Carl Levin

Mr. LEVIN

Mr. LEVIN. A century ago, Juliette Gordon Low proclaimed, ``I've got something for the girls of Savannah, and all of America, and all the world, and we're going to start it tonight!'' This was the phone call to her cousin that started it all. Ms. Low believed in the power and spirit of young women and was determined to make a difference. And Ms. Low's dream of creating an organization to develop young woman for pursuits out of the house began with a simple call. A century later in Congress and across our Nation we celebrate this wonderful organization that has built a significant and undeniable legacy of empowerment. The Girl Scouts of the USA is one of the largest educational organizations for girls in the world and seeks to foster self-reliance and resourcefulness through outdoors activities and volunteerism. The leadership skills and sense of civic awareness nurtured through an array of Girl Scouting activities has touched many lives, helping to mold strong, confident women. I am a proud cosponsor of S. Res. 310 that designates 2012 as the ``Year of the Girl'' and congratulates the Girl Scouts of the USA on its 100th anniversary. In addition, I supported legislation authorizing the minting of a commemorative silver dollar coin in 2013 recognizing this centennial celebration. These honors are richly deserved and a fitting tribute to the Girl Scouts. In Michigan, where more than 53,000 active Girl Scouts reside, there are a number of celebrations planned. Since its inception, more than 50 million women have taken part in Girl Scout activities. These young women have made a difference in the lives of others and in communities across the nation. From a group of 18 in 1912 to an organization of 3.7 million today, the Girl Scouts has consistently sought to shape the lives of young women through fun and diverse scouting activities. The Girls Scouts of the USA has stayed true to its mission to ``build girls of courage, confidence, and character, who make the world a better place.'' And we don't have to look very far to see results. Impressively, near 60 percent of women in the U.S. Senate and the U.S. House of Representatives are former Girl Scouts. Indeed, successful women from all walks of life can surely point to their Girl Scout experience as a valuable part of their formative years. As we celebrate the 100th anniversary of the Girl Scouts of the USA, I am delighted to offer my sincerest gratitude for the difference the Girl Scouts has made in the lives of young women. From their humble beginnings in Savannah, GA, to the impressive service organization we honor today, the Girl Scouts has had a positive impact on our nation. I look forward to the next 100 years of this remarkable organization and its members.

