Don Nickles

Mr. NICKLES

Mr. NICKLES. They made it by 1 day.

Mr. NICKLES. I am trying to figure out what we are doing. Let's take Ingersoll-Rand. Ingersoll-Rand will not be covered. They would not be debarred. This is very interesting. Ingersoll-Rand makes heavy industrial equipment. I know that because I used to be in the heavy industrial equipment business. Actually, I was a competitor with Ingersoll-Rand at one time. Ingersoll-Rand does about $40 million worth of contracts. They have a lot of employees in the United States. They have employees in my State of Oklahoma. Ingersoll-Rand has a plant in Tulsa, OK. They would be debarred from doing any work with the Federal Government. No, they would not because they incorporated on December 31. Cooper Industries competes with Ingersoll-Rand. They reincorporated in Bermuda on May 21. They probably did it because Ingersoll-Rand did it. They compete. They are competitors. So one company got in and will not be affected by debarment; they would not lose $40 million worth of contracts. Cooper Industries, on the other hand, is doing about $6 million worth of contracts. They would be debarred because they reincorporated on May 21. So here we have two competing industries, one of which made it in under the wire, and so they are not denied $40 million worth of contracts, but their competitor--I believe their principal competitor-- would be debarred for $6 million. That is a little troublesome. Both have a lot of employees in the United States. I notice Cooper Industries--I know my colleague from Texas is here--is headquartered in Texas. I know they have thousands of employees in the United States. I know they pay Federal income taxes on every single dime of these contracts. I guess that is what bothers me. I believe there is a misunderstanding that if somebody reincorporates in Bermuda they will not pay U.S. taxes on U.S. contracts, and that is false. They will pay U.S. taxes on U.S. contracts. To have a penalty that says if they reincorporate in Bermuda because they want to avoid taxation on foreign source income and we are going to debar them from U.S. contracts and maybe cost thousands of jobs domestically, that is very shortsighted and probably not the right solution. Maybe the right solution would be we would work through the appropriate committees and try to discourage people from relocating in Bermuda. Maybe we can make our tax structure more competitive internationally. I have been on the Finance Committee for a long time. Those of us who have looked at it for years have said we need to relook at international taxation. We are not competitive internationally. We encourage jobs to go overseas because of our international posture. If we do not fix it, we are going to continue encouraging people to relocate. The amendment of my colleague from Minnesota is going to exacerbate that problem. He will, in effect, be denying contracts to a lot of U.S. firms that have jobs in the United States that pay taxes on these contracts. I am afraid the net result is competitors from other countries, with employees in other countries, are going to be competitive and win these contracts, and the net loss is we are not only not going to get U.S. taxes on these contracts, we are going to have employees go overseas. The amendment may be very well intended politically, and my compliments to my colleague from Minnesota. It is a very popular amendment. It looks good, it is populist, but I think it is bad tax policy. I think tax policy should be done in the Finance Committee, not on the floor of the Senate on a Department of Defense bill. I urge my colleagues to oppose this amendment.

Mr. NICKLES. Will the Senator yield?

Mr. NICKLES. Mr. President, I tell my friend and colleague that one Oklahoma-headquartered company relocated in Texas called Phillips Petroleum. I wasn't very happy about that, but they had the right to do that. Let me make it clear. My friend and colleague from Texas read the statute that says you pay taxes on all American-source income. Isn't that correct?

Mr. NICKLES. Corporate income tax--not just payroll tax.

Mr. NICKLES. Really, the difference we are talking about is income generated in other countries.

Mr. NICKLES. Any contract with the Department of Defense--and any company doing that has to pay U.S. corporate income taxes if they generate income off those contracts.

Mr. NICKLES. I appreciate the clarification.

Mr. NICKLES. Will the Senator yield for an additional question?

