Debbie Stabenow

Ms. STABENOW

Ms. STABENOW. Madam President, I want to take a moment, first, to thank my colleague for his kind words and for his leadership. Secondly, I do want to indicate cosponsors on our side of the aisle to the amendment: Senators Levin, Feinstein, Kohl, and Rockefeller. I very much appreciate their support.

Ms. STABENOW. Madam President, I appreciate the opportunity to join my colleague from Kentucky on a very important amendment. I also appreciate Chairman Grassley and our ranking member, Senator Baucus, as well, for their leadership and their support in working with us on this important amendment. Our amendment, as my colleague indicated, speeds up the tax cut for all U.S. manufacturers to address the current manufacturing crisis. This particular amendment would increase the tax relief in 2004--five times more than in the underlying bill--and, in fact, would provide about $6.5 billion in relief to manufacturers and small businesses over the next 5 years. My colleague has gone into the specifics of a lot of this amendment. What I would like to do is spend my time talking about why this is so critical. We have a crisis in manufacturing in this country. Nowhere is that more evident than in my home State of Michigan where last year we had the largest number of jobs lost in the country and the highest unemployment rate. This is an issue that is my top priority. When we look at what has happened in terms of manufacturing jobs over the last number of decades, we see that we are back now to the lowest point since the Depression and when Herbert Hoover was President of the United States. We have seen huge drops in jobs. My great concern is that even though we are seeing an increase as it relates to the stock market and positive indications, we have not yet seen that translate into jobs. I believe that is for many factors that relate to the pressures on manufacturers in a global economy. When we look at the fact that the United States has lost over 2.8 million manufacturing jobs in the last 3 years, this is a crisis. Let me speak specifically to a couple of examples I have talked about. When we look at this number in Michigan compared to other States, there is a 19-percent job loss. We have seen literally, every single day, headlines in the papers about people losing their jobs, plants closing and going to other countries, the exporting of jobs, and layoffs occurring all around Michigan; not only in manufacturing, I might add, but when we look at the outsourcing issue, we are looking to white-collar jobs, technology jobs, engineers, health care workers, a wide variety of jobs. But we know in our country--and I believe very strongly coming from Michigan--that we have to have a foundation, a manufacturing base to have a strong economy and a strong middle class. In Michigan, I am very proud of the fact that we make products and we grow products. That is the basis of our economy. Frankly, it has been the basis of the U.S. economy since the beginning of our country. We are seeing a huge drop--on down to 2003--in what has happened in terms of jobs in Michigan. One example I talked about earlier today is a plant called Electrolux in Greenville, MI, a community of 9,000 people in the western rural part of the State, where 2,700 people are employed to make refrigerators, Frigidaire, in fact, through Electrolux. They have added a third shift and the company says they are making a profit. But they have also indicated they could make a bigger profit if they moved to Mexico and paid $2.50 an hour and no health benefits. So they are closing. We have Michigan residents here today to speak at a hearing tomorrow about the devastation this loss of jobs will create. We have to do everything possible to provide incentives and support for manufacturers to remain in the United States and keep our jobs here. There are a lot of factors, when we look at what is happening with Electrolux and when we look at what is happening in Steelcase in Grand Rapids, MI, cutting 77 of its skilled workers. Wohlert, in Lansing, MI, has laid off 245 workers because of the bad economy and overseas competition; Easton, in Marshall, MI, indicates they would be cutting 185 of their 285 jobs and moving plants to Mexico; Federal Mogul in St. Johns and Greenville, MI, Lear Corporation in Traverse City, Gidding & Lewis in Menominee, Straits Steel in Ludington. The stories go on and on. There are many reasons for that. We know we need to be smart about trade policies where we are encouraging the creation of a middle class and raising the standards around the world, raising standards in Mexico and in China and other places, where we are competing and finding our jobs are moving, and by raising that standard of living. Instead of losing or exporting our jobs, we can export our product and they will have a middle class so they can buy our products. I indicated to the folks that Electrolux may be able to move the plant to Mexico and pay $2.50 an hour with no health benefits, but the question I had was, who was going to buy the refrigerators? Certainly not citizens if they make $2.50 an hour with no health benefits. We have to be doing everything possible to create a race up instead of a race down. This amendment is a very important part of the equation to do that. We need to make sure we are providing incentives and tax relief for manufacturers which create jobs in the United States. This amendment, in fact, will do that. We also know we need to tackle issues such as currency manipulation, where China, Japan, and other countries basically create a tax for our manufacturers. When a Michigan manufacturer sells a product into China they have to sell it at a higher price. It can be up to 40 percent equivalent of a tax into China. When Chinese businesses sell in the United States, they can artificially lower their prices. Why do they do that? They want us to move the plant to China instead of selling our goods to China. We need to tackle that. If the Secretary of the Treasury would simply certify that, in fact, currency manipulation is occurring, there are actions we can take to level the playing field. That needs to happen as well. Senator Schumer has a bill--in fact, I am a cosponsor--and I hope in addition to the amendment today and the legislation before the Senate, we would pass that very important legislation to level the playing field for our businesses and our workers in America. We also need to address health care costs. We need to do it in a way that addresses the fact that our manufacturers have health care costs tied to employment in this country as part of doing business and in other countries they do not. We need to tackle that in a way that does not cost our workers in terms of their health care coverage or increase their costs. We can do that. We also need to be addressing a number of issues that deal with trade. The reality is, the place to start right now is with this bill. This amendment provides $6.5 billion more in tax relief and assistance to manufacturers who create American jobs. I have another amendment I will offer that will add to what I believe is a very important part of the picture. That is, this tax deduction phases out over the next 10 years and is then available to all manufacturers, not just domestic manufacturers. I believe that is a mistake and we ought to make sure it remains only for those creating jobs in America. I look forward to debating that even further. I am pleased today to be sponsoring this amendment with my colleague. I should also indicate I have legislation I had introduced last fall with my colleague from South Carolina, Senator Graham, on this very subject that included both the manufacturing tax credit and eliminated the phaseout so that those dollars and the tax credit would be focused on our domestic manufacturers. What we see today is not only an issue that affects major employers. It is important to say this is a small business issue as well. The majority of manufacturing establishments are small businesses. The vast majority of them have 20 employees or less. This is not only an issue for our major manufacturers--and certainly in Michigan we are very proud of our large manufacturers; they are part of our auto industry and our high-tech industry, and we are very proud of our furniture industry and all of the other industries we have in Michigan--but this is very much a small business issue, as well. Let me finally say as we help manufacturers, we are also helping our economy and our families in terms of standard of living. When we look at the average service-sector salary and a manufacturing-sector salary, we see a major difference. Within our families, our workers are able to have a good manufacturing job, they are able to have dollars in their pocket to care for their families, to buy that house, to send the kids to college, to be able, in Michigan, to buy that snowmobile or the cottage up north and able to have the quality of life we all want for ourselves and our families. The way to stimulate this economy, the way to keep consumer confidence moving and to keep all of the economic indicators moving in the right direction is to support our manufacturing sector in our country. That is what the bill does; that is what this amendment does. I hope my colleagues will join together in a bipartisan way to support this particular amendment which will add significant support for our manufacturers. It will do it immediately this year because they need help now.