Mr. LEVIN

Mr. LEVIN. Mr. President, I will use 3 minutes to very briefly explain. Under the PATRIOT Act, Congress gave the Treasury the power to take a range of measures against foreign financial institutions, or jurisdictions that are defined as being of primary money-laundering concerns. The Levin-Conrad amendment just adopted would authorize the Treasury to impose the same types of measures on the same types of entities if Treasury finds them to be impeding U.S. tax enforcement. This amendment had been the subject of a bill for a number of years, and it comes out of the hearings of the Permanent Subcommittee on Investigations, which I chair. Those investigation show each year the United States loses tens of billions of dollars in tax revenue from people using offshore tax havens to dodge U.S. tax obligations, including through hidden accounts at tax haven banks. We issued a lengthy, bipartisan report in the subcommittee. We detailed case history involving tax haven banks that help thousands of U.S. clients dodge their U.S. taxes, banks that used a long list of secrecy tricks that make it nearly impossible for U.S. tax authorities to trace funds sent to them offshore. Our amendment offers one provision from the Cut Unjustified Tax Loopholes Act, S. 2075, which Senator Conrad and I introduced some weeks ago. I continue to hope and believe that momentum is building behind the idea of real tax reform and in support of legislation like the CUT Loopholes Act to comprehensively tackle the many tax loopholes that favor a few taxpayers over ordinary American taxpayers. Closing tax loopholes is critical to real deficit reduction, and restoring lost revenue that will allow us to cut the deficit without slashing important programs. With the threat of sequestration looming at the end of this year, it is more vital than ever that we find bipartisan agreement on closing tax loopholes. Our amendment hopefully will advance that goal. The full CUT Loopholes Act attacks loopholes in two areas. First is closing offshore tax loopholes, a subject that the Permanent Subcommittee on Investigations, which I chair, has explored for years. Second is the stock-option loophole, a corporate tax giveaway that forces American taxpayers to subsidize corporations for the stock-options granted to their executives. The Levin-Conrad amendment takes one provision from the offshore portion of the CUT Loopholes Act. Our amendment would give regulators a powerful tool to stop offshore tax havens and their financial institutions that impede U.S. tax enforcement from doing business in the United States. The Levin-Conrad amendment is modeled on the successful provision in the Patriot Act now used to combat foreign financial institutions and jurisdictions engaged in money laundering. Under section 311 of the Patriot Act, Treasury can take a range of measures against foreign financial institutions or jurisdictions that it finds to be of ``primary money laundering concern.'' The Levin- Conrad amendment would authorize Treasury to impose the same types of measures on the same types of entities if Treasury finds them to be ``significantly impeding U.S. tax enforcement.'' Treasury could, for example, prohibit U.S. banks from accepting wire transfers or honoring credit cards from those foreign banks. The provision would not require Treasury to act; it would give Treasury the authority and discretion to take action against foreign jurisdictions or banks that are facilitating U.S. tax evasion and tax avoidance. Over the last several days, we have worked with the administration and others to improve our amendment. We have made changes to clarify that it covers significant impediments to tax enforcement, and that foreign jurisdictions and financial institutions that are complying with the Foreign Account Tax Compliance Act will be viewed favorably with respect to their level of assistance with our tax enforcement efforts. Each year, the United States loses an estimated $100 billion in tax revenue from U.S. taxpayers using offshore tax havens to dodge their U.S. tax obligations, including through hidden accounts at tax haven banks. My Subcommittee has held several hearings and issued a lengthy bipartisan report showing how some tax haven banks have used an array of abusive practices to help U.S. clients hide assets and income from Uncle Sam. We presented detailed case histories involving tax haven banks that helped thousands of U.S. clients dodge their U.S. taxes, banks that used a long list of secrecy tricks to make it nearly impossible for U.S. tax authorities to trace funds sent to them offshore. Those tricks included using code names for clients to disguise their identities; directing personnel to use pay phones instead of business phones to make it harder to trace calls back to the bank; providing bankers with encrypted computers when travelling to keep client information out of the reach of U.S. tax authorities; funneling money through offshore corporations to conceal incriminating wire transfers and make audits difficult; opening accounts in the names of offshore shell companies to hide the real owners; and providing bankers with counter-surveillance training to detect and deflect inquiries from government officials. That kind of conduct, which actively facilitates tax evasion, amounts to a declaration of war by offshore secrecy jurisdictions against honest, hardworking taxpayers. It's time to fight back and end the abuses inflicted on us by those tax havens. Congress took one step two years ago by requiring foreign banks with U.S investments to disclose accounts opened by U.S. persons or pay a hefty tax on their U.S. income. But that law doesn't apply to tax haven banks that avoid U.S. investments. The United States needs authority to take special measures against foreign banks that not only refuse to disclose accounts opened by their U.S. clients, but also significantly impede U.S. tax enforcement efforts. Our amendment would enable the United States to fight back by authorizing the Treasury to tell U.S. banks to stop doing business with those aiders and abettors of U.S. tax evasion. According to the Joint Committee on Taxation, we could, by adopting this amendment, reduce the deficit by $900 million over 10 years. That is an indication of how closing just one of many loopholes can raise significant revenue. The CUT Loopholes Act would, conservatively, reduce the deficit by $155 billion over 10 years. And other tax loopholes not addressed in the CUT Loopholes Act, such as the carried- interest and blended-rate loopholes, offer additional opportunities for deficit reduction. Mr. President, we face difficult choices in the months ahead. We all agree that we must reduce the deficit. But the American people also expect us to make sure that we are protecting national security, that parents can still send their kids to college, that our citizens still have health care, that we are repairing roads and bridges. We must do both--reduce the deficit and protect important priorities. But we cannot accomplish those twin goals unless we restore revenue lost in part to the gaping loopholes in our tax law. With this amendment, we can take a step down the path of closing abusive loopholes, and continue building momentum for the work we must to in the months ahead. Mr. President, I thank Senator Conrad, Senator Whitehouse, and many others who cosponsored this amendment.

Mr. LEVIN. Mr. President, I move to reconsider the vote and I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. LEVIN. Mr. President, the next item on the unanimous consent agreement is my amendment No. 1818. It is my understanding now that this amendment can be adopted by a voice vote. It has been cleared for that. I ask unanimous consent to set aside the pending amendment and I call up my amendment No. 1818.

Mr. LEVIN. Mr. President, this has been on the list for unanimous consent. I will let the Chair rule on this and see if there is something else. If not, I will speak for a few minutes afterward.

Mr. LEVIN. Mr. President, I ask unanimous consent that the Merkley amendment relative to farm vehicles listed in the previous order be changed from No. 1653 to No. 1814.

