Wayne Allard

Mr. ALLARD

Mr. ALLARD. Mr. President, briefly I want to talk about the fact we have not had any hearings on this particular issue. I do not know how many Senators who come from a different part of the country than those of us in the West have come up to me and said: We do not understand your water law. Granted, it is complicated and it varies a little bit from State to State. Due to that complexity, I don't think we are doing the Members of the Senate any service by rushing this matter through and not having proper hearings and giving everybody an opportunity to understand the full impact of this piece of legislation. The U.S. Supreme Court has clearly given the States the sovereignty in the matter of water adjudication. We are talking about a property right. My State of Colorado has recognized water as a property right. We have sometimes referred to it as the ``doctrine of prior appropriation'' or perhaps simply the ``Colorado water doctrine.'' Many Western States have followed suit and the laws have been put in place in the State of Colorado. Vote on Amendment No. 2830

Mr. ALLARD. Mr. President, I ask unanimous consent that I be recognized immediately after the vote to speak on the Crapo amendment.

Mr. ALLARD. Mr. President, I am opposed to the Reid provision in the farm bill and stand in support of the Crapo amendment to remove that provision. May I inquire as to how much time remains?

Mr. ALLARD

Mr. ALLARD. Mr. President, I am here this morning to express my disappointment that I am not going to have an opportunity to call for the yeas and nays on the permanent extension of the research and development tax credit. It has to be one of the most important provisions and amendments that will be made to the stimulus package. I again am disappointed that stimulus package is not going to move forward out of the Senate. Many of us have worked hard. We think it is time for us to have a stimulus package. The economy needs to have that happen. I want to refer to some charts and to what some very key individuals are saying about the R&D tax credit being extended on a permanent basis. Right now, it is not extended on a permanent basis. I think the National Association of Manufacturers is trying to address the question. I think they have said it very succinctly. They ask: Why worry? They say: because the R&D tax credit expires in 2 years and major R&D projects take an average of 5 to 10 years to complete. If we don't get this passed now and move forward, that is going to be another reason our economy will not move forward. I am very concerned about that. The Democrats in the Senate also recognize the importance of the R&D tax credit. I looked at what the majority leader said in January of 2002. He said: We should act to make the research and development tax credit permanent; the sooner the better. The action we are getting from the Senate today doesn't show any interest at all in moving forward in keeping up with the ``sooner the better'' pledge. This is a serious problem and a catastrophe. The R&D development tax credit is one of the most effective mechanisms to encourage innovation, increase business investment, and keep the economy growing. Again, that is the majority leader speaking on January 4 of this year. I am extremely disappointed that we will not have an opportunity to bring this amendment up for discussion. Just to again point out how important this amendment is to the economic recovery of this country to restore economic prosperity, I would like to show you a one-half-page ad from the Wall Street Journal. Mr. President, I show you an ad that was put in the Wall Street Journal from Ontario, Canada. It points out: ``The Future's Right Here'' in Ontario, Canada. They say: With pharmaceutical R&D spending up 300 percent in the past decade, Ontario is proving to be an excellent locale for life sciences. The reason they are saying that is because they have a research and development tax credit of which companies can take advantage. They go on further to say: ``Protection of intellectual property rights and R&D tax credits, [which are] among the most generous in the industrialized world, are a couple of key contributing factors'' and why it is so important to do business in Ontario. We are missing the boat. We need to do more to encourage economic research and development in this country. It is key to restoring economic prosperity. Again, I cannot emphasize enough how very disappointed I am that I am not going to have an opportunity, along with Senator Hatch, who has worked very hard on this particular amendment over the years, to get it passed on a permanent basis. In addition to what I have shown here, we have looked up studies that say the permanent extension may, in some cases, by 2010, increase domestic economic growth by $58 billion. We have the tax credit available for incremental research and activities in both the United States and Puerto Rico where 75 percent of research and development tax credit dollars go to salaries and wages of employees associated therewith. These are high-paying American jobs, and high-paying American jobs pay taxes. It is taxes that go to the Federal Government and help us balance our budget at the Federal level. So it is important. I am disappointed that not only my amendment but other amendments that would lead to economic growth in this country are not going to have an opportunity to be brought up. I cannot emphasize enough how very disappointed I am that this has been stalled because of action on the other side, even after we have had such positive statements made on January 4 of this year as to how we need to move forward with some of these tax cut provisions that stimulate economic growth, such as the research and development tax credit. Mr. President, I yield the remainder of my time to the Senator from Texas.

