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[Congressional Record Volume 154, Number 175 (Monday, November 17, 2008)]
[Senate]
[Pages S10579-S10582]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Ms. MIKULSKI (for herself, Mr. Bond, Mr. Levin, and Ms. 
        Stabenow):
  S. 3684. A bill to amend the Internal Revenue Code of 1986 to allow 
an above-the-line deduction against individual income tax for interest 
in indebtedness and for State sales and excise taxes with respect to 
the purchase of certain motor vehicles; to the Committee on Finance.
  Ms. MIKULSKI. Mr. President, our economy is in shambles. People are 
losing their jobs, they are losing their life savings, and they are 
losing their homes. Congress must act and we must act now.
  I agree with the Senator from Pennsylvania, Mr. Specter, that this 
session of the Congress and this session of the Senate should not be 
called a lameduck. We should neither be lame nor should we duck the big 
issue facing our country. We have helped out. If you look at what we 
have done already--well, we have already done a bailout. We helped the 
sharks and we helped the whales. Now it is time to help the minnows, 
the little guy and gal, the American consumer.
  I have that solution. Today, I introduce legislation, cosponsored by 
my colleague from Missouri, to save jobs in the American automobile 
industry, to help consumers, and get our economy back on track. It is 
simple, it is straightforward, and it is bipartisan. It is also timely 
and temporary.
  My bill would save jobs. What is it that I want to do? I want to 
stimulate demand in the automobile industry so people actually come 
into showrooms and buy cars, minivans, or light trucks. Why is this a 
good idea? Actually, if you buy a car, someone has to make it, someone 
has to sell it, someone has to service it, and someone has to provide 
administrative services. This is good for manufacturers, the dealers, 
and the suppliers. It could save considerable jobs in the auto 
industry.
  My bill is not about bailouts. It is about jobs, jobs, jobs. Six 
million jobs are at stake in the American car industry. One out of ten 
jobs in America relies on the auto industry. Right now, the facts are 
gloomy. Sales are down. The auto industry has already cut over 100,000 
jobs. The 30,000 American dealerships in this country are at risk of 
losing 37,000 jobs. We cannot let this happen. We cannot let the 
American automobile industry implode.
  I believe we can help by getting the consumers into the showroom, 
have them feel that Government is on their side in helping them with 
one of the biggest purchases during this tough time.
  What does this amendment do? My bill is simple. If you buy a 
passenger car, minivan, or light truck between November 12 of this year 
and December 31 of 2009, you will get a tax deduction for your sales or 
excise tax and the interest on your loan. Families can save anywhere 
from $2,000 to $5,000 by the Mikulski-Bond bill.
  This is a big deal because, next to the purchase of your home, the 
purchase of your automobile is your next big ticket.
  It is targeted. I cap it at families with an income of over $250,000 
a year. It focuses on the middle-income and the middle-class family 
cars. It is also timely because we need to know that the biggest 6-week 
period for automobile sales is between Thanksgiving and New Year's Eve. 
They sell other cars during 6-week periods, but between Thanksgiving 
and New Year's

[[Page S10580]]

Eve is the biggest 6-week sale. This bill also helps the environment 
because it gets more people in more fuel-efficient cars.
  This bill is not limited to only American cars. It focuses on any 
car, recognizing that many automobiles are now made in southern States, 
as Texas does Toyotas; Kentucky does Toyotas; Tennessee does Nissans. 
Any way we look at it, even though it might have a foreign logo, it is 
American jobs doing the manufacturing.
  What would this mean? I have here a chart--it is bigger than me--for 
a Dodge minivan. The average minivans cost about $25,500.
  On a 4-year loan at an 8 percent excise tax, it would result in a 
savings of anywhere, depending on the State, from $1,500 to $2,000.
  I have already heard from people all over this country how that, plus 
the deals being offered by manufacturers and dealers, could result in 
being able to buy a minivan for under $20,000 a year.
  This would be fantastic. I could put up chart after chart for the 
Malibu, for the Ford pickup 150, for the Toyota Camry. This would 
stimulate demand. Just think what it means. People could come into a 
showroom of their choice, and if we passed this bill--it would be 
retroactive to the day I announced they could actually buy something 
that would put them on the road with a car that is more fuel efficient 
with lower carbon emissions.
  At the same time, jobs, jobs, jobs. As I said, there are 30,000 new 
car dealerships nationwide. They employ close to 1 million people. In 
my own home State there are 300 dealerships. People do not realize that 
dealers in many rural parts of my State usually employ over 50 people 
in sales, the auto mechanics, as well as the administrative positions. 
