Byron Dorgan

Mr. DORGAN

Mr. DORGAN. It reads: Let me, as a member of that non-endangered species, give you an example of how the scales are currently balanced. He means with the Tax Code. Again, this is the second richest man in the world. The taxes I pay to the federal government, including the payroll tax that is paid for me by my employer, Berkshire Hathaway, are roughly the same proportion of my income--about 30 percent--as that paid by the receptionist in our office. My case is not atypical--my earnings, like those of many rich people, are a mix of capital gains and ordinary income--nor is it affected by tax shelters (I've never used any). As it works out, I pay a somewhat higher rate for my combination of salary, investment and capital gains income than our receptionist does. But she pays a far higher portion of her income in payroll taxes than I do. His point is that he and the receptionist pay about the same percentage of their income. Understand, this is the second richest man in the world and his receptionist in his office. Then he says: Now the Senate says that dividends should be tax-free to recipients. Suppose this measure goes through and the directors of Berkshire Hathaway (which does not now pay a dividend) therefore decide to pay $1 billion in dividends next year. Owning 31 percent of Berkshire, I would receive $310 million in additional income, owe not another dime in federal tax, and see my tax rate plunge to 3 percent. And our receptionist? She'd still be paying the 30 percent, which means she would be contributing about 10 times the proportion of her income that I would to such government pursuits as fighting terrorism, waging wars and supporting the elderly. Let me repeat the point: Her overall federal tax rate would be 10 times what my rate would be. I read that into the Congressional Record because I thought it was a fascinating description by Warren Buffett, one of the richest men in the world, about the issue of deciding that dividends should get extraordinarily preferential tax treatment. In fact, some say we should eliminate the tax on savings and investment, therefore, exempting interest, dividends, and capital gains from tax. We have a lot of people who do different things. Some people work hard. Some people invest and clip coupons. Some people get up and shower in the morning. Some people work hard in difficult jobs, labor jobs and others that require them to shower at night. Some people work outside. Some people work indoors. Some people have income from wages. Some people have income from dividends or earnings or royalties of some type. So the question is how should the Tax Code treat all of this? I ask this question: Which is more worthy, work or investment? Or are they equally worthy? And if so, if work is as worthy as investment, then why would one decide to treat investment income with such preferences in the Tax Code? And why would one decide to tax work and exempt investment? Why would one decide to say we are going to take out this activity called work and sock it with a tax, and we are going to take out this activity called investment and make it tax exempt? What is the value system that says let's tax work but exempt investment? I think the value system, although I do not subscribe to this, is one that says the most important element in this business cycle of ours, in this free enterprise system, is investment. Investment is very important, there is no question about that. But so, too, is work. Let me read something I put in the Congressional Record in 1996 in the Senate. It was about a fellow who I think is a hero. I have only met him once. I did not know him at all at that point. I read about him in the Minneapolis Tribune as I came through the Minneapolis Airport one morning. His name is Robert Naegele, and this relates to the point of value of work relative to value of investment. Robert Naegele and his wife Ellis did something very extraordinary, something that surprised me when I read it in the Minneapolis Star Tribune that morning at the Minneapolis Airport. He owned a company called Rollerblade, a very successful company, the largest company producing inline skates in America, rollerblades. Most people know about rollerblades. I happen to like to rollerblade. I enjoy rollerblading. So he owned and was chairman of this company called Rollerblade. He sold the company after it was very successful, and he made an enormous amount of money. Just before Christmas in the year 1996, just after he sold this company and made a substantial amount of money, he decided he was going to return some of the profits from the sale of that company to the employees who worked in that company. He did not tell any of the workers about it. They began opening what they thought were Christmas cards from the previous owner of this company, Mr. Naegele and his wife. It turns out it was, in fact, a Christmas card with a check. The check was computed on the basis of the number of months these people had worked for the company. It was an amount of money that he wanted to return to the employees as a result of the profit he had made from selling this company that made rollerblades. The checks were as high as $20,000 to those who had worked there a long period of time. He said: By the way, I have prepaid the taxes on this bonus. So this is a check that is free and clear. I have paid the taxes on it for you. He said: I did this because while I was very fortunate to run a very successful company, I understand that this company was successful because of the wonderful men and women who worked there. They worked in the plant. They worked in shipping. They worked in manufacturing. They worked in the finance area. They made this company. They were this company. They helped make me successful, and I made a lot of money. But I want to share it with those workers. I thought, what a wonderful story. What a heroic thing to do, to finally recognize something that has been so lost in this country in recent years: the value and the worth of the workers who perform the work, who make these companies. These days, employees are too often treated like a wrench: Use it, use it up, throw it away; it is just another tool. Mr. Naegele understood an employee is not just another tool. An employee is a part of the personality and productivity of that company. The work is as important as the investment. It is workers and management. It is workers and investors. All of it together makes a company and makes a company successful. Very seldom do you see that ethic exist these days in how people look at these companies. But I put something in the Senate Record on January 10, 1996, paying tribute to this fellow. I tell that story today because it describes the value of work and the understanding of what work contributes to this country, to the innovation of its business community, and to the capability of what America can offer its employees in the free