Appointment of Conferees on H.R. 4520, American Jobs Creation Act of 2004

APPOINTMENT OF CONFEREES ON H.R. 4520, AMERICAN JOBS CREATION ACT OF 2004 -- (House of Representatives - September 29, 2004)

Mr. THOMAS. Mr. Speaker, I ask unanimous consent to take from the Speaker's table the bill (H.R. 4520) to amend the Internal Revenue Code of 1986 to remove impediments in such Code and make our manufacturing, service, and high-technology businesses and workers more competitive and productive both at home and abroad, with a Senate amendment thereto, disagree to the Senate amendment, and agree to the conference asked by the Senate.

The SPEAKER pro tempore. Is there objection to the request of the gentleman from California?

There was no objection.

MOTION TO INSTRUCT CONFEREES OFFERED BY MR. NEAL OF MASSACHUSETTS

Mr. NEAL of Massachusetts. Mr. Speaker, I offer a motion to instruct conferees.

BREAK IN TRANSCRIPT

Mr. NEAL of Massachusetts (during the reading). Mr. Speaker, I ask unanimous consent that the motion to instruct be considered as read and printed in the RECORD.

The SPEAKER pro tempore. Is there objection to the request of the gentleman from Massachusetts?

There was no objection.

The SPEAKER pro tempore. Under rule XXII, the gentleman from Massachusetts (Mr. Neal) and the gentleman from California (Mr. Thomas) each will control 30 minutes.

The Chair recognizes the gentleman from Massachusetts (Mr. Neal).

Mr. NEAL of Massachusetts. Mr. Speaker, I yield myself such time as I may consume.

I am pleased that the House Republican leadership has finally seen fit to appoint conferees to resolve the foreign sales corporation or extraterritorial income issue that the World Trade Organization found to be an illegal export subsidy. I note that the appointment of conferees today comes more than 2 months after the Senate appointed their conferees. This delay by the House Republican leadership has only resulted in more trade sanctions on many of our industries.

Today I am offering a motion to instruct that I believe should be the framework for the conference report. First, the motion to instruct offers a requirement that House conferees include an effective rate reduction for U.S. businesses manufacturing or producing goods in the United States. This benefit for U.S. producers is the appropriate replacement for today's export benefit which was enjoyed by U.S. manufacturers and producers. The replacement benefit should also apply to U.S. manufacturers and producers. This motion requires that all businesses, including farmers, farm cooperatives, subchapter S corporations, and other unincorporated small businesses should enjoy the benefit of the new rate reduction. I have never understood the opposition of the House Republican leadership to permitting small businesses to be eligible for the new benefit. I have always agreed with the gentleman from Illinois (Mr. Manzullo), chairman of the Committee on Small Business, in his insistence that small businesses be eligible.

This motion also requires that businesses that are purely domestic receive the largest benefit, as included in the Senate amendment. We should reward companies for keeping their operations in the United States. This motion also requires the inclusion of Senate provisions to ensure that companies do not receive benefits for income attributable to cost savings from purchasing cheap imported parts or outsourcing labor. Again, I do not understand why the Republican House bill encouraged outsourcing of parts and labor offshore.

Second, this motion requires that the conference report not further increase tax incentives for companies to move operations offshore. We have had ample opportunity in this House for the better part of 3 years to do something about an issue that I think causes great concern to the American taxpayer and to the American worker. Our current tax laws already provide incentives for companies to invest and move operations offshore. There is no reason to provide additional tax benefits that could result in further U.S. job losses.

The Bermuda issue has never been debated vigorously in this House, and we should take that up perhaps as a separate issue down the road; but we sure could include it with this motion to instruct. We should be focused on increasing incentives for U.S. jobs, not incentives to create jobs overseas.

Third, this motion requires that the conference report be revenue neutral. We already are experiencing deficits of historic size, and there is no reason to further increase the deficit in this legislation. I would remind the consuming audience today that what began as a $4.5 billion problem now looks as though it will have a $130 billion solution. In making this bill revenue neutral, the motion also requires the House conferees to take the following specific actions:

First, the House conferees shall include the Senate provisions preventing corporations to avoid U.S. tax by merely reincorporating in a tax haven overseas. I have yet to meet anybody who believes that Tyco is a Bermuda-based company. I have never understood why House Republican leaders insist on defending companies that move to tax havens to avoid paying their fair share of tax, particularly at a time when we are engaged in combat overseas. Patriotism should never take a back seat to profits.