Mr. ALLARD

Mr. ALLARD. Mr. President, I understand that I have 5 minutes.

Mr. ALLARD

Mr. ALLARD. Mr. President, I ask unanimous consent a fellow from my office, Carol Welsch, be granted the privilege of the floor.

Mr. ALLARD

Mr. ALLARD. I would like to have 4 minutes whenever it works out.

Mr. ALLARD. Mr. President, I am pleased to join Senator John McCain in sponsoring amendment No. 2700, the military homeowners tax equity amendment, to H.R. 622. This amendment will correct a serious, inadvertent oversight in the Taxpayer Relief Act of 1997 and provide much needed tax equity to our members of the uniformed services and the Foreign Service. The content of this amendment is the exact language as S. 1678, which Senator McCain and I introduced last year. The Taxpayer Relief Act of 1997 exempted up to $250,000-$500,000 per couple in capital gains from federal income taxes for homes occupied as a principal residence for at least 2 of the last 5 years. Unfortunately, Uniformed and Foreign Service members may have difficulty meeting the 2 year requirement. Service members are directed to move to meet the needs of the U.S. Government and may be directed to move prior to owning a residence for 2 full years. Many service members keep their homes while reassigned overseas or elsewhere in hopes of returning to their residence. On occasions when this proves impossible, the members are subjected to substantial tax liabilities. Prior to the 1997 law, service members who were assigned overseas or otherwise away from their principal residence on military orders for an extended period of time had a special provision that allowed them to ``rollover'' capital gains. The 1997 Taxpayer Relief Act made many improvements to the tax code by replacing the capital gain ``rollover'' rules with the tax exclusion, but failed to provide for those on military orders. This amendment will correct this oversight by providing that absences from the principal residence due to serving on a qualified official duty as a member of a uniformed service or the Foreign Service be treated as using the residence in determining the exclusion of gain from the sale of such residence. In 1999 both the House and Senate passed the Taxpayer Refund and Relief Act which included language to correct this oversight, but that act was vetoed by then-President Clinton. S. 1678, which as I stated earlier mirrors our amendment, has support from all four service chiefs, the Chairman of the Joint Chiefs of Staff, the 31 organization members of the Military Coalition, the American Bar Association, the American Foreign Service Association. Our service men and women face enough challenges today. They should not have to face additional tax liabilities in return for serving their country.

Mr. ALLARD. Mr. President, I have about 4 minutes to comment on Senator McCain's amendment. I was giving a speech and I could not be here when he brought it up. I would like to be able to use that time, if you don't need all the time. Otherwise, I will wait.

Mr. ALLARD

Mr. ALLARD. Mr. President, I ask unanimous consent reading of the amendment be dispensed with.

Mr. ALLARD. Mr. President, at one time or another, we have had various Members from the Senate state how important it is to encourage research and development in our country. In fact, the majority leader himself, Tom Daschle, on January 4, 2001, said: We should act to make the research and development tax credit permanent; the sooner the better. And then majority leader Tom Daschle, on January 4, 2001, stated: . . . the R&D tax credit is one of the most effective mechanisms to encourage innovation, increase business investment, and keep the economy growing. Now, as I mentioned in my remarks, being a scientist and having been in business for myself, I fully understand the importance of research and bringing those technologies to the marketplace. Not only do the consumers benefit, but society in general and the whole world benefit. If we are going to continue to be a leading competitive nation in the world, we need to continue research and development. As members of the chamber of commerce in the town in which I practiced veterinary medicine, we tried to attract businesses that did a sizable amount of research and development because we understood that, with research and development, that company was likely to be with us for a long time because they were continually keeping up with advancements in science and bringing that to the marketplace. So as we talk about what it is with which we can stimulate the economy in America, I think one of the most significant things we can do as a Congress is to send to the President a research and development tax credit that is permanent, not one that will change every year. I can understand the frustrations of business people who come to me and have talked in town meetings and said: Look, if we only had some idea of how long this research and development tax credit would last instead of periodically renewing it, we could lay out long-term plans for R&D. I agree. I think it is important to have a very successful program of research and development in your company. You have to have a long-range plan in place, and the only way to do that is to have some assurance from the Congress, the President, and the Federal Government that the tax credits are going to be there to use in putting together any research needs you may have in order to meet product development within your company. So this is an extremely important piece of legislation. I think it is an important issue. The Senate should address it, and the sooner the better, during these times when our economy is not doing so well. Even if our economy was doing well, this is what we need to have in place in order to sustain economic growth. It would be less likely we would get into economic downturns with this kind of encouraging tax credit on a permanent basis. I encourage my colleagues to join me in voting for the permanent extension of the research and development tax credit. I yield the floor.