enterprise system. The question of how we tax is very important. We must build roads, we must provide for our country's common defense, we must build schools and educate children, we must provide health care to those who cannot provide for themselves--there are things we must do. So we must pay a tax. The question of how we impose that tax burden on the American people is very important. And this ethic, somehow this notion, this value system that says, oh, by the way, let's tax work and exempt investment, is one that I think relates directly to values. What is the value system that tells us work is less worthy than other enterprises? Work is not less worthy than other enterprises. It is an important part of what has helped build this country. I do not diminish at all entrepreneurs and investors. They are an important part of this. But so, too, is the important labor force in this country. I taught economics for a brief period in college. Samuelson, Econ. 101, you teach the streams of income and what generates the streams of income. You teach the business cycle--all of these issues. Nothing has really changed very much over the years except there is a change with respect to those who want to create a new reality here, suggesting that somehow there is one element of this system of capitalism that is so much more important than the others. I do not believe that is the case. I believe all of this fits together like the picture of a puzzle. A significant part of America's progress has been the worker and the ethic of work and the value of work. We will work together to overhaul this country's tax system. But I will not be a part of a system that says let's decide to impose a burden on the receptionist in the office that is 10 times the burden we will impose on the world's second richest man. That is not a value system that makes sense to me. Oh, some will come here and say: But we have to do that to incentivize growth. That doesn't incentivize growth. That retards fairness, but it doesn't incentivize growth. We have a lot to do to fix this tax system of ours. I proposed in the past and will again a way with respect to the current income tax system to remove the burden of some 70 to 80 million Americans from even having to file a tax return. We don't need to have the streets clogged on April 15 for people to get to the post office to get their tax returns postmarked. We can and should dramatically simplify this tax system. But we should not take a giant step in the direction of deciding there are some who will pay a substantial amount more than others, in reverse order here, with the highest amounts being paid by those who are least able to afford it, and the lowest amounts being paid by those who are most able to afford it. We are blessed to be a part of this great country. We could have been born anywhere. We could live anywhere. We share this planet with 6 billion people and, through God's grace, somehow we ended up here. There is not another place like it. It is our job to take what we have inherited and make it better. They say we inherit this from our folks and borrow it from our children. This great democracy of ours, including the progress over two centuries now that I am very proud of, requires nurturing and constant attention. Yes, one of the controversial and difficult areas has always been, How do you raise the revenue to do that which is necessary in our Government? We can debate about how large government should or should not be. My colleague from Oklahoma will follow me today. He is working, probably today--I suspect almost every day for months and months, on this question of, How do we construct a new highway program? What amount of money is necessary? With what formula shall it be distributed? That is really important work. That is an investment in the infrastructure of this country that is very important. When he and others get a bill that we can finally get to the floor and create, I hope a 6-year program--then we have to figure out how we pay for that just as we have to pay for everything else. The question isn't whether there should be a tax system. There is a system by which we collect taxes. The question is how should that system be constructed so that it is fair to all Americans. I look forward to a debate this coming year in which we talk about tax reform and changing our tax system because I think this is a system that is ripe for change. But it is critically important that we have a discussion about the tax burden and what is fair. The President announced today he is going to have a commission, which is a good thing. I hope that all viewpoints will be involved in that commission. You can get a commission to propose almost anything here in this town. I saw a few of the names on that commission, and I certainly think it needs some more energy and some more thought from other points on the compass. But I would say to the President, I think the Congress will welcome a debate about overhauling the Tax Code. But if it is proposed that we decide, for example, that dividends, interest and capital gains income shall be eliminated from the tax rolls, we will welcome that debate with a very aggressive discussion about what is the value of work and why should we diminish the value of work. I indicated earlier today about the ``good enough'' description, by Ma Ferguson, the former Governor of Texas. I will not recall that story again, but if a 5.25-percent tax rate is good enough for companies who move their jobs overseas, why is it not good enough for all Americans? If a zero-percent tax rate is good enough for those earning dividends, why is it not good enough for the wages of workers. Let me just show you, if you exempt investment income from taxation, the top 10 percent get most of the benefit--$463 billion in realized dividend, capital gain and interest income. The bottom 90 percent have far less. So you see, if you eliminate dividends, for example, from taxation, a massive amount of the tax breaks goes to the same old corner that it always goes, those who have the most. Bob Wills and his Texas Playboys used to have a line in their 1930s song: The little bee sucks the blossom And the big bee gets the honey. The little guy picks the cotton And the big guy makes the money. Every time we focus on tax reform we find the same thing, especially in recent years. Let me again say I am all for changing our Tax Code in ways that are thoughtful. We ought to simplify it. But we ought to resist efforts that will make it more unfair and strive to move towards efforts that will make the burden fair to all Americans. That has certainly not been the case in recent years. My hope is when we next see a proposal dealing with America's Tax Code that we will see something that represents some semblance of fairness. Otherwise there is likely to be a debate breaking out in the Senate, which would be a very healthy thing, in my judgment. I yield the floor.

