Bring Jobs Home Act--Motion to Proceed

Floor Speech

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Mr. DURBIN. Madam President, there is an old adage that sunlight is the best disinfectant. The reason it is an old adage is it is true. That is why I introduced the Financial Disclosure to Reduce Tax Haven Abuse Act of 2012. I introduced this months ago. It would require candidates for Federal office and certain Federal employees to disclose any financial interests they or their spouses have in an offshore tax haven. If the bill becomes law, individuals who file financial disclosure reports would be required to list the identity, category of value, and location of any financial interest in a jurisdiction considered to be a tax haven by the Secretary of the Treasury. The Secretary would be required to provide a list of those countries to filers and to consider for its inclusion on the list any jurisdiction that has been publicly identified by the Internal Revenue Service as a secrecy jurisdiction.

The American people might be surprised to know that we do not already ask whether candidates and Members of Congress are sheltering their money offshore to avoid paying taxes in America. That is because under current law those individuals--that would be candidates and Members of Congress--are not required to account for where their financial interests are held. Candidates for Federal office, including President, do not have to explicitly disclose their holdings in tax havens. The bill, which I introduced months ago with Senator Franken, would change that.

Today it seems that we have a tax system with two sets of rules: one for those who are very wealthy and one for the rest of the people in America. The wealthiest Americans are able to take advantage of certain breaks, loopholes, to pay lower tax rates than working families. We should not have a political system where a candidate can claim to champion working people while that same person is secretly betting against America through tax avoidance and tax haven abuse.

Without this bill, the American people will not know whether a candidate has taken advantage of foreign tax havens to avoid paying his or her fair share. Offshore tax havens and other similar loopholes cost taxpayers in America $100 billion a year which otherwise would be paid by these Americans who are using these offshore tax havens.

Senator Carl Levin of Michigan may be joining me shortly. I hope he can. He has held an extensive set of investigative hearings in the Permanent Committee on Investigations on this particular issue. No one has explored it more than Senator Levin of Michigan. I am hoping he can join me and share his findings.

The money that is invested in these offshore tax havens is money that could be invested in America. It could be invested in America's schools, America's roads, America's Medical research, America's jobs, and it could be paying down America's deficit. Instead, that money is headed to Swiss bank accounts and holding companies in Bermuda and the Cayman Islands.

Senator Levin and Senator Conrad, who will be joining me, have both done extraordinary work to shine light on these practices and what they mean to the American economy. Those two Senators, Levin and Conrad, successfully included a provision in the Senate Transportation bill that will give the Treasury Department greater tools to crack down on offshore tax haven abuse. Unfortunately, that provision was not included in the conference report, and so we have to continue to fight to put an end to offshore tax haven abuse.

The American people are rightly concerned that wealthy and well-connected Americans are skirting our laws to avoid paying their taxes. They deserve to know that the people who hope to represent them in Washington are not cheating the system.

Nothing in my bill impinges on any individual's right to hold financial interests anywhere in the world. If there is a legitimate reason for a candidate or a Member of Congress or any other individual who files a financial disclosure to hold their money, let's say, in an account in the Cayman Islands, they should not have any problem explaining that to the voters. But any individual who has or wants to have the public trust should be honest about the practices they have engaged in that, in fact, cost American taxpayers, whom they may wish to represent, literally billions of dollars every single year.

This is an important step we must take to restore the public trust. I would hope that this issue, like the one we just finished debating in the previous several days, is one most Americans will understand. It is one that should be bipartisan.

I happen to have had the good fortune of coming into politics being schooled by two people who were my mentors and inspired me, Senator Paul Douglas of Illinois and Senator Paul Simon, both of whom enjoyed positive reputations after the end of their public career for being honest people. One of the things Senator Douglas started doing--and Senator Simon followed--was to make public disclosure of income and net worth. They did it long before it was the law and always did it to a greater degree and greater detail than was required by law.

