Jumpstart Our Business Strength (JOBS) Act - Resumed - Part II

Jumpstart Our Business Strength (JOBS) Act - Resumed PART II
I said: If you are not working overtime, why are you opposed?
They said: It is a right we have. We may not have gotten overtime, but if I do work it, I want my right protected. That just about sums it up. It is a right that should not be taken away.
Again, it is urgent that we proceed to the overtime amendment. Let's go to my amendment. Let's have a good debate. I am willing to have a time agreement, if the other side would like to have a time agreement. Let's have the debate. I want to hear from the other side why we should let these proposed regulations go into effect. Let's have the debate so the American people can understand what is at stake, and let's have an up-or-down vote on my amendment. Let's have an up-or-down vote on whether the Senate would agree with the administration that these proposed rules, these changes in the Fair Labor Standards Act, should go into effect or whether the administration should go back to the drawing board, work with Congress, do it in an open, aboveboard manner.
There are some changes that do need to be made in the Fair Labor Standards Act. There is one part of the proposed rules of which I am supportive, and that is raising the base from about $8,000 a year to $22,000 a year. That should have been done a long time ago.
My amendment does not affect that. My amendment leaves that in place. But in giving with one hand-that is, raising the base up to $22,000 a year-the administration is taking away the right to overtime pay from about 8 million Americans with the other hand. That is a bad deal.
I hope we can get to my amendment. I hope we can have a good debate and an up-or-down vote on it. I am prepared to do so whenever the leadership dispenses with these pending amendments.
Madam President, I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. NICKLES. Madam President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. NICKLES. Madam President, I ask unanimous consent to speak as in morning business for not to exceed 10 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
WAR ON TERRORISM
Mr. NICKLES. Madam President, last night I observed, as I am sure many Americans did, Richard Clarke's statement on the program "60 Minutes" where he made some very strong allegations concerning President Bush and his lack of effort on the war on terrorism. I was struck by his tone, by his statements, and also by the lack of questions concerning what he had done the previous years.
I believe Mr. Clarke was appointed in May of 1998 by President Clinton as the first National Coordinator for Security Infrastructure Protection and Counterterrorism at the National Security Council. That is a very long title, but many people say "counterterrorism czar." He was the person to combat terrorism. That is a very prestigious position, a very important position.
Looking at the events that occurred in 1998 and also in 2000, I wonder what we were doing. I kept waiting for the questioner to ask him: Why didn't we do more?
On August 7, 1998, terrorists bombed the American embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania. Madam President, 212 people were killed on August 7, 1998, and over 4,000 people were injured in Nairobi. Eleven people were killed and 72 people were wounded in Tanzania. It was a very deadly day.
Two U.S. embassies-that happens to be U.S. soil-a lot of people are not aware of that but our embassies are U.S. soil. Those are U.S. buildings, those were U.S. employees, some U.S. citizens-almost all U.S. employees. Africans were killed.
What was our response? The Clinton administration, with Mr. Clarke as the head of counterterrorism, lobbed a few cruise missiles, supposedly to get Mr. bin Laden. We missed, but I compliment them for trying.
What else did we do? Did we try again? The answer is no. Did we send special forces over there? The answer is no. They killed 212 people in Nairobi, 11 people in Tanzania, over 4,000 people injured, some of them critically, very seriously injured, and what did we do? We lobbed a few cruise missiles and hit the desert. This was in August of 1998.
I kept waiting for the questioner to say: Why didn't we do more in 1998? I heard him say: We were on a wartime footing; we had a lot of meetings; I had a lot of face time with President Clinton; I talked with him about it; we urged him to do more. Why didn't we do more?
I have only served with a few Presidents but I could not help but think Ronald Reagan would have done more. We had American soldiers who were killed as a result of a terrorist bombing in Germany, and Ronald Reagan sent planes to Libya and sent a heck of a signal to Mr. Qadhafi and, frankly, I think he changed his terrorist ways to some extent.
I can't help but think President Bush 1 would have done more, and I know President Bush 2, the current President, would have done a lot more.
President Clinton was President for 8 years, and Mr. Clarke was head of his counterterrorism division for about 3 of those years. He worked in his administration in another capacity as well. But we didn't do hardly anything after the 1998 bombings, which was a direct assault on the United States and our citizens, our people, our property, and two poor countries in Africa, and we did not do anything.
Later, the USS Cole was attacked on October 12, 2000, and 17 people were killed, 39 were wounded, and it was pretty close to being a lot more serious than that. We could have had hundreds killed. Again, that was a direct attack on the United States. Mr. Clarke was still head of counterterrorism, and what did we do then? The answer is nothing. They might have had some meetings, but they did not do anything. They did not do anything visible, anything we could see. They did not make concerted efforts.
Last week, I was watching on TV a picture of bin Laden walking in Afghanistan where we had satellites viewing him, and we still did not do anything. We did not have assets in the region. Why? We had plenty of time to put assets in the region to make a change and maybe prevent 9/11/2001 from even happening, but maybe the administration and maybe Mr. Clarke were preoccupied or they did not have it high on their priorities.