Mr. LEVIN

Mr. LEVIN. Madam President, there has been a great deal of conversation recently about the need to close tax loopholes. This is a welcome development for those of us who have gone after these loopholes for years. It is particularly timely as the public is focusing more and more on how tax loopholes distort economic incentives and often benefit the wealthiest among us at the expense of most U.S. taxpayers. Last week, President Obama released a framework for business tax reform that took aim at many corporate tax loopholes. I look forward to working with the administration and with our colleagues in the Senate to make real reform a reality--reform that brings greater fairness to the Tax Code, eliminates incentives for moving jobs and assets overseas, restores revenue lost to unjustified tax loopholes, and helps us reduce the deficit without damaging vital programs for education, transportation, health care, and national security. One recent and very public announcement illustrates dramatically our Tax Code's distortions and the need for reform. At the center of this story is Facebook and its founder and CEO Mark Zuckerberg. Mr. Zuckerberg and his company have become a remarkable American business success story. As part of that success, Facebook is in the process of making its initial public offering of stock. The public documents that Facebook is required to file as part of that offering tell another compelling story about one of our Tax Code's unjustified corporate loopholes. According to its filings, when Facebook goes public, Mr. Zuckerberg plans to exercise options to purchase 120 million shares of stock for 6 cents a share. Obviously, Mr. Zuckerberg's shares are going to be worth a great deal more than 6 cents each--a total of about $7 million. They will apparently be worth in the neighborhood of $5 billion. Here is where the tax loophole comes in. Under current law, Facebook can, perfectly legally, tell investors and the public and regulators that the stock options he received cost the company a mere 6 cents a share. That is the expense shown on the company's books. But the company can also, perfectly legally, later on file a tax return claiming that those same options cost the company something close to what the shares actually sell for later on--perhaps $40 a share. The company can take a tax deduction for that far larger amount. So the books show a highly profitable company--profitable, in part, because of the relatively small expense the company shows on its books for the stock options it grants to its employees--but when it comes time to pay taxes, to pay Uncle Sam, the loophole in the Tax Code allows the company to take a tax deduction for a far larger expense than they have shown on their books. In addition, Facebook is allowed by law to carry back the so-called loss arising from this deduction for 2 years into the past, which means it can claim a tax refund for the income tax it has paid over the past 2 years--a refund that the company estimates at $\1/2\ billion. So instead of paying taxes to the Treasury, this profitable company will claim a hefty refund on the taxes already paid. But that is not all. The company says it will, as allowed by law, also carry forward the so-called losses arising from this tax deduction for over 20 years into the future, thereby reducing any taxes that it owes in the years ahead. Over the years, this loophole could give a tax break of up to $3 billion. The end result is that a profitable U.S. corporation--a success story--could end up paying no taxes at all for years, even decades. I emphasize that Facebook's actions are within the law. As with so much of our Tax Code, it is not the law-breaking that shocks the conscience, it is the stuff that is perfectly legal. For years, my Permanent Subcommittee on Investigations has identified this stock option loophole and tried to explain its cost, its unfairness, and why it should be closed. Facebook's $3 billion tax break brings the issue into sharp focus. Again, the stock option loophole allows corporations to compensate their executives with stock options, report a specific stock option expense to their shareholders, and then later take a tax deduction for typically a much higher amount. Stock option grants are the only kind of compensation where the Tax Code allows companies to claim a higher expense for tax purposes than it shows on its books. Our subcommittee found that the difference between what U.S. corporations tell the public and what they told the IRS was as much as $61 billion in 1 year. Facebook's use of this loophole is the most pointed illustration yet of the cost of this loophole. It is difficult to get our minds around a $3 billion tax break for a single corporation. Just how big is it? Well, consider this: In 2009, the most recent year for which IRS data is available, taxpayers from 11 States in our Union sent less than $3 billion in individual income tax revenue to the Treasury. How does this make any sense? After all, American taxpayers are going to have to make up for what Facebook's tax deduction costs the Treasury. That $3 billion is either going to come out of the pockets of American families now or it will add to the deficit they are going to have to pay for later. What could our Nation do with the $3 billion it will lose when Facebook exploits the stock option loophole? We could reduce the Federal deficit or we could pay for programs that protect our seniors, put cops on the beat or teachers in classrooms. The $3 billion Facebook will get in tax deductions would more than triple the budget of the Small Business Administration, which seeks to help American entrepreneurs create jobs and grow the economy. Three billion dollars would pay for the Pentagon's budget for housing our military families for nearly 2 full years. It would pay the budget of the National Institute of Science and Technology for 4 full years. It would more than triple what we plan to spend helping homeless veterans next year. It would pay 6 times over for the 24 Reaper unmanned aerial vehicles the Air Force plans to buy next year. Some are going to argue that Facebook's tax break is offset by the fact that Mr. Zuckerberg himself, as well as the other executives who are receiving stock options, will pay taxes as individuals. As various news reports indicate, Mr. Zuckerberg will face a substantial tax bill on the $5 billion in compensation he is about to receive--perhaps in the neighborhood of a $2 billion tax bill. But it is unlikely that the individual taxes Mr. Zuckerberg pays will offset the tax revenues lost to this loophole. What the Treasury receives from Mr. Zuckerberg on the one hand, it will return, and then some, to his company with the other hand. We also should remember that Mr. Zuckerberg's financial future is closely tied to that of his company. The value of the options and his retained interest make that clear. To the extent that his corporation benefits--and as I have shown, Facebook will benefit handsomely from the use of this loophole--Mr. Zuckerberg stands to benefit as well. Put simply, some of that big tax bill he faces right now will come back to him through the corporation he will still own a huge part of and will control. Our tax system is built on the principle that businesses as well as individuals ought to help pay our Nation's bills. Corporations impose plenty of costs on society, from environmental disasters, financial bailouts, product recalls, and more. Businesses also want and need government services, including efficient transportation systems, patent protections, even Federal loan guarantees. Paying those costs is why we have a corporate income tax to begin with. Both businesses and individuals are required by law to contribute, and should do so, to meet their civic obligations and to pay their fair share. There is no reason Facebook and the other corporations that use this tax loophole should continue to receive these windfall tax deductions. Senator Conrad and I earlier this month introduced S. 2075, the Cut Unjustified Tax Loopholes Act, or CUT Loopholes Act. This bill, similar to the legislation I have introduced in the past few Congresses, would close this loophole. Under our bill, corporations would no longer be allowed to claim tax deductions for options that are larger than the expense they report to their shareholders and to people considering buying their stock. It would also subject stock options to the same $1 million cap on deductions for executive compensation that now applies to other forms of compensation. At the same time--and this is important to know--our bill would leave unchanged the way the law applies to individuals who receive stock options, and it would leave unchanged incentive stock options that are offered by startup companies. We would not affect that. The stock option loophole should have been closed long before Mr. Zuckerberg's extraordinarily lucrative options became public. But surely the case of Facebook illustrates to the Senate, to the Congress, and to the American people that we must close this loophole. I have spoken today about one corporate tax loophole, but there are many more. The momentum has never been stronger for tax reform that brings more fairness to the Tax Code, restores revenue lost to unjustified tax loopholes, reduces the deficit, and protects important priorities. I look forward to working with our colleagues and with the administration to turn that momentum into real reform. Madam President, I thank the Chair, I yield the floor, and I note the absence of a quorum.

