Senate Budget Committee Chairman Don Nickles Addresses ACCF Forum

ACCF Capital Formation Forum
September 2003

Senate Budget Committee Chairman Don Nickles (R-OK) knows all too well the problems facing today’s business owners. A former businessman himself, Sen. Nickles found was chagrined earlier this year when confronted with the fact that the U.S. had the highest tax on corporate distributions.

"I was embarrassed about that," Senator Nickles admitted. Fortunately for the U.S. business community, the senior senator from Oklahoma, aided by his Republican brethren, were able to drastically reduce the tax on corporate dividends, which has since dropped to 15 percent. "Now we’re in the middle of the pack," the Senator noted, adding that the tax package was an extremely positive step. Overall the Senator is pleased with recent progress on tax issues, but he also believes more needs to be done.

"It’s been a very positive year for tax policy," Senator Nickles said. "The cuts on capital gains and dividends in the President’s 2003 tax package represent a giant step in the right direction. I would like to thank the ACCF and the many others that helped us with that."

One area that warrants additional scrutiny and assistance according to Senator Nickles is the U.S. manufacturing sector.

"Manufacturing is getting killed from a couple of standpoints, asbestos and

class action lawsuits being two examples," Senator Nickles said. "Class action is probably as onerous as anything we’ve got. It is a real punitive liability on domestic manufacturing."

The domestic manufacturing sector is also feeling the heat on energy issues. Many business leaders believe that rising energy costs are just one more reason why the U.S. has lost millions of manufacturing jobs over the last three years. Energy legislation remains a top priority for Congress, according to Senator Nickles.

"I think were going to get a bill," Senator Nickles said. "It’s going to have a lot of junk in it. The junk being unnecessary subsidies. I don’t have the votes to stop some of it but I think we’ll be successful in passing something."

Senator Nickles readily admits he is frustrated with the number of subsidies and mandates in the current bill. Given his druthers, he would let the market decide energy sources. The Senator estimates that the final energy bill will cost taxpayers between $8 and $12 billion.

Senator Nickles added that he supports efforts to explore for energy sources in the Arctic National Wildlife Refuge, but he does not believe that will make it into the final energy bill.

"We’re not going to let that kill the bill," the Senator said.

A $12 billion price tag for the Senate energy bill is considerably less than the $19 billion measure proposed by the House earlier this year. One reason Senate lawmakers are likely to spend less is the ongoing and increasing cost of liberating and rebuilding Iraq.

Senator Nickles is not at all surprised by the fact that many of his colleagues are unwilling to dedicate more financial resources to domestic energy issues following the "donnybrook" over the President’s $87 billion spending package to cover the cost of the Iraq war and the country’s reconstruction.