Dorgan Bill Would Discourage Runaway Corporations.

Sen. Byron L. Dorgan, D-N.D., has introduced S. 1597, which would discourage American businesses from moving jobs overseas and to encourage the creation of new jobs in the United States.

Dorgan said that under current law, businesses are allowed to defer taxes on profits if the profits are used to invest and to build new plants overseas; his bill would end this tax break. The tax code should be "at least neutral on the question of whether you ought to have your jobs in America or overseas," Dorgan said. His bill also would provide a 20 percent payroll tax credit for companies that stay in the U.S. and create net new jobs. The credit would apply to the first two years of the worker's employment.

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S. 1597. A bill to amend the Internal Revenue Code of 1986 to discourage American businesses from moving jobs overseas and to encourage the creation of new jobs in the United States, and for other purposes; to the Committee on Finance.

THE AMERICAN JOBS ACT OF 1996

Mr. DORGAN. Mr. President, today I intend to introduce legislation called the American Jobs Act, and I simply wanted to come to the floor and describe it. I also intend in the coming weeks to try to convince as many Members of the Senate as possible to cosponsor this, because I think it does relate to a lot of the issues that the American people are very concerned about.

I spoke yesterday on the floor of the Senate about the issue of trade and jobs and the economy. I know some people get tired of hearing that. It is probably the same song with 10 different verses that I come and talk about from time to time.

But I think it is central to the question of where are we headed as a country? Who are we and where are we going? We are a country that is a wonderful country with enormous challenges ahead of us, but a country still filled with substantial strength and opportunity in the future.

I mentioned yesterday how interesting it is to me that at a time when people talk about how awful this country is, we have people suggesting we ought to put fences down across the border down south to keep people out. Why would we want to keep people from coming to this country? We have an immigration problem. Why do people want to come here? Because they think this is a remarkable place. Most people around the world think this is a wonderful place to live and a wonderful place to be.

What is happening in our country? Well, we are a country that survived the Civil War and came out as one country. We survived the depression and went on to build the strongest economy in the world. We defeated Hitler, cured polio, and we put a person on the Moon. When you think of all the wonderful things we have done in this country and then understand there is a kind of mood in America that is a mood of dissatisfaction and concern, not about what is past because all of us understand that what we have done has been quite remarkable in the history of humankind, but the concern is about the future. Where are we headed? Where are we going? What kind of a country will we be in the future?

There are several levels of that concern. One is about the declining standards and values in our country that people see. One is about crime and the increase in violence in our country and the concern about why that exists. But the other is about the issue of jobs. Will we have good jobs in our country? Under what circumstance will we have good jobs? There is not a social program in America -- none that we talk about in the Senate or the House ever during the year -- that is as important or as useful as a good job to an able-bodied person that wants to have a good job.

A good job is the best social program in our country -- a good job with good income. My ancestors came here from other countries because they saw that beacon of hope and opportunity in our country. They wanted to take advantage of it. They wanted a good job. They got good jobs and were able to give their children an education. That is what people in America want today. They are concerned because so many jobs in America seem to be moving elsewhere, and because the jobs that exist here seem to pay less money than they used to and have less security than they used to have.

We do not have wages spiking up in America, except for the wages of CEO's. Yesterday there was a report in the newspaper in town that says the average CEO salary of the large corporations of the country was up 23 percent in 1 year -- an average $4 million salary. But that is unusual because blue-collar workers are not keeping pace with inflation. In fact, 60 percent of the American families sit around the dinner table and talk about their lot in life, and they discover that after 20 years they are working harder and they have less income. If you adjust it for inflation, they have less income now than 20 years ago.

Why is that the case? Why is it the case that we have jobs with lower income, with less security, and jobs that are moving from our country overseas?

The chart behind me shows America's trade deficit. I am not going to speak about that today. That is for another time. I have already given that speech, in any event. But the trade deficit. The merchandise trade deficit last year was over $170 billion. What does that mean? It means we are buying more from other countries than they are buying from us. And we have a very substantial deficit. What it means is jobs that used to be here now are somewhere else. It means jobs are moving from America, from our country, to other countries. In fact, this chart shows foreign imports now take over one-half of U.S. manufacturing gross domestic product.

Said another way, if you evaluate what it is we produce, manufacture in our country, and measure that to what we import from other countries, foreign imports now take one-half of U.S. manufacturing GDP. A fair portion of these foreign imports are goods made by American corporations in foreign countries to be shipped back for purchase by American consumers. Or said another way, there are American jobs that are now gone overseas somewhere, making the same products to ship back to Pittsburgh, Denver, Fargo, and Sacramento, to be bought by American consumers. They think it is a good deal. If you can get somebody working for 14 cents an hour in some foreign land to make your shoes, shirts, or pants, think of how cheap that is going to be for American consumers -- not understanding, of course, that the jobs that used to exist here to produce those products for our people are now gone.

This chart depicts jobs that used to be in America. To pick a few countries, U.S. jobs now in foreign affiliates of U.S. firms were nearly 70,000 in 1992; 53,000 in Hong Kong; 14,000 in Costa Rica; 40,000 in Ireland, and it goes on and on.

I pointed out yesterday that there are a lot of reasons for all of this, like global economics, in which corporations are redefining the economic model and saying, "We want to produce where it is cheap and sell into an established market." That might be fine for them because, for them, that is profits. For the rest of the American people it is translated into lost jobs.