I have followed that practice, and sometimes it has been hard. I can remember coming out of law school and going to work for then-Lieutenant Governor Paul Simon in Springfield, IL. There I was, deep in student loan debt with a beat-up old car, a wife and two babies, filing an income and net worth disclosure. My first filing, because of my student loan debt, showed me with a negative net worth. I took a little bit of ribbing as a result of that. But I continued to do it every single year I served on a public staff and every year I was a candidate or elected to office.

So there is a rich trove for anyone who is summarily bothered and wants to spend some time, if they would like to read what happens to a public official over the span of a lifetime, when they are in this business, in terms of their own personal wealth. There have been moments when the detail I have provided in these disclosures has been an invitation to the press; it makes their life easier to take a look at things that I and my family do. I can recall when, regarding my daughter Jennifer, I got a question from a reporter about what was her financial interest in Taco Bell. It turned out her financial interest was as a person working at the Springfield Taco Bell making tacos. That was it. But because we go into detail, those things are open for investigation and provide some clarity about my financial circumstance.

Paul Simon used to always say: When my career comes to an end, I want people to look at my record and say I never understood why he voted this way or that way, but he said I never want them to question my honesty in making a political decision. That has been my goal as well.

What I am suggesting is to expand the disclosure of Members of Congress and candidates for Federal office, such as President of the United States, to include foreign tax havens. I think it is an important element that people who are running for office and serving in office stand and basically explain why they felt it was a better idea to put money, for instance, in a Swiss bank account.

I have made a point of asking people--Members of Congress and business leaders--why would anybody have a Swiss bank account? I asked Warren Buffet, who is one of the wealthiest men in America. I said: You have been a successful businessman for decades. Why would you have a Swiss bank account? He said: I don't know. I have never had one. We have good banks in America, so why would I go there?

There are two reasons: One is to conceal their wealth and how they are changing, moving the money around; and second, if they happen to believe the Swiss franc is a stronger currency, a better bet than the U.S. dollar. That is it. There are no other reasons for an American to have a Swiss bank account. Yet people do. I think they should disclose it, and then they should stand ready to explain which of those two explanations stands behind their decision.

Senator Carl Levin has come to the floor. At this point, I will yield to him because he has done extensive investigation on the Senate Permanent Subcommittee on Investigations about these foreign tax havens. He and Senator Conrad have probably told us more about dollars lost and tax collected and what is happening in some of these tax havens and shelters around the world. I yield to Senator Levin.

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Mr. DURBIN. Mr. President, for the last hour my friends on the Republican side of the aisle have had the floor, and they have presented their point of view. I would like to--and I am joined by the Senator from Vermont--I would like to spend a few moments, if I can, reflecting on what they said and perhaps making some observations that disagree with some of their conclusions.

There are some points on which we agree. The deficit is a serious national problem. Right now we are borrowing 40 cents for every dollar we spend. Whether we are spending that dollar on education, student loans, food stamps, missiles, or the paychecks for our soldiers, we borrow 40 cents for every dollar we spend. No company, no family could survive borrowing 40 percent of everything they spend. That is a fact. So we need to be serious about reducing this deficit.

We are confronted, however, with a reality in terms of our economy. Since 2008 we have had a weak economy. We have had a recession that has killed off a lot of jobs. We are coming back but slowly. If we are not careful in the way we reduce the deficit, we can make it worse. I think everybody agrees with that premise on both sides of the aisle.

So we have a massive deficit, and we have a weak economy. We have to be careful how we reduce spending and raise revenue in a way that doesn't kill off the recovery. Ultimately, we cannot have a strong American economy unless we start putting people back to work in larger numbers. I think both sides will agree on that.

Here is an area where we start to disagree. How do we achieve this? Several years ago the majority leader, Senator Reid, asked me to serve on the Simpson-Bowles Commission. I sat for over a year listening to testimony about ways to reduce the deficit. At the end of the day I came to a conclusion that turned out to be bipartisan, and 11 out of 18 of the members of the Commission voted for it--Democrats, Republicans, public members.

