Orrin Hatch

Mr. HATCH

Mr. HATCH. Mr. President, I would like to briefly respond to the remarks of my democratic colleague on the state of the judicial nominations process. We have heard a lot of statistics batted around about judicial confirmations. Some of them are accurate, some of them are dubious, but one of the more misleading ones I have heard is the claim that the score on President Bush's judicial nominees is 140 to 2. This is hardly the score. First, there are more Federal appellate vacancies today, 18, during President Bush's third year in office, than there were at the end of former President Clinton's second year in office, 15. Almost one-third of President Bush's Federal court nominees have not been confirmed. There are 68 total vacancies on the Federal district and appellate benches, 32 of which are classified as judicial emergencies. We have worked to do, and we will continue to fill those vacancies. No raw number of confirmations means anything, in and of itself, while there are not one, but two filibusters of exemplary nominees going on now, potentially more to come, and emergency vacancies continued to exist. Are we supposed to be grateful that only a few of President Bush's nominees are being filibustered? Is there an acceptable filibuster percentage that the Democratic leadership has in mind? The mere fact that we have to ask these questions makes it crystal clear that we have a broken process. Even one filibuster of a judicial nominee is one too many. As for the allegation that two nominees have been defeated, well, I for one would not be as quick as some of my Democratic colleagues to declare that the nominations of Miguel Estrada and Priscilla Owen have been defeated. We will continue to fight for the confirmation of these nominees and continue to file for cloture on their nominations. They are exemplary nominees who deserve to be confirmed. And as for the implication that it is somehow acceptable to filibuster two judicial nominees in light of the others that have been confirmed, I must ask my Democratic colleagues who are leading these filibusters: Would you ever argue that it is permissible to break two criminal laws just as long as all the rest are being followed? Of course not. Nobody would make that argument any more then they would argue that it is permissible to disregard two of the constitutional amendments that comprise our Bill of Rights simply because there are eight others. The confirmation of other Bush judicial nominees in no way excuses or justifies the shabby treatment inflicted on Miguel Estrada and Priscilla Owen.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to introduce legislation to change the way this country taxes business income, whether earned at home or abroad. The bill I am introducing, the ``Promote Growth and Jobs in the USA Act of 2003,'' or the ``Pro Grow USA Act,'' was made necessary because the World Trade Organization has ruled that a significant feature of our current tax system, the Extraterritorial Income Exclusion (or ETI), is an impermissible trade subsidy under WTO rules. This final WTO ruling followed a similar decision of that body made a few years ago that a previous U.S. tax provision, the Foreign Sales Corporation (or FSC), was also an illegal trade subsidy under the WTO rules. After that first WTO decision, Congress replaced the FSC provision with the ETI provision, which generally replicated the benefits of the FSC to its recipients. Both provisions were designed to help U.S. exporters better compete in the global economy. Unfortunately, we now find ourselves in the very unpleasant situation of having to repeal the ETI tax benefit. This repeal will cost the exporters of this nation more than $4 billion per year. Failure to repeal it by the end of 2003 could bring upon us trade sanctions by the European Union, which has already been authorized by the WTO to assess these sanctions in an amount exceeding $4 billion per year. Even though I am not enthusiastic about introducing legislation to repeal that tax benefit, I believe we should make a virtue out of necessity. This is what I am trying to accomplish with this bill. We know we cannot, in a WTO-compliant way, give those lost tax benefits back to the companies that are losing them by the repeal. What we can do, however, is pass tax reform measures to strengthen all American businesses. I see this as an opportunity to once again make America the world's greatest location to start a business, and the world's greatest location to grow a business. Today, savings and investment dollars flow around the world at the speed of light, and businesses look all over the world when deciding where to put their global headquarters, their research departments, and their manufacturing operations. We need to take these facts into account when we reform our tax rules, which we now are forced to do. Our goal should be to make the U.S. economy a magnet for greater innovation and greater capital formation. I believe, that this is the right time to look at how our companies do business overseas, both how they export products abroad and how they expand their operations abroad. And, I believe we should also take this opportunity to examine whether our tax policy can be improved to better help U.S. firms that operate only domestically grow and thrive. In my view, the ETI repeal has to address the legitimate concerns of both domestic producers and U.S.-based multinationals. Both kinds of companies hire Americans, both kinds of companies make interest payments and dividend payments to Americans, and both kinds of companies pay American taxes. In response to this situation, Members of Congress have introduced several proposals to repeal and replace the ETI benefit. One leading proposal would create a new, lower tax rate for American manufacturers. While I am certainly not opposed to lowering tax rates on U.S. manufacturers, I am convinced that such a solution, by itself, is not adequate. This is because it ignores the very real problems our tax code presents to U.S. businesses that expand overseas. As with several of my colleagues on the Finance Committee, I have long been interested in improving our tax rules that govern international transactions. They are woefully out of date and harm the ability of U.S. firms to compete on a global basis. Moreover, the rules are mind numbingly complex. Legislation I introduced with Senator Baucus in 1999 would have gone a long way toward updating and simplifying these laws so they work much better. Some of those provisions were included in a large tax bill that both the Senate and House passed that year that was unfortunately vetoed by President Clinton for reasons unrelated to the international provisions. Since then, however, there has been a great deal of interest in reforming the international rules, but the opportunities to bring such measures to the floors of the House and Senate have been quite limited, until now. As I mentioned, I believe that the repeal of the ETI represents a rare opportunity to address these much-needed changes. Another major solution to the ETI repeal and replacement problem is the one taken by Chairman Bill Thomas of the House Ways and Means Committee in the bill he introduced last Friday. I want to emphasize that while my bill and Chairman Thomas's bill are very different in many respects, they are very much alike in the approach they take to the problem. Both Chairman Thomas and I believe it is vital to address the issues presented by both domestic businesses and by multinational firms. There are three principles underlying my legislation. The first is that as we repeal ETI, we should strive to replace it with provisions that would increase the competitiveness of U.S. companies at home as well as abroad, and that would increase the productivity growth of our economy. I want to increase the ability of all American firms to compete, both those just at home and those that also operate abroad There is a false notion we hear from time to time that if we make it easier for U.S. companies to operate effectively on a worldwide basis, we are making them more likely to move U.S. jobs abroad. I believe just the opposite is true--that making U.S. firms more competitive worldwide increases the quality and quantity of American jobs. When companies expand overseas, they likely hire more people at the U.S. headquarters. The R&D jobs, the marketing jobs, management and support jobs--we can have those jobs here, supporting a U.S. company's worldwide operations. I think we should make it easier to grow those kind of good-paying headquarters jobs right here at home. The second principle is that we ought to simplify the tax code to the extent possible. My bill would do this both in the international arena and in the depreciation rules. Finally, I want to make it clear that I disagree with the notion that replacing the ETI provision has to be a zero sum game. The Senate budget resolution calls for nearly $500 billion more in tax cuts outside of budget reconciliation. I believe we should be willing to spend some of this tax cut money to ensure that all American businesses are better able to grow and compete. Notwithstanding our new deficit projections, I still believe that President Bush and those who support him are on the right track in trying to pass tax cuts to increase economic growth and productivity, combined with spending discipline. One thing is for certain--we will never get out of a deficit mode with the slower growth that comes from tax hikes and more government spending. I understand the political realities facing the Senate in this, the 108th Congress. I understand that a bill featuring $200 billion or more in additional tax cuts is not likely to attract the kind of bipartisan support it needs in order to be marked up in the Finance Committee and to make it to the floor of the Senate. Therefore, my goal in introducing this legislation is threefold. First, I hope to help convince my colleagues of the importance of meeting our WTO obligations this year, by repealing the ETI provision. As our economy struggles to shake off the last recession, the last thing we need is to impose large and onerous trade sanctions upon it. Second, I want to expand the options on the table for the Finance Committee to consider when we start putting the bill together this autumn. Even in a revenue neutral environment, the ideas put forward by my bill should provide many additional choices for the Committee to consider. Finally, I hope that by introducing this legislation, we will end up with a final bill that will be more beneficial to U.S. domestic and U.S.