[Congressional Record Volume 145, Number 158 (Wednesday, November 10, 1999)]
[Senate]
[Pages S14499-S14512]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                BANKRUPTCY REFORM ACT OF 1999--Continued


                    Amendment No. 2532, as Modified

  The PRESIDING OFFICER. There are 15 minutes equally divided on the 
Dodd amendment.
  Mr. DODD. I yield myself 4 minutes under the agreement.
  This chart explains the amendment I am offering. As most of my 
colleagues are aware, there is $43 billion in uncollected child support 
in this country. If we could collect a fraction of the child support 
that is outstanding, we could make a huge difference in the lives of 
children and families all across this country.
  Despite the good efforts of those who have authored this bill on 
bankruptcy, there is a major gap in this bill. The major gap affects 
the very people this number reflects for child support recipients. This 
bill places at a significant disadvantage women and children who may 
get caught up in the turmoil of a bankruptcy proceeding and leaves them 
at a significant disadvantage with respect to meeting the basic 
necessities in their lives.
  This morning's Washington Post made the case abundantly clear in the 
lead editorial. It said that the Congress should make sure that in the 
name of financial responsibility it does not unduly squeeze people who, 
because of job loss, family breakup, medical bills, et cetera, can't 
help themselves. These are the people affected by this amendment 
Senator Landrieu and I have offered and on which we will ask for your 
votes shortly.
  Children and families are the most vulnerable. The median income of a 
person who files for bankruptcy is around $17,000 a year; for a woman 
filing for bankruptcy, that number is a lot lower than $17,000 a year.
  Unfortunately, this bill does not appear to treat these people as we 
have for almost 100 years. Since the first bankruptcy law was passed in 
1903, women and children came first in the line of distributable assets 
in bankruptcy. They are going to be protected no matter what other 
tragedy has befallen. No matter what other rights creditors may have, 
they will not be allowed to disadvantage innocent children and women 
who have to depend upon some income in order to provide for their 
families. Unfortunately, this bill leaves gaping holes in this area.
  The amendment we have offered has been endorsed by 180 organizations, 
every imaginable family organization in this country. It does the 
following four things:
  First, we say creditors can't seize or threaten to seize bona fide 
household goods, such as books, games, microwave ovens, and toys. As 
written today, S. 625 provides no protection against repossession of 
operations of business, coming into a home and removing such items from 
a family. Needless to say, that would be an unsettling, intimidating 
occurrence for families and children. I don't think this body wants to 
go on record ratifying these kinds of scare tactics. I appreciate 
Senator Grassley's support for this provision.
  Second, we say if people in bankruptcy are put on a budget and they 
cannot repay some of their debts, it ought to be a realistic budget. 
The bill puts them on a budget based on IRS guidelines for people who 
owe back taxes. Unfortunately, those guidelines ignore obligations such 
as child care, school supplies, and church tithes. We say the 
bankruptcy judge ought to be allowed to at least consider these kinds 
of valid, often necessary expenses when it comes to family needs.
  Third, we say money for kids should go to kids, not creditors. We 
mean that funds a parent receives for the benefit of children--like 
child support payments or earned income tax refunds--should not be 
divvied up among creditors. They ought to be reserved for the children.
  I want the manager of the bill to have a chance to make his argument 
against the amendment, and then I will respond.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, this bill, the original bill, contains 
many

[[Page S14500]]

provisions to help collect past due child support. This is not just the 
authors saying this. These provisions are endorsed by the prosecutors 
who actually enforce child support laws.
  On another point, in response to what the Senator from Connecticut 
has said, if one is under the median income, the means test doesn't 
even apply to that person. The people Senator Dodd is worried about 
won't be affected.
  In a more broad sense, this amendment should be defeated. First, the 
means test we now have in the bill is very flexible. The charge has 
been that we are not flexible enough. I will point out that 
flexibility. If a bankrupt is in a unique or special situation, our 
bill, the means test, allows that person to explain his or her 
situation to the judge or to the trustee and thus get out of paying 
these debts if there are special expenses. If these special expenses 
are both reasonable and necessary and this reduces repayment ability, 
the debtor doesn't have to repay his or her debts.
  The way we determine living expenses in this bill is to use a 
template established by the Internal Revenue Service for repayment 
plans involving back taxes.
  I have a chart and a study of the bill which was done by the General 
Accounting Office. The General Accounting Office noted in its June 1999 
report, which was to Congress, and a report about bankruptcy reform, 
that this template includes a provision allowing a debtor to claim 
child care expenses, dependent care expenses, health care expenses, or 
other expenses which are necessary living expenses. Tell me, with all 
these things included, and with the General Accounting Office backing 
up the intent of our legislation, that this bill is not flexible, that 
this bill does not take into consideration the living expenses and 
needs of the potential person in bankruptcy.

  This is, frankly, as flexible as you can get. According to the 
General Accounting Office and the Internal Revenue Service, living 
standards in the bill now provide that any necessary expense can be 
taken into account. The only living expenses not allowed under this 
bill are unnecessary and unreasonable expenses. What is wrong with not 
allowing unreasonable and unnecessary expenses? The only people who 
oppose the means test as currently written are people who want 
deadbeats looking to stiff their creditors to dine on fancy meals and 
to live in extravagant homes and to take posh vacations.
  On the issue of household goods, this might by a surprise to the 
Senator from Connecticut, but I tend to agree with some of what he said 
now and last night. If Senator Dodd were to modify his amendment, just 
to deal with household goods, I will be pleased to work with him on 
that, to get the amendment accepted. But his amendment does much more 
than just deal with the household goods issues. I simply cannot accept 
these other changes.
  Finally, this amendment by the Senator from Connecticut makes fraud 
much easier because the problem we must address in doing bankruptcy 
reform is that some people load up on debts on the eve of bankruptcy 
and then try to wipe out those debts, wipe them all away, by getting a 
discharge. Obviously, this is a type of fraud which Congress needs to 
protect against. The bill now says that debts for luxury items 
purchased within 90 days of bankruptcy in excess of $250, and cash 
advances on credit cards made within 70 days in excess of $750, are 
presumed to be nondischargeable. This is pretty flexible on its face. 
Under the bill now, you can buy $249 worth of luxury items such as 
caviar the day before you declare bankruptcy and still walk away scot-
free. Under the bill, you can get $749 worth of cash advances minutes 
before you declare bankruptcy and still walk away scot-free.
  But this is not enough for the people proposing this amendment. So 
the question we have to answer is how much fraud do we want to 
tolerate? This amendment is way off base. If you want to crack down on 
out-and-out fraud, and that is what we are talking about, you should 
support the bill and you should be against this amendment because by 
supporting the amendment, you make it easier for crooks to game the 
bankruptcy system and get a free ride at everyone else's expense. 
Consequently, if you do not want to do that, you will not support the 
Dodd amendment. I oppose the amendment and I ask my colleagues to do 
the same.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. Mr. President, crooks and scam artists there may be, but in 
our appetite, to go after the scam artist, we should not make women and 
children pay the price. To suggest somehow that someone is scamming the 
system because they buy $251 worth of goods and services they may need 
for their children, that they are somehow ripping off the system, is to 
approach being ludicrous when it comes to this.
  I have great respect for prosecutors, and the General Accounting 
Office. But when 180 organizations representing every family group in 
this country from the right to the left, if you will, strongly support 
this amendment because it tries to do something to protect these 
families, then we have achieved a new low when it comes to speaking 
about families and children with one voice and then turning around and 
doing violence to them.
  The IRS schedule is not terribly flexible. I ask unanimous consent it 
be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

   COLLECTION FINANCIAL STANDARDS--ALLOWABLE LIVING EXPENSES FOR FOOD, CLOTHING AND OTHER ITEMS; TOTAL MONTHLY
                                  NATIONAL STANDARDS (EXCEPT ALASKA AND HAWAII)
----------------------------------------------------------------------------------------------------------------
                                                                        Number of persons
           Total gross monthly income           ----------------------------------------------------------------
                                                     One          Two         Three         Four      Over four
----------------------------------------------------------------------------------------------------------------
Less than $830.................................          345          466          579          726         +125
$831 to $1,249.................................          391          525          646          762         +135
$1,250 to $1,669...............................          433          630          737          800         +145
$1,670 to $2,499...............................          527          685          781          830         +155
$2,500 to $3,329...............................          554          769          863          924         +165
$3,330 to $4,169...............................          620          830          948        1,063         +175
$4,170 to $5,829...............................          773          957        1,018        1,170         +185
$5,830 and over................................          991        1,235        1,399        1,473         +195
----------------------------------------------------------------------------------------------------------------