It basically said this: Any honest approach to reducing our deficit puts everything on the table--everything. It puts spending cuts on the table for sure, but it also puts on the table revenue. And entitlements.

I can tell you, there is a great deal of pain in addressing some of these issues.

On the Republican side of the aisle when you say the word ``revenue''--I wouldn't dare use the word ``taxes''--but when you say the word ``revenue'' they race for the door.

On our side of the aisle, when you mention the entitlements--my colleague from Vermont and I and many others share a real concern about the future of programs such as Social Security, Medicare, and Medicaid, the basic insurance policy for senior citizens of America and the safety net for the poor and disabled. So you can understand this becomes extremely difficult in terms of cutting spending, raising revenue, reducing the deficit, and not killing off an economic recovery.

What happened last year? Last year we faced what is called the debt ceiling. The debt ceiling is a vague term that not many people understand. Let me try to put it in simple words, if I can.

The debt ceiling is America's mortgage. America's mortgage is growing in size, unlike many home mortgages which go down. America's mortgage is growing because our national debt is growing. Periodically, we have to borrow more money to cover what we have spent. So Members of the Senate on both sides of the aisle who vote for the spending--whether it is for a war or for education or health care--ultimately know the day will come when we have to borrow more money to cover the 40 percent of what that expenditure is that we are not raising in revenue.

The debt ceiling came up for us to consider last year, and for the first time--the first time--the Republicans in the House and Senate said: Let's default on the national debt.

What would happen if you started missing mortgage payments at home? After a month or two somebody might give you a phone call. Then on the third month you might get a letter from a lawyer. On the fourth month you might be in foreclosure proceedings. In other words, you were not a trustworthy borrower and your credit rating is being destroyed by your failure to pay your bills.

The same thing would happen to America if we did not pass the debt ceiling, if we did not extend our mortgage, if we did not make our timely payments on our debt. But that was what the Republicans threatened. So in order to get through this crisis, the possibility that our entire economy would shut down over this default on our national debt, we came up with a plan. Here is what the plan was.

We would create a bipartisan House and Senate supercommittee. We said to that supercommittee: Come up with $1.5 trillion in deficit reductions over the next 10 years--$1.5 trillion in deficit reduction. We did not say to the committee how to do it, but we told them if they fail to come up with this savings of $1.5 trillion over the next 10 years, there will be automatic spending cuts--automatic spending cuts called sequestration. We said specifically what they would be: $500 billion from defense spending, $500 billion from nondefense spending. That was the alternative. Reach an agreement, cut the deficit, or face this automatic penalty.

What we have heard on the floor of the Senate today are the protests of a half dozen or more Republican Senators to what we are now facing. You see, the supercommittee could not reach an agreement. There was no agreement because basically the Republican side refused to even consider raising revenue--raising taxes on anybody over the next 10 years. So the alternatives were to continue to cut spending and/or cut Medicaid and Medicare.

It broke down. So the automatic spending cuts, sequestration is now looming. January 2 they are looming as a possibility. The protests on the floor today from Republican Senators are over the possibility of a $500 billion cut in defense spending over the next 9 years, $55 billion a year--not an inconsequential cut by any means.

Here is what is interesting. I asked for the transcript from the Republican Senators in describing the defense sequestration cut, and every one of them came to the floor to condemn it. The words they used in describing it are ``predictable,'' ``devastating,'' ``arbitrary,'' ``irresponsible''--one after the other. That is how they described this.

Then I asked my staff to please get me a copy of the rollcall of Senators who voted for this option. Of the Senators--Republican Senators--who spoke on the Senate floor this afternoon protesting the defense sequestration as devastating, irresponsible, and arbitrary, the following Republican Senators voted for it: Senator McConnell of Kentucky, Senator McCain of Arizona, Senator Thune of South Dakota, and Senator Cornyn of Texas. In fact, the entire Republican leadership team voted for what they are now branding as devastating, arbitrary, and irresponsible. So it is a little hard for me to understand how on this date, August 2, 2011, in the early afternoon, they could vote for this and now come to the floor and condemn it.