Mr. DORGAN. If the Senator will yield for a moment, I would say I was actually not a professor. I did teach economics at the college briefly, but I was able to overcome that experience.

Mr. DORGAN

Mr. DORGAN. I thank my colleague from Montana and my colleague from Iowa. I listened carefully to his comments. We are here debating the proposition of increasing the debt limit by $800 billion. We have come through a time in the 1990s when we were actually running budget surpluses. We were paying down the debt. Now we are stacking debt on top of debt on top of debt. This is the most reckless fiscal policy I have ever seen. I didn't vote for it. I don't feel responsible for things I didn't vote for. Let me say that if this Senate passes an increase in the debt limit and does nothing about the underlying fiscal policy that has created it, then this Senate ill serves the American people. The President says: You know, we have had an economic slowdown, a recession, war, and terrorism. Yes. So have other Presidents. That is all true. But it seems to me it probably would have augured well for this administration, then, to recognize that things have changed and therefore fiscal policy must change. We are spending $5 billion a month every month in Iraq and Afghanistan--$4 billion in Iraq, $1 billion in Afghanistan. We are not paying for one penny of it. It is all being charged. This administration says we are fighting a war. Yes, we are fighting a war and guess what, this administration doesn't ask anyone to pay for it. They say we want to give big tax cuts mostly to people at the upper income level. What kind of fiscal policy is that? Part of this increase in the debt limit, I suppose, is to accommodate something that was done last year on the floor of the Senate. It says, you know what we have to do now? We have to reconstruct the country of Iraq. We want the American people to ante up $20 billion to reconstruct the country of Iraq. I offered an amendment. I said: I don't think we ought to do that. Iraq has the second largest oil reserves in the world. I had soldiers tell me they stood in indentations in the sand and got oil on their boots. I think the Iraqi people ought to pump oil and sell it at $45 a barrel. They will have more money than they know what to do with. But this administration believes the American taxpayer should pay for the reconstruction of Iraq and the Senate should raise the debt limit to make this happen. It is just one domino in this line, but it is a hood ornament of failure. The question is, When will this place and when will this administration come to its senses? I am not saying one side is all right and the other side is all wrong. But I am saying this: This fiscal policy was constructed at the White House at a time when they said we have so much surplus we don't know what to do with it. Let's start giving it back. Some of us stood on the floor of the Senate and said we ought to be a bit conservative. What if something happens we did not anticipate and things change? A war? A terrorist attack? An economic slowdown? The President says, no, don't worry about that. The future is bright. So we put in place tax cut after tax cut after tax cut and we are now choking on red ink and the President doesn't seem to care much at all. He doesn't address it, talk about it, or think about it. I think it's true to the admonition in Bob Woodward's books about the President saying I don't want second guessers around me. Once we decide to do something, that is what we do, and I don't want to talk about it. It seems to me when you have a fiscal policy that created an avalanche of debt for this country, the thing you ought to do--it is like the old southern saying about the law of holes. When you find yourself in a hole, stop digging. Maybe we ought to stop digging. Maybe this administration ought to describe the fiscal policy that stops making this hole deeper. But that is not what this is about today and I regret that. There is so much to talk about. We are talking about the budget deficits and the accumulated debt. By the way, every penny of the Social Security surplus is being spent. This administration makes the case that what matters is debt held by the public. No, no, that is not what matters. It is not just debt held by the public. It is debt held by the public and debt instruments that exist in the Social Security accounts which we are going to have to repay. All of that represents an obligation that this country must meet and it is growing and mushrooming in a way that is dangerous for the future of this country. Everybody knows it except the President, apparently, and those in this Chamber who have decided this President's fiscal plan is moving us in the right direction. You know the old saying in the western movies: Are you going to believe me or your lying eyes? The fact is, we understand what is happening here. We see it. Only in this town, where we make an industry out of creating euphemisms, can we have enough sugar to sugarcoat this nonsense. This is awful. This fiscal policy is injuring this country in a very dramatic way. We ought to take a step right now on this debt ceiling limit and decide we are going to tell this administration we demand a change in fiscal policy.