Ms. STABENOW

Ms. STABENOW. Mr. President, I simply, first, wanted to thank my colleague from North Dakota, and to stand in support of everything he has said. Tomorrow, our friend from North Dakota will be chairing an important hearing. I will have two individuals from Michigan from a small town called Greenville. I appreciate the fact that we have someone who will be sharing their story tomorrow. But just to reinforce what they said, this is a town of 9,000 people in rural west Michigan. They make refrigerators. They make Frigidaire refrigerators, and they work for Electrolux. Of the 9,000 people in town, 2,700 people work making refrigerators. They have added a third shift. They make a profit. Electrolux indicated that they make a profit in the United States. But they decided they could make a bigger profit if they moved to Mexico and paid $2.50 an hour with no health benefits. So that is what they have decided to do. We see a community now that is losing 2,700 jobs. When you count the businesses in the surrounding area that are affected, it is 8,000 jobs. I agree with the Senator's conclusion. I said to the folks at Electrolux: At $2.50 an hour with no health benefits, who is going to afford to buy your refrigerators making $2.50 an hour?

Ms. STABENOW. Mr. President, I support the amendment of the Senator from Connecticut. I think it is the least we can do on this issue. We need to set an example. If we can't as a Federal Government set an example for our own country through our own contracts and our own outsourcing policies, then how can we ask others to do the same thing? As I indicated, we have one community losing 2,700 jobs to Mexico. We lost more jobs last year than any other State. We have lost over 167,000 jobs in Michigan in the last 3 years. As I look at the paper every day--literally I can go to papers throughout Michigan, from the Upper Peninsula to Detroit to west Michigan to southern Michigan--there will be stories of plant closings, of job outsourcing or exporting of jobs, and layoffs. This is the most critical issue facing the people of our country. Therefore, it needs to be the most serious issue facing us in the Senate. We need to spend whatever time is necessary, take whatever actions are necessary and put in place a set of policies that stops the exporting of jobs, that creates a level playing field for our businesses and our workers. If we give them a level playing field, they will compete and they will win. But we don't have that now. We don't have that when it comes to the issue of manipulating currency, which China and Japan are doing. When it costs a Michigan business up to a 40-percent tax to sell into China, and when Chinese products come back and are sold at artificially lower prices, and our government doesn't do anything about it when we could, there is something wrong. Why does China do that? They want us to move the plants to China. They want to make it as difficult as possible to sell goods in China because they want the plants there. We don't want the plants there. We want to be able to take advantage of smart trade policies and sell goods and services to China, Mexico, Japan, and all around the world. That is what trade is all about, and that is how we make it positive for us. But right now we have a situation where instead of having smart trade policies, instead of addressing those issues to create a level playing field, we are seeing a set of policies that actually encourages a race to the bottom by saying to folks in Greenville, MI: The only way we are going to stay here is if you make $2.50 an hour with no health benefits. What does that say for the future of our country? What does that say, if any business could say that? The Federal Government could say that. We will not have a middle class and we will not have middle-income families. We will not have what has made us great as a country in terms of opportunity and small business growth, if we don't stop this. That is why I am very pleased to be supporting the amendment of the Senator from Connecticut. We need to lead by example, and that is what this amendment does. It says while we are asking that businesses in the private sector change policies, and we are asking others not to export, we ought not to be exporting jobs either. We need policies that will stop that and invest in our own workers and in our own people. I hope that rather than secondary amendments and other possibilities of slowing this amendment down or killing this amendment, we would be joining together--all 100 Members--in saying we do not support the report of the President's Council of Economic Advisers. We do not support Mr. Mankiw's comments that exporting jobs is good for our families, for our businesses. We reject that. We come together saying the Federal Government needs to lead by example. If we do the right thing and put the right incentives in place, we can then turn to others and ask them to do the same thing. This is about jobs. It is about the future of our country and our quality of life. I hope we will join in supporting the Dodd amendment. I suggest the absence of a quorum.

Ms. STABENOW

Ms. STABENOW. Mr. President, today I am introducing legislation with my distinguished colleague, Senator Carl Levin, that would protect my State of Michigan from being forced to participate in an experiment that could lead to the unraveling of Medicare as we know it. This project, mandated under the Medicare reform bill approved in late 2003, effectively replaces Medicare in the designated demonstration area with private voucher coverage in six sites in 2010. I have strongly opposed the portion of the Medicare bill that authorizes this project, and I particularly oppose Michigan seniors being forced to participate in this ill-advised experiment. If Michigan is included in one of these areas, then older and sicker seniors who want to stay in traditional Medicare will be forced to pay higher premiums. This is wrong, and my bill will stop this from happening to my constituents.

