American Jobs And Closing Tax Loopholes Act Of 2010

Floor Speech

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Mr. DURBIN. Will the Senator from Montana yield for a question?

Mr. BAUCUS. I will yield to the Senator.

Mr. DURBIN. I listened to the statements made today by the Republican leader about the increase in this fee that is to be paid into the Oil Spill Liability Trust Fund. I would like to ask the chairman of the Finance Committee, currently, the fee is 8 cents a barrel?

Mr. BAUCUS. That is correct.

Mr. DURBIN. And the price of a barrel of oil, as of this morning's Wall Street Journal, is $71.99 a barrel?

Mr. BAUCUS. That is correct.

Mr. DURBIN. So this is a small, tiny fraction--one-tenth----

Mr. BAUCUS. Of the current fee.

Mr. DURBIN. Of the current fee. One-tenth of 1 percent as best I can calculate it.

Mr. BAUCUS. That is true.

Mr. DURBIN. That is being paid by oil companies into a fund so that if there would be a spill and the oil company responsible couldn't pay for it, they would have at least accumulated enough money to protect the taxpayers----

Mr. BAUCUS. That is correct.

Mr. DURBIN. From this liability.

Mr. BAUCUS. That is correct. I might also say this fund was created in the wake of the Exxon Valdez spill.

Mr. DURBIN. Twenty-one years ago. I might also ask the chairman of the Finance Committee, it is my understanding that the total value of the current Oil Spill Liability Trust Fund is somewhere in the range of $1.5 billion?

Mr. BAUCUS. I think that is the amount. I am not certain, but it is about that.

Mr. DURBIN. So the effort in this bill is to increase that per-barrel tax paid by oil companies for this oilspill

liability fund to----

Mr. BAUCUS. Forty-one cents.

Mr. DURBIN. Forty-one cents. So 41 cents would represent, as I calculate it, one-half of 1 percent of the current cost of a barrel of oil.

Mr. BAUCUS. The current oil priced at $71 a barrel.

Mr. DURBIN. Right. So the argument from the other side is that even if we accumulated this money and put it into this fund for cleaning up spills, we shouldn't count it as additional money being held by the Federal Government at the same time; is that correct?

Mr. BAUCUS. That is correct.

Mr. DURBIN. And if we fail to count it as an additional source of revenue being held by the Federal Government, is it not true that it would be subject to a budget point of order, which would then require 60 votes, and that would allow the oil companies to find 41 friends on the Senate floor--and I think I know where they will start looking--to defeat this effort to create this tax?

Mr. BAUCUS. I might say that is my reading of the Budget Act; that is correct.

Mr. DURBIN. Could I also ask the chairman of the Finance Committee, in this situation--where BP is clearly responsible for the mess in the Gulf of Mexico and has at least stated its responsibility; where we have a deep-pocket defendant that declared $5.6 billion in profits the first quarter of this year--if the next spill or the next accident resulting in multibillion-dollar damage to the Gulf of Mexico, or wherever, is caused by a company without deep pockets, is this fund the only place to turn to protect taxpayers?

Mr. BAUCUS. That is exactly correct.

Mr. DURBIN. And if we fail to increase this tax and increase the size of this fund, it means the taxpayers would be called on to bail out other oil companies that may be responsible for similar damage in the future?

Mr. BAUCUS. That is the precise theory of all trust funds in the first place, but now the cap needs to be raised.

Mr. DURBIN. So all the protests from the other side of the aisle about this 40-cent tax on big oil companies is basically not only to protect the big oil companies but to put the taxpayers on the hook for another bailout----

Mr. BAUCUS. That is correct.

Mr. DURBIN. If we run into another oilspill?

Mr. BAUCUS. If the fund is not large enough, that is exactly correct.

Mr. DURBIN. I thank the Senator.

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Mr. DURBIN. Mr. President, pending before the Senate is a bill that includes many provisions. It is known in shorthand as the extenders bill because each year there are portions of the Tax Code which expire, and they relate to a lot of different things we kind of take for granted--the biofuels tax credit, for example--and other things. Each year, Congress extends or reauthorizes those portions of the Tax Code, and most of them are noncontroversial.

