all the information you had as a moral document, but what was important? What mattered to this country? What did this country believe represented the most important areas of investment, expenditure to build on the successes of this country? Would it be, for example, that you decided tax cuts for wealthy Americans are the most important?

Let me show you a picture. I showed it yesterday, but I think it is important. This is a picture of a five-story building on Church Street in the Cayman Islands. Some people would just as soon you didn't this picture. But On Church Street in the Cayman Islands, there is a five-story building called the Ugland House. Do you know what is inside this building? This building is the official address for 12,748 corporations. Impossible, you say? No, it is not impossible. It is not impossible. We are running an economy now and, by the way, with the advice and consent of those in the Congress and in the Senate who voted for it--we are running one that says to businesses: Go ahead, get rid of your American jobs, move them to China, ship the products back to this country to sell them, and run your business through a mailbox in the Grand Cayman Islands so you don't have to pay taxes. That is what this building is about. And, oh, by the way, many of the companies that have this building as their address in the Cayman Islands to avoid paying U.S. taxes got a gift from this Congress--not with my vote--that is the equivalent of a $60 billion tax break--a $60 billion tax break.

In the past year and a half, a bill was passed called the JOBS Act to create new jobs. Of course, it didn't. It cost jobs. It gave a very fat tax break to the largest corporations in our country that do business here and overseas. It said, if you repatriate your income from overseas, because some day you are going to and when you do, you have to pay the 35-percent corporate rate, if you do it now, we will give you a special deal that we won't give to any other Americans: You pay a 5.25-percent tax rate. There is not one American living in Ohio, North Dakota, Oklahoma, or any other State represented in this Chamber who is told in law that they get to pay an income tax of 5.25 percent.

This Congress told the largest companies in this country, we will give you a 5.25-percent tax rate. That was a priority. My colleague who sat in this desk behind me, Senator Fritz Hollings, offered the amendment to strip it. I voted for it. I spoke for it. But, no, we could not strip that out because too many Members of this Congress believed it was important, a priority, to provide a big fat $60 billion tax break to the largest corporations in this country, with a 5.25-percent tax rate.

Compare that to the proposition we are offered today by people who come to the floor breathlessly saying we have to cut spending to reduce the deficit. Did they care about reducing the deficit when they gift-wrapped a $60 billion tax cut package for the biggest companies by giving them a 5.25-percent tax rate? No. It did not matter. It did not matter then. They just promised that it would create new jobs.

Interestingly enough, the very companies repatriating income to take advantage of this bargain basement tax rate are cutting jobs. This is not just me saying it. This is from the Wall Street Journal and other newspapers that describe exactly what is happening.

So today we have the breathless chant about let us cut funds for the Child Support Enforcement Program, which, it is estimated by the Congressional Budget Office, will result in $2.9 billion in child support going uncollected. Let us cut funding $12.7 billion for the student loan programs. Let us cut funding from family farmers--by the way, many of whom faced some disaster this year; the worst drought since 1895 in Illinois, Missouri, Iowa. One million acres could not be planted in North Dakota.

Those farmers are not going to get disaster help, but the leadership had no reservations about allowing a situation where 12,748 corporations establish their address in one five-story building in the Cayman Islands, for the purpose of not paying taxes in this country. It is all perfectly legal because this Congress believes it ought to continue to happen.

We have had vote after vote on my amendment to try to shut this down. Cannot do it. So in terms of priorities I think it is important to ask the question, on whose behalf are we legislating? I happen to believe we ought to cut the deficit. In fact, in January and February I am going to be offering a very specific set of plans on how you cut spending in a real way. We have very large agencies in our Government, and unlike businesses that have overhead expenditures and then direct expenditures there is no distinction between our overhead expenditures. In fact, they cannot even separate out overhead expenditures.

The first thing one should cut back on is overhead and travel and those kinds of things, but it cannot even be separated out in these agencies. We ought to take a whack at that. I am going to propose that.

I support some of these issues, but let me mention a number of issues that are attendant to this as well. There is a provision buried in this huge reconciliation bill, as is always the case in these things that come to our desk--my colleagues can see the size of this legislation. There is a provision repealing something called the Byrd law that I want to talk about just for a moment.

When American enterprises, American companies, are the victims of unfair trade--and there is a lot of it--our government sometimes imposes antidumping and countervailing duties. The Byrd amendment, which I supported, says that U.S. producers who have been injured by unfair trade should receive those duty revenues.

But the WTO stepped in and said: Well, it is not right that you would recompense your victims of trade who have been injured by unfair trade. So the WTO ruled against us, and we have our colleagues in the Senate and in the House who have been very anxious to overturn the Byrd rule. Sure enough, they do it in this bill.

They cannot run to the bank fast enough, in my judgment. Those who want to do this sort of damage to us cannot run to the bank fast enough to deal with all of these issues. We have the biggest trade deficit in history. We have jobs flowing out of this country. We have a country that does not have the spine, the backbone, the will to stand up for our producers on unfair trade. Those who have been victimized, those who have been hurt by unfair trade, ought to receive the benefits of the tariffs. Now the majority says that is not true; we are going to take it away.

I do not understand that. I do not have the foggiest idea where the Senate's priorities are.

We are right at the end of the session, a couple of days left, and the Defense appropriations bill was not passed this year. Now it is about to be passed, except they load on one of the most controversial issues called drilling for oil in ANWR. Under any other circumstance, one would be laughed out of the Chamber for that. Yet we have people come here--I heard a colleague of mine yesterday say: Well, let us all be bipartisan.

I am all for being bipartisan. Let us also be fair and let us legislate the right way. Let us not stick these unrelated issues on this legislation and then say: By the way, it does violate the rules, but we will change the rules and we will change it only for this purpose and change it right back, and never mind.

Do they think that we cannot see, hear, or think? Is that what this arrogance is born of? I do not understand it. We are close enough to the end of this session, and this country is in deep enough trouble with trade and budget deficits and a range of other issues that we ought to find a way to work together.

This is not about bending steel. This is about compromise, working together to do the right thing for this country. There is no Republican or Democrat way to go off track on trade or on the budget. It just hurts our country. Together, we ought to be able to do better for America.

I yield the floor.

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