Ms. STABENOW

Ms. STABENOW. Mr. President, I note with sadness the passing of Peter Vlcko, a hero for all of humanity. When immense love and bravery coalesce in one person, as they did in Mr. Vlcko, amazing things are bound to happen. And they did. Mr. Vlcko's love for humankind manifested itself in his brave fight against evils such as totalitarianism, fascism, and anti-Semitism. During the dark days of World War II, at huge and constant risk to his own life, he fought against the pro-German Slovak Government and rescued over 20 Jews from deportation and death by the Nazis. His heroic efforts have not gone unnoticed. Among other awards and recognitions, in 1981, Mr. Vlcko received the Silver Medal for Righteous Gentiles from Israel. With descendants of the Jews he saved looking on, he stood witness as a tree was planted in his honor at the top of a hill in Jerusalem. His name has also been forever memorialized in a large granite relief in the Garden of the Righteous at the Holocaust Memorial center in West Bloomfield. Born in a Slovak village in 1912, Mr. Vlcko volunteered for military service immediately upon completion of his secondary education. He rose quickly through the ranks until the invasion and occupation of Czechoslovakia by the German military in 1939 forced him to be disarmed and reassigned to a war college in Bratislava. He took a break from his studies to serve a tour of duty on the Russian front, but his service was cut short when he sustained shrapnel wounds and an injury to his left leg from the heavy mortar fire. Returning to his studies, he met his future wife, Georgina Reichsfeld. The strict anti-Semitic laws could not deter his love for Georgina, who was of Jewish ancestry. At a risk to Mr. Vlcko's life, the two entered into wedlock. As the danger to his young bride and her family mounted, he hid them until he could obtain false identification papers. His perilous efforts did not stop with his bride's family. He continued on, obtaining false papers for twenty other Jews, which identified them as ``essential personnel,'' preventing certain deportation and death. Summoning more courage still, Mr. Vlcko offered his assistance to an attempt to overthrow the Nazi-friendly regime in Slovakia. Through a variety of disguises, such as a shoemaker and a woman, Mr. Vlcko managed to evade German forces and twice to escape capture. Forced into hiding for the remainder of the war, he was separated from his family for a year when he escaped into Bavaria. Once reunited, Mr. Vlcko and his family immigrated to the United States, where they began a new life in Michigan. After attending a community college, he went to work for Ford Motor Company. His new surroundings, however, could not make him forget his violent past. Through his narrative, he tried to educate people on the horrors of fascism and anti-Semitism. To do so, he both lectured throughout the United States and Canada and published an 860-page autobiography. People needed to know and, thanks to him, we do. In 1991, Mr. Vlcko was granted honorary Israeli citizenship, and both he and his wife regained their Czechoslovakia citizenship, which was taken from them when they fled Czechoslovakia after the Communists seized power in the 1948 coup. In fact, he had been living under a death sentence issued by the Czech government until 1989. He has been honored by the Czech President and Czech Minister of Defense and has often been the guest of honor of the Czech and Slovak Ambassadors to the United States. Mr. Vlcko is survived by his wife, Georgina, and their four children. Despite what severe images a background as a soldier might evoke, his wife affectionately describes the full picture: ``He loved his family very much and worked his whole life to keep them safe.'' Mr. Vlcko left behind more than a family, however; he left behind a legacy of love and hope embodied in the children of the Jews he saved and an outstanding example of courage and decency in the face of darkness and tyranny. It is that legacy that I am sure will surround him as he rests in peace.

Ms. STABENOW

Ms. STABENOW. Mr. President, today I am introducing legislation with my distinguished colleague, Senator Carl Levin, that would protect my State of Michigan from being forced to participate in an experiment that could lead to the unraveling of Medicare as we know it. This project, mandated under the Medicare reform bill approved in late 2003, effectively replaces Medicare in the designated demonstration area with private voucher coverage in six sites in 2010. I have strongly opposed the portion of the Medicare bill that authorizes this project, and I particularly oppose Michigan seniors being forced to participate in this ill-advised experiment. If Michigan is included in one of these areas, then older and sicker seniors who want to stay in traditional Medicare will be forced to pay higher premiums. This is wrong, and my bill will stop this from happening to my constituents.

Ms. STABENOW

Ms. STABENOW. We thank the chairman and ranking member. golden gate bridge

Ms. STABENOW. Mr. President, I rise to engage in a colloquy with the distinguished chairman and ranking member of the Banking Committee. The SAFETEA bill provides over $656 million in transit formula funding to the State of Michigan and while this represents a 53 percent increase over our funding under TEA-21, it still falls short of our transit needs. The Michigan Department of Transportation, MDOT, estimates that their routine Federal capital needs over the next 6 years just to maintain existing systems and services would exceed $1 billion. This comes at a time when Michigan's ridership continues to grow. Over the life of TEA-21, Michigan's transit ridership has grown from 81.6 million passengers in 1997 to over 89 million passengers in 2002--close to a 10 percent increase. The Senior Senator from Michigan and I have submitted a request on behalf of MDOT to help close this funding gap. The request would provide MDOT with $120 million in the 5309 Bus Discretionary account over the next 6 years. Would the chairman and ranking member work with us in conference to provide MDOT with this necessary funding to support Michigan's transit needs?

Ms. STABENOW

Ms. STABENOW. Mr. President, on behalf of the men and women of Michigan I thank the Democratic leader for his comments this morning. We read headlines every single day of jobs being lost to other countries, outsourcing, plants that are leaving. It is clear to me we have an administration more focused on wealth than valuing work, as the distinguished Senator from Illinois indicated, with a whole series of policies that do not reward work. I wonder if the leader might comment on the fact this is a race to the bottom. What they are saying to Americans is they should work for $2.50 an hour or $1 an hour or instead of being a computer programmer here, earning $50,000 a year, if you earn $15,000 a year, maybe we won't outsource your job. Isn't this a way to eliminate the middle class? How do they, in fact, purchase the cars and the refrigerators and computers and have the quality of life they want, send their children to college, be able to afford a quality of life as Americans, if this is a race to the bottom? Would the leader agree this is now a race to the bottom and a threat to the middle class and their way of life?

Ms. STABENOW. Will the leader yield for a question as well?

Ms. STABENOW

Ms. STABENOW. This report actually is the new report from the economic advisers to the President on the state of the economy and jobs, where they are saying outsourcing to other countries is, in fact, a good thing and, in fact, outsourcing health care jobs will actually bring health care costs down. I was stunned at what I was reading. Certainly, it is not something I know the people in Michigan are going to be very happy to hear about.

Ms. STABENOW. That is right.

Ms. STABENOW. Absolutely.