The obvious question many people ask who are affected by them is, Why do you do this every year and go through this exercise? It is an honest and legitimate question. I just say that the honest answer is, Because the extenders themselves are not controversial; they are popular. They become the spoonful of sugar that helps the medicine go down because they usually accompany other things that have more controversy with them. That is the way politics works. That is the way the Congress works, and that is what we do each year. This year is no exception, and we are considering the extension of portions of the Tax Code and including with it other things that will have an impact on the country and on the economy.

When I look at what is included in this bill, which is going to be important, there are several provisions that I think are critically important for the economy.

Most of us believe we would be better off in America if we stopped exporting good-paying American jobs overseas. So the President has said repeatedly and many of us have said in our speeches on the floor and back home that we want to stop rewarding in the Tax Code companies that decide it is to their economic advantage to locate overseas, closing down a factory in Galesburg, IL, and moving over to Europe or Japan or China or India or wherever it happens to be. So this bill, first and foremost, eliminates major tax cuts and loopholes available to U.S. corporations that want to relocate their business operations overseas. I think that is eminently sensible. Why would we in our Tax Code reward companies that want to leave the country, companies that want to eliminate American jobs? That is the No. 1 thing this extenders package does, in addition to extending some of the tax provisions I mentioned earlier.

It also provides help for small businesses across America. If we are going to get out of this recession sooner rather than later, we really need to depend on small businesses in America that will be able to step up and hire more people. We all think about the big company that is going to locate its new plant in our hometown and create 1,000 or 2,000 jobs. Occasionally, that happens. But more likely than not, the job growth in most communities and most cities will be when smaller businesses can hire 1 or 2 people or maybe 10 or 20 people. Cumulatively, those efforts result in a growth in the American workforce. This bill, as a second part, creates tax incentives and help for small businesses to hire more people in this weak economy.

Those are the two pillars of the bill: stop the export of American jobs by eliminating the tax incentives in our American laws that reward companies for sending jobs overseas and, secondly, create an environment in our Tax Code and programs that help small businesses retain and hire more American workers. I cannot think of two better things to do in a weak economy. Yet it seems there is opposition to this bill from the Republican side of the aisle. There are some who may support it, and I hope they do. I hope it genuinely becomes a bipartisan bill.

But there is a genuine concern about some other provisions that I would like to address.

I don't know that there is an American alive today who is unaware of what is going on in the Gulf of Mexico. I don't know what day we are in--60, 61--of this terrible environmental disaster where the BP rig blew up, killing 11 innocent people, and then the oil started spewing into the Gulf of Mexico. British Petroleum came in and has been trying vainly to stop this oil from flowing into the gulf. They have said repeatedly that they will make this all whole at the end of the day; they will stop the oil from flowing and set about repairing the damage, which is extensive.

Twenty-one years ago, I was on a congressional trip up to Prince William Sound in Alaska. The Exxon Valdez, a large tanker, had run aground because the captain, they think--it was alleged--had been drinking and didn't pay attention. It gashed the hull of the boat and ended up spewing oil in every direction. I will never forget that as long as I live because there was this black, dirty, sludgy oil all over everything. We went out on a Coast Guard ship and looked at it. You would see these horrible situations where, in this pristine Alaskan environment, everything would be covered with this black oil, and you would look down into the rocks and you could see as deep as you could see that there was more and more of that oil.

I asked Senator Murkowski of Alaska what Prince William Sound is like
21 years later, and she said things have gotten back to a more normal state but some things have changed forever. Some species of fish, such as the herring, are just gone from this particular place. Maybe at some distant point in the future, they will return, but for the last 20 years, they have been extinct and gone. I hope Mother Nature takes care of that over time. You can see that it will take a long period of time.

We don't know what is going to happen in the Gulf of Mexico, but we know it will be expensive, first, in terms of human life--losing 11 people--and, second, in terms of the environmental damage, which is incalculable at this moment; that is, the economic cost of the damage.

If there is any encouraging thing--and there isn't much--in this whole conversation, it is the fact that British Petroleum is a very wealthy company. In the first 3 months of this year, they announced $5.6 billion in profits. When they say they can pay for the damage, it is clear that they have deep pockets and they can pay. And they will pay. The taxpayers will not pay.