-based multinational companies and their workers. In my view, we simply cannot afford to focus on just workers for domestic companies or just on employees of global companies. We need both for our long-term prosperity. The bill I am introducing today has four major components. First, of course, it repeals the ETI provision and provides three years of generous transition relief. When a representative of the U.S. Trade Representative's office testified before the Finance Committee a few weeks ago, I asked him what the appropriate phase-out of the ETI benefit might be, so as not to trigger the trade sanctions by the E.U. In reply to my question, he stated that he believed the Europeans would view one or two years as a normal and expected phase out period. On the other hand, the USTR official indicated that he believed that a longer period of, four or five years I believe he said, would definitely cause some real concern on the part of the Europeans. Therefore, I included a three-year phaseout of the ETI benefit in my bill. Specifically, the benefits of the ETI exclusion would be phased out at the rate of 25 percent in 2004, 50 percent in 2005, 75 percent in 2006, and no benefits in 2007 and thereafter. Second, the bill contains a substantial international tax reform title. Our international tax system is based on two key principles, neither of which work very well in practice under our current outdated laws. The first principle is that U.S. companies that pay income tax to other countries should not be double taxed on that income. The second principle is that companies engaged in active overseas businesses should not pay tax on that income until it is returned to the U.S. parent corporation. Our current rules violate these principles again and again, and I think it's time to return to these principles. For example, our foreign base company tax rules, which make it expensive for companies to create an overseas regional marketing and distribution network for U.S. products, are an anachronism. They hurt U.S. exports, and need to be fixed. But we are told that repealing these rules would cost the Treasury too much revenue, and that they may open up opportunities for transfer pricing abuses. Recognizing this revenue concern, I am proposing to allow a repeal of the foreign base company rules as long as the base company is in a country with which we have a comprehensive tax treaty, or when the U.S. parent has an advanced pricing agreement in place with the IRS. These backstops should reduce these concerns about base company repeal. Further, I want to open a debate on the merits of a territorial tax system. I want to open that debate by proposing an expansion of the temporary dividend repatriation proposal that some of my colleagues have embraced, and that I myself voted for in the Finance Committee and on the floor. While I believe that such a temporary provision has merit from an economic stimulus standpoint, I have real tax policy concerns about it. Therefore, in my bill I propose a permanent, reduced corporate tax rate of 5.25 percent to companies that repatriate foreign earnings to the U.S., as long as they spend that money on higher levels of business equipment and research expenditures. Overseas profits can pay for new machines, new research, and better jobs right here at home, and multinational businesses will be given a strong incentive in my bill to invest in such economically positive activities. I hope that my colleagues will give serious consideration to this proposal. In the 107th Congress, Senator Breaux and I introduced S. 1475, a bill to provide an appropriate and permanent tax structure for investments in the Commonwealth of Puerto Rico and the possessions of the United States. That bill would have allowed subsidiaries of U.S. companies incorporated in Puerto Rico and the U.S. possessions to repatriate active business income earned in these jurisdictions at the equivalent of a 5.25 percent tax rate. As I just mentioned, the bill I am introducing today would provide generally comparable treatment for U.S. subsidiaries incorporated in all foreign jurisdictions, including Puerto Rico and the U.S. possessions, to the extent the companies invested those repatriated earnings on higher levels of business equipment and research. As a result of expanding the scope of last year's bill, I recognize that U.S. companies might not be encouraged to invest in Puerto Rico and the U.S. possessions as compared to any foreign country. Since 1921, the United States has accorded preferential tax treatment to the business operations of U.S. companies in Puerto Rico and the U.S. possessions. This tax treatment offsets U.S. regulatory mandates--such as minimum wage and environmental and safety regulations--and has supported Puerto Rico's industrial development program, which has resulted in an increase in Puerto Rico's per capita income from 16 percent of the U.S. average in 1948 when the industrial incentives program began, to 32 percent today. I remain concerned about the economic development of Puerto Rico and the U.S. possessions and therefore will continue to support separate legislation that supports employment and economic opportunity for American citizens living in the Commonwealth and the possessions. The third section of my bill extends and expands the research credit on a permanent basis. This provision is identical to the bill that Senator Baucus and I introduced earlier this year. And as many of my colleagues know, a permanent research credit enjoys significant bipartisan support here in the Senate, both on and off the Finance Committee. Finally, the bill offers real depreciation reform. The bill offers three years of complete expensing of business equipment and leasehold improvements. It builds on the bonus depreciation incentives we included in both the 2002 stimulus tax cut bill and the growth tax cut bill we passed earlier this year. Essentially, all the same kinds of assets that qualified for the bonus depreciation benefits in those two bills would now qualify for 100 percent immediate expensing under this bill. Moreover, the bill would extend the Section 179 expensing provision for small businesses by one full year. Economists tell us that what this recovery lacks is capital spending by business. By building on the incentives we passed in the earlier tax bills, we can get capital spending moving again. This will lead to higher productivity and higher wages. I would like to comment on more aspects of the depreciation section of my bill. I have been told by some of my business constituents in Utah that the bonus depreciation provisions are not helpful to them. This is because those companies are currently suffering losses and have no current taxable income. Moreover, some of these businesses have been having difficulties for so long that they have no recent year when tax was paid to which they may carry back a net operating loss. One tax attribute that many of these companies do have, however, is prepayment credits under the Alternative Minimum Tax. As many of my colleagues know, the AMT has the perverse effect of hurting companies when business conditions are poor, thus exacerbating an already difficult financial situation. So, unprofitable companies often find themselves continuing to pay the alternative minimum tax. In order to assist companies like the ones I described, my bill includes a provision that would allow a taxpayer to elect to forego the expensing of newly acquired business property and instead to effectively monetize their corporate alternative minimum tax credits to that extent. This simple proposal bestows no new tax benefits on these companies, but rather delivers the full expensing provision at the time it is most needed by the company and in the economy generally. Moreover, this provision helps to equalize the tax treatment between fully taxable companies that can take full advantage of tax incentives and their less fortunate competitors that cannot at the present fully utilize those benefits. Having Congress assist those companies who are enjoying good times at the expense of those who are struggling is not in the best interest of this nation. I hope this bill will make a positive contribution to the debate in both the Senate and the House. And, I hope the final ETI repeal and replacement bill that the President signs will be more beneficial to more domestic and multinational companies because of the ideas we are proposing. Finally, I hope that throughout this debate, as accusations and proposals fly back and forth regarding how best to help the U.S. economy, we keep our eyes on the real goal--keeping America's workers the most productive in the world, whether they work in an office park or in a factory. And as the 1990s proved beyond doubt, high productivity and lower unemployment rates can easily go hand in hand. As we saw in the 1990s, higher productivity is the key to higher wages and better jobs. I ask unanimous consent that a section-by-section summary of my bill be printed in the Record.