This legislation would help them because they would actually be 
working. It would help the people who are actually making those.
  Senator Specter said he has been traveling the State. I have been 
traveling mine too. I went to the General Motors plant in Maryland at 
White Marsh where they make the new power transmission. Right now they 
can make a Tahoe hybrid, a Tahoe, a big muscle car, that with the 
hybrid technology they have now, can get the same mileage as a Toyota 
Camry.
  If you also talk to the people who worked there, they could employ 
1,000; they now employ 250 people. If you were with me in the car 
dealership and would talk to people such as the mechanic--I talked to a 
mechanic who works for a Chevy dealer in Bethesda. He has worked there 
for 23 years.
  He said to me: Senator Barb, all my life I have loved to work on 
cars. I just love it. I love to fix them; I love to repair them. If 
they are new, I want to make sure they are fit for duty. I have earned 
a good living. I have been happy. I think I have helped make a lot of 
other people happy. But the only way I can stay happy is if I continue 
to work. I have a mortgage. I have two kids in college. Maybe they are 
going to go into engineering, I do not know, but I know if we do not 
get more people into this dealership my job could be gone.
  Talk to the dealer. The dealer's name is Sam. The first thing you 
know about him is he wears the little Rotary pin on his lapel because 
he is the guy who not only provides jobs, tries to provide good deals 
to customers, but also is the one who is part of the Chamber of 
Commerce, part of the United Way.
  We are talking about people who are part of the fabric of our 
society. We are not talking about an abstraction. We are not talking 
about a single ZIP code like Wall Street. We are talking about the 
automobile industry in every State and every community. So when we help 
them, we are helping ourselves.
  People say: what is the cost of this, Senator Barb? Well, I will tell 
you. It is about $8 billion. They go: Oh, well, we just spent $350 
billion and threw it down the rat hole. We do not have anything to show 
for this $350 billion but more arrogance and more greed. While they 
want Americans to dine on Lean Cuisine, they are dining on spa cuisine.
  So I think it is time we help people in our own community, help the 
consumers who want to participate in the economy. Clunkers get traded 
in, and we also help them. Maybe you know somebody who works for a 
hedge fund, I do not. But I do know the people who work for the 
automobile industry--whether it is the dealers or the receptionist who 
came to work 43 years ago right out of high school who said: Senator 
Barb, we could not sell cars in those days, but I have been here in and 
out of this same dealer for 43 years, raised my kids, earned a good 
living, did the back office work. I want to keep on doing it. I am not 
ready for Social Security, and, for God's sake, do not put it in Wall 
Street.
  Well, I say do not put Social Security on Wall Street and do not put 
another nickel on Wall Street. If we are going to help with our 
economy, let's do it where it creates jobs.
  I wanted to explain the bill I have introduced today that I am going 
to bring up as part of our economic recovery plan on Wednesday. But 
most of all, what I wanted to say is, the Congress should not go home 
until we see how we are going to help this economy get rolling.
  I think my bill which has been cosponsored by Senator Bond puts 
wheels on the American economy, and I hope I have victory on it later 
this week.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Missouri is recognized.
  Mr. BOND. Mr. President, it is a real pleasure to join and partner 
with my good friend, Senator Mikulski, on this initiative to save 
American jobs, help American families, support the auto industry, as 
she has just said, and put America back on wheels.
  During those tough economic times, we believe this proposal will help 
American families afford the cars, small trucks, and SUVs they need to 
get to work, to take their kids to school, and encourage investment 
needed to boost auto sales which will help save American jobs, help 
middle-class families, and support the auto industry.
  Selling cars, again, is one of the most important things we can do 
for the entire auto industry, by encouraging now tentative buyers who 
are worried about making the payments to go ahead and purchase. This is 
the best way to get our auto industry back to work and provide the jobs 
people need.
  In my home State of Missouri and throughout the Nation car sales have 
declined sharply in recent months, and there will likely be a further 
decline as the economy struggles. Cars and trucks are one of the 
largest purchases for households. Most rely on some kind of financing 
to acquire the vehicles.
  By making interest payments and sales and excise taxes deductible, 
this program will help middle-class families afford the cars, SUVs, and 
light trucks they need to get to work and take their kids to school. 
This should mean real savings to middle-class families who are 
struggling to pay a mortgage or rent, buy groceries, and afford health 
care.
