Phil Crane

Mr. CRANE

Mr. CRANE. Mr. Speaker, I am very pleased to introduce the Jobs Protection Act of 2003, legislation which will respond to a recent World Trade Organization ruling that held that our export-related tax benefit, the FSC/ETI provision in our tax code, violates our trade agreements. It is my distinct pleasure to be joined in this effort by my good friends Charles Rangel and Don Manzullo. This legislation achieves two goals: it brings the United States into compliance with the WTO, and it keeps the playing field level for our manufacturers, which will keep jobs here. I'd like to address each of those issues. As Chairman of the Trade Subcommittee, I have a strong interest in preserving and promoting free trade throughout the world. Trade is fundamental to our relations with other nations, and free trade has been the greatest civilizing force throughout modern history. I have fought ardently for many years to ensure that the United States, which is the largest exporter in the world, maintains its rightful role as world leader when it comes to trade. Like my colleagues who have joined me in introducing this legislation, I believe that we must comply with our international agreements. To do otherwise could precipitate a trade war, which would be an unacceptable result. Therefore, this legislation repeals FSC/ETI and brings the United States into compliance with our WTO obligations. The issue, then, is how to best replace FSC/ETI. In recognition of the fact that the repeal of FSC/ETI raises the tax burden of current beneficiaries by at least $50 billion over ten years, this legislation returns that money to the U.S. manufacturers. In order to understand why that is so crucial to protecting our job base, it is important to understand why the FSC/ETI benefit exists in the first place. U.S. corporations that export manufactured goods pay a 35 percent corporate tax rate on their profits. In addition, the corporation pays an additional value added tax when they it sells its products in Europe. However, European manufacturers get a portion of their VAT rebated. FSC/ETI compensates manufacturers for this double taxation, thus leveling the playing field between U.S. and European manufacturers. That means jobs stay here. Were this benefit to be repealed with no replacement, U.S. jobs and wealth would be artificially transferred to Europe. This is another unacceptable result. Therefore, the Job Protection Act of 2003 provides a permanent new deduction, which is an effective rate reduction for U.S. manufacturers, that is consistent with our trade agreements. It is structured in such a manner as to preserve and strengthen U.S. jobs. Surely, Mr. Speaker, that is a goal we should all support! Mr. Speaker, I would like to be clear as to the process we should follow as we debate how best to replace FSC/ETI. We have faced challenges to export-related benefits in years past. As in the past, it is my fervent belief that our common goal must be to protect the interests of the United States, not our foreign competitors. While I expect a great deal of vigorous debate as we seek to comply with our WTO obligations, I remain hopeful that we will resolve any differences in a dignified manner, not giving our opponents the benefit of a public spectacle. A summary of the provisions of the legislation follows. The Job Protection Act of 2003--Strengthening U.S. Manufacturing and Addressing the WTO Challenge to FSC/ETI (April 2003) repeal of fsc/eti The Job Protection Act of 2003 (the ``proposal'') would repeal the current-law FSC/ETI benefit effective for transactions after the date of enactment. Transition relief: The proposal would provide two types of transition relief-- (1) Binding Contracts: The proposal would not affect transactions pursuant to binding contracts in effect on the date of introduction of the legislation. This provision ensures that pre-existing arrangements of U.S. taxpayers are not retroactively penalized merely because of the WTO ruling. (2) General Transition Relief: The proposal also would provide general transition relief based on the company's average FSC/ETI benefit during 2001. A company would receive a deduction for 100 percent of its base period amount (indexed for inflation) for 2004 and 2005, 75 percent for 2006 and 2007, and 50 percent for 2008 (no general transition relief thereafter). A permanent benefit for production activities in the U.S., described below, would begin to phase-in as the general transition relief phases out. The general transition relief is not contingent upon future exports and, therefore, is WTO compliant. permanent benefit for manufacturing activities in u.s Strengthening U.S. Manufacturing: The proposal would provide a permanent new deduction which reduces the effective corporate tax rate that would apply to so much of the company's taxable income as is attributable to ``U.S. production activities''. U.S. production activities would be defined as the manufacture, production, growth, or extraction of property eligible for the current FSC/ETI benefit whether or not actually exported. Calculating U.S. Production: The portion of the taxable income attributable to U.S. production activities would be calculated by computing total gross receipts from sale, rental or license of eligible property produced in whole or part by the taxpayer in the United States, and then subtracting from those gross receipts inventory costs, directly allocable deductions, and a pro rata portion of other deductions. Allocation would be done in a manner similar to the method used in allocating deductions between U.S. and foreign source income. Corporate Tax Rate Reduction: For companies with 100 percent domestic production, the effective rate reduction would be 3\1/2\ points (35 percent corporate tax rate reduced to 31\1/2\ percent) once fully phased-in. Other companies would receive a sliding-scale effective rate reduction based on the value of their U.S. production of eligible products compared to the value of their worldwide production. revenue neutral The bill has been structured to be roughly revenue neutral year-by-year and over the 10-year budget period. The proposal does not include any extraneous revenue offsets.

