Hire More Heroes Act of 2013 -- Motion to Proceed -- Continued

Floor Speech

Mr. WYDEN. Mr. President, the Senate is now debating the EXPIRE Act.

This is bipartisan legislation. I again thank the distinguished Senator from Utah Mr. Hatch. He has been so constructive in trying to build a bipartisan piece of legislation, a bill that came out of the Senate Finance Committee several weeks ago with very substantial bipartisan support.

It really is designed to deal with a number of tax provisions that are temporary in nature and it, in effect, extends those temporary tax provisions until the end of 2015. In consultation with the distinguished Senator from Utah, I thought it was important to call this bill the EXPIRE Act. It was important because this legislation actually does expire after 2 years.

It, in effect, says--and I said--on my watch as chair of the Senate Finance Committee there will not be another extenders bill. It is not going to happen on my watch. This is it.

In effect, by extending these important provisions now for one last time, the Congress can give itself and the Finance Committee--on a bipartisan basis--the space that is needed to take on the challenge of comprehensive tax reform.

It is not going to be easy, but it is absolutely imperative for the future of the American economy. I know it can be done. I know we can get Senators of both political parties together and build a bipartisan tax reform plan. I know this because I have--and other Senators do as well--a fair amount of sweat equity in this cause.

Our former colleague Senator Gregg of New Hampshire sat next to me on a sofa for more than 2 years to build what still is the only bipartisan Senate comprehensive tax reform bill in the last 30 years. With Senator Gregg's retirement, to their credit, Senator Coats and Senator Begich pitched in.

So we know that there has already been a lot of bipartisan work on comprehensive tax reform and, suffice it to say, again building on this bipartisan lineage. My colleague from Utah, the senior Senator Mr. Hatch, and Ambassador Baucus and Chairman Camp in the other body, have also put in years of work and laid a strong foundation for tax reform.

So once the Senate passes the EXPIRE Act, the job of the Finance Committee will be to focus in a kind of laser-like fashion on a bipartisan plan that is going to give all Americans the opportunity to get ahead.

I want to emphasize that. If I were to sum up my philosophy about tax reform, I want everybody in America to have the opportunity to get ahead--all our small businesses, all our Americans who are trying to deal with an extraordinarily challenging economy.

Frankly, that would be my first choice, to be out here working on comprehensive tax reform. But it was clear to me, with Chairman Baucus going to China as our Ambassador, that it wasn't going to be possible in a few short months to pass comprehensive tax reform.

I made the judgment--I will share it with the Senate again today, and I brought it up yesterday--that the failure to act on these temporary provisions, which are what the EXPIRE Act is all about, would cause further unnecessary, really gratuitous harm to American workers, to our small businesses, to our ability to compete in tough global markets. The EXPIRE Act is all about preventing a tax increase. We would clearly have a tax increase absent the EXPIRE Act, and it would be in areas of the economy that would be particularly damaging.

For example, it would really be a tax on innovation because right at the center of these temporary provisions--provisions that under this bill will last only until the end of 2015, and then they will expire--they are not just meant to expire, they actually expire at the end of 2015. But if we don't take action to ensure that innovation has an opportunity to flourish, what will happen is we will, in effect, have a tax on those very jobs that are most important for our middle class--to grow wages, to encourage the kind of economic multiplier that is so good for our economy. So we ought to pass the EXPIRE Act so as not to have a tax increase on innovation.

We ought to pass the EXPIRE Act to not make it tougher for a company to hire a veteran, which I think is also hugely important. I will talk about it in a couple of minutes in further detail.

Another one that I know a lot of Senators are going to hear about this week is what would happen--absent this bill--to millions of Americans who are underwater on their mortgages. These are hardworking middle Americans who now are deeply underwater. Their lenders are willing to work out arrangements to lower their debt in a number of instances. But absent this bill, instead of getting their heads above water, what we will see is a tax increase on those homeowners that really drives them back down and increasingly sinking under all of this debt. Absent this bill, middle class people would be paying a tax on phantom income. I mean, they are not really getting any net income. When their lender works with them to relieve their debt, they surely shouldn't have to pay a hefty new tax. This bill does that.

This is National Small Business Week, and this legislation in particular goes to great lengths to make it attractive for small businesses and particularly for small businesses that would like to hire new workers.