Mr. NICKLES. There is a major automotive company called Chrysler that recently merged--or you could say was acquired by Daimler, a German company. They are headquartered now in Germany and domiciled in Bermuda. I am guessing; I don't know. If my memory serves me correctly, Chrysler used to make tanks, or used to make military equipment. They wouldn't be covered by this because the effective date is beginning January 1. But the theory is, if the effective date was earlier, they would be prohibited from making tanks or providing goods and services that maybe they provided for a long time. In other words, they might be providing an essential component to our national defense, and those thousands of employees who might be employed making products for national defense would find themselves unemployed.

Mr. NICKLES

Mr. NICKLES. Mr. President, I rise today to honor the memory of Robert Wayne Jenkins, a U.S. Postal Service letter carrier who was tragically killed while serving the Tulsa community and to introduce legislation that would redesignate the Southside Station Postal Service facility in Tulsa, Oklahoma, as the ``Robert Wayne Jenkins Station''. On December 21, 2001, Robert Wayne Jenkins said goodbye to his wife Amber and daughter Caitlyn and left home for work. Arriving with his usual friendly and positive attitude, Robert prepared for his mail route. Before leaving the office to deliver the mail on his route, Robert gave his customary message to a fellow letter carrier: ``be safe''. That afternoon, Robert was senselessly gunned down while on his route, dying instantly. Robert Wayne Jenkins was in his ninth year of dedicated service in a job he truly loved. His co-workers respected his dedication and professionalism, and Robert was also greatly admired for his love and devotion to his wife and daughter. The spirit and vitality with which Robert served the U.S. Postal Service and his community will live on in the hearts of those who were privileged to know him. Rededicating the southside station in Tulsas as the Robert Wayne Jenkins Station is an honor most appropriate for an American who asked for so little but who gave so much to his family, his friends, the United States Postal Service, and the Tulsa community. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. NICKLES

Mr. NICKLES. Mr. President, I rise today to honor the memory of Robert Wayne Jenkins, a U.S. Postal Service letter carrier who was tragically killed while serving the Tulsa community and to introduce legislation that would redesignate the Southside Station Postal Service facility in Tulsa, Oklahoma, as the ``Robert Wayne Jenkins Station''. On December 21, 2001, Robert Wayne Jenkins said goodbye to his wife Amber and daughter Caitlyn and left home for work. Arriving with his usual friendly and positive attitude, Robert prepared for his mail route. Before leaving the office to deliver the mail on his route, Robert gave his customary message to a fellow letter carrier: ``be safe''. That afternoon, Robert was senselessly gunned down while on his route, dying instantly. Robert Wayne Jenkins was in his ninth year of dedicated service in a job he truly loved. His co-workers respected his dedication and professionalism, and Robert was also greatly admired for his love and devotion to his wife and daughter. The spirit and vitality with which Robert served the U.S. Postal Service and his community will live on in the hearts of those who were privileged to know him. Rededicating the southside station in Tulsas as the Robert Wayne Jenkins Station is an honor most appropriate for an American who asked for so little but who gave so much to his family, his friends, the United States Postal Service, and the Tulsa community. I ask unanimous consent that the text of the bill be printed in the Record.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from North Carolina (Mr. Helms) is necessarily absent. I further announce that if present and voting the Senator from North Carolina (Mr. Helms) would vote ``no''.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from North Carolina (Mr. Helms), the Senator from Ohio (Mr. DeWine), the Senator from Arkansas (Mr. Hutchinson), and the Senator from Kentucky (Mr. McConnell), are necessarily absent.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from North Carolina (Mr. Helms), the Senator from Ohio (Mr. DeWine), the Senator from Arkansas (Mr. Hutchinson), and the Senator from Kentucky (Mr. McConnell), are necessarily absent.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from North Carolina (Mr. Helms), the Senator from Arizona (Mr. Hutchinson), the Senator from Ohio (Mr. DeWine), and the Senator from Kentucky (Mr. McConnell) are necessarily absent.

