TAX RELIEF EXTENSION RECONCILIATION ACT OF 2005
BREAK IN TRANSCRIPT
MOTION TO INSTRUCT CONFEREES
Ms. STABENOW. Mr. President, I thank our leader on the Committee on Finance, Mr. Baucus, for his leadership on so many different issues.
I send a motion to the desk and ask for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The bill clerk read as follows:
Ms. STABENOW moves that the managers on the part of the Senate at the conference on the disagreeing votes of the 2 Houses on the Senate amendment to the bill H.R. 4297 (to provide for reconciliation pursuant to the concurrent resolution on the budget for fiscal year 2006 (H. Con. Res. 95)) be instructed to insist on the inclusion in the final conference report of a permanent extension of the credit for increasing research activities and to reject any extension of the tax rate for capital gains and dividends which does not expire until 2009.
Ms. STABENOW. Mr. President, I rise this evening to introduce a motion to instruct conferees to extend the R&D tax credit permanently and offset costs related to that by striking capital gains and dividends provisions of the House bill in the conference committee. I realize my colleague from Utah has introduced something similar to extend the R&D tax credit permanently, which I support, but I believe the most responsible approach is to provide as much of an offset as possible so we are not extending the national debt which is already the largest in our Nation's history.
This is a very difficult time for Michigan families. Michigan lost 11,000 manufacturing jobs since 2000. Last week, GM announced more bad news. Plant closings and job losses are becoming a common headline in our newspaper. There needs to be a sense of urgency in Washington about helping to protect and maintain these good-paying jobs and the way of life these jobs have offered for Americans. Our middle-class way of life is truly at risk. We are still not seeing any action from this administration. I was so disappointed to see the President did not mention the word ``manufacturing,'' in his State of the Union Address, despite all that is happening and all that needs to be done on behalf of Michigan families, Michigan businesses, and those across the country that are affected.
People in my State are worried about their jobs, they are worried about the fact that they might lose their pension that they worked for, for 30 years. Who would have thought, in the United States of America, people would have to worry about paying into a pension system and possibly not having that when they retire? That is immoral.
They see their health care premiums continuing to skyrocket every year, they are struggling to fill their gas tank and pay their home heating bill and are feeling squeezed on all sides. We need to take that seriously because there are things we can do to help turn that around.
What does the House bill dealing with taxes propose to do to help middle-class families? Absolutely nothing. Instead, it gives more tax cuts to the wealthiest few.
We can do better. We must do better for the people we represent. Hard-working families should be able to have a good-paying job, send their kids to college, retire with dignity, including health care and a pension and Social Security. We need to lower health care costs which are hurting American manufacturers and promote new health IT technologies that can save billions in health care costs. I was pleased to see the President mention that in the State of the Union.
Senator Snowe and I have legislation, working with colleagues on both sides of the aisle. We can get this done and save hundreds of billions of dollars that can go back into lowering health care costs and paying for access to health care for our families.
We need to protect people's pensions and uphold the fundamental principle that if you work hard and pay into a retirement fund, you get every cent you have earned and you deserve.
We must also investigate and enforce our trade laws. Countries such as China and Japan should be required to play by the rules, stop manipulating their currency. This is what we should be voting on now. How to save and strengthen our middle class, our way of life.
One answer that would be extremely positive would be to make the R&D tax credit permanent, to help continue to spur innovation into the future. As we all know, the way to profitability for struggling manufacturers is through innovation and education.
The House bill only budgets a 1-year extension of the R&D tax credit, leaving businesses to worry about whether longer term projects will be terminated. A 1-year extension undermines our commitment to innovation and economic prosperity. Instead, the House bill provides $50 billion in tax breaks for the wealthy few who do not have to worry about losing their jobs or pensions tomorrow or struggling to pay their bills.
We need to be investing in our manufacturers and our workers to prepare for the future by planting seeds for the next innovative idea. I am very proud that in Michigan we have been the heart of so much innovation. We create ideas. We build great products, not just automobiles but furniture and all kinds of products. And we are on the cutting edge today of new innovations.
But it is time to reinvest in what has led our country to economic prosperity and to support these on-going efforts. We have the best colleges and the brightest minds in the world. We know American workers can compete with any workers from any country if we make it a priority to invest in education and innovation--and, by the way, if we enforce our trade laws so other countries are not cheating--and change the way we fund health care. That is the prescription for success, for maintaining our way of life as Americans.