                                                               MONTHLY NATIONAL STANDARDS
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                           Gross Monthly Income
                                                 -------------------------------------------------------------------------------------------------------
                      Item                         Less than     $831 to     $1,250 to    $1,670 to    $2,500 to    $3,330 to    $4,170 to    $5,830 and
                                                      $830        $1,249       $1,669       $2,499       $3,329       $4,169       $5,829        over
--------------------------------------------------------------------------------------------------------------------------------------------------------
One Person:
    Food........................................          170          198          214          257          270          325          428          456
    Housekeeping supplies.......................           18           20           21           26           27           29           35           43
    Apparel & services..........................           43           52           75          120          127          129          168          334
    Personal care products & services...........           14           21           23           24           30           37           42           58
    Miscellaneous...............................          100          100          100          100          100          100          100          100
                                                 -------------------------------------------------------------------------------------------------------
      Total.....................................          345          391          433          527          554          620          773          991
Two Persons:
    Food........................................          228          227          351          365          424          438          515          635
    Housekeeping supplies.......................           23           27           28           40           46           51           57           74
    Apparel & services..........................           71           72           98          121          128          167          202          335
    Personal care products & services...........           18           24           28           34           46           49           58           66
    Miscellaneous...............................          125          125          125          125          125          125          125          125
                                                 -------------------------------------------------------------------------------------------------------

[[Page S14501]]

 
      Total.....................................          466          525          630          665          769          830          957        1,235
Three Persons:
    Food........................................          272          326          390          406          444          488          545
    Housekeeping supplies.......................           24           28           29           41           47           55           58
    Apparel & services..........................          110          114          134          143          175          205          206
    Personal care products & services...........           23           28           34           41           47           50           59
    Miscellaneous...............................          150          150          150          150          150          150          150
                                                 -------------------------------------------------------------------------------------------------------
      Total.....................................          579          646          737          781          863          948        1,018
Four Persons:
    Food........................................          374          376          406          416          472          574          629
    Housekeeping supplies.......................           36           37           38           46           49           57           60
    Apparel & services..........................          114          145          146          147          179          206          244
    Personal care products & services...........           27           29           35           46           49           51           62
    Miscellaneous...............................          175          175          175          175          175          175          175
                                                 -------------------------------------------------------------------------------------------------------
      Total.....................................          726          762          800          830          924        1,063        1,170
More Than Four Persons: For each additional               125          135          145          155          165          175          185
 person, add to four-person total allowance.....
--------------------------------------------------------------------------------------------------------------------------------------------------------

  Mr. DODD. Find for me the word ``children'' anywhere in this 
schedule. It does not show up, not once. There is no flexibility at 
all. It is very rigid in terms of how it applies. There is no 
consideration for the regions of the country where people live, whether 
you live in New York City or Iowa or Connecticut or the State of Ohio. 
It is a one-fix system, across the board.
  I appreciate the Chairman and others who have tried to do something 
on the means test. If you think it is so flexible, then merely adopt 
this amendment. What you have also left out, of course, is that you 
still allow for funds that a parent receives to the benefit of children 
to be dissipated. Things like child support payments and earned-income 
tax credits, which you do get if you are making $17,000 a year, should 
not be divided up among creditors. As the bill presently reads, that 
can happen. That is why 180 organizations are vehemently opposed to the 
present language of this bill.
  Let me go on. With regard to the seizing of household goods, again 
there is nothing in this bill, nor the managers' amendment that 
prohibits these repossession operations from coming in and taking toys 
and books and VCRs that may be necessary for the education of children.
  Lastly, the bill says if a consumer buys food, clothing, medicine, 
and similar items on credit within 90 days of a bankruptcy filing, and 
if the value of those items exceeds $250, then they are presumed to be 
luxuries and the person filing the bankruptcy has to hire a lawyer to 
defend such purchases, make the case they were not luxury items. That 
is what the bill says. That goes far beyond anything we have ever done 
in 100 years in bankruptcy law, to turn around and say the present law 
says $1,075 over 60 days. Our amendment says $400 per item or service 
in 60 days. The bill provides for a total of $250 in 90 days, while 
mine provides a more rational and reasonable itemized sum--per item or 
service--in 60 days. The managers' amendment does not say anything 
about that at all.
  This would be a travesty, an absolute travesty to say we are going to 
make families go into court and prove, when they went to Kmart and 
bought $251 worth of goods in the last 60 days, that they are not scam 
artists. Maybe there are some out there, but let's not let the millions 
of people who get caught in a bankruptcy proceeding because someone is 
sick and they lose a job, that somehow they are going to have to hire a 
lawyer and defend themselves for $250. This amendment is critical.
  Mr. President, I ask unanimous consent for 1 additional minute?
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DODD. This amendment is as critical as it gets to this bill. We 
are doing a lot to help the credit card companies. This is going to 
reduce the number of bankruptcies. But in our zeal to do that, do not 
allow this to happen. This would really be a major setback. Since 1903, 
we have put children and families in the exalted position of not 
allowing them to be brought in and damaged in bankruptcy proceedings.
  They are not going to get off scot-free. They have obligations to 
pay. But to say, somehow, we are putting families first because we have 
a flexible means test, disregarding all the other things that are in 
this bill, would be a major setback of significant proportions.
  The Washington Post editorial this morning is right on point. This is 
the amendment they were talking about. We urge our colleagues to 
support it.
  Mr. BIDEN addressed the Chair.
  Mr. GRASSLEY. I yield the Senator from Delaware 1 minute.
  Mr. BIDEN. Mr. President, under the present law there are 
nondischargeable items with cash advances. It is a little over $1,000. 
This goes down to $750. There is a difference, but it is not what the 
Senator from Connecticut makes it out to be.
  No. 2, in the means test in terms of ``other necessary expenses,'' it 
includes such expenses as charitable contributions, child care, 
dependent care, health care, payroll deductions--that is taxes, union 
dues, and life insurance. It is not true they are not able to be viewed 
as ``other expenses'' to be considered within bankruptcy.
  I understand the Senator's point. I think he doth protest too loudly. 
It is not $1,000; it is $750. That is true. It is a $250 difference. 
That is what we are arguing about.
  I have no more time, so I yield the floor.
  Mr. HATCH. Mr. President, I rise in opposition to the amendment 
offered by Mr. Dodd and others, which has many components that 
undermine the kind of bankruptcy reform we are seeking to accomplish in 
this bill. The amendment creates new windfalls for debtors in 
bankruptcy. It imposes an artificial definition of gross income which 
excludes major sources of income. This would undermine both the means 
test and the obligation that debtors pay all their disposable income to 
creditors in chapter 13 plans. Furthermore, the amendment undercuts the 
bill's definition of household goods, allowing virtually any frivolous 
item a debtor owns to qualify as a ``household good''.
  The amendment claims to be ``pro-family'', but it takes a tremendous 
step backward with respect to families--particularly those who work 
hard to pay their bills every month. I have worked very hard, along 
with Senator Torricelli, provision by provision, to ensure that this 
bill is an important for families over current bankruptcy law. I 
described in considerable detail last week the particular provisions in 
the bankruptcy bill that are designed to help families, along with the 
amendment Senator Torricelli and I developed to further enhance these 
provisions. Therefore, I am deeply concerned by the fact that this 
amendment inexplicably allows debtors to discharge debts without being 
responsible to repay what they can afford.
  A practical effect of this amendment is to allow rich debtors to 
defraud their creditors. Debtors with high income who are receiving 
child support could subtract child support from the calculation of 
their ability to repay. Thus, a debtor who earns $100,000 per year and 
receives an additional $25,000 in child support, and who has mortgage, 
car, and household expenses equaling $100,000, can go bankrupt in 
chapter 7 and walk away with $25,000 a year. This windfall to the 
debtor is passed on the hardworking families that end up subsidizing 
the cost of bankruptcies of others.

[[Page S14502]]

  Furthermore, the definition of household goods in the amendment 
allows debtors to avoid a security interest in expensive items like 
$2,000 stereo systems. I am mystified by why windfalls to debtors of 
this kind are viewed as pro-family. I have been reminded many times 
during the course of this debate that bankruptcies end up costing every 
American family at least $400 per year. When these windfalls are 
incorporated into our bankruptcy laws, hardworking American families 
end up paying for them.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent for 1 minute so 
I can have the same 1 minute the other side had.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. Mr. President, I want to point out the big deal the 
Senator from Connecticut made about the IRS regulations and the 
guidelines not mentioning the word ``children.''
  The point is very clear, from the General Accounting Office, but in 
their study of the IRS guidelines, under a category ``other necessary 
expenses,'' if it does not mention children, if it does not take the 
needs of children into consideration, what in the heck do the words 
``child care'' mean? What does ``dependent care'' mean, if the needs of 
children are not taken into consideration? It may not be mentioned in 
the IRS guidelines per se, but under ``other necessary expenses,'' it 
is very clear that the needs of every child will be taken care of.
  I yield the floor.
  The PRESIDING OFFICER. The question is on agreeing to the amendment.
  Mr. DODD. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The question is on agreeing to amendment No. 
2532, as modified. The yeas and nays have been ordered. The clerk will 
call the roll.
  The legislative assistant called the roll.
  Mr. FITZGERALD (when his name was called). Present.
  Mr. NICKLES. I announce that the Senator from Arizona (Mr. McCain) 
and the Senator from Pennsylvania (Mr. Santorum) are necessarily 
absent.
  Mr. REID. I announce that the Senator from California (Mrs. Boxer) is 
necessarily absent.
  The result was announced--yeas 45, nays 51, as follows:

                      [Rollcall Vote No. 365 Leg.]