Mr. HATCH

Mr. HATCH. Mr. President, I rise today to introduce legislation to change the way this country taxes business income, whether earned at home or abroad. The bill I am introducing, the ``Promote Growth and Jobs in the USA Act of 2003,'' or the ``Pro Grow USA Act,'' was made necessary because the World Trade Organization has ruled that a significant feature of our current tax system, the Extraterritorial Income Exclusion (or ETI), is an impermissible trade subsidy under WTO rules. This final WTO ruling followed a similar decision of that body made a few years ago that a previous U.S. tax provision, the Foreign Sales Corporation (or FSC), was also an illegal trade subsidy under the WTO rules. After that first WTO decision, Congress replaced the FSC provision with the ETI provision, which generally replicated the benefits of the FSC to its recipients. Both provisions were designed to help U.S. exporters better compete in the global economy. Unfortunately, we now find ourselves in the very unpleasant situation of having to repeal the ETI tax benefit. This repeal will cost the exporters of this nation more than $4 billion per year. Failure to repeal it by the end of 2003 could bring upon us trade sanctions by the European Union, which has already been authorized by the WTO to assess these sanctions in an amount exceeding $4 billion per year. Even though I am not enthusiastic about introducing legislation to repeal that tax benefit, I believe we should make a virtue out of necessity. This is what I am trying to accomplish with this bill. We know we cannot, in a WTO-compliant way, give those lost tax benefits back to the companies that are losing them by the repeal. What we can do, however, is pass tax reform measures to strengthen all American businesses. I see this as an opportunity to once again make America the world's greatest location to start a business, and the world's greatest location to grow a business. Today, savings and investment dollars flow around the world at the speed of light, and businesses look all over the world when deciding where to put their global headquarters, their research departments, and their manufacturing operations. We need to take these facts into account when we reform our tax rules, which we now are forced to do. Our goal should be to make the U.S. economy a magnet for greater innovation and greater capital formation. I believe, that this is the right time to look at how our companies do business overseas, both how they export products abroad and how they expand their operations abroad. And, I believe we should also take this opportunity to examine whether our tax policy can be improved to better help U.S. firms that operate only domestically grow and thrive. In my view, the ETI repeal has to address the legitimate concerns of both domestic producers and U.S.-based multinationals. Both kinds of companies hire Americans, both kinds of companies make interest payments and dividend payments to Americans, and both kinds of companies pay American taxes. In response to this situation, Members of Congress have introduced several proposals to repeal and replace the ETI benefit. One leading proposal would create a new, lower tax rate for American manufacturers. While I am certainly not opposed to lowering tax rates on U.S. manufacturers, I am convinced that such a solution, by itself, is not adequate. This is because it ignores the very real problems our tax code presents to U.S. businesses that expand overseas. As with several of my colleagues on the Finance Committee, I have long been interested in improving our tax rules that govern international transactions. They are woefully out of date and harm the ability of U.S. firms to compete on a global basis. Moreover, the rules are mind numbingly complex. Legislation I introduced with Senator Baucus in 1999 would have gone a long way toward updating and simplifying these laws so they work much better. Some of those provisions were included in a large tax bill that both the Senate and House passed that year that was unfortunately vetoed by President Clinton for reasons unrelated to the international provisions. Since then, however, there has been a great deal of interest in reforming the international rules, but the opportunities to bring such measures to the floors of the House and Senate have been quite limited, until now. As I mentioned, I believe that the repeal of the ETI represents a rare opportunity to address these much-needed changes. Another major solution to the ETI repeal and replacement problem is the one taken by Chairman Bill Thomas of the House Ways and Means Committee in the bill he introduced last Friday. I want to emphasize that while my bill and Chairman Thomas's bill are very different in many respects, they are very much alike in the approach they take to the problem. Both Chairman Thomas and I believe it is vital to address the issues presented by both domestic businesses and by multinational firms. There are three principles underlying my legislation. The first is that as we repeal ETI, we should strive to replace it with provisions that would increase the competitiveness of U.S. companies at home as well as abroad, and that would increase the productivity growth of our economy. I want to increase the ability of all American firms to compete, both those just at home and those that also operate abroad There is a false notion we hear from time to time that if we make it easier for U.S. companies to operate effectively on a worldwide basis, we are making them more likely to move U.S. jobs abroad. I believe just the opposite is true--that making U.S. firms more competitive worldwide increases the quality and quantity of American jobs. When companies expand overseas, they likely hire more people at the U.S. headquarters. The R&D jobs, the marketing jobs, management and support jobs--we can have those jobs here, supporting a U.S. company's worldwide operations. I think we should make it easier to grow those kind of good-paying headquarters jobs right here at home. The second principle is that we ought to simplify the tax code to the extent possible. My bill would do this both in the international arena and in the depreciation rules. Finally, I want to make it clear that I disagree with the notion that replacing the ETI provision has to be a zero sum game. The Senate budget resolution calls for nearly $500 billion more in tax cuts outside of budget reconciliation. I believe we should be willing to spend some of this tax cut money to ensure that all American businesses are better able to grow and compete. Notwithstanding our new deficit projections, I still believe that President Bush and those who support him are on the right track in trying to pass tax cuts to increase economic growth and productivity, combined with spending discipline. One thing is for certain--we will never get out of a deficit mode with the slower growth that comes from tax hikes and more government spending. I understand the political realities facing the Senate in this, the 108th Congress. I understand that a bill featuring $200 billion or more in additional tax cuts is not likely to attract the kind of bipartisan support it needs in order to be marked up in the Finance Committee and to make it to the floor of the Senate. Therefore, my goal in introducing this legislation is threefold. First, I hope to help convince my colleagues of the importance of meeting our WTO obligations this year, by repealing the ETI provision. As our economy struggles to shake off the last recession, the last thing we need is to impose large and onerous trade sanctions upon it. Second, I want to expand the options on the table for the Finance Committee to consider when we start putting the bill together this autumn. Even in a revenue neutral environment, the ideas put forward by my bill should provide many additional choices for the Committee to consider. Finally, I hope that by introducing this legislation, we will end up with a final bill that will be more beneficial to U.S. domestic and U.S.