  This proposal also helps the struggling auto industry and millions of 
jobs that are dependent on them: auto suppliers, steel and glass 
manufacturers, and the car dealers.
  There are closing car dealerships in Missouri. They are shutting 
their doors, laying off workers, cutting jobs. Others are facing real 
squeezes. They, too, may be facing this same crisis if they do not get 
people purchasing cars.
  With our economy shedding hundreds of thousands of jobs over the past 
several months, it is critical that we act now to prevent further 
losses to an industry that touches the entire Nation.
  Now, in addition to this tax proposal, I think we must take action to 
provide bridge loan financing to Detroit's big three auto companies. 
The idea of getting Government involved in the free market is 
troublesome and potentially dangerous to the health of our system, but 
I strongly believe we have to act in unique times of crisis when 
millions of workers are in danger of losing their jobs. We are clearly 
in this unique crisis. We are experiencing a crisis unparalleled since 
the Great Depression.
  It is for that reason that I will not turn my back on hundreds of 
thousands of Missouri jobs. Now is the time to act. Unlike many other 
industries, the auto industry touches, as I said, millions of 
manufacturing and servicing jobs across the Nation.
  Over 100,000 auto workers are in assembly plants, more than 1 million 
workers are at auto dealerships in every State, over 300,000 workers 
are in the wholesale end of the auto industry,

[[Page S10581]]

over 800,000 workers work in auto repair, and over 500,000 workers are 
in auto parts plants.
  These autoworkers are not just in big cities such as Detroit. 
Autoworkers are found supporting families in small- and medium-sized 
communities across rural America.
  In my home State of Missouri, small towns such as Maryville in 
northwest Missouri have 10,000 people, and 1,800 families depend upon 
the 200 workers at the Federal-Mogul plant. They are making steering 
systems. Closing that plant will be a tough blow to the Maryville 
community dependent upon it.
  We have 500 jobs at the Dura plant in Moberly, 400 at the Gates plant 
in Versailles, 170 at the Modine plant in Joplin. On and on it goes, 
like a long list of just about every Missouri small- and medium-sized 
town. We cannot afford to pull the plug on the manufacturing backbone 
of rural America.
  These auto-dependent jobs, whether they are union or not--and many 
are not--provide very good wages. They are manufacturing jobs that 
support middle-class families. They provide health care benefits for 
families, retirement for the elderly, and a couple weeks of paid 
vacation. Without these blue-collar jobs, many of these middle-class 
families would slip back into lower incomes with no health care, little 
hope for college, and an uncertain future. We have to fight for working 
people and their jobs and not allow their employers to go under.
  Despite the real need for temporary emergency assistance to save jobs 
in Missouri and across the country, I do not support a blank check from 
the Government. I want to make sure we are not simply throwing good 
money after bad. It is critical that any rescue include three basic 
principles: First, the bill must have strong taxpayer protection. This 
means any bill must ensure that taxpayers are repaid for their 
emergency assistance and that taxpayers share in the turnaround profits 
of participating automakers.
  Second, the bill must include executive accountability so that failed 
executives are not rewarded for poor management. I do not know about 
you, but I am offended when I read in the paper that companies getting 
Federal bailout money are using it to pay bonuses. Some of them said 
they have already set the bonuses aside. Well, if they set the bonuses 
aside, they set them aside as their company was going down. Getting 
money from the Federal Government should not enable them to make those 
bonus payments.
  I have seen one major Wall Street firm saying it is going to stop 
bonuses until this crisis is over. I think that is something we should 
commend. I think that is a practice that ought to be followed.
  Third, and most important--and this is key--the bill must include 
significant financial reform so that recipients of taxpayer funds 
demonstrate that they have a plan to ensure long-term competitiveness, 
health, and profitability by bringing their costs under control.
  Funds should be conditioned on a strong restructuring plan for the 
industry and for each recipient to have funds so that this aid is a 
bridge to somewhere, not a bridge to nowhere. That is why I need to 
emphasize the need for a real financial strategy that will put the 
Detroit big three on the road to competitiveness, health, and 
profitability.
  I believe we ought to set up a system where a responsible Government 
agency, a Secretary-level official, has to approve the continuing 
plans, the goals, the definable standards that must be met, and that 
official ought to hold them accountable for accomplishing the purposes, 
cutting the costs, and making the tough business decisions that are 
necessary to assure profitability.
  Well, these are things I believe most of my colleagues want to see. I 
do not believe anybody wants to see the auto industry go down. But 
there is real concern that if we put in some money now, we may be back 
seeing them in the same condition several months down the road.