                                YEAS--45

     Akaka
     Baucus
     Bayh
     Bingaman
     Breaux
     Brownback
     Bryan
     Byrd
     Cleland
     Conrad
     Daschle
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Graham
     Harkin
     Hollings
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerrey
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Mikulski
     Moynihan
     Murray
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Torricelli
     Voinovich
     Wellstone
     Wyden

                                NAYS--51

     Abraham
     Allard
     Ashcroft
     Bennett
     Biden
     Bond
     Bunning
     Burns
     Campbell
     Chafee, L.
     Cochran
     Collins
     Coverdell
     Craig
     Crapo
     DeWine
     Domenici
     Enzi
     Frist
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hutchinson
     Hutchison
     Inhofe
     Kyl
     Lott
     Lugar
     Mack
     McConnell
     Murkowski
     Nickles
     Robb
     Roberts
     Roth
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner

                        ANSWERED ``PRESENT''--1

       
     Fitzgerald
       

                             NOT VOTING--3

     Boxer
     McCain
     Santorum
  The amendment (No. 2532) was rejected.
  The PRESIDING OFFICER. The Senator from Minnesota.


                           Amendment No. 2752

  Mr. WELLSTONE. Mr. President, could I have order in the Chamber?
  Mr. President, we are now dealing with amendment 2752. Is that 
correct?
  The PRESIDING OFFICER. The Senator is correct.
  Mr. WELLSTONE. I thank the Chair.
  Mr. President, we will start this debate tonight, and we will 
conclude the debate on Wednesday. There will be an hour of debate on 
Wednesday as well. I want to give this a little bit of context. Mr. 
President, could I have order in the Chamber? Would Senators please 
take their conversation outside the Chamber?
  I thank the Chair.
  Mr. President, I will start out with some narrative that was written 
by Jodi Niehoff, who works with me, and who is the daughter of dairy 
farmers, Jane and Loren Niehoff, in Minnesota from Melrose, MN, and 
close thereby.
  Grove Township is 6 miles by 6 miles. It is a typical Midwest 
township. Fields of wheat, corn, some oats, and alfalfa span across the 
township line. In Grove Township, as in surrounding townships, the 
biggest topic of conversation is the economic farm crisis.
  There are fewer and fewer folks attending to local board meetings. It 
is not because fewer folks care. It is because there are fewer farmers 
around.
  In Grove Township, regardless of which gravel road one chooses to 
travel along, one will inevitably drive by an abandoned farm. Let me 
begin by illustrating how the farm crisis affects rural communities. 
I'll use Grove Township as an example.
  Sometimes we have these debates, and we never talk about it in terms 
of people.
  Reuban Schwieters--Reuban just recently quit farming. Reuban and his 
wife Paula and their young boys sold half of the farm. Reuban is now 
pouring cement at a local construction company.
  The PRESIDING OFFICER. The Senate will be in order. Senators will 
please take their conversations elsewhere.
  Mr. WELLSTONE. Mr. President, I will just keep speaking, and if you 
can't get order, I will get order.
  Mr. President, I would say to colleagues that we could have had a 4-
hour debate tonight. Colleagues wanted to go home. So I was 
accommodating because I think all of us want to get back for Veterans 
Day. We start this debate tonight about agriculture. It is taken me 
probably about 8 weeks to get this amendment on the floor.
  I would appreciate it if colleagues would take their conversations in 
the back of the room outside. If we would have order in the Chamber, I 
am not going to speak until we do.
  Mr. President, I thank the Chair.
  I don't like reading about people's lives, many of whom have lost 
their farms, and have Senators out here on the floor and others 
speaking as if it makes no difference.
  Reuban Schwieters--as I said, Reuban just recently quit farming. He 
and his wife Paula and three young boys sold half their farm. Reuben is 
now pouring cement at a local construction company. Bear again in mind, 
these loss of farms is just in Grove Township in my State of Minnesota.

  Steve and Lori Sand lived about 3 miles from Reuben and Paula. Steve 
and Reuben went to school together. Steve began farming next to his 
father's farm since at that time his father Wally was not ready to 
retire. Steve and Lori, their three daughters, and son could not hang 
on to the farm. The prices were too low to maintain a household of six 
and still run the family farm. They moved to Cottage Grove, MN, where 
Steve does construction and his wife Lori is now a computer technician. 
Incidentally, Steve's father Wally has retired, but none of his 
children or grandchildren has taken over the family farm.
  These are Minnesotans willing to let their names be used so I can 
tell their story, which is the story of what is happening in 
agriculture.
  Allen Nathe closed down his farm and is now doing small engine 
repairs. Gloria Schneider sold the farm to her son Glen. Glen and his 
wife farmed only a few years before they sold their family farm and he 
and his wife and small daughter moved to Minneapolis.
  Dave Feldewerd sold his farm and is also driving a truck. Mike 
Ellering recently sold his farm and is working construction. Danny 
Frieler and his family quit farming. They still live on the farm, but 
the barns stand hollow. Marcy Wochnik recently retired and sold her 
farm to her son, and her son tried for a few years before he threw in 
the towel. Marcy moved into a house only a mile from a farm. No one has 
yet purchased the farm.

[[Page S14503]]

  I am going through the story of farmers and farm families who have 
quit farming in Grove Township, one township in the State of Minnesota, 
a small story that tells a large story of what is happening to 
agriculture and the ``why'' of the amendment I introduced tonight with 
Senators Dorgan, Daschle, Johnson, Leahy, and other Senators.
  Alvin and Mary Hoppe also recently sold their farm and moved off the 
farm. Mary commutes to St. Cloud, and her husband has been doing 
mechanical jobs. Their son Jason is 12 years old, but he has always 
been by his father's side eager to learn farming. Despite Jason's 
enthusiasm and interest to farm, given the current conditions in 
agriculture, it is difficult for his parents to recommend this 
occupation.
  This is only a corner of Grove Township in my State. If one crosses 
the water, one will be in Oak Township, where I could go through 
another list of farmers who have also had to quit farming. About a 
quarter of a mile from the Grove and Oak Township line lies the small 
town of New Munich. Since 1996, New Munich has also declined in 
residents. The effects of the farm crisis are apparent just walking 
along Main Street. Ostendorf Grocery closed. Marvin, who is known as 
Bud, and his wife Rosie have moved on. Rosie commutes to St. Cloud and 
sells retail clothes, and Bud works at a factory. Ostendorf Grocery was 
a practical general store. After Sunday mass, folks from the 
congregation would make quick stops for any last-minute items or simply 
visit with Rosie and Bud. During the week, farmers often would run into 
town to pick up a needed ingredient or item at the store. As in most 
towns, Ostendorf Grocery also served as the news and information 
center. Rosie always knew of the current events in the area, and folks 
enjoyed spending a few minutes to talk to her and Bud. Gone.
  Since 1996, the elementary school closed. The school closing affected 
the local businesses. The school also has been used for community 
events. Schoolchildren, particularly farm kids, now face much longer 
bus rides to school.
  Thielen Meats will close by the end of this year. Thielen Meats was a 
little mom-and-pop meat shop located across from the J.C. Park. Many 
farmers would bring a hog or a cow to be butchered by their family. The 
larger shipments of livestock delivered to Thielen Meats were sold 
directly to residents in the town or in the surrounding area.