Mr. DORGAN. Let me ask for two additional minutes, if the Senator from Montana has it.

Mr. DORGAN. I am happy to yield.

Mr. DORGAN. The response to that is this administration is spending every single penny that comes into the Social Security trust fund. They want to fight the war and do all these things and no one has to pay for it. Don't worry. Be happy. Dance down the sidewalk and be oblivious to what is happening. We have the largest budget deficit in the history of this country and one that, incidentally, all the experts say you cannot grow out of. But we have our colleagues saying, we will just hang around, thumb our suspenders, and grow out of this. I guarantee we will grow out of it, they huff and puff. Nonsense. And they know it is nonsense. In addition to the biggest budget deficit in the history of this country, we have the biggest trade deficit in the history of this country, as well. I worry that one of these days the currency traders are going to look at this and say, as an electronic herd, we are moving elsewhere. When they do, the collapse of this dollar will have enormous consequences. I ask this President to provide some leadership in a fiscal policy that moves us in a constructive direction. I yield the floor.

Mr. DORGAN

Mr. DORGAN. Mr. President, I ask unanimous consent that the order for the quroum call be dispensed with.

Mr. DORGAN. Mr. President, my understanding is that the vote is ordered for 5:15.

Mr. DORGAN

Mr. DORGAN. Mr. President, I wanted to come to the floor to say that this Senator is going to miss the booming voice and the southern drawl of the Senator from South Carolina who is one of a few who has relentlessly, over a long period of time, talked about the issue of international trade. He has talked about how it relates to our country's economy. Very few come to the floor to talk about the doctrine of comparative advantage and Adam Smith and the kind of things that I have had the privilege of hearing from Senator Hollings. As one who comes to the floor to talk about trade a lot, I am going to miss very much the work which has been done by Senator Hollings and which he has been doing for so many years. He is absolutely right about these issues. They will take a look at statements and say, well, he is a protectionist. I don't view Senator Hollings as wanting to put up walls around this country. I think if the charge is that Senator Hollings or I or others want to protect the economic interests of the United States, we ought to plead guilty quickly. That is why I am here and why he has served this country for so many decades. We want to protect the economic interests of this country. I wanted to say, having heard the comments just offered by my colleague from South Carolina, how proud I am to have served with him. Being here when Senator Hollings was here and when Senator Byrd has been here and a few others is a very special privilege for someone like myelf.

Mr. DORGAN. Of course, I yield.

