National Defense Authorization Act for Fiscal Year 2014
Floor Speech
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Mr. SCHUMER. Mr. President, I thank my colleague from Michigan for her heartfelt words. I couldn't agree with her more. I thank the majority leader and my colleagues from Ohio and New Jersey as well for recognizing the importance of this package of tax relief.
The Tax Extenders Act of 2013 would extend tax relief which business and middle-class families in my home State of New York and across the country depend on. They are noncontroversial. They have received bipartisan support in the past. And because of the great uncertainty over our economy, doing this quickly and not saying we will do it 3 months after they expire makes a great deal of sense. I know my colleagues on the other side of the aisle have objected to all of these. I hope they will reconsider, because for the good of the economy--which is just beginning to pick up a little bit--we need to do these extenders.
I am going to talk about four of them, but one is particularly critical because it doesn't work very well retroactively. The others do. That is why I urge my colleagues to reconsider and will ask for a separate UC before we leave here on this particular one because it has particular need right now, and that is the mass transit commuter tax benefit.
There are about 700,000 commuters in the New York metropolitan area, including from the Presiding Officer's home State, who take advantage of this current incentive. The commuter benefit currently covers up to $245 a month from a person's income to pay for their mass transit commute to and from work. So whether you take the subway, bus, train, or drive to work and park, the benefit provides significant savings.
The tradition, unfortunately, in this Senate and in this Congress was to treat mass transit as a second-class citizen, because the benefit traditionally had been significantly greater for those who drive and park than for those who take mass transit, and we have had serious problems.
First, until we changed it a few years back, the mass transit was half the benefit of parking and driving. Second, it was not indexed for inflation the way the parking benefit was. So if we let this provision expire, the mass transit benefit will revert to $130 a month, while those who drive and park will actually get an increase to $250 for 2014 because of inflation.
We cannot let these transit benefits for mass transit users get left behind. To do them is a win-win. It is a win, of course, for those who use mass transit--and we have so many in the New York area. It is also a win for drivers, because every person who is encouraged to use mass transit by this benefit will actually take a car off the road, remove some degree of congestion, and allow drivers to move more quickly. And, of course, it is a win for our environment, because mass transit is a far more effective way environmentally of moving things along.
So when the leader a few minutes ago requested the Senate pass the tax extenders act, I was disappointed it was blocked, and particularly disappointed that this benefit was blocked, because while we can do it retroactively, it is harder to implement than the others that are done retroactively, because most of them take effect when you pay your taxes in 2015, whereas this one takes effect month by month.
The proposal we are asking for is exactly the same as was included in the bipartisan negotiated tax extenders package considered by the Senate Finance Committee and passed by the Senate on a bipartisan basis for one additional year, through 2014. I hope we will consider it now, not retroactively later next year as we did last year. Employers need to plan whether they will provide the benefit. Commuters need to elect to take it. And as I said, it is done on a monthly basis. You can do it retroactively, but it is much harder.
I know we have lots of problems here between the parties, but we should not hold the mass transit commuters of America hostage. We should not make them second-class citizens. Their deduction is every bit as important, every bit as justifiable, as for those who drive and park. I hope my colleagues, before we adjourn this year for the Christmas holiday, would in the Christmas spirit extend this benefit.
Now I wish to talk about a few other credits which are also part of the package being blocked right now. One is the new market tax credit. Individuals and businesses across my State are counting on the new market tax credit. The new market credit program was created to stimulate private-sector investment in economically distressed communities. It has done exactly that. I have seen it work in Buffalo, Rochester, Syracuse, and the capital district in New York.
Over the first decade of the program, $20 billion in new market tax credit investment leveraged an additional $25 billion in capital from other sources to finance economic development in communities where financing might be difficult to come by.
The program is a proven job creator. Between 2003 and 2010, new market tax credit investments created over 500,000 jobs across the country. Again, it has always had bipartisan support. It is sort of a no-brainer. It should be continued.
I will now talk about the short line rail tax credit. It is a little like the new market tax credit in that it is a tax credit which encourages private investment and jobs.
We have short lines all across the country. They connect the main trunk lines on rail to the more isolated regions. But in those somewhat isolated regions are factories. We have opportunities for tourism, say, in the Adirondacks, and the short line rail tax credit helps maintain and renovate the short line rail system.
Rail is very prosperous these days. The big carriers can maintain the trunk lines very well. But it is harder to maintain the short line, and Congress in its wisdom decided to give a tax break for those. If you are unfamiliar, the short line rails are a web of tracks all over the country connecting local businesses and manufacturers to interstate rail systems. The unheralded links that bring raw materials into our businesses and connect them with other cities and supply chains must be maintained. Over 50 percent of rail track in my home State is short line rails. Approximately 550 short line railroads provide 50,000 miles of track in the country, and the credit is extremely useful in my State, financing hundreds of thousands of dollars of rail infrastructure investment annually. It is used all across the country. We have 42 bipartisan cosponsors in the Senate for this legislation. So I hope we will consider this one and pass it.
Finally, the IRA rollover. The IRA rollover provision is also set to expire, affecting so many retirees. They need to know whether it will be extended in order to plan their charitable giving in the coming year. If it isn't extended, many taxpayers over 70 1/2 years of age will be surprised with a tax bill when they transfer funds from their IRA to their favorite charity in 2014. So this is important and, again, is one that truly is in the Christmas spirit.
