Imposing a Minimum Effective Tax Rate for High-Income Taxpayers-- Motion to Proceed

Floor Speech

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Mr. McCAIN. Madam President, I thank my colleague for his continued leadership on this issue and his eminent qualifications to address it and help educate the American people about what is at stake.

I think this colloquy we are having has to be considered in the context of the arguments before the U.S. Supreme Court. I think my colleague from South Carolina, Senator Graham, will mention that we should not draw too many conclusions from the questions that are asked by the Justices of the Supreme Court.

One of the things I find when I watch the talk shows--and I ask the Senator from Wyoming this--the first thing they say is that the most important thing about ObamaCare is that parents can keep their children on their health insurance plan until they reach age 26. Well, you know, I think all four of us right now would be glad to put that into law as an amendment in a New York minute. If they want to keep their children home living in the basement until they are 30, that is fine. But for that to be the centerpiece, saying that this is why we have to preserve ObamaCare, is, of course, a bad joke.

What we are arguing about here is the thousands of pages--I guess the Senator from Wyoming knows--is it 100,000 pages of regulations that have been already issued to try to implement this plan?

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Mr. McCAIN. Also, we have promised to repeal and replace ObamaCare, depending on not only the Supreme Court decision but the will of the people as expressed, perhaps, next November.

Of the areas that I think we have not focused enough attention on, one is the unsavory process that resulted in passage of this legislation--behind closed doors and everybody at Blair House bludgeoning the AMA and the pharmaceuticals and the deals that were cut here.

Another area was a promise made by the President that he would consider--it wasn't committed to, I will admit--medical malpractice reform. And here we are talking about 20 to 30 percent of the health care costs in America which, in the view of some, can be attributed to the unnecessary tests that are being administered and prescribed by physicians and health care providers because of their fear of ending up in court. Yet, in all of this bill, there is not one mention that I know of that has a meaningful approach to medical malpractice reform.

Since the Senator from South Carolina not only is an expert on the Supreme Court, but also he is one of the trial lawyers' Republican favorites, maybe he could address that aspect of medical care as well.

Would the Senator from Wyoming comment on that?

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Mr. McCAIN. Could I ask my colleagues if they remember the Cornhusker kickback? Another Democratic holdout took credit for $10 billion in new funding for community health centers, an exemption for nonprofit insurance in their States; and Vermont and Massachusetts were given additional Medicaid funding; a $300 million increase for Medicaid in Louisiana, and the list goes on and on. This was the process they went through, culminating, as the Senator from South Carolina mentioned, on Christmas Eve--a process that, obviously, most Americans find unsavory.

It is interesting, and I would ask my two colleagues to comment on the fact that the same people, the same organizations--the AMA, the hospitals, the pharmaceuticals, and others, that all signed up and were bludgeoned into supporting ObamaCare--and by the way, that negotiating that took place, since the President promised there would not be lobbyists in the White House, that they would not play a major role, it was done in Blair House--these same people, these same organizations, have come to our offices asking for relief from ObamaCare. Isn't that fascinating. I mean, time after time, the same members of the same organizations that supported ObamaCare come and say, look, we can't live with this provision, we can't do this, it is impossible for us to comply with that provision. It is a fascinating commentary on trying to do the Lord's work in the city of Satan, is it not, I ask my colleagues?

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Mr. McCAIN. Mr. President, I am glad to see the Senator from Illinois on the Senator floor to object to my next proposal.

Mr. President, throughout our history, from time to time we have passed legislation that long after it has served its purpose, if it ever did, still remains on the books. I think one of the great and outstanding examples of that is a law called the Jones Act.

The Jones Act, I am sure, may have had some rationale behind it back in 1920 when it was enacted. I am also sure there is perhaps only 1 American in 1,000 who has ever heard of the Jones Act. But the Jones Act has a direct impact on oil supplies, on the cost of oil, and the cost of other products.

The Jones Act says, incredibly, any product shipped between two U.S. ports--whether it is Honolulu, HI, and San Francisco or one of the gulf coast ports to the northeast or anyplace between two U.S. ports--can only be transported by U.S.-owned, U.S.-built, and U.S.-crewed vessels. Talk about protectionism. There is probably no greater example than this.

The Jones Act, enacted in 1920, has cost consumers--especially in places such as Hawaii where the transportation of goods is long distance--enormous amounts of money. In other words, citing the February 2012 Energy Information Administration Report, there are only 56 tankers that meet the Jones Act requirements, which accounts for less than 1 percent of both the total number and the total deadweight tonnages of tankers in the world. So less than 1 percent of the tankers in the world are able, by law, to operate between two U.S. ports.

