Carl Levin

Yesterday, Senator McCain, Senator Lieberman, Senator Graham, and I sent a letter to President Obama stating our concerns about these proposed reductions in the Afghan security forces.

We believe that is the wrong approach. It is just too early to decide that conditions 2 or 3 years from now will allow a one-third reduction in the size of the Afghan security forces.

I share very much in that frustration and look forward to that meeting this afternoon.

The President also committed to modernization of the nuclear weapons complex. That commitment has been undercut in the fiscal year 2013 budget request which seriously underfunds the weapons complex modernization plan.

Future instances of what Mr. Kendall has labeled 'acquisition malpractice' are unaffordable and unacceptable especially with the budget cuts that we are facing.

Such leadership has been lacking in articulating the policies that will enable the Services fairly and without sacrificing readiness to achieve a drawdown of over 100,000 Active and Reserve troops.

The cost estimates for the Future Combat System, according to GAO, grew to $300 billion of the taxpayers' money, a scandal of proportions that if most taxpayers knew about it, they would share the outrage that a lot of us feel.

I am delighted to be here today to introduce Judge Gershwin Drain, whom the President has nominated to the Federal bench.

Again, we are grateful for your appearance here today.

Thank you both. We have a vote that is on now, and apparently there is only 5 minutes left.

Well, we passed a law in 2010 talking about economic substance saying that something has got to be real, it cannot be fake, and we are going after these totally phony transactions, which is what this is acknowledged to be. It is a shell…

We are not talking illegality here. We are talking tax avoidance.

They acknowledge it. But then when the IRS says they are going to allow that to be used, it undermines all the efforts we are making.

What troubles me is why there is any doubt in your mind as to what the purpose is.

I am amazed at your reluctance to say yes to the most obvious question.

The reason that these are set up in these offshore locations is so that they can avoid that impact of that section of the Tax Code.

I think your statement here today is very important and hopefully will be relied upon and counted on as being factually accurate.

Will you check out that doctrine?

The moratorium on these letters which they have sent, which gives the green light to specific mutual funds to proceed in this area, runs right into a number of doctrines.

Thank God now there is a moratorium, but you put your stamp of approval on a mechanism which is inconsistent with what you are arguing in so many cases.

They want to have their cake, which is investing in commodities, and eat it, too, by not paying what the tax would be if they did that directly in the United States.

They want to avoid triggering a tax? You do not think that is the whole purpose here, they want to avoid triggering a tax?

That runs inconsistent with your effort to pierce those shell corporations.

How do we give a green light to the use of them to qualify this kind of investment under our Tax Code?

That proves that tax avoidance is their purpose, which is exactly our point.