Tax Extenders Bill

Floor Speech

Mr. GRASSLEY. Madam President, I was surprised to see the Senate majority leader on Friday morning, in some of the harshest possible language, make the misleading assertion that Senate Republicans oppose the underlying policy in the tax extenders bill. His statement conveniently ignored the basic reason nearly every Republican for opposing the Democratic leadership's substitute. It was opposed to because it perpetuated the large deficit spending that has become the modus operandi of the Democratic leadership.

The way to a bipartisan agreement is to follow the path set 1 week ago
today. Just 1 week ago, the Senate passed a bill that extended the so-called Medicare doc fix for several months.

The bill was fully offset. It was paid for. It did not add to the deficit. Every Republican Senator supported that fiscally responsible approach. I would like to make a couple of points on the process employed by the Democratic leadership. The majority leader's comments this morning are typical of the dysfunctional way that these routine extenders have been unnecessarily delayed by the strategy and tactics of the Democratic leadership.

What I find surprising is that we took up a package, the fourth in the latest series, that, like previous exercises, absolutely belongs to the Senate Democratic leadership. That is to say they continued to refuse to take up a bipartisan package that I put together with Finance Committee Chairman Baucus. To be sure, some of the structure reflected the agreement my friend, the chairman and I reached.

I was under the impression that the Senate Democratic leadership was genuine in its desire to work on a bipartisan basis, but clearly I was mistaken. Although the Senate Democratic leadership was highly involved in the development of a bipartisan bill, they arbitrarily decided to replace it with a bill that skews toward their liberal wing.

My second comment goes to the way in which these expiring tax provisions have been described by many on the other side, including those in the Democratic leadership. If you rolled the videotape back a few months or so ago, you would hear a lot of disparaging comments about these routine, bipartisan extenders. From my perspective, those comments were made in an effort to sully the bipartisan agreement reached by Chairman Baucus and me.

If you take a look at newspaper accounts of that period, you'd come away with the impression that the tax extenders are partisan pork for Republicans. A representative sample comes from one report, which describes the bipartisan bill as ``an extension of soon-to-expire tax breaks that are highly beneficial to major corporations, known as tax extenders, as well as other corporate giveaways that had been designed to win GOP support.'' The Washington Post included this attribution to the Senate Democratic leadership in an article at that time: ``We're pretty close,'' [the majority leader] said Friday during a television appearance in Nevada, adding that he thought ``fat cats'' would have benefitted too much from the larger Baucus-Grassley bill.''

The portrait that was painted by certain members of the majority in some press reports was inaccurate.

For one thing the tax extenders include provisions such as the deduction for qualified tuition and related expenses and also the deduction for certain expenses of elementary and secondary school teachers. If you are going to school or if you are a grade school teacher, the Senate Democratic leadership apparently viewed you as a fat cat. If your house was destroyed in a recent natural disaster and you still need any of the temporary disaster relief provisions contained in the extenders package, too bad, because helping you would amount to a corporate giveaway in the eyes of some.

The tax extenders have been routinely passed repeatedly because they are bipartisan and very popular. Democrats have consistently voted in favor of extending these tax provisions. House Speaker Nancy Pelosi released a very strong statement upon House passage of tax extenders in December of 2009, saying this was ``good for businesses, good for homeowners, and good for our communities.'' December of 2009 was not very long ago. In 2006, the then-Democratic leader released a blistering statement ``after Bush Republicans in the Senate blocked passage of critical tax extenders'' because ``American families and businesses are paying the price because this Do Nothing Republican Congress refuses to extend important tax breaks.''

Recent bipartisan votes in the Senate on extending expiring tax provisions have come in the Emergency Economic Stabilization Act of 2008, the Tax Relief and Health Care Act of 2006, which passed the Senate by unanimous consent and the Working Families Tax Relief Act of 2004, which originally passed the Senate by voice vote, although the conference report only received 92 votes in favor and a whopping 3 against. According to the non-partisan Congressional Research Service, extension of several of these provisions go back even further, including the Tax Relief Extension Act of 1999, which again passed the Senate by unanimous consent, but lost 1 vote on the conference report.

One Member on the other side said ``Our side isn't sure that the Republicans are real interested in developing good policy and to move forward together. Instead, they are more inclined to play rope-a-dope again, My own view is, let's test them.'' Another Member of this large 59-vote majority exclaimed, ``It looks more like a tax bill than a jobs bill to me. What the Democratic Caucus is going to put on the floor is something that's more focused on job creation than on tax breaks.''

Reading those comments I found myself scratching my head. The only explanation for this behavior is that certain senators decided last week that it serves a deeply partisan goal to slander what have been for several years bipartisan and popular tax provisions benefitting many different people. The Washington Post article I quoted from earlier includes a statement from a Senate Democratic leadership aide saying that ``No decisions have been made, but anyone expecting us immediately to go back to a bill that includes tax extenders will be sorely disappointed.''

You can imagine, that today, after considering these comments, I am really scratching my head. We have before us the expiring tax and health provisions that were disparaged just a short time ago. Have they morphed from corporate tax pork? Have they suddenly re-acquired their bipartisan character? Are these time-sensitive items, now expired for more than 2 months, suddenly jobs-related?

Madam President, I also want to correct the record regarding a statement made last Thursday night by the senior Senator from Illinois. He said that the international tax increases that the Democrats have called for in the extenders bill would stop companies from sending jobs overseas. If only these international tax increases would do that, I would be at the front of the line, doing what I could to pass them. But, unfortunately, that is not what they would do. I would like to briefly describe why, if anything, these international tax increases would actually tend to hurt the job market here at home in America.

Quite to the contrary of the complaint by the senior Senator from Illinois, these international tax increases may make American businesses less competitive in the global marketplace. Increased taxes increase the cost of doing business. Those tax increases are targeted only at U.S. companies on their business abroad. They are not aimed at foreign companies with which the U.S. companies are competing side-by-side. Guess what. The cost must be absorbed by the U.S. company. The cost of these tax increases may make it less likely that American businesses will hire. Instead German, or Indian, or Chinese companies will out-compete and thus be hiring more. If the U.S. taxes the foreign subsidiaries of U.S. parent companies at ever higher rates, the result won't be jobs kept here at home.

No, the result will instead be that the U.S. will become a less and less attractive place to have a parent company, to have a global headquarters. This will result in less, not more, but less jobs here in America.

But that is certainly not my only objection. Not only could these international tax increases result in less American jobs, but these proposed tax increases have not had adequate vetting. In some cases, the proposed tax increases would actually be retroactive. These tax increases would be permanent tax increases, meant to pay for temporary tax reductions--a strange miss-match. If these international tax increases really are loophole closers, then it is squandering them to use them for such temporary provisions, rather than to use them to pay for corporate tax reform.

Finally, the business community--that is, the hiring sector--has reacted quite negatively to this bill, even though the bill also contains the tax extenders that the business community wants.

Those are the reasons that I oppose these tax increases.

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