Second, the House shall include the Senate provisions addressing corporate tax avoidance transactions, including provisions targeting tax avoidance transactions utilized by the Enron Corporation. At one time we were prepared to give them, as we repealed the corporate alternative minimum tax, a $250 million tax break. These transactions are purely paper transactions that have no purpose other than tax avoidance. The House has resisted action in this area for years, permitting corporations to continue to avoid their responsibilities. It is time to close and stop those transactions.

Third, the House conferees should be instructed to drop the House provision that authorizes private collection of Federal tax liabilities. We debated that issue years ago in the Committee on Ways and Means, and I thought that the evidence that was presented would have offered substantial support for the position as outlined in our motion to instruct.

Finally, this motion requires that the conference meet in open session and file its report before the House leaves for the elections. There is no reason that this issue should have taken so long to resolve. The bill that the gentleman from Illinois (Mr. Crane) and many of us introduced last year provided that it was possible to have a prompt bipartisan solution to the World Trade Organization decision. Instead, it has been decided to use this issue to provide more tax benefits overseas.

Essentially, it has been recommended that a tax increase on U.S. producers fund a tax decrease for offshore operations of U.S. multinationals. It is that decision and the decision to use this bill for narrowly targeted tax benefits that have caused trade sanctions to be imposed on some of our industries. This motion to instruct essentially rejects those decisions and provides a reasonable framework for properly completing the conference on this bill. I also would suggest that this motion to instruct urges the House to instruct the conferees on behalf of U.S. workers.

It is pretty simple. We provide benefits to manufacturers, particularly small businesses. We do not provide more tax incentives to move jobs overseas. And our legislation is revenue neutral.

Mr. Speaker, I reserve the balance of my time.

BREAK IN TRANSCRIPT

ANNOUNCEMENT BY THE SPEAKER PRO TEMPORE

The SPEAKER pro tempore. The Chair would like to clarify that, while it is in order to include in debate quotations from Senate proceedings for the purpose of establishing legislative history on a matter currently under debate in the House, Members may not characterize Senate action, as by parsing votes of particular Senators.

Mr. NEAL of Massachusetts. Mr. Speaker, could the Speaker clarify that further? Was the gentleman from Washington (Mr. McDermott) correct in what he said?

The SPEAKER pro tempore. To the extent that remarks include Senators' quotations outside of Senate proceedings, they are not in order.

Mr. NEAL of Massachusetts. Mr. Speaker, I thank the Chair for the ruling.

Mr. THOMAS. Mr. Speaker, will the gentleman yield?

Mr. NEAL of Massachusetts. I yield to the gentleman from California.

Mr. THOMAS. Mr. Speaker, my understanding of that interpretation is that I am not permitted to characterize the vote, and I believe I did to a certain extent. And, therefore, what I would like to do is to simply emphasize that one of the votes was a rejection of 77 to 22 and the other one was a rejection of 74 to 23, and people can reach their own conclusion on those votes rather than my presenting a conclusion, which was, I thought they were overwhelmingly rejected. I am not allowed to say "overwhelmingly rejected," but 77 and 74 can be concluded by anyone on their own.

To that extent, Mr. Speaker, I certainly want to correct the record in emphasizing that it was overwhelming rather simply make sure that the vote of 77 and 74 noes is on the record.

Mr. NEAL of Massachusetts. Mr. Speaker, I yield myself such time as I may consume.

I thank the gentleman from California (Chairman Thomas) for that clarification as well. I hardly think that it is inflammatory rhetoric, by the way, which sometimes we are not as good at as some people on the other side when it comes to addressing some of these issues, but I hardly think it is inflammatory rhetoric to stand in the well of this House and to ask the following question: How did a $4.5 billion problem become a $130 billion solution? That is really the point of much of the debate that is going to follow.

Mr. Speaker, I yield the balance of my time to the gentleman from Michigan (Mr. Levin), ranking member of the Trade Subcommittee of the Committee on Ways and Means, and I ask unanimous consent that he be allowed to control that time.

The SPEAKER pro tempore. Is there objection to the request of the gentleman from Massachusetts?

There was no objection.

BREAK IN TRANSCRIPT