Mr. CRANE

Mr. CRANE. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, before I speak on the bill, I want to congratulate Members on both sides of the aisle, especially the gentleman from New York (Mr. Houghton) for the gentleman's work on behalf of getting this bill introduced. I also thank the gentleman from Virginia (Mr. Wolf) and the gentleman from California (Mr. Lantos) and the gentleman from New York (Mr. Rangel) on the other side of the aisle. This is a very important bill that has nothing to do with partisan politics whatsoever. When it was introduced in 2001, it passed this body by a vote of 408 to six. I think the six Members that voted against it at the time are probably reconsidering it because there is no basis for anyone to find any objections to it. I hope that the bill we have before us this evening, based on H.R. 2722 from the 107th Congress, which passed by that 408 to six vote, and since that time the administration has worked with the international community to finalize the structure of the Kimberly Process Certification Scheme which controls the trade in rough diamonds, that it is to all countries, and it prevents trade in conflict diamonds and the bill reflects the new structure. I thank the administration for its hard work and dedication to the effort on this important issue, too. The funds derived from the sale of rough diamonds have been used by rebels and state actors to finance military activities and to overthrow legitimate governments, subvert international efforts to promote peace and stability, and commit horrifying atrocities against unarmed citizens. During the past decade, more than 6.5 million people from Sierra Leone, Angola, and the Democratic Republic of the Congo have been driven from their homes by wars waged in large part for control of diamond mining areas. The United Nations Security Council has issued resolutions urging nations to take actions against conflict diamonds. In response, the United States has issued various Presidential executive orders to ban direct imports from nations subject to the United Nations resolution. The United States has also led international negotiations to reach an agreement that set standards for diamond extracting and trading nations to meet. These international negotiations, the Kimberly Process it is called, came after the name of the city in which they were initiated. It creates a system of checks and balances for rough diamonds throughout the world. This system tracks through governmentally verifiable certificates that trade in diamonds between countries and individuals. Since its January 1 implementation date, over 40 countries are participating in this system. The United States requires this system to ensure that its leadership position in this critical matter continues. Finally, this bill is consistent with our WTO obligations. Mr. Speaker, I strongly urge my colleagues to support this bipartisan bill and to pass this important legislation.

Mr. CRANE. Mr. Speaker, I yield back the balance of my time.

Mr. CRANE. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1584) to implement effective measures to stop trade in conflict diamonds, and for other purposes, as amended.

Mr. CRANE. Mr. Speaker, I yield 3 minutes to the gentleman from California (Mr. Royce).

Mr. CRANE. Mr. Speaker, I yield 3 minutes to the gentleman from New York (Mr. Houghton).

Mr. CRANE. Mr. Speaker, I yield 3 minutes to the gentleman from Virginia (Mr. Wolf).

Mr. CRANE. Mr. Speaker, I yield 5 minutes to the gentleman from New Jersey (Mr. Smith).

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

Mr. CRANE

Mr. CRANE. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on the subject of H.R. 1584, the bill just passed.

Mr. CRANE

Mr. CRANE. Mr. Speaker, I would like to commend a valuable member of my staff, a treasure who has served the Committee on Ways and Means for over 20 years. Meredith Broadbent, who serves as senior professional staff member to our Subcommittee on Trade, is a noted expert in all areas of trade policy but especially agriculture and textiles, two of the most complex areas. She has committed her career to developing good trade policy, and she has been involved in every major trade initiative over the last 20 years. Most recently, she was a key player in granting the President Trade Promotion Authority, according preferential trade benefits to the Caribbean, African and Andean countries, and extending permanent normal trade relations to China. Trade initiatives such as these are good for spurring U.S. economic growth but also to help foster a world that trades in freedom and lives in liberty and prosperity. Ms. Broadbent's wise counsel, sound judgment, and thorough expertise will be truly missed. I am glad that she will continue to serve her country in the international trade arena as Assistant United States Trade Representative for Industry, Market Access and Telecommunications. She will be a tremendous asset to the Bush administration, and I wish her well. Moreover, I know as chairman of the Subcommittee on Trade that I will still have the privilege of working with Meredith as our Assistant United States Trade Representative. God bless her.

Mr. CRANE

Mr. CRANE. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 1047) to amend the Harmonized Tariff Schedule of the United States to modify temporarily certain rates of duty, to make other technical amendments to the trade laws, and for other purposes.

