(Senate - April 25, 2013)

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[Pages S2992-S3014]
From the Congressional Record Online through the Government Publishing Office []

              MARKETPLACE FAIRNESS ACT OF 2013--Continued

  Mrs. FISCHER. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. COBURN. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. COBURN. I ask unanimous consent to speak as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.


  Mr. COBURN. I wanted to spend a minute as we have had a lot of 
discussions over the pain that is being caused by the American 
traveling public and businesses on the FAA. We heard the majority 
leader say we couldn't do the sequester because we still have the same 
amount of money, and there is no way we could cut the $40 billion out 
of our budget over the next 6 months.
  I thought I would just draw a little comparison for us so we could 
actually see the Federal budget, and then we could make a comparison to 
the average family budget. Here is the Federal budget. This is last 
year's Federal budget. We spent $3.7 trillion, we took in $2.46 
trillion, and we had a deficit of $1.32 trillion. We added to our total 
debt, so we have come to a total debt now of $17.57 trillion. The 
sequester cuts are $85 billion, and $85 billion sounds like a lot of 
  Now let's compare it to the average family household in America. The 
median household income in America last year was $53,000. By the way, 
in real dollars that is less than what it was in 1989--less than what 
it was in 1989.
  If we spent money in households the way the Federal Government spends 
money, we would have spent $81,000. We would have only earned $53,000, 
but we would have spent $81,000. We would have had an annual credit 
card debt that we would have chalked up of $28,000 doing exactly what 
the Federal Government does, which would have made our total credit 
card debt $375,000.
  We are spending $81,000, and if we cut the amount of spending in the 
sequester as a percentage of the total Federal budget as to the median 
family income in America, we would have cut $182. That kind of puts it 
in perspective.
  How many families would continue to be able to operate this way? They 
wouldn't. No credit card company would continue to give them $28,000 
worth of credit card debt. They certainly wouldn't let them run up 
$375,000 and then say: Oh, by the way, what are you doing about getting 
your finances in order? Your response would be: I have cut $182 out of 
my budget this next year.
  What we are seeing is a farce when we talk about we can't cut $44 
billion or $88 billion out of the Federal budget over a year's period. 
It is an absolute farce.
  Then when you talk about the FAA, in fact, they have less controllers 
now than they did in 2010. If you look at the budget requested in 2013, 
there is about a $300 million difference between the sequester level 
and, actually, it is the same as in 2010.
  What the FAA and the administration are telling us is there is no way 
they can possibly do anything to associate less inconvenience and less 
delayed flights. Yesterday there were 6,800 flights delayed to make it 
  I want to enter something into the Record that came up on my 
whistleblower site. This is an employee of the FAA and what they were 
told in a meeting on Monday by management. Here is what they were told.

[[Page S2993]]

  ``I hope this is the appropriate channel to contact you through.'' I 
am not going to say who works for the FAA and asked me to e-mail you. 
We want to ``let you know that the FAA management has stated in 
meetings that they need to make the furloughs as hard as possible for 
the public so that they understand how serious it is. Due to this there 
is management trying to make everyone take the same furlough day so 
that the FAA shuts down completely on that day. Union employees are 
supposed to be able to pick their furlough day, but are being pushed by 
management to take the same day as everyone else. Example, recently 
there was a meeting between''--and I am not going to say between which 
group of employees, but at the FAA, ``management, and union where the 
union reminded a manager that he cannot force them to take off the same 
day. A union employee wants Wednesdays off so another employee, under 
the managers orders, tried to make the union employee change his mind. 
When the union employee asked why, the other employee said to prove a 
point. I do not know if any of this information is useful or not. If it 
is I'' will contact you with more information.
  Well, the fact is, if that is really going on, that the management at 
FAA is trying to make union employees all take the same day off, what 
is that about? Is that about airline travel in America or is that 
trying to make the sequester hurt? Is that about $182 out of your 
budget and we can't even do that?
  We have the government's management manipulating a program so that it 
hurts the American public? How cynical, how un-American is that.
  I would ask unanimous consent to submit this e-mail for the Record.
  There being no objection, the material was ordered to be printed in 
the Record as follows:

     Sent: Wednesday, April 24, 2013 8:16 AM
     To: Coburn, Whistleblower (Coburn)
     Subject: FAA Furlough
       Sen. Coburn: I hope this is the appropriate channel to 
     contact you through. My wife works for the FAA and asked me 
     to email you for her. She wanted me to let you know that the 
     FAA management has stated in meetings that they need to make 
     the furloughs as hard as possible for the public so that they 
     understand how serious it is. Due to this there is management 
     trying to make everyone take the same furlough day so that 
     the FAA shuts down completely on that day. Union employees 
     are supposed to be able to pick their furlough day, but are 
     being pushed by management to take the same day as everyone 
     else. Example, recently there was a meeting between 
     employees, management, and union where the union reminded a 
     manager that he cannot force them to take off the same day. A 
     union employee wants Wednesdays off so another employee, 
     under the managers orders, tried to make the union employee 
     change his mind. When the union employee asked why, the other 
     employee said to prove a point. I do not know if any of this 
     information is useful or not. If it is I can get my wife to 
     contact you with more information.

  Mr. COBURN. Here is another from an FAA supervisor: I am an air 
traffic control supervisor. I am writing you because I don't want to 
lose my job but, more importantly, I don't want to see safety across 
the Nation be deteriorated at the risk of the lives of aviators. Sir, I 
don't need to remind you about the importance of safety and would like 
to talk to you about what could have happened on the day OSU played OU 
16 February 2013. Please call me day or night.
  The fact is there is a bigger story behind that, which I will make a 
speech on tomorrow, to actually detail what is going on.
  When we hear there is no risk to safety, and here is a supervisor 
saying there is, what are we doing? This is a contrived farce to make 
the American people think we can't cut $182 out of an $81,000 budget, 
put in simple family budget terms, or we can't cut $85 billion out of a 
$3.7 trillion budget.
  When we get down and look at it in those terms, everybody in America 
knows it is possible to do that. Everybody knows all it takes is some 
common sense and the utilization of priorities that are in the best 
interests of the country, not the best interest of any political party 
or political philosophy, to actually accomplish this.
  I must say I am disappointed in the Department of Transportation. I 
am disappointed in the FAA that they would be so callous as to carry 
this forward.
  I also want to make some comments about the remarks of the majority 
leader 2 days ago about the tea party. I have to say I adamantly 
disagree. The tea party people I know from Oklahoma and the Midwest 
love our country. They want an effective, efficient government. They 
want a government that follows the Constitution. They want the rule of 
law to be supported all the time.
  He related and compared them to anarchists. Nothing could be further 
from the truth. Are there some crazy opinions on both sides of the 
extremes in both parties? You bet. But the vast majority of people in 
America understand over the last few years they have had to do more 
with less at the same time the government is doing less with more.
  To indict a group of people who care just as much about this country 
but see a different way of solving the problems, who say we should live 
within our means, that we shouldn't borrow against our children's 
future, that we should follow the Constitution, that we should follow 
the enumerated powers, that we should honor the Bill of Rights--that we 
should honor the Bill of Rights asking us to do the very things that 
our oath calls on us to do--to me, the fact that the majority leader 
would attack that group of people as a class and relate their motives 
to that of anarchy is very shameful. They even make the comparison, but 
it is also made out of ignorance.
  Everybody in this country wants the best in the long term. There is a 
difference in our view of how we get there, but there is no difference 
that we do have a Constitution, and it is not un-American to think we 
ought to honor our oath to that Constitution; that we ought to truly 
follow the Bill of Rights and not pass laws that abandon it; that we 
truly ought to embrace the enumerated powers.
  Over the last 3 years the GAO has shown us where $250 billion a year 
in waste is, and yet the Congress has done nothing. Senator Feinstein 
and I eliminated $6 billion a year in terms of the ethanol blenders 
credit. That is the only thing that has gone through in 3 years that 
even comes close to addressing what the GAO has recommended out of $250 
  You can understand why people might be cynical of Washington--because 
we don't have our nose pointed in the right direction. We continue to 
pass laws that ignore the enumerated powers.
  One of the results of that is $250 billion of duplicative programs 
which have no true metrics on them. If they were all working, that 
would be fine. But, in fact, most aren't.
  I think it needs to be countered that there are a lot of disparate 
views in our country, but the motivation behind them is really love of 
country. Whether they are on the hard left or on the hard right, it is 
just a different path. To compare that group of people to anarchists is 
both insensitive, inaccurate, and outrageous. What we need in our 
country today is leadership that pulls us together, not leadership that 
divides us further. What we are seeing is just the opposite.
  I would ask my fellow Americans if they think on a comparative basis 
we couldn't cut $182 out of an $81,000 budget, if that is too much, 
especially since the fact that this budget has grown 89 percent in the 
last 10 years while their income has gone down 5 percent. Which is the 
better way? Should we raise your taxes and spend more of your money or 
should we actually decrease and eliminate tremendous amounts of 
wasteful, ineffective, and inefficient government spending and not 
sacrifice the future of our children?
  I don't think the answer is complicated. I think most of America 
would agree that we could get $182 out of $81,000. That is the 
comparative ratio of $85 billion out of $3.7 trillion and what we heard 
the majority leader say that is impossible to do. It is only impossible 
to do this because we don't want to do it.
  I have spent 8 years outlining waste in the Federal Government. Very 
few of my colleagues have helped eliminate that waste. The reason is 
they are double minded. In their hearts they want the best for the 
country, but they also want to get reelected. Every one of those 
duplicative, wasteful programs has a constituency.
  So parochialism trumps patriotism in the Senate. That is the only 
explanation for why we haven't addressed

[[Page S2994]]

what the GAO has plainly said is duplication, waste, and actual 
  When we have over 100 job training programs, 47 for the nondisabled, 
and all but 3 of them do exactly the same thing, and most of those do 
not have a metric--in fact, none of them have a metric to say whether 
they are effective--and we will not reform it, we are saying we do not 
care; we cannot cut $182.
  When we have 110 teacher training programs, and none of those has a 
metric, across 9 different agencies, not in the Department of 
Education, and none of those has a metric. We spend about $4 billion a 
year on them, and we do not know if they are effective and we will not 
conform them into 1, even if it is a role for the Federal Government, 
or into 2, and eliminate and get some consolidated savings, what we are 
saying is we cannot cut $182 out of an $81,000 budget.
  You see, the problems are not insolvable. There is no attempt being 
made to solve them. So we get a choice, America gets a choice: Continue 
to operate as we are, and what we are actually going to do is put 
handcuffs on our children and shackle their legs and take away the 
opportunity of a life equal to ours. We are stealing that from them.
  When we have the majority leader of the Senate say it is impossible 
for us to cut $182 out of an $81,000 budget, what we are saying is our 
priorities are wrong. I can go through the list. We have 204 science, 
technology, engineering, and math programs. Twenty-one different 
agencies run those. Half of them are at the Defense Department. None of 
them has a metric to see if they are working. They are well intended. 
Why do we have 204 science and technology programs? Nobody can answer 
that question. We just have them because somebody saw a need but did 
not look to see what we were already doing or make what we were already 
doing work. It is not rocket science. It is common sense. There is not 
a thimbleful of it in Washington. There is not a thimbleful of common 
sense in Washington; otherwise, we would be addressing these programs. 
We would not have a statement saying there is no way we can cut $85 
billion out of a $3.7 trillion budget. America does not believe that.
  Now we have sequester and a refusal by the administration to even 
accept flexibility if we were to grant it, or any request for 
reprogramming to make it better for the American people. What we have 
is a political stunt by the FAA that not only inconveniences travelers 
but puts people at risk, markedly affects business, and changes 
people's lives. When you think about those people who are not going to 
make the funeral of one of their loved ones because of this stunt or 
are not going to be at a graduation because of this stunt or the 
airlines and the significant losses they are incurring every day 
because of this stunt, you have got to ask: Who in the world is leading 
this country and where did they get their motivation? It is an 
  The fact is the Senate has not acted in the best interests of the 
country in the long term, and what we have denied--the fact is we 
cannot cut $182 out of an $81,000 budget. We cannot do that; it is too 
hard. But nobody in America believes that. Nobody believes it. So what 
we do is call up all of the heart-wrenching things we can to say how 
terrible it is but do not talk about the real fact that we are living 
way outside of our means. We are living on the backs of our children. 
Every day we are stealing their future and we refuse to admit to the 
very real concept that that is morally wrong. It is especially morally 
wrong when we, if we did our jobs properly, would not be doing it.
  I yield the floor and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. COBURN. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
  Mr. COBURN. Mr. President, I understand there are going to be 
objections to amendments, but I am going to offer them anyway and let 
people object. One of the ways the Senate is running now is that we 
have spent 3 days doing nothing, so I am going to talk about my 
amendments. If they get objected to, fine. But the fact is the American 
people should know what we are doing rather than spending all our time 
in quorum calls.
  So I will be calling up several amendments. If they are objected to, 
I will spend the time talking about those amendments. I have no 
intention of losing the floor until I have finished calling up all my 
amendments and talking about each of them.
  I just gave a talk on the tremendous waste that is in this 
government, but there is a lot of other waste and ways to solve it. 
Most of these amendments have bipartisan sponsors or have had in the 
past, and they are about good government. I understand there will be 
objections, and that is fine. Members can defend the objection and the 
fact that there are not going to be any amendments on the bill, but I 
am going to offer mine anyway.
  The first amendment I would like to call up is amendment No. 753 and 
I ask unanimous consent for its consideration.
  The ACTING PRESIDENT pro tempore. Is there any objection to setting 
aside the pending amendment?
  Mr. DURBIN. I object.
  The ACTING PRESIDENT pro tempore. Objection is heard.
  Mr. COBURN. I will discuss amendment No. 753, and I appreciate the 
objection by the Senator from Illinois to that amendment.
  We have over $4 billion owed to the Federal Government by Federal 
employees in past due taxes. I am not talking about taxes that have 
been adjudicated or settled or that have been worked out. I am talking 
about taxes owed today that haven't been paid. The Federal Government 
has the ability to garnish those wages, but they will not.
  The way we get rid of a $1 trillion deficit is $1 billion at a time. 
On active Federal employees right now there is $1.1 billion in tax 
arrears and $2.2 billion from retired. That is undisputed. I am not 
talking about disputed. This is undisputed and hasn't been paid. So if 
there is an agreement that has been worked out, if they are working it 
out, that is fine, this amendment does nothing.
  We are laying off people at the FAA. A portion of these people at the 
FAA, whether it be in communications or a secretary or whatever, owes 
the Federal Government thousands of dollars, but we are asking somebody 
else to take a furlough day rather than either terminating this other 
individual or garnishing their wages. Something is wrong with that 
  This amendment says we are going to do that. We are going to actually 
enforce the rule of law and we will apply it equally to Federal 
employees as we apply it to everybody else in this country.
  This will save, over the next 2 to 3 years, about $3 billion. Yet I 
can't bring up this amendment. I understand the dynamics that are 
ongoing. I have no personal animosity toward Senator Baucus or Senator 
Durbin for objecting to the amendment. I know what is happening. But 
the fact is we can't bring up an amendment to save us $3 billion.
  The Marketplace Fairness Act is going to pass this body. Everybody 
knows that. But what we can't do is the regular work of the American 
people and we can't get a vote on an amendment that would actually save 
us $3 billion.
  Mr. DURBIN. Would the Senator yield for a question?
  Mr. COBURN. I would be happy to yield to my colleague from Illinois.
  Mr. DURBIN. The Senator from Oklahoma is my friend, and we have 
worked together on many occasions. I wish to state for the Record, 
because he knows it and I wish to put it on the Record, that we have 
what is called a blue-slip problem. There are no Federal taxes as part 
of the underlying bill. In fact, no taxes--no new taxes. If we add a 
provision, which the Senator has suggested--and he has six or eight 
amendments each dealing with the Internal Revenue Code, and many of 
them very meritorious--they would be objected to and the bill would be 
rejected in the House because revenue measures have to originate in the 
House of Representatives.
  So it is a technical, procedural objection and does not reflect my 
feelings about the substance or about the sponsor.