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from Missouri (Mr. Bond), the Senator from Texas (Mr. Gramm), the Senator from North Carolina (Mr. Helms), the Senator from Texas (Mrs. Hutchison) the Senator from Arkansas (Mr. Hutchinson), and the Senator from Wyoming (Mr. Thomas) are necessarily absent.

Mr. NICKLES

Mr. NICKLES. Will the Senator yield for a very brief question?

Mr. NICKLES. On my time. Is the Senator saying that should his amendment become law, there will not be a request to extend this next year?

Mr. NICKLES. Mr. President, I reserve the remainder of our time.

Mr. NICKLES. Mr. President, how much time remains on both sides?

Mr. NICKLES. Will the Senator yield me 8 minutes?

Mr. NICKLES. Mr. President, I rise in support of the budget point of order that was raised by my colleague from Texas. I am a little disappointed that the chairman of the Budget Committee didn't raise it. It is the responsibility of the Budget Committee. I have had the pleasure of serving with my colleague from Texas on the Budget Committee. That is the reason why we have a Budget Committee and the reason why we tried to pass a budget. We didn't pass a budget this year for the first time since 1974. Shame on this Congress. Shame on this Senate. Shame on, frankly, the leadership in this Senate for not getting it done. It is maybe the most fiscally irresponsible thing we have not done and, as a result, there is no limit to how much money we can spend. A budget point of order still lies on an amendment such as this, or any amendment, until the end of September, so we are raising a budget point of order for good reason. My colleague from Texas and the sponsors of the amendment, say this is a $9 billion amendment. This will increase Federal spending. You can come up with a list to show that every State is going to benefit. I know my State is going to benefit $93 million. I am sure my Governor would send me a letter saying please vote for this; we need help. And they do. I agree with my colleague and very good friend from Maine. A lot of States are in very difficult times. If you have an amendment on the floor that says here is $9 billion, and cut it up, every State is going to benefit. You could have every State Governor saying pass this amendment. What is wrong with it? Yes, states are having a difficult time. The Federal Government is having a difficult time, too. The Senator from Texas pointed out that the Federal deficit is much larger than the States' deficits. The Federal deficit, if you include Social Security, is $322 billion. Things may have deteriorated for State revenues, but they have deteriorated significantly for Federal revenues. It is not just borrowing against Social Security. It is borrowing against the American people. The American people are going to have to borrow this $9 billion. They will have to pay interest on it. My biggest concern is that it is not a $9 billion amendment. I know the amendment is temporary. I know it is retroactive. It is kind of interesting how we are going to spend retroactive money. This goes back and says we are going to increase spending going back to April of this year. And then presumably, we are going to do it through this September, and then next year. It is an amendment that is for about 1 \1/2\ years. My concern is it won't be a year and a half. If you increase these formulas, States are going to still be in difficult times next year. They are going to say: Let's make this permanent. These formulas, in many respects, are good. We don't want them to ever go down. We never want the States to get less. If it is temporary, and here is a 1.35 percent increase in Federal match, what makes anybody think this won't be extended? This amendment is a $100 billion amendment. If it is extended, I can tell you if we pass this--and it may well be that my good friend from West Virginia has the votes. The administration is very opposed to it, illustrated in a letter from them that I have here. But if it becomes law, I have no doubt whatsoever that a year from now colleagues will say: Let's make this permanent. States are still in trouble. Governors will say: Let's make this permanent. Let's just increase the Federal share. It is free. It came from the Federal Government. I just happen to disagree with that. If this is made permanent, we are talking about spending $100 billion--$9 billion basically for the first year--$100 billion. We are just going to do that? Next year we may not be able to make a budget point of order if we don't figure out some way to get fiscal discipline. We are just going to pass $100 billion, and have colleagues stand up and say: I can't believe these deficits are so high. This amendment increases the Federal share. It increases FMAP. Times are tough, and we are going to increase the Federal share on Medicare. Wait a minute. Times were good in the last several years when we had the largest surplus in the country. Did we see an increase in the Federal share when States were doing very well? We have