-based multinational companies and their workers. In my view, we simply cannot afford to focus on just workers for domestic companies or just on employees of global companies. We need both for our long-term prosperity. The bill I am introducing today has four major components. First, of course, it repeals the ETI provision and provides three years of generous transition relief. When a representative of the U.S. Trade Representative's office testified before the Finance Committee a few weeks ago, I asked him what the appropriate phase-out of the ETI benefit might be, so as not to trigger the trade sanctions by the E.U. In reply to my question, he stated that he believed the Europeans would view one or two years as a normal and expected phase out period. On the other hand, the USTR official indicated that he believed that a longer period of, four or five years I believe he said, would definitely cause some real concern on the part of the Europeans. Therefore, I included a three-year phaseout of the ETI benefit in my bill. Specifically, the benefits of the ETI exclusion would be phased out at the rate of 25 percent in 2004, 50 percent in 2005, 75 percent in 2006, and no benefits in 2007 and thereafter. Second, the bill contains a substantial international tax reform title. Our international tax system is based on two key principles, neither of which work very well in practice under our current outdated laws. The first principle is that U.S. companies that pay income tax to other countries should not be double taxed on that income. The second principle is that companies engaged in active overseas businesses should not pay tax on that income until it is returned to the U.S. parent corporation. Our current rules violate these principles again and again, and I think it's time to return to these principles. For example, our foreign base company tax rules, which make it expensive for companies to create an overseas regional marketing and distribution network for U.S. products, are an anachronism. They hurt U.S. exports, and need to be fixed. But we are told that repealing these rules would cost the Treasury too much revenue, and that they may open up opportunities for transfer pricing abuses. Recognizing this revenue concern, I am proposing to allow a repeal of the foreign base company rules as long as the base company is in a country with which we have a comprehensive tax treaty, or when the U.S. parent has an advanced pricing agreement in place with the IRS. These backstops should reduce these concerns about base company repeal. Further, I want to open a debate on the merits of a territorial tax system. I want to open that debate by proposing an expansion of the temporary dividend repatriation proposal that some of my colleagues have embraced, and that I myself voted for in the Finance Committee and on the floor. While I believe that such a temporary provision has merit from an economic stimulus standpoint, I have real tax policy concerns about it. Therefore, in my bill I propose a permanent, reduced corporate tax rate of 5.25 percent to companies that repatriate foreign earnings to the U.S., as long as they spend that money on higher levels of business equipment and research expenditures. Overseas profits can pay for new machines, new research, and better jobs right here at home, and multinational businesses will be given a strong incentive in my bill to invest in such economically positive activities. I hope that my colleagues will give serious consideration to this proposal. In the 107th Congress, Senator Breaux and I introduced S. 1475, a bill to provide an appropriate and permanent tax structure for investments in the Commonwealth of Puerto Rico and the possessions of the United States. That bill would have allowed subsidiaries of U.S. companies incorporated in Puerto Rico and the U.S. possessions to repatriate active business income earned in these jurisdictions at the equivalent of a 5.25 percent tax rate. As I just mentioned, the bill I am introducing today would provide generally comparable treatment for U.S. subsidiaries incorporated in all foreign jurisdictions, including Puerto Rico and the U.S. possessions, to the extent the companies invested those repatriated earnings on higher levels of business equipment and research. As a result of expanding the scope of last year's bill, I recognize that U.S. companies might not be encouraged to invest in Puerto Rico and the U.S. possessions as compared to any foreign country. Since 1921, the United States has accorded preferential tax treatment to the business operations of U.S. companies in Puerto Rico and the U.S. possessions. This tax treatment offsets U.S. regulatory mandates--such as minimum wage and environmental and safety regulations--and has supported Puerto Rico's industrial development program, which has resulted in an increase in Puerto Rico's per capita income from 16 percent of the U.S. average in 1948 when the industrial incentives program began, to 32 percent today. I remain concerned about the economic development of Puerto Rico and the U.S. possessions and therefore will continue to support separate legislation that supports employment and economic opportunity for American citizens living in the Commonwealth and the possessions. The third section of my bill extends and expands the research credit on a permanent basis. This provision is identical to the bill that Senator Baucus and I introduced earlier this year. And as many of my colleagues know, a permanent research credit enjoys significant bipartisan support here in the Senate, both on and off the Finance Committee. Finally, the bill offers real depreciation reform. The bill offers three years of complete expensing of business equipment and leasehold improvements. It builds on the bonus depreciation incentives we included in both the 2002 stimulus tax cut bill and the growth tax cut bill we passed earlier this year. Essentially, all the same kinds of assets that qualified for the bonus depreciation benefits in those two bills would now qualify for 100 percent immediate expensing under this bill. Moreover, the bill would extend the Section 179 expensing provision for small businesses by one full year. Economists tell us that what this recovery lacks is capital spending by business. By building on the incentives we passed in the earlier tax bills, we can get capital spending moving again. This will lead to higher productivity and higher wages. I would like to comment on more aspects of the depreciation section of my bill. I have been told by some of my business constituents in Utah that the bonus depreciation provisions are not helpful to them. This is because those companies are currently suffering losses and have no current taxable income. Moreover, some of these businesses have been having difficulties for so long that they have no recent year when tax was paid to which they may carry back a net operating loss. One tax attribute that many of these companies do have, however, is prepayment credits under the Alternative Minimum Tax. As many of my colleagues know, the AMT has the perverse effect of hurting companies when business conditions are poor, thus exacerbating an already difficult financial situation. So, unprofitable companies often find themselves continuing to pay the alternative minimum tax. In order to assist companies like the ones I described, my bill includes a provision that would allow a taxpayer to elect to forego the expensing of newly acquired business property and instead to effectively monetize their corporate alternative minimum tax credits to that extent. This simple proposal bestows no new tax benefits on these companies, but rather delivers the full expensing provision at the time it is most needed by the company and in the economy generally. Moreover, this provision helps to equalize the tax treatment between fully taxable companies that can take full advantage of tax incentives and their less fortunate competitors that cannot at the present fully utilize those benefits. Having Congress assist those companies who are enjoying good times at the expense of those who are struggling is not in the best interest of this nation. I hope this bill will make a positive contribution to the debate in both the Senate and the House. And, I hope the final ETI repeal and replacement bill that the President signs will be more beneficial to more domestic and multinational companies because of the ideas we are proposing. Finally, I hope that throughout this debate, as accusations and proposals fly back and forth regarding how best to help the U.S. economy, we keep our eyes on the real goal--keeping America's workers the most productive in the world, whether they work in an office park or in a factory. And as the 1990s proved beyond doubt, high productivity and lower unemployment rates can easily go hand in hand. As we saw in the 1990s, higher productivity is the key to higher wages and better jobs. I ask unanimous consent that a section-by-section summary of my bill be printed in the Record.