Here is the reality. The reality is we need to deal with our deficit in a responsible fashion. We need to keep this economy moving forward. In order to deal with the deficit in a responsible fashion, I still believe the Bowles-Simpson approach is the right approach--put everything on the table and work through it in a responsible way. I thought it was right then; I still believe it is right.

I am troubled, though, by this concept about defense spending. Let me confess my own personal family feelings. An hour ago my nephew Michael Cacace, who is in the 10th Mountain Division out of Fort Totten, NY, came to visit me upstairs. He was a sight for sore eyes. I hadn't seen him in a long time. A little over a year ago he was a doorman letting people into the gallery upstairs, and then he enlisted in the U.S. Army and spent a year in Afghanistan. I thought about him every single day. We sent him care packages and got notes back from him and occasional e-mails, and in he walks to my office today safe and sound. I couldn't have been happier to see him. In just a few weeks he is off to Korea. He has 2 more years in his commitment to the Army.

I thought about him--and think about him and so many others like him--every time the issue of America and the military came up. While Michael and so many others are risking their lives for our country, we can do nothing less than to keep them safe--as Michael was able to do. I am committed to that personally, politically.

To suggest that any of us, in either party, would jeopardize the defense and security of America for political reasons I do not accept. Everyone here is committed to the basic premise of keeping America safe and standing behind our men and women in uniform. I also want to be realistic about the defense budget. It is a big budget.

The last time the Federal budget was in balance was about 10 years ago, and we hit the sweet spot when it came to taxes and revenue on one side and spending on the other. The sweet spot was 19.5 percent of our gross domestic product. That is the sum total and value of all the goods and services produced in America. So we raised 19.5 percent of our gross domestic product on taxes and that is how much we spent. We were in balance 11 years ago.

What has happened since? Senator Dan Inouye, chairman of the Senate Appropriations Committee, told us. Since the budget was last in balance, domestic discretionary spending for things such as education, health care, correction systems, highways, and all the nondefense items in our budget has not grown at all. It flatlined, zero growth. When it came to the entitlement programs, such as Medicaid, Medicare, veterans programs, and the like, they have gone up about 30 percent in costs since the budget was last in balance.

What about the defense budget? What has happened to the defense budget since we had a balanced budget? It has gone up 73 percent. Zero on domestic discretionary, 30 percent on entitlements, 64 percent on the military side. So what happened in the last 10 years? There were two wars we didn't pay for, a dramatic buildup in the military, and the reality is all of it was added to the debt.

When we had the Simpson-Bowles Commission, we brought in experts from the Department of Defense and asked them a lot of questions about our spending over there. There were some things there that were troubling. The F-35, which is supposed to be the fighter of the future, ends up dramatically overspent. There were cost overruns in every direction. You may have heard a lot about the Solyndra energy project. The cost overrides on the F-35
project are more than 10 times the money we lost on the Solyndra energy project. There has been a dramatic overrun on some of these major weapons systems.

We then asked the Department of Defense: How many contractors do you have working for you, not including civilian employees, in the Department of Defense or uniformed employees? Their answer to us was very candid: We don't know. We really don't. We hire contractors, and they hire people. We have no idea how many people work for us. It could be a million people, it could be 3 million people. It raises a question in my mind: Can we be safe as a country and still save some money at the Department of Defense? I think we can.

What I hear from the Republican side of the aisle is: Keep your hands off the Department of Defense. Well, I don't want to cut them and jeopardize our security or endanger our servicemen, but I do believe money can be saved there. How did we find ourselves in this position where we are even considering these cuts? Because the Republicans have steadfastly refused to consider revenue.