There is a provision in this bill relating to this issue that has become controversial on the floor. We decided back in the time of the Exxon Valdez spill that we would create an oilspill liability fund. In other words, we would collect money and put it into a ``rainy day fund'' that would be there in case of an environmental disaster to pay for the damage. We collect, under current law, 8 cents for every barrel of oil to put into this fund. This morning's paper tells us that a barrel of oil is selling for $71.99, so 8 cents represents about one-tenth of 1 percent of the cost of a barrel of oil. It is a tiny, small amount.

Over time, with all the oil that has been explored and produced, we have collected over $1 billion into this oilspill liability fund, thinking we were prepared for the worst. We couldn't imagine what happened in the Gulf of Mexico, where $1.5 billion wouldn't even come close to paying for the damage that has been created by this BP disaster. So this bill will increase the amount of tax on a barrel of oil to 41 cents a barrel.

Remember, the price of a barrel of oil is $71.99, and we are going to charge 41 cents to be put into this oilspill liability fund. There is an objection to this from the Republican side of the aisle. Their objection is a little hard to follow because they are kind of tied up in a budgetary argument here. I think it is pretty clear to see what the choices will be. If we don't collect this money for every barrel of oil and put it into an oilspill liability fund, God forbid if there is another environmental disaster; there won't be enough money to pay for it.

Today, British Petroleum has its slimy fingerprints all over this mess. We know they are going to end up holding the bag, as they should. They have the money to pay for the damages associated with it. But what about tomorrow? What if the company involved is not as well off as BP? What if they are bankrupted by an environmental disaster and they go out of business? Who then is going to compensate the shrimpers, the oystermen, the fishermen, the tourist industry, the resorts, and all the others who are affected by all this? At that point in time, you would look to this oilspill liability fund. But the $1.5 billion it currently holds is not enough to do the job. That is why this bill increases the amount per barrel of oil from 8 to 41 cents, so instead of one-tenth of 1 percent, it is about one-half of 1 percent of the current cost of a barrel of oil that will be set aside as an insurance fund.

The Republicans are objecting to this. You have to ask them, what is the alternative? If the oil companies don't pay so that we have an insurance fund for the next environmental disaster, who will pay? I think we know the answer. It will require another taxpayer bailout, which means taxpayers across America will be called on to come up with the emergency disaster funds to pay for the next environmental disaster, God forbid it ever occurs. Isn't it better to have the industry drilling for oil building up the reserves in this oilspill liability fund so that the taxpayers don't end up ultimately paying for the cleanup? It is obvious to me. The alternative is unacceptable, but the alternative is what is being argued for on the Republican side of the aisle. They want to step aside from what is the clear responsibility of the big oil companies and those who would drill.

Yesterday, we had a hearing in the Senate Judiciary Committee, and we talked about the liability of the oil companies in this situation. It turns out that Senator PATRICK LEAHY, of Vermont, and Senator SHELDON WHITEHOUSE, from Rhode Island, did some research on it and found that most of the law that governed this situation was ancient law--150, 160 years old. The law, for example, for the 11 people who died on this oil rig in the explosion limits the recovery of their surviving families to the actual monetary losses--in other words, how much future income will be lost to that family because of the death of that worker. They cannot collect for any loss of companionship due to the death of a father or husband, and they cannot collect punitive damages, except to the amount of the actual compensatory damages--one to one. There is a limit to what they can recover.

Yesterday, Christopher Jones testified about his brother Gordon, who died as a result of the explosion on this rig in the Gulf of Mexico. He showed us photos of the family, the two little boys--one born after the father died and another young boy and his mom. It was so compelling.

The argument was made by a man representing the oil and energy industry that it would be reckless for us to expand the liability of oil companies beyond the current limitations in the law. I think it is reckless for us to consider allowing anybody to drill in the Gulf of Mexico who doesn't have the bonding and wherewithal to stand up for any damages they should incur. Why in the world would we allow anybody to go out in this circumstance, when we can see what happens when it goes wrong, and do it again without having some sort of insurance that protects those involved working there, as well as those who are affected by the environment around the Gulf of Mexico? They have no business drilling, as far as I am concerned, if they are not financially responsible and if they cannot stand behind their operations to make sure the taxpayers don't end up in a situation where they are vulnerable.