Mr. LEVIN

Mr. LEVIN. Mr. President, the amendment we are considering today represents a direct assault on access to preventive health care services for millions of women in this country. The ostensible purpose of this proposal is to protect the rights of conscience of any employer or healthcare insurer, religious or secular, who may have a religious or moral objection to providing family planning services free of charge to their employees. I respect and will defend the moral values of employers and insurance companies. But I also respect the moral values of people who need medical services. So we will end up deciding whether or not to deny access to critical and possibly lifesaving health services for millions of people in this country, not whose religious or moral values have precedence. As drafted, Senator Blunt's amendment would grant employers and health insurance companies the power to deny access to not just preventive healthcare services for women, but any healthcare service, for anyone, regardless of its nature. This means any employer could choose to deny employees insurance coverage for such things as children's immunizations; mammograms; lifesaving cancer treatments; or blood transfusions simply because that employer may find these or any other healthcare services morally objectionable. For the Senate to pass such a policy would be indefensible. It would go far beyond nullifying the administration's rule to implement provisions in the Affordable Care Act requiring access to some preventive services at no cost. Instead, this amendment would codify infringement on personal healthcare decisions, would grant an employer the right to substitute his moral convictions for those of his employees, and would effectively deny access to critical healthcare services. Considering that some of my colleagues vociferously defend the idea of personal liberties, I am truly surprised they would support a policy to undermine those same liberties by handing power over an individual's personal healthcare decisions to that individual's employer or his insurance company. This body took a bold and historic step by enacting healthcare reform in 2010. We accomplished something that had eluded the country and the Congress for decades. The law recognizes that women have specific medical needs and that gaps have historically existed in preventive care for women. And it correctly called for specific steps to address that. We should not now support policies that would not only walk these advances back, but take giant leaps backwards in access to healthcare services for everyone. I urge our colleagues to vote against this amendment.