  Well, the time has come for the auto industry to lay out for 
Government officials in their ability to approve the release of these 
funds if they have a plan. And as they go forward, they ought to be 
required to show the approving official that they are taking those 
steps that are necessary to make their plants and their companies 
profitable.
  Some ask: Why don't we just allow the automakers to fall into 
bankruptcy like some in the airline industry? We all know bankruptcy 
has successfully allowed many airlines to get back in the air. I am 
afraid it would be a disaster for the thousands of parts and service 
businesses dependent on major automakers. How would they get credit to 
run their operations to supply a company in bankruptcy? How would the 
bankrupt company in the current crisis get the credit it needs to 
emerge from bankruptcy? Who is going to buy a car from a bankrupt 
company? What protections would they have for their warranties and 
other requirements they have for servicing?
  Others say a financial rescue has no place in the free market. I 
agree that generally that is a good question. But even free markets 
need oversight and a safety net. That is why we have the Federal 
Reserve, the Securities and Exchange Commission, and the Federal 
Deposit Insurance Corporation. Each of these agencies is designed to 
take emergency actions in times of emergency. Clearly, that is what we 
have. That is why we should respond now.
  There have been a lot of discussions on the source of funding for the 
auto industry, whether it should come out of the Treasury's Troubled 
Asset Relief Program, or TARP, or the Department of Energy's Section 
136 program. I am pleased to see that there seems to be broad support 
for assisting the auto industry despite the differences in funding. I 
support either or both of these measures of support, provided we meet 
the conditions I laid out which include significantly laying out a plan 
to profitability, cost cutting that will be approved and then will be 
monitored by the appropriate Government official who has the power to 
continue to release the funds.
  I will discuss in other remarks how the TARP has changed in purpose 
from what we were told it would be. It has continued to change. I am 
afraid it has caused a great deal of uncertainty, which, obviously, 
markets do not like. But before closing, I wish to suggest an area 
where there is great need and where I believe the funds under the 
Troubled Asset Relief Program can and should be used to give the 
economy a major boost, creating the jobs we badly need, and that is in 
State and local government infrastructure.
  Despite the Government's efforts to thaw the credit crunch, State and 
local governments continue to face hardships in municipal bond 
financing. People were telling me, once we got the money into the 
banks, credit would loosen up and municipal bonds could be sold. So 
far, we are not seeing that. State and local bond and debt financing is 
still a problem. In Missouri and throughout the Nation, many 
infrastructure projects are being delayed or scaled back due to credit 
problems, the inability to get credit, and they have not faced it in 
many years.
  Even State and local governments with high credit ratings are 
struggling to obtain affordable financing. In Missouri, for example, we 
have some $800 million approved in debt to rebuild our bridges. The 
city of Kansas City, MO, has $200 million it is ready to spend on its 
water and sewer infrastructure. The St. Louis Airport is badly in need 
of funding for $100 million in upgrades to facilitate commerce and 
continue to provide jobs. I believe the funds should be used to 
purchase those portions of those debts that can be used to put people 
to work in 2009. Not all of the $800 million on fixing bridges is going 
to be spent in 1 year, but there should be a reasonable judgment as to 
how much work can be started when construction season begins in the 
spring.
  We ought to be willing to have the Federal Government provide the 
funding and get the debt issuance in return, which, if they fund it at 
the current going rate for debt with the Federal Government, should be 
a no-cost ultimate cost to the taxpayer or an addition to the debt. But 
what these infrastructure jobs will do right now is provide work so 
that working men and women will be able to do things such as buy cars, 
provide for their families, spend the money to get the economy growing 
again.
  I urge Treasury to consider assisting the municipal bond market 
through the TARP program. It will not only

[[Page S10582]]

boost infrastructure investments, build the critical infrastructure we 
need to make our economy go forward, but it will create jobs. As has 
been said many times before by people a lot smarter than I, a good job 
is the best social policy we have. A good job is the basis of the 
economy.
  What we are advocating today in the bill I cosponsored with Senator 
Mikulski is a way to get cars sold so they will create jobs all up and 
down the chain in the auto industry and provide a bridge to somewhere 
for the future of the auto industry so they will get their costs under 
control, keep them out of bankruptcy, and make the changes that are 
needed to be competitive in the national and the world market.
  I urge my colleagues to join with us in the legislation by Senator 
Mikulski and also in pushing to use the TARP funds for investment in 
municipal bonds that will put people to work on infrastructure.
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