Mr. ALLARD. Mr. President, I ask unanimous consent Senator Warner be added as a cosponsor to the amendment.

Mr. ALLARD. Mr. President, I ask unanimous consent that a news release from the Senate Republican High Tech Task Force dated Friday, June 29, 2001, be printed in the Record. It talks about, again, Senator Smith's effort in getting it attached to the Patients' Bill of Rights and reemphasizes the point we are trying to make today on how important it is we provide a permanent extension of the research and development tax credit.

Mr. ALLARD. I also ask unanimous consent to print a number of letters, from the American Electronics Association, the Information Technology Industry Council, and the R&D Credit Coalition, regarding the importance of including this permanent R&D tax credit extension in the current stimulus bill.

Mr. ALLARD. Mr. President, I am pleased to rise today to offer an amendment making the research and development tax credit permanent. I express my gratitude to Senator Hatch, the distinguished ranking member of the Judiciary Committee. Senator Hatch has been working on this issue for years, and I am grateful for the opportunity to join him in this continuing effort on this essential piece of legislation. I also express my thanks to Senator George Allen who has distinguished himself as the chairman of the High Tech Task Force. I am pleased to serve with Senator Allen on the task force, and I look forward to continuing to work with him as we address the many numerous technology issues that confront this Nation. Both of our States take a very active role in high tech. We have many businesses in both of our States--Virginia and Colorado--that rely on high tech in order to grow. As a member of the Senate High Tech Task Force, I have been fortunate to work with a number of my colleagues on an agenda that is both probusiness and proconsumer. We have focused on expanding the reach of Internet and broadband technologies, putting more computers in classrooms, more schools online dealing with cyber security issues in general relating to e-commerce, the spectrum, and intellectual property issues. None of these issues has the power to make as immediate an impact in the technology industry as a permanent extension of the research and development tax credit. It is altogether appropriate that we include this language in any stimulus bill to pass out of the Senate. A study by Coopers & Lybrand in 1998 showed that a permanent extension of the R&D tax credit would create nearly $58 billion in domestic economic growth through 2010. This is an astounding and immediate impact that affects virtually every American. Available solely for incremental research activities in the United States and Puerto Rico, approximately 75 percent of the R&D tax credit dollars pay for salaries of employees associated with research and development. These are high-skilled, high-paying American jobs. In an ever expanding global marketplace, it is important that American companies be able to compete abroad. It is also important that multinational firms see the United States as a welcome laboratory for research and development. Australia, Canada, Germany, Great Britain, and Japan all offer financial incentives to companies to perform research and development within their borders which lowers the cost of R&D and gives companies both a competitive advantage and an incentive to bring their resources and jobs to the marketplace where they can get the most bang for the buck. It is my hope that international research and development investors will recognize that the United States is just such a place. The R&D tax credit provides an effective incentive for companies to create valuable, skilled jobs. This is not just theory. The research and development tax credit was originally enacted in 1981 and has been extended 11 times. From 1995 through 1998, the innovation and economic growth in information technology alone was responsible for one-third of the real economic growth. Studies by the General Accounting Office, the Bureau of Labor Statistics, and others have documented the impact the research and development tax credit has on private research and development spending. One such study found that every dollar of tax benefit spurs an additional dollar in private research and development investment. This is to say nothing of the major economic benefits associated with increased productivity and efficiency that new technologies and products bring. And the benefits don't stop there. Investment in research and development has generated countless products and technological advances affecting every facet of American life. In 1866, American farmers could expect to yield 11.6 bushels of wheat per acre. Then, about 34 years later, in 1900, the expected yield was 12.2 bushels, climbing to 16.5 bushels per acre in 1950. Today, thanks to advances in pesticides and crop genetics, that yield can reach well over 43 bushels per acre. Medical patients today benefit from a variety of wonder drugs and medical devices previously unimaginable. The hardware, software, and fiber that makes the Internet run, even the Internet itself, provide examples of what aggressive research and development can do. The benefits of investment in research and development in short makes our lives better. Every American has benefited from the giant leap forward in technology. Our standard of living is higher. Our quality of life is greater. I realize that many of my colleagues may ask why we must make this tax credit permanent rather than continuing to extend it annually semiannually. As a former small businessman, I know many of my colleagues can relate to this. A business must budget, look forward, and plan in order to get the highest use of their hard-earned dollars. This principle applies to all businesses, regardless of size, location, or the number of borders they cross in doing business. The process of ongoing renewal year to year means the research and development tax credit offers less value to the businesses and research initiatives we are seeking to support. Business and technology leaders look at multiyear projects often over 10 years down the road. When we look around today and take stock of the many goods and services today that did not exist 10 years ago, I believe we can agree that this kind of planning must be encouraged. I mentioned my experience as a small businessman. As my colleagues know, I ran my own veterinary hospital. Trained as a scientist, I continue to keep up on the latest developments in pharmaceuticals, treatment techniques, and chemistry. I would like to make one thing very clear today: That is, scientific development does not fit in calendar or fiscal years. It is not cyclical or situational. Science is an evolving, growing, expanding study. This vital process through which virtually all human endeavor can be traced is one that should not be inhibited by regular policy debates when the result is so clear. Research and development is the cornerstone of healthy industry and provides solutions to problems we may not even realize exist. Uncertainty can equate to less investment and undermines the entire purpose of the research and development tax credit. President Bush included permanent extension of the R&D tax credit in his initial tax relief plan. I was pleased to see that a majority of my colleagues supported this credit by voting 62 to 38 on the final tax package, which at that time included the permanent extension. It is my hope that we will be able to continue the momentum of last year's vote and seize this opportunity to state, in no uncertain terms, that the Senate recognizes the importance of this tax credit, the innovations it inspires, and the tangible impact it makes on the quality of life in America. A number of prominent trade organizations have organized the R&D credit coalition in an effort to support the Congress in passing this legislation. I ask unanimous consent to print a list of these organizations in the Record.