[[Page S2995]]

  Mr. COBURN. I understand that, but I think this amendment has no 
technical problem because it does not raise new revenues. It is simply 
a direction for performance of the Federal Government, which is the 
marketplace fairness. We are directing what will happen to the States 
and the involvement of the Federal Government in it. So there may very 
well be a blue-slip problem with some of the others, but I don't think 
there is with this one.
  The point is here we sit. I just gave a speech saying it is $182 out 
of a $81,000 budget we say we can't cut. That is the equivalent family 
situation I just lined up here, and here is a way to get $3.2 billion 
that is owed and due back into the Federal coffers and we are not going 
to allow it.
  So we could allow the amendment and then table it. The fact is we 
don't want to do that either. In talking to my House colleagues, it is 
going to be a while, if ever, if this bill actually sees the light of 
day. So we ought to be voting on the things that will actually make a 
  I don't disagree it is unfair on the Marketplace Fairness Act. I 
think the exclusion level is way too low for any business to be able to 
afford to comply with it, but that is another story. The very fact is 
we are not doing what we could do to collect the revenue we are due 
now. This is an example of just saying: Start enforcing the law. Start 
using the tools at hand at the Treasury and the different agencies. Yet 
we are not going to get to vote on that. We ought to vote. If they want 
to table it, fine, but not to allow an amendment to come up? We are not 
postcloture, but we are not allowing an amendment, which means I don't 
have the right to modify a bill or even have a vote on modifying the 
  I understand what is going on, but I think that is a significant 
amendment. Most Americans don't know Federal employees who are actively 
working today owe that kind of money to the Federal Government. Yet 
nothing is being done about it and no consequence for not paying. I 
guarantee if you are out there and you are not paying, you are feeling 
the full force of the IRS.
  I ask unanimous consent to bring up amendment No. 751 and set aside 
the pending amendment.
  The ACTING PRESIDENT pro tempore. Is there objection?
  Mr. DURBIN. Mr. President, reserving the right to object, I 
appreciate I have to object, but I want the Senator from Oklahoma to 
please explain the amendment.
  Mr. COBURN. Can I actually have it read and then the Senator from 
Illinois object after having it read?
  Mr. DURBIN. Whatever way the Senator from Oklahoma wishes to explain 
it. I will object at this point.
  I am sorry, I understand that can't be done.
  Mr. COBURN. All right. Let me explain a minute, and the Senator can 
object ahead of time or later. It doesn't matter when.
  The ACTING PRESIDENT pro tempore. Objection is heard.
  Mr. COBURN. This is an amendment to require a report from the 
Treasury Department on the abuse of tax-exempt status by charitable 
organizations. What we have seen in studies by the GAO and the IG is 
that many professional athletes set up charitable organizations and 
then use them inappropriately to pay the expenses of their lives. All 
we are asking from the IRS is to take a good look at this. Let's not 
allow this aspect of a very well-intended tax law to be utilized to 
skirt expenses and taxes.
  On March 31, 2015, ESPN investigative unit ``Outside the Lines'' 
released the findings of an in-depth look at 115 different charitable 
organizations founded by prominent athletes. They gave extensive 
details of that investigation. What they outlined was that 74 percent 
of these nonprofits fell short of one or more of the acceptable 
guidelines for nonprofit operating standards. That means they are 
operating outside the law or do not meet the requirements for a 
charitable organization. Yet nothing has been done about it.
  Here again they are asking for oversight, asking for us to do the 
right thing, asking us to get the money that is actually due the 
Federal Government. We are not going to get a vote on it. We are not 
going to have an ability to vote on it. We are not going to direct the 
IRS to actually do that and actually recapture some of the money that 
is actually due to the Federal Government.
  All it is is a study: Tell us how bad this problem is and what you 
are going to do about it. How are you going to fix it? But, no, we are 
not going to do that. We are going to continue to allow the process to 
go on so that some of the most wealthy people in our country continue 
to pay less taxes than what they owe because Congress is dysfunctional.
  I am not going into the individuals who were named in the ESPN story. 
I think it created quite a stir in the media. Yet we have seen no 
action either in the House or the Senate in this area. All we are 
asking with this amendment is the number of charitable organizations 
that existed 10 years ago; the number that had their tax-exempt status 
revoked each year since 2007; the number and nature of the allegations 
of the problems made to the Internal Revenue Service with respect to 
charitable organizations that were founded in this area of expertise 
for charitable organizations and what the IRS has done about it over 
the last 6 years; a description of the challenges the Internal Revenue 
Service faces in trying to enforce and oversee such organizations; the 
number of criminal investigations of charitable organizations conducted 
by the IRS since 2010--in other words, what are you doing about the 
problem--and then finally an explanation of any problems the Internal 
Revenue Service has had with the U.S. attorneys in prosecuting criminal 
violations of tax-exempt and charitable organizations.
  Mr. DURBIN. Will the Senator yield for a question?
  Mr. COBURN. I am happy to.
  Mr. DURBIN. I would like to say I would vote for that in a second and 
I am not ruling out the possibility of agreeing to allow the Senator to 
offer this as an amendment to the bill. Please let us see if it raises 
a blue slip issue, which we mentioned earlier, which is a procedural 
issue, which means if it has a revenue measure in it initiated in the 
Senate, it would be subject to a blockage or objection in the House, 
which we are trying to avoid.
  This is a measure Senator Enzi worked on for 12 years. I have worked 
on it for several years. We would like to get this measure up for a 
vote and for approval in the House. If the Senator from Oklahoma is 
offering a measure that would not jeopardize that, I am at least going 
to entertain that idea, and I will talk to my staff about it.
  Mr. COBURN. I appreciate the comments of my colleague, and question.
  The next amendment I would like to call up is amendment No. 767, 
which requires all legislation to be reviewed before it is considered 
by the Senate to determine whether duplicative or overlapping programs 
are created. I ask that that amendment be called up and the pending 
amendment be set aside.
  The ACTING PRESIDENT pro tempore. Is there objection?
  Mr. DURBIN. I object.
  The ACTING PRESIDENT pro tempore. Objection is heard.
  Mr. COBURN. Here is one that doesn't get anything as far as a blue 
slip. What we now have is 3 years' worth of reports by the General 
Accountability Office showing at least $250 billion in questionable 
programs that are markedly duplicative of one another. This is multiple 
areas, and I have them now memorized and all the new ones too. It is 
layer after layer, agency after agency, program after program.
  This is a bipartisan amendment. All this says is that before we 
create another program in the Senate, we have a report from the 
Congressional Research Service: Does this duplicate a program that is 
already out there? If we continue doing what we are doing, we are going 
to continue to get GAO reports that we are creating programs that 
duplicate what we are already doing.
  It is not the fact that maybe our intent is good, it is the fact that 
we don't know what is out there now--except GAO does now--and how will 
we ever know until we put a requirement on ourselves to quit creating 
new duplicative programs? What the commonsense man would say is that if 
you have programs that are doing things and they are not working, don't 
create another one, fix the ones you have. Yet we

[[Page S2996]]

refuse to do that. Committee after committee refuses to do the 
  There is a bill sitting right now awaiting our determination, coming 
from the House, that reformed 36 job-training programs that the GAO 
said were failing and were duplicative and didn't have the metrics, and 
they converted those to 6, 36 out of 47 because the committee that did 
this, the SKILLS Act, only had jurisdiction over them. They created six 
programs, and they put metrics on it. We spend $19.8 billion on those 
47 programs. We are going to achieve wonderful savings. But the most 
important thing we are going to do with the SKILLS Act is we are 
actually going to give somebody a skill with the money we spend rather 
than wasting 80 percent in the job-training programs we have, and that 
is what the oversight says. When you look at it, that is what it says.
  For us to not continue adding to the problem, this is an amendment--
it does not have a blue slip problem, so what is wrong with considering 
this amendment? I ask my colleague, what is wrong with considering this 
amendment? This is common sense. It works. It will actually cause us to 
not do stupid things in the future. It will actually help us to be 
better stewards of the public's money. Yet we are going to object to 
bringing it up.

  Mr. DURBIN. If the Senator will yield?
  Mr. COBURN. I will be happy to yield.
  Mr. DURBIN. Just to restate, we are going through--I think the 
Senator has six or eight amendments. We are going through those in a 
good-faith effort to find those which would complement what we are 
doing and not create a problem substantively. My objection at this 
moment should not be taken as an objection beyond this moment. We would 
like to work with the Senator in good faith to do this.
  Mr. COBURN. I thank my colleague. I will make my mark on what I am 
going to reoffer in the future.
  I ask unanimous consent to call up amendment No. 766 and have the 
pending amendment set aside.
  The ACTING PRESIDENT pro tempore. Is there objection to setting aside 
the pending amendment?
  Mr. DURBIN. Reserving the right to object, I do not know the 
substance of the amendment.
  Mr. COBURN. I am happy to let the Senator object ahead of time, as he 
obviously is going to.
  Mr. DURBIN. I object. It is a good-faith objection. I hope the 
Senator understands.
  The ACTING PRESIDENT pro tempore. Objection is heard.
  Mr. COBURN. Every 4 years the Federal Government spends $200 million 
so both political parties can have a party. We are $17.4 trillion in 
debt as we speak at this moment. That is $50 million a year. The way to 
get rid of a billion-dollar debt is $50 million at a time. The way to 
get rid of a trillion-dollar debt is $1 billion at a time. Do we really 
have the capability right now to borrow $200 million every 4 years for 
parties for the Democratic and Republican conventions and charge it to 
our children? All this does is put in a prohibition that we are not 
ever going to do that again. That is not a wise expenditure of taxpayer 
money. It is probably not constitutional. It has never been challenged. 
It certainly does not fall within the enumerated powers of the 
Constitution, article I, section 8. So it is another way of saving us 
some money.
  I would just repeat my point. We have the FAA out there intentionally 
causing pain and harm to the American public today, and we have the 
Senate intentionally not doing what will solve those problems--
intentionally not doing what will solve those problems. We are not 
trying to find the waste. We are not offering bills to eliminate the 
waste. We are not offering bills to eliminate duplication. We are not 
trying to refine programs to make them better. We are not trying to 
save Medicare and we are not trying to save Social Security--the very 
things that are very important in terms of what is getting ready to 
happen to us.
  We cannot point to the administration and say they are cynical 
without pointing to ourselves as well. Here is $200 million that we 
spend every 4 years. Why don't we quit spending it? If the political 
parties--I have never been to a political convention in my life, but if 
they want to have a party, they ought to pay for it and we should not 
charge it to Dick Durbin's grandkids or Mike Enzi's grandkids or Tom 
Coburn's grandkids or anybody else's grandkids, which is what we are 
  We are probably not going to get a vote on this amendment either, 
which shows again that our focus is not on what is most important for 
our country; our focus is on us. We have not set about to solve the big 
problems for our country.
  This is a no-brainer. There are not many people other than those 
people in the political hierarchy of each party who would be against 
this. Yet it is not even going to get a vote. What does that say to the 
American people? Sure, it is only $200 million. Two hundred million 
dollars. Two hundred thousand thousands. We talk about millions as if 
they are nothing. Most of our fellow citizens will have trouble making 
that amount of money in their lifetime, and we flip it off as nothing.
  This is a simple amendment. It has been objected to. I understand. I 
have no animosity toward my colleague. I understand what is going on. 
But do we really want to solve problems for the American people or do 
we just want to play this game some more? It is disturbing. It has to 
be disturbing to the average American.
  In the last 5 years the average Oklahoma family has truly struggled 
to get by, and we have been one of the more fortunate States. But they 
made very hard choices about their priorities. They have had kids go to 
an instate school who didn't want to because they couldn't afford to go 
to an out-of-State school. They have driven a car 2 or 3 years longer 
than they wanted to and put money into an old automobile because they 
could not afford to go the other way. They have changed the way they 
enjoy themselves as a family because of what we have done. They have 
made hard choices. They have gone through the priorities in their lives 
and said: What is important based on the amount of money we have?
  That is not just in Oklahoma; in every State in this country they 
have done that. Everybody has done that but the Federal Government--the 
Federal Government. And once we do take $182 out of a $150,000 family 
budget, which I showed an example of earlier, what we are told is, we 
can't do that. There is no way. It is impossible. We can't do that.
  Then we have a demonstrated, overt exacerbation of something that was 
not caused by the sequester, that could have been averted, to prove a 
point that we cannot cut a penny from the Federal budget.
  When $100 billion a year in Medicare and Medicaid fraud is ongoing in 
this country, we are talking about trimming the availability of 
Medicare services to seniors, and we have not solved that problem. We 
are not believable anymore; we are not trustworthy anymore.

  This is a very simple, straightforward amendment. I know $200 million 
doesn't sound like much in Washington, but it is a ton in Muskogee, OK. 
I will offer my amendment again and there will be objections. What will 
probably happen is that I will not have a chance to offer it again 
because it is not germane to the bill, and then when we get 
postcloture, it will be ruled nongermane.
  We will not have a chance for Senator Durbin or Senator Enzi to 
object in the future because of the rules we are operating under. We 
are not going to have any amendments until we get postcloture, which 
means everything I have talked about so far is not even going to be 
  We could consider them. We could allow them to be voted on. We could 
demonstrate to the American people we are actually interested in trying 
to solve some of the problems up here, but we decided we will not do 
that. It is pretty frustrating to me as a Senator, but it has to be 
terribly disappointing to the average American.
  I have just outlined about $5 billion worth of savings with the four 
amendments I have talked about. We are not going to get to vote on 
them. Now, $5 billion is almost Oklahoma's entire State budget for 1 
year. This is easy, simple stuff to do. Mark my words, we will never 
vote on one of these amendments associated with this bill. Since we 
don't have real amendment opportunities anymore in the Senate, they

[[Page S2997]]

will only come forward when the majority leader decides he wants to 
vote on them. He has been very recalcitrant in offering to vote on 
hardly anything that will actually make a difference in our future in 
terms of finances.
  I am going to talk about the other amendments I wish to bring up. I 
will not make the Senator from Illinois object to them, so I will just 
talk about them.
  Amendment No. 29, which I will not call up, is an amendment on 
something I think is terribly unfair. If this amendment were passed, it 
would only save us $90 million a year. Does anyone realize the 
Professional Golfer's Association is a tax-free organization? They 
raise billions of dollars every year, but the money that goes into the 
PGA is tax free--that actually goes into the organization. They are a 
501(c)6 tax-exempt organization. Not only does it include the PGA tour, 
it includes the National Football League, the National Hockey League, 
and it includes the LPGA.
  Can anybody tell me why they are tax-exempt other than it is under a 
loophole we have created? So if they were not tax-exempt and they paid 
their taxes as other organizations that are in the business of making 
money, the IRS would collect about $95 million more a year from just 
these four organizations.
  Professional baseball saw the light and gave this up. They said it 
was not right. They did it a number of years ago. They said it is not 
right. Yet we continue to allow the well-heeled in our country to take 
advantage of the Tax Code as we raise taxes on everybody else. I think 
this is something we ought to fix.
  A lot of my colleagues on my side of the aisle don't like this. I 
think it is inherently unfair that the very profitable sports 
organizations in our country don't pay taxes on the income their parent 
organizations make. I am not saying they don't do some positive things.
  The President talked about paying your fair share. This is one that 
is not fair. Let's make it fair. Let's collect that money. It is not 
going to make any difference in what they do.
  There are a few more organizations to add to this list: The ATP, WTP, 
the U.S. Tennis Association, Professional Rodeo and Cowboy Association, 
the National Hot Rod Association, as well as the ones I mentioned 
earlier also get this benefit.
  People say this is going to impact their teaching certification or 
their charitable activities. They already have a 501(c)3. All of these 
organizations have a 501(c)3. They have a (c)6 just so they don't have 
to pay taxes. They have a charitable organization for all of their 
charitable stuff as well as their certifications.
  This amendment will take the extra $90-some million and give it back 
to the American people. By giving that money back, it is giving it back 
to our kids because that is $90 million we are not going to borrow 
against their future.
  The final amendment I will mention is on subsidies for millionaires 
for gambling losses. I will admit to Senator Durbin that this one does 
have a blue slip. For anyone who reports $1 million in adjusted gross 
income a year in this country, they have an unlimited amount of 
gambling losses they can offset against that.
  I am not a big fan of gambling. If it was a great business, we would 
all be gambling and be better off, but we are not. Most of us are 
losers when we try to gamble. The fact is the high rollers in this 
country get to deduct their gambling losses, and it is a large amount 
of money.
  We also don't have any cutoff in terms of taking advantage of a lot 
of other expenses, which is for a speech another day, but here is one 
that is not necessarily great for society, yet we incentivize because 
we give an unlimited availability of deduction for the very wealthy. It 
ought to be something we change.
  Mr. DURBIN. Will the Senator yield for a question?
  Mr. COBURN. I will be happy to.
  Mr. DURBIN. I am not much of a gambler myself. I make a voluntary tax 
payment every once in a while and buy a lottery ticket, although I 
realize I will never win.
  Refresh my memory--and the Senator probably knows this--do I recall 
that the only deduction for gambling losses is against gains in 
gambling and not against ordinary income?
  Mr. COBURN. It is against gains in gambling. The Senator is correct.
  Mr. DURBIN. I thank the Senator.
  Mr. COBURN. Nevertheless, we give an advantage to those with an 
adjusted gross income of $1 million or more a year. What we have done 
is given the well-heeled and well-connected an advantage the average 
American citizen cannot do. I cannot recall, but this morning I read 
the exact amount of revenue. The point is it is the principle.
  Over the next few months will--regardless of this bill, its outcome--
the Congress start addressing the real problems facing our country? We 
just passed $740 billion worth of increased income taxes and payroll 
taxes at the end of the year. Supposedly we will start cutting $85 
billion over the next 12 months. We will see if that actually happens, 
as we have grown the government 89 percent over the last 10 years, 
while the average American family income has declined 5 percent over 
the same time.
  I made the statement earlier--and it can be checked on any Web site--
if we go by inflation-adjusted dollars, the average American is where 
they were in 1989. If we look at the size of government, it is almost 
four times that size. It doesn't seem to me we are accomplishing a 
whole lot as far as elevating the prosperity of Americans, but we have 
certainly elevated the prosperity of the Federal Government, and we 
have certainly undermined the prosperity of our children.
  I am worried about our country. I am worried about the loss of 
confidence in this body. I am worried about our abandonment of common 
sense. I am worried about the fact that we ignore the enumerated power 
and then we wonder why we get GAO reports that talk about the 
duplication and things that are not effective.
  There is a great role for government in a lot of areas in this 
country, but in many areas we are not effective and certainly not 
efficient. The reasons our Founders put the enumerated power in was so 
the decisions that could be made on so many things would be made at the 
local level so it would be done effectively and efficiently.
  When we have this year's GAO report showing that there is $98 billion 
worth of duplicative waste--$250 billion over the last 3 years of 
duplicative waste--and we don't do anything about it, what we are 
saying is it is not important. The future is not important, having the 
confidence of the American people is not important, our kids' future is 
not important, and don't worry, we will be able to pay all the debt 
  I will close with this: There are a lot of biblical principles about 
paying interest and going into debt. Last year we paid about $223 
billion in interest costs. If we took our historical pattern over the 
last 30 years of what our interest is, we are actually paying the same 
interest we were 25 years ago on one-fourth the debt.
  If we took our historical interest rate, which is about 5.88 percent, 
and applied it to where we are today, what we would see is our interest 
costs would be $880 billion a year. That is going to happen to us 
pretty soon. Nobody knows for sure when, but interest rates are not 
going to stay at zero for the Federal Government. We are not going to 
have the Federal Reserve continuing to print money, and if we do, then 
the value of our dollar is going to decline and we will all get taxed 
through the decrease in value of whatever we have or hold.
  The point I want to make is that the interest payment doesn't help 
the poorest person in this country, it doesn't help the single mom, it 
doesn't help the kid in Head Start, it doesn't help our schools, it 
doesn't help our military, it doesn't help our foreign service. It 
doesn't help anybody except the person who has our debt.
  Don't we have an obligation to not let that happen? Don't we have an 
obligation to start addressing the very real problems in front of us? 
Not one dollar we pay in interest helps anybody in America in the long-
term net way.
  Last year the Chinese dumped $250 trillion of our debt. We ought to 
ask ourselves why. Their perception is that as their currency 
appreciates, our currency is eventually going to depreciate.