Ms. STABENOW. Mr. President, I wish to take a moment to comment about the report that was just released yesterday, the White House Annual Economic Report of the President, because I was stunned to see the statements regarding the economic report to the country as it relates to jobs. I invite any member of the group who put this report together or anyone from the administration to visit us in Michigan and see literally every day now the headlines in the papers. It doesn't matter if you are in Detroit or Grand Rapids or in northern Michigan or southern Michigan; we have headlines about jobs that are leaving this country and going overseas, good-paying jobs, white-collar jobs, blue- collar jobs, service jobs, and manufacturing jobs. When we look at the report of economic advisers and we hear them saying, ``President Bush's top economist yesterday said the outsourcing of U.S. service jobs to workers overseas is good for the Nation's economy,'' I wonder what nation are they talking about. Whose economy are they talking about? It is certainly not good for our economy when people are losing their jobs. Let me go on to some of the other statements that are quoted in today's Washington Post: Shipping jobs to low cost countries is the latest manifestation of the gains from trade. These were not the gains from trade I was hearing about. I was hearing that we were going to actually be creating more markets to produce more goods and services that would be increasing jobs, not losing jobs. It says: Just as U.S. consumers have enjoyed lower prices from foreign manufacturers, so, too, should they benefit from services being offered by overseas companies that have lower labor costs. It is stunning to me that we would not be concerned about the outsourcing of jobs, good-wage jobs to other countries. I commend any of my colleagues to watch, as I do nightly, Lou Dobbs on CNN with the continuing critique of what is happening to our country, including service jobs. I have friends and constituents in Michigan who have been in good- paying service jobs who are now unemployed and have lost their insurance, many of them struggling to see whether they will lose their homes as a result of having lost their job. They would not agree with this report. What we are seeing is the assumption that somehow moving out of this country to lower cost labor countries, whether it is goods or services, is ultimately better for the United States. Now think about this for a moment. They are embracing a race to the bottom that will only eliminate middle-class America. We had a recent situation occur in Greenville, MI, a small community of 9,000 people. There are 2,700 people who work at the local refrigeration plant, manufacturing refrigerators, Electrolux. They added a third shift. They have been productive. They make money. But the company came in this fall and said even though they make money, they make a profit in Greenville, MI, and people are productive, they could make more money if they went to Mexico and paid $2.50 an hour with no health benefits. Well, I am sure that is true. I am sure any business could make more money if they paid $2.50 an hour with no health benefits. I am sure they could make more money if they paid $1 an hour or 50 cents an hour with no health benefits. My question to the management was: Who will be able to afford to buy your refrigerator? Who will be able to afford to buy our automobiles? Who will be able to afford a middle-class standard of living in this country if this is only about a race to the bottom? When we look at what is happening in our country today, not only in manufacturing but in the service industry, we see a race to leave the country because instead of having trade policies that encourage a middle class in Mexico, in China, in India, and other places around the world so they bring up their standard of living, so they can have good wages and buy our products, we see instead pressure on our businesses and our workers to lower our standard of living, to lower our costs, and there is a race to the bottom. This race ultimately will cost us our way of life and our middle class. But that is how we are different and strong. That is why we are the greatest country in the world--because we have a strong middle class. I am extremely concerned when I see these kinds of statements. In fact, also quoted in this article from the Washington Post is a statement by Franklin J. Fargo, vice president of International Economic Affairs at the National Association of Manufacturers: It is kind of a flip thing to say when people are losing their jobs. I would agree with that. It is more than flip; it is outrageous to say we as a country somehow benefit by the outsourcing and the elimination of jobs. In recent years, companies have shipped out software engineering jobs, data entry, customer service, hospital jobs, as well as manufacturing. We know when we pick up the phone--in fact, I picked up the phone one time to talk to a credit card representative and asked where they were. They said: A facility near you. Well, I knew it was not a facility near me in Michigan, where I was calling from, but it was a facility overseas. I think often of a friend of mine who goes to my church in Lansing, MI. He is a trained engineer, a very competent individual who has lost his job. He told me he is now working for $19 an hour with no health benefits, that he is now struggling with whether he will be able to keep their home with kids in college. That is very real. I urge those making statements that losing jobs to other countries is a good idea to talk to somebody who has in fact lost their job and may lose their home, and may not be able to send their kids to college, may not be able to buy that new car or keep the house, the cottage up north, be able to do those things that spend dollars in our economy, buy that new refrigerator. How in the world have we gotten to a point where we do not understand the basic economics of people being able to have a good wage so they can purchase goods and services and care for their families and be successful in this country? We know there are serious issues. Looking at something else in this report, it says: Indeed, outsourcing health care jobs to lower wage countries could help control the upward spiral of health care costs. When a good or service is produced more cheaply abroad, it makes more sense to import it than to make it here. First, as someone who has worked on health care issues and helped to lead efforts to try to move us to lower health care costs, health care prices, the idea of saying the way we are going to lower health care prices is by losing jobs rather than tackling the big issues of lowering prescription drug prices, rather than allowing Medicare to negotiate group discounts under the new Medicare bill, which we did not do because the prescription drug company wants to be able to stop us from lowering prices--instead of addressing those things that will bring costs for businesses down, the suggestion is we should export health care jobs. So maybe if all of our nurses, doctors, and health care workers were all in another country where they were making less, we would be lowering our health care costs. I find this report and the comments in it and the public comments in the paper extraordinarily out of touch with what is happening to the people of our country and what is good for our country. I argue instead that in fact we do need to tackle health care costs. It is a major issue for businesses, large and small. In a global economy, it is a major issue for them to be able to compete. It is a major issue for our families and workers who are being asked to pay more, take a pay cut, pay more in a premium or copays. We should tackle that by addressing what is actually causing the health care costs to go up--the lack of competition, an explosion in prescription drug pricing. If we want to lower prescription drug prices and lower health care costs, rather than having the jobs go to Canada, let us open the border and bring the prescription drugs back from Canada at a cost of 50 percent less. We could do that tomorrow if the administration would look at what is best for our families instead of what is best for the pharmaceutical lobby. We do not have to export jobs. We can import safe prescription drugs that are actually made here, which we help to produce, that taxpayer dollars subsidize, that are then allowed to be sold in other countries around the world for half the price. I agree, health care costs are a huge issue for our businesses, and we need to tackle it in a way that brings down prices, that maintains our quality and does not say the way we are going to cut costs is to export our jobs. As I mentioned earlier, I also ask all of us to rethink what we are doing on trade. We must trade in a global economy, obviously. But our trade laws need to focus on incentives and on policies that will increase the standard of living in other countries, not decrease ours. I also would ask the administration to work with us on issues to level the playing field. We know China, Japan, and others manipulate their currency. What does that mean? It means it costs us more to sell into China. Our businesses can pay up to a 40 percent tax, essentially, for selling something into China because they want us to move the plant there. It costs us more to sell to them. It costs them less to bring in goods. If the Treasury Secretary will simply certify that this is going on, we have, then, the authority to begin to do something about it; we have legislation that will give us an opportunity to do something about it. I am proud to be a cosponsor, with Senator Schumer, in that effort. There are actions we can take to level the playing field. There is no doubt in my mind that if we give American businesses and American workers a fair shot, a level playing field, we will win every time. We can compete when the rules are fair. But instead of addressing those things, we have a report coming before us that says outsourcing of U.S. jobs to overseas workers is good for our Nation's economy. With all due respect, I think they should go back to the drawing board and try this again. I would just say one other thing. The Annual Economic Report predicted 2.6 million new payroll jobs by the end of the year. Certainly we would all greatly love to see that be the case. But last year they reported 1.7 million jobs would be created and the year before they said 3 million jobs would be created. Instead, the Nation lost 53,000 payroll jobs last year, according to the Labor Department. Instead of proposing, and suggesting, and proclaiming millions of new jobs without the right policies to actually make it happen, I hope we will place on our agendas the loss of jobs--manufacturing jobs, service jobs, professional jobs--happening in this country, all across our Nation, and certainly in my State of Michigan, where we have paid dearly for policies that have not worked. I hope we make this our top priority and that we focus on those things that will stop the exodus from the United States and the exporting of American jobs around the world.