Countries such as Japan and China have been doubling and tripling their investments in R&D over the last decade. Japan, which has always invested in R&D, increased their funding by 25 percent. Korea has doubled their R&D. China has tripled their R&D. In China, engineering professors and graduate students even receive bonuses every time they are published in an international journal.
Our Federal Government must be a strong partner with American manufacturers, American businesses, and American workers, and support innovation in this country for the next generation of workers.
My home State of Michigan invests over $20 billion in R&D expenditures--the second highest of any State, according to the National Science Foundation. Although Federal investments in R&D only contribute 17 percent of total investments, these Federal funds are used to attract even more research dollars from businesses. It is a great investment for us.
It makes perfect sense for us in the Federal Government to help spur this innovation by being partners with the private sector. In total, about $25 billion is provided by the Federal Government and over $200 billion by businesses. This partnership in innovation is at the center of American companies competing in the global marketplace. Everyone knows that to stay ahead, we need to invest in the future. That means education. That means innovation.
I might say, it does not mean accepting the cuts the President has proposed--the largest cuts in the 26-year history of the Department of Education--over $2 billion in cuts proposed in this budget. That certainly is going in the wrong direction. But permanently extending the R&D tax credit goes in the right direction, and helping to pay for that also goes in the right direction of fiscal responsibility.
As I indicated before, the distinguished Senator from Utah, Mr. Hatch, has offered a motion to instruct on a permanent extension of the R&D tax credit without an offset--in other words, without paying for that. I would suggest there is a more fiscally responsible approach and that we are not providing a long-term incentive for investment by just extending the credit for a year at a time or by not paying for it. I believe we need to have a permanent extension of the R&D tax credit, but we need to do that in a way which is fiscally responsible.
This debate this evening is really about our values and about our priorities and who will benefit from the tax bill. Are we going to give another $50 billion in tax cuts to those who are most blessed and extend the capital gains tax cut which is not even going to expire for 2 years or are we going to help people who are trying to create jobs and working men and women right now, manufacturers who right now need some support as they move into the future to compete internationally and businesses that right now need our support, by extending the R&D tax credit so they have the partnership they need, the support they need for those new ideas which will allow them to compete on into the future?
This is about what is happening to families right now. In Michigan, people are asking the President and asking us to look at what is happening to families at this moment and to take action now.
Let's stop China and Japan from cheating by stealing our patents or by counterfeiting--counterfeit autoparts, for example, is a $12 billion industry which has cost over 200,000 jobs in this country--or by manipulating their currency. Let's force them to play by the rules and have a level playing field, but turn around and look at what they are doing on R&D and education. While they are cheating and stealing our ideas, they are educating more engineers and more scientists and those who will be competing with our workers. We need to turn that around, make them play by the rules, change the way we fund health care in our country, protect our pensions, and then aggressively invest in education and innovation.
To see the kind of bold, aggressive investment we need means we need to extend the R&D tax credit. We need to send a strong message to businesses around this country that this is a permanent tax credit, the R&D tax credit. We also need to send a message that we are going to choose, when choices have to be made, between those who need the support right now to keep jobs here in America and those who down the road may be interested in having an additional tax cut on top of those they have already received. I believe it is about the future of our country, which approach will create opportunity, which approach will create jobs for the future.
My vote is with our manufacturers who are deciding, maybe at this very moment, whether to lay off more people in Michigan or around the country, who need this tax credit to invest in the future of their companies. That is my priority, not a few, most blessed in this country who have a capital gains tax cut in place until 2008--it does not even expire until 2008--those who are not worried today about whether that pension is going to be there or whether they can pay their heating bill or whether they can send their kids to college or whether they are going to have a job tomorrow. They have a tax cut in place which does not even stop until 2008.
We can do better than the bill that was certainly passed by the House of Representatives. I hope the conference committee will do better. I urge support for my motion to instruct, with a clear message. This is about bold innovation for the future, permanently extending the R&D tax credit. It is about fiscal responsibility. And it is about making the right choices and values that say we are going to focus on those today, we are going to pay for this by focusing on those right now, those businesses right now which need our help, and make those families a priority for us.
It is about our way of life in this country. It is a fight we can win if we are serious about it. And I believe innovation is an important part of our future. I urge the support of my colleagues for this motion to instruct.