Before you took the chair, Madam President, our colleague and friend Senator Merkley of Oregon sent me a note to ask Senator Sessions of Alabama a question. I want to read it. He said: Ask Senator Sessions the following: What is more important, taking care of our national security or giving bonus tax breaks of over $100,000 a person for the richest 2 percent of Americans? What the President has proposed is that we cut the tax breaks off at $250,000 of income, and it means the top 2 percent of Americans would pay more. They would pay the rate they used to pay under President Clinton, and the Republicans have said: No way. President Obama's tax proposal would save us $800 billion. The Department of Defense cut over 9 years is $500 billion. So the Republicans here, almost to a person, are basically arguing that rather than raise taxes on the richest 2 percent in America at all, we would run the risk of jeopardizing our national security. That is a false choice. We can have a strong national defense and we must, but we can also have a rational approach to reducing our debt.

Our military is the best in the world, the biggest in the world, and larger than most other nations--the next 10 combined--and it is dramatically larger than any potential enemy of the United States. It has kept us safe as a Nation, and we want it to continue to do so. The men and women who serve us in the military are the best, but we can save money in the Department of Defense. We can do it and reduce the deficit.

What we need from the Republican side of the aisle is the willingness we found in the Simpson-Bowles Commission of a few Republicans to step up and say: Yes, we need to put everything on the table. Let's avoid deep cuts either on the domestic side or the defense side. Let's basically come up with an approach that is fair across the board, and we can do it. Let's spare those who are the most vulnerable in America, the homeless and helpless. For goodness sake, we all care for them. We should all care for America's needy. Those programs have to be protected.

When the Senator from Alabama comes to the floor and decries the fact that more people are using food stamps, I say to my friend from Vermont, who has probably seen the same thing I have: Meet these families on food stamps.

Meet them when you go to the soup kitchens and when you go to the food pantries. Many of them are working families. They can't make it on what they are being paid. They are struggling from paycheck to paycheck. At the end of the month, they are looking for something to put on the table. Sadly, families who have an income still qualify for food stamps because their income is too small.

The Senator from Alabama said the food stamp costs have gone up way too high. True, they are high, but they reflect the state of the economy and the troubling challenges that face working families and poor families across America. He also made a point of saying the entitlement payments are going up dramatically. Why? Because today in America 10,000 of our fellow citizens reached the age of 65. Yesterday was the same thing, tomorrow is the same thing, and for the next 18 years it will be the same thing: The boomers have arrived. And when they arrive at age 65, they look around and say: Well, we paid in all of our lives for Social Security and Medicare. Aren't we qualified? Aren't we entitled to our benefits?

Is the Senator from Alabama suggesting we walk away from those commitments? I don't think that is fair. We can make these better programs, we can make them more efficient, but we certainly don't want to give up on our commitment to Medicare, for example, as the Paul Ryan budget did. I think that is a serious mistake.

To my friends on the Republican side of the aisle, I think the message is clear: You voted for this, so don't keep coming to the Senate floor and criticizing it. They knew what they were voting for. It said if you failed to reach a bipartisan agreement on the supercommittee, this is what we would face.

Secondly, we can solve this problem still. We can avoid sequestration with a bipartisan approach that considers all of the key elements to bring deficit reduction in a sensible and thoughtful way, that doesn't kill our economic recovery.

Third, I will never question any colleague's commitment to the safety and security of this Nation, and I hope our friends on the other side won't either. Everyone is committed to that, and we are committed to our men and women in uniform. Now let's do them proud and make America's economy stronger and make America stronger. Let's invest in what we know will make us a strong Nation. In addition to our military, let's invest in our schools and education, research and innovation, clean energy projects that offer an opportunity for 21st century leadership for America, the infrastructure which serves our country from one side to the other and keeps products moving and keeps America competitive. We can make the investments in these key areas and not jeopardize our national defense. We can do that and reduce the deficit.

I yield to my colleague from Vermont, Senator Sanders.

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