[[Page S2998]]

  As my friends in Oklahoma say, one of the reasons we are doing so 
well right now is we are the best-looking horse in the glue factory. We 
look good because everybody else is looking so bad. We are lulled into 
a position of thinking we, in fact, can get away with continuing to do 
what we have done for years in Washington when, in fact, we cannot.
  I appreciate the time on the floor and my colleagues' consideration 
of my amendments. I understand what is happening. I am not happy about 
what is happening in the Senate. I think we ought to be working on 
solving real problems. They are the biggest problems in front of our 
country. Saving Medicare is important. In 13 months, Social Security 
disability is going to be out of money. Those people who are truly 
disabled are going to see a cut in their benefits. We are not going to 
be able to address that.
  The time for us to be acting is now.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Wyoming.
  Mr. ENZI. Mr. President, I appreciate the comments from the Senator 
from Oklahoma and have enjoyed working with him the entire time he has 
been here. He brings up a lot of important issues, part of which is the 
financial shape our country is in right now. I noticed his comment that 
we are the best-looking horse in the glue factory and so people are 
pouring money into the United States.
  I went to one of the bond issue auctions where we and some people 
from other countries were willing to take a negative interest rate in 
order to buy our bonds, which means they think we are the best hope 
there is out there. But that could change pretty quickly, and 5.88 
percent is the average, which changes to $880 billion a year, which is 
a lot more than we spend on defense. So we need to be looking at some 
of those issues.

  It is difficult to get a bill up around here. It is difficult to get 
a vote on an amendment around here. I know, because I have been working 
on the bill that is on the floor for 12 years, hoping to get an 
opportunity on the floor. So I would love to give Senators all the 
amendments they want; I was just hoping their amendments might be 
relevant--not germane, necessarily, relevant--to what we are doing; 
that it would be something about the sales tax collection. Those ought 
to come up. But when amendments are brought up as a result of 
frustration because people haven't been able to bring them up before--
or some have even been brought up before and voted down--I would hope 
they would kind of constrain themselves on trying to make those an 
amendment to this bill.
  Yes, there ought to be an easier way to get things going around here, 
and I think that would be in kind of a bipartisan way. This is a 
bipartisan bill. It is even bicameral. We have Republicans and 
Democrats on the House end working with us, conferring with us, 
hopefully, so something can be done, and here, of course, it is 
Republicans and Democrats--more than half of the people--who are 
supporting this bill.
  As I said, I have worked for 12 years to get the bill to this point, 
and it usually gets blocked at the committee level. This time it didn't 
go to committee. I prefer bills to go to committee, but if we can't get 
them to committee and we get an opportunity to bring one up, we do.
  One of the difficulties we have here is there are a lot of things 
that have to be done in the Senate, there are a lot of things people 
want to have done in the Senate, and there are a lot of things that 
have tremendous appeal throughout the United States or at least among 
certain people.
  It is my understanding the next thing we are going to go to is water, 
and if my colleagues want to talk about a sensitive issue in the West, 
talk about water. My State gets an average of 16 inches--yes, that is 
right, just 16 inches--of rainfall a year. Other States get 16 inches 
in a month. We are considered high desert, and we are conscious of our 
water. So we will be interested in the water bill.
  Following that, I think, is the immigration bill which has gotten a 
lot of publicity. There are a lot of people working on it, and there 
are a lot of opinions that I think are actually being worked into some 
kind of a bill.
  Again, if we had a process where people could bring their bills up 
step by step, we could probably go through with a lot more. Because one 
of the complaints around here is bills often wind up to be a couple 
thousand pages long and it is hard to digest that. It is hard to bring 
the American people along on it. But the bill we are talking about here 
is an 11-page bill, and I think it is probably one of the most readable 
bills people have ever had to work on. An 11-page bill shouldn't 
probably take very long around here, but it takes just as long as any 
other bill. So I am hoping for this one chance we have to shore up some 
of the State, county, and town revenues, particularly since they are 
not going to be able to come to the Federal Government for money.
  In fact, the Federal Government is taking money away from them right 
now and is talking about even more ways of taking money away from the 
States, the towns, the counties, and the municipalities.
  What we did recently in that sequester bill is we took 5.3 percent 
out of the Federal Government's payment in lieu of taxes. They know 
they own properties in the States that, if they were in private hands, 
would result in property tax, but they are in the Federal Government's 
hands, and the States can't tax the Federal Government. But the Federal 
Government said, We know that is wrong, so we will pay a tax. The 
Federal Government decided what that tax would be and they don't raise 
it, so it has no relationship to the actual value of the property and 
what that property would raise if it were in private hands, which is 
why there are some appeals around here to sell off Federal property. 
But this year the Federal Government said, Well, yes, we owe that, and 
we haven't been increasing it so it is way below what the property tax 
ought to be, but we are going to cut you out of another 5.3 percent. I 
know people across America didn't have a choice of saving 5.3 percent 
of the money before sending it to the Federal Government, but the 
Federal Government is saying, For the taxes we owe, we are going to 
take 5.3 percent out of it first. So there are a lot of things there 
that are going to infringe on States and counties and municipalities.
  I used to be a mayor so I know what the money is going to be used for 
and I know an essential part of that comes from sales tax--in States 
that have sales tax--and in those States the property tax is usually 
pretty low. But if they continue to lose revenue on the remote sales 
that take their revenue away, they are going to have to probably raise 
some of those taxes. I know there is a desire to force them to reduce 
some tax in exchange for whatever tax they get from this, but they have 
been losing tax and they are going to be losing tax.

  This is a States rights bill. That is how we got it shortened down so 
much. The States actually have to take some action in order to be able 
to do this. I hope we don't try to dictate to the States what they do 
with whatever money they raise from this. But, again, that is a 
possibility on an amendment.
  I am sorry the Senator from Oklahoma isn't on the Finance Committee 
anymore because there is the possibility, as we are doing tax reform 
right now, to talk about a number of these things he brought up, 
including gamblers who get to deduct their losses and the 501(C)(6) 
corporations that are tax-free. We need to be talking about whether 
some of those things should be tax-free, what their purpose is, where 
the money goes, how much is in the private sector, and what it is used 
for. Of course, I have been on the Finance Committee and I have been 
going through these discussions on reforming the taxes, and every time 
we get into it, we think of a lot more things we could be spending 
money on. So sometimes we talk about raising the tax instead of making 
it fairer and simpler. The two things can actually be separate. The 
policy of how we spend the money is supposed to be appropriation and 
authorization from the committees. The committees say what they think 
the money ought to be spent on and then the appropriators are supposed 
to stay within those limits. But that isn't the way it exactly happens.
  If we are going to have fairer and simpler taxes, they are going to 
have to be fairer and simpler. I know Senator Wyden has a principle 
that is a

[[Page S2999]]

one-pager. That would be nice, if it were only one page to fill out for 
our taxes. Of course, that means getting rid of a lot of things we have 
come to take as standard policy in our taxes. Again, a lot of those 
could be handled another way and they could be more forthright and more 
honest on what exactly we are doing, and probably fairer to the 
recipients of some of the tax expenditures we get.
  I appreciate the amendments brought up by the Senator. I hope others 
will come and at least explain their amendments, but I hope they will 
try to stick to amendments that actually affect the sales tax 
provisions. If we try to put on some other kind of taxes or take off 
some other kind of taxes, we are actually getting into the Ways and 
Means in the House which has the right to start all of these kinds of 
issues, and they call that a blue slip. That means they object to it 
and it is done for. So if we end up with one of those for this bill, 
what it actually does is kind of kill the bill.
  I am hoping after all the years of work that we don't kill the bill, 
particularly since we found a way to simplify it and make it a States 
rights situation, so States have to take some action and so the States 
understand the action they are taking. I am hoping we can do that. But 
I appreciate those explanations and perhaps there are some of those 
that somebody won't object to. I don't object.
  At this point, I yield the floor and suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The assistant bill clerk proceeded to call the roll.
  Mr. DURBIN. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Ms. Warren). Without objection, it is so 
  Mr. DURBIN. Madam President, my friend and colleague from Utah 
Senator Hatch is going to give a speech in a moment. I would like to 
say before he speaks that after he has spoken, I am going to ask for a 
unanimous consent which renews an earlier request but expands it, and 
the request is going to be that we call up three amendments, two of 
which have been objected to already, and a third one, Senator Hatch's 
  For my colleagues who are following this debate in their office, the 
three amendments we are talking about are amendment No. 740, offered by 
Senators Pryor and Blunt, a bipartisan amendment that relates to the 
Internet Freedom Act, a 10-year extension, which was objected to 
yesterday; and then I will ask for consent that we go from that, after 
an agreed to time for debate, to amendment No. 771, offered by Senators 
Collins and King, another bipartisan amendment that relates to the 
effective date of the underlying legislation; and then, to Senator 
Hatch, I would say that we are going to include in this unanimous 
consent request his amendment No. 754, which I believe he is going to 
speak to now on the floor, which relates to the substance of the 
underlying bill, S. 743.
  I am not asking for the consent at this moment but giving notice to 
my colleagues that this is a request that will be made after Senator 
Hatch has spoken.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. Madam President, on Monday, before the cloture vote on the 
motion to proceed to the Marketplace Fairness Act, I came to the floor 
to discuss the need to reinstate the committee process in the Senate.
  I have come to the floor many times over the past few months to talk 
about the importance of restoring regular order. I know a number of my 
colleagues share the same concerns. Yet here we are today debating 
another piece of legislation that has not gone through the full 
committee. It has not gone through the full committee process, and, 
once again, it appears we will be getting less than optimal results.
  I think the legislation before us is a prime example of why regular 
order is so essential. The Marketplace Fairness Act is a complicated 
piece of legislation that deserves more thorough examination.
  I think the bill is well-intentioned, and I am not fundamentally 
opposed to it. But make no mistake, there are problems with this 
legislation as it is currently drafted, problems that likely could have 
been avoided if the Finance Committee had been given an opportunity to 
fully consider the bill.
  I also understand the feelings of those who feel otherwise. But the 
committee chairman offered to have a hearing on a set date, a markup on 
a set date, and go to the floor. I thought that was a pretty good 
  I am not here today to talk about the process failures we have had 
with regard to this legislation. I think I have made that point, and 
others have as well. Instead, I am going to take a few minutes to talk 
about just a few of the specific problems I see with this legislation 
and how I propose to fix them.
  I have filed an amendment that would address some of my concerns. I 
believe my amendment would make this bill more workable for businesses 
and consumers around the country.
  For example, my amendment would implement a 5-year sunset on the 
taxing authority provided under this legislation. Like I said, this is 
a complicated bill, and we are not precisely sure what the impact is 
going to be.
  Whenever Congress deals with legislation this complex, unintended 
consequences are to be expected. I believe we need to ensure that 
Congress has an opportunity to revisit these issues once we have had a 
chance to see how this bill is implemented. A 5-year sunset would 
provide that opportunity, but that is not enough. If we are really 
serious about preventing unintended consequences, we need to change 
some of the specific provisions of the bill.
  One particular troublesome aspect of this bill is the preemption 
provision. In order to downplay the need for regular order on this 
legislation, proponents of the Marketplace Fairness Act have repeatedly 
claimed that the bill has been around in some form or another for over 
10 years. And, in a sense, that is true.
  However, none of the previous versions of this bill--including the 
version that was introduced just 18 months ago--have included a 
preemption provision.
  Specifically, this provision states that this legislation ``shall not 
be construed to preempt or limit any power exercised by a State or 
local jurisdiction under the law of such State or local jurisdiction or 
under any other Federal law.''
  At first glance this sounds innocuous, but why was it only added to 
this latest version of the bill? Why was it not included in previous 
  My concern is that this provision seeks to address an issue that the 
authors of the Streamlined Sales and Use Tax Agreement have been 
wrestling with for years, which is that States are reluctant to 
surrender any taxing authority at all.
  I always have been a proponent of States rights. I have fought hard 
to preserve the right of States to regulate issues within their own 
spheres in a number of contexts. But we need to recognize, with this 
provision in place, we would be backing up State laws with Federal 
enforcement. By passing this legislation as it currently stands, we 
would be essentially signing off on laws that have not even been 
written yet.
  I think it is only reasonable to consider whether we should, after 
passing this bill, expect more aggressive State sales tax laws to be 
enacted with the promise of Federal authority to enforce them.
  My amendment would help us avoid the potential problems with this 
preemption provision by simply striking it from the bill. As I stated, 
this is a new provision that deserves more careful examination before 
being enacted into law.
  If the Finance Committee had been given an opportunity to examine 
this provision more thoroughly, it is possible these concerns could 
have been addressed. But that is not the world in which we are living. 
Under the current circumstances, this provision should be removed from 
the bill.
  I should point out that I am not the only person expressing concern 
about the potential impact of enforcing new State sales tax laws with 
Federal authority. That is an important issue.
  Earlier this week the Securities Industry and Financial Markets 
Association released a statement saying:

       We believe the impact of this legislation on trade and 
     services has not been adequately explored by Congress. The 
     bill could

[[Page S3000]]

     lead to unexpected costs being passed on to consumers of 
     financial services, including sales taxes on services or 
     state-level stock transaction taxes.

  On Monday, I quoted from a letter delivered to Senators from the 
American Society of Pension Professionals and Actuaries that argued:
  The legislation would allow states to impose a financial transaction 
tax that would apply to American workers' 401(k) contributions and 
other transactions within workers' accounts.
  These are not concerns that can just be cast aside. These are experts 
in the financial services industry saying there is a set of problems 
with the way this bill is drafted.
  I am not saying the Marketplace Fairness Act will automatically 
create these new taxes on financial services. But unless we are sure 
the legislation would prohibit such taxes, we may be handing a blank 
check of Federal power to States that are becoming increasingly 
aggressive with regard to tax enforcement.
  That is why my amendment requires the Government Accountability 
Office to study whether, and under what circumstances, the authority 
granted under this legislation might allow States to impose taxes on 
financial transactions or retirement contributions.
  My amendment provides a simple, straightforward way to address a 
potentially serious problem with the Marketplace Fairness Act. My 
amendment would also require the GAO to conduct a study on the costs 
incurred by remote sellers in complying with the new sales tax 
requirements that would be imposed by States under this bill.
  There are serious questions regarding the economic impact of this 
legislation. We are talking about a bill that would impose new costs on 
businesses throughout the country--costs that will most certainly 
impact the ability of these companies to grow and expand.
  I do not need to tell you that these are perilous economic times.
  What impact will the Marketplace Fairness Act have on job creation? 
We simply do not know. This study would help provide us with some 
answers. But we need to do more to ensure that this legislation will 
not harm small businesses throughout the country.
  Another concern I have with this bill is that it could potentially 
create a situation in which small remote sellers are routinely audited 
by multiple States at the same time. This would be a severe impediment 
to small business growth and job creation. I think we need to ensure 
that this legislation does not impose administrative burdens that crush 
small remote sellers under an avalanche of paperwork.
  To help address this concern my amendment would institute a 3-year 
statute of limitations on State audits of remote sellers. This would 
provide a uniform rule for State sales tax audits, one that mirrors the 
current Federal statute of limitations in situations where fraud is not 
  One of the major driving forces behind this legislation is the fact 
that over the years, the number of tangible goods purchased over the 
Internet has increased exponentially. Proponents of the Marketplace 
Fairness Act believe it is necessary to level the playing field between 
Internet and brick-and-mortar businesses.
  While this is a fair point, it does not address the issues 
surrounding the sale of digital goods. Digital goods are often consumed 
in places that are not at the location of either the buyer or the 
seller. That being the case, applying State sales taxes to the purchase 
of digital goods presents a number of problems that are simply not 
contemplated or resolved under this bill.
  Some of my colleagues in the Senate have spent time working on 
legislation in this area. In addition, the Streamlined Sales and Use 
Tax Agreement has also considered this issue. However, the legislation 
before us is completely silent on this and other matters.
  These issues demand more consideration than will be possible under 
this bill. That is why my amendment includes a carve-out for digital 
goods. Exempting digital goods from the sales taxes authorized by this 
legislation will give Congress an opportunity to examine this matter 
more fully and provide a solution that makes sense.
  Another problem with this legislation is that it does not take into 
account the costs businesses will face as they transition into this new 
sales tax system. There is just no way around it. This bill represents 
a change to longstanding policy that will require many companies to 
incur additional costs.
  For example, as the bill stands as written, businesses that sell into 
multiple States will likely have to incorporate multiple software 
packages into their operations or create their own program. Anybody who 
thinks about it can see that is a big set of problems.
  Furthermore, an online retailer will still be required to pay 
interchange fees on all transactions regardless of whether the amounts 
transacted represent the tax or the price of the item purchased. My 
amendment would help to address this problem by providing for 
compensation for remote sellers that will be required to withhold and 
remit sales taxes as a result of this legislation.
  A simple, fair system of vendor compensation will help businesses 
overcome the difficulties of transitioning into the new sales tax 
regime. The amendment would phase out vendor compensation over a 5-year 
period. It would begin at 10 percent of amounts collected for 2 years, 
8 percent of amounts collected for an additional 2 years after that, 
and then 6 percent of amounts collected for 1 year. I think this is a 
reasonable provision. I think it would solve a lot of the problems 
folks are raising on this bill.
  This is a simple approach. It would go a long way to ensuring that 
businesses, particularly small businesses, are not unduly harmed by 
this legislation. If you hadn't noticed, the common theme running 
through all of the provisions of my amendment is a desire to protect 
small businesses. I think we all want to ensure small businesses are 
allowed to grow, expand, and create jobs. While I do not think the 
proponents of this bill want to intentionally harm small businesses, I 
do not think they have done enough to protect them from the burdens 
this 11-page piece of legislation would impose.
  Let me give you one more example. Businesses making less than $1 
million a year in remote sales would be exempt from the sales taxes 
authorized under this legislation. That may sound like a fair 
concession, but it warrants further examination. First of all, previous 
versions of the bill set the exemption at $5 million a year. Why has 
that number been reduced over time? Is it an arbitrary number that 
sounds good or is there a specific target in mind? These are the 
questions I have when I look at that number. My concern with placing 
the exemption at $1 million is it could subject smaller regional 
companies and individual sellers to sales tax burdens in States where 
they only do a small amount of business. In our already fragile economy 
the last thing we want to do is discourage the businesses from growing, 
expanding, and creating new jobs. My amendment would set the exemption 
at $10 million a year in remote sales. It would also index the level of 
the exemption to inflation to ensure it does not shrink as the years go 
  I recognize coming up with the exact definition of a small business 
is no easy task. Any number we use will necessarily be a rough figure 
because it has to encompass different industries and different business 
models. But setting the exemption at $10 million would protect small 
businesses in a number of different sectors and ensure we are not 
discouraging expansion and investment in those types of companies.
  I have a number of concerns with the Marketplace Fairness Act as it 
is currently drafted. These are just some of the concerns I have. I 
have more, but I thought I would at least make these concerns 
noticeable by talking about them on the floor. My amendment would go a 
long way toward resolving these concerns. I respect my colleagues who 
have worked on this legislation over the years. But I want to work with 
them to improve the bill.
  I respect the distinguished Senator from Tennessee, the distinguished 
Senator from Wyoming, the distinguished Senator from Illinois. They are 
sincere, they are dedicated, they believe they are right. I wish to 
work with them to improve this bill. Everyone knows if we pass this 
bill in its current form the House is not going to take it. So we may 
be doing a thankless act here rather than working, as legislators 
should do, to improve the bill, make it acceptable, hopefully make it 
so both

