[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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