Those questions were not asked in this program. Maybe, for whatever reason, he has a vendetta against the current President. I don't know.
I also learned today from Condoleezza Rice, the President's National Security Adviser, that Mr. Clarke wanted a job in the new Department of Homeland Security. I don't know what caused his change. I don't know what his motivation is. I am not sure if he wants to sell books or is looking for a job or what his efforts are. But I am amazed at the neglect or the lack of interest in the previous administration after we had our embassies attacked, after we had the USS Cole attacked, and we had Americans killed and hundreds of American employees killed.
We had thousands of people injured, and we did not do anything. For him to have the gall or the nerve to start pointing a finger at President Bush saying he did not do enough in fighting the war on terrorism when Mr. Clarke was actually in a position to really do something for 2 or 3 years during the Clinton administration, I find unbelievable. I cannot believe the press would not ask, why did he not do more, why did President Clinton not do more? Why did we not respond? If we would have responded in 1998, 1999, or 2000, maybe 9/11 would have never happened. It is unbelievable that kind of attack would be made. Maybe it is for political reasons. I do not know. It is very sobering and startling.
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I hope when he is in front of the cameras or maybe when he is before a committee in Congress people ask him why did he not do more when he was in a position to do so.
It is also interesting to note on October 19, 2001, the Bush White House issued a press release saying Mr. Clarke was recently named special adviser to the President for cyberspace security. It is not the same. The President has an excellent team and he receives counsel from an excellent team. With his national security adviser, Condoleezza Rice, Vice President DICK CHENEY, with Secretary of State Colin Powell, the President has an excellent team in foreign policy.
I am very disappointed in Mr. Clarke's comments. I think he should be held accountable and questions need to be asked of him.
I yield the remainder of my time, and I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. CORNYN). The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. GRASSLEY. Mr. President, I ask unanimous consent that the pending Grassley amendment No. 2687 be agreed to; provided further that I then be immediately recognized to offer a further second degree related to net operating loss. I further ask consent that the amendment then be agreed to, and the underlying amendment No. 2686 be agreed to, as amended, with the motions to reconsider laid upon the table. I further ask consent that Senator Harkin then be recognized in order to offer an amendment relating to overtime; further, that no second degrees be in order to that amendment prior to a vote in relation to that amendment.
The PRESIDING OFFICER. The Democratic whip.
Mr. REID. Reserving the right to object, Mr. President, I think this is tremendous progress. I commend the two managers of the bill. They do work well together, as everyone knows. But I have heard-and I certainly do not know if this is valid or not-there is going to be an effort made later tonight to try to invoke cloture on this bill. I want everyone within the sound of my voice to know we have spent time here this afternoon with our manager, and we have indicated that we believe we could whittle down significantly the number of amendments that are pending on this very important piece of legislation.
The amendment Senator Harkin is going to offer is his amendment. We have worked with the majority on other occasions to have him not offer this amendment in an effort to get important legislation passed. We can no longer do that. It is long overdue that the Senate speaks on this issue. I can say, as I have indicated, to anyone listening, if there is an attempt to invoke cloture on this legislation without an up-or-down vote on the overtime amendment offered by the Senator from Iowa, there are no guarantees, but I think it is going to be extremely difficult to have cloture invoked on this bill.
We want an up-or-down vote on this overtime amendment. If there are efforts made later tonight to file a motion to invoke cloture, I think the majority leader should know that I think it is extremely doubtful that he would get cloture on this bill.
Senator Harkin has been talking about offering this amendment on several occasions, and we are going to go forward. As I said, I want the majority leader to know that I think it would be extremely doubtful, without an up-or-down vote on overtime, that he would be able to get cloture on this bill. I could be wrong, but I really kind of doubt it.
I also want everyone to understand that the reason for taking this bill down is the inability of the minority to get a vote on this overtime amendment. It seems somewhat foolish to pull down this very important bill for this amendment. I cannot imagine why the other side won't let us vote. It has passed before. It will pass again. The overtime amendment will pass.
So having said that, I withdraw my reservation.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
The amendment (No. 2687) was agreed to.
AMENDMENT NO. 2882 TO AMENDMENT NO. 2686
Mr. GRASSLEY. Mr. President, then, according to the unanimous consent agreement, I send an amendment to the desk for Senators BUNNING, LINCOLN, SANTORUM, CONRAD, and BAUCUS.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:
The Senator from Iowa [Mr. GRASSLEY], for Mr. Bunning, for himself, Mrs. Lincoln, Mr. Santorum, Mr. Conrad, and Mr. Baucus, proposes an amendment numbered 2882 to amendment No. 2686.
Mr. GRASSLEY. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To provide for the extension of the special net operating loss carryover provision)
At the end of the matter proposed to be inserted at the end of the bill, add the following:
SEC. __. FIVE-YEAR CARRYBACK OF NET OPERATING LOSSES.
(a) IN GENERAL.-Subparagraph (H) of section 172(b)(1) is amended-