So what does this do? Obviously, when we are talking about supply and capacity, it drives up the cost of petroleum. In fact, sometimes it is two or three times the rate of a foreign flagship--again, according to the Energy Information Administration. Not only that, the Jones Act tankers--those 56--aren't always readily available, so the costs can be even higher than we are talking about.

Let me give another example of the harm the Jones Act does to American consumers. In 1999, the U.S. International Trade Commission--not a Republican or Democrat or Liberal or Conservative organization--said a repeal of the Jones Act would lower shipping costs by approximately 22 percent. A 2002 economic study from that same commission found repealing the Jones Act would have an annual positive welfare effect of $665 million on the overall U.S. economy. Given the price of oil, that is probably now close to $1 billion.

The Jones Act adds real direct costs to consumers, as I mentioned, particularly to Hawaii and Alaska. I notice the Senator from Alaska is on the Senate floor. A 1988 GAO report found the Jones Act was costing Alaskan families between $1,921 and $4,820 annually for increased prices paid on goods that were shipped from the mainland. In 1997, a Hawaii Government official asserted that ``Hawaii residents pay an additional $1 billion per year in higher prices because of the Jones Act. This amounts to approximately $3,000 for every household in Hawaii.'' Again, those figures are from 1988 to 1997. Obviously, they are higher today.

Everybody says there is nothing that can be done immediately about the price of oil. My friends, if we repeal the Jones Act, we would have an immediate effect on the price of oil because when we are transporting oil from the gulf coast to the Northeast, and it costs two or three times more if that supply is restricted to being transported only by these 56 tankers, then, obviously--according to figures that are accurate that it costs two to three times more than if we allowed other foreign-flagged ships to move these goods and services, but particularly oil tankers--we could cut the cost of oil, of gasoline, immediately.

So the next time you hear the President of the United States or my friends on the other side of the aisle say there is nothing that can be done now about reducing the price of a gallon of gasoline, understand that we can do so by repealing the Jones Act immediately.

If there was ever a law that has long ago outlived its utility or usefulness, if it ever had any, it is this law passed in 1920. Only American built? We can't even buy another one--a tanker or a ship--that is built in another country and not have it fall under the Jones Act, even if it is American owned and with an American crew. Amazing.

What I am leading to, obviously, is that we should repeal the Jones Act. If not repeal it, then waive the Jones Act. If not fully waive it, then waive it just for the transport of oil, for oil and gas tankers. If that is not enough, let's just waive it for 6 months. Couldn't we just do that for 6 months?

I know what the response of the Senator from Illinois is going to be. That is his duty on the Senate floor, and I respect that. But, my friends, the price of a gallon of gasoline is now, this March, according to media reports, the highest it has been in history. Depending on what happens in a lot of different areas of the world--particularly the Middle East and what happens in Iran and other things that are going on in this very dangerous world we are living in today--it could go considerably higher.

So why don't we take a commonsense approach and at least for 6 months waive the requirements of the Jones Act for only oil and gasoline tankers--for just 6 months. It seems to me that would make a great deal of sense.

I know all four of my unanimous consent requests on these amendments are going to be denied. But, first of all, I think the Jones Act should be repealed completely. If it isn't to be repealed, couldn't we at least waive the Jones Act restrictions on coastwise trade for oil and gas tankers? If we can't waive it permanently for that, can't we waive those restrictions for 6 months? We are discussing energy and the price of oil. Can't we waive the Jones Act restrictions on coastwise trade for oil and gasoline for 6 months.

So with the indulgence of my friend from Illinois, I ask unanimous consent that when the Senate returns to consideration of S. 2204, the pending energy tax bill, it be in order for me to offer--I want to offer them all--my amendment No. 1948, which is, as I described, an amendment that would waive the Jones Act restrictions. In other words, it would allow a foreign-flagged tanker to move oil and gas--a waiver for 6 months to move just oil and gas--so that we can immediately reduce the cost of transportation, which would then translate itself at the pump at every gas station in America.

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Mr. McCAIN. Mr. President, I always enjoy a little dialog between myself and the Senator from Illinois. I hope he would have the same passion concerning all subsidies, including the outrageous and disgraceful subsidies that--and there is a lot of solar in the State of Arizona--a lot of solar. I will stop here, but if we are going to repeal the gas and oil subsidies, let's repeal them all. Let's repeal them all.

I am not sure--again, the logic that says that if we are able to immediately reduce the cost of oil by repealing the Jones Act, which then would reduce the cost of transportation, would then reduce the cost of gasoline--why should we out of hand reject such a motion or an effort to do so?

But I understand what the position of the majority and the distinguished Democratic leader is, and I know others are waiting, so I thank the Senator and I yield the floor.

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