Mr. LEVIN

Mr. LEVIN. Mr. President, I am pleased that today we can approve a full-year extension of the payroll tax cut, important tax relief that is focused on middle-class families who have suffered greatly during the Great Recession, tax relief that will help continue the economic recovery that appears to be under way and that we all hope will strengthen in the months to come. The controversy over how to offset the cost of this payroll tax relief has twice now nearly derailed this important middle class tax relief. I am glad that we have for the second time avoided such an outcome. But my strong preference would be for our colleagues across the aisle and across the Capitol to accept the reality that added revenue must eventually be a part of our strategy here. Democrats have offered common-sense solutions that would have allowed us to prevent a tax increase on American families without adding to the deficit and without damaging our economic recovery. Rather than take steps such as ask for a small contribution from the wealthiest Americans--those with annual incomes above $1 million--our Republican colleagues preferred to add to the deficit. That is an unfortunate choice. Just as important as the extension of middle-class tax relief in this bill is the extension of emergency unemployment benefits. It is good for Michigan and good for the Nation that we have rejected the approach advocated by some, which would have slashed these important benefits. Emergency jobless benefits have kept food on the table and shelter overhead for millions of families across the country coping with the loss of a job through no fault of their own. Beyond those families, this funding has been an economic lifeline to communities hard-hit by job losses, and it has been an important component in our economic recovery. I should note here that my own State cannot take full advantage of this extension unless it reverses the decision of the Governor and State Legislature to cut State benefits from 26 weeks to 20 weeks. Because of this decision, from March through May of this year, Michiganians who could be eligible for a total of 89 weeks of benefits will be limited to 69 weeks. For a relatively small investment on the State's part, we could make a major difference for Michigan families if we reverse the State's cuts. I hope the Governor and Legislature will reconsider their position. The extension of the so-called ``doc fix'' to prevent major cuts in Medicare reimbursements to health care providers is another important part of this legislation. Year after year we find ourselves toying with the idea of allowing drastic cuts to the providers who serve our nation's elderly and most vulnerable. I am glad we again avoided this outcome; however, we missed yet another important opportunity to fix this growing problem that becomes more expensive the longer we wait to act. In addition to supporting our nation's health care providers, this bill includes a short-term extension of hospital wage index reclassifications under Section 508 of the Medicare Modernization Act. While I am disappointed we were unable to provide a long-term extension of this provision--which helps remedy an inaccurate Medicare classification--at least we were able to include a retroactive 4-month extension for affected hospitals in my State. And while some of the health care cuts used to pay for these extensions will be very difficult to absorb, I am pleased we successfully pushed back against the most draconian cuts to important safety net providers that House Republican's included in their bill. The legislation also authorizes the Federal Communications Commission to hold incentive auctions to entice broadcasters to sell some of their unused or underused spectrum to free up spectrum to meet growing demand for wireless broadband technologies and also help public safety officials build a national broadband network to improve communications during emergencies. Securing adequate spectrum for and building out a nationwide interoperable public safety broadband network is an important public policy goal that is overdue to be implemented as a recommendation of the 9/11 Commission. One issue related to these auctions of particular interest to me is the uniqueness of our border states when it comes to spectrum signals. Broadcasters, including those in Detroit, Flint, Traverse City, Grand Rapids, and Lansing, have been concerned about potential interference of signals along the border if spectrum allocations were modified from the carefully negotiated existing signals. I am pleased that this has been addressed by requiring that any reassignments of channels be subject to special rules to avoid that interference.

Mr. LEVIN

Mr. LEVIN. Mr. President, for the Committee on Armed Services I report favorably the following nomination lists which were printed in the Record on the dates indicated, and ask unanimous consent, to save the expense of reprinting on the Executive Calendar, that these nominations lie at the Secretary's desk for the information of Senators.

Mr. LEVIN

Mr. LEVIN. Mr. President, my colleague Senator Debbie Stabenow and I would like to pay tribute to Brian Donnelly. The measure of a man is seen from many vantage points, from the family he loves, to the good work he has done, to the lives he has positively influenced along the way. By this measure, Brian Donnelly lived a full and prosperous life. We see that in the words of his adoring and devoted wife and family; we see that in the seemingly endless outpouring of affection from his colleagues, friends, and associates; and we see that even from those he prosecuted. Brian Donnelly, who died suddenly last month, was a dedicated civil servant from my home State of Michigan. He devoted his life to upholding the law and serving the citizens of Michigan. This devotion and commitment can be seen through Brian's 25 years of service as a prosecutor, most recently for Kalkaska County. Brian was a skilled and highly respected litigator who was known to work long days, often returning to the office after dinner. Brian was admired not only by his colleagues but by those on both sides of the bench. His commitment both to his work and to his family was evident to all who knew him. Brian graduated from Michigan State University and received his law degree from the University of Michigan School of Law. He married his wife Ruthann in July of 1987, and they remained partners for the rest of his life. While Brian's life was full of many successes, he also experienced tragedy. Brian's brother, Mac J. Donnelly, Jr., was killed in the line of duty while working as a police officer in Lansing, MI, in 1977. His brother's death helped encourage Brian to pursue a successful career as a prosecutor. It also led to his continued support of Michigan Concerns of Police Survivors, MI C.O.P.S, an organization dedicated to supporting the families of fallen officers. He took what was a personal tragedy and transformed it into a lifelong, positive pursuit that filled a void for many across Michigan. After his death last month, Ruthann was inundated with letters of condolence from across our State. Some of these condolence letters even came from people Brian had prosecuted, who praised his fairness and decency and expressed sorrow for his loss. To be respected by one's colleagues is a sign of a job well done, but to be respected by one's adversaries is the mark of a truly unique man. Posthumously, Brian was honored by the Prosecuting Attorneys Association of Michigan for his outstanding service as a prosecutor in Kalkaska County, an honor he richly deserved. Brian Donnelly left a legacy of nobility and dedicated public service for Michigan and for the legal profession. He will be missed, but his many efforts and the good he has done will be remembered for years to come. Senator Stabenow and I are proud to honor him today.