[[Page S3001]]

Houses will take it, and the President will sign it. But as you can 
see, there are simply too many problems and too many unanswered 
questions surrounding this legislation for me to support it as it is.
  As I have stated, I believe these problems could easily be resolved 
by a simple return to regular order. Indeed, if the Finance Committee 
had been given an opportunity to fully examine this legislation, many 
of these problems would undoubtedly have been solved already. There are 
people who do not want this bill; I understand that. The chairman of 
the committee does not want this bill. But he was willing, knowing he 
would lose, to go ahead with a committee markup, a committee hearing, 
and a committee battle on the floor.
  As I said, that is not the world we are living in. Once again, I want 
to work with my colleagues to improve this bill. I hope they will 
listen to my concerns and consider the changes my amendment would make. 
If no changes are made to this legislation, if it is forced through the 
Senate without any real improvement, I am going to have to vote no. 
That is not where I want to be, but that is what I would have to do. We 
have already missed some real opportunities to examine and improve this 
legislation. I hope we can change course and take a good look at all of 
these implications surrounding this particular bill.
  I ask unanimous consent that the pending amendments be set aside, and 
that it be in order to call up the following amendments en bloc: 
Collins 744 or 771; Ayotte 759, as amended; Coats 765; Thune 765, with 
a GAO study; Thune 778, with a GAO study; Coburn 753; Coburn 767; Thune 
743; Lee 768; Ayotte 763; Hatch 754; Portman 772; Cruz 794; Coats 797; 
Portman 792; Paul 755; Cruz 799; Ayotte 776.
  I further ask unanimous consent that each amendment be limited to no 
more than 1 hour for debate equally divided in the usual form; I 
further ask consent that following the use or yielding back of time on 
each of the amendments, the Senate proceed to a vote in relation to 
each amendment with no intervening action or debate.
  The PRESIDING OFFICER. Is there objection?
  The Senator from Illinois.
  Mr. DURBIN. Reserving the right to object, this is the first time I 
have seen this list. It has 17 Republican amendments on it. An hour 
apiece with a vote would probably take us around the clock or close to 
it. I wish to review this list with the Senator from Utah and others 
interested. I said earlier I was going to make a unanimous consent 
request. I will not make it at this very moment, but I will be making a 
unanimous consent request within minutes, which will include at least 
two of the amendments that are on his list, and it will be a starting 
point. I will object to the request at this moment.
  The PRESIDING OFFICER. Objection is heard.
  The Senator from Massachusetts.
  Mr. COWAN. Madam President, I rise both early and late in my Senate 
career in strong support of the Marketplace Fairness Act, legislation 
that Massachusetts-based merchants and Massachusetts municipalities 
tell me is long overdue.
  First, let me congratulate Senators Durbin, Enzi, Alexander, and 
Heitkamp for their tireless efforts over many years on this issue. I 
strongly encourage my colleagues to vote for this measure and to 
continue working with the House so we can finally see it enacted into 
  As I see it, in a sense, this legislation finishes the job that was 
started in the House by former Congressman, now Senator, Wyden and 
former Congressman Christopher Cox, when they first introduced the 
Internet Tax Freedom Act. That law, which Congress first enacted in 
1998, officially declared that the Internet and electronic commerce 
should not bear a higher tax burden than traditional commerce.
  Standing here in 2013, knowing how commerce has evolved, how consumer 
behavior and expectations have evolved, and how technology itself has 
evolved, I am happy to report Congress largely has been successful. 
State tax laws do not discriminate against electronic commerce. These 
transactions do not need any special protection from State tax 
collectors. Quite the contrary. On the contrary. Now so much commerce 
routinely is conducted on line, the pendulum has swung in the other 
direction. It is time to ensure our State tax laws are uniformly 
applied no matter how a transaction is consummated.
  For more than 300 years, New England Main Streets have been anchored 
by local merchants who not only offer consumers important goods and 
services but are key employers for our communities. Those Main Street 
establishments have always been and will always remain an important 
part of the fabric of our communities.
  Today in Massachusetts, the retail sector employs 550,000 people in 
60,000 locations across our 351 cities and towns. They represent 17 
percent of all the jobs in the Commonwealth--an important percentage, 
yet one which has declined from a decade ago.
  Consumers today are fortunate to have unlimited choices, meaning 
extremely competitive pricing from retailers and great service in order 
to obtain and retain customers. That is good for both the consumer and 
the economy, but it also means retailers necessarily must have very 
tight margins in order to stay competitive on price. Those tight 
margins mean many small businesses thrive or die on a daily basis based 
upon consumer trends and purchasing decisionmaking.
  Those of us in government should foster consumer choice and 
competition but, equally important, we must also take care to prevent 
unfair market incentives that drive consumers to spend or not spend at 
certain establishments based upon government policy and decisions.
  I find it interesting that many news reports about the bill we are 
debating now seemed to lead with the headline ``tax-free shopping on 
the Internet is about to come to a halt.'' Let's be clear about one 
thing. There was never such a thing as tax-free shopping over the 
Internet in States such as mine and so many other States that have a 
sales or use tax. Under the Commonwealth's sales and use tax law--and 
the laws that exist in 44 other States in this Nation--if you owe a tax 
when you walk into a store to buy an item, then you owe a tax when you 
go online, buy it, and have it shipped to your house. You heard me 
correctly. If you live in Massachusetts or one of the other 44 States 
that collect sales tax, you owe taxes today on those Internet purchases 
  For 45 years, Massachusetts merchants have competed against sellers 
in our neighbor State, New Hampshire, which has no sales tax. Some 
Massachusetts consumers choose to hop in their cars and drive up Route 
93 to make purchases. I understand the frustration of Massachusetts 
merchants, particularly since the tax is still actually due to the 
Commonwealth in the form of a consumer-remitted use tax.
  For the past decade, the growth in competition based upon sales tax 
collection avoidance hasn't been from north of the Massachusetts border 
but, rather, from desktop and laptop computers and today from smart 
phones and tablets. Consumers who are reeled in by the tax avoidance 
marketing messages of certain sellers don't have to drive to New 
Hampshire. Avoiding the State sales tax takes only a few keystrokes on 
their phones.
  Billions of sales that otherwise would go to Massachusetts employers 
are annually sent elsewhere. Those losses are real for our Main 
Streets, for our retailers, our retail employers, for all our cities 
and towns, and the losses are growing every year. The annual sales tax 
loss in Massachusetts is currently estimated to be $335 million. That 
number grows to $400 million when you include lost income and property 
taxes from declining employment and darkened storefronts. If we don't 
act, if we don't pass this bill, that number will grow to over $1 
billion by the year 2020. Allow me to repeat that. That is $1 billion 
in losses to my State.
  A sale is a sale is a sale. With today's technology, it shouldn't 
matter how it is transacted or where it is transacted. Government must 
be blind and be a nonfactor in our competitive consumer marketplace and 
in our application of taxation to that market. We understand this fact 
in Massachusetts. Increasingly, many online sellers recognize this 
reality too.
  Last year I worked with Gov. Deval Patrick to negotiate with

[[Page S3002]]

to begin collecting and remitting the Massachusetts sales tax. Amazon 
did the right thing for Massachusetts employers, workers, our schools, 
services, and for our cities and towns. Amazon recognized that they use 
our infrastructure, the airports, the highways, and streets to deliver 
goods to consumers. Furthermore, they understood that their customers 
who purchase from them use those very same services in Massachusetts 
and enjoy our vibrant downtown. Amazon and many of the other businesses 
that support this legislation have stores in multiple States. They have 
made their online presence and their brick-and-mortar presence seamless 
to consumers. They already collect and remit applicable sales tax and 
follow all the other business rules in the States where they do 
business. If other States want to compete for their customers in the 
great Commonwealth of Massachusetts, they also should play by all of 
our rules, including the obligation to collect and remit our sales tax.
  It used to be the case that if you wanted to reach a broader 
marketplace, you opened a location there. You complied with all the 
State laws that applied in those jurisdictions because it was worth it 
to expand your reach and build a broader customer base. Why isn't it 
the same thing now? Why have we been so unwilling to apply the same 
rules to online businesses that we do to businesses in our States?
  This is not an unreasonable proposal. Every time a business opens a 
physical space in my State, they set down roots there. They create jobs 
there. They support our communities, and they contribute to the cost of 
local services. That means they collect and remit sales taxes on the 
purchases made by the customers who enter their front door. Every open 
business in the Commonwealth and every consumer in the Commonwealth 
understands this relationship. Why should we allow an online business 
transaction better treatment than we provide to our own folks? 
Outsiders should not be treated better than insiders. Everybody should 
be treated equitably.
  That is all this bill will do. It will allow a State government to 
require the same sales tax collection obligations of businesses that 
sell to State residents online that it does to businesses that sell to 
State residents on Main Street--nothing different, nothing more 
  There has been a lot of misunderstanding about what this bill does, 
so let me try to clear it up. This bill will not create a new tax 
obligation for anyone who doesn't already have one. If you live in a 
State that already imposes sales and use taxes, online merchants will 
add the sales tax to your purchase in the same way the neighborhood 
retailer does. If you live in a State without a sales tax, nothing 
changes for you--nothing. If you don't pay a tax at a store on Main 
Street, you won't pay one on the Web. It is that simple.
  This bill will not crush small businesses. When I served in State 
government, small business owners and their associations repeatedly 
called on us to beg Congress to level the playing field. Those same 
small business owners are the people who sent us here to represent 
their interests. When our bosses--the people--tell us they want us to 
act, they should not have to beg. We should act on the will of the 
  Let me be clear about how this bill will work. Businesses that have 
less than $1 million in remote sales will be exempt from compliance. 
States that want businesses to collect and remit the sales tax already 
due will be required to provide those businesses with the software to 
do it free of charge. The State will set up a simplified process so 
that businesses only have one point of contact with the State on 
collections and audits. No business will have to navigate the thousands 
of taxing jurisdictions opponents of this bill are so fond of 
  If a business really does not want to comply, it is easy: they can 
forgo the customers in that State. If they do, I assure you, those 
consumers--a very resourceful group--will quickly fill that void with 
another business that is willing to follow a State's business rules.
  This bill will not impose a tax on financial transactions. I admit 
that when I heard this assertion, it worried me and many of my 
constituents, so I went back and I read the bill again. This charge is 
  The bill is crystal clear. I quote:

       Nothing in this Act shall be construed as encouraging a 
     State to impose sales and use taxes on any goods or services 
     not subject to taxation prior to the date of the enactment of 
     this Act.

  I come from State government, as do several of my colleagues in this 
body. Trust me, budgeting on the State level is a little different from 
the process that plays out here in Congress. In Massachusetts we rely 
on a combination of income taxes and sales taxes to cover the costs of 
the services our citizens tell us they want and need and provide the 
appropriate measure of investments--in education, infrastructure, and 
innovation--we know is necessary for a growing and prosperous State 
economy. Sales tax revenues represent almost one-quarter of our total 
tax collections.
  Sales taxes are a difficult revenue source, I understand, because 
they are so dependent upon broader economic conditions. As we saw 
during the recent recession, when people are out of work or believe 
their jobs are threatened, they pull back on spending. In fact, many 
small businesses in my State and in others, I am sure, were told by 
banks that lines of credit needed to be tightened because consumers 
were pulling back. It was an unfortunate domino effect that our Main 
Street businesses are still struggling to overcome. Yet, as they were 
trying to hang on, they also watched the customers walk into their 
stores, browse the merchandise, take out a cell phone, and walk out, 
opting to buy a product from an online retailer that could ignore the 
State sales tax collection. Guess what. Now there is an app for that.
  Our States have limited sources of revenue and significant 
obligations and investments to fund. We know the reality of this 
situation--that no matter how much our consumers prefer to shop online 
rather than on the street, they do not and cannot call a virtual 
ambulance or an online firetruck. We need to do all we can to keep our 
businesses in business. We need to ensure them a level playing field in 
which to compete. We need to protect the integrity of our tax laws that 
ensure we can provide essential services to our residents.
  I have listened carefully to the objections to the bill that have 
been raised by others here on the floor, in the correspondence sent to 
my office, and the many tweets on my Twitter feed. While I am 
sympathetic to some of the assertions made against this bill, 
respectfully, I am not persuaded by them. There are just too many 
consumers, small businesses, and struggling communities in the 
Commonwealth of Massachusetts that are shouldering an ever-growing 
burden because Congress has yet to join forces with the States to help 
us efficiently enforce our tax laws in a 21st-century marketplace.
  I urge my colleagues to support this bill.
  Madam President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. Madam President, let me first thank my colleague from 
Massachusetts for an excellent statement in support of the legislation 
pending on the floor.
  Let me remind my colleagues that I am planning to make a unanimous 
consent request on several amendments. I have asked Senator Ayotte from 
New Hampshire to come forward with amendments to be included on this 
list, and I am hoping she will do that momentarily. After Senator Paul 
of Kentucky, who is seeking recognition, concludes his statement, I 
would like to make this unanimous consent request.
  May I ask the Senator from Kentucky if he would be kind enough to 
tell me how long he will be speaking on the floor.
  Mr. PAUL. Between 3 and 5 minutes.
  Mr. DURBIN. Without objection, I yield the floor.
  The PRESIDING OFFICER. The Senator from Kentucky.

                          Neurofibromatosis 2

  Mr. PAUL. My nephew Mark Pyeatt has neurofibromatosis 2, NF2, but 
that is not who he is. He is an indomitable spirit, a courageous young 
man, a man who knows and faces each day certain that he is one with his 
God. He is like many young people on Earth--he is in search of the 
truth. He reads, he thinks, but he no longer hears.

[[Page S3003]]

  Neurofibromatosis 2 is characterized by recurrent neurologic tumors. 
Its signature tumor affects the auditory nerves and destroys the 
hearing. Its relentless course eventually takes all of the hearing. I 
have never heard Mark complain.
  While my signing is only rudimentary, most of his immediate family 
are proficient, and at Christmas dinner for 40 family members, nearly 
everyone is trying to learn some signing. The grandkids sing, ``Happy 
Birthday, Jesus. I am so glad you came.'' The whole family is learning 
to communicate with their hands. I mostly like to learn insults so I 
can taunt Mark on the golf course. I can't use most of the signs he 
taught me on the Senate floor. I don't know this for certain, but I 
think the seven words George Carlin said you can't say on TV, I think 
you can't sign them on TV either. I love the way names for people in 
sign language are created only by the deaf. Mark's mother Lori is ``L'' 
to the ear because she is on the phone all the time. My wife Kelley is 
``K'' sweet. My middle son Duncan is ``D'' in a hoop because he likes 
  Neurofibromatosis 2 is a rare disease. Some call it an orphan 
disease. Orphan diseases face certain obstacles that others do not. 
Money is typically allocated to research based on how prevalent a 
disease is. For rare diseases, the resources are likewise rare.
  In order for investors to invest in a cure for neurofibromatosis 2, 
regulatory obstacles need to be cleared. We need to allow foreign drug 
studies to be accepted in the United States and not repeated. We need 
to have speedy approval of drugs that are already being used by the 
general population in other countries.
  My chief of staff's sister Karen has pulmonary fibrosis--another 
orphan disease. She is 40 years old with a young daughter, and she is 
likely only alive today through a fluke in the system. She takes a 
medication that is part of an experimental trial in the United States 
but has been on the general market in Japan for years. If she didn't 
live near a research center and if her family couldn't afford to pay 
$1,500 a month out-of-pocket, she wouldn't receive this drug, even 
though it is legal in Japan.