(1) by inserting "5-YEAR CARRYBACK OF CERTAIN LOSSES.-" after "(H)", and
(2) by striking "or 2002" and inserting ", 2002, or 2003".

(b) RULES RELATING TO CERTAIN EXTENDED NET OPERATING LOSSES.-Section 172 is amended by redesignating subsection (k) as subsection (l) and by inserting after subsection (j) the following new subsection:

"(k) RULES RELATING TO CERTAIN EXTENDED NET OPERATING LOSSES.-For purposes of this section, in the case of a taxpayer which has a net operating loss for any taxable year ending during 2003 and does not make an election under subsection (j), such taxpayer shall be deemed to have made an election under paragraphs (4)(E) and (2)©(iii) of section 168(k) with respect to all classes of property for such taxable year.
(c) TEMPORARY SUSPENSION OF 90 PERCENT LIMIT ON CERTAIN NOL CARRYOVERS.-Section 56(d)(1)(A)(ii)(I) (relating to general rule defining alternative tax net operating loss deduction) is amended-

(1) by striking "or 2002" and inserting ", 2002, or 2003", and
(2) by striking "and 2002" and inserting ", 2002, and 2003".

(d) TECHNICAL CORRECTIONS.-

(1) Subparagraph (H) of section 172(b)(1) is amended by striking "a taxpayer which has".
(2) Section 102©(2) of the Job Creation and Worker Assistance Act of 2002 (Public Law 107-147) is amended by striking "before January 1, 2003" and inserting "after December 31, 1990".

(3)(A) Subclause (I) of section 56(d)(1)(A)(i) is amended by striking "attributable to carryovers".
(B) Subclause (I) of section 56(d)(1)(A)(ii) is amended-
(i) by striking "for taxable years" and inserting "from taxable years", and
(ii) by striking "carryforwards" and inserting "carryovers".

(e) EFFECTIVE DATES.-

(1) IN GENERAL.-Except as provided in paragraph (2), the amendments made by this section shall apply to net operating losses for taxable years ending after December 31, 2002.
(2) TECHNICAL CORRECTIONS.-The amendments made by subsection (d) shall take effect as if included in the amendments made by section 102 of the Job Creation and Worker Assistance Act of 2002.
(3) ELECTION.-In the case of a net operating loss for a taxable year ending during 2003-

(A) any election made under section 172(b)(3) of such Code may (notwithstanding such section) be revoked before April 15, 2004, and
(B) any election made under section 172(j) of such Code shall (notwithstanding such section) be treated as timely made if made before April 15, 2004.

(4) SPECIAL RULE FOR TAXPAYERS WITH TAXABLE YEARS ENDING DURING JANUARY.-Any taxpayer which has a taxable year ending during January may elect under this paragraph to apply section 172(b)(1)(H) of the Internal Revenue Code of 1986 (as amended by this section) to its taxable year ending in 2004 rather than its taxable year ending in 2003. If such election is made, then section 172(k) of such Code (as added by this section) shall be applied to the taxpayer's taxable year ending in 2004. Such election shall be made in such manner and at such time as may be prescribed by the Secretary of the Treasury. Such election, once made, shall be irrevocable.