Mr. DORGAN. I thank my colleague from South Carolina and wish him well. Sinking Of The ``Leopoldville'' Mr. President, yesterday I was privileged to be at a very moving ceremony at the Tomb of the Unknown Soldier. Very few people will know of this issue, but I want to mention it because yesterday was the commemoration of the 60th year of the sinking of the SS Leopoldville, a troopship that was sunk in the English Channel on Christmas Eve 1944 by a torpedo shot by a German U-boat. Seven-hundred and sixty-three young American soldiers died in the frigid waters of the English Channel on that Christmas Eve. What was most interesting about this and in many ways the most tragic of this circumstance is that those young soldiers died in the waters of the English Channel, and virtually no one knew of them. On Christmas Eve of 1944, at a critical period, during the Battle of the Bulge, the announcement that 763 young American soldiers had been killed would have been devastating to the psyche of the American public, according to the Defense Department. So the result was there was no news. This was an enormous tragedy that occurred with virtually no one knowing of it. Yesterday, we placed a wreath at the Tomb of the Unknown Soldier. I was proud to have been a part of the ceremony. My uncle was on this ship and was killed when it sunk. I walked down the aisle to place the wreath with Tony Martinez, one of the survivors from that night, and with Lucy Ruggles, the widow of one of the fellows who was killed in that event. I believe 20 survivors from this ship were there yesterday at Fort Myers and at the Tomb of the Unknown Soldier, along with more than 100 family members and friends. Let me say just a word about what happened. The Leopoldville was a Belgium ship staffed by a Belgium crew. It was within 5 miles of the French coast. They could see the lights of the French coast when the German U-boat hit it with several torpedoes. Then this ship sank. There were 2,300 soldiers on this ship, and 763 of them died on Christmas Eve 1944. There was no notice to anybody about the tragedy because the Americans, the English, the Belgiums, the French, and others decided to keep it silent. Sixty years later, we know much more about it largely thanks to a book that was written, by Allan Andrade. Let me say thanks to Carmella LaSpada, who is the Executive Director of the White House Commission on Remembrance, for putting together a program yesterday that was extraordinarily moving. At that program, we heard from the survivors of the Leopoldville. They told us that the Belgium crew in most cases didn't speak English. When the ship was torpedoed and began to sink, the Belgium crew got in the life boats, and by and large the young American soldiers were stranded on that ship, and 763 of them died. I was invited to be a speaker yesterday and to be at the Tomb of the Unknown Soldier as a part of the ceremony because my uncle, Allan Dorgan, was one of the casualties that evening. I have known a lot about this in recent years because there has been a lot of investigation done. I just wanted to say that yesterday was a very moving day with discussions and visits with those who survived this sinking, and also a tribute to the memory of those who perished in the sinking of the Leopoldville. I hope America remembers that the young soldiers, 19, 20, 18, and 21 years of age who died that night in the frigid waters of the English Channel did not die in vain. They were patriots. There is an old saying that when the night is full of knives, the lightning is seen, and the drums are heard, the patriots are always there ready to fight and die as necessary for their country. These 763 patriots died that evening, and the world didn't know it. But they know it now. Yesterday's ceremony was a tribute to their service to our great country. I know we have a 5:15 vote. My colleague, I believe, wishes to speak. I wish to speak just for a moment about a trade issue. Might I ask my colleague how much time he needs?

Mr. DORGAN. Mr. President, I think as a courtesy to my colleague from Montana, I will not speak 5 or 6 minutes on trade. I will do that tomorrow because I think we have about 6 minutes before the vote. But let me just say this in 1 minute.

Mr. DORGAN

Mr. DORGAN. Mr. President, I would like the Record to reflect that I was necessarily absent for the vote on the conference report to H.R. 4520. While I believe that there were some missed opportunities on this legislation, overall I support the bill. I voted for the original bill when it passed the Senate and to invoke cloture on the conference report. Had I been present, I would have voted in support of the conference report.

Mr. DORGAN

Mr. DORGAN. Mr. President, the Senate is not in order. The Senator from Louisiana has an hour. She deserves to be heard. The Senate is clearly not in order.

Mr. DORGAN

Mr. DORGAN. Let me, in the few moments remaining, thank the Senator from Iowa. Yesterday, someone asked him what he was doing, and he said: I am supporting my farmers. The fact is, farmers in his State, our State and others, have been hit by weather-related disasters. You ought not treat farmers in different parts of the country in different ways. If you are going to provide disaster assistance to people in one part of the country, those farmers who have been hit with weather-related disasters in other parts of the country deserve to be helped as well. This is a case of the Government saying to farmers during a tough period, you are not alone; we are here to help you. This is not a case of farmers begging to be helped. It is a case, for example, in our part of the country, where torrential rains wiped out the opportunity for farmers to even plant a crop on 1.7 million acres. Think of that. There were 1.7 million acres that could not be planted. These are farmers that will lose their farms if we do not offer some help. The Senator from Iowa has been doing something very simple and powerful in the Senate. He is standing up for family farmers. My colleague from North Dakota, Senator Conrad, myself, and others are insistent we provide disaster relief and do so in the right way. What is being done in the conferences, back and forth, the ping- ponging of inadequate proposals, proposals that are unusual, is not fair. I commend the Senator from Iowa for being unwilling to sit by idly, silently, and allowing this to happen. I stand with him, as does my colleague, Senator Conrad, and many others.

Mr. DORGAN

Mr. DORGAN. Madam President, I wonder if the Senator will yield for a question.

Mr. DORGAN. Madam President, I understand the Senator from North Carolina is speaking as in morning business under a block of time allocated to the other side by prior agreement. I ask unanimous consent that following the Senator from North Carolina--if nobody is on the floor--that I be recognized for 15 minutes as in morning business, preserving the remainder of the 30 minutes allocated to the other side. If other speakers on that side are here to follow the Senator from North Carolina, I suggest that I follow them at the end of the 30-minute period.

Mr. DORGAN. Madam President, I believe I asked for 15 minutes.