  The drug should have been cleared already, but we are not doing a 
good enough job of trying to get drugs cleared. It went through trials 
here. It has already been approved in Europe and Japan, but 200,000 
Americans who have a rare deadly terminal disease are being denied this 
  We all want safety in the drugs and in the cures for disease. We all 
acknowledge this is a balancing act. We should all acknowledge the 
regulatory obstacles and burdens new drugs face in our country are 
oppressive and counterproductive.
  My hope is by putting a face to two orphan diseases--my nephew Mark, 
with neurofibromatosis, and my staff member's sister Karen, with 
pulmonary fibrosis--this situation will be made more personal. These 
are people who are close to our families, and we hope others will come 
to realize we must do something to get rid of government obstacles to 
cures for rare diseases.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. Madam President, I have reached out during the statement 
of the Senator from Kentucky to try and find the Senator from New 
Hampshire. I know she has a busy schedule, and I couldn't find her to 
ask her for her amendments to include on this list. I am going to go 
ahead and make the unanimous consent request, and I give her my word 
when she comes to the floor I will be happy to amend it to include two 
of her amendments, which offer I made to her earlier and I wish to make 
  I ask unanimous consent that the pending Enzi amendment be set aside 
and it be in order for the following amendments to be called up: the 
Collins-King amendment No. 771, the Pryor-Blunt amendment No. 740, and 
Hatch amendment No. 754; further, that no second-degree amendments be 
in order to any of these amendments prior to votes in relation to the 
  Unless someone has another suggestion, I am going to suggest we have 
20 minutes of debate equally divided between opponents and proponents 
of each amendment.
  The PRESIDING OFFICER. Is there objection?
  Mr. WYDEN. Reserving the right to object, Madam President.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. WYDEN. Madam President, over the last few days, I have spent a 
good chunk of my waking hours trying to find some common ground, some 
opportunity to bring both sides together. I have repeatedly put 
specifics on paper and provided those specifics to the proponents of 
this legislation. By and large--and I believe there is a little bit of 
a Senate code when one talks around here--the response has been: They 
have 75 votes, and that is kind of it. But I have been trying to deal 
with the issues that have been raised.
  For example, my colleague from Illinois sincerely believes that 
unless Oregon's small businesses are not coerced into enforcing out-of-
state laws, that Oregon is going to become a small business haven. He 
says Oregon has to be coerced by this bill or it is going to be a small 
business haven. I would just say to my colleagues that is not the 
reality of what we see in the Pacific Northwest every day.
  Washington State has a sales tax. Oregon does not have a sales tax. 
So if my colleague from Illinois was right, we would be seeing moving 
vans all the time coming across the borders from Washington State to 
Oregon because somehow Oregon was going to be an Internet tax haven.
  We all know States rights means States take different approaches with 
respect to this issue. To me, what we ought to be looking at are 
approaches that bring people together. So I offered Senator Durbin a 
chance to test out this question of whether Oregon would be an Internet 
tax haven and try it out for a period of time. That was unacceptable.
  So now this amendment includes the Pryor-Blunt legislation, which, 
for example, says we ought to reauthorize the Internet Tax Freedom Act. 
Colleagues, I wrote that legislation. It says in section 2 you can't 
have discriminatory taxes on electronic commerce. The Internet tax 
freedom proposal Senator Durbin seeks to include in his base bill is 
basically trying to add some sugar into a very bitter cup of coffee. He 
is taking our legislation, which has been a real boost for the economy, 
and trying to put it into this very bitter cup of coffee that is his 
  I just don't think that makes a lot of sense. This bill is going to 
make it possible--the base bill--for discriminatory treatment of 
electronic commerce because online retailers in communities across the 
country are going to be subjected to burdens that brick-and-mortar 
retailers would not be subject to.
  I know my colleague from Montana wishes to speak on this as well, but 
I would just close by saying I will have to object to the Senator's 
request because this particular amendment, including the bill I wrote, 
in effect, is akin to adding sugar to the bitter cup of coffee. The 
base bill offered by the proponents undermines the Internet Tax Freedom 
Act by allowing the very discrimination on electronic commerce the 
Internet Tax Freedom Act was all about.
  This effort needs more time to bring about some common ground. I will 
close with this. Our technology policy over the last few years has been 
built on three kinds of principles:
  No. 1, we would take voluntary steps. We wouldn't use coercion. This 
bill uses coercion. In fact, it was the voluntary steps, starting with 
some of the first laws that encouraged investment in social media, that 
were so important. This bill moves away from any semblance of 
  No. 2, I have outlined the discriminatory aspect of the legislation 
where we are going to have brick-and-mortar retailers not have to do 
certain things that online people do.
  Finally, No. 3, what is just breathtaking is this gives foreign 
retailers a leg up on a Montana business, on an Oregon business, and, 
frankly, it gives a leg up on every business in the United States 
because the foreign retailer will not be subjected to what a business 
in our country is subjected to.
  I know my colleague from Montana wants to speak on this issue as 
well, so I am going to maintain my reservation

[[Page S3004]]

so my colleague can speak, but I will have to object.
  The PRESIDING OFFICER. The Senator can object or not object.
  Mr. WYDEN. I object.
  The PRESIDING OFFICER. Objection is heard.
  The Senator from Montana.
  Mr. BAUCUS. Mr. President, I am happy the Senator from Oregon is 
objecting. I am not going to get into how many times the Senator from 
Illinois and anybody else wrote the Finance Committee to work on this 
bill. That is frankly irrelevant, and it is not a discussion that is 
worth getting into. It misses the whole point. The whole point is 
whether this is sound legislation. The whole point, in my judgment, is 
we should try to find a process where we do make this sound 
  I think I am known around here as not somebody to unnecessarily hold 
up legislation. I have been here it will be close to 36 years, and that 
is not my style. That is not who I am. It is not in my DNA. I am 
someone who wants to work out things fairly, work both sides fairly but 
not stand and filibuster, not delay for the sake of delay or to try to 
get leverage. That is not what I do. I think, by and large, that is not 
very productive.
  I have said many times, and I will say it again, we can improve upon 
this bill if we would go to the Finance Committee and work on the bill 
the next work period and report the bill out. I have made that 
commitment; that the Finance Committee will have a markup on this 
legislation in the next work period and report it out so we can work on 
a lot of problems that are in this bill. There are a lot of them.
  One of the problems that comes to my mind--and I haven't had time to 
analyze it; nobody has had time to analyze it because there is no forum 
for it. Sure, Senator Enzi has worked on this for many years, but that 
was another provision. That was other legislation which States rejected 
because they couldn't reach agreement. So Senator Enzi found another 
solution, which is the bill he has introduced, and that has not ever 
been, to my knowledge, thoroughly examined in any committee.
  One of the problems I have is audits--out-of-State audits. Nothing in 
this bill protects States from an out-of-State audit which is 
oppressive in duration. This bill says there will only be a single 
audit. How long is a single audit? How many years is a single audit? 
How much pressure will an out-of-State taxing authority push on another 
State's seller--a single seller or a bunch of sellers? What is a single 
audit; a single audit for all the sellers in a State or a single audit 
per seller? This legislation doesn't say.
  What is the enforcement provision? What if a taxing authority from 
one State wants to go to another State, feeling that State is not 
living up to the provisions of this bill? What protection does that 
State have from an out-of-State taxing authority, an out-of-State 
audit? There is none here, but there could be. There could be 
protections if we go to committee and reasonably find a way to deal 
with this.
  Those are just some of the problems with this bill, and there are 
many others that have not really been thought through--many others. I 
have deep respect for Senators standing on the floor and pointing out 
their States are losing some revenue. I understand that argument. But 
most of those States don't go the next step. Most of those Senators 
don't go the next step. They have not read the bill. I have read it 
all. It is right here. It is 11 pages.
  As I have pointed out, with respect to audits, with respect to 
enforcement, there is no protection whatsoever. There are some nice 
wishful words in this bill, but when we stop to think about it, if 
someone is a small businessperson, they start asking a lot of 
questions. What does that out-of-State taxing authority do to me? What 
does it do to me, an out-of-State taxing authority?
  We are not talking about a Federal taxing authority. We are talking 
about an out-of-State taxing authority as it affects me as a seller in 
my home State. Whether you are a sales tax State is irrelevant. Let's 
take Massachusetts and a remote seller in the State of Massachusetts. 
Let's say, for example, some other State feels that remote seller in 
Massachusetts isn't properly adhering to the provisions of this bill. 
Let's say it is a California taxing authority and it goes to the remote 
seller in the State of Massachusetts and audits that remote seller and 
brings an enforcement action against that remote seller in the State of 
Massachusetts--I don't know--or if you are a nonsales tax State, such 
as the State of Oregon or Montana.
  There are a lot of questions. Frankly, I believe very strongly it 
makes much more sense for this legislation to go to the appropriate 
committee where we can work on it, especially when the committee has 
made a promise to report that bill out in the next work period. I grant 
you it will be a short period of time to work on it, during the next 
work period, but that is the compromise between those who want this 
bill up now--who want to ram it through, ram it through--with no 
significant committee consideration on the one hand and on the other 
hand having several weeks to work it out and report the bill to the 
  For that reason, I join my friend from Oregon in objecting to these 
amendments. We can't write the bill on the floor of the Senate. We have 
to go to committees where we can work things out.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. Madam President, I respect my colleagues from Oregon and 
Montana, but I respectfully disagree with the way they have described 
the situation.
  We are talking about asking Internet retailers around America, when 
they make a sale, to collect the sales tax on that sale. That is it.
  My colleague, Senator Heitkamp from North Dakota, was tax 
commissioner in her State and took a case to the Supreme Court 20 years 
ago about the collection of sales tax for remote sales--catalog sales, 
mail order operations.
  She took the case to the Supreme Court, across the street, and 20 
years ago they said: Congress, you have to fix this problem.
  She had hoped she found the solution, but they said, no, you can't 
fix it State by State. Congress has to fix this problem.
  Here we are 20 years later. Senator Enzi of Wyoming has been working 
on this issue for 12 years. I have joined him for the last 3 or 4, 
partnering with him in this effort. This is not a new issue. It is not 
new to me, not new to Senator Heitkamp or anyone on the floor. As far 
as this version of the bill, this version of the bill was introduced, 
if I am not mistaken, in February--is that correct? This version of the 
bill, 11 pages--by Federal standards, this is not a big, complex piece 
of legislation.
  We asked for hearings before the Finance Committee and we did not get 
our wish. We brought it directly to the floor. I wish it would have 
been heard before the Finance Committee. Perhaps they would have made 
some adjustments or changes that might have been beneficial. But it 
reached the point where we said we have to get this done. After all 
these years, we have to get this done.
  Why do we have to get it done? First, understand if you happen to be 
a person who has made a sacrifice and opened a small business in your 
hometown--think in terms of your sporting goods store to start with--
you invested your capital. You and your spouse are there every single 
day. You are part of the community, to sponsor that Little League team. 
They came around asking for money for the United Way and you say our 
sporting goods store always gives to you. We are part of this 
  Then the customers walk in the door and sit down and say I want to 
try on that pair of running shoes, maybe try the next larger size. Do 
you have a different color? Once they find the right running shoe, they 
say, can I write down a few numbers here? And you know what happens 
next. They walk out the door, go home, get on the Internet, and buy 
that product without paying sales tax on it. So that sporting goods 
store down on the corner or at the mall is a showroom for goods they 
are not selling.
  We are trying to change that. We are trying to make sure if you sell 
goods in a State, you collect the sales tax of that State. We do not 
create any new taxes. The tax we are collecting is already owed by the 
consumer. We certainly do not create any new Federal

[[Page S3005]]

taxes whatsoever. It is just a matter of collection.
  Why are we tied up in knots here? The two States represented by the 
last two Senators to speak, Oregon and Montana, have no sales tax. 
There are three other States that have no State sales tax: Alaska, 
Delaware and New Hampshire. You would think from their arguments, the 
coercion they are talking about, we are trying to impose a sales tax on 
Oregonians or Montanans. That is not true. If this bill passes, 
Oregonians will not be required to pay a penny in sales tax whether 
they buy over the counter or over the Internet. The only people who 
will be affected by this are Internet retailers in that State who 
choose to sell their products in States that have a sales tax. We put 
an exemption in this bill and said if your Internet retailer has less 
than $1 million in sales the previous year, you are exempt; you do not 
have to collect sales tax.
  Let's take a look at the specific States that are objecting to this 
bill. Of the roughly 1,000 Internet retailers who will be affected by 
this bill across the United States, there are 11 in the State of 
Oregon. Five already collect sales tax. Let me read their names because 
you will know them right off the bat: Adidas of Oregon already collects 
sales tax, Columbia Sportswear is already collecting sales tax, Nike is 
already collecting sales tax, Harry and David--I have gotten that as a 
gift once in a while--already collects sales tax. Five of the 11 
Internet retailers in Oregon already collect sales tax. This is no new 
burden on them.
  What we are talking about, then, is six Internet retailers in Oregon 
that I assume do not want to collect sales tax.
  In Montana there are two Internet retailers with Web sales above the 
exemption in this bill--actually there are four in the list of Internet 
retailers, but one already collects sales tax and the other one is 
below the exemption level so they are not covered by this bill.
  When I hear this objection about stopping this bill and the impact it 
is going to have on these States, we are talking about five businesses 
in Oregon, one or two businesses in Montana. That is what it is about.
  But it is about much more, because these sales tax revenues are 
important to States and localities and local units of government. This 
is the money they use to avoid raising your property taxes and income 
taxes. This is the money they use to provide basic services for the 
people who live in the communities around these local stores and it is 
a question of leveling the playing field for the businesses as well.
  What happened today, happened yesterday, and this morning? We 
attempted to bring to the floor amendments to this bill--and I would 
say that three of the five amendments we were bringing to the floor 
were being offered by Senators who oppose the bill. We know it. They 
don't want to see this bill pass. They want to try to change the bill, 
perhaps even jeopardize the bill. We are prepared to debate their 
amendments. How much more fair can you be? We have opened this bill to 
amendments, we have opened it to amendments that are critical of the 
bill, and the Senators object to our even debating them.
  To the folks on C-SPAN, I am sorry, call for a refund because the 
Senate is not going to be the Senate today. We are not going to debate. 
We are not going to vote. We are in the midst of a filibuster where we 
are trying to bring amendments to the floor for an actual debate and a 
vote on a bill and we are being stopped from doing that. Is that why we 
ran for this office, so we can find ways to stop debate, stop 
amendments? I think not. I think we are sent here to do a job. If 
someone has a good idea on this bill, I am ready to consider it. The 
Internet freedom amendment we talked about here is a bipartisan 
amendment. Senator Pryor, a Democrat of Arkansas, Senator Blunt, 
Republican of Missouri, came together and said we want to extend for 10 
years the prohibition against taxing people for using the Internet. I 
am for that. I am for that amendment. I want to consider it and I want 
to vote for it.
  The Senator from Oregon said, oh, that is a spoonful of sugar in a 
bitter cup of coffee. For goodness sake, what we are trying to do is 
improve this legislation, and if he has a good idea, offer it as an 
amendment. We have opened it--Senator Enzi on the Republican side, I 
have opened it on the Democratic side. Bring your amendments to the 
floor. We are ready to debate them. But for the last 2 days 
consistently, those from no-sales-tax States have stopped every effort 
to bring an amendment to a vote.
  I think that is unfortunate. Eventually this matter will be brought 
to a vote. We have had three different votes already--75 votes in favor 
of it, 74 votes in favor of it, and 75 votes. Clearly a bipartisan 
majority of the Senate wants to finally meet the challenge the Supreme 
Court gave us 20 years ago. We want to get this done. We put a lot of 
effort into it--no one more than Senator Enzi of Wyoming.
  I thank Senator Alexander of Tennessee and Senator Heitkamp from 
North Dakota. I am going to yield the floor at this point and say to my 
colleagues, I don't know what it takes for the Senate to be the Senate. 
This notion of sitting here staring at one another, hoping we never get 
to a vote, is a disappointment, not only to those of us on the floor 
but I think to those who have a lot more hope for the Senate.
  The PRESIDING OFFICER (Mr. Coons). The Senator from Wyoming.
  Mr. ENZI. Mr. President, I want to make a couple of comments on what 
has transpired here this afternoon and for the last several days. One 
of the toughest things to do is to pass a bill. One of the easiest 
things to do is to kill a bill. You can do that simply by creating some 
confusion. Around here you can do it by applying some rules and 
suggesting that part of the process could be backtracked and done 
differently and done over.
  It is pretty hard to get a bill to the floor. It doesn't happen very 
much. It could happen easier, it could happen more often. When you get 
one here, there are still a lot of ways to kill a bill and that is kind 
of what we are seeing because there are some people who say: Gee, if we 
don't get our amendment, we are going to kill the bill. We are going to 
vote against cloture, which is the only way to move on in the Senate 
because we like debate, we like pretty much unlimited debate.
  Debate can be constructive. There are things that need to be done on 
bills. I heard several good ideas. They have been objected to, so we 
are not going to get to actually vote on those. But one thing as an 
accountant that I want to bring up is this thing about audits, because 
that can loom pretty strong for a business. Audit is something that we 
know from the IRS and it is very scary. But the audits they are talking 
about are not going to happen to nearly the extent they think they are 
going to happen. Somebody will have to be avoiding the sales tax 
entirely and they will have to have a very strong suspicion that they 
exceed $1 million online in a year before they will ever audit because 
it costs money to audit. Especially it would cost money if you went 
over the border to another State to audit. Then there are some 
difficulties with being able to collect what is discovered in the 
audit. But it is only done when something seems very wrong.
  One of my clients I worked with for 10 years had big sales in the 
oilfield--lots of sales in the oilfield. We got audited on sales tax 
once in 10 years. I am pleased to say they did not find anything. It 
took them 2 weeks to do the audit and that was a very big business. It 
was very technical stuff. Of course they looked at it because a lot of 
them are very big sales. There are some confusing things in the sales 
too. But you have to have an audit in there for a little bit of 
honesty. So that is why that is in there. But it is not going to be 
something the States are going to jump on because it has some costs.
  If you are a government that wants to do audits--I remember when I 
was in the Wyoming legislature they used to talk about how much return 
they got out of their audit. They would get $20 or $30 to the $1 of 
cost. Consequently they used that as an argument for hiring even more 
auditors because they would find a lot more money. The intent of an 
audit is not to find $1 for every dollar that is expended. It is to 
find $20 or $30, somebody who is violating the law in a big way so you 
can afford the cost of the audit. That of course keeps all of the 
people a little bit more honest. So audit has to be in here but audit 
is being blown out of

