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Providing for Consideration of H.R. 681, American Jobs Creation Act of 2004

Floor Speech

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Date:
Location: Washington, DC

Mr. McGOVERN. Mr. Speaker I yield myself 8 minutes.

(Mr. McGOVERN asked and was given permission to revise and extend his remarks.)

Mr. McGOVERN. Mr. Speaker, I thank the gentleman from New York (Mr. Reynolds) for yielding me the customary 30 minutes.

Mr. Speaker, all of us recognize the need to quickly fix the FSC-ETI export tax issue. Thousands of U.S. exporters are needlessly paying 8 percent tariffs to European countries simply because the Republican-controlled Congress has failed to pass legislation to avoid these penalties. These tariffs will continue to climb 1 percentage point each month as long as the issue remains unresolved.

These retaliatory tariffs are especially hard hitting as the United States continues to experience difficult times in the manufacturing sector, which has lost nearly 3 million jobs under the Bush administration. In my congressional district in Massachusetts, jewelry, textiles, and small manufacturers have especially been hit hard by these sanctions.

Throughout the WTO process there has been bipartisan consensus that the U.S. should repeal the extraterritorial income exemption, the ETI and comply with the WTO decision. The disagreement has been over what to replace it with. Last year the gentleman from New York (Mr. Rangel) and the gentleman from Illinois (Mr. Crane) and the gentleman from Illinois (Mr. Manzullo) and others introduced a bipartisan, revenue-neutral fix to this problem, H.R. 1769.

This bill currently has 172 bipartisan cosponsors. When our colleague, the gentleman from Indiana (Mr. Hill), filed a discharge petition in March to bring the bill immediately to the floor, 18 Members signed that petition.

The Crane-Rangel bill would take the $50 billion in tax incentives that American companies operating overseas receive under the current ETI and create new incentives for American companies to produce goods in the United States. It lowers the corporate income tax rate for U.S. companies and addresses the growing problem of U.S. companies moving their plants overseas.

Simply put, H.R. 1769 is a clean, paid-for bill that remedies the FSC/ETI problem without unduly burdening those companies that have benefited from this exemption in the past, and without unduly burdening our children and grandchildren by adding to our deficit.

So why did we not fix the problem months ago by passing the Crane-Rangel bill? Why are we not debating H.R. 1769 this morning? Why is the Republican leadership denying the gentleman from New York (Mr. Rangel) the opportunity to offer his alternative on the floor today?

Because time after time the leadership of this House has demonstrated that it would rather offer a goody-bag of corporate tax giveaways to special interests than simply and quickly fixing the problem.

What is in this grab bag of a bill? The closer you look at it, the uglier it gets.

This bill is chock full of sweetheart deals, special fixes, and big giveaways to special interests. It looks like every lobbyist in town will be celebrating tonight. The list of provisions that favor particular companies or industries includes cruise-ship operators, whale hunters, Chinese ceiling fans, foreign gamblers, NASCAR track owners, timber companies, cattle ranchers, bourbon distillers, movies theater owners, small plane manufacturers, bow and arrow sets, fishing tackle boxes, and corporate jet owners.

This is no way to do tax policy.

The list of narrow special interest giveaways is very familiar because we have seen them all before, when a similar set of giveaways held up passage of the Armed Forces Tax Fairness Act for 18 months, until finally, finally, they were thrown out and this House decided to do the right thing and support our uniformed men and women and their families.

But like the evil poltergeists in the movie, they are back. And this time they have brought along some friends. What else is in this bill?

How about paying a private company to make a profit collecting debts owed to the IRS so that all our private tax information will now be given to private bounty hunters. How about tax provisions that give U.S. companies fresh incentives to locate operations anywhere other than in the United States by giving them even more tax shelters for their foreign income? At the very core of this bill are $35 billion in tax incentives for U.S. firms to invest overseas.

If you are a small manufacturer or farm cooperative that creates jobs and has production solely in the United States, too bad. You are simply out of luck in this bill.

Mr. Speaker, let us talk about the frosting on the cake. This bill as it is written will add at least another $34 billion to the deficit. In just 3 short years, the Bush administration and the Republican-controlled Congress have taken our Nation from record surpluses to the largest budget deficits in the history of the United States, in the history of the United States, Mr. Speaker. And now the leadership of this House wants to add at least $34 billion more to these deficits.

The legislation passed in the other body at least has the benefit of being revenue-neutral. And the Crane-Rangel bill is fully paid for.

Why is it that everyone seems to be able to pay for their corporate tax legislation except for the Republican House leadership? Why are they the only ones that want to pass the burden of debt on to future generations? And let us not forget that when all the phony accounting gimmicks such as slow phase-ins and phase-outs and sunsets provisions are factored in, the amount added to the deficit is more likely to be closer to $45 billion.

This bill may mean more jobs, Mr. Speaker, but they will not be U.S. jobs.

This bill rewards companies that move off shore, that shelter income from production abroad, and that outsource even
more jobs now and forevermore.

Now, I seem to remember the Republicans saying over and over that our Tax Code is simply too complex, too confusing and too costly; but this bill, instead of simplifying and tightening the Tax Code and closing loopholes, creates over 400 pages of new and expensive special interest exceptions.