Mr. HATCH

Mr. HATCH. Madam President, for the information of all Senators, on Monday, the Senate will resume consideration of S. 14, the Energy bill. The chairman and ranking member were able to work through a number of amendments today, and they will continue to consider amendments during Monday's session. On behalf of the leader, I encourage Members who want to offer amendments to do so as early as possible next week. Those Members should contact the bill managers for an orderly consideration of those amendments. Under a previous agreement, at 5:20 p.m. on Monday, the Senate will proceed to executive session to consider the nomination of Earl Yeakel, to be U.S. District Judge for the Western District of Texas. The Senate will vote on the Yeakel nomination at 5:30 p.m., and that will be the first rollcall vote of the day. Members should anticipate additional votes in relation to Energy bill amendments or any other items that can be cleared for action. In addition, the Senate will consider the trade agreements with Chile and Singapore. If all debate has been completed on those bills, the votes would also occur during Monday's session of the Senate. Next week is the final week prior to the August recess. Senators can, therefore, expect busy sessions with rollcall votes throughout each day, and Members should schedule themselves accordingly.

Mr. HATCH

Mr. HATCH. Madam President, I ask unanimous consent that the Judiciary Committee be discharged from further consideration of S. Res. 196 and that the Senate proceed to its immediate consideration.

Mr. HATCH. Madam President, I ask unanimous consent that the resolution and preamble be agreed to, en bloc; that the motion to reconsider be laid upon the table; and that any statements relating to this measure be printed in the Record, with the above occurring with no intervening action or debate.