  Kenny and Rita Revermann may also be closing the True Value Hardware 
store. After the school closing, the grocery store closing, and the 
recent news of the meat shop closing, the trips made by farmers to New 
Munich will grow fewer and fewer.
  I have letters from farmers from Minnesota, Kentucky, Iowa, Kansas, 
Montana, and Missouri. Over and over again, if I had to summarize, 
these farmers say: We have record low prices, we have record low 
income, we are not going to be able to make it, it doesn't matter 
whether we work 19 hours a day, it doesn't matter how good a manager we 
are, there are economic forces that are destroying our lives.
  So far, Senators have not helped. So far, we have acted as if this 
crisis didn't exist. This amendment tonight, which calls for a 
moratorium on all of these mergers and acquisitions of the huge 
conglomerates makes it hard for our family farmers and producers to 
have any leverage when they are only dealing with three buyers. If you 
are at an auction and you have three buyers for a product, what kind of 
price do you get?
  This is just the first amendment. The first vote next week will be 
the beginning of a major floor fight over and over again until we 
change farm policy in the country. It is not just a question of people 
losing their farms, it is a question of our rural communities. When 
people lose their farms, it is more than just a family. We are seeing a 
rising incidence of divorce. We are seeing all kinds of tensions within 
families. We have too many suicide lines that are being used now. We 
have too much depression. We have too many farmers without any life 
insurance, too many farmers without any health insurance, too many 
farmers without any health and dental care, too many farmers with too 
little self-esteem.
  Mr. LOTT. Will the Senator yield?
  Mr. WELLSTONE. I am happy to yield to the majority leader.
  Mr. LOTT. Mr. President, I appreciate the cooperation of the Senator 
from Minnesota. He has been waiting a long time to get this 
opportunity. We told him he would get it, and he has it.
  For the information of all Senators, the Senate will now debate the 
pending Wellstone agriculture amendment. However, no further votes will 
occur this evening. I want to make that clear. We will hotline both 
sides so our Members will know there are no further votes this evening.
  The Senate will not be in session on Veterans Day, and we will 
convene next on Tuesday, November 16. On Tuesday, I expect the Senate 
to debate and possibly complete action on any number of items arriving 
from the House of Representatives relative to the appropriations 
process and perhaps other conference reports. I will be discussing the 
specifics of what the schedule will be with Senator Daschle, and we 
will keep Members informed of the subject matter.
  By a previous order, the Senate will conduct a vote relative to the 
Wellstone agriculture amendment on Wednesday of next week. I suspect 
additional votes will be required in order to finish the necessary 
items pending between the two Houses of Congress. The continuing 
resolution we passed will expire at midnight on Wednesday. I think that 
will give the Senate more than enough time for final negotiations to be 
completed, for the House to act, for the package to be received in the 
Senate, and complete action on Wednesday. However, that is a deadline I 
believe we can meet, and we should work to complete our work for the 
year by then.
  We will let Senators know, of course, if there is to be a big package 
of votes during the day on Wednesday. We will notify Senators exactly 
what time that will be. Senators should be prepared for the voting to 
begin as early as 10 o'clock on Wednesday on the Wellstone amendment.
  I urge all Senators to be patient and accommodating during the next 
few days of the session. I thank all Members in advance for their 
cooperation.
  We have a number of nominations we have been working assiduously to 
clear on both sides of the aisle. These are judicial nominations and 
other nominations. We have a couple more issues we have to check on to 
confirm everything we agreed to has been worked out. Also, Senator 
Daschle and I have talked at great length about how to handle the 
judicial calendar. I think we have a fair arrangement.
  I ask unanimous consent a colloquy between the two of us be printed 
in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DASCHLE. Mr. President, it's my understanding that the majority 
leader has committed to proceeding to the nominations of Richard Paez 
and Marsha Berzon to the ninth circuit court of appeals no later than 
March 15, 2000. Is that correct?
  Mr. LOTT. That is correct. I will move to proceed to each of these 
nominations no later than March 15 of next year.
  Mr. DASCHLE. It is also my understanding that the majority leader 
will work to clear the remaining judges left on the executive calendar 
this year, and if they can't be cleared, he will move to proceed to 
each of the remaining judicial nominees no later than March 15 of next 
year. Is that also correct?
  Mr. LOTT. That is my hope. In addition I do not believe that 
filibusters of judicial nominations are appropriate and, if they occur, 
I will file cloture and I will support cloture on the nominees.
  Mr. DASCHLE. It's my understanding that Senator Hatch supports your 
view of cloture on these nominations. Is that correct?
  Mr. LOTT. Senator Hatch will have to speak for himself but it is my 
understanding that he supports all of these nominations and will 
support cloture if necessary.
  Mr. DASCHLE. I thank the majority leader.
  Mr. LOTT. I yield the floor.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. WELLSTONE. Mr. President, tonight I speak, Wednesday I speak, and 
Wednesday we debate a crisis that is

[[Page S14504]]

ravaging rural America. I started out speaking about this crisis in 
personal terms, in human terms. On present course, the conservative 
estimate is we will lose 7,000 farmers this next year, but it could be 
more in Minnesota. On present course, over the next couple of years we 
are going to lose a whole generation of producers, if we do not change 
our course of policy.
  I do not believe family farmers in my State of Minnesota, or family 
farmers in America, will be able to continue to farm or will their 
children be able to farm, unless we change the structure of 
agriculture. Bob Bergland, who was Secretary of Agriculture in the late 
1970s, commissioned a report called ``The Structure of Agriculture.'' 
He now lives in northwest Minnesota. It was prophetic.
  In the past decade and a half, we have seen an explosion of mergers 
and acquisitions and anticompetitive practices that have raised 
concentration in agriculture to record levels. Everywhere family 
farmers look, whether it is who they buy from or who they sell to, it 
is but a few firms that dominate the market.
  The top four pork producers have increased their market share from 36 
percent to 57 percent. The top four beef packers have expanded their 
market share from 32 percent to 80 percent. The top four flour millers 
have increased their market share from 40 percent to 62 percent. The 
market share of the top four soybean crushers has jumped from 54 
percent to 80 percent.
  The top four turkey processors now control 42 percent of production. 
Mr. President, 49 percent of all chicken broilers are now slaughtered 
by the four largest firms. The top four firms now control 67 percent of 
ethanol production. The top four sheep, poultry, wet corn, and dry corn 
processors now control 73 percent, 55 percent, 74 percent and 57 
percent of the market, respectively. The four largest grain buyers 
control nearly 40 percent of elevator operators.
  The effect of this concentration has basically been to squeeze our 
producers out. Our family farmers no longer have the leverage or the 
power in the marketplace to get a decent price. This amendment is a cry 
from the countryside. Everywhere I go in Minnesota and other States, 
farmers say: We cannot get a decent price because of this concentration 
of power, because of this monopoly power. We are not able to survive. 
When we look at the packers and we look at the grain companies and we 
look at the exporters and we look at the processors, they are making 
good profits, sometimes record profits, but we cannot get a decent 
price.
  Farmers say to me: Where is the competition in the food industry? 
This amendment is an effort to put some competition back into the food 
industry. We are talking about an 18-month moratorium.
  We are saying what we need to do is take some time out. Something is 
not working. We passed the Sherman Act. We passed the Clayton Act. 
Estes Kefauver was a great Senator who talked about antitrust action. 
But we have had this wave of mergers and acquisitions that have led to 
precious little competition. Again, these conglomerates have exercised 
their power over our producers and our producers cannot get a decent 
price.
  This amendment is not the be-all or the end-all, but I say to my 
colleagues, if you believe in competition and if you believe family 
farmers ought to have a chance in the marketplace, then the very least 
we can do is pass an amendment that says when it comes to these large 
agribusinesses, these large conglomerates with $100 million and over 
revenue buying up a company with at least $10 million, we ought to say 
we are going to have a moratorium on this.
  For 18 months, we set up a review commission and then we come up with 
recommendations and we pass some legislation that gives our producers a 
fair chance in the marketplace. If we pass that legislation in 2 months 
or 3 months, then this moratorium is no longer operative.

  Built into this amendment I introduced with Senator Dorgan and other 
colleagues is the opportunity, if you will, the waiver that any 
business can file with the Justice Department, where a business can 
say: We have to merge or we have to buy because we are facing financial 
insolvency. We allow for that. But we have to pass this kind of 
amendment now because over and over again, every single day, we are 
seeing these acquisitions and mergers; more and more concentrated 
power, more and more concentrated power which is harmful to our 
producers and harmful to our consumers and harmful to America.
  On present course, we are going to see a few large conglomerates that 
are going to control every phase of the food industry from the seed to 
the supermarket or grocery shelf. We are going to have a few 
landowners. Somebody is going to own the land and somebody is going to 
own the animals, but it is going to be just a few conglomerates.
  That is dangerous for our country. Thomas Jefferson told us it was 
dangerous; Andrew Jackson told us it was dangerous; Abraham Lincoln 
told us it was dangerous; Teddy Roosevelt, later on, told us it was 
dangerous. Why are we not, in the Senate and House of Representatives, 
willing to pass some legislation which will promote competition, which 
will protect consumers, and which will give our farmers and our 
producers who are going under some leverage in the marketplace? This 
legislation is also important to the environment, to our rural 
communities, and to democracy.
  Just yesterday the Wall Street Journal reported that Novartis and 
Monsanto, two of the biggest agribusiness giants, may be merging. The 
Wall Street Journal accurately states:

       The industry landscape seems to be changing every day.

