Transportation, Treasury, Housing and Urban Development, the Judiciary, the District of Columbia, and Independent Agencies Appropriations Act, 2006
TRANSPORTATION, TREASURY, HOUSING AND URBAN DEVELOPMENT, THE JUDICIARY, THE DISTRICT OF COLUMBIA, AND INDEPENDENT AGENCIES APPROPRIATIONS ACT, 2006 -- (House of Representatives - June 30, 2005)
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Ms. DeLAURO. Mr. Chairman, none of us come here to defend the Cuban Government or its historically poor human rights record and repressive system of government. But 46 years of the same failed policy have accomplished nothing. And the more we normalize relations with Cuba, the faster Fidel Castro will lose his grip on the Cuban people. This is why we should be making it easier for Americans to go to Cuba.
Yet we seem to be going in the opposite direction. Rather than being committed to political openness and the free exchange of goods and ideas--powerful forces--we are clamping down on our own citizens--in the process, preventing any liberalization of the Castro regime and penalizing law-abiding Americans.
Last week, I met with U.S. Army Sgt. Carlos Lazo, who has two sons in Cuba, one critically ill. This is a man who won the Bronze Star for fighting in Iraq, but our government will not let him visit his own son. Why? Because he traveled to Cuba last year. Even the Cuban government has said Sgt. Lazo's son can come here to visit his father.
So, Mr. Speaker, this is an issue of human rights and economic freedom. Limiting the rights of Americans to travel back to Cuba, or to send money home to their families is no way to bring change to Cuba.
In committee, we already acknowledged as much from the business end. There, we recognized how much progress we have made in the last few years on the economic front, with agriculture sales growing to almost $400 million from almost nothing 4 years earlier. That is why the committee unanimously agreed to loosen traveling restrictions to Cuba with respect to agribusiness.
There is no reason we should not do the same for these families. Now is a time for compassion. Particularly when we are talking about men and women in the United States military uniform, who are defending our freedom overseas, we should show them that their Congress recognizes that freedom begins at home. Support this amendment.
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Ms. DeLAURO. Mr. Chairman, I offer an amendment.
The CHAIRMAN. The Clerk will designate the amendment.
The text of the amendment is as follows:
Amendment offered by Ms. DeLauro:
At the end of the bill (before the short title), insert the following:
SEC. __. None of the funds made available in this Act may be used to enter into any contract with an incorporated entity where such entity's sealed bid or competitive proposal shows that such entity is incorporated or chartered in Bermuda, Barbados, the Cayman Islands, Antigua, or Panama.
The CHAIRMAN. Pursuant to the order of the House of June 29, 2005, the gentlewoman from Connecticut (Ms. DeLauro) and the gentleman from Michigan (Mr. Knollenberg) each will control 7 1/2 minutes.
The Chair recognizes the gentlewoman from Connecticut (Ms. DeLauro).
Ms. DeLAURO. Mr. Chairman, I yield myself 2 1/2 minutes.
This amendment would prevent the Departments and agencies under this bill from using any funds to contract with American companies which have created shell corporations in tax-haven countries in order to reduce their U.S. taxes. The Department of Homeland Security is operating under a similar contracting ban.
Recent data shows that despite costing our government $5 billion in lost revenue, corporate expatriates reaped $1.4 billion in Federal contracts in 2002 alone. This in the middle of a budget crisis. In every appropriations bill we have considered this year, we have heard the same refrain: we have done the best we could under the circumstances. But this budget crisis did not create itself; it is a direct result of the budget and tax choices of this Congress; and as a result, this bill lacks sufficient funding for public transit, Amtrak, housing. Perhaps if we did more to discourage companies from setting up post offices overseas to reduce their tax burden here, we would have more funding available for these critical investments.
Four of our top 100 Federal contractors have incorporated in tax-haven countries. One of them actually holds a contract with the IRS. The agency charged with collecting taxes willingly contracted with a company that is determined to avoid paying them.
These companies are not overtaxed. In fact, effective corporate tax rates have fallen by 20 percent since 2001, even as pretax profits jumped 26 percent. Between 2001 and 2003, our 275 largest companies paid taxes totaling about half of the 35 percent corporate tax rate.
I should emphasize that this amendment will not affect existing contracts. It will not affect existing contracts. It simply ensures that in the future, we will favor good corporate citizens with government contracts, rather than rewarding companies for moving overseas and putting tax-paying American companies at a permanent competitive disadvantage. Corporate expatriate companies have made a clear choice: leave the country and not pay their taxes. It is up to us to make the choice and set a standard. If they are going to manipulate loopholes in our Tax Code, they should no longer be able to reap the benefit of current government contracts.
I urge my colleagues to support this amendment.
Mr. Chairman, I reserve the balance of my time.
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Ms. DeLAURO. Mr. Chairman, I yield myself such time as I may consume.
This amendment does not affect existing contracts. That is something people would like to portend to our colleagues, but it is not the fact. And later in the conversation, I will talk about dispelling some of the inaccuracies that have been talked about this afternoon.
Mr. Chairman, I yield 2 minutes to the gentlewoman from New York (Ms. Slaughter).
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Ms. DeLAURO. Mr. Chairman, I yield myself 1 minute.
Let me just try to correct some inaccuracies. First of all, once again, this amendment does not deal with existing contracts. It is contracts in the future. We are not discussing the Homeland Security bill. We are discussing the Transportation Treasury bill, so this does not affect what happened with Homeland Security.
I might also add under the Homeland Security bill, this ban is in place and we voted on it in this institution.
Secondly, my colleagues have talked about the JOBS Act. Very quickly, the JOBS Act does not solve the existing problem that we have here today. Corporations who are paying their taxes in the U.S. to the full amount. Let us take a look at what Accenture is doing. Accenture earned $503 million in the United States in 2004, up from $243 million in 2002. They reduced their tax liability to $135.5 million from $241 million. Their tax burden is going down because they have set up very intricate and elaborate structures in order to reduce the amount of taxes owed in the United States. That is what this is about. They are free to go to tax haven. They should not get any contracts because they are lowering their tax obligation to the United States at a time of a budget crisis and a time of war.
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Ms. DeLAURO. Mr. Chairman, I thank the gentleman for yielding.
Let me just first say once again, and I will say it as many times as we have to. This does not affect existing contracts. It does not affect existing contracts.
Second, the Department of Homeland Security is operating under a similar contracting ban now. We are not talking solely about one company. There are some 25 or 26 companies who, in fact, have reincorporated in tax haven countries in order to be able to diminish their tax obligation to the United States. Accenture, in fact, has its roots back to 1953, as part of the Illinois-based Arthur Andersen Company. It incorporated in Bermuda in 2001. Their CEO was based in Dallas. And the fact of the matter is that they are now having it both ways.
I would make the point that this comes down to a question of values. Do you stand with corporations who have abandoned our country in a time of war, who have gone through these elaborate contortions to reduce their U.S. tax burdens, or do you stand with the companies who, in fact, have been good corporate citizens? They are paying their taxes, they are employing Americans, and they are living up to their obligations of their country.
Now, as it has been said by my colleagues, these companies can go and do what it is that they would like. And if they want to diminish their tax burden here, we should not allow it, but we do at the moment. But the fact is, should we then add insult to injury to other American corporations and to American citizens by allowing these companies to get billions of dollars in Federal contracts? Again, it does not affect existing contracts.
We have a historic low in Federal corporate income taxes. The fact is these folks set up these mailboxes overseas. That they are overtaxed is not, in fact, the case. It is time we tell these corporate expatriates the free ride is over. I urge my colleagues to vote in favor of this amendment.
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