Today we know there are nearly 10 million Americans out of work, and they are looking for jobs. The unemployment rate in my home State is 6.9 percent, which is well above the national average.

I think we would all agree that our highest priority should be to help people find jobs, and the EXPIRE Act is an opportunity to do that, particularly with respect to what it does for our small businesses.

Let me outline a few of those provisions--again, temporary in nature--so that we can do even more on a permanent basis for growing our economy and making it attractive for our small businesses to hire new workers.

In the EXPIRE Act is the Work Opportunity Tax Credit, which encourages employers to recruit, hire, and retain individuals who often have had trouble finding jobs. The EXPIRE Act extends and expands this legislation in a few key ways so that the credit can help small businesses hire an even greater number of struggling Americans.

First, it would do more to help the long-term unemployed find work. These are those hard-hit Americans who are deeply at risk of falling between the cracks.

Second, the new approach will preserve the credit for veterans returning from overseas whom we have seen packing--literally packing--job fairs in cities across the country in search of work. Picture that. The veterans who have worn the uniform of the United States and served all of us so admirably come back and can't find work, and they are coming out in throngs to these job fairs around the country. This bill will help them.

Small businesses that employee military reservists also currently get a wage credit when their employees get called to Active Duty. Not only will the EXPIRE Act increase that credit, it will open the credit to employers of all sizes to improve job security for even more reservists.

I mentioned the research and development credit, which of course encourages innovation in firms of all sizes. For many of them, having a strong research and development credit is simply imperative, but the reality is the current credit isn't doing all it might do to help small businesses, and complicated rules that are buried in the Tax Code may erase any benefits they see. The EXPIRE Act will change that in several key ways. To start, it will expand the pool of small businesses that benefit. It will also allow startups to use the research and development credit to help pay their employees' salaries, and it will build a bridge to tax reform so Congress can do more work to improve the credit further and make it permanent.

The research and development credit is critically important to the future of innovation in our country. Apropos again of the bipartisan theme we have taken in the Finance Committee, with the support of the ranking minority member, the distinguished Senator from Utah, there has been some very good work done by the Senator from Kansas, Mr. Roberts, and Senator Schumer. I wish to commend them for their efforts to spotlight the need to do more to reconfigure the research and development credit to help small businesses.

The reality of course is what is the common thread between so many of our most successful companies--Intel and Apple, Amazon and Microsoft, and a host of others. They all started as innovative small businesses with their eyes trained on developing the future. The EXPIRE Act is a step toward a stronger, permanent research and development credit that will help even more entrepreneurs in our country grow their best ideas into successful businesses.

In the meantime, we all know small businesses in my home State of Oregon and across the country still suffer from the recession. They feel the effects of sluggish growth pretty much like everyone else. In a stronger economy, healthy small businesses might have decided to turn higher profits into investments aimed at expansion. The research and development credit--particularly the improved research and development credit--is going to help a lot of Americans, but we do want to place a special focus on our small businesses because helping them to make capital investments in new machinery, vehicles or computers is absolutely critical.

Again, the EXPIRE Act steps in to begin to address that effort in a thoughtful manner. The legislation allows small businesses to expense up to $500,000 of equipment costs right away, and it indexes that dollar amount to inflation so it grows in the future. It is what I think a number of Members know as section 179 expensing. If the Congress were to fail to pass the EXPIRE Act, that limit would fall from one-half million dollars to just $25,000.

The legislation also continues to simplify recordkeeping--all of the redtape we have heard small businesses, concerned about section 179, talk with us about. The legislation continues to simplify those procedures so small businesses can focus on their own growth instead of redtape.

A lot of small businesses have property that has lost value over time. Those small businesses can claim a deduction to compensate for it. The EXPIRE Act extends a key provision that allows small businesses to expense up to half the cost of that property upfront in the first year rather than spreading it out over a longer period.

Both of these tax incentives, section 179 expensing and bonus depreciation, are powerful tools to encourage investment. They are lifelines for small businesses looking to grow, and the EXPIRE Act protects them also.

Next, I would like to touch on the energy sector, which I know the distinguished presiding officer has a great interest in. Obviously, small energy businesses play a major role in the future of the American economy, building a lower carbon future, and the EXPIRE Act is going to protect the incentives those businesses rely on to grow.