  In fact, the ground is constantly shifting beneath our feet and it 
soon may be too late to do anything about it. That is why we need a 
time out. That is exactly what this amendment calls for.
  Too many corporate agribusinesses are growing fat and too many 
farmers are facing extinction and very lean times. Clearly, we cannot 
count on the current antitrust statutes and antitrust authorities to 
address this rapid consolidation. We are going to have to do better. We 
are going to have to change our laws to enable someone like Joel Klein, 
who is so skillful and so gifted, to be representing family farmers. 
Whether or not our antitrust agencies have the authority, we need to 
move forward. We have to develop a new farm policy and we know it is 
going to take some time. But we do not have much time left.
  The question for Senators is, Whose side are we on? Whose side are we 
on? Are we on the side of the packers and the grain companies, or are 
we on the side of family farmers? I mean this. I mean this very 
sincerely. I know, because I have heard from other Senators, that you 
have a lot of these big companies and they are sending in faxes and 
letters and they are lobbying hard.
  But aren't we going to be for the producers? Aren't we going to be 
for the family farmers in our States? For Senators who are not from the 
farm States, who do you want to control agriculture? Isn't food a 
precious item? Should we not give these producers a fair shot? Wouldn't 
it be better for the environment to have family farmers? Wouldn't it be 
better for our rural communities? Wouldn't it enable us to continue to 
count on being able to purchase food at a reasonable price? Why in the 
world would we want to move to a corporatized, industrialized 
agriculture, where a few conglomerates control the whole food industry?
  That is not competition. That is not Adam Smith's invisible hand. 
That is not the United States of America. I offer this amendment 
tonight with my colleagues. We will have the debate again next week, 
and then we will have the vote because we need to take some action.
  We have to act now, otherwise there are going to be more mergers and 
it is going to be too late, and we are going to lose, as I said 
earlier, a whole generation of family farms.
  I have seen some of these faxes and letters that have come in. I do 
not even have this in writing before me, but I can almost remember it. 
Some of them say: Oh, my gosh, this is a threat to co-ops.
  Co-ops are not covered.
  Some of these letters say: But if you want to sell your farm, then 
you can't sell your farm.
  This does not apply to farms, it applies to these agribusinesses.

[[Page S14505]]

  Then some say: This is going to stop all mergers and acquisitions.
  That is not true either. We set up a test. There is a Hart-Scott-
Rodino test right now where, if you have a big company, the Justice 
Department has to take a look at you to see whether or not you are in 
violation of antitrust laws. We are applying this to the large 
conglomerates and large agribusinesses.
  Then there is the argument, if a company is going under this, this 
would prohibit them from selling or buying. That is not true either. 
There is a waiver with the Justice Department for companies faced with 
financial insolvency.
  The question is whether or not the Senate is willing to take some 
action right now that will make a difference. I cannot think, I say to 
every single colleague, of any vote that we will cast when it comes to 
family farms and agriculture that is more telling in terms of what the 
Senate is about.
  We have a few conglomerates. My case is compelling. They control well 
over 50 percent of the market. When farmers look to from whom they buy 
and to whom they sell, it is monopoly or oligopoly at best. They cannot 
get a decent price.
  This amendment to the bankruptcy bill--by the way, on present course, 
more and more farmers will be faced with bankruptcy--let us have at 
least a moratorium on these mergers of these large conglomerates. Let's 
at least step back for 18 months, set up a commission, study this, and 
come up with legislation that will provide some protection for family 
farmers so they can get a decent price in the marketplace. If we pass 
that legislation in January or February, then this moratorium is no 
longer operative.
  I come from a remarkable State. I want to quote a remarkable 
Minnesotan, Ignatius Donnelly. I want to quote from a speech he gave at 
the People's Party Convention in 1892. It reads as if it could have 
been written yesterday. He was an implacable foe of monopoly power. 
Donnelly in his speech affirmed that the interests of rural and urban 
labor are the same. He called for a return to America's egalitarian 
principles. He said:

       We seek to restore the Government of the Republic to the 
     hands of the plain people with whom it originated.

  We should do no less. If we want to sustain a vibrant rural economy 
and a thriving democracy, we need urgently to reform our farm and 
antitrust laws, and we have to act now. Time is not neutral. Time 
rushes on, and if we are not willing to take this action next week, 
time will leave many farmers behind. Now is the time to act.

  Next week, I will read from letters of support from any number of 
different farm organizations, and I will start out with the Farmers 
Union, which has been so helpful in this whole effort. I especially 
thank Tom Buis for all of his policy work.
  This may be the final vote of this session this year. This vote will 
be very telling for Senators who value a family farm structure of 
agriculture, for Senators who have seen the anguish of farmers in our 
rural communities, and for Senators who have seen in personal terms 
what record low farm prices and record low farm income means. It is 
important to come to the floor and fight for people.
  Tonight is the first speech. Wednesday we come back with 1 hour more 
of debate. Between now and Wednesday, I am going to do everything I can 
as a Senator to make sure a lot of grassroots people in our farm States 
and in other States contact Senators because this is a tough fight. A 
lot of these large companies and a lot of their associations that 
represent these large companies--and I will read the names of the 
different organizations that are opposed to this legislation--pour in 
the faxes and pour in the letters. By the way, I say to my colleagues, 
a good part of what they are saying is not accurate.
  I understand there are certain interests who give a lot of money and 
are heavy hitters, who are well connected and who are the players and 
investors, maybe too much so in both parties. I understand that a call 
for antitrust action or at least to call for a moratorium on these 
mergers and acquisitions of these large companies goes directly at that 
power. But the truth is--and I conclude on this note--this is but a 
glimpse of what is to come.
  In some ways, our country today reminds me a little bit of the gilded 
age of the 1890s, moving into the next century. We moved into the 20th 
century. As we went through the 1890s, we had a tremendous 
consolidation of power which gave rise to the populist movement, gave 
rise to progressives, gave rise to Teddy Roosevelt, the Sherman Act in 
1890, the Clayton Act in the teens, and then the Stockyard Act of 1921 
or 1922. This feels the same way.
  We have CBS being bought by Viacom. We have banks merging, a few 
banks, a few large insurance companies, a few airlines--concentration 
of power in telecommunications, concentration of power in agriculture--
the list goes on and on.
  I am a Senator from a farm State. I am a Senator from an agricultural 
State. I am a Senator from the Midwest. I am a Senator from the State 
of Minnesota, and when I look at the need to do something about this 
monopoly power and I look at the need to do something that will give 
our producers, our family farmers a fair shake, I cannot think of any 
more important action we can take than to at least have this temporary 
moratorium on these mergers.
  Mr. President, I ask how much time I have left this evening.
  The PRESIDING OFFICER (Mr. Allard). The Senator has 55 minutes.
  Mr. WELLSTONE. Mr. President, I yield the rest of the time I have 
this evening to Senator Harkin. I was going to suggest the absence of a 
quorum, but if my colleague from Oregon is going to speak, I will not 
do so. Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. SMITH of Oregon. Mr. President, I rise to respond to Senator 
Wellstone, not with any personal animus at all, but to give a 
perspective on this issue that perhaps I uniquely can give because, I 
say to Senator Wellstone, before I came into politics, I was a pea 
processor.
  I say to the Senator, his amendment covers everybody I know in the 
industry, save those who are in farm cooperatives.
  Mr. WELLSTONE. Mr. President, will the Senator yield for a quick 
question? I have to leave to try to get back to Minnesota to mark 
Veterans Day, but I want to ask my colleague, is he talking about a 
cooperative with which he was involved?
  Mr. SMITH of Oregon. I ran a stock company, a food processing 
company. But its ownership was not by farmers but by stockbrokers.
  Mr. WELLSTONE. I see. I thank my colleague.
  Mr. SMITH of Oregon. I come to the floor, I say to Senator Wellstone, 
with the same interest that he has in farmers. I care very deeply about 
the rural economy. I note, with great concern, what is happening to my 
farmer friends and the rural economy. And I simply come here, in 
respect, and say, while as well-motivated as I believe the Senator from 
Minnesota is with his amendment, it is too broad and too wrong when it 
comes to what we believe in in this country, which is a free market.
  I look at what has affected the farmers in my area and much of rural 
Oregon. I know in Oregon the Asian flu had a great deal to do with a 
loss of markets and low commodity prices. I have watched, in horror, as 
this administration has attacked the grazing industry in my State, 
going after their grazing rights, making sure the little guy can't 
utilize public lands anymore. I have watched, with amazement, that in 
the Columbia Basin there is actually serious talk about taking out 
transportation systems provided by hydroelectric dams that are able to 
transport hundreds of millions of tons of wheat and grain inland from 
Idaho all the way to the Port of Portland and out into the Pacific rim. 
What happens to those farmers? This bill does not help at all.
  I look at the Food Quality Protection Act being administered by the 
Environmental Protection Agency. While I support the Food Quality 
Protection Act, I have been one who has pled with this administration 
to employ good science as they review chemical tolerances. As they take 
away the pesticides, the herbicides that these farmers have depended 
upon--which have greatly contributed to their ability to be good

[[Page S14506]]

farmers and to produce high-quality crops with low production costs--
they leave farmers with no effective alternatives. This bill does not 
address these farmers' concerns.
  I have to say that the way the Senator from Minnesota has described 
this day of decision with respect to farmers, I think he has forgotten 
that we in this Congress have already voted out $8.7 billion in 
emergency assistance to farmers to help tide them through this very 
desperate season.
  Many of us have gone to the U.S. Trade Representative and pled that 
this time, in Seattle at the WTO meetings, agriculture not be left out. 
One of the predicates of the Freedom To Farm Act was that we would 
increase markets and we would decrease regulations. We have not done 
either of those things. We have diminished markets, and we have 
increased regulation. We have, I am afraid, perhaps cut the farmer too 
short a deal. That is in part why we had to send another $8.7 billion 
in assistance this year.
  In addition to that, I have tried to help farmers with the whole 
issue of immigrant labor, trying to reform the H-2A program. I am 
amazed at the things that are said about those of us who actually 
believe immigrant workers should have some legal stature to be here, to 
do labor that they want to do and that agricultural employers need them 
to do if they are going to have a harvest. I have been amazed at the 
way that we, who are trying to improve their legal standing, are 
characterized by those who are in the labor shortage business.
  If you want to hurt a farmer, just make sure he does not have the 
ability to have his crops harvested. The amendment of the Senator from 
Minnesota does nothing for these farmer's concerns.
  I want him to know, and anyone else interested in this issue, that 
Senator Hatch, of the Judiciary Committee, has announced that there 
will be hearings on agricultural concentration so we can examine the 
instances where perhaps the Federal light ought to be put on a few 
mergers and acquisitions. We have laws to take care of those things. 
They need to be enforced. Perhaps they are not being enforced to the 
extent some would prefer. Senator Hatch's hearings I believe will get 
at that issue.