Ms. STABENOW. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Ms. STABENOW. That is right.

Ms. STABENOW. Right.

Ms. STABENOW. That is right.

Ms. STABENOW. If I might ask a question of my friend from Florida, as a former insurance commissioner, he certainly understands the insurance side of this. I think, first of all, he is absolutely right. I think the two major drivers for health care now are the explosion of prescription drug prices and the fact that every time a person loses his or her insurance and that person walks into an emergency room to get care and is sicker than they otherwise would be, and so on, people with insurance end up seeing their rates go up because there is a smaller and smaller group of people who actually have insurance, and they pay more and more. Wouldn't that be the philosophy?

Ms. STABENOW. If I might ask my friend another question, wouldn't he share my amazement that, in this new economic report, the proposal is that the way we lower health care costs is to export the jobs? Export the nurses, export the doctors, radiological assistants, whoever it is--that is how we should bring down health care costs? Lose our jobs to other countries? Does that make sense?

Ms. STABENOW

Ms. STABENOW. Mr. President, I rise today to introduce the Manufacturing Opportunities to Revitalize our Economy's JOBS Act, or the MORE JOBS Act. We are facing a manufacturing job crisis in this country, and that is why I am introducing this bill to help our U.S. manufacturers to create manufacturing jobs here at home. Since January of 2001, the State of Michigan has faced devastating losses in the manufacturing sector. While the U.S. has lost 3.3 million private sector jobs--2.5 million in the manufacturing sector, Michigan has lost 162,300 manufacturing jobs. That is 18 percent of the state's manufacturing employment. In other words, 1 in 6 Michiganians has lost their manufacturing job in the last 2 years. It is an unfortunate fact that Michigan is one of the leading states in the country in manufacturing job loss. Indeed, while the U.S. employment rate is around 6 percent, Michigan's unemployment rate is currently around 7.6 percent. In some parts of Michigan, the unemployment rate is as high as 12 percent. The people of Michigan and the people of the United States need relief to help revitalize our economy. In the midst of these troubling times, we are faced with a new challenge: complying with a World Trade Organization (WTO) decision finding that our Foreign Sales Corporation (FSC) and Extraterritorial Income (ETI) tax code must be reformed to meet international trade law requirements. I understand that our colleagues on the Senate Finance Committee have been and continue to work diligently on this issue. Our country is one that plays by the rules and we will ultimately fix our tax code. The tax benefits of the FSC and ETI, however, are valued at nearly $50 billion over 10 years. We cannot just take away these benefits to our American manufacturers without creating new tax relief for them. The practical effect of that would be a $50 billion tax increase. And, that is why we must create a new tax credit for our U.S. manufacturers. The MORE JOBS Act that I am introducing today lays out a vision on how I believe we should reform the code. First of all it, it phases out the non-compliant FSC/ETI tax code over the next three years. Then, to help our U.S. manufacturers, the bill creates a Manufacturers' Tax Credit for domestic companies. A company, under my proposal, would be allowed to deduct 9 percent of its domestic production income before it has to figure its tax liability. In effect, this would result in a new tax rate for our U.S. manufacturers that are 3 percent lower--32 percent instead of 35 percent. And, my bill would make this effective immediately, not phased in as others have suggested. The credit would be extended to a wide array of companies: small businesses, large businesses and agricultural cooperatives. So whether it is a small furniture manufacturer in western Michigan, a tool and die company in Grand Rapids, or one of our automakers in metro Detroit, companies will be rewarded for their domestic production. And, our farmers will benefit, too. I often say that we in Michigan pride ourselves on what we make and what we grow. These two activities are vital to a strong economy, and our farmers would also benefit under my bill. Farmers themselves, if they have at least one employee, will directly benefit under my bill, since they qualify for the tax benefit as manufacturers. In addition, agricultural cooperatives would also receive this tax benefit. Farmers often belong to an agricultural cooperative which is covered under my bill. Agricultural cooperatives do the processing, handling, storing, and marketing for their members. For example, a farmer will sell his specialty crop to the cooperative. The cooperative then takes the farmer's crop and puts it with other farmers' produce and then stores and prepares the produce for sale to a food processing company. The coop passes its profits on to the members of the cooperative based on the amount of business each member does with the cooperative. So the tax benefits for the cooperative can be passed-through to farmer members of the coop. Finally, one of the cornerstones of my legislation is that my bill would create incentives for companies to keep jobs in the U.S. and to bring more jobs to our country. The MORE JOBS Act would encourage companies to keep their manufacturing in the U.S. by basing the amount of their tax credit on how much of their manufacturing is done in the U.S. Companies that have all of their manufacturing in the U.S. would receive the full 3 percent tax credit. Companies that have much their manufacturing outside of the U.S. would receive a reduced credit in proportion to their U.S. manufacturing. While other proposals being circulated eventually eliminate this incentive, my bill would make this incentive permanent. Why would we want to reward companies if they send their jobs overseas? We want to reward those who are contributing to our economy and putting Americans to work here at home. I want to work closely with my colleagues to reform our manufacturing tax code. In doing so, we will make our country stronger, our economy more resilient, and we can create millions of new good jobs in the manufacturing and agricultural sector. But we must do it carefully and with a priority on our U.S. manufacturing base. I urge my colleagues to support the MORE JOBS Act.