[[Page S3006]]

proportion, probably so we can try to kill the bill. I hope that is not 
the intention.
  They talked about needing to go to committee. I have gotten a couple 
of hearings on this in 12 years but have never been able to get a 
markup in the committee. This process has gotten this bill to the floor 
and I am hoping everybody will listen to their retailers and help out 
on this bill and get it finished. I can tell you, being in charge of 
this bill and one of the drafters of this bill, it is not a popularity 
contest you are winning. It is just the right thing to do. It is what 
the States need if they are going to have the revenue to provide all of 
the services that are in the municipalities--whether it is police or 
fire protection or cleaning the streets or whatever is done there, plus 
all of the charitable work people in the communities do too, because 
that is the sense of community they have so they contribute. All of 
that is going to dry up.
  If you ask your municipality how much money they get out of sales 
tax, I think the minimum one of them will say is 30 percent. Probably 
the maximum is 70 percent. But that is a lot of budget and that is 
declining as the Internet grows and the sales happen without the tax. 
So I hope people will help pass this bill and get this into effect. It 
is only an 11-page bill. That is a miracle around here. It is possible 
for people to read the bill.
  I thank the Senator from Massachusetts and appreciate the comments he 
made. He is new to the Senate but he obviously read the bill. I am very 
impressed with the comments he made. I hope people will help pass this 
  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Ms. HEITKAMP. Mr. President, I will be very brief. I want to respond 
to a couple of claims that have been made, especially with how they 
relate to foreign corporations. I think there is a sense that foreign 
corporations have absolutely no State tax obligations no matter what 
they do in their State or what their presence is.
  I want to clarify a couple of points. People argue that foreign 
corporations that make remote sales will have an advantage over 
domestic companies. We need to understand that is not true. The 
Marketplace Fairness Act treats foreign corporations the same as it 
treats domestic corporations, and by that I mean corporations which are 
incorporated in the 50 States in our country.
  All online retailers who make over $1 million in remote sales, 
regardless of where the retailer is located, must collect and remit 
sales tax to States that require it. States currently have and do exert 
jurisdiction over foreign companies. In fact, States collect different 
types of tax from foreign companies even when those companies are 
exempt from Federal taxation.
  Locating facilities--there has been a big argument here--means people 
will now move their operations to Canada and operate out of a foreign 
country. That has its own brand of problems for any corporation that 
would consider that, and I will outline some of those.
  Locating facilities outside of the 46 States while still selling to 
the U.S. consumers would actually increase some costs for retailers and 
complicate the sales process. Locating farther away from customers 
would increase shipping costs. Many online retailers are moving their 
distribution and other facilities closer to their consumers so they can 
be more responsive to their customers. In fact, we are seeing 1-day 
shipping or same-day shipping.
  International sales may be subject to duties. Foreign currency 
exchanges may be needed to conduct the sale, and so it is a whole brave 
new world. It is a very complicated world.
  The other thing is there is a big discussion about how to enforce it. 
States can currently request information from Customs and Border 
Protection about international shipments into their States so they know 
what products are coming in and where they come from.
  I want to take a moment to explain how this works. As my colleagues 
have heard in this discussion on the floor, I, in fact, was the tax 
commissioner of the State of North Dakota who initiated the action in 
Quill, but that is not the extent of my experience. I also spent a 
great deal of time--in fact, 6 years of my life--as a tax commissioner 
collecting sales and use taxes.
  We frequently have people go across the border and shop in Canada or 
spend a weekend in Canada. Their Customs reports are filed. We 
typically would send a sales tax auditor up to review those Customs 
reports and send use tax collection statements out as a result of that. 
That kind of compliance is already happening.
  States also have enforcement options available to them to ensure that 
foreign corporation compliance is completed, including liens and other 
kinds of discussions.
  I want to offer a CRS report on this issue, which said:

       Finally, some have noted that U.S. based retailers may 
     respond to the expanded state tax collection authority by 
     shifting operations outside the U.S. to avoid the collection 
     burden. The costs of moving operations and increased shipping 
     costs, however, would seem greater than any benefit conferred 
     by avoiding the collection burden.

  Again, as my colleagues have heard over and over, we have heard about 
how expensive this is. Yet we have vendors out there. In fact, eBay is 
charging no more than $15 a month to provide this service to businesses 
they have.
  Some may say, Well, that is all fine and good, Senator Heitkamp, I 
don't believe that actually happens. I requested some information from 
our current tax commissioner in the tax department in North Dakota 
because I know a little bit about sales and use tax, and I know we 
actually have foreign corporations--Canadian corporations--that are, in 
fact, licensed or permitted as retailers.
  In fact, the State tax department records show that in calendar year 
2011 we collected $1.6 million from Canadian companies that were 
registered and actually remitted the tax. So anyone listening 
understands the level of business North Dakota is doing; our sales tax 
is 5 percent. There was a big leap in 2012 as we saw almost $3.8 
million. That is, I am sure, due to Canadian companies supplying North 
Dakota corporations and North Dakota businesses in the oilfield.
  We already do this, and very many Canadian companies already know 
what these requirements are, just like a North Dakota domiciled company 
that does business and takes advantage of the Canadian marketplace will 
be subject to Manitoba taxes or subject to Sasquatchian taxes. We know 
what our obligations are.
  It is very important that we do not mix concepts here. I think the 
Senate is a place where they do understand foreign tax treaties. But 
provinces of Canada and States such as North Dakota are subnationals, 
which is their classification within trade law. They are not bound by 
very many of these treaties. They are not obligated under these foreign 
tax agreements we hear over and over, and it is not make-believe. The 
reality is that in States such as North Dakota, we collect taxes from 
Canadian companies.
  I yield the floor.
  The PRESIDING OFFICER. The majority leader.
  Mr. REID. Mr. President, I ask unanimous consent that as soon as I 
finish my brief remarks, the Senator from Montana be recognized to 
respond to the remarks of the Senator from North Dakota.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, this is not a partisan bill. There are times 
I am on the floor advocating for partisan advantage, but that is not 
what we have here. We have managers of this bill who have worked very 
hard for a long time, and this is where we are now. We are to a point 
where there have been a number of amendments offered, there have been 
objections made, and so no amendments are allowed to be debated or 
voted on, and that is where we find ourselves procedurally.
  As the manager of the Senate, I am left with no option except to look 
to the next alternative to try and move things along, which will be 
after midnight tonight. At 12:30 a.m. or 1 a.m. this morning, we would 
have a vote on cloture on the bill.
  I say to my friends who oppose this--and I know they believe in their 
opposition to it fervently--it is a big waste of time. We have had 
overwhelming votes twice. Whether we vote after midnight tonight or at 
6 p.m. this evening, it will still be the same result. So I would hope 
those who oppose this

[[Page S3007]]

will take a look at this and maybe arrive at a point so we can have a 
vote earlier. If that doesn't happen, everyone should understand we are 
going to come here sometime after midnight tonight and move forward on 
this legislation. After that, of course, it is only a majority vote to 
complete this legislation.
  The managers are still ready to allow amendments to be offered. It is 
getting late in the day. The 30 hours is grinding to a halt. I hope we 
can get something done and move on.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, I wish to ask the Senator from North 
Dakota a question. I guess I will ask the question through the Chair.
  Mr. President, I wonder if the Senator from North Dakota would tell 
me where in this bill--and I have read it--a State would have the 
authority to audit and bring enforcement action against a remote seller 
in any other country, such as China. Where in this bill does the State 
of North Dakota have the taxing authority to go to a remote seller in 
China that is selling goods in North Dakota? Where in the bill does it 
say that? What is the language in the bill which allows any State to 
bring enforcement action against a remote seller in any other country?
  Ms. HEITKAMP. Mr. President, I say to the Senator from Montana, what 
the bill exerts jurisdiction over is remote sellers. It does not 
differentiate whether they are foreign nationals or domestic 
corporations. In State law we have the ability to enforce State laws 
against anyone who is obligated under the jurisdiction of the State to 
comply. I will tell the Senator that the jurisdiction in here is not 
over States. It is not over Oregon or New Hampshire. It is over a 
remote seller. It does not differentiate anywhere in this bill in terms 
of a remote seller.
  I will also tell the Senator that as the former tax commissioner of 
the State of North Dakota, I have enforced State tax laws against 
foreign corporations just as foreign corporations have enforced their 
provincial laws against North Dakota domiciled companies. It happens 
every day in America.
  Mr. BAUCUS. Mr. President, I have another question. This is very 
similar to the context of this bill, and that is, I have asked the 
Senator from North Dakota many times to provide me with the authority 
for that proposition. I am wondering if the Senator from North Dakota 
could provide me the authority for that proposition rather than just 
asserting it. What is the authority? Is there a case? Is there a 
Federal law? Is there a Supreme Court case on that authority? I wish to 
  Ms. HEITKAMP. Mr. President, and my friend from Montana, we will 
provide the citations and the Supreme Court cases that talk about the 
exertion of jurisdiction over foreign corporations by State taxing 
  I will offer up this document which outlines that we are not parties 
to foreign treaties: Nelson v. Sears, Roebuck & Co., which is a 1941 
Supreme Court case. Felt & Tarrant Manufacturing v. Gallagher, which is 
a 1939 U.S. Supreme Court case.
  It is a well-established and longstanding precedent in this country 
that if a company is doing business as a foreign company in a State or 
in our jurisdictions, we have jurisdiction and can apply our State law 
and our State taxing authority over a foreign company that has 
jurisdiction and nexus in our----
  Mr. BAUCUS. The Senator just said the magic word. The Senator is 
talking about States where there is nexus. I ask for the proposition 
where there is no nexus. That is the whole point of a lot of this 
discussion here.
  The point in Quill is that in a State where there is no nexus, a 
sales tax cannot be enforced. Where there is nexus, it can be enforced. 
I will bet those cases the Senator cited have to do with whether a 
State is doing business in another State, and that is nexus. We are not 
talking about that here. We are talking about remote sellers where 
there is not nexus and not doing business in the State.
  Let's say there is a remote seller in China selling merchandise in 
North Dakota. I will bet dollars to doughnuts those cases have nothing 
to do with remote sellers generally.
  I will make a second point, that I think North Dakota will have a 
hard time enforcing the provisions of this bill in some province in 
China. Is North Dakota going to go to Hunan Province and have the 
Premier of Hunan Province enforce this? I doubt it. It is not just 
China, it is any other country.
  The Senator is confusing nexus from remote sellers, and that is not 
the point here. The point is remote sellers. That is just one of the 
problems of this bill when we start looking at it and start thinking 
about it and what is in it. That is why this bill should have gone to 
committee in the first place so we could correct it.
  One other point, and I don't think this is understood by very many 
Senators. This is not just a nonsales-tax issue, by any stretch of the 
imagination. For example, let's say two States--and they are both 
sales-tax States. There is a remote seller in one State--let's say 
Massachusetts--selling to a State such as California, and both have 
sales taxes. Under this legislation, California State taxing authority 
could audit the online seller in Massachusetts if it wants to and bring 
an action against that online seller in Massachusetts.
  So this applies to remote sellers in all States. This is not just 
nonsales-tax States but all States. This bill allows all States to 
bring enforcement actions and audit actions against remote sellers in 
any State. This bill does that. That is what it provides. This is not 
just a nonsales-tax State question. This is a question that affects all 
small businesses, all remote sellers all around the country in addition 
to the point I mentioned earlier--and I cannot for the life of me think 
any State can bring an enforcement action in many countries around the 
world where that remote seller does not have nexus in the State in 
question. This is another reason why this bill is fraught with problems 
and why it should have gone to committee in the first place.

  I yield the floor.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Ms. HEITKAMP. Mr. President, I wish to clarify one point about nexus 
versus commerce clause, and I think it has been misstated about tax 
  There was a case decided in the 1950s called National Bellas Hess 
that said remote sellers do not have nexus nor can we apply the 
collection burden because of the commerce clause. When it was decided, 
what was decided is that, yes, North Dakota had nexus over Quill. We 
could not apply the sales tax because it was in violation of the 
commerce clause.
  The nexus standards have changed from physical presence to economic 
activity and that is why we are here. We cannot, in my opinion, as a 
body--and as a lawyer who has studied this area--we cannot change the 
nexus standards by any statute in this body, so every State will have 
to defend their own application of nexus.
  What we are talking about is not nexus; it is commerce clause 
jurisdiction--the ability to apply it and not violate the interstate 
commerce clause.
  So I think we need to be very careful about our terminology.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. ALEXANDER. Mr. President, I wish to engage the Senator from North 
Dakota, if I may, in a colloquy for a few minutes on the subject, so we 
may speak through the Chair to each other.
  The PRESIDING OFFICER. Does the Senator from North Dakota agree?
  Ms. HEITKAMP. Yes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ALEXANDER. The Senator from Montana has raised a good question 
about audits. Let me say to the Senator from North Dakota, I wish to 
paint a picture, and I wish to ask the Senator from North Dakota to 
help me because she may be one of the newer Members of this body, but 
she knows more about this subject than most of us put together because 
of her experience, with all respect to all the Senators already here in 
the Senate. I wish to paint a picture of what would happen if we don't 
  We are talking about audits. We are talking about businesses. Let's 
think about what we are talking about. I want to look to Washington 
from Nashville, TN, or from some other State

[[Page S3008]]

capital--the requests that States are making of us is that if I am a 
Governor of Tennessee or a legislature, I want to be able to make the 
decision myself as a sovereign State about whether people who sell in 
our State are treated in the same way.
  A person may be a catalog seller or an Internet seller or a brick-
and-mortar seller, but if an entity is going to sell in our State and 
we have decided we are going to have a sales tax instead of an income 
tax, if we require the local business to collect the tax, we are going 
to require everybody who sells there to collect the tax. If an entity 
wants to sell in our State, that is what they need to do. If they want 
to drive in our State, they follow our speed limit. They follow our 
criminal laws. If one lives in our State, they pay our income tax. If 
someone sells in our State, wherever they are in the world, we want 
them to collect the tax and send it to us. That is what we are talking 
about, treating everybody the same in that way.
  So the obvious thing comes up: What about all these different 
jurisdictions? We hear a lot about 9,600 taxing jurisdictions, and I 
live in Maryville, TN. So the city might have a sales tax and the State 
might have a sales tax and they might be different than what the next 
city is.
  So my question to the Senator from North Dakota is--what this law 
does is it streamlines these 9,600 jurisdictions. It simplifies the 
whole process to make it easier for out-of-State sellers. It takes 
advantage of the technology of the Internet so there could be a single 
tax return for each State, a single audit for each State, and States 
often work together with audits and there can only be one audit per 
year; in other words, it reduces this burden.
  Of course, if an entity is in Kansas and they are selling in 
Tennessee, they may be subject to an audit and they file a report every 
year electronically. But, according to this, there can only be one a 
  What if we didn't pass this law? Let's say I am an enterprising 
Governor of Tennessee, which I once was, and I say, the Senate can't 
get anything done. They can't even agree when they have 75 people on 
both sides of the aisle who already have voted 3 times for the bill. So 
I have given up on them. So I am going back to the Supreme Court 20 
years later, after Senator Heitkamp wins as tax collector for North 
Dakota, and I am going to say, back then, 20 years ago, we didn't know 
anything about the Internet and this case came to the Supreme Court and 
the Court said it is too much of a burden on interstate commerce for 
you to require out-of-State sellers with no physical presence in the 
State to do the same thing you already require your instate sellers to 
do on taxes that are already owed--taxes that are already owed. I am 
going to go back to the Court and say things have changed. Times are 
different. I can take my computer out and I can put in my ZIP Code and 
type in ``Williams-Sonoma,'' figure out the sales tax I owe when I buy 
my ice cream freezer online, and they can collect it and send it to the 
State of Tennessee. So it is not any sort of burden on interstate 
  It is my right as a sovereign State to make everybody who wants to 
sell online or by catalog into the State of Tennessee--I am going after 
them. I am going after them if they don't collect the tax. Then, my 
friends in Mississippi see me do that and they do it too and then 
Kentucky does it and then the next State does it and then all 9,600 
taxing jurisdictions go after this single remote seller.
  They might come back to the Senate and say: Why didn't you guys do 
your job a few years ago? Why didn't you simplify this system? Why 
didn't you create something that was easy, which limited our liability, 
which made the States provide us with the software that makes this 
work, which limited the audits to one a year, which limited the tax to 
one per State? Why didn't you make it so even a smaller seller--99 
percent of the Internet sellers are exempt from this act--a smaller 
seller wouldn't have to worry about it?
  So I ask the Senator from North Dakota if she would respond, given 
her 20, 30 years of experience in this whole issue, am I exaggerating? 
What would it be like if the State of Tennessee got tired of the Senate 
not being able to act after all this time and went back to the Supreme 
Court and won the case and Tennessee and North Dakota and all the other 
States started enforcing their laws against remote sellers?
  Ms. HEITKAMP. Mr. President, in response to my friend from Tennessee, 
the first thing I will say is the tools we have today were not 
available 20 years ago. The simplification, the immediacy of buying a 
$15 opportunity from e-bay so you can collect sales tax in all 
jurisdictions on products that are unique to each State, that was not 
even a thought when we litigated Quill. Yet we came pretty close to 
convincing the Court this should be allowed under the interstate 
commerce clause. I think, at the end of the day, the Court decided that 
case because they were concerned mainly about retroactivity. But now, 
if we compare the experience of 20 years ago to what we know in terms 
of data availability and the ease of administration today, which is 
being further streamlined by requiring a streamlined tax, one single 
tax base--what do I mean by that? The city of Fargo imposes sales tax. 
Let's assume for a moment we allow them to tax different products than 
what the State taxes. This requires one tax per product. We don't get 
to have different tax bases. So we have streamlined that piece that 
concerned the Court at the time. When we think about it, local sales 
taxes were not unique and were prevalent even at the time we litigated 
  This argument was overwhelming for the Court. They looked at the 
burden on interstate commerce, coupled with the potential of 
retroactive application, which would have meant huge audits where there 
was no opportunity to collect, and said: You know what. We think this 
is better left to Congress. We share an obligation with Congress on 
interstate commerce. We think Congress can do the right thing.
  The world has changed since then. What we know that Internet sellers 
know about us today is remarkable. Can we imagine litigation, I say to 
my friend from Tennessee, where we show that we simply order--in my 
case one plus-size blouse--and we get all kinds of plus-size ads on the 
side. Some people think that is kind of insulting, but I think it is an 
interesting evaluation of how much these retail sellers know about us 
individually. If they can know that, they can collect the sales tax.
  The other piece of this that is new in this statute that I think 
further compels us is we are not talking about the small mom-and-pops. 
The other reason why I am supporting this legislation is I have small 
beekeepers who make wax candles and maybe they put those wax candles on 
the Internet; maybe they make $20,000, $30,000 a year selling wax 
candles. I don't want them, after further litigation, to have a burden 
of sales tax collection. They are small mom-and-pops, and we are 
talking about $1 million.
  So, in many ways, this legislation is prosmall business, it is 
prostreamlining tax. If we let this go back to the Court with a better 
argument than we are not burdening interstate commerce, with an 
argument that we can do it for $15 a month, the Court is going to be 
persuaded that there is no impediment to interstate commerce, and that 
is the risk we run by not acting and not acting soon.
  Mr. ALEXANDER. Mr. President, I thank the Senator for her knowledge 
and her contribution to the debate. Of course, what she is emphasizing 
is that if we do act, we simplify things for the small businessperson. 
For one thing, we exempt anyone whose revenues are less than $1 
million. That, by some economists' studies, is 99 percent of all 
Internet sellers. If we don't act and a case is won in the Supreme 
Court today, that is different than 20 years ago. There is no $1 
million exemption--there is no $1 million exemption--and there is 
exposure to 9,600 tax districts if they win that case.
  So the thing to think about is if we do our job, and the Supreme 
Court said 20 years ago we are the ones to do it--and 74 or 75 of us 3 
times now have indicated we think we should through this 12-page bill, 
we will provide an exemption for virtually all Internet sellers, we 
will create rules that simplify, and we will give States the 
opportunity to do what States should have the opportunity to do. My 
heavens, I hear some people say--and I have said this on the floor--
Washington didn't trust the States to make these decisions about tax 
matters. Nobody in Tennessee