  But the thing I would really to impress upon my colleagues in the 
Senate is that Senator Wellstone's amendment exempts farm cooperatives. 
I have nothing against farm cooperatives. They do a lot of business in 
my State, and they do a lot of good in my State. They play a very 
important role in agriculture. About one-third of the farmers in this 
country have a farm cooperative for the outlet of their production. How 
about the other two-thirds? The other two-thirds grow their products 
for stock-owned companies.
  What the Senator's amendment is proposing to do is to say that in 
this 18-month moratorium, no market conduct, no mergers, no 
acquisitions can occur among stock-held companies. However, this same 
activity, among farm cooperatives, is no problem. That makes no sense 
to me. In fact, a lot of farm cooperatives buy stock companies. To me, 
this is just patently unfair. If we should do something this un-
American, this countermarket, we should do it to all. But, frankly, 
let's not do it to any.
  There are many ways to help the farm community without this kind of 
market intrusion by the Government. This really is an amendment that 
will ask every Senator what they believe about the free market system, 
not what they believe about helping farmers.
  My Heavens, there is almost nothing you could bring to this floor 
that would actually help a farmer that I would not vote for or have 
tried to vote for and have taken a lot of heat for because I have voted 
for things that really do help a farmer to survive. But to go in and 
say one class of farm processors is exempt but two-thirds of you cannot 
participate in the free market, frankly, strikes me as strange.
  I will tell you another thing that really is troubling based on my 
experience. I have seen many farm cooperatives be very good at 
producing lots of food, lots of surplus. In some instances, some have 
not been as good at marketing that surplus. So in a backhanded way, 
what we are saying is, if you organize yourself in this way, you get 
the benefit of the free market, but if you organize yourself as a stock 
company, you are limited as to how you can merge, sell, and acquire.
  What does that mean to two-thirds of the farmers in this country? 
What does that mean to them, if their output goes to a stock food 
processor? It means the food processor, if he or she is in trouble, has 
one option because they can't sell. They can't merge. They could go 
bankrupt. So what have you done to help the two-thirds of the farmers 
in this country, if you put their outlet of production in that kind of 
jeopardy?
  This amendment is a shotgun blast at the marketplace. I plead with my 
colleagues, I appeal to their commitment to free enterprise not to 
interfere in the marketplace in this way. This does not work. This is 
not fair. This is not the American way.
  If there are antitrust problems, we have laws for that. If there is 
illegal conduct, we have laws to go after crooks. But why penalize all 
of the agricultural community that organizes themselves in stock 
companies as opposed to farm cooperatives? It makes no sense. I, 
frankly, don't know of a precedent for that in our Nation's history. 
Perhaps someone can show me one. This is not the way to help farmers. 
This is wrong. This penalizes hundreds and thousands of food processors 
who are trying to deliver to the farmer a good outlet for their product 
and to pay them a fair price.
  I am aware of one farm cooperative this year that has said to their 
growers, the dollar you put in for a crop, we are going to pay you 75 
cents this year. And, in this instance, all of the stock food 
processors are paying 100 cents on a dollar, plus the profit that they 
guaranteed by the contract. So we are going to punish the processor 
that is delivering 100 cents and more on the dollar? We are going to 
advantage those who are delivering less than that?
  This amendment is misguided and must not pass, or we will be 
punishing farmers and food processors that simply do not deserve this 
kind of treatment from the Senate.
  I rise in opposition to the amendment being brought forward by the 
Senator from Minnesota. While I recognize the concern among farmers in 
his state and mine over agribusiness concentration, I believe we would 
be making a profound mistake if we were to respond to the current 
situation by adopting this amendment today.
  I, too, am concerned about the future of family farmers and American 
agriculture. Agriculture is one of the largest industries in Oregon. It 
represents more than 140,000 jobs including on-farm employment, food 
processing, marketing, and all the other factors that go into bringing 
fine Oregon produce to restaurants, grocery stores, and dining room 
tables around the country. It is the dominant industry in many Oregon 
counties, and it flourishes just a short drive from the urban centers 
of Portland and Eugene. So when farmers are concerned about something, 
I am too.
  I am well aware that many people in farm country are suffering these 
days from another year of low commodity prices. Most of the farmers 
that have spoken to me about this current farm crisis believe it is 
mainly due to the lack of overseas market access, expensive 
environmental and labor regulatory burdens, and in some areas, natural 
disasters. For a state like Oregon that exports much of its produce 
across the Pacific, the recent Asian financial crisis has had a 
devastating impact on farmer's bottom lines. Moreover, in the Northwest 
especially, I have been witness to an Administration that has not been 
particularly friendly towards the interests of rural communities by 
continuously threatening long-standing grazing rights and the essential 
grain transportation network afforded by the lower Snake River dams.
  So I have tried to be very sensitive and responsive to the needs of 
farmers in rural America that have fallen into something of a mini-
depression while watching their urban counterparts enjoy an economic 
boom. Here in the Congress, we have decided to direct billions of 
taxpayer dollars in assistance to help tide farmers over during these 
lean years--another $8.7 billion was sent out to farm country this 
fall. I have voted for these assistance packages knowing that they are 
short-term

[[Page S14507]]

fixes and that much work remains to be done to improve the long-term 
outlook. Part of this is improving the demand side of the equation 
through the expansion of trade opportunities. I have been very 
supportive of unilateral sanctions reform, tearing down agriculture 
trade barriers through the WTO, and full funding for the promotion of 
American commodities overseas utilizing the Market Access Program. 
These efforts are all vital to induce a rebound in world demand, and, 
eventually, a rebound for our farmer's prices here at home. An equally 
important part of the equation is to reduce costs of production for 
farmers that come in the form of excessive federally-mandated 
regulations. I have worked hard to overhaul the currently impractical 
H2A guest worker program and free farmers from INS and Social Security 
Administration intimidation by giving them a legal workforce. I have 
consistently pushed for a science-based implementation of the Food 
Quality Protection Act, and an even-handed review of pesticide 
tolerances. I believe that continued work to open market opportunities 
for farmers while fulfilling our promises to ease regulatory burdens--
in other words keeping the Congress' promises under the Freedom to Farm 
bill--will be necessary in order to get the farm economy back on track.
  With that said, I am also aware that many farmers in my state and 
around the country have reservations about the pace of change and 
consolidation underway in certain agriculture sectors. The meat packing 
and grain processing industries have seen a number of headline-grabbing 
mergers and acquisitions in recent years. Critics of these mergers 
often cite the 3% rise in consumer food prices that has come over the 
last 15 years while the farmer's percentage of the food dollar has 
simultaneously dropped 36%. Others note the high profits attained by 
large agribusinesses at a time when many farmers continue to suffer 
from historically low commodity prices. Certainly, the pace of the 
concentration and how it affects the bargaining power of average 
producers and the overall future of family farming warrant careful 
review by appropriate federal agencies and continued study by the 
Congress. I note that this issue of concentration and competitiveness 
in agriculture was the subject of a recent hearing in the House 
Judiciary Committee just a few weeks ago. In addition, Chairman Hatch 
just announced last week that his Judiciary Committee will be looking 
into this issue in a comprehensive way early next year. I also want to 
point out that we in the Congress, largely in response to concerns 
about the competitiveness within the meat packing industry, just passed 
a provision to the FY 2000 Agriculture Appropriations bill that 
requires mandatory price reporting for meat packers. So I want farmers 
to know that the issue of agribusinesses concentration has not gone 
unnoticed by the Congress.
  I concur with the Senator from Minnesota that this is an important 
issue. However, I must respectfully disagree with his conclusion that 
an outright moratorium on agribusiness mergers is the right response.
  His amendment would impose a moratorium on mergers and acquisitions 
among agribusinesses with annual net revenue or assets of more than 
$100 million for one party, and $10 million for the other. This would 
affect agriculture brokers, commission merchants, commodity dealers, 
agricultural suppliers such as seed and chemical producers, and food 
processors. This moratorium would remain in effect for 18 months or 
until Congressional legislation on this issue is enacted. In addition, 
this amendment would create a new 12 person federal panel to 
investigate the issue and report back to the Congress and the 
President. I find it remarkable that one week after tearing down 
barriers to mergers and increased efficiencies in the financial sector, 
we are now considering doing the opposite for agribusiness, an industry 
in part responsible for delivering the safest and most economical food 
supply in the world. What kind of message for American competitiveness 
would we be sending to the business world by placing such an arbitrary 
18 month moratorium on only certain actors within a particular 
industry?
  Unlike most people here in the Senate, I have actually run a food 
processing business. I have had to meet a payroll, efficiently produce 
a high quality product, endure all of the bureaucratic government 
regulations--and do it all at a competitive price the consumer was 
willing to pay. I had to go out there and compete in the marketplace. 
From my experience, I can tell you that it is a lot more competitive, 
at least in the frozen vegetable business, than proponents of this 
amendment would have you believe. I am afraid that the Wellstone 
amendment, which has not been subject to Senate hearings or markup in 
committee is overreaching and blatantly unfair to many honest business 
people in the agriculture sector.