Ms. STABENOW

Ms. STABENOW. Mr. President, I rise today to introduce the Manufacturing Opportunities to Revitalize our Economy's JOBS Act, or the MORE JOBS Act. We are facing a manufacturing job crisis in this country, and that is why I am introducing this bill to help our U.S. manufacturers to create manufacturing jobs here at home. Since January of 2001, the State of Michigan has faced devastating losses in the manufacturing sector. While the U.S. has lost 3.3 million private sector jobs--2.5 million in the manufacturing sector, Michigan has lost 162,300 manufacturing jobs. That is 18 percent of the state's manufacturing employment. In other words, 1 in 6 Michiganians has lost their manufacturing job in the last 2 years. It is an unfortunate fact that Michigan is one of the leading states in the country in manufacturing job loss. Indeed, while the U.S. employment rate is around 6 percent, Michigan's unemployment rate is currently around 7.6 percent. In some parts of Michigan, the unemployment rate is as high as 12 percent. The people of Michigan and the people of the United States need relief to help revitalize our economy. In the midst of these troubling times, we are faced with a new challenge: complying with a World Trade Organization (WTO) decision finding that our Foreign Sales Corporation (FSC) and Extraterritorial Income (ETI) tax code must be reformed to meet international trade law requirements. I understand that our colleagues on the Senate Finance Committee have been and continue to work diligently on this issue. Our country is one that plays by the rules and we will ultimately fix our tax code. The tax benefits of the FSC and ETI, however, are valued at nearly $50 billion over 10 years. We cannot just take away these benefits to our American manufacturers without creating new tax relief for them. The practical effect of that would be a $50 billion tax increase. And, that is why we must create a new tax credit for our U.S. manufacturers. The MORE JOBS Act that I am introducing today lays out a vision on how I believe we should reform the code. First of all it, it phases out the non-compliant FSC/ETI tax code over the next three years. Then, to help our U.S. manufacturers, the bill creates a Manufacturers' Tax Credit for domestic companies. A company, under my proposal, would be allowed to deduct 9 percent of its domestic production income before it has to figure its tax liability. In effect, this would result in a new tax rate for our U.S. manufacturers that are 3 percent lower--32 percent instead of 35 percent. And, my bill would make this effective immediately, not phased in as others have suggested. The credit would be extended to a wide array of companies: small businesses, large businesses and agricultural cooperatives. So whether it is a small furniture manufacturer in western Michigan, a tool and die company in Grand Rapids, or one of our automakers in metro Detroit, companies will be rewarded for their domestic production. And, our farmers will benefit, too. I often say that we in Michigan pride ourselves on what we make and what we grow. These two activities are vital to a strong economy, and our farmers would also benefit under my bill. Farmers themselves, if they have at least one employee, will directly benefit under my bill, since they qualify for the tax benefit as manufacturers. In addition, agricultural cooperatives would also receive this tax benefit. Farmers often belong to an agricultural cooperative which is covered under my bill. Agricultural cooperatives do the processing, handling, storing, and marketing for their members. For example, a farmer will sell his specialty crop to the cooperative. The cooperative then takes the farmer's crop and puts it with other farmers' produce and then stores and prepares the produce for sale to a food processing company. The coop passes its profits on to the members of the cooperative based on the amount of business each member does with the cooperative. So the tax benefits for the cooperative can be passed-through to farmer members of the coop. Finally, one of the cornerstones of my legislation is that my bill would create incentives for companies to keep jobs in the U.S. and to bring more jobs to our country. The MORE JOBS Act would encourage companies to keep their manufacturing in the U.S. by basing the amount of their tax credit on how much of their manufacturing is done in the U.S. Companies that have all of their manufacturing in the U.S. would receive the full 3 percent tax credit. Companies that have much their manufacturing outside of the U.S. would receive a reduced credit in proportion to their U.S. manufacturing. While other proposals being circulated eventually eliminate this incentive, my bill would make this incentive permanent. Why would we want to reward companies if they send their jobs overseas? We want to reward those who are contributing to our economy and putting Americans to work here at home. I want to work closely with my colleagues to reform our manufacturing tax code. In doing so, we will make our country stronger, our economy more resilient, and we can create millions of new good jobs in the manufacturing and agricultural sector. But we must do it carefully and with a priority on our U.S. manufacturing base. I urge my colleagues to support the MORE JOBS Act.