never said this should be based on the economy or on States' ability to pay. The formula for the FMAP is based on the States' income relative to the Federal income. The States' income was much higher than the norm with Federal income. They paid a greater percentage, or they weren't subsidized to get as much. Another way to say this is that the poorer States were being subsidized more. This just kind of inverts and says the States that had the significant growth last year are going to get the biggest benefit out of this proposal. It doesn't do anything to fix some of the biggest fraud that is being perpetrated in this system right now--the upper payment limit. I wish my colleagues new something about it. Maybe some do. Maybe former Governors do. But there is a fraud, an accounting scheme and scam that is going on today called upper payment limit. It is being done by about 30 States that are ripping off the Medicaid Program and the Federal Government that is having difficulty. They devised a clever little gimmick to have the Federal Government--not pay 50 percent, not pay 60 percent, not pay 70 percent--pay 100 percent of Medicaid costs. Are we fixing that? No. If we are going to deal with Medicaid, I tell my colleague from West Virginia and others that we are going to deal with the upper payment limit. It is sickening to me to think we are telling people we are going to hold private America to a strict accountability standard; we are going to have you sign truth-in-accounting statements, fiscal statements and financial statements; and, we have Governors who are ripping off the taxpayers of this country with an upper payment scheme and scam to where they get the Federal Government to pay 100 percent of their Medicaid costs. It is happening in State, after State, after State, after State. Have we fixed that? No. Should we fix it? Yes. Let us deal with that. If we are going to get into Medicaid reimbursements, let us wrestle with that. Have we had a markup in the Finance Committee? No. Have we requested it? Yes. Did we mark up this FMAP proposal? No. Some said: We will deal with the upper payment limits. This didn't go through the Finance Committee. Maybe it is just a continual stream. Maybe the Finance Committee, which used to be an important committee, doesn't matter whatsoever. Maybe we don't need hearings anymore. Maybe we don't need markups in committee. Maybe we will do everything on the floor of the Senate. I disagree with that. I disagree with the abuse that is being put on some States by the upper payment limit; and, then to come up with this amendment and say let us increase the Federal share on Medicaid--a Federal-State program--and have the Federal Government take more and more of the program. It used to be a Federal-State combination. Now there is this idea to let us make the Federal Government pay more. If you are going to do a 1.35 percent increase, why not make it all Federal? Make it 70 percent in every State, or make it 80 percent. There has to be some kind of limit. The Federal Government happens to have deficit problems, too. Just to increase this entitlement and really kind of turn the formula upside down--this goes all the way back to the creation of Medicaid, a successful program to help low-income States; a program designed to benefit the poorer States, to assist them. Medicaid is a good program, but this amendment says, well, we want the Federal Government to make up more, and when some States are abusing it, we don't stop that abuse. We are just going to have the Federal Government pick up more. We can hand out cards. Your State is going to get so many billion dollars. We'll just borrow some Federal money. The Senator from Texas said it is Social Security money. It is Social Security, plus we are going into debt $165 billion. We will borrow every penny that we are talking about. We will pay interest on that debt and write a check for that interest. It is not just an accounting gimmick. It is not just crediting some fictitious trust fund. We will write a check for every dime that is spent in this program. I question the wisdom of doing that. The administration is opposed. I will ask unanimous consent to have printed in the Record a letter from the Secretary of Health and Human Services, Tommy Thompson, dated July 18 that says: The Administration is opposed to this amendment. A temporary change in the FMAP rate would be an unprecedented disruption of the longstanding shared fiscal responsibility for the Medicaid program. FMAP rates are not designed to change according to short-term economic developments. Such cyclical movements are contrary to the intent of the Medicaid statute, and in the long term, would serve the interest of neither the States nor the Federal Government. I believe that is exactly right. I ask unanimous consent that this letter be printed in the Record.

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

Mr. NICKLES

Mr. NICKLES. I announce that the Senator from North Carolina (Mr. Helms) is necessarily absent.