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Vol. 150 |
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No. 66 |
Senate
Statement of
Senator Dianne Feinstein
"On Passage of
the Jumpstart Our Business Strength Act”
pdf
version
MRS. FEINSTEIN. Mr. President, I rise in favor of the
Jumpstart Our Business Strength (JOBS) Act.
This is far from a perfect bill.
But, without this legislation,
Additionally, I voted for it
because on balance it provides important tax relief for
This bill will:
Effectively provide a three
percent tax cut for manufacturers;
Give manufacturers a 50 percent
tax credit for the cost of adding jobs;
Extend the research tax credit
through 2005;
Protect hundreds of thousands of
workers from cuts in federal overtime protections;
Prevent the federal government
from spending taxpayer dollars on contracts with companies that use foreign
labor when there are domestic alternatives;
Provide a tax credit for
companies which produce energy by using underbrush and other potentially
hazardous fuels found in our forests;
Provide a tax credit for
consumers who buy hybrid vehicles; and
Protect the
Since January 2001,
A three percent tax cut for
manufacturers, coupled with a 50 percent tax credit for the cost of adding new
jobs, will help us create more jobs in
The research tax credit will also
help
Productivity growth in recent
years has been driven by the combination of new technology and investments in
capital goods, research and development, workers, and public infrastructure.
To continue this pattern of
growth, the focus must now be on providing incentives to companies that invest,
innovate, and create the new capital and knowledge that drive the
Since its enactment in 1981, the
research tax credit has provided a powerful and effective incentive for firms
to increase research spending.
The tax credit lowers the cost of
conducting research in the
This credit makes a real
difference in the amount of research undertaken and jobs created in the
I also support the Harkin
amendment which was adopted as part of this legislation. This amendment will prevent the White House
from implementing changes in existing overtime laws that reduce the number of
workers protected by labor laws.
Last year the White House
proposed redefining the job descriptions of millions of workers, thereby eliminating
their right to federal overtime protection.
After many in this chamber raised
serious concerns over such a change, the Administration released final rules
that made a significant, yet insufficient, change to those draft rules.
Unless we act, these rules will
take effect later this year.
If the Department of
Labor’s own numbers are correct, then more the 117,000 individuals could
lose overtime protection. If they are
wrong, it could be millions.
These rule changes would wipe out
overtime pay protections and increase work hours.
In
But, some public employees and
many in the film industry won’t be so lucky.
Although most workers in
I also support provisions in the
bill that will prevent the federal government from spending taxpayer money on
contracts that use labor located outside of the
Although our nation has entered a
period of economic recovery with significant productivity gains in the last
several quarters – it is clear that a great deal of this productivity
comes from two things:
Downsizing of employees, and
Outsourcing – turning to
foreign labor in foreign countries.
In the past decade, General
Electric sent 10,000 information services jobs to
Microsoft spent $100 million on a
new call center in the
And, while corporate earnings are
up and the stock market remains high, we are continuing to lose service sector
and manufacturing jobs.
I realize that many firms benefit
greatly from outsourcing, but it damages the long term health of our
communities unless we vigorously support new job growth.
We must give companies incentives
to keep jobs here, and we must ensure that taxpayer money is not used to
subsidize outsourcing.
This legislation will also help
protect our environment by providing tax credits that encourage companies to
produce energy by using underbrush and other hazardous fuels from our forests.
By providing an incentive to
companies to remove these hazardous fuels from our forests, we will reduce the chance
of forest fires in the
Additionally, this bill contains
tax credits directly to consumers who purchase hybrid vehicles. These vehicles reduce air pollution and cut ozone
in
Having said this, however, I
recognize that there are significant problems with this bill.
For instance, it is clear that
multi-national corporations are not paying their fair share of taxes.
This bill allows companies to
bring foreign-earned profits back into the
This is half as much as the
lowest personal tax rate paid by individuals – 10 percent.
Under an amendment which I
sponsored with Senator Breaux, companies would have been allowed to bring
foreign-earned profits back to this country at the reduced 5.25 percent rate
provided that they use those repatriated profits for activities that promote
job growth or benefit employees.
Sadly, a lobbying effort by large
multi-national companies helped to defeat that amendment.
What is disturbing about this
provision is that an unconscionable number of American companies are taking
advantage of loopholes in
According to a recent Government
Accounting Office report, (entitled “Comparison of the Reported Tax
Liabilities of Foreign and U.S. Controlled Corporations, 1996-2000”), 61
percent of
This means that approximately
two-thirds of all companies operating in the
This is stunning.
Corporate tax receipts used to
account for a much greater percentage of federal revenues than they currently
do.
According to the Brookings
Institution, in 1945, income taxes from corporations accounted for 35.4 percent
of federal receipts. In 1970, income
taxes from corporations accounted for only 17 percent of federal revenues.
Today, however, corporate income
taxes account for only 7.8 percent of federal revenues.
This means that corporations are
paying a smaller percentage of taxes than they have in the past five decades.
We have got to change the way we
tax corporations in
Corporations have got to worry
about more than just the bottom line.
They have got to become good corporate citizens. Unfortunately, this bill does not do enough
to encourage that kind of corporate responsibility.
Going forward, I will seek to
return balance to our tax system.
The middle class is being
squeezed, while multi-nationals continue to outsource jobs and receive tax
breaks for doing it.
Nevertheless, I will vote to
protect
I will support research and
development in our labs and factories.
And, I will support protecting
overtime protections for
This is by no means a perfect
bill.
But taken as a whole, I believe
it is worthy of passage.
Thank you.