Ms. STABENOW

Ms. STABENOW. Mr. President, first, I thank my friend and colleague from the State of Washington for her eloquence this evening in laying out where this is not a good deal for seniors. We wish it was a good deal for seniors. Both of us have been here since 2001, speaking in the Chamber frequently about the need to provide prescription drug coverage for seniors, real coverage, and about the need to lower prices for everybody. In fact, I have been working on senior issues for a long time. Actually that was the very first opportunity I had to get involved in public service. I won't say when, but it was about 25 years ago. I came into county government, which is a part-time position in Michigan. But what brought me into the Ingham County Board of Commissioners was the issue of senior citizen health care. I have been involved in that issue ever since. Nothing would please me more than to be able to stand on the floor this evening and say: We did it. We have put together a voluntary, comprehensive prescription drug benefit under Medicare for seniors and the disabled. Nothing would please me more. And nothing would please me more than to say: We did it. We have put in place the ability to lower prices for everyone. As colleagues have said, this is not just about Medicare and just about our seniors and the disabled--although certainly they are very important people. They use the majority of the prescription drugs. But we know right now the explosion in prices of prescription drugs is driving the entire cost of the health care system. When I talk to those who are in the auto industry, or when I talk to small businesses, when I talk to those who are in the furniture business in Michigan, or in retail sales or work in State government, I hear the same thing, which is at least half the cost increases in health care are a result of the explosion in prescription drug prices. So this is an issue that affects everybody. As we look at this question under Medicare, this is also an issue that affects everyone, every taxpayer as well as every person who is paying for Medicare. So this is a big deal. It is important that we get this right. It is important that we be able, at the end of the day, to say we have strengthened one of the great American success stories called Medicare, and that we have put in place the competition and the accountability to bring prices down. This bill absolutely does not do that. It doesn't do either one of those things. First of all, it starts from the premise that seniors want something other than traditional Medicare. When we look at what seniors have said when they have had a choice, here is what they said. Eighty-nine percent of those who have a choice right now between Medicare+Choice, which is an HMO, private insurance, or traditional Medicare, 89 percent said: We will take traditional Medicare. Eleven percent said: We will take the private insurance. Seniors have already said what choice they want. When I hear folks talking about what they want in Medicare, they are not asking for more bureaucracy, or more insurance paperwork, or more insurance companies to choose from. They just want to update Medicare for prescription drugs, that is all--just update Medicare for prescription drugs. Eighty-nine percent of the Medicare beneficiaries have already told us what they want to do. They want traditional Medicare. This bill basically sets in place--some of it is immediate with prescription drug coverage where you have to choose from private insurance plans if they are in your area, and some of it is down the road a bit in 2010 when the entire unraveling of Medicare begins. In some areas, people will have a very different system that will attempt to move them into private insurance. That is not what folks have said to me. People say we should do that because it costs less. Medicare is in trouble financially down the road. We need to do something to lower costs. When you look at this, Medicare costs about 2 percent to administer and private HMOs cost 15 percent. So that can't be the reason we are doing this. It costs more to go into private plans than it does with traditional Medicare. For many of the reasons colleagues said on the floor, traditional Medicare has a very large insurance pool--those who are sick, those who are well, those who are older, those who are younger, all together--the bigger the pool, the bigger the risk pool, the lower the price. It is not because it would cost less, because it doesn't cost less; it will cost us more. It will cost taxpayers more. It costs more for services under the private sector than it does under traditional Medicare. Why are we doing this? I think we are doing this for one reason: Unfortunately, the driving reason behind this legislation is that the pharmaceutical lobby has decided, instead of continuing to fight Medicare coverage and the Medicare prescription drug benefit as they have done for many years--they decided they don't want to stop it anymore because it is too big an issue for people. It is a critical life-and-death issue in order to pay for your medicine. That is not to say people got up today and decided to eat or get their medicine. That is not rhetoric; it is real. So they changed their approach and thought they couldn't stop it anymore because it is too real for people: This is a real problem. Let us create a benefit that is done in a way that divides people up into private insurance plans and in a way that doesn't allow Medicare to use all of its leverage to be able to lower prices. So behind all of this, there are I think two things. There are those who really do believe it ought to be done in the private sector, that we ought to go back to private insurance. But you couple that with an industry that wants to make sure that: No matter what, we can't lower their prices; let us make sure that no matter what, people have to pay the highest prices. That is why there is no reimportation, which is really important in my State. The idea that you can have a local pharmacist in Michigan be able to do business with a pharmacist in Canada, be able to bring prescription drugs back into the local pharmacy in Michigan at half the price, many of them made in the United States, they are safe, they are FDA approved, bring them back, and create a way to lower prices--they don't want that. That is not in the bill. They do not want a strong provision to tighten patent loopholes so competitors can be able to get into the marketplace with generic drugs. That is not in the bill. We have a weakened version of that. Amazingly, as colleagues have said, they were actually able to get language into the bill that says Medicare is prohibited from group purchasing on behalf of seniors and the disabled. It is amazing. That is just amazing. The private insurance companies can try to get the best price. Everybody else can try to get the best price. But Medicare on behalf of our seniors is prohibited from trying to get the best price. That would only be in the bill for one reason; that is, because the industry has been successful in creating a whole new group of customers who will be forced to pay the highest possible price. How do we know this? This is not just me talking. The Boston University School of Health has looked at this legislation and estimates there will be $139 billion in increased profits over the next 8 years for the world's most profitable industry. At $17 billion annually, this means about a 38 percent rise in drugmaker profits. I am all for folks making a profit. I have a major pharmaceutical company in Michigan. They do wonderful research. I am very proud of them for doing this research. But we are talking about an industry that is already one of the most heavily subsidized by taxpayers, because they do not make shoes, or chairs, or cars, they make lifesaving medicine. We want them to make it. We want them to do research. So we help them pay for it. We give them protection. We have patent protection so that they are protected from competition. We give them the ability to write off their research and write off their advertising. They get a lot of support and help. Why? Because we want to be able to afford the product. At the end of the day, when, by the way, they are spending 2\1/2\ times more on advertising and marketing and administration rather than research, which is a big concern of mine, but at end of the day we are seeing not prices going down so people can afford them but efforts to actually protect prices and allow them to go up. We are looking at about a 38 percent rise in drugmaker profits. Certainly any business would welcome that. But that is on the backs of American citizens. This is on the backs of American taxpayers who are paying the bill--American seniors who just want to know that they can count on Medicare, get the medicine they need, pick their own doctor, live a healthy life, and visit grandkids and great grandkids. They trust us to look beyond the 650 lobbyists, or however many there are in the drug industry now. I know it is over six lobbyists for every one Member of the Senate. Imagine, more than six lobbyists for the drug companies for every Member of Congress. They are counting on the Senate to look beyond the swarm and to look at what they need. They are counting on us to look at what they are asking for. I know at the end of the day it is our obligation and responsibility to make sure we put together something that actually helps people get their medicine at affordable prices, is responsive to the taxpayers of this country, and is something that protects one of the great American success stories called Medicare. The No. 1 reason I am opposing this legislation, there is nothing in here to lower prices for anyone. Profits will continue to go up and they are locked in. This legislation sanctions that. Second, we are putting into place a system that will unravel by privatizing Medicare, or will allow Medicare to wither on the vine as former Speaker Newt Gingrich said. It took a while. He said that in 1995 and here we are in 2003 with a bill that does that. It does a couple of other things that make no sense to me. I would assume that the first rule would be: do no harm. Yet under this legislation, it is estimated that over and above what is happening right now in the marketplace, 2.7 million retirees will lose their coverage, people with private coverage. That is one in four. That means three out of four employers will wrap around and keep the coverage going, but one out of four, which is too high--we could make that zero if we wanted to, if we had legislation I cosponsored a year ago that made it--but right now one out of four in this bill are estimated to lose their private retiree coverage. My guess is a lot of those folks gave up pay increases over the years to get good coverage, gave up other things so in their retirement they would have private coverage. On top of keeping prices high and unraveling Medicare, it is estimated by a study group that 143,000 people in the State of Michigan would lose their private coverage. I don't know how in the world I can support that. And I will not. The last thing this does, there are 6.4 million low-income seniors and disabled who will lose access to the drugs they need. Many of them will actually pay more. How in the world does it make any sense that we would have a prescription drug benefit that has been described as helping our low-income seniors the most, but actually costs people more out of pocket, people who are currently on Medicaid, who find themselves under Medicare with a different system, a different asset test, different copays, and would actually pay more. We should be focusing on and helping the people who really are choosing every day whether or not to eat or get their medicine or pay the electric bill. When we look at this whole picture, as much as I would love to say this is a great deal, this is a bad deal. My colleagues say this is a first step. There is an old saying: Beware of the first step. I think the first step is right off the cliff on this legislation for too many people. In closing, there is one important piece in this bill that has strong if not unanimous bipartisan support that I wish we were passing separately this evening. That is the issue I have talked about a number of times: what is happening to our doctors, our hospitals, our home health agencies, nursing homes, and others who have been cut consistently in the reimbursements they receive, whether they be rural or urban providers. Those who care for our seniors and the disabled have seen resources cut. That, in turn, is cutting access. We have known that cuts were coming now for the last 3 years, and instead of doing something about it sooner because our doctors and other providers desperately needed us to, it gets rolled into this legislation that is highly controversial. I regret that. I have offered separate legislation pulling out all of these provisions. I offered it on Saturday, and I asked unanimous consent we take it up immediately and pass it. It was objected to on the other side. I regret that, as well. The reality is, in the middle of this bill I believe there are some very important providers being held hostage, folks I want to support, whom I have supported, and I will support in the future; folks for whom I have fought, and unfortunately because of the fact that this is in the middle of this bill to unravel Medicare and hurt them in the long run and increase cuts in the long run for all of them, I am not going to be able to support this bill. However, I do want the record to reflect that our doctors and hospitals and others who have been cut too much are cancer care providers. They are still cut too much in this legislation. I am extremely upset that is the case. But we do have in this bill provisions for rural hospitals, urban hospitals, and others that are desperately needed. I am at least pleased there are provisions there recognizing the desperate needs our providers feel. In conclusion, when we look at the broad bill before the Senate that unravels Medicare, keeps prices high, causes people to lose their health insurance in the private sector, and causes the most vulnerable seniors to pay more, this is a bad deal. I am hopeful, still, that those listening this evening will call their Members before the vote that I believe is coming tomorrow morning. Tell the Members to go back to the drawing board. We can do better than this for people. I am still very hopeful this will be stopped and we will get back to the drawing board and get it right. Section 641