Mr. LEVIN

Mr. LEVIN. Mr. President, I would like to pay tribute to MG Jeffrey J. Dorko, deputy commanding general for military and international operations for the U.S. Army Corps of Engineers, who is retiring from Active Duty service on Friday, February 10, 2012. As we reflect on the career of this exemplary public servant, I express appreciation for his distinguished and selfless service on behalf of a grateful nation. It is his sacrifice, along with the sacrifices of countless others in uniform around the world, which helps to keep our Nation strong and secure. Major General Dorko has accumulated more than 33 years of service to our country, and, more important, has amassed an impressive record of accomplishments. His military career began in 1978 as a platoon leader, company executive officer, and assistant battalion operations officer for the 299th Engineer Battalion at Fort Sill, OK. Over the next three decades, he served three tours of duty with the U.S. Army Corps of Engineers in Germany and was deployed in support of Operations Joint Endeavor and Joint Guard in Bosnia-Herzegovina. From 2007 to 2008, Major General Dorko assumed command of the U.S. Army Engineer Division, Gulf Region, headquartered in Baghdad, Iraq, in support of Operation Iraqi Freedom. And currently, as the deputy commanding general for military and international operations for the U.S. Army Corps of Engineers, Major General Dorko is responsible for the successful execution of more than $28 billion in design, construction, and environmental projects. I know Major General Dorko would want us to also recognize his family's many sacrifices throughout his exemplary career. Major General Dorko's dedicated service and sound leadership have served as useful examples to our men and women in uniform. I know my Senate colleagues join me in congratulating Major General Dorko and honoring his distinguished record of service to our country. I wish him the best as he embarks on the next chapter of his life.

Mr. LEVIN

Mr. LEVIN. Mr. President, today, along with Senator Conrad and others, I am introducing S. 2075, the Cut Unjustified Tax Loopholes Act, or CUT Loopholes Act. This legislation will help us meet three important goals: Reducing the budget deficit, protecting important priorities, and restoring some of the fairness to our tax system. Our legislation would reduce the deficit by $155 billion. It would do so by closing tax loopholes that favor wealthy individuals and corporations while raising the tax burden that American families must carry. It would provide more than enough revenue to pay for a full-year extension of the payroll tax cut now in place, or put a significant dent in the deficit reduction we need to avoid draconian automatic cuts through sequestration. It is clear to almost everyone that revenue must be a part of our deficit reduction strategy. Presidents from Reagan to Bush, Sr. to Clinton have used balanced strategies that included revenue as well as spending cuts. I will continue to fight for a number of other revenue measures such as a surtax on millionaires and billionaires; eliminating tax subsidies for oil and gas companies; ending the Bush-era tax cuts for those earning more than $250,000; and ending the carried interest loophole. We need to make those changes. But so far, they have run into an ideological brick wall, as many here in Congress refuse to consider reasonable revenue measures. But even that rigid ideological stance should allow for ending the kinds of egregious loopholes we are discussing today. First is offshore tax haven abuse. The Permanent Subcommittee on Investigations, which I chair, has spent years shedding light on how these abuses aid the wealthy and corporations. Based in part on S. 1346, the Stop Tax Haven Abuse Act, our bill would, in part: Give Treasury the authority to combat tax haven banks and jurisdictions that help U.S. clients hide assets and dodge U.S. taxes; crack down on offshore corporations that are managed from the U.S. from claiming foreign status to dodge taxes; eliminate tax incentives for moving U.S. jobs overseas or for transferring intellectual property offshore; and establish the presumption that, unless a taxpayer proves otherwise, a corporation formed by, receiving assets from, or benefiting a U.S. taxpayer is considered under that taxpayer's control for tax purposes. These provisions and others would reduce the deficit by at least $130 billion over 10 years. Our bill's second focus is on a tax loophole that subsidizes corporations giving stock options to corporate executives. Today, corporations can take massive tax deductions for stock options, but usually show much lower expense on their books. Our subcommittee found that from 2005-2009, this loophole allowed excess tax deductions ranging from $12 billion to as high as $61 billion in a single year. The CUT Loopholes Act would prevent corporate income tax deductions for stock options that exceed the expense shown on company books. It would preserve current tax treatment for individuals receiving options and for incentive stock options used by start-up companies. According to the Joint Committee on Taxation, these measures would reduce the deficit by $25 billion over 10 years. The time for these measures is now. First, the math is inescapable. We can't reduce the deficit and do other important things--protect our country, care for our seniors, educate our young--if tax revenue remains at its lowest level in decades, and if the effective corporate tax rate is at historic lows, thanks in part to these and other tax loopholes. Second, there is a growing recognition among Americans that loopholes like these and many others leave the deck stacked against them and their families. Overwhelmingly Americans tell us: Close those loopholes down. Third, this is not just a realization by Democrats. Strong majorities of Independents and Republicans say that we need balanced deficit reduction, and that closing loopholes is one way to do that. Just this week, a national poll showed that 90 percent of small business owners-- a majority of them Republicans--believe big corporations use loopholes to avoid taxes that small businesses still have to pay. Reducing the deficit and protecting important programs is hard. We face many tough decisions and difficult fights in the months ahead. But this decision should be easy. We should close these loopholes and make a bipartisan statement that we can reduce the deficit, serve important priorities, and restore fairness to the tax code.