Mr. HATCH

Mr. HATCH. Mr. President, I rise in support of the nomination of William Pryor to the Eleventh Circuit Court of Appeals. Mr. Pryor was No. 1 in his class at Tulane University Law School. He is a magna cum laude of Tulane University School of Law where he was editor and chief of the Tulane Law Review, something that very few lawyers have the privilege of saying. He then clerked for Judge John Minor Wisdom for the Fifth U.S. Circuit Court of Appeals, a civil rights legend who helped implement desegregation in the South. While working at two of Alabama's top private law firms, he was the adjunct professor of law at Samford University Cumberland School of Law. In 1995, then-Attorney General Jeff Sessions, current Senator from Alabama, hired him as Deputy Attorney General, and in 1997 he was appointed to serve out Senator Sessions' term. In 1998, Alabamians elected General Pryor to this position. He was reelected in 2002 with the remarkable 59 percent of the vote. Let me share some of the letters that prominent Democrats have written about General Pryor. Joe Reed, chairman of the Alabama Democratic Conference, which is the State's African-American caucus, writes that General Pryor ``will uphold the law without fear or favor. I believe all races and colors will get a fair shake when their cases come before him . . . I am a member of the Democratic National Committee and, of course, General Pryor is a Republican, but these are only party labels. I am persuaded that in General Pryor's eyes, Justice has only one label--Justice!'' Judge Sue Bell Cobb, who sits on the Alabama Court of Criminal Appeals, stated: I write, not only as the only statewide Democrat to be elected in 2000, not only as a member of the Court which reviews the greatest portion of General Pryor's work, but also as a child advocate who has labored shoulder to shoulder with General Pryor in the political arena on behalf of Alabama's children. It is for these reasons and more that I am indeed honored to recommend General Pryor for nomination to the 11th Circuit Court of Appeals. And Congressman Artur Davis encouraged President Bush to nominate General Pryor, declaring his belief that ``Alabama will be proud of his service.'' I will submit copies of these letters for the Record, along with copies of the other many letters from Democrats and Republicans, men and women, and members of Africa-American, Jewish, and Christian communities who support Bill Pryor's nomination. It is fundamental that a State attorney general has the obligation to represent and defend the laws and interests of this State. General Pryor has fulfilled this responsibility admirably by repeatedly defending the public first and the laws and policies enacted by the Alabama legislature. But one of the reasons for the broad spectrum of support for General Pryor is his demonstrated ability to set aside his personal views and follow the law. As you will undoubtedly hear during the course of the debate on his nomination, General Pryor is no shrinking violet. He has been open and honest about his personal beliefs, which is what voters expect from the persons whom they elect to represent them. Yet General Pryor has shown again and again that when the law conflicts with his personal and political beliefs, he follows the law. For example, in 1997, the Alabama legislature enacted a ban on partial birth abortion that could have been interpreted to prohibit abortions before viability. General Pryor is avowedly pro-life, and has strongly criticized Roe v. Wade, so one might very well have expected General Pryor to vigorously enforce the statute. Instead, he instructed law enforcement officials to enforce the law only insofar as it was consistent with the Supreme Court's precedents of Casey and Stenberg v. Carhart--despite pressure from many Republicans to enforce broader language in the act. Here's another example: I am sure that we will hear General Pryor's call for modification or repeal of section 5 of the Voting Rights Act, which requires Department of Justice preclearance. By the way, General Pryor is not alone in his opinion of section 5; the Democratic Attorney General of Georgia, Thurbert Baker, has called section 5 an ``extraordinary transgression of the normal prerogatives of the states.'' Despite his opinion that section 5 is flawed, General Pryor successfully defended before the Supreme Court several majority- minority voting districts approved under section 5 from a challenge by a group of white Alabama voters. He also issued an opinion that the use of stickers to replace one candidate's name with another on a ballot required preclearance under section 5. In other words, he upheld a law that he thinks is legally flawed and politically flawed. In other words, this man will abide by the law in spite of his personal beliefs. Yet another example involves General Pryor's interpretation of the First Amendment's Establishment Clause. In an effort to defeat challenges to school prayer and the display of the Ten Commandments in the Alabama Supreme Court, both the Governor and the Chief Justice urged General Pryor to argue that the Bill of Rights does not apply to the States. General Pryor refused, despite his own deeply held Catholic faith and personal support for both of these issues. And here's my final example: General Pryor supported the right of teachers to serve as state legislators, despite intense pressure from his own party, because he believed that the Alabama Constitution allowed them to do so. This man follows the law, regardless of his personal beliefs. That is all you can ask of a judicial official and of somebody who is nominated to a Circuit Court of Appeals in this country. These examples, and I can give others, aptly illustrate why General Pryor's nomination enjoys broad bipartisan support from persons like former Democratic Alabama Attorney General Bill Baxley. He observed of General Pryor: In every difficult decision he has made, his actions were supported by his interpretation of the law, without race, gender, age, political power, wealth, community standing, or any other competing interest affecting judgment. That is pretty high praise coming from a Leading Democrat, one of his predecessors. Mr. Baxley continued, I often disagree, politically, with Bill Pryor. This does not prevent me from making this recommendation because we need fair minded, intelligent, industrious men and women, possessed of impreccable integrity on the Eleventh Circuit. Bill Pryor has these qualities in abundance. . . . There is no better choice for this vacancy. During the course of this debate, we will hear many things about Bill Pryor. We will hear many one-sided half-truths perpetuated by the usual liberal interest groups who will stop at nothing to defeat President Bush's judicial nominees. I want to make sure that this debate is about fairness, and about telling the full story of Bill Pryor's record. We will hear that General Pryor is devout pro life Catholic who has criticized Roe v. Wade, but the rest of the story is that many prominent prochoice Democrats, such as Justice Ruth Bader Ginsburg, Archibold Cox and former Stanford Dean John Hart Ely have also criticized roe without anyone questioning their recognition of it as binding Supreme Court precedent. We will hear claims that General Pryor is against the disabled and elderly, but the real story is that General Pryor has done his duty as Attorney General to defend his State's budget from costly lawsuits. Other state attorneys general, including respected Democrats like Bob Butterworth of Florida and now Senator Mark Pryor of Arkansas, have taken the same positions as General Pryor in dfending their States. While the Supreme Court agreed with the attorneys general in these cases that the Eleventh Amendment protects States from monetary damages in Federal court, these rulings did not affect--and General Pryor did not seek to weaken--other important methods of redressing discrimination, like actions for monetary damages under state law, injunctive relief, or back pay. We will hear claims that General Pryor's criticisms of Section 5 of the Voting Rights Act indicate a lack of commitment to civil rights. That is pure and simple, unmitigated bunk. But the real story is that General Pryor has a solid record of commitment to civil rights, which includes defending majority-minority voting districts, leading the battle to abolish the Alabama Constitution's prohibition on interracial marriage, and working with the Clinton Administration's Justice Department to prosecute the former Ku Klux Klansmen who perpetrated the bombing of Birmingham's 16th Street Baptist Church, which resulted in the deaths of four little girls in 1963. We will no doubt hear other claims during the course of this debate distorting General Pryor's record or presenting only partial truths. I urge my colleagues to judge this nominee on his record, not on the distortions we too often hear about President Bush's nominees. He will make a fine addition to the Eleventh Circuit. I ask unanimous consent that the letters to which I have referred be printed in the Record.