  We all know that revolutionary innovations have developed in 
technology, marketing, and food production and processing over the last 
one hundred years. Our country has shifted from an agrarian economy to 
an industrial economy to an information technology and service economy. 
Today American agriculture has become part of a global marketplace. 
This is a far cry from the turn of the century when many if not most 
Americans were directly employed in food production and many producers 
distributed their goods largely within their own local area. The 
agribusiness sector--from processors and brokers to suppliers and 
grocers--has changed with the times as well; just like the small farmer 
buying land from his neighbor to add production acreage, many food 
processors and agribusinesses have found it helpful, if not imperative, 
to band together to meet the challenges of the new economy and, 
ultimately, the demands of the consumer.
  It is demand of the consumer that I believe is a large reason for the 
growing disparity between the food dollar paid at the retail level and 
the cash received by farmers for their crops. Today's consumer is 
demanding greater convenience, enhanced nutritional value, choices in 
packaging, low fat and nonfat products, faster and easier to prepare 
items--all values usually added to the product after it leaves the 
farm. In addition, all of these new products have to be marketed in 
some way so that the customer knows they are available and attaches 
values to the brand names. And, of course, these products must be 
offered at a price the consumer is willing to pay.
  There are a host of reasons why companies find it in their best 
interest to merge or why one company agrees to be acquired by another. 
Certainly, any of my colleagues that have experience in the business 
world understand that there are occasions when businesses, searching 
for the greatest efficiencies and competitive advantage, find the need 
to sell an underperforming or unprofitable division. There may be 
another business out there with the right mix to take these divisions 
on and make them efficient and profitable. In some instances, 
businesses that are failing would have to close their doors altogether 
if there is no willing buyer to come in and restructure the company. If 
there is no buyer for these businesses, the alternative is simply to 
see these jobs lost. This ability to adjust to the market and the 
changing demand of consumers is a fundamental component of our free 
enterprise system. Now, I am aware that a provision of the Wellstone 
amendment might allow businesses in severe financial distress to 
request a waiver from Janet Reno, but that option strikes me as 
especially bureaucratic and time-consuming.
  Despite their portrayal as the oppressor of family farmers, many 
agribusinesses are family-owned operations or small businesses. 
Although $10 million in assets or annual sales sounds like a lot, when 
considering the capital-intensive nature of many of these food 
processing and support businesses, it is not an uncommon threshold to 
surpass. Many of these business-owners and entrepreneurs are depending 
on their businesses to serve as their nest egg for retirement. The 
Wellstone proposal would prevent an unknown number of families in these 
circumstances from selling their business to whom they pleased.
  Even worse, the Wellstone proposal only applies to certain 
agribusinesses--it specifically exempts agriculture cooperatives. Many 
co-ops are large agribusinesses in their own right that have also 
acquired smaller companies in recent years. Yet, under the Wellstone

[[Page S14508]]

amendment, they would be in direct competition with other agriculture 
businesses and free from the requirements of this moratorium.
  Mr. President, with this proposal, you would be led to believe that 
the Justice Department has failed to uphold our federal antitrust laws. 
However, that has not been the case. In the case that set off much of 
the concern in the first place, the Cargill-Continental Grain 
acquisition, the Department of Justice allowed the deal to go through 
only after the companies divested four port elevators, four river 
elevators, a rail terminal, and made a number of other concessions to 
enhance competition. The Justice Department intervened and required 
similar divestiture before approving the Monsanto Corporation's 
acquisition of DeKalb Genetics Corporation, ensuring continued 
competitiveness in the genetically-modified seed industry. Another 
announcement came just last week with respect to the merger of New 
Holland and Case Corporations, major farm equipment suppliers. I know 
the definition of supplier in this amendment exempted farm equipment, 
but many farmers were concerned about the potential implications of 
this merger, nonetheless. In this case, the Justice Department again 
required divestitures on the part of both companies. So, so I think the 
evidence is clear that the administration is looking at these merger 
proposals, and looking fairly carefully at what impacts they may have 
in the market, and enforcing federal antitrust law. Coming on the heals 
of last Friday's well-publicized victory for the Antitrust Division, I 
find it astounding that there are those that would imply this is an 
agency that is sleeping on the job.
  In closing, I believe the matter at hand is a simple one. Mr. 
President, the Wellstone amendment is the wrong answer to the wrong 
question. This isn't the key to farm recovery--that lies with expanding 
trade opportunities, government regulatory relief, and fulfilling our 
promises under Freedom to Farm. And this is not even the way to solve 
any flaws that may exist with our current antitrust laws. Those 
solutions must be developed with the scrutiny and public hearings of 
the Judiciary and Agriculture Committees. Do we want to set a precedent 
today by placing this kind of moratorium on business activity for one 
particular industry and treat them differently than all other 
businesses? Do we want to take a sweeping and unprecedented step of 
pushing a merger moratorium on an unknown number of businesses that 
play key roles in our food chain? I hope my colleagues will agree with 
me that the correct answer to both questions is no and that the prudent 
step to take here is to accept Chairman Hatch's offer to have 
comprehensive hearings on the matter early next year and take 
subsequent appropriate action in a way that is fair to our farmers, our 
businesspeople, and our consumers, alike. I urge my colleagues to join 
me in opposition to the Wellstone amendment.
  I yield the floor.
  Mr. HARKIN addressed the Chair.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. HARKIN. Mr. President, the face of American agriculture is being 
changed dramatically by the quickening pace of mergers, buyouts, 
takeovers and vertical integration. Over the years, farm families have 
survived bad weather and ups and downs in the markets. They have 
adapted to new technologies, new ways of buying production inputs and 
new ways of marketing what they produce.
  But today farm families are being hit by a tidal wave of economic 
concentration and consolidation that is threatening their survival in a 
way that is unlike anything in the past. The pace of consolidation is 
being driven even faster by the disastrously low commodity prices of 
the past couple of years. These are deeply troubling times for anyone 
concerned about the future of the family farm--and we are quickly 
running out of time to turn things around.
  Senator Wellstone's amendment, of which I am a cosponsor, is vitally 
necessary because I believe that we need a time-out from the headlong 
rush towards ever greater economic concentration and consolidation in 
agriculture. All this amendment does is put a hold on mergers and 
acquisitions involving large agribusiness firms for a period of 18 
months or until legislation is in effect addressing market 
concentration in the agricultural sector, whichever comes first. So it 
can't be longer than 18 months.
  All this amendment is saying is that we have to take a pause to get a 
handle on the mergers and acquisitions in agriculture that I believe 
have gotten out of hand and out of control. Some will say the amendment 
goes too far, as my friend from Oregon just said. But I think the 
merger mania in agriculture has gone way too far already. We must act 
before the family farm is driven to total extinction.
  I tell my colleagues, there is no more critical issue to the farm 
families of America than the rapid and sweeping changes taking place in 
the economic structure of agriculture. It is an issue that I believe 
overshadows even the record low commodity prices that are devastating 
rural America. Farm families and their communities have their backs 
against the wall, and they are fighting for survival. They are being 
overrun by economic forces far more powerful than they are. The least 
we can do is to provide a time-out before it is too late.
  Far too little attention has been paid to the tremendous consequences 
of transforming American agriculture from a system of independent 
family farms to one based on the corporate industrial model. Ever 
greater economic concentration in the food and agricultural sector 
affects not only farm families and rural communities. Everyone eats. 
Consumers ought to ask whether they will enjoy the same high-quality 
food at reasonable cost if our food supply is in the hands of a few 
corporate giants instead of many thousands of family farms.
  Make no mistake about it, the sweeping consolidation in the food and 
agricultural sector is not about productive efficiency. When it comes 
to efficiency, nobody beats the independent family farm. What is taking 
place is about the corporate bottom line: stock deals, positioning in 
the market, and capitalizing on economic power. Is it in the best 
interests of this country to have a food and agricultural system 
dominated by the principles and standard operating procedures of Wall 
Street? Does it make any sense to continue down a path of ever 
increasing economic power and consolidation among agribusiness firms 
while family farmers are driven off the land?
  The underlying principle of our Nation's antitrust laws is that we 
are all better off with a system of full, free, and fair competition in 
the markets. The rapidly growing economic concentration in the food and 
agricultural sector stands this principle on its head. We have to ask 
why the antitrust laws on the books are not working to stem the tide of 
economic concentration in agriculture.
  Now, the speaker before me--I listened carefully--said over and over 
again that we shouldn't be interfering in the marketplace. Well, there 
are times when we must interfere in the marketplace because unbridled 
exploitation of the marketplace leads to concentration, undue economic 
power, and monopoly practices. If you don't believe me, look what has 
happened with Microsoft. Why did we have the Clayton and Sherman 
Antitrust Acts in the first place? Because unbridled economic power led 
to more and more concentration, more and more monopolies, and less and 
less competition.
  I believe in the marketplace, but the marketplace must be tempered. 
The marketplace must be tempered by adequate rules and regulations and 
laws that keep one party from becoming so big it can squash out all 
effective competition. So to say we shouldn't interfere in the 
marketplace is to fly in the face of what our stated policy has been 
for the last century in America.