The Republican position that says we should not impose a new tax on oil companies to make sure there is enough money in an oilspill fund so that the taxpayers won't have to pay for these disasters in the future is a position that is indefensible. It is a position that makes no sense.

They argue, incidentally, that if we collect this money, we should somehow say it won't be used for any other purpose. Well, the money will be used for the purpose of oilspill cleanup, but because it will be a new asset of the Federal Government, it will be shown on the books on the positive side. We are collecting the tax, gaining the asset, and increasing in a small way our budget picture on the positive side. I think they are lost in a budgetary argument that really is, in effect, trying to protect the oil companies from this new tax.

I hope my colleagues won't be discouraged in this debate but will stand by the efforts of the committee to impose this new tax responsibility. I hope that as Members of the Senate consider this bill--and I see my friend from Ohio here, and I will yield momentarily to him--they will try to understand how difficult it might be to explain why they voted against a bill that eliminates tax breaks for American companies that want to locate their businesses overseas and why they voted against a bill that provides help for small businesses in America to hire more workers in a time of high unemployment. Those are the two most important elements in this so-called extension bill. I hope--wouldn't it be a great day--we could have bipartisan support for those two basic ideas and at the end of the day do something on the floor to create jobs in America and, in the process, do it in a sensible way that builds for our future.

I yield the floor.

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Mr. DURBIN. Mr. President, pending before us on the floor is the bill from the Senate Finance Committee, the extenders bill relating to the Tax Code, but I would like to address an issue which is to come before the Senate tomorrow. It is an issue that rarely comes here under a procedure that was designed to give Congress a voice in the determination of regulations and rules promulgated by a President and the administration.

The Senate has entered into a unanimous consent agreement to consider S.J. Res. 26 tomorrow, which would disapprove of the Environmental Protection Agency's endangerment. As a result of this action by the Senate, if we vote, we will vote in disapproval of this endangerment. The EPA's action was in response to a Supreme Court order that it make a determination about whether greenhouse gases as pollutants could be reasonably anticipated to endanger public health or welfare.

This is an interesting story because it began with a question that was posed to Carol Browner, then head of the Environmental Protection Agency under President Bill Clinton. As I was told the story, the Republican leader in the House, Tom DeLay, asked Carol Browner of the EPA whether the Clean Air Act covered greenhouse gases, and she said she would have to get back to him because that particular question had never been directly asked or answered. After long study, she replied in the affirmative, which was not the reply the gentleman from Texas was expecting. This led to a flurry of lawsuits and questions because it really raised the question as to whether greenhouse gases, as we know them, going into the atmosphere are dangerous to the health and safety of people living on Earth and particularly here in the United States.

The EPA studied this for a long period of time. The Supreme Court considered this case, as to whether the Clean Air Act applied to greenhouse gases, and ultimately concluded that it did but left it to the EPA to make the final determination as to whether in fact these greenhouse gases were dangerous. The EPA responded to the direction provided by the Supreme Court by proposing to find that the emission of six greenhouse gases--carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluorides--threatened the public health and welfare of current and future generations and the combined emissions of these same gases from new motor vehicles and motor vehicle engines contribute to the atmospheric concentrations of these greenhouse gases and hence the threat of climate change.

So, literally, tomorrow the Senate will be debating and voting on the question of climate change and whether greenhouse gases in fact are dangerous to the environment and the health and safety of people living in the United States. This has been a long, torturous process that led us to this moment. But the resolution being offered by the Senator from Alaska, Ms. Murkowski, would basically ask the Senate to find against the scientific findings linking greenhouse gases and climate change. The judgment of the EPA was based on scientific findings that showed that the concentration of greenhouse gases is at unprecedented levels compared to the recent and distant past; the effects of climate changed observed to date and projected to occur in the future will have impacts on public health and welfare; and the emissions of greenhouse gases from on-road vehicles regulated by the Clean Air Act contribute to climate change.