Mr. CRANE. Mr. Speaker, I yield myself such time as I may consume. I rise to support H.R. 1047, the Miscellaneous Trade and Technical Corrections Act, which is a compendium of trade provisions drawn largely from legislation introduced by individual Members. This bill has more than 350 such provisions and enjoys broad bipartisan support. The bill contains provisions involving the temporary suspension of duties on narrowly defined products, miscellaneous trade-related items, and technical corrections to the Trade and Development Act of 2000. The House passed substantially the same bill, but unfortunately no other action was taken. In essence, we have taken last year's bill, made technical changes, and added or dropped a few of the duty suspension provisions, all of which are known by the sponsoring Members and their staffs. The most significant change has been removing the provision related to ``Turkey Qualified Industrial Zones.'' I recall this provision received favorable comments from both sides of the aisle when the bill came to the floor last year. There is still strong support from Members for the provision. We are dropping the provision for the time being, but can consider it or a variant of the provision at some future time if appropriate. There are several miscellaneous trade provisions in this bill that are noteworthy. The bill would make technical and clarifying corrections to provide benefits for Caribbean and sub-Saharan African countries. The preferential trade benefits for these countries would support U.S. trade policy to improve trade networks and opportunities for American firms while helping key American allies in the fight against terrorism and illegal drug traffic. Finally, the bill would provide national trade-relation status to Serbia and Montenegro, which was revoked in 1992. The provisions included in this bill are noncontroversial, but that does not mean they are unimportant. Most of the products in the duty suspension provisions are those that American firms use as supplies or components of the products they manufacture. The purpose of this bill is to eliminate the burden that American firms have when buying these products so they can in turn lower their cost of production and thereby the cost to the consumer. In many instances these provisions will give our companies and their employees a fighting chance to compete. This bill traditionally follows the same rules every Congress. The provisions have been thoroughly vetted and have no opposition. Both the Department of Commerce and International Trade Commission investigated the bills and contacted domestic industries. With the exception of a few of the miscellaneous provisions that have wide applicability, each provision has a de minimis cost under $500,000. Lastly, the administration confirms that all of the bills can be administered. I strongly urge my colleagues to support this bill and to provide this assistance to American companies. Mr. Speaker, I reserve the balance of my time.

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

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

Mr. CRANE. Mr. Speaker, I commend the gentleman for making the request, and I can assure him that we will study and consider the faction policy related to the gentlewoman's request and that in conference we have an opportunity potentially to go down that path.

Mr. CRANE. Mr. Speaker, I yield 3 minutes to the distinguished gentleman from Texas (Mr. Brady).

Mr. CRANE. Mr. Speaker, I yield 3 minutes to the distinguished gentleman from Michigan (Mr. Camp).

Mr. CRANE. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I just want to wrap up with a couple of comments about the comfort of advancing a trade piece of legislation like this in the Congress of the United States, where we enjoy good bipartisan support. I want to commend my colleagues on the other side of the aisle who were the ones that were touting to Republicans the importance of free trade. It took almost a century for our party to yield to the very persuasive arguments advanced by free traders on the Democratic side, and after World War II we basically became free traders, too. I know we have divisions in our ranks on both sides of the aisle; but I know, too, that trade is one of the most important issues facing not only this country but the entire world. I have made the comment in the past, and it bears repeating, that trade has done more to advance civilized values worldwide than anything else in the span of recorded history; so I commend my colleagues on a bipartisan basis. Mr. Speaker, I ask for an ``aye'' vote on this very important piece of legislation.

Mr. CRANE. Mr. Speaker, on that I demand the yeas and nays.

Mr. CRANE

Mr. CRANE. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days in which to revise and extend their remarks and to include extraneous material on the subject of H.R. 1047, the bill just considered.

Mr. CRANE

Mr. CRANE. Mr. Chairman, I rise to lend my full support to H.R. 4 the reauthorization of the Personal Responsibility, Work, and Family Promotion Act of 2003. Before 1996 there were many cases of honest, hard-working individuals on the welfare rolls, who, faced with hard times, were forced to rely on our government in order to help provide for themselves and their families. Unfortunately, there were also many cases of individuals who in the past abused this system set up to help those in need. I believe that individuals who choose to live off of government welfare, with no intention of leaving the rolls, not only cheat the American taxpayer, they also cheat their children and grandchildren who often live their lives trapped in a cycle of receiving government handouts. Mr. Chairman, the bill we are considering on the floor today gradually raises work requirements over the next five years and continues to award States that are successful at moving people from welfare to work. This bill protects children with a $2 billion increase in childcare funding. The bill allows States greater flexibility in providing care for children of low-income working families. This keeps with the idea that those closer to a problem know best how to fix it. The plan also includes $300 million annually to encourage healthy marriages and two-parent married families, through programs such as pre-marital education and counseling. Let me briefly say that despite my support for the measure, I remain concerned about some of the provisions in the legislation. While the measure does improve upon work requirements from the 1996 Temporary Assistance for Needy Families (TANF) bill, in some cases it does not go far enough. For instance, H.R. 4 increases the number of hours a welfare beneficiary must work and spend in job training programs, but it allows the states to define ``work'' in practically any way they see fit for these additional hours. Mr. Speaker, I am in favor of allowing States flexibility in administering welfare programs--flexibility is, after all, the linchpin of the reforms we enacted in 1996--but in my view we should set some sort of minimal standard and let the States implement them as they see fit. Mr. Chairman, TANF has shown how, through simple common sense means, the lives of millions of Americans can change from a cycle of poverty and dependence to lives that are happier and more productive. They have shown how expecting more from our fellow citizens can lift the Nation as a whole. I am happy to support this measure and encourage my colleagues to vote in favor of this important legislation.