I will start briefly with the production tax credit. The wind energy industry, which benefits from the production tax credit, supports more than 50,000 jobs. Many wind companies are small, and they require lots of capital and planning to bring them to market. Their story illustrates what is important to end the cycle of stop-and-go tax policies that make our Tax Code, again, needlessly--as some would say, almost insanely--complicated and uncertain. Growth in wind energy has leveled off over the last 2 years, largely because of the expiration and late renewal of provisions such as the production tax credit.

The EXPIRE Act also extends provisions to encourage the provision of other alternative renewable fuels--fuels such as biodiesel, cellulosic ethanol, liquefied natural gas, and liquefied hydrogen. There are small businesses across the country that stand to gain if the EXPIRE Act is passed, and there are incentives to create jobs in those areas, but our country is going to lose out if the Senate fails to act.

Our small businesses ought to be able to plan for the future, to chart a course, in effect, from youth through maturity. Stop-and-go tax policies only make that more difficult. Even when well-intentioned, productive tax incentives go into the code, allowing them to expire over and over undermines their effectiveness and the ability of our businesses to have the certainty needed to grow for the long term. Our taxpayers, small businesses included--and we recognize them especially this week--deserve predictability and certainty.

The EXPIRE Act is called the EXPIRE Act for a reason. It is going to end after 2 years. I have heard my colleagues on the other side of the aisle over the last day make a number of very thoughtful comments about the need for comprehensive tax reform, and I wish to tell my colleagues, particularly on the other side of the aisle, that with respect to the need for comprehensive tax reform, they pretty much have me at hello. We are going to get this extender bill passed, and then it is my intent to work very closely with Senator Hatch, the distinguished ranking member on the Finance Committee, and all of our

colleagues to start putting together a strategy for a comprehensive tax reform plan to pass this Congress.

I will say on the floor that I think there is a real opportunity now to break the gridlock on tax reform. If we look, in effect, from this day, essentially May of 2014, until certainly the middle of 2015, there is an ideal opportunity, an ideal window for Democrats and Republicans in the Senate to build a bipartisan coalition to pass that into law--comprehensive tax reform--and to work with our colleagues on the other side of the Capitol who have similar interests. I know that because I have talked to a number of them in recent months.

I want colleagues on both sides of the aisle to know we are going to focus on getting these extenders passed now. Speed is important because the longer we wait, the more we damage, for example, our ability to create those innovation jobs because, in effect, we are going to have a tax increase on innovation, making it harder to hire veterans and the tax hike middle-class people would get, in effect, because they are underwater on their mortgages and they got a break from their lender. We have to get that done. It is my intent to use every single day as we go forward with that effort to make sure the extenders pass and pass quickly, then move on to comprehensive bipartisan tax reform. I know we can do it.

He is not here today, but my colleague Mr. Coats, the senior Senator from Indiana, has done very good work--stepped in when Senator Gregg retired--and has more than met me halfway. I particularly want to commend Senator Begich, who has been part of our bipartisan coalition and who has had very thoughtful ideas, particularly on protecting the middle-class small business incentives for savings. He is a small businessperson himself.

I have been out here probably 20 minutes or so, and I haven't said anything that isn't about Democrats and Republicans coming together, coming together first to pass the extender legislation and then to use every single day over essentially the next year and a half--that window until the summer of 2015--to put together a bipartisan plan that can help grow the economy.

I will close with this. After the bipartisan effort in 1986, where a big group of progressive Democrats and conservative Republicans came together, our country created 6.2 million new jobs over the next 2 years. Nobody can claim every one of those jobs was due to tax reform; that simply would be stretching things, but clearly it helped. The business people I talk to now in Oregon and others who come to Washington say they very much want the same certainty and predictability that was seen in 1986, in terms of being able to make those investments to grow their businesses and particularly hire more middle-class Americans at good wages. That is what we are going to be all about. We are going to pursue it in a bipartisan way. Let us pass the EXPIRE Act and move on to address the question of bipartisan comprehensive tax reform.

As I leave the floor--I touched on it while he wasn't here--I am particularly pleased about the Roberts-Schumer addition to help more small businesses be part of those innovation jobs for the future because what Senator Roberts and Senator Schumer did is to take that credit and do more to move it toward an approach that will help those small businesses, the ones starting in garages and all across the country where individuals are betting on the future and taking the risks. It is going to be easier for them because of the good work done by Senator Roberts and Senator Schumer. It is another reason for colleagues to vote for the EXPIRE Act.

With that, I yield the floor.

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