This bill makes our Tax Code more complex, not less; more unfair, not less. It does too little for those businesses that prefer to produce and hire in the United States. It hurts farmers, stiffs small businesses, and benefits large multinational companies first and foremost.

It increases the deficit and tacks on major unrelated initiatives. Instead of simply fixing the $5 billion FSC/ETI problem, it creates a $150 billion special interest giveaway.

Mr. Speaker, this Special Interests Christmas Tree Giveaway Act is quite simply a scandal. Now, in light of such largesse for special interests and large corporations, I was surprised when this morning the Republican majority in the Committee on Rules did not make in order an amendment proposed by the gentleman from California (Mr. Lantos) and me. Our amendment would provide tax relief to every company and business that makes up the difference in income to an employee activated into the National Guard or Reserves and would have provided support to those same companies to train temporary employees to fill the jobs left vacant by active-duty employees.

At a time of national emergency, when members of the Reserves and National Guard are serving extended deployments in Iraq and Afghanistan, the Republican majority in the Committee on Rules decided that this modest tax relief proposal was not important or relevant enough to be considered during the debate on this bill.

This bill before us helps Halliburton and Bechtel, two corporations that are ripping off the American taxpayer through fraud and abuse of their defense contracts in Iraq; but the Republican leadership will not help the hundreds of small businesses suffering from long-term vacancies or the families whose loved ones have been activated for service in Iraq and Afghanistan.

Mr. Speaker, at the end of the debate on this rule, I will offer a motion to defeat the previous question. If the previous question is defeated, the gentleman from California (Mr. Lantos) and I will offer our amendment to H.R. 4250 to help the Reservists and small business.

We have the chance to do the right thing today. I urge my colleagues to reject this rule and to oppose the underlying bill.

Mr. Speaker, I reserve the balance of my time.

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Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I just want to clarify to the gentleman from Washington (Mr. Hastings) that the sales tax deduction provision phases out in 2 years. It is not permanent. And this morning the gentleman from Washington (Mr. Hastings) and other Republicans voted against making it permanent.

Mr. Speaker, I yield 5 ½ minutes to the gentleman from New York (Mr. Rangel), the ranking Democrat on the Committee on Ways and Means.

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Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume.

The distinguished chairman of the Committee on Ways and Means refused to show me or the gentleman from New York (Mr. Rangel) the same courtesy that the gentleman from New York (Mr. Rangel) showed the chairman of the Committee on Rules, and he refused to answer the question as to whether or not the Committee on Rules would have made in order the Crane-Rangel alternative, in whatever form it would have been in. The answer is clearly they would not have.

The gentleman mentioned American democracy. Twenty amendments were denied in the Committee on Rules. That is not democracy.

Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Doggett).

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Mr. McGOVERN. Mr. Speaker, may I inquire how much time remains on each side.

The SPEAKER pro tempore. The gentleman from Massachusetts (Mr. McGovern) has 14 minutes remaining and the gentleman from New York (Mr. Reynolds) has 11 minutes remaining.

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Mr. McGOVERN. Mr. Speaker, I yield 2 minutes to the gentleman from Washington (Mr. McDermott), a member of the Committee on Ways and Means.

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Mr. McGOVERN. Mr. Speaker, will the gentleman yield?

Mr. REYNOLDS. I yield to the gentleman from Massachusetts.

Mr. McGOVERN. Mr. Speaker, I appreciate the gentleman yielding. How many of those amendments were made in order?

Mr. REYNOLDS. None.

Mr. McGOVERN. Mr. Speaker, I thank the gentleman.

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Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, let me also say that the Republican leadership made it clear last night that no substitute in any form would have been made in order.

Mr. Speaker, I yield 4 minutes to the gentleman from California (Mr. Lantos).

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Mr. McGOVERN. Mr. Speaker, I yield 2 minutes to the gentleman from North Carolina (Mr. Etheridge).

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Mr. McGOVERN. Mr. Speaker, I yield 2 minutes to the gentleman from Oregon (Mr. Blumenauer).

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Mr. McGOVERN. Mr. Speaker, I yield 2 minutes to the distinguished gentleman from Texas (Mr. Stenholm).

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Mr. McGOVERN. Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, the continuing activation of military Reservists to serve in Iraq and the war on terror has imposed a tremendous burden on many of our country's businesses. For too many of these small businesses, the temporary loss of these employees makes it difficult to continue operating successfully, and many are faced with severe financial difficulties, even bankruptcy. Why not help alleviate some of this burden for these employers who are doing the right thing for their employees and their families?

It is ironic that the party that never met a tax cut they did not like and that claims to support small business would deny small businesses a tax credit to help pay their employees who are serving their country in a time of war. I cannot imagine why the Republican leadership denied the full House an opportunity to vote on this amendment. Certainly this is a more important issue than tax relief for Chinese ceiling fan makers.

I urge my colleagues to vote "no" on the previous question and let this House vote on tax fairness for small businesses whose employees are bravely serving their country in the Armed Forces.

Mr. Speaker, I ask unanimous consent that the text of the amendment be printed in the RECORD immediately before the vote on the previous question.

The SPEAKER pro tempore (Mr. LaTourette). Is there objection to the request of the gentleman from Massachusetts.

There was no objection.

Mr. McGOVERN. Mr. Speaker, I yield back the balance of my time.

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