Mr. ALLARD. Mr. President, I ask unanimous consent to lay aside the pending amendment and call up amendment No. 2722, which is the Allard- Hatch-Allen amendment.

Mr. ALLARD. Mr. President, my understanding is that we are under regular business.

Mr. ALLARD. Mr. President, I do not see anybody seeking recognition, so I suggest the absence of a quorum.

Mr. ALLARD. Mr. President, I ask unanimous consent that a news release dated Tuesday, May 8, 2001, entitled ``High Tech Task Force Members Urge Finance Committee to Make R&D Tax Credit Permanent,'' which documents the work of this task force and the importance they place in making permanent the research and development tax credit, be printed in the Record.

Mr. ALLARD. Mr. President, I also ask unanimous consent that another press release from the Senate Republican High Tech Task Force for Friday June 29, 2001, be printed in the Record.

Mr. ALLARD. I thank the Senator from Utah for all his compliments. This is a subject I know he has worked on for years. I appreciate what he is trying to do. I could not agree more with his statement that one of the most important things we can do to get the economy to grow is to make on a permanent basis the research and development tax credit. I am also involved in the Senate Republican High Tech Task Force. I would like to make a part of the Record their policy agenda for the 107th Congress where they talk about a Tax Code for the 21st century and list a number of actions they believe we can take to encourage the high-tech industry to grow in America. They mention, among those, making the research and development tax credit permanent, in addition to a number of other provisions. I ask unanimous consent that be printed in the Record.

Mr. ALLARD

Mr. ALLARD. Mr. President, I ask unanimous consent the order for the quorum call be rescinded.