Mr. DORGAN. Madam President, I came to the floor because we are going to have a great deal of business in the final days of this legislative session. Some of the legislation will be very significant. This is one piece of tax legislation that originally came out of the Senate Finance Committee and the House Ways and Means Committee. It rests on all of our desks. It is a large unwieldy piece of legislation dealing with, in some cases, arcane portions of our Tax Code. There is much in this conference report on what is called the FSC/ETI bill, which is the shorthand way we talk around here. Others call it the JOBS bill. There is much I commend, much that I support, and much that I think represents good work. But I want to talk a moment about some missed opportunities as well. I am mindful of what Mark Twain once said. It is always easy to be negative. Mark Twain once said, when asked if he would debate: Of course, if I can take the negative side. They said: We haven't told you the subject. He said: It doesn't matter, the negative side doesn't require preparation. I am mindful of that when I am trying to pick apart some pieces of this bill, but I think it is important to talk about missed opportunities at this late date. I am going to vote for this bill, but I will tell you what is not in it and should be. We are drowning in debt in this country. We have the largest budget deficit in the history of America, and add to that the largest trade deficit in the history of this country. We are neck deep in debt. We are spending money we do not have, in some cases on things we do not need. We send our men and women to war and say, by the way, we will not pay for that, we will have them pay for it when they come back. We are drowning in debt. One part of dealing with that debt in fiscal policy is to try to get the revenue into the coffers of the Federal Government that is owed by those who are required to pay taxes. Let me describe a couple headlines from recent days: House Negotiators Reject Tougher Tax Shelter Penalties. Those House negotiators said: No, we do not want to get tough to shut down tax shelters and tax dodgers. I am talking now about very large corporations that make billions of dollars and decide they want to do everything they can do as an American citizen, except they do not want to pay taxes. They do not want the obligation of paying taxes. Madam President, $40 billion would have been raised as a result of the provision that was objected to by the House negotiators. That's $40 billion saved in taxes that will not be paid by companies that should have been full taxpayers. October 7: How Big Tax Shelters with Cities Shortchanges the Federal Treasury. This is about people buying a sewer system. Can you imagine someone wanting to own a sewer system? But cities are now selling their subways, city hall, and the sewer system. Why? Because if they sell it to a corporation, a corporation can depreciate it, and then they can each share in the tax writeoff because a city does not have a tax write off because it is not taxable. So we see these things being sold to private investors so that everybody wins, except the taxpayer loses, and our debt goes up and up because entities that should be paying taxes are not. Let me talk just for a moment about the issue of missed opportunities with respect to runaway plants and moving American jobs overseas. This morning there was an announcement about the number of jobs created in the last month. We need to create about 175,000 jobs a month just to keep pace with the increased population moving into the workforce. This month it was only 96,000 new jobs, far short of what is necessary just to keep pace with the new people coming into the workforce. Even as we struggled to create these new jobs, we have in place a provision in this country's Tax Code that says to a company: Guess what. If you will just decide to move your jobs overseas, we will give you a tax cut for doing it. We will give you a big fat tax cut if you move your jobs overseas. Now, I cannot think of a more pernicious, obscene thing to do than to say to American companies, move your jobs and we will give you a tax cut. If some tax concessions are going to be given, give them to the businesses that create jobs and stay here, not to the businesses that fire their workers and move their jobs to China, Bangladesh, Sri Lanka, and Indonesia. We voted on this provision and the Senate actually turned it down. Senator Mikulski and I offered an amendment that said let us shut down this pernicious tax cut that says to people, move your job overseas and we will give you a benefit. That, it seems to me, should have been a revenue raiser in this bill. Or how about the proposition of American companies that decide they want to have all the benefits that accrue to being an American citizen as a corporation--because in law we say a corporation is a citizen, artificial citizenship. It can sue and be sued; contract and be contracted with. It wants in some cases all of the opportunities of citizenship in this country except for paying taxes. That is why we see corporations that decide what they want to do is do their business through a post office box in the Cayman Islands. Why? Is that where they run their company, from a post office box? No. What they want to do is shelter their income from this country so they can have all the benefits our country has to offer them but avoid paying U.S. taxes that are required. Who then pays the taxes? Oh, it is just the working men and women who get up in the morning and dress and go to work all day. They do everything right, and at the end of the day they try to provide for their families and try to pay shelter and transportation, all the things that are necessary to send their kids to school, pay for health care, and then pay taxes as well. It seems to me this is a terrible missed opportunity to shut down aggressive tax shelters, to shut down the tax opportunities that have come from tax haven subsidiaries of U.S. corporations. I could go through a list of corporations. One corporation, for example, set up 441 entities in the Cayman Islands alone. Yes, an American corporation, an energy company, for example, set up 441 subsidiaries in the Cayman Islands. Why? Because they do not want to pay taxes. The Halliburton Company has 17 tax haven