The initiative I am offering in the Senate today has two purposes, one of which I have already introduced in a separate smaller piece of legislation. The first provision is to say let us start by stopping the bleeding. Let us decide we will not reward a tax break to companies which decide to shut their American plants down and move their U.S. jobs overseas. How do we do that? Here is an example: If we have two companies on the same street making the same product, owned by two Americans, in any American city in the country, and they are the same kind of company, make the same product, they may have the same profitability; the only difference is that one of them, on a Monday, decides, I am out of here, I am done, I am tired of having to pay a living wage to an American worker. I am tired of having to comply with air and water pollution laws. I am sick and tired of not being able to hire kids. I am tired of having to comply with these regulations that require my workplace to be safe. So I am escaping. I am shutting my door, getting rid of my workers, taking my equipment and capital and moving to a foreign country where I do not have to bother about pollution laws. I can dump whatever I want into the streams and air. I can hire 14-year-olds if I choose. I do not have to care about an investment in safety in the workplace. Most importantly, I can pay 14 cents an hour, 25 cents an hour, or 50 cents an hour and increase my profitability.

When that person, on a Monday, decides he is going to do that, and his plant closes, and the other person on the other end of the block making the same product stays here, what is the difference? The person that left our country to produce the same product and ship it back into our country and compete with the person that stayed gets a tax break.

Our tax law says that if you leave this country, shut your plant down, move your jobs overseas, we will give you a deal. You get something called "deferral." You can defer your income tax obligation on the profits you earned. In fact, you can defer them permanently, if you wish, and never pay taxes on that profit. You can invest those proceeds overseas and use profits to build more plants and create more jobs overseas. We will give you a deal. The American taxpayer tells you that you can get a big fat tax break.

Well, no more. In fact, I tried to close that little thing last year, and 52 Members of the Senate cast a vote to say, "No, we want to keep that tax break." I do not have the foggiest idea why they would think that. But I am going to give them a chance to think about it at least a dozen more times this year because we are going to vote and vote and vote on this provision until we decide to do the right thing. The right thing is to have a Tax Code that is at least neutral on the question of whether you ought to have your jobs in America or overseas.

I am really flat tired of seeing a Tax Code that subsidizes the movement of American jobs abroad. Are there conditions under which people would move jobs abroad? Yes. Should we stop it? I do not think we can because we have a global economy. But should we subsidize it? No! It is totally ridiculous. Title I of my bill says let us stop this insidious tax loophole, stop the break that says we will reward you if you simply shut down your American plant and move your jobs to Mexico, Singapore, Sri Lanka, Bangladesh, China, or you name it.

Title II is also very simple: It says for those that create net new jobs in America, for those American companies that stay in America and create net new jobs in America, you get a 20 percent payroll tax credit on your income taxes for the first 2 years of that new job. Why am I doing that? Because I want to close the loophole that allows them to move their jobs overseas and get paid for doing it, and I want to create an incentive for people to create jobs here in this country.

These people in this town who have this global notion that it does not matter where manufacturing exists, it does not matter where jobs are, are not thinking about the well-being of this country. This country does not exist by consumption figures alone. Every single month you drive to work, turn the radio on, guess what? There is some commentator telling us about our economic health. How do they describe our economic health? They say we consumed so much last month, we bought so much, sales were so high. So we measure now the economic health of America by what we consume. That is not what describes the economic health of my hometown or the economic health of my State or this country.

Economic health in this country is described by what we produce -- manufacture, production. The genesis and source of wealth in this country is what does this country produce. Those who believe America will remain a long-term economic world power without a strong vibrant manufacturing economy have not studied the British disease of long, slow economic decline at the turn of the century when they decided it did not matter where manufacturing existed. This country had better start caring again about whether we have a productive sector, whether we have a strong manufacturing base, and whether we retain a broad network of good paying jobs in this country. That comes from the manufacturing sector.

We spend our time in the Congress talking about almost everything except that which matters most to American families -- jobs. Jobs and opportunity. You ask most people what they care about. They care about whether or not they have a decent job and they have an opportunity to make a living and support their family. Then they care about whether their kids are going to be able to find a decent job. Yes, along the way, whether they can get a good education for their kids. Yes, whether their families are safe. Yes, whether they get decent health care. Those are the central issues for families. All of it is driven by do you have an opportunity to get a decent job.

It ought not escape anybody's notice that as those who describe our economic circumstances in our country, these economists -- and I guess I should make clear with truth in labeling that I taught economics in college for a couple of years part-time; I was able to overcome that and go on and do other things in life. The economists who have described for us an economic model in which they talk about how wonderfully healthy America's economy is because it is growing and it is moving ahead. Why? Because they talk about how much we are consuming -- a fair amount, incidentally with debt, debt-assisted consumption, as opposed to manufacturing assisted by good investment. That is the difference.

If we do not start moving to debate the central issue of what moves our economy ahead and what provides economic strength and vitality for American families, we are always, it seems to me, going to be on the end of a disconnection from the average American voter. They want us to be dealing with things that matter most in their lives. There is not much that is more important than the issue of will this economy of ours produce decent jobs in the future? Now, we can, as we have in the past, just hang around here and talk about all the other ancillary issues that do not matter very much, but if we do not decide that jobs matter and that our Tax Code that actually encourages people to move their jobs overseas, if we do not decide that desperately needs changes, we do not deserve to belong in this Chamber. We have to decide what the central issues for our country are.

I think everybody in this country knows that we have lost some 3 million manufacturing jobs in about a 5-to 8-year-period, at a time when we have increased by tens of millions the number of American citizens who live here. A good job base in the manufacturing sector is shrinking, our population is increasing. Opportunity is moving away. It is not too late. I think that what most of the American people would like us to do is put America's Tax Code on the side of America's workers and America's taxpayers, and not on the side of big corporations that will milk the Tax Code by moving jobs overseas instead of keeping jobs here at home.

Mr. President, I will be introducing the legislation in the Senate today. I hope that some of my colleagues will join me. Again, I indicate that I fully intend that we will have repeated votes on this kind of legislation this year because I think it is central to the issue of what we ought to be doing.