Mr. ALLARD

Mr. ALLARD. Mr. President, it is both an honor and a privilege to stand before my colleagues today and thank them for accepting the nomination of The Honorable Marcia S. Krieger to the U.S. District Court for the District of Colorado. Marsha S. Krieger is a person of outstanding legal credentials, and has served the people of Colorado and the United States with great diligence and dedication for many years. Judge Krieger has strong ties to Colorado and is familiar with the issues faced by people in the State, an important aspect of any Federal judge who will work with fellow citizens through a myriad of complex litigation settings. She graduated from the University of Colorado School of Law, and has since spent many years as a sole practitioner, practicing in a law firm, and, most recently, serving as Judge. Since 1994, Judge Krieger has served on the Bankruptcy Court--a key indicator of her efficiency and effectiveness; she was also unanimously chosen by the federal judges to become Chief Bankruptcy judge in January 2000. However, practicing law is not her only passion. Judge Krieger, manages to find time to teach, sharing her knowledge of the law with future attorneys, teaching in a manner that provides hands-on learning, sharing with students her passion for the law. Marsha Krieger presides over the court with a stern hand and keen intellect--she has the ability to decisively pull the issue from complex litigation with certainty and accuracy. According to an article in the Denver Post, Judge Krieger is widely respected by other judges and by lawyers that have appeared before them. She has extensive experience, solid knowledge of the law, and has a reputation for fairness. This vote is significant for many reasons--Colorado hasn't added a judge since 1984. Making matters more serious, only four active judges struggle to do the work of nine judges. The legal community believes the Judge to be well qualified as well. The Honorable Lewis T. Babcock, Chief Judge of the United States District Court for the District of Colorado, in a letter to Senator Leahy and Senator Hatch stated, ``I know Judge Krieger, and believe her to be well qualified.'' I thank Senator Hatch and Senator Leahy. I ask unanimous consent to print in the Record the editorial from the Denver Post and the letter from the Honorable Lewis T. Babcock, Chief Judge of the U.S. District Court for the District of Colorado.

Mr. ALLARD

Mr. ALLARD. Mr. President, at the beginning of this year we passed a series of tax cuts. This was a strong action in favor of hardworking Americans. With the recent slowdown in the economy, we must again act, and act quickly, for the American worker. Historically, Congress has failed to act quick enough to provide economic relief when it is needed. Let us not repeat this error. It is imperative that we now take this opportunity to act in unison to provide the American people with the assistance they deserve. Several economic stimulus packages have been proposed. The House has recently passed a stimulus package that I feel will give the economy a much needed boost and provide dislocated workers with the temporary assistance they require. I, as well as many of my colleagues, have some reservations about certain items contained in this package. But for the sake of the economy and the American worker we must take quick and decisive action now. Overall, this stimulus package is a positive and much-needed step in the right direction. We must provide aid to dislocated workers. In times of a slow economy, many hardworking Americans are forced from their jobs through no fault of their own. It is of the utmost importance that we provide the support these hardworking Americans deserve. This package provides around 20 billion dollars in aid to these displaced workers, which includes a measure that will provide a 13 week extension to unemployment benefits, supporting American individuals and families in their time of financial hardship. This also provides support to Medicaid. This assistance is a temporary and much needed helping hand to those whose families and way of life are currently threatened by the recent economic downturn. When we have taken care of these dislocated workers, we must look forward to what lies beyond the realm of short-term relief. History has shown us time and time again that overall economic growth is one of long term planning. Here we have the opportunity to provide the economy with a short and long term boost via a 10 year investment stimulus package. This would provide almost $160 billion worth of support, through the year 2011, to small businesses and taxpayers. This package calls for increased tax cuts for individuals, $60 billion of tax relief in Fiscal Year 2002 and $112 billion over the next 10 years. This package will provide health care tax credits so that displaced workers and their families do not go without medical coverage. Furthermore, this package provides increases in investment opportunities and net operating loss flexibility for small businesses. This package, aptly named Economic Stimulus and Aid to Dislocated Workers, is a good start. In the future, we will need to return to these issues. We will need to provide more incentives for long term economic growth and development. But our immediate action on this package is crucial. We must act now, we must pass this stimulus bill before Christmas, because this is what the American people need and deserve. I have commended my colleagues on the passage of the education school reform bill; a bill that leaves no child behind. We must now ensure that American families, workers, and the temporarily unemployed are not left behind. The President proposed an economic security package in October. Now I stand before you in December and tell you that the American people can wait no longer. We must support our economy and our unemployed workers now. I humbly ask my fellow Senators: Put aside your differences and vote in unison for the economy, for hardworking displaced Americans, and for the American family.

Mr. ALLARD

Mr. ALLARD. Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.