[[Page S3009]]

trusts Washington to make decisions about tax matters. So what this 
bill does is say to the State of Tennessee or Delaware, it is your 
business; you decide it. If what you want to do is collect tax from 
some of the people who owe it and not all of the people who owe it--
States have the right to be right; States have the right to be wrong. 
That is what the 10th Amendment is about. In some States, they will use 
the money to pay teachers more for teaching well.
  In the State of Ohio they have already decided if this passes, they 
are going to lower the income tax. The Governor of Idaho said he 
already has his eye on a tax he would like to lower. If we can collect 
taxes from everybody who already owes them--and that is the important 
point to make. We are not talking about new taxes; we are talking about 
taxes people aren't paying that they owe. So why should I have to pay 
my tax, and if the Senator from Delaware is in the same similar 
situation, why should he not have to pay? So in each State, the same 
people ought to have to pay.
  Art Laffer, the distinguished economist who wrote a good column in 
the Wall Street Journal endorsing this idea of marketplace fairness, 
said the best tax, if there has to be a tax, is one that affects the 
largest number of people at the lowest possible rate. If we have a 10-
percent sales tax in Tennessee and 25 percent of the people who buy 
things are not paying a tax they owe, they ought to be paying it. They 
ought to be paying it. If they all pay it, we can lower the rate for 
everybody. That is what--we are not deciding that here; we are just 
deciding the States could have the right to decide.
  But the important point of the Senator from North Dakota is that if 
we act, we are protecting the small seller by creating the $1 million 
exemption. We are protecting the small seller or any remote seller by 
saying you have a limited liability, a limited number of audits, a 
limited number of States to do it in, and if we don't act and the 
Supreme Court hears this case, Katy bar the door, and out-of-State 
sellers all over the world will be coming to the Congress and saying: 
Why didn't you do your job?
  So there is a good reason why we have a majority of Democrats who 
have voted three times to express their support for this bill and a 
majority of Republicans who have done the same. There is a good reason 
why leading observers across the country, from the chairman of the 
American Conservative Union and others who don't like to see States 
picking and choosing between winners and losers--there is a good reason 
all of those people support this. And there is a good reason it is an 
11-page bill. It is a simple idea.

  We have sovereign States. States make their own tax laws. Unless 
States, by their tax laws, create an unconstitutional burden on an out-
of-State seller, it is no business of ours. We should create the 
environment the court says to give them the freedom to make those 
decisions for themselves. Some may do it one way, some may do it 
another, but States have the right to be right, States have the right 
to be wrong, and we have the responsibility to recognize the 
constitutional framework of our country which was created by sovereign 
  Thank you, Mr. President.
  Mr. BAUCUS. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. SESSIONS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SESSIONS. Mr. President, I ask unanimous consent to be able to 
speak as in morning business for up to 15 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.


  Mr. SESSIONS. Mr. President, we have an attempt to move and rush 
through the Senate an immigration bill before the American people can 
absorb what is in it. I think this is a very bad policy. The bill was 
introduced at 2 a.m. 8 days ago. It was set for markup in the committee 
today. Our diligent staff has been trying to read it and absorb it, and 
they are having a great deal of difficulty sifting through this 
complicated 844-page bill.
  Senator Grassley, the ranking Republican on the committee, has asked 
for the bill to be put over for 1 week. Next week is a recess, so now 
it will come up in 2 weeks to be presented and passed out of committee.
  On Monday, we had a hearing. I will not say it was a circus, but it 
was impossible to absorb all the information. Twenty-three witnesses 
testified, one right after the other, 5 or so minutes each. The 
Senators who were here on Monday--not a lot--had 5 minutes of 
questioning and not much was resolved. They did not know what was in 
the bill either. They were just testifying about policy, basically. 
Nobody could explain exactly how the bill is going to work.
  So people say: You should be able to handle a bill like that. You 
should be able to read an 844-page bill.
  So I just want to show why this is a pretty complicated process and 
why a piece of legislation such as this has to be carefully read. It is 
not easy to do so.
  So this is page 65 of the bill that I will show you. It deals with an 
issue I talked about yesterday. Secretary Napolitano issued a 
prosecutorial directive and guidance to ICE officers that was so 
upsetting to the ICE officers that they sued her and their Director, 
Mr. Morton, in Federal court, saying she is directing them not to 
follow plain U.S. law.
  I brought it up in the hearing, and Chairman Leahy said: Well, a lot 
of people file lawsuits. Very few win. Well, yesterday or the day 
before yesterday, the Federal judge basically ruled in favor of the 
officers and said a Secretary of DHS has no authority to issue 
guidelines that counteract plain mandatory Federal law. So, basically, 
the Secretary was saying: Do not remove certain people from the country 
that current law says must be removed. She was refusing to do what the 
law of the United States says. This is one of the reasons we have such 
a problem reforming and fixing immigration law. It is because the 
American people have little or no confidence in the willingness of our 
officials to even follow present law, much less new law.
  They have planned to fix this in the bill so now the Secretary would 
have even more power. In the legislation we have already found maybe 
200 references to waivers and discretion of the Secretary. But look at 
page 65:

       (B) Waiver.--
       (i) In general.--The Secretary may waive the application of 
     subparagraph (A)(i)(III) or any provision of section 212(a) 
     that is not listed in clause (ii) on behalf of an alien for 
     humanitarian purposes, to ensure family unity, or if such 
     waiver is otherwise in the public interest. Any discretionary 
     authority to waive grounds of inadmissibility under section 
     212(a) conferred under any other provision of this Act shall 
     apply equally to aliens seeking registered provisional status 
     under this section.
       (ii) Exceptions.--

  Exceptions to that.

     The discretionary authority under clause (i) may not be used 
     to waive--
       (I) subparagraph (B), (C), (D)(ii), (E), (G), (H), or (I) 
     of section 212(a)(2);
       (II) section 212(a)(3);
       (III) subparagraph (A), (C), (D), or (E) of section 
     212(a)(10). . . .

  So if I am a Senator, and I am trying to protect the interests of the 
people of the United States to understand what a piece of legislation 
means, I have to go back and read every one of those subparagraph 
  This is gobbledygook. My staff tells me every time they go back and 
read it, they see more difficulty. I have not even had a chance to look 
at this. Oh, but do not worry about it, we have set up a vision. We 
have a vision of this great immigration bill that is going to be 
comprehensive and fix all our problems. Trust us. Do not worry about 
it. You will find out what is in it later. Right? Just like health 
care, I guess.
  This is not a way to do business. The immigration policy of the 
United States is just as important as the health care policy of the 
United States.
  I am not going to consent to this bill. We ought to find out what is 
in it. It goes on more and more and more, this kind of gobbledygook.

       (IV) with respect to misrepresentations relating to the 
     application for registered provisional immigrant status, 
     section 212(a)(6)(C)(i).

  And it goes on.
  It is not right to say that people who are concerned about the 
legislation are

[[Page S3010]]

obstructing the process. We are trying to find out what the bill does.

  A headline yesterday in the Christian Science Monitor said: How many 
people will be made legal under this bill? It then quoted one of the 
supporters of the bill as saying: We don't know.
  So I asked at the Judiciary Committee this morning--one of the 
sponsors was there, Senator Schumer--I asked: Do you want to tell us 
how many people are going to be legalized under the bill? Oh, we don't 
  So we do not know that. We do not know answers to other questions, 
such as: How much will the bill cost the Treasury of the United States? 
What kind of expenses will be incurred? What is the total number of 
people who will be admitted?
  What we have discovered has revealed that the legislation fails to 
live up to virtually all the promises that have been made about it so 
far. I hate to say that, but that is the truth.
  Let me list a few instances. These are promises we have been told are 
taken care of or will be effectuated by the legislation if we just vote 
for this good bill. Just vote for it. It is 844 pages. Just vote for 
it. Here are some of the things:
  We were told the bill would be enforcement first. But the plan 
confers immediate legalization in exchange for future promises of plans 
for enforcement, many of which will likely never occur. We have plain 
law now that requires removal in lots of cases that the Secretary is 
failing to follow.
  In fact, a major loophole that jeopardizes the entire border security 
section commands that the Secretary of DHS grant current illegal 
immigrants permanent legal status and, therefore, a guaranteed path to 
eventual citizenship after 10 years if just one of the so-called 
triggers that is supposed to ensure enforcement is prevented from 
occurring by a lawsuit. So all they have to do is to keep an 
enforcement trigger tied up in court for ten years, and then the people 
are not going to be deported if the enforcement does not occur.
  We were told the Secretary would be required to build a fence at the 
border. We passed a law in 2007 that required 700 miles of double-
strength fencing at the border--not the whole border but 700 miles. How 
many miles have been built since then? Thirty. Congress passed a law 
that said we would do this enforcement in the future, but it has not 
  We were told the bill would reduce the deficit. We have been told it 
will reduce the deficit and strengthen Social Security and Medicare. 
But the effect will be to legalize large numbers of low-skilled 
immigrants. Over half of those illegally here today do not have a high 
school diploma and will add trillions to the unfunded liabilities of 
Medicare, Social Security, and the President's new ObamaCare health 
care bill.
  We are talking about trillions of dollars when Social Security and 
Medicare need to be strengthened, not weakened; and the numbers are not 
going to be disputed. It is not going to strengthen Social Security and 
Medicare, as many advocates say. It is going to weaken it, and it is 
also going to weaken the financial stability of the ObamaCare 
  We were told illegal immigrants would not have access to public 
benefits, but the bill ensures that millions of illegal immigrants will 
immediately be eligible for State and local public assistance. If 
people need something, need health care, they are going to get it 
somewhere. Some will get formal benefits in as short as 5 years and 
will be eligible for all Federal welfare programs at the time of the 
grant of citizenship.
  We were told there was a 10-year path to green cards or permanent 
legal residence and a 13-year path before one could become a citizen. 
But 2 to 3 million of those who are in the country illegally are 
expected to assert that they came into the country as younger people 
and, therefore, would be eligible for citizenship in 5 years under this 
remarkably broad DREAM Act provision that removes any age cap on the 
persons who can assert that they came as a youth. Even those who had 
been removed from the country can come back and claim the benefits of 
this bill.
  Illegal agriculture workers will also get green cards in 5 years. 
Individuals working illegally in agriculture today would be able to get 
legal permanent resident status in just 5 years. This would enable them 
to receive benefits of some kind. We were told this legislation was for 
illegal immigrants who have deep roots in the country. But the amnesty 
is extended to recent arrivals, including those who may have come here 
alone just over a year ago.
  Millions would be legalized who overstayed their visas. People who 
are not even living in the country anymore could return and receive 
benefits and legal status. Those who have been deported multiple times 
could receive benefits under this legislation. That is just what is in 
this complex 844-page bill.
  We were told the legislation would curtail the administration's 
aggressive undermining of Federal law. That somehow the law was going 
to be enforced more. But it provides the Secretary of Homeland Security 
with even more discretion than she has today. It is filled with grants 
of waiver power and discretionary power. The American people are very 
dubious of the willingness of our government to do anything that would 
consistently and effectively enforce laws.
  I believe the American people's heart is right about the issue of 
immigration. I believe the American people should be respected and 
their opinions valued. What are they saying? They say: We need a lawful 
system of immigration. People should be treated fairly. They believe in 
immigration. Right now we are bringing in 1 million people a year 
legally. The American people say that is about right, although a recent 
poll showed that over half of the American people believe that number 
is too high. They would like to see it brought down some at this time 
of unemployment and falling wages.
  They still strongly favor immigration for America. They are not mad 
at immigrants. They do not hate immigrants. They do not dislike them. 
They respect people who want to come to America. They understand the 
desire of good people around the world who would like to come to 
America. But what they are angry about is people in high office flatly 
telling them time and time again: We are going to fix this system, we 
are going to make it lawful, and we will make it one that you can be 
proud of. Then they do not do it. They say they are going to build a 
fence, and it does not get built. They say they passed a law that 
requires removal of certain people who violate the law; they do not get 
removed. The American people are right about this. It is Congress and 
the President who have not been fulfilling the right standard.
  We were told there would be strict standards for amnesty, but the 
bill grants amnesty for those who have been convicted of multiple 
crimes. There are a whole host of exceptions to ineligibility. We were 
told the bill would make us safer. But Mr. Chris Crane, the head of the 
ICE association, said it will not; that immigration officers have been 
undermined. They have voted--the 7,000-member association voted no 
confidence in Mr. Morton, their supervisor. They filed a lawsuit for 
the failure of their officials to allow them to enforce the law, 
basically complaining about their supervisors directing them to violate 
the law.
  That is what they complained about. That is what the judge seemed to 
take very seriously. We were told this would move us toward a merit-
based, high-skilled immigration system with a responsible future flow 
that would be more effective in identifying people who could be 
successful in America. This might be the biggest and most dangerous 
flaw of all. It does not look like it is going to move our numbers in 
any way in that direction.
  The bill would remove limitations on the number of visas for spouses 
and children of green card holders. That would apply to both those here 
illegally and all current and future legal immigrants. It would clear 
the 4.5 million illegal immigration backlog of people who filed to come 
under chain migration, family migration. Only so many were supposed to 
be admitted per year. You file and wait until your time comes up, then 
you get admitted. So, apparently, the drafters of the bill felt bad 
because people said: You are giving people who came illegally advantage 
over those who have been waiting their time.
  So how did they solve that? That is a pretty brilliant way to solve 
it. They