Mr. LEVIN

Mr. LEVIN. Mr. President, today, along with Senator Conrad and others, I am introducing S. 2075, the Cut Unjustified Tax Loopholes Act, or CUT Loopholes Act. This legislation will help us meet three important goals: Reducing the budget deficit, protecting important priorities, and restoring some of the fairness to our tax system. Our legislation would reduce the deficit by $155 billion. It would do so by closing tax loopholes that favor wealthy individuals and corporations while raising the tax burden that American families must carry. It would provide more than enough revenue to pay for a full-year extension of the payroll tax cut now in place, or put a significant dent in the deficit reduction we need to avoid draconian automatic cuts through sequestration. It is clear to almost everyone that revenue must be a part of our deficit reduction strategy. Presidents from Reagan to Bush, Sr. to Clinton have used balanced strategies that included revenue as well as spending cuts. I will continue to fight for a number of other revenue measures such as a surtax on millionaires and billionaires; eliminating tax subsidies for oil and gas companies; ending the Bush-era tax cuts for those earning more than $250,000; and ending the carried interest loophole. We need to make those changes. But so far, they have run into an ideological brick wall, as many here in Congress refuse to consider reasonable revenue measures. But even that rigid ideological stance should allow for ending the kinds of egregious loopholes we are discussing today. First is offshore tax haven abuse. The Permanent Subcommittee on Investigations, which I chair, has spent years shedding light on how these abuses aid the wealthy and corporations. Based in part on S. 1346, the Stop Tax Haven Abuse Act, our bill would, in part: Give Treasury the authority to combat tax haven banks and jurisdictions that help U.S. clients hide assets and dodge U.S. taxes; crack down on offshore corporations that are managed from the U.S. from claiming foreign status to dodge taxes; eliminate tax incentives for moving U.S. jobs overseas or for transferring intellectual property offshore; and establish the presumption that, unless a taxpayer proves otherwise, a corporation formed by, receiving assets from, or benefiting a U.S. taxpayer is considered under that taxpayer's control for tax purposes. These provisions and others would reduce the deficit by at least $130 billion over 10 years. Our bill's second focus is on a tax loophole that subsidizes corporations giving stock options to corporate executives. Today, corporations can take massive tax deductions for stock options, but usually show much lower expense on their books. Our subcommittee found that from 2005-2009, this loophole allowed excess tax deductions ranging from $12 billion to as high as $61 billion in a single year. The CUT Loopholes Act would prevent corporate income tax deductions for stock options that exceed the expense shown on company books. It would preserve current tax treatment for individuals receiving options and for incentive stock options used by start-up companies. According to the Joint Committee on Taxation, these measures would reduce the deficit by $25 billion over 10 years. The time for these measures is now. First, the math is inescapable. We can't reduce the deficit and do other important things--protect our country, care for our seniors, educate our young--if tax revenue remains at its lowest level in decades, and if the effective corporate tax rate is at historic lows, thanks in part to these and other tax loopholes. Second, there is a growing recognition among Americans that loopholes like these and many others leave the deck stacked against them and their families. Overwhelmingly Americans tell us: Close those loopholes down. Third, this is not just a realization by Democrats. Strong majorities of Independents and Republicans say that we need balanced deficit reduction, and that closing loopholes is one way to do that. Just this week, a national poll showed that 90 percent of small business owners-- a majority of them Republicans--believe big corporations use loopholes to avoid taxes that small businesses still have to pay. Reducing the deficit and protecting important programs is hard. We face many tough decisions and difficult fights in the months ahead. But this decision should be easy. We should close these loopholes and make a bipartisan statement that we can reduce the deficit, serve important priorities, and restore fairness to the tax code.