There are those who deny the connection between greenhouse gases and what is happening to the Earth, the world in which we live. There are some who do not believe in climate change, they do not believe in global warming, and they are very vocal in their positions.

I have had many groups come to see me on the issue from my State of Illinois. Many of them are farmers, agricultural groups, and I have made a point of asking these farmers--as they tell me they oppose any type of efforts to control carbon, to tax it or measure it in the future--a very basic question: Do you believe human activity on Earth is leading to changes in the world we live in--climate changes, the melting of glaciers, different problems with pollution, public health issues, asthma, lung problems? And I have been surprised, at least initially, to find that none of them believed it--not one.

Three--after I asked this repeatedly--three said they had some questions about it, but not one said they believed it; that human activity was changing the world in which we live. I said to them: It is very difficult for us to have a conversation let alone a debate about this issue if you don't buy the premise, if you don't buy the starting point that things we are doing--the way we live, the way we produce electricity, the way we move from one place to another--create pollution which changes the Earth.

This resolution by Senator Murkowski basically takes the same position: that the Environmental Protection Agency's finding that these greenhouse gases are a danger to us in the future and now is wrong. The EPA did not reach this conclusion lightly, as to whether there was a connection between greenhouse gases and the safety and health of people living on Earth. They had over 380,000 public comments they elicited for this work.

The EPA endangerment finding has been supported not only by their conclusions but peer-reviewed literature in the work of the Intergovernmental Panel on Climate Change and the Proceedings of the National Academy of Sciences. For the Senate to decide tomorrow that greenhouse gases do not pose a danger to our environment or our own health is comparable to the Senate voting against gravity, saying basically we are going to disagree with the scientific conclusion on gravity.

I could argue without gravity the space program would be a lot cheaper. But the fact is, gravity is a scientific finding backed up by virtually everyone. Here we have a scientific finding backed up by the National Academy of Sciences, and the Senator from Alaska is going to ask us to vote tomorrow to reject it--the Senate to reject it. We will stand in judgment of these scientists and find they are wrong.

By what authority could we reach that conclusion? They have gone through this long process of concluding that greenhouse gas emissions endanger the planet we live on and our lives in the future. They have suggested we need to take that into consideration when we talk about the fuels we burn in the future, the way we generate electricity in the future, and start making plans to improve fuel efficiency, energy efficiency, to reduce the dangers associated with this.

I think this is an important vote, maybe a historic vote. It is also interesting who supports the position of Senator Murkowski that we basically reject the sound science behind the EPA position. It is a position backed by many groups but particularly supported by big oil. The big oil companies are concerned about the impact of measuring greenhouse gas emissions and carbon emissions on the environment because it directly impacts the product they create and produce and sell.

Here we are in the midst of an environmental disaster in the Gulf of Mexico brought on by one of the biggest oil companies on Earth, and we are now going to consider in the Senate a Murkowski resolution that is supported by the same big oil interests asking us to reject the finding by the EPA that greenhouse gas emissions do pose a danger to our environment and the people living in the United States.

I say to my colleagues, tomorrow I hope they will think long and hard about this vote. This is not just another vote about another political issue. The credibility of the Senate is at issue. If we are going to stand in judgment of these scientific findings and reject them, then I think we will at least subject ourselves to a level of criticism that we have not accepted basic and sound science as it has been developed.

There are many groups supporting the Murkowski resolution. I mentioned big oil. But there are many groups that oppose the Murkowski resolution. Among them are the American Academy of Pediatrics, the Children's Environmental Health Network, the American Nurses Association, the American Lung Association, Public Health Association, Physicians for Social Responsibility, the Association of Schools of Public Health, Union of Concerned Scientists--the list goes on and on.

It is interesting, too, that automobile manufacturers oppose the Murkowski effort to reject the science behind greenhouse gas emissions. An alliance of automobile manufacturers and 11 member companies have written to us expressing concern over the Murkowski resolution that would overturn the EPA's endangerment finding on greenhouse gas emissions.

..... if these resolutions are enacted into law, the historic agreement creating the One National Program for regulating vehicle fuel economy and greenhouse gas emissions would collapse.