Ms. STABENOW. Mr. President, we have a very important vote coming up shortly on whether or not to proceed with the bill or to continue working, whether or not to stop our efforts to continue to try to improve this bill or to begin the clock to a final vote. Many colleagues have pointed out that this is the bill--this is the bill. The bottom line of all of this paperwork is that it does not take effect, in terms of prescription drug coverage for seniors, until 2006. So this is the bill we are asking for time to thoroughly go through, line by line, and to be able to fix what does not work for our seniors. We are being told we have to rush this; this is the last time we are going to be able to do it; we don't have any more time to be able to put this together. Yet the bottom line of all this, for seniors' prescription drug help, if there is any in here--and there is a little--doesn't even start until 2006. I am going to be voting against the effort to stop debate and move to a final vote because I believe we need to take the time to get it right. I believe there are critical issues we need to fix. Let me first say a positive aspect in all of this is important efforts to help our rural providers, our doctors and hospitals, home health agencies, and nursing homes. On Saturday I put forward a bill that would actually pull out those positive provisions that are critical for our providers, to vote separately on that. I believe we would have, if not unanimous, overwhelming bipartisan support for those efforts that help our providers. While I do not believe this bill, on balance, is good at all for our seniors, it is a bad deal for seniors, there are good provisions in it. I hope if this bill does not go forward, we can pull those provider pieces out and support them. Why don't I support this bill as written? In this bill as written, 2.7 million retirees lose their coverage. One out of four folks who worked hard during their lives, maybe have taken a pay cut here or there to get good health coverage, would actually lose coverage as a result of the provisions, the way this bill is written for private employers. Mr. President, 6.4 million low-income seniors, the folks we all talk about, the folks we are desperately concerned about, who really are sitting down today at the table and saying, Do I eat today or do I take my medicine, they will end up paying more because of the way this is changed between Medicaid and Medicare. That doesn't make any sense. It is a bad deal for too many of our low-income seniors who need help the most. It is a bad deal for 2.7 million folks who have private insurance and will lose it. My fear is they will not just lose the prescription drug coverage; they will lose their entire health care coverage. To add insult to injury, this bill locks in the highest possible prices in the world. It keeps drug prices high, which is why the pharmaceutical industry is so strongly supporting it. They changed their strategy a few years ago. They have been trying to stop prescription drug coverage because they didn't want Medicare to use its clout as a group purchaser to be able to get a good discount, as we do for the veterans, and lower prices. They fought it, but then they decided they couldn't fight it anymore because seniors are desperate and we do need to do something. We are long past doing something real for our seniors. So they changed the strategy. They said: Let's write a bill that gets a whole bunch more customers, 40 million more customers potentially, and let's make sure we lock in the highest prices so they can't compete; they can't lower prices; they can't go to Canada or other countries where there are safe, FDA- approved processes right now to be able to bring drugs back across the border. That is a big deal for us in Michigan. It is 5 minutes across a bridge or 5 minutes through a tunnel to be able to get lower prices--in half or more. So they made sure we are not going to be able to do that and they made sure we are not going to be able to negotiate for lower prices. What do we have in the end? We have a whole new group of customers for the pharmaceutical industry who will be forced to pay the highest possible prices. This is not a good deal for our seniors. We can do better than this. People don't have to lose coverage. People don't have to pay more. People don't have to be locked into the highest possible prices in the world. We have time. This bill doesn't take effect until 2006 for our seniors. I urge us to take the time to get it right.