Mr. HATCH

Mr. HATCH. Mr. President, on Wednesday the Judiciary Committee favorably reported to the full Senate the nomination of Alabama Attorney General William Pryor for the Eleventh Circuit Court of Appeals. It has been more than 6 weeks since General Pryor's confirmation hearing, and I am pleased that the full Senate will now have the opportunity to consider his nomination. Nevertheless, we will no doubt hear over the course of this debate many allegations from some of our Democratic colleagues as to why they believe that Bill Pryor's nomination does not deserve an up or down vote by the full Senate. I want to make perfectly clear right now that there is no valid reason to delay this body's consideration of the Pryor nomination. All we ask is that there be an up-or-down vote. Vote against him if you don't like the man personally--although there is little room to vote against him because of his record. Despite these efforts by committee Democrats to erect a procedural roadblock to voting on the Pryor nomination in spite of fact that I had set five markups, I finally was able to have a markup on his nomination. They wanted to revive a debate over the interpretation of committee rule IV. This rule, entitled ``Bringing a Matter to a Vote'', was clearly intended to serve as a tool by which a determined majority of the committee could force a recalcitrant chairman to bring a matter to vote. In fact, the rule provides, ``The Chairman shall entertain a non-debatable motion to bring a matter before the Committee to a vote.'' Clearly, it was a rule by which you could force a chairman to have a vote. All you had to do was get a majority of the Senators on the committee with one from the minority side and you could force a chairman to call for a vote. On Wednesday there was no motion to bring the matter before the committee to a vote. In fact, there was an objection to voting, which I overruled. Thus, on its face, rule IV was inapplicable to the Pryor nomination. Despite claims to the contrary, there has been no inconsistency in my interpretation of this rule. First of all, I have checked with two Parliamentarians, and both said I could interpret the rule. I believe I have interpreted it correctly. During the Clinton administration, in an effort to prevent the defeat in committee of a controversial Justice Department nominee, I was chairman and I wanted to bring the nomination to a vote. We had enough votes to defeat the nominee in committee. It would have been a 9-9 tie, and the nominee would have gone down to defeat. The Democrats then started to filibuster their own nominee. In deference to them, I chose not to exercise the inherent powers I and all committee chairmen have to bring a matter to a vote. I have been condemned for that ever since as though I acknowledged that you should just have filibusters in the committee any time you want to. President Clinton ultimately made a recess appointment of their nominee. In retrospect, my reliance on rule IV to accomplish this was admittedly not the best course of action. I was wrong to say they could filibuster. But I was trying to be gracious to my colleagues on the other side who clearly did not want to vote on the record defeating their nominee. Since I respected and liked the nominee himself, but not for the particular position he was nominated for, I would have supported him for any other position. And I had good reason to be against him for this position. I agreed to allow their filibuster to cause me to pull down his nomination rather than to have a vote that would have been embarrassing to him and to the Democrats. And that is why they were filibustering their own nominee. Now they cite that as the reason why I am wrong here. But there is no reason for that. I nevertheless believed then, and I do now, that I had the power to bring that matter to a vote, and that I used the discretion of the chairman to decide not to do so. It was a matter of showing decency and kindness to my colleagues on the other side and to the nominee so he would not have a vote that defeated him in committee. The fact of the matter is I don't believe there should be filibusters in the Judiciary Committee. We have had at least two instances now where my colleagues on the other side have tried to filibuster. In addition, the Democrats now complain they weren't given enough time to do an investigation. We have given them all kinds of time to do an investigation. Since their investigation was proving to be fruitless because they couldn't find one thing to criticize Attorney General Pryor on, they wanted to have a fishing expedition to do further investigation. I want to make clear that at no time did I agree to modify my interpretation of rule IV in connection with the Cook, Roberts, or Sutton nominations, which is the last context in which this debate arose. I did agree to bring Roberts back in to the committee and have one more day of hearing. I did not agree to bring Cook back or Sutton back. But at no time did I agree my interpretation of rule IV which I made at that time was in error. It certainly was not. I can't imagine any committee chairman agreeing to give up his or her right to call for a vote in committee after there has been a sufficient debate. No chairman is going to give up that right because that means the minority could control the committee any time they wanted to. The argument which they make on this is ridiculous. But, be that as may, at no time did I agree to modify my interpretation of rule IV in connection with the Cook, Roberts, or Sutton nominations, which is the last context in which this debate arose. To have adopted the interpretation my Democratic colleagues advanced both then and now would have constituted an unprecedented curtailment of the chairman's inherent authority to bring a matter to vote, and would have given the authority to control the committee to the minority. I don't think they would want that when they are in the majority, and I certainly don't want it now that we are in the majority. No other chairman I know of who has any brains at all would have allowed that type of interpretation. Yet you hear all of the screaming and shouting that they were mistreated. In short, there was no violation of committee rules or process in bringing the Pryor nomination to a vote on Wednesday, and any argument to the contrary is merely a last-ditch effort to prevent the full Senate from considering that nomination. Another complaint we will hear is there was an open investigation into General Pryor's activities on behalf of the Republican Attorneys General Association at the time of the vote. Here are the facts: When our Democratic colleagues brought to our attention documents they obtained pertaining to RAGA, we joined with them to conduct a bipartisan investigation to determine the authenticity of the documents, whether they reflected any wrongdoing on the part of General Pryor. Committee staff interviewed several witnesses in connection with this investigation, with two notable exceptions. First, the Democrats' source of these documents has not answered key questions about when the documents were drafted, who drafted them, and who has had access to them. Second, Democratic staff asked General Pryor no questions about the documents, despite his willingness to answer whatever questions they may have had. Nevertheless, our Democratic colleagues have insisted on pressing forward with an investigation, over Republican objection, based on unauthenticated and unreliable documents provided to them by a source who refuses to talk to Republican staff, whose former employer stated under oath that she stole the documents, and who has yet to disclose the details of when and how she first provided the documents to Democratic staff. Some on our side wanted the committee to conduct an investigation of Democratic staff. I am certainly not going to do that. Frankly, Democratic staff, I think, have an obligation if they get documents to look at them and to present them to us. However, these documents weren't presented to us until the last minute. Frankly, it is just another pattern of practice of delaying as long as they can and making it miserable for people like Bill Pryor to get a vote up or down. All we want is a vote up and down. Democratic staffers have interviewed 20 persons but have found nothing inconsistent with General Pryor's testimony. There is simply nothing to indicate General Pryor was anything less than truthful about the material facts of his participation in the Republican Attorneys General Association. What is going on here is a classic game of ``beltway gotcha.'' That is no reason to delay consideration of General Pryor's nomination. We even had members say we want to have another hearing for General Pryor after all that we have had. His was one of the longest hearings I can recall having in my 27 years on the Judiciary Committee. It was a very difficult hearing with a lot of moaning and groaning and screaming and shouting. Frankly, it was one in which I don't think he was treated as fairly as he should have been treated, nor do I think he has been treated fairly since. I think there are reasons for that. One of them is he is so forthright about his testimony and that he has conservative beliefs that I think some on the other side are afraid that even though his whole record is one of following the law, he might not follow the law if he gets on the Eleventh Circuit Court of Appeals--even though he is an honest man and said he will follow the law regardless of his personal viewpoint. That is all you can ask of these people. When you have a person of the integrity and the ability and the capacity of William Pryor who says he will follow the law, you had better believe it, in my opinion. If we get to the point where we have to second-guess people who have an impeccably honest reputation around here, it is going to get to where nobody who has any views is going to be able to serve on the Federal courts of this land. That is wrong. I felt like I needed to come here today and say some of these things, because in all honesty I think we have had too many of these type of ridiculous battles in the Senate Judiciary Committee. I am trying to bring some decency to the committee. I have tried to work as closely with my colleagues who differ with us on our side as I possibly can, and I am going to continue to do that, and try to work in a decent, honorable, good way with my colleagues. But I do personally resent some of the accusations that have been made, some of the mischaracterizations that have been made, some of the things that have been done to besmirch some of these excellent people whom the President of the United States has nominated, and a continuation of filibustering on the floor of the Senate. Having said that, I am going to conclude with these remarks: Never in the history of the Senate--before Miguel Estrada, Priscilla Owen; and now there is some indication there is going to be a filibuster of William Pryor, the attorney general of the State of Alabama--never has there been a filibuster, a true filibuster against anyone. Now, I thought--and I have said it on the floor--I thought there was a filibuster of the Fortas nomination, but I was corrected by none other than the Senator who led the fight against Fortas--and that was Robert Griffin of Michigan--in a Republican policy meeting, where he said: I only need to correct Senator Hatch on one statement that he made; and that is, that having led the fight against Fortas--for a variety of what he believed were appropriate reasons; and apparently a majority of the Senate did--he said: We were never filibustering Abe Fortas. And the reason we were not is because we had the votes to defeat him up and down. But the Democrats called for a cloture vote, which was narrowly won by Fortas, with 12 Members absent at the time, many of whom would have voted against Abe Fortas. So never in the history of this body has there been a filibuster against any Federal judicial nominees until this year. And now we have two--and a potential of three. And I hope they are not going to filibuster Kuhl. And I hope they are not going to filibuster Holmes. And I hope they are not going to filibuster Judge Pickering when he comes out of the committee, and others. It is a dangerous thing to do. It is a wrong thing to do. It flies in the face of senatorial history. In the end, this body is going to be very saddened if that is the way all of these nominations wind up, without an up-and-down vote on the floor of the Senate. What is wrong with having up-and-down votes on the floor of the Senate for these nominees? Whether it is a Democrat President or a Republican President, once they are brought to the Senate floor, they deserve an up-and-down vote. That is all we are asking for. I yield the floor.