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© PRIOR SECTION TO HAVE NO EFFECT.-Notwithstanding section 311(e) of this Act, such section, and the amendments made by such section, shall not take effect.
Mr. BUNNING. Mr. President, I am happy to join with my colleagues in offering an amendment to address the net operating loss NOL rules in the Internal Revenue Code. The NOL carryback and carryover rules are designed to allow taxpayers to ease swings in business income that result from business cycle fluctuations and unexpected financial losses.
I am certain that every Senator on the floor will admit that the last few years have been difficult for many American companies. But we have finally turned the corner and are headed to economic recovery. Businesses are finally ready to reinvest in equipment and, more importantly, create new jobs. The NOL provisions increase the cash flow of many struggling American companies and help them to hire and retain workers and fund capital investments.
Under current law, companies may carry back NOL for 2 years. In the Job Creation and Worker Assistance Act of 2002, however, we here in Congress recognized the difficult circumstances that many American businesses have found themselves in during recent years and have granted them temporary relief by allowing NOL to be carried back for 5 years, rather than 2. That 5-year carryback provision expired at the end of 2002.
I believe that it makes sense to extend the relief we have granted in the past in the form of a 5-year NOL carryback for one additional year. While the economy started showing strong signs of economic recovery last year, there were still many taxpayers who incurred unexpected financial losses in 2003. Now is not the time to roll back important tax provisions that are among the very reasons we are now on the road to economic recovery. We need to give American companies every opportunity to expand and invest.
I led the fight with my colleague, Senator CONRAD, to extend the 5-year carryback provision to 2003 when we passed the bill before us out of the Finance Committee with strong bipartisan support last fall. Senator CONRAD and I were able to include in the Finance Committee-approved bill a 3-year carryback for 2003. The amendment I offer with my colleagues today will expand upon what we achieved in committee by simply returning the NOL carryback rule for 2003 to the 5-year period rather than the 3-year period currently provided for in this legislation.
This important amendment will give much needed relief to U.S. employers and provide an additional jump start to our economy.
Mr. BAUCUS. Mr. President, a fundamental feature of any income tax system is the ability to use losses to reduce taxable gains. If a company has gross income of $100,000 and losses of $50,000, we don't force the company to pay tax on $100,000-they only pay tax on net income.
But just as a company can have gross income and losses within the same year, a company can also have income in one year and losses in the next.
Letting companies "carry-back" their losses to prior years smooths things out and helps companies deal with the hardships of the business cycle.
And it is important to be able to carry losses back. Carrying losses forward doesn't give taxpayers a boost when they need it.
Carrying losses forward only gives them a boost after things have already turned around.
Many businesses have been in hard times for the last 3 or 4 years. Giving them a 1- or a 2-year NOL carryback doesn't help them-because they don't have any profits in the last few years.
For many of these companies, the last year they were profitable was 1999 or even earlier. These companies will be able to use a 5-year NOL carryback to help them turn things around.
I urge you to support this amendment, to help get our economy going again.
For example, the timber industry in Montana and many parts of the Northwest was profitable in the late 1990s. But many of these timber companies-both large and small-have fallen on hard times in the last few years. The terrorist attacks of 9/11, the economic downturn, and the wildfires of last summer have taken their toll on these timber companies.
These companies paid large tax bills when things were going well. But how that they are struggling they can't get any of those taxes back.
If they had a smoother, more consistent pattern of earnings, they would have paid less tax over the course of the last 5 years. Instead, the boom-bust cycle that has actually played out is giving them higher tax bills overall.
This NOL provision will ensure that these timber companies-and many other companies in cyclical industries-pay an appropriate amount of tax over time. It will give them a boost in those unprofitable years when they need it most.
The PRESIDING OFFICER. Under the previous order, the question is on agreeing to the amendment. The amendment is agreed to.
The amendment (No. 2882) was agreed to.
VOTE ON AMENDMENT NO. 2686
The PRESIDING OFFICER. The question is on agreeing to the underlying amendment, as amended.
Without objection, the amendment, as amended, is agreed to.
The amendment (No. 2686), as amended, was agreed to.
The PRESIDING OFFICER. Under the previous order, the motions to reconsider are laid upon the table.
The Senator from Iowa.
AMENDMENT NO. 2881
Mr. HARKIN. Mr. President, I call up amendment No. 2881 and ask for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:
The Senator from Iowa [Mr. HARKIN], for himself, Mr. Kennedy, Mr. Sarbanes, Mr. Kerry, and Ms. Mikulski, proposes an amendment numbered 2881.
Mr. HARKIN. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To amend the Fair Labor Standards Act of 1938 to clarify provisions relating to overtime pay)
At the appropriate place, insert the following:
SEC. __. PROTECTION OF OVERTIME PAY.
Section 13 of the Fair Labor Standards Act of 1938 (29 U.S.C. 213) is amended by adding at the end the following:
"(k)(1) The Secretary shall not promulgate any rule under subsection (a)(1) that exempts from the overtime pay provisions of section 7 any employee who would not be exempt under regulations in effect on March 31, 2003.
"(2) Any portion of a rule promulgated under subsection (a)(1) after March 31, 2003, that exempts from the overtime pay provisions of section 7 any employee who would not otherwise be exempt if the regulations in effect on March 31, 2003, remained in effect, shall have no force or effect.".
Mr. HARKIN. Mr. President, I appreciate my colleague from Iowa, the Senator from Montana, and also Senator Reid, our assistant leader on this side, for working out this agreement. As I have said all along, all we want is debate and a vote on the overtime issue.
This is an important issue that has come to a head right now because the administration shortly will be issuing final regulations on this issue without really having duly consulted with Congress. These regulations could take away the right to overtime pay for over 8 million American workers.
So I hope we can have a good debate on this, probably tomorrow-not tonight but tomorrow. Certainly I have discussed this with the Senator from Montana. We would be willing to enter into a time agreement.
I have heard some talk around that the other side, the Republican side, will now file a cloture motion. Obviously, if that cloture motion wins, then my amendment fails because it is "nongermane."
Now, we just saw-and I did not object to the amendments just being adopted which have to do with some extenders. There were some other things added. Those are also nongermane to the bill. So the other side cannot make the argument that they are not going to allow nongermane amendments to this bill. We just adopted a whole bunch of nongermane amendments to this bill. So that is fine. We do that all the time around here.
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I hope we can have a good debate on this overtime issue and have an up-or-down vote. I can assure the other side that if their goal is to cut off this amendment by filing a cloture motion, we will do all we can on this side to deny cloture on this bill until we have a vote on the overtime amendment.
With that, Mr. President, I yield the floor and look forward to the debate tomorrow on overtime.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Mr. President, I would like to comment on the remarks of the Senator from Nevada. He mentioned the possibility of a cloture motion. My colleague from Iowa also mentioned that possibility, and it could be a possibility. But I hope that will not poison the waters as we still try to reach agreement on this amendment and try to reach agreement on getting to finality on this bill.
I, along with Senator Baucus, have urged that we not have a cloture motion. That, of course, is a leadership decision. I would urge my colleagues to think in terms of the fact that it takes 48 hours for that motion to mature so it can be voted upon. That will be time for us to see if we can work out agreements not only on the pending amendment but also on any other amendments that may be adopted, and then, if so, the cloture motion could be vitiated.
I hope Members will look down the road at the goal of this legislation. That goal is to create jobs that are going to be very difficult to create if we are stuck with sanctions put on our manufacturing by the European Union. We already have 5-percent sanctions. It is going to go up 1 percent a month until it gets to 17 percent. Between now and the election, that is going to add up to at least 12-percent sanctions.
I hope both sides of the aisle will agree that it is already very difficult for U.S. manufacturing to compete in the global economy. A 17-percent penalty after 1 year is just like a 17-percent sales tax. That is going to make our manufacturing exports much more uncompetitive. Since everybody is concerned about creating and preserving jobs, keeping American manufacturing strong, competitive, passage of this legislation is very important.
We all have amendments we want to get adopted. We want the Senate to consider amendments, whether germane or nongermane. There is plenty of opportunity between now and adjournment of this Congress to consider these amendments. In the meantime, if we don't pass this legislation this week, we are going to have a 6-percent penalty in April, a 7-percent penalty in May. I hope we can get this legislation passed very soon so we can get rid of all those sanctions against our products.
In the meantime we have reduced the corporate tax for manufacturing in America by 3 percentage points, and that is going to make it possible for the cost of capital in America to be less expensive and make American manufacturing much more competitive and, in the process, preserve jobs and create jobs.
I yield the floor and suggest the absence of a quorum.