[Congressional Record Volume 141, Number 27 (Friday, February 10, 1995)]
[Senate]
[Pages S2453-S2454]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             HELIUM PROGRAM

  Mr. FEINGOLD. Mr. President, Tuesday's business section of the 
Washington Post had an interesting article in it on the termination of 
the helium program, which is a target as elusive and difficult to rein 
in as the helium gas itself. The subheading of the article was 
entitled, ``Helium Bureaucracy Targeted by Clinton Has Survived Many 
Budget Cutters.''
  The story in the Post went on to recount how termination of the 
helium program has been on the target list for elimination by those 
seeking to find ways to reduce the Federal bureaucracy.
  The story talks about how this helium program has been on the list 
for ways to reduce the Federal bureaucracy and the Federal deficit, but 
that it has survived many attempts under the Reagan, Bush, and Clinton 
administrations, precisely because of the usual constituencies and 
political horse trading that tends to keep these programs alive.
  Mr. President, I suggest that this helium program is exactly what 
this balanced budget amendment debate is all about, or maybe the better 
way to say it is, is what this balanced budget amendment debate should 
be about. It should be about how we are actually going to balance the 
budget.
  On January 4, the first day of this Congress, I introduced 
legislation, S. 45, which would terminate the Federal helium program 
and sell off the crude helium that the Federal Government has 
stockpiled to pay off the $1.4 billion in program debt that has 
accumulated. We have good bipartisan support on the legislation. 
Senators Harkin, Lautenberg, Leahy, Reid, Kyl, Bumpers, and Campbell 
have all cosponsored this effort, once again, to try to get rid of the 
helium program.
  It did not happen to be part of the plan I proposed to reduce the 
deficit during my campaign. But I had not thought about that one. It is 
important to add new ideas because, obviously, some of the things I 
wanted to cut, you cannot cut. There are not the votes for it.
  So the helium program was a great one to add on because we found out 
it really does not make sense anymore. I, along with the cosponsors, 
want to see the 104th Congress be the Congress that finally gets rid of 
this program.
  For this reason, I was delighted when the President highlighted, as 
the first program he mentioned for a cut in his State of the Union 
Address on January 24, the helium program. He said it is one of the 
businesses that the Federal Government ought to get out of running. I 
was also pleased, of course, to see that the President added this 
proposal into his budget, and that the President submitted that to 
Congress on Monday of this week.
  In my mind, this is exactly the step-by-step approach that real 
deficit reduction is all about: Proposing a bill, hoping the President 
will push for it in his budget, getting it down here, and hoping we 
will get to work on it right away instead of waiting for the balanced 
budget amendment to be approved or not and waiting for the States to 
ratify it or not.
  I hope, before this Congress adjourns, we will have completed this 
task and turned this program over to the private sector. If there is 
any reality at all to all this talk behind a balanced budget amendment, 
then surely the helium program should be on its way out.
  There is simply no good reason for the Federal Government to continue 
to stockpile helium or run a public program when a perfectly viable 
private industry has developed that supply that we need for all of the 
Nation's helium requirements.
  Mr. President, this program, like many of the deficit reduction 
targets that I have been involved with trying to get rid of--like Radio 
Free Europe or the wool and mohair program--was begun decades ago, when 
there was a different need and purpose. These programs, however, seem 