Mr. HATCH

Mr. HATCH. Madam President, I ask unanimous consent that the resolution be agreed to; that the preamble be agreed to; that the motion to reconsider be laid upon the table; and that any statement relating to the resolution be printed in the Record.

Mr. HATCH. Madam President, I ask unanimous consent that the Senate proceed to the immediate consideration of S. Res. 201, which was submitted earlier today.

Mr. HATCH

Mr. HATCH. Madam President, I ask unanimous consent that when the Senate completes its business today, it stand in recess until 11 a.m., Monday, July 28. I further ask unanimous consent that following the prayer and pledge, the Journal of proceedings be approved to date, the time for the two leaders be reserved for their use later in the day, and the Senate then resume consideration of S. 14, the Energy bill.

Mr. HATCH

Mr. HATCH. Madam President, if there is no further business to come before the Senate, I ask unanimous consent that the Senate recess under the previous order following the remarks of the distinguished Senator from West Virginia, Mr. Byrd, for up to 20 minutes, and the distinguished Senator from Alabama, Mr. Sessions, for up to 10 minutes.

Mr. HATCH

Mr. HATCH. Madam President, I ask unanimous consent that the Senate proceed to the immediate consideration of Calendar Nos. 229, 230, and 231, en bloc.

Mr. HATCH. Madam President, I ask unanimous consent that the resolutions be agreed to, en bloc; that the preambles be agreed to, en bloc; that the motions to reconsider be laid upon the table, en bloc; and that any statements relating to these measures be printed in the Record.

Mr. HATCH

Mr. HATCH. Madam President, I ask unanimous consent that the live quorum as provided for under rule XXII be waived.

Mr. HATCH. For the information of all Senators, this will be the third cloture motion with respect to this nomination. This cloture vote will occur Tuesday, so we will notify Senators when the exact vote time is locked in.

Mr. HATCH. Madam President, I send a cloture motion to the desk.

Mr. HATCH

Mr. HATCH. Madam President, I ask unanimous consent that notwithstanding passage of H.R. 2555, amendment No. 1364, which was previously agreed to, be modified with the changes that are at the desk.

Mr. HATCH

Mr. HATCH. Madam President, for the information of all Senators, this will now mean that the first vote during Monday's session will begin at 5:30 p.m.

Mr. HATCH. Madam President, I ask unanimous consent that on Monday, the debate on Calendar No. 296 begin at 5:20 p.m.; provided further that immediately after the vote on that nomination, Executive Calendar No. 304 be confirmed, the motion to reconsider be laid upon the table, the President then be immediately notified of the Senate's action, and the Senate then resume legislative session.

Mr. HATCH

Mr. HATCH. Madam President, I ask unanimous consent that the Senate proceed to a period for morning business.

Mr. HATCH

Mr. HATCH. Madam President, I would like to correct the distinguished minority whip on one thing. It is true we have had about 140 judges go through and only two so far have been filibustered. The third is on its way, maybe fourth, fifth, and sixth. Stopping, through a filibuster, anybody, even one judge, is unacceptable. It has never been done before, especially judges for the circuit court of appeals. But it has never been done even for district court judges and certainly not for Supreme Court judges. All we want is an up-or-down vote on these people. That is all we want. If they are defeated, we can live with it. If they pass, I hope the other side can live with that. But I don't think it is too much to ask for the President's nominees who are brought to the floor of the Senate to have an up-or-down vote. I don't think that is too much to ask, and I don't think the American people believe that is too much to ask. Even the filibuster of one nominee is unacceptable because that means you are not allowing the President to have an up-or-down vote if somebody is brought to the floor of the Senate. I am concerned that we will soon see the number of judges who are denied an up-or-down vote escalate from two to three to four to five to six, maybe more. Is that an acceptable number of judges who do not deserve an up-or-down vote? Of course not. Not one should be denied an up-or-down vote, once they are brought to the floor of the Senate. I believe that is true.

Mr. HATCH

Mr. HATCH. Madam President, I ask unanimous consent that the Senate proceed to the consideration of S. Con. Res. 62, submitted earlier today by Senators Daschle and Hagel honoring the service of Korean war veterans; that the concurrent resolution be agreed to; that the preamble be agreed to; that the motions to reconsider be laid upon the table; and that any statements relating to the concurrent resolution be printed in the Record.

Mr. HATCH

Mr. HATCH. Madam President, I ask unanimous consent that the Senate resume legislative session.

Mr. HATCH

Mr. HATCH. Mr. President, I ask unanimous consent my remarks be as in morning business.