Mr. LEVIN

Mr. LEVIN. Mr. President, I will vote in support of the conference report to accompany the FAA Reauthorization and Reform Act, H.R. 658. The last reauthorization bill expired at the end of fiscal year 2007 and since then we have passed 23 short-term extensions. We are long overdue to enact a long-term reauthorization of FAA's programs in order to provide important funding and program improvements that will enhance the safety and efficiency of our Nation's aviation system. I am pleased we are finally doing that today and in so doing we make key investments in our Nation's aviation infrastructure as well as create good jobs in the process. One of the main issues holding up the bill for so long was a provision contained in the House bill, but not the Senate bill, to repeal the National Mediation Board--NMB--rule that ensures that only those votes cast in a union election are counted. I am glad to see that controversial provision has been removed, although I am disappointed language has been added to change Railway Labor Act rules and regulations governing union elections by raising the showing of interest threshold for holding an election from 35 percent to 50 percent of the employees in the craft or class. I do not believe the FAA reauthorization bill is the appropriate vehicle for this sort of change and I do not support its inclusion in this bill. Providing a long-term 4-year reauthorization of our aviation programs is vitally important. Our global economy depends on the smooth and efficient movement of goods, services and people from city to city and across international borders. A safe and efficient aviation system goes hand in hand with a strong economy. We are fortunate to have one of the best aviation systems in the world and I am pleased that under this bill we continue to make the necessary investments and upgrades to retain that high standard. This FAA reauthorization bill addresses problems of capacity, congestion and delays to help ensure our aviation system can handle the projected growth in airlines passengers. The FAA reauthorization bill will also create much needed jobs by providing the funding and directives for safety improvements at our airports and in the aviation industry. In Michigan alone the FAA is building two new air traffic control towers, at Kalamazoo and Traverse City. The FAA is also repaving numerous runways and taxiways, including at Detroit Metropolitan Wayne County Airport, Alpena County Regional Airport, Bishop International Airport, Sawyer International Airport and at other airports around the state. The FAA is also constructing new terminal buildings at Kalamazoo/Battle Creek International Airport and at MBS International Airport in Freeland, MI. And FAA funds are paying for the design of a new building for aircraft rescue and firefighting and snow removal equipment at Pellston Regional Airport in Emmet County. These are important upgrades to Michigan airports and funding of many more needed improvements will make flying into and around Michigan safer and easier. H.R. 658 will move us closer toward modernizing our air traffic control system by building the Next Generation Air Transportation System--NextGen--of satellite-based navigation. The NextGen system will be more accurate and more efficient than the current radar-based air traffic control system. It will also result in significant fuel efficiencies and time savings by allowing aircraft to fly more direct routes. This is good for the environment, good for air carriers and good for the flying public. I am very pleased the conference report adopted the Senate approach to the Essential Air Service Program--EAS--and preserves this important program rather than terminate it as the House bill would have done. The EAS provides rural communities with access to the national air transportation system and is very important to Michigan. We have 8 communities that rely on EAS subsidies to help provide them with daily commercial air service. This conference report maintains the EAS program at current funding levels with some minor modifications. I very strongly opposed attempts to deprive Michiganians living in the less populated areas of our State of commercial air service. For businesses in the affected communities, this service is an economic lifeline that connects them to the web of both national and international commerce. At a time when we are doing everything we can to compete globally and to increase the number of jobs, cutting off that access makes no sense and I am glad this conference report recognizes this.

Mr. LEVIN

Mr. LEVIN. Mr. President, Senator Leahy and Senator Cornyn have introduced a rather substantial amendment to the STOCK Act that would strengthen the tools that prosecutors and investigators use to detect and prosecute corruption by public officials. I would like to ask my colleagues a few clarifying questions about how their amendment achieves this laudable goal.

Mr. LEVIN. My first question refers to section 205 of your amendment, covering bribery and graft. What is the purpose of including the phrase ``former public official''? How is it possible to bribe a former public official?

Mr. LEVIN. Under section 205, an ``official act'' can refer to any matter which may ``at any time be pending.'' What prevents this definition from being overbroad and covering matters that a former public official, for example, never anticipated would be pending?

Mr. LEVIN. Section 205 also refers to an official's ``place of trust and profit.'' What is a ``place of trust and profit''?

Mr. LEVIN. I thank my colleague. Turning to section 211 of your amendment, the ``Prohibition on Undisclosed Self-Dealing By Public Officials,'' what is purpose of codifying this prohibition?

Mr. LEVIN. Why is it necessary to make it a Federal crime for a local official to engage in undisclosed self-dealing?

Mr. LEVIN. Does this amendment create the potential for arbitrary or politically motivated prosecutions of local officials?

Mr. LEVIN. Why isn't there a magnitude requirement for the financial interest underlying undisclosed self-dealing? If one just reads this section, it appears as though even a trivial, attenuated financial benefit could lead to a violation.

Mr. LEVIN. Suppose a local official has not disclosed, as required by a local ordinance, that he owns a home in a targeted improvement district in his county. Then this official votes to install street lights in his town, which lowers crime, improves commerce, and consequently increases the value of his and other homes. Has he committed a Federal offense?

Mr. LEVIN. I thank my colleague for his helpful explanation. There is one more issue I would like to discuss. Section 211 of your amendment includes a definition of ``material information.'' I want to be absolutely clear that this definition is specific to section 211 and is in no way intended to provide any meaning to the phrase ``material information'' as used elsewhere in the STOCK Act or anywhere else in law.