subsidiaries, including in Liechtenstein--Panama, Cayman Islands, Liechtenstein. I would like to see these shut down. If you are setting up circumstances where you are doing business through a post office box in the Bahamas or the Cayman Islands or, yes, Liechtenstein, in order to avoid paying taxes, the next time you get in trouble maybe you should call out the Liechtenstein Navy to protect you, or the Bahamian Navy. Someone told me the Bahamian Navy has 20 people. These companies want all the benefits that can come to an American citizen, but they do not want to pay their fair share of taxes. Again, we have people who get up every morning in this country, they are good citizens, pay their bills, and they pay their taxes, because they want to send their kids to the best schools, and they want to be able to have affordable health care. They want to live in safe neighborhoods. They want grandma and grandpa to have access to health care. They want a good job that pays well. Instead, we have a tax system that says, oh, by the way, we will give you a tax cut to ship your job overseas and oh, by the way, it is fine for you to access, even if you stay here, tax shelters so that if you make money, you do not have to pay, but your workers do. Your workers should pay taxes, but you make $2 billion, you do not have to pay. Do your business through a mailbox somewhere. These are enormous missed opportunities, and they are missed opportunities because, as this says--and this is why House negotiators reject tougher tax shelter penalties. What that means is a bunch of people come to this conference and say, no, we want to protect these special deals, we do not want to close these loopholes. The fact is, the American people deserve better. This country is drowning in debt. People ask, how do you get a handle on the fiscal policy? The first thing you do is you stop this sort of nonsense. You stop subsidizing jobs being exported overseas by American companies that are told by this Government, shut down your plant and we will give you a tax cut if you move your job overseas. Yes, we voted on that in the Senate and it was voted down. Closing that loophole was voted down in the Senate. My hope would have been with the deficit growing worse and worse, that perhaps in conference, working on this bill, we would have seen a conference that would have closed these loopholes, closed these shelters, closed off the opportunities that result in such a massive amount of lost revenue to the Federal Treasury at a time when we are deep in debt. At a time as well when our country is reliant on about 60 percent of our oil from others around the world, it seems to me that we also missed some opportunities to move aggressively in areas to make us more independent with respect to our oil supply. It seems to me that when we have a circumstance where we need additional energy and we reach for 60 percent of that oil from troubled parts of the world, it puts our economy in great jeopardy. When we are talking about incentives for energy production in this country, we could have done and should have done much better. If we do not understand that the 60 percent reliance on Saudi Arabia and Kuwait and, yes, Iraq, Venezuela, and Nigeria is very troublesome to this country, then we do not understand very much. I happen to think we are going to always continue to use fossil fuels--coal, oil, and natural gas. I also believe we ought to move toward a hydrogen fuel cell future in which we stop putting gasoline through our carburetors; find an inexhaustible supply of energy such as hydrogen, which is ubiquitous and everywhere, and when you use a fuel cell hydrogen vehicle you put water vapor on the tailpipe, you have twice the power to the wheel. What a remarkable future. We will not get there because the energy companies, particularly many of them that have a vested interest in what we are doing now, do not want to get there. There are some who are very excited about a new Apollo project in which this country describes a completely new energy future. I would hope some of those incentives would have been in this bill, and they are not. This legislation which is presented to us now over the weekend is legislation that has a number of things that I believe moves us in a good direction, a number of constructive things. I will make one other point on tax shelters. My colleague Senator Grassley, for example, announced some long while ago that he was going to put a stop these phony lease transactions between cities and companies. Yet, the way this conference report comes out they actually went easier on some of these transactions. The same is true with respect to inversions. Corporations that decide, we do not want to be American citizens anymore, we renounce our American citizenship, we want to become citizens of the Bahamas. Why? I do not know. Sun, sand, good food. I do not know. They want to become citizens of the Bahamas in order to avoid paying U.S. taxes so they do something called inversion, which is renounce your citizenship. There was a date set by my colleague Senator Grassley and his counterpart and they said, beyond this date, understand you are in jeopardy when you do this. Well, guess what. In this conference, they went a year forward from that date. I do not have the foggiest idea why they did that. By the way, this is not a criticism of Senator Grassley because he has been a leader in shutting down these abusive transactions. My assumption is that the House of Representatives came over once again and said, no, we cannot buy that. It is unbelievable that corporations that want to renounce their citizenship are given even an inch of ground by anybody in this Chamber, let alone anybody in that conference. We ought to say, you want to renounce your American citizenship in order to save on taxes? Shame on you. You are not going to get tax benefits or tax savings from this Tax Code, not from this Congress. You want to do what is called an inversion and renounce your American citizenship? Then this Congress is not going to give you one cent of benefits in the Tax Code. Yet regrettably, what has happened here is they have actually given another year's flexibility to the companies that did that, a year beyond the date in which my colleague--and good for him, Senator Grassley--said, here is the date.