In conclusion, businesses, families, retirees will pay the price if all of these valuable tax relief provisions, and many of the others mentioned by Senator Reid, are not extended by the end of the year. I would hope, in the same spirit of comity that we passed the budget, we could come together and pass these extenders. They have always had bipartisan support. They are, after all, tax reductions. I know my colleagues on the other side of the aisle believe in tax reductions. To delay them and do them retroactively would be doing a disservice to our economy and to the millions of Americans who are working or seeking work in our country today.
I yield the floor.
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Mr. SCHUMER. Mr. President, I want to echo the outstanding words of my colleagues from both Florida and Louisiana. They echo the views of many. Everyone says the public is exasperated with the Congress. Our approval ratings are low. They are. Why? It is simply because when huge problems occur that affect ordinary people, we seem paralyzed. What is happening with flood insurance embodies what I am talking about. Average homeowners who purchased flood insurance through the years for $800, $1,000, are now being hit with bills of $4,000, $5,000, $6,000. If you are rich, that is nothing. But the vast majority of people who have flood insurance, whether they live on the oceans in my State or the State of the Senator from Florida or on the gulf of the State of the Senator from Louisiana or on the bodies of water such as the Mississippi or Missouri Rivers, are not wealthy people. You tell them all of a sudden out of the clear blue they have to pay $4,000, $5,000, $6,000 for flood insurance, they do not know what to do. It is a crisis for them. They say to us: Congress, fix this.
This is what we are supposed to do. So in their wisdom, the Senator from New Jersey, the Senator from Louisiana, the Senator from Georgia, the Senator from Florida, myself, many others have come up with a proposal that says: We know flood insurance is broken, but we do not want to see it broken on the backs of average homeowners. We have a plan that will delay these increases until 2017, while FEMA studies affordability, and while Congress reexamines this issue.
There was an affordability study in Biggert-Waters. Somehow FEMA ignored it. We are not letting that happen. So that is why we have to act here. There are three types of people who are in danger. The first are those who know or are about to know they are going to be hit. They have flood insurance already and their costs are going to go way up. The vast majority are middle-class people.
The second are those who will be told: Your insurance will not go up, but when you sell your home it is going to go way up. Any bureaucrat who tells us, well, that does not affect the average person--it affects the value of their home immediately. But it also says they cannot sell their home. In my area, if flood insurance is going to be $8,000 or $10,000 or even $20,000 a year, who is going to buy the home, except at a greatly reduced value?
But, my colleagues, there is a third group. They do not know who they are. FEMA is changing flood maps throughout the country. They will get to your State, unless maybe Utah or a State such as that does not have any flood insurance. I do not know. But the vast majority of our States that either bound the Great Lakes, the Pacific Ocean, the Atlantic Ocean, the gulf, the great rivers--the Mississippi, the Missouri, the Ohio, the Platte--are all going to be affected.
A year from now your constituents are going to come to you and say: Stop this. This will affect the overwhelming majority of States and Senators, even if they do not know it now. So our solution is not an ideological solution, it is not a solution that picks one side or the other. It says: Put a moratorium on this until we can figure it out in the right way that does not put the burden of flood insurance solely on the backs of people who cannot afford it--average folks.
In my State--my good friend from Florida mentioned it--we have people who have struggled to fix their homes from Sandy, spending tens, even hundreds of thousands of dollars. Then all of a sudden they are hit with a huge flood insurance bill. They are already in debt.
That is not fair. Just when they move back finally into their homes, FEMA comes in and tells them in a year or two they cannot afford to live in those homes they fixed. That is intolerable.
The bottom line is simple. We have a good piece of legislation. We would hope we could pass it by unanimous consent, as my colleagues from Florida and Louisiana said, as a nice Christmas--not present, because it is not a present. These are people who deserve to have this. But it is a nice Christmas thought. But if not, we will come back in January. That is my expectation. That is what the leader has told us. We are willing to go through a cloture vote and bring this legislation to the floor. We expect and hope that we will get the same kind of bipartisan support that has helped us put this bill together with Senators from every part of the country.
I would say to homeowners: It is my hope and prayer and indeed expectation, although around here expectations sometimes are not met, that we will have this bill on the floor and then passed so that homeowners, millions of homeowners across America, can breathe a sign of relief; they can stay in their homes, and flood insurance will be amended in the right way.
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Mr. SCHUMER. My understanding is just that, that in the--even possibly in the first week when we get back, that the leader, having rule XIV'd it, which means he can bring it to the floor right away, can put it on the floor and, of course, then people can demand--those opposed--that we invoke cloture so we can proceed to the bill and then vote on the bill. But if we have 60 votes, we will be able to meet that cloture barrier. So it is my understanding the plan is to actually do it as soon in January as the first week we get back, which I believe is January 6. If we cannot do it then, we will be pushing very hard to do it shortly thereafter.
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Mr. SCHUMER. I thank my colleague for that question. Exactly. This is affecting so many people in so many parts of the country. It does not affect just Democrats or Republicans, conservatives or moderates, Independents or liberals. The support is building daily. Senators and Congress Members are getting calls from their constituents pleading with them to do something.
So it is my view, it is my understanding that the House is undertaking a very similar piece of legislation. I would expect it would pass the House, where they do not even need the 60-vote majority. I know in my delegation it has bipartisan support. As I understand it, in most delegations it has bipartisan support.
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