to survive long after the original purpose, because the constituencies 
build up that are dedicated to one cause, and that is simply preserving 
and continuing their existence whether we need the program or not. This 
is certainly true of the helium program.
  This program dates back to the Wilson administration, when 
observation balloons were thought to have strategic merit. The Helium 
Act of 1925 authorized the Bureau of Mines to build and operate a 
helium extraction and purification plant in Amarillo, TX, in 1929.
  According to the GAO, a nominal private helium industry existed in 
the United States before 1937. Between 1937 and 1960, the Bureau of 
Mines was the only domestic helium producer, selling most of what it 
produced to other Federal agencies, but also supplying some to private 
firms.
  This program got an additional boost in 1960 when the Eisenhower 
administration feared there would not be a sufficient supply of helium 
to meet the demand for strategic blimps to spot 
[[Page S2454]] enemy submarines in the Atlantic, and for maintaining 
fuel tank pressure and rocket engines for the fledgling space program 
at the time.
  The 1960 act created incentives for private companies to return to 
the market and, as a result, we finally did have four private natural 
gas producing companies building five helium extraction facilities, and 
they entered the market.
  What is happening now, as of 1995, is that 90 percent of the helium 
produced in this country does come from these private operations.
  Unfortunately, though, the 1960 act also led to a growing Government-
run operation and the stockpiling of helium purchased by the Federal 
Government.
  The act also stipulated that the Bureau of Mines set prices that 
would cover all of this Government-run program's costs, including its 
debt and interest, and that Federal agencies and contractors were then 
required to buy helium from the Bureau of Mines.
  Today, Mr. President, that debt is approximately $1.4 billion, and 
some have suggested that our current stockpile could supply the 
Government's needs, if you can believe it, for the next 80 to 100 
years. Although the proponents of the program have a complicated 
argument about how this program does not really cost the Federal 
Government any money, the point is that the Federal Government does not 
need to run a helium program anymore. There is a private sector helium 
industry that can and does provide the necessary helium to the 
Government.
  By terminating the program now, Mr. President, selling off the helium 
reserves over time to ensure that the taxpayers receive a fair price 
for the helium they have financed, we can pay off the debt and, 
according to the CBO, we could recover between $1 and $1.6 billion from 
the reserves if sold at current prices. CBO also believes that we can 
double annual revenues from the program by doing this over time.
  Mr. President, achieving deficit reduction is a very difficult task. 
Programs like the helium program were created to meet certain needs. 
The defenders of the program have a variety of arguments to justify its 
continued existence, but the reality is that it appears over and over 
again on target lists for deficit reduction because it no longer makes 
any sense for the Federal Government to continue to run this program. 
It has not been terminated despite attempts of the Reagan, Bush, and 
now the Clinton administration because powerful constituencies fight to 
keep these types of programs alive.
  Mr. President we simply cannot afford to keep these programs going. 
The 104th Congress should be the place where this program is 
terminated.
  Mr. President, I ask unanimous consent that the article I referred to 
earlier from the Washington Post February 7, 1995, business section 
relating to the helium program be printed in the Record.
  There being no objection, the editorial was ordered to be printed in 
the Record, as follows:

                [From the Washington Post, Feb. 7, 1995]

                 Odorless, Colorless--and Hard To Kill

                          (By Cindy Skrzycki)

       Deep in the earth near Amarillo, Tex., the federal 
     government is sitting on a 32 billion-cubic-foot stash of 
     crude helium--enough to last 100 years--and an inflated 
     bureaucracy built on the premise that you can never have too 
     much helium.
       President Clinton burst the balloons of the helium reserve 
     program's 195 workers in his budget request yesterday, 
     singling out the federal program as one that had outlived its 
     usefulness and proposing that it be phased out. Estimated 
     savings: $16 million by 2000.
       The program dates back to the observation balloons of World 
     War I and got another boost in 1960, when Congress and the 
     Eisenhower administration feared there would not be enough 
     helium for Cold War strategic uses, including the expanding 
     space program. The program's debt to the U.S. Treasury has 
     grown from $252 million to $1.3 billion--just as impressive 
     as the supply of helium in its Texas stockpile.
       Yesterday, Clinton proposed canceling the debt, saying that 
     it would not affect the federal budget deficit.
       Its tale is one of yet another federal government program 
     that has had more than nine lives. The program has ducked 
     budget cutters in the Reagan, Bush and Clinton 
     administration, allowing employees such as Armond Sonnek, 
     assistant director for helium, and Dale Bippus, the plant's 
     general manager, to amass about 75 years of combined federal 
     service until their recent retirements. Still on the job is 
     John D. Morgan Jr., 74, chief staff
      officer of the Interior Department's Bureau of Mines, who 
     can trace the origins and applications of helium in his 
     head.
       Ironically, the helium program escaped its latest brush 
     with death in the name of stemming the growth of the deficit. 
     Just when it looked like getting rid of the program was what 
     Clinton-style reinvention of government was all about, the 
     now-defeated congressman from Amarillo, Democrat Bill 
     Sarpalius, became a key vote for the president when Clinton 
     was trying to pass his contentious budget bill in 1993.
       After Sarpalius voted with the president--providing 
     Clinton's 218 to 216 margin of victory--the program was 
     floating high again. The administration offered legislation 
     to cancel the program's debt and make it more efficient. The 
     measure never got off the ground.
       Now, the administration proposes getting out of the helium 
     business, liquidating the stockpile and selling the 
     production facility in Amarillo.
       That would end the government's involvement in helium, 
     which began in 1971, when the Bureau of Mines began 
     researching uses of the odorless gas for the military. 
     Research and production continued through World War II, when 
     the government used blimps to spot enemy submarines in the 
     Atlantic Ocean. Even now, though using helium for blimps is a 
     tiny portion of its consumption, the airships are used for 
     surveillance on the U.S. borders and weather observation--
     and, it has been reported, there may even be a stealth blimp.
       The gas, a nonrenewable resource, is more commonly used 
     today for special welding procedures, the fueling process of 
     space shuttles and magnetic resonance imaging. For those 
     applications, it has no replacement.
       It wasn't until 1960 that the Cold War scared the 
     government into buying, refining and stockpiling helium. It 
     feared shortages that would leave the National Aeronautics 
     and Space Administration and the Pentagon flat. So the Bureau 
     of Mines became owner and operator of a helium-refining 
     plant, a 425-mile pipeline, railroad cars and an unusual 
     underground helium storage facility.
       It filled an underground reservoir called the Cliffside 
     Field, near Amarillo, with helium crude bought from natural 
     gas companies. Helium, which natural gas producers had
      vented into the air, was being captured and sold to the 
     government.
       ``It was a good investment,'' said Carl Johnson, Chairman 
     of the Helium Advisory Council, a trade organization 
     representing the nation's 11 helium producers, refiners and 
     marketers. ``Without the helium collected in Cliffside field, 
     the industry wouldn't be as vibrant as it is now.''
       All this was done with a $252 million loan from the 
     Treasury to the Interior Department--which has never been 
     repaid. With back interest, the debt has grown to $1.3 
     billion. The program was intended to be self-supporting 
     through the sale of helium, but sales projections proved too 
     optimistic.
       In the minds of some, such as officials at the General 
     Accounting Office, the debt doesn't exist--it was merely an 
     intergovernmental transaction between the Treasury and the 
     late Fred Andrew Seaton, President Dwight D. Eisenhower's 
     interior secretary, who signed the note.
       Helium program staffers like to think they cost the 
     government no money since the program covers its operating 
     costs and, in 1994, returned $10 million to the federal till. 
     Plus, they point out, the government does own 32 billion 
     cubic feet of crude, unrefined helium which, at current 
     prices, is worth about $600 million.
       ``Our employees think they are giving money back to the 
     taxpayer,'' said David Barna, spokesman for the Bureau of 
     Mines. ``They feel pretty good about it.''
       There is some dispute over how the government should phase 
     out the helium program. The companies that now supply 90 
     percent of the market don't want the government opening the 
     spigot and depressing prices. After all, how many Barney 
     balloons can you sell? There also is a vocal constituency for 
     paying back the loan from the sale of the crude.
       An administration source said the government wants to 
     ``sell into a rising market'' but it needs to start 
     liquidating. The calculation is that the market could absorb 
     300 cubic feet of crude helium annually and not be the worse 
     for it.
       And, the $1.3 billion debt?
       Ever heard of forgive and forget?
       

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