They are, of course, referring to an agreement which is trying to move toward more fuel-efficient vehicles and vehicles that pollute less. An agreement is being reached. Most Americans would agree that is a good thing. But the basis for agreeing it is a good thing is the belief that what is coming out of your tailpipe is not necessarily good for the world we live in, and if we can reduce the greenhouse gas emissions by moving toward hybrid engines, electric cars, getting better mileage in cars we do use, it is a good thing for the American owning the car--they buy less fuel oil--and it is a good thing for the environment because there are fewer emissions.

If the Murkowski resolution prevails, we are rejecting the scientific basis for believing that what comes out of your tailpipe can be harmful to the world in which we live. That is a position which is hard to understand and difficult to explain.

The auto workers have written to us asking us to vote against the Murkowski resolution, saying they are very concerned that such a vote ``would unravel the historic agreement on one national standard for fuel economy and greenhouse gas emissions.''

We have had EPA Administrators from Presidents, both Democratic and Republican--under Nixon, Ford, and Reagan--who oppose the Murkowski resolution: Russell Train, William Ruckelshaus, many faith groups, a long list of environmental groups, and key stakeholders who oppose this Murkowski resolution. The list goes on and on.

It will be an interesting vote tomorrow to see if this Senate, this historic and traditional body, will be looking forward to the future and realizing if we do not take better care of the world we live in, we will not be leaving as clean a world, as safe a world to our children in the future.

The Murkowski resolution says ignore the science, ignore the findings, and ignore the responsibility we face to do something about this problem. I think that is clearly a move in the wrong direction, and I hope my colleagues will reject this resolution when it comes before us tomorrow.

There are some who have argued if we do not pass the Murkowski resolution the EPA will start regulating just about everything in sight. When my farmers come here and start worrying about the tractors they drive in the fields, I wonder if they have taken a close look at what the EPA rule has suggested.

There are approximately 900 currently regulated facilities, and the EPA estimates there will be about 550 more that would be affected by this rule. No small farms, restaurants, or midsize commercial facilities emit enough carbon to be regulated by the EPA. Many of these entities have been frightened by people who have been exaggerating the reach of the EPA or their interest in this particular issue.

When you look at the phase-in called for by the EPA, they are dealing with the largest emitters of pollution in our country. What I think it does is, unfortunately, make the debate somewhat distorted to suggest it is going to apply to a farmer or small businessperson because the EPA's schedule and rules do not.

The alternative of doing nothing is unacceptable from my point of view. I do believe, sadly, things are changing for the worse in many respects when it comes to the environment of the world in which we live. I do believe there has been, as the EPA has found, an increase in greenhouse gas emissions and accumulation of those emissions in the environment which have had a negative impact on the world.

I have seen the photos--most everyone has--about the warming of this Earth. Although there are clearly days and weeks when we have a lot of cold weather--we had it in Washington--we know on average the temperature of the world we live in is going up. As it does, things change: glaciers melt, there is more water in the oceans, currents change, the temperature of the water that moves around the world changes, and climate patterns start to change as well.

We need to do something about it. Voting for the Murkowski resolution is a step in the wrong direction. It basically says we are walking away from our responsibility, a responsibility which, though it is politically difficult, I think is a responsibility we must face because the science and our human experience lead us to that conclusion.

I know it is going to mean some changes in the world. I come from a State where there is a lot of coal. That coal is a source of a lot of energy. But it also could be the source of a lot of pollution. There are ways to deal with it.

I see the Senator from Missouri on the Senate floor. He and I have come together, not on every issue but at least on the notion of carbon sequestration. The idea is to take the emissions from an electric powerplant using coal, for example, and pipe them deep into the earth well below any surface where they could escape. I think this is one of the technologies, one of the scientific processes that should be researched as a possibility.

Let me conclude, because I see my colleague on the floor, by urging my colleagues to oppose the Murkowski resolution tomorrow. This resolution wants to basically reject scientific findings that have been backed up across the world. It would subject this body to not only criticism but maybe even ridicule for us to step away from basic scientific findings which have linked the activities of humans on Earth and a change in the Earth in which we live. We need to accept that basic premise and accept that basic responsibility.

I yield the floor.

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