Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act of 2012--Continued
Floor Speech
BREAK IN TRANSCRIPT
Mr. REID. Mr. President, the provision my friend talks about is placed in legislation as a result of the study made during the Bush administration--second Bush administration. GAO did a study. They found that 33,000 contractors, in effect, cheated on their taxes, and they owed some $3 billion. This money, they also determined, went mostly to giving the owners more salary and building them second and third homes.
There is no question that a lot of people, in addition to the 33,000 who cheated, were found to be burdened by this withholding 3 percent of what they had coming to them. What my friend fails to acknowledge is this bill that was amended that my friend has before the Senate has no chance of accomplishing anything. Constitutionally it will be killed in the House in a matter of a millisecond because constitutionally it will be what we call blue slipped here. It is a revenue measure. It cannot start in the Senate.
It costs $11.6 billion to take this money out--I am sorry--take that 3-percent provision out, and we need to do that. It costs $11.6 billion. What my friend fails to alert the Senators to is that since this matter has come up in years past and months past, things have changed. We have burdened the American people--especially the American middle class--with all of these cuts we have made. We did them. It was done by Democrats and Republicans, but they have given enough.
My friend's bill is offset by reducing discretionary spending by $30 billion. Senator McConnell's bill does nothing to address contractors who cheat on their taxes and still get Federal contracts. Nothing, zero.
Our alternative--and I will offer a unanimous consent request of this at a later time before we get to these two cloture motions we have. It repeals the 3-percent withholding tax, and we acknowledge it should do that. The Democratic alternative also addresses the problem of tax evaders receiving government contracts by expressly prohibiting contractors who are delinquent on their taxes being eligible for Federal contracts. That way all contractors are not punished, only those who are, in effect, cheating.
The Democratic alternative offsets the costs of repealing the withholding requirement by closing the loophole that allows companies to claim excess foreign tax credits and the famous corporate jet preference. It has a 1-year delay in implementing worldwide interest allocation which allows taxpayers to claim greater tax credits for the foreign taxes they pay; fair, reasonable, not a burden on the middle class.
A vote for Senator McConnell's amendment would do nothing to repeal the withholding requirement because the House, I repeat, will blue slip this. The House will send us a repeal bill. They told us, the Republican leadership, soon, and I mean soon rather within a matter of weeks. We will have a real opportunity to repeal the withholding requirement when we get the House bill. We would, of course, put our amendment on that.
Let's be honest about this. This is nothing more than a misdirected stunt by my friend, the Republican leader. This provision will be repealed, but it should be done the right way. We all agree that it is unfortunate that the Bush administration did that. They had a good intent. They were trying to get rid of some people who were cheating, but it was too broad and overreaching and has hurt a lot of people. That GAO report said 33,000 people, civilian contractors, owed more than $3 billion. I repeat, that 2005 GAO report said $3 billion in taxes. I didn't make this up. The GAO report also found that these firms, many of them diverted these payroll taxes to increase an owner's salary or building him a new home or two.
So by withholding a small amount of a contractor's payment and sending it to the IRS, the belief was that the contractors would have more motivation to comply with the law. It didn't work well. It was too overreaching and too broad.
I would hope that we would look at the consent I will offer. Procedurally there is no way we can have a second-degree or side by side with what we are doing here. I would hope my friends, Democrats and Republicans, would do something that is real, not something that is only figurative. What we are doing is real. We agree it should be done. It should be done right. It should not be done by burdening the middle class with more domestic discretionary cuts.
I will say this generally. Here it is 9:30 at night. The decision is going to have to be made very quickly as to whether we will be here tomorrow. The two matters that the Republican leader and I have spoken about, we could vote on those right now. I offered to vote on those earlier today, but we were unable to do that. We can come tomorrow. It is getting late here, and I am not sure what we are accomplishing by trying to work through all of this tonight. We are trying to be reasonable. As I indicated, my friend the Republican leader said he needed 10 or 12 votes. We agreed to that a long time ago. I cannot imagine why we cannot move forward.
I repeat, we cannot be stalled so we come back with a very short work period. We have a continuing resolution and many other things to deal with when we come back with the short work period. I wish to do another appropriations bill, but we cannot do another appropriations bill while this one is still floundering here.
This was an experiment that I was happy to engage myself in because I believe we should try to do our work here. But this CR business and holding us up from doing the work we have done for 10 months this year was not our doing. This has been as a result of my friends who are the majority in the House and the minority over here. So we have spent all of these months on two major issues, CRs and raising the debt ceiling. I would hope we can work something out on this appropriations bill and get it done tonight.
BREAK IN TRANSCRIPT
Source