[[Page S3011]]

agreed to let everybody who has filed to come in immediately and exempt 
from them from the caps. That would solve the problem all right.
  Those who are approved under the DREAM Act, persons who came as 
younger individuals, can obtain green cards on an expedited status for 
their spouses and children. We have to be careful that we do not create 
a system that allows aging parents to be brought to the country in 
large numbers. That will be a burden on us. Truly, we have to be 
thoughtful about that. We have to be responsible. As a member of the 
Budget Committee, we are looking at these numbers. We have to reduce 
our costs, not add to it wherever possible.
  The agriculture worker program is expanded, giving the Secretary of 
Homeland Security almost unchecked authority to increase the visas to 
whatever number he or she sees fit. Think about this: The Christian 
Science Monitor asked: How many will be illegal immigrants will be 
  I asked the bill sponsors and supporters today in committee: How many 
would be admitted over the next 10 years?
  Under current law, we should be admitting about 1 million people a 
year, the largest number any Nation in the world allows, to come into 
our country legally. That would be 10 million over 10 years. Under this 
bill, we believe the number would be 30 million-plus.
  Let me say to my colleagues, I respect their work and their efforts. 
I know we have always valued immigration in our country, but it is time 
to create a system that serves the national interest, a lawful system 
where those who violate the law are not rewarded, those who do not 
violate the law are validated, a system that brings in the kind of 
person that has the best chance to be successful and not be a ward of 
the State or charge of the State.
  There are a lot of things that we really need to do: protect our 
national security, have a system and a policy that we are proud of, 
that is morally defensible. I am afraid this bill is not there. That is 
why I am concerned about it. I look forward to doing the best I can to 
examine it carefully.
  I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, over the course of the next several 
weeks, I hope to come to the floor and visit with my colleagues about 
the immigration bill that will soon be going through the Judiciary 
Committee. Today I want to share my thoughts on the parts that deal 
with the border security section of S. 744.
  The immigration bill is very likely to allow millions of people who 
entered our country illegally or overstayed their visa to receive legal 
status and eventually green cards. However, it is very unlikely to 
result in true border security. The bill provides that those in a 
probationary status--and that is known in this legislation as 
``registered provisional immigrant status''--be given green cards as 
soon as the Secretary of Homeland Security certifies that four 
conditions have been satisfied.
  On page 11 of the bill it lays out the process. The Secretary 
certifies that the border and fencing strategies, and those strategies 
are ones that she wrote, are substantially deployed, operational, and 
completed. She also has to implement a mandatory employment 
verification program and electronic exit system at airports and 
seaports. The authors of the bill envision that this will happen in 5 
or 10 years down the road.
  There are three reasons this process is problematic: First, the 
Secretary has unbridled discretion to conclude that the four provisions 
have been satisfied even if they have not been satisfied. The Secretary 
determines if the strategic plans are substantially deployed, 
operational, and completed according to requirements of the law. For 
example, the Secretary could say she is using an electronic exit system 
by collecting visa and passport information even if that system is not 
totally effective. The bill establishes no deadline for implementing 
any of these conditions.
  Second, the bar is set very low for certifying that these conditions 
have been met. One of the four triggers to green card is a summation of 
a border fencing strategy. The bill defines in one sentence in section 
5 the contents of that border fencing strategy condition. At a hearing 
on Tuesday before our Judiciary Committee, Secretary Napolitano 
testified that fencing was not a priority of this administration.
  Considering how sensitive of an issue this is, one would not think 
she would say that. She did not really want $1.5 billion to be 
designated just for fencing. She implied that no more fencing was 
needed. Well, ask the people down on the border if that is true. She 
testified that the Department would prefer flexibility to use 
technologies other than fences. She stated that if she determined that 
little or no additional funding were necessary for fencing, she might 
then be able to certify this condition very quickly.
  Third, litigation could ensure that legalization could occur in 10 
years, regardless of whether any and all of the four border security 
triggers in the bill are met. The bill does this in four ways: First, 
green cards can be issued if litigation of any kind prevents any 
conditions from being met. Second, green cards can be issued if the 
Supreme Court rules that the implementation of any of the conditions is 
unconstitutional. Third, green cards can be issued if the Supreme Court 
grants review of litigation on the constitutionality of the 
implementation of these conditions. I note that this provision is 
especially ill-considered because it could trigger green cards merely 
because the Supreme Court agreed to review the condition's 
constitutionally, a highly likely event even if the Court later upheld 
  Fourth, the bill restricts litigation challenging one particular 
decision of the Secretary to a constitutional challenge only. But that 
limitation expressly does not apply to litigation challenging 
implementation of the conditions. Litigation brought against the 
conditions can be based on any legal theory.
  Under the bill, if any court in this country issues a stay on 
implementing one of the conditions, then green cards are to be issued 
after 10 years.
  The bill does not specify what sort of ruling must prevent 
implementation or even that the ruling be based on the merits, nor does 
the bill require that appeals run their course, even if the appeal 
upholds the condition. It says that the Secretary ``shall permit''--and 
this is mandatory language--``shall permit'' applications for 
adjustment to LPR status if ``litigation . . . has prevented one of the 
conditions from being implemented.''
  Under the plain language of the bill, 10 days after the day that any 
court prevents any of the border security conditions from being 
implemented, then, of course, the floodgates for green cards are to be 
opened. And nothing in the bill stops the administration from agreeing 
to a consent decree that prevents one of the conditions from being met.
  Because I listened to over 7 hours of testimony on Monday and because 
on Tuesday the Secretary of Homeland Security shared her thoughts, I 
summarize to this one statement: During all that time, not one person 
disputed the fact that legalization begins upon the mere submission of 
both a southern border security and fencing strategy. Thus, the 
undocumented become legal after the plans are submitted despite the 
potential that the plans could be flawed and inadequate.
  If enacted today, the bill would provide no pressure on this 
Secretary or future Secretaries to actually secure the border.
  Secretary Napolitano has stated that the border is stronger than ever 
before. She even indicated that Congress should not hold up 
legalization by adding border security measures and requiring them to 
be a trigger for the program.
  I am concerned that the bill we will be taking up repeats the 
mistakes we made in 1986. Maybe people will resent my referring to 
1986, but I do that because I went through this before, and we thought 
we were doing it absolutely right in 1986. We didn't secure the border 
then and assumed legalization alone would stop the flow of more people 
crossing the border without papers.
  Simply, we screwed up. We need to learn a lesson because the basis of 
this whole legislation is that the borders will be secured. The people 
don't want some phony language that allows the Secretary to circumvent 
congressional intent.

[[Page S3012]]

  I urge all my colleagues to really understand what the bill does in 
regard to border security and, in the process, to make sure the same 
mistakes of 1986 aren't repeated and to insist that the border be 
secured instead of trusting what the Secretary says.
  In regard to this whole issue, there has been a lot of finger-
pointing going on in Washington in the past 2 weeks as it relates to 
immigration. It is a lot like the weeks and months after 9/11. What 
warning signs were missed about the brothers who bombed the Boston 
Marathon? Law enforcement and intelligence agencies tell conflicting 
stories. Bureaucracies are gearing up to do battle over who dropped the 
ball. They are preparing their defenses. They are leaking bits and 
pieces of information favorable to themselves.
  Meanwhile, Congress and the public have a growing number of 
questions. I have written to the Department of Homeland Security and 
the FBI. Senator Paul and I have written on another matter to the FBI. 
But the Senate Judiciary Committee has not yet received clear answers 
to our questions, and there are very serious questions about whether 
our government has forgotten the lessons of 9/11.
  The most important of those lessons is this: When extremist fanatics 
say they want to wage war against us, we should take them seriously. 
Our government was reportedly warned on multiple occasions that one of 
these brothers had become a radical jihadist. Do we still have agencies 
failing to follow up, failing to share information, and failing to 
connect the dots?
  In this morning's Washington Post, the editorial board asked, ``Is 
the FBI focused enough on the real bad guys?'' The editorial pointed 
out that in addition to the older brother in Boston, several people who 
have been investigated by the FBI have gone on to commit attacks. The 
Post cited 2 examples: the man who shot 2 soldiers at a Little Rock 
military recruiting office in 2009 and the man who was accused of 
shooting and killing 13 people at Fort Hood later that year.
  According to the editorial, ``Meanwhile, the FBI has devoted 
considerable resources to sting operations . . . sometimes on what look 
like dubious grounds.'' For example, the FBI launched an elaborate 
sting operation in Boston against a man planning to attack the U.S. 
Capitol with a remote-controlled model airplane loaded with grenades.
  The Post concluded:

       In [some cases], it's not clear that a sometimes far-
     fetched plot would have gone forward without the 
     encouragement and help of FBI informants.

  That is a very good point. It may be easier for an FBI informant to 
draw someone into a far-fetched plan, but it is harder to detect the 
real terrorist plot, such as the one in Boston. Unfortunately, it is 
connecting the dots that keeps us safe, not those easy sting 
  Other warning signs about the older brother may have been missed 
because tips about him weren't shared between law enforcement. The 
older brother's best American friend was murdered in an unusual triple 
homicide. My office has been told that local authorities investigating 
the murder were unaware of the warnings from Russia about his 
radicalization. Thus, those local authorities in turn apparently didn't 
know they should make the FBI aware of the murder.

  Four months later the older brother traveled to Russia, just as the 
Russian Government had warned us. The FBI claims it was unaware of the 
older brother's trip, even though the Homeland Security Department says 
its systems alerted them to the travel. Did the Homeland Security 
Department fail to share that information with the FBI?
  The immigration reform bill, with all of its bells and whistles, 
can't make agencies share information with each other. That bill is 
supposed to require background checks on the 12 million people who are 
in our country undocumented. Yet it seems we have a hard time doing 
successful background checks just on those here legally.
  Lack of information-sharing and failure to see real warning signs are 
probably things that no bill will fix. What has to change is the 
culture, and, of course, that begins at the top. It requires true 
  At the end of the day, this is about much more than who dropped the 
ball. It is about learning from mistakes and doing a better job next 
time. In order to do that, we need real transparency about what 
happened, not just talking points from agencies trying to deflect the 
  The immigration bill before the Senate will make enforcement of 
immigration laws more inefficient, time-consuming, and ineffective.
  I would refer my colleagues to section 3502 of the bill. That section 
governs immigration court proceedings. Under current law, people here 
illegally who are going through removal proceedings are not entitled to 
legal counsel at government expense, and the Justice Department is not 
required to provide that. However, this section opens the law wide, 
making taxpayers foot the bill for attorneys who will represent people 
here who are undocumented. It provides that ``the Attorney General, in 
the Attorney General's sole and unreviewable discretion, may appoint or 
provide counsel to aliens in'' removal proceedings.
  The heading of the section implies that court proceedings would run 
more efficiently, when in actuality the goal is to ensure that people 
here illegally have every opportunity to fight removal orders. Some of 
these aliens could be dangerous. They certainly don't deserve free 
counsel whenever the Attorney General is inclined. Making it harder to 
deport aliens who should be deported will make it harder to deter 
aliens from entering the country illegally. Of course, there are 
organizations, such as law firms, law school clinics, and others, that 
provide pro bono legal services to aliens at no cost to the taxpayers.
  The bill's language is just so astounding. There are very few 
statutes that say that any government official can do anything in his 
or her ``sole and unreviewable discretion.'' That means no oversight. 
However, time and again throughout this bill this language pops up. It 
means that no court can stop what that official wants to do. That is 
hard to square with our principles of democracy and a government based 
on the principles of checks and balances.
  Ironically, the title for the section implies that this measure would 
``reduce costs,'' but in fact it only increases the costs for 
taxpayers. This measure to provide legal counsel for people here 
illegally would be paid for from the newly created fund known as the 
Comprehensive Immigration Reform and Trust Fund. This fund, on the date 
of enactment, will have $6.5 billion, which is transferred from the 
General Treasury. How much will this section cost? We won't know until 
CBO scores it, but it won't be borne by the people in the removal 
proceedings, and that is going to be hard for the American people to 
  Anything that makes deportation harder or that makes deportation 
proceedings more likely to be about delaying tactics should be avoided, 
but the immigration bill appears to desire those results as goals. We 
should decline that invitation to mischief that is going to be a direct 

                 Drug Prevention and Treatment Programs

  Mr. President, I have long been a strong advocate for the responsible 
stewardship of taxpayer dollars.
  Throughout my career I have sent countless requests, letters, and 
conducted numerous investigations all in the interest of preventing 
waste, fraud, and abuse of taxpayer dollars. Today, we are confronted 
with a government that is recklessly spending tax dollars and running 
up a huge Federal budget deficit and debt. We are also confronted with 
the need to tighten the government's belt when it comes to this 
reckless spending.
  One area where we need to do a better job of responsibly using 
taxpayer dollars is through our drug treatment and prevention efforts. 
I have a strong commitment to ensure drug abuse does not flourish in 
communities throughout the country. I have championed numerous efforts 
to prevent drug abuse before it starts including my sponsorship of the 
Drug Free Communities grant program.
  Drug abuse is very costly to society. The National Survey on Drug Use 
and Health estimates that 22.5 million Americans aged 12 and older used 
drugs in 2011. This is clearly a problem that needs to be addressed in 
an aggressive but wise manner.
  Senator Feinstein and I requested the Government Accountability 

[[Page S3013]]

to conduct a study of the Federal drug treatment and prevention 
programs that has recently been released. This report and another, 
which annually reports on the duplication or overlapping of Federal 
programs, states that out of 76 drug abuse prevention and treatment 
programs 59 or nearly 80 percent had evidence of overlapping efforts. 
In Fiscal Year 2012, 4.5 billion taxpayer dollars were allocated to 
these programs.
  The Government Accountability Office reported that some programs, 
including the Drug Free Communities program, have a low risk for 
duplication because they have coordinated their efforts among their 
respective administering agencies. However, 29 of the 76 programs 
surveyed reported that no staff have coordinated with other agencies or 
programs to reduce duplication. This is almost 40 percent of all 
Federal drug prevention and treatment programs. The report further 
states that the Office of National Drug Control Policy, which is 
responsible for coordinating the government's anti-drug efforts, has 
not systematically assessed drug abuse prevention and treatment 
programs to examine the extent of overlap or opportunities for 
  It is with disappointment that I learned that the President has 
proposed a significant increase in his Budget to many of these 
programs. Specifically, the President has proposed a $1.5 billion 
increase for drug treatment programs, which is an increase of 18 
percent from fiscal year 2012. Many of these programs have good 
intentions and may even do good work, but in a time when we are making 
many painful cuts throughout most federal agencies and programs to rein 
in spending should we be making such large increases?
  Further, should we be spending more taxpayer dollars on programs that 
are duplicating efforts before they correct their problems? The last 
thing we need to be doing now is chasing good money after bad, and this 
is what the President is proposing with his budget.
  Before we start increasing any program budget, we must first ensure 
that program is responsibly tracking and utilizing every taxpayer 
dollar it currently has and not wasting it by duplicating the work of 
another program. One example of success in eliminating duplication can 
be found with the National Drug Intelligence Center.
  This center had repeatedly been listed as a duplicating agency for a 
number of years. The funding for this center was eventually eliminated 
in fiscal year 2011 while the work of the center has been consolidated.
  I am pleased that the Office of National Drug Control Policy agrees 
with the recommendation of the Government Accountability Office report 
to assess the extent of overlap and duplication across all drug 
prevention and treatment programs by identifying where agencies can 
better coordinate their efforts. Yet these actions should have been 
taken years ago. However, it is with disappointment that I saw no 
mention of any effort to assess prevention and treatment programs in 
the President's recently released 2013 National Drug Control Strategy.
  In fact, it appears that the President wants to expand many of the 
programs that currently do not coordinate efforts in his strategy. An 
assessment must be done and actions must be taken to eliminate waste 
before any expansions take place.
  Failure to adhere to the Government Accountability Office 
recommendation will result in more wasted taxpayer dollars and less 
recipients benefitting from those dollars. The people most vulnerable 
to drug abuse, our Nation's youth, require our best efforts with the 
limited resources we have to ensure they receive the proper education 
and professional help so that they can grow into healthy adults. By 
failing to carefully safeguard taxpayer dollars, we are failing our 
children and grandchildren. We must do better.
  The ACTING PRESIDENT pro tempore. The majority leader.
  Mr. REID. Mr. President, I ask unanimous consent that the vote on the 
motion to invoke cloture on S. 743 occur this evening at 5:35 p.m.; 
further, that if cloture is invoked, all postcloture time be considered 
expired at 5 p.m. Monday, May 6; the Durbin amendment No. 745 then be 
withdrawn; that no other second-degree amendments be in order; that the 
Senate then proceed to vote in relation to the Enzi-Durbin amendment 
No. 741; that upon disposition of the amendment, the Senate proceed to 
vote on passage of the bill, as amended, if amended; finally, that the 
filing deadline for second-degree amendments be 4 p.m. Monday, May 6.
  Mr. President, just briefly, I appreciate very much the fact this is 
a consent agreement I had nothing to do with. I appreciate all the good 
work of everyone who was involved in this.
  The ACTING PRESIDENT pro tempore. Is there any objection to the 
  Without objection, it is so ordered.
  The clerk will report the motion to invoke cloture.
  The assistant legislative clerk read as follows:

                             Cloture Motion

       We, the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     hereby move to bring to a close debate on S. 743, a bill to 
     restore States' sovereign rights to enforce State and local 
     sales and use tax laws, and for other purposes.
         Harry Reid, Richard J. Durbin, Heidi Heitkamp, Martin 
           Heinrich, Amy Klobuchar, Al Franken, Sherrod Brown, 
           Brian Schatz, Benjamin L. Cardin, Angus S. King, Jr., 
           Richard Blumenthal, Sheldon Whitehouse, John D. 
           Rockefeller IV, Joe Manchin III, Thomas R. Carper, Tom 
           Harkin, Patrick J. Leahy.

  The ACTING PRESIDENT pro tempore. By unanimous consent, the mandatory 
quorum call has been waived.
  The question is, Is it the sense of the Senate that debate on S. 743, 
a bill to restore States' sovereign rights to enforce State and local 
sales and use tax laws, and for other purposes, shall be brought to a 
  The yeas and nays are mandatory under the rule.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. DURBIN. I announce that the Senator from California (Mrs. Boxer) 
and the Senator from New Jersey (Mr. Lautenberg) are necessarily 
  Mr. CORNYN. The following Senators are necessarily absent: the 
Senator from Texas (Mr. Cruz), the Senator from Texas (Mr. Cornyn), the 
Senator from Arizona (Mr. Flake), the Senator from Ohio ( Mr. Portman), 
and the Senator from Mississippi (Mr. Wicker).
  Further, if present and voting, the Senator from Texas (Mr. Cornyn) 
would have voted ``nay.''
  The PRESIDING OFFICER (Mrs. Hagan). Are there any other Senators in 
the Chamber desiring to vote?
  The yeas and nays resulted--yeas 63, nays 30, as follows:

                      [Rollcall Vote No. 111 Leg.]


     Johnson (SD)
     Udall (CO)
     Udall (NM)


     Johnson (WI)

                             NOT VOTING--7

  The PRESIDING OFFICER. On this vote the yeas are 63, the nays are 30. 
Three-fifths of the Senators duly chosen and sworn having voted in the 
affirmative, the motion is agreed to.

                           Voting Explanation

 Mrs. BOXER. Madam President, I was unable to attend the roll 
call vote that occurred on April 25, 2013 because of a family 
obligation. Had I been present, I would have voted in favor of the 
motion to invoke cloture on S. 743, the Marketplace Fairness Act.

[[Page S3014]]

  As electronic commerce has grown dramatically, new policies are 
necessary to maintain a level playing field so that businesses of all 
types can both compete and prosper. This bipartisan bill has the 
support of a broad coalition of Governors, mayors, business leaders, 
and labor groups, and is especially important to our local governments. 
I look forward to working with my colleagues to ensure that 
implementation of these changes is manageable for small businesses in 
California and elsewhere.

  The PRESIDING OFFICER. The majority leader is recognized.