Mr. DORGAN. I am happy to yield.

Mr. DORGAN. I ask unanimous consent for 1 additional minute to answer my colleague.

Mr. DORGAN. Let me answer my colleague from Louisiana by saying of course it is absurd. Let me say it seems to me the first obligation in this Congress is to make sure we are doing what we should do for those men and women who, when called, left their homes, left their families, left their jobs, and went to serve this country. It is unbelievable to me, some of the priorities that have been established around here. I heard the Senator from Louisiana make the case earlier today. She is absolutely right about that. The soldiers she is talking about should not be put at the end of the line. They ought to be at the front of the line when you talk about trying to do what is right in this bill. I appreciate the leadership of the Senator from Louisiana on that point. I yield the floor.

Mr. DORGAN. Will the Senator yield for a question?

Mr. DORGAN. I think the Senator was not in the Chamber when I began my presentation. I did say I intend to vote for this. I said there is much in it that I commend and much that I support, including some of the energy provisions that I believe you just mentioned. I was speaking specifically only about the series of tax shelters representing, in my judgment, a missed opportunity. But I think the Senator from Wyoming missed the opening comments of this Senator. He probably missed that I did say there is much here to commend, and I was speaking about what I think is a gross abuse, which we call tax shelters, which we have to close, and I think most Members think at some point we will have to close them.

Mr. DORGAN

Mr. DORGAN. Mr. President, I rise to thank members of the Defense Authorization Committee for addressing the Energy Savings Performance Contract, ESPC, program. Not only did the conference adopt the Senate position on the importance of this program, they went a step further and extended the program through 2006. Getting this reauthorization has been a long process and unfortunately one that will need to be revisited during the next Congress. We could have avoided this situation by simply providing a permanent authorization for the program, but since we didn't, I believe we should focus on this issue at the beginning of the next Congress instead of waiting until the contracting authority runs out in 2006. I want to take a moment of the Senate's time to explain to my colleagues the importance of energy savings performance contracts. Energy Savings Performance Contracts allow Federal agencies to enter into unique contracts through which private companies provide energy- efficiency improvements in Federal buildings. What makes these contracts unique is that the private companies are reimbursed for these improvements only through the resulting stream of savings on that Federal agency's energy bill. Simply put, if there are no savings, then there are no payments. The Federal Government owns the energy efficiency improvements, but pays for these improvements through actual energy savings achieved. The Government retains the monetary value equivalent of any savings that exceed the payments to the private company during the duration of the contract and then retains all energy savings once the contract is complete. Importantly, the Federal agency pays no upfront capital costs for the upgrade. The authority to enter into these contracts expired last year. To ensure continuation of the program, several of us in the Senate worked to include renewal authority in the comprehensive energy bill. Unfortunately, that extension authority was removed from the modified version of the energy legislation introduced by the majority leader. One of the main reasons for this deletion was because the CBO has assigned a significant revenue impact to continuation of the program. This scoring occurred even though the private sector energy efficiency providers are required by law to guarantee the energy savings and thus provide no net cost to the Treasury. Let me say this again, unless there are savings, the Government owes nothing. CBO's interpretation of how to score these contracts may be in line with the literal meaning of the Budget Act, but it certainly is not in line with the spirit of the act. By allowing these private sector companies to work with the Federal Government on installing energy efficiency measures, an enormous service is being provided. We are saving energy; the Government is not required to pay up front costs; and at the end of the day, the Government and the American taxpayer gets the benefit of lower energy bills. With passage of this short-term extension, the Senate must now turn its attention to passing a permanent extension. The start-stop program we have now is not conducive to getting these efficiency measures installed. During debate on the fiscal year 2005 budget resolution over 40 companies and associations signed a letter in support of the ESPC program. The signatures ranged from USPIRG to the Chamber of Commerce. There are not many instances when you have those two associations agreeing on a measure, so I believe the benefits of the program speak for itself. In closing, I want to again thank members of the conference committee for their work and support for this program.