Mr. CRANE

Mr. CRANE. Mr. Speaker, I am pleased to rise today with my friend and colleague, Mr. Pomeroy, to reintroduce the Patient Access to Physical Therapists Act. This bill will allow Medicare beneficiaries direct access to qualified physical therapists without a physician referral. Currently, Medicare beneficiaries must see a physician before being allowed to see a physical therapist. This burdensome requirement in Medicare is a regulation whose time has passed. The referral mandate is unnecessary and limits access to timely and medically necessary physical therapists' services. I believe that providing Medicare beneficiaries with direct access to physical therapists is critical as Congress looks to modernize the Medicare program. All health care consumers should have the ability to choose the health care services they want when they need it. Allowing Medicare beneficiaries to have direct access to physical therapists will help achieve that goal. Currently, 47 states and the District of Columbia allow direct access to physical therapist evaluation and 35 states, including the state of Illinois allow their citizens to access physical therapists' services without the added cost of a physician referral. The Medicare Patient Access to Physical Therapists Act would allow Medicare beneficiaries in these states to access care that is already available to other residents of the state. Direct access to physical therapists allows for improved access to quality health care services. A study of BlueCross BlueShield insurance claims in Maryland indicates that when a patient has direct access to physical therapists, services are neither over-utilized nor do they result in higher costs for physical therapy. To the contrary, the study found that the costs incurred for episodes of physical therapy care were 123 percent lower when patients went to a physical therapist directly. State boards that regulate physical therapy confirm that patient safety is not compromised by the elimination of the referral requirement. With this in mind, the policy of improved access to physical therapists is healthy to the Medicare program and its beneficiaries. It is clear that improved access to physical therapists will maintain this critical balance of patient safety, cost to Medicare program, and improved beneficiary service. Medicare beneficiaries should have the same access to physical therapists as the rest of patients in Illinois and 35 other states. Providing better access to qualified physical therapists will help ensure patients receive quality health care for all Americans. Mr. Speaker, I ask my colleagues for their consideration and support of the Patient Access to Physical Therapists Act.

Mr. CRANE

Mr. CRANE. Madam Speaker, I thank the gentleman for yielding me time. Madam Speaker, I rise in strong support of this resolution to honor all of our prisoners of war from the Vietnam conflict. In particular, I want to join the House in paying a special tribute to my good friend and colleague, the gentleman from Texas (Mr. Sam Johnson). Sam's service to his country has spanned the Korean War and the Vietnam War, where he was a prisoner of war for 7 years. In his office on Capitol Hill, Sam has a photo of his favorite plane. On it is inscribed part of a special Bible verse from Isaiah, ``They shall mount up with wings as eagles,'' an inscription that embodies the continuing spirit of this great patriot in our midst and one which should inspire all Americans with the courage to face the critical, difficult challenges facing this Nation in the days ahead. It is my distinct honor and privilege to serve with Sam in this great body and on the Committee on Ways and Means. Sam, you are a true champion for all Americans and a true hero to me. America is better off for your service, and I am very proud to call you my friend.

Mr. CRANE

Mr. CRANE. Mr. Speaker, last Saturday we lost seven of mankind's finest. The crew of the space shuttle Columbia made the ultimate sacrifice, not in a feat of arms, but in the noble quest to expand human knowledge. My deepest thoughts and prayers go to the families of those brave men and women lost in this accident. Their loved ones will be remembered with deep gratitude and admiration for their dedication towards advancing our understanding of new frontiers and discovering ways science can improve our lives. While space shuttles fly regularly, space travel itself is anything but routine. Its dangers are many, but the Columbia's crew was willing to brave them. We in Congress have a duty to them and our astronauts to find the cause of this horrific accident. We can never fully eliminate the danger, but we can manage the risk. When asked by his brother about what would happen if something went wrong, Captain David Brown, a member of Columbia's final crew, replied ``This program will go on.'' He was right, but it will not just be this one program that goes on. No matter what setbacks confront us, humanity will explore the unknown, brave its dangers, and continue our drive to create a better world.