  We do interfere in the market. We interfere in the market to try to 
keep it a free and open and fair and competitive market. Otherwise, let 
the big get bigger, let them buy out everybody else, and let them 
squash competition. Why bring a case against Microsoft? Because I think 
it is being shown that Microsoft is engaging in anticompetitive 
behavior to squash out competition so that they can charge the 
consumers what they want to charge for what they offer, not what 
competition in an open market would bring to the consumers of software, 
but whatever

[[Page S14509]]

Microsoft wants to charge for what they choose to sell because they can 
effectively squeeze out everyone else.
  I don't buy the argument that we have to keep our hands off of the 
market. We tried that in the past, and it brought us to the brink of 
ruination. So you have to have interventions periodically. I think 
where we are in agriculture now begs us for that kind of intervention.

  Now, there is one other important aspect of this amendment. It sets 
up an Agriculture Concentration and Market Power Review Commission to 
take a close look at economic concentration in agriculture and to make 
recommendations on changes in antitrust laws and other Federal laws and 
regulations in order to ensure that there is a fair and competitive 
marketplace for family farmers and rural communities.
  Again, in that connection, I want to say that the present Justice 
Department has been the most active in the area of antitrust 
enforcement in agriculture of any Justice Department in my experience 
in Washington. So I commend the Attorney General and especially commend 
assistant Attorney General Joel Klein for bringing new life to 
antitrust enforcement in agriculture and elsewhere. Incidentally, I 
congratulate Mr. Klein for his wisdom and judgment in taking on the 
Microsoft case, because I believe if this case had not been pursued, 
Microsoft would have gotten even bigger and bigger, and more and more 
of any competition would have been snuffed out. I think this case is 
going to help consumers.
  But the Justice Department can only do so much under the present 
state of our antitrust laws. We must keep in mind that the antitrust 
laws on the books were written around the close of the 19th century, 
and we are now at the beginning of the 21st century. The economic 
structure of agriculture and agricultural businesses has changed 
dramatically in the intervening years. In addition, there have been 
many court decisions interpreting and applying the general language of 
the Sherman and Clayton Acts. Those decisions, quite frankly, have not 
all been favorable to the strong antitrust enforcement that I believe 
we need in the area of our food and agriculture system.
  So, at the end of this century, almost 100 years after the Sherman 
and Clayton Acts and after court decisions that I believe have 
interpreted these laws in ways that are inimical to the best interests 
of family farms, this amendment will put a brake on the category of 
large agribusiness mergers and acquisitions for a period of time, 18 
months, so we can have a careful review of economic concentration in 
agriculture and of what need we have for changes in the law to ensure a 
fair and competitive marketplace in agriculture.
  There is a lot of rhetoric flying around about sustaining the family 
farm in this body. This amendment allows us to address the greatest 
threat to the survival of family farms now existing. This amendment 
provides for a pause, a breathing spell, so family farms are not driven 
to extinction before we can even get a handle on what has happened.
  I urge my colleagues to support the amendment.
  I yield the floor.
  Mr. Presdient, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative assistant proceeded to call the roll.
  Mr. DASCHLE. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DASCHLE. Mr. President, I wanted to come to the floor for just a 
moment to express my support for the Wellstone amendment, as well. I 
commend the distinguished senior Senator from Minnesota, as well as the 
Senator from Iowa, for their work and for the effort that this 
amendment represents.
  Basically, this amendment has a very simple purpose. It is simply to 
take a deep breath, take a close look, and to give careful thought to 
what is happening in agriculture today. We all espouse the free 
enterprise system. We all say that we are enthusiastic advocates of 
real competition, which is really the essence of the free enterprise 
system--competition. We all express our grave concern when we find 
circumstances within the economy that are not competitive. Yet, as we 
look at agriculture today, as we look at the tremendous economic power 
now represented in fewer and fewer companies, with more and more 
mergers underway almost weekly, one has to ask, how much is enough? 
When do we undermine the very tenets of free enterprise by continuing 
to look the other way when these mergers are announced? We see it 
especially in livestock. The latest announcement that Smithfield 
Corporation will be acquiring Murphy Farms illustrates the point. There 
are fewer buyers. There are fewer processors. There are fewer options. 
There are fewer and fewer competitors.

  Mr. President, when that happens, we reach a point where there is no 
competition. I am not one who is prepared today to say that there is 
collusion in the market, that there is something illegal going on in 
the market; but I am prepared to say today that what is happening in 
the market is not healthy for agriculture. What is happening in the 
market goes the wrong way from competition. What is happening in the 
market today precludes real opportunities for producers to be able to 
ensure a fair price, a real opportunity in the marketplace, a real 
sense of competition.
  I was just told again last week that in many places in South Dakota, 
a buyer will tell you that he will be in a location for one day for as 
little as one-half hour, and if you want to be able to sell your cattle 
to that buyer, you have to be there in that half hour's time, on that 
appointed day, or you don't sell cattle that week. I don't know how 
that is competition. I don't know how we can say today this is the free 
enterprise system that we all defend and espouse. What is free 
enterprise when you have one buyer and all these producers lined up to 
sell, almost supplicating themselves to that buyer? That isn't free 
enterprise. That isn't what we say agriculture is supposed to be. Most 
important, that isn't ever going to allow us the confidence that we 
need as we look to the future and encourage young people and encourage 
rural people to stay where they are. They need more confidence and more 
assurances than what we are giving them today.
  So this amendment is really pretty simple. It just says, let's take a 
deep breath, let's not do anymore until we have had a chance to analyze 
whether or not our fears are being realized, whether or not we really 
have any legitimate basis for concern, whether or not the situation is 
going from bad to worse. That is all we are saying. Once it happens, it 
can never be undone. I doubt very much that we will ever go back and 
say, OK, we are going to break up these companies, because that is the 
only way it is going to assure that we have the kind of competitive 
environment that we need. I don't think that is in the offing in the 
short term. So while we still have a chance to put everything on hold, 
to analyze whether or not this is good, why not simply say, let's take 
a deep breath.
  I personally don't believe that we ought to be content with just 
this. I really worry about whether or not vertical integration in 
agriculture ultimately is going to destroy the young family farmer, or 
the livestock producer. Once you have the processor in charge of every 
step from to table, then you really don't have competition. More and 
more, that seems to be the approach the large processors are taking--
get involved in production, get involved in transportation, get 
involved in wholesaling, get involved in retailing, get involved in 
every single aspect from top to bottom. I am concerned about vertical 
integration.
  It seems to me that when we made the decision to break up the old 
telephone company back in the early 1980's we created a competitive 
explosion the likes of which we never imagined, and from which we are 
still benefiting today. We see things that are happening today that 
make other countries' heads spin. We broke up a large company, and we 
made progress the likes of which we could have never have anticipated. 
I would love to see the kind of competition, the kind of excitement, 
the kind of enthusiasm in agriculture as we now see in 
telecommunications.
  Mr. President, I am hopeful that we will send the right message. I am 
hopeful that we can simply say, Look. At the very least, let's stop 
before we allow this to go any further for just a

[[Page S14510]]

few months--18 months. Let's make some good decisions, and calculate 
whether or not this is good for the country and good for the 
agriculture industry.
  I think it is a good amendment. I support it.
  I yield the floor.
  I note the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                           amendment no. 2648

  (Purpose: To protect the citizens of the State of Vermont from the 
     impacts of the bankruptcy of electric utilities in the State)

  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the pending 
amendment be laid aside, and I call up amendment No. 2648, and ask that 
the amendment be agreed to, and the motion to reconsider be laid upon 
the table.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will report.
  The legislative clerk read as follows:

       The Senator from Iowa (Mr. Grassley), for Mr. Jeffords, 
     proposes an amendment numbered 2648.

  The amendment is as follows:

       At the end, add the following:

    TITLE ____--PROTECTION FROM THE IMPACT OF BANKRUPTCY OF CERTAIN 
                           ELECTRIC UTILITIES

     SECTION ____01. SHORT TITLE.

       This title may be cited as the ``Emergency Imported 
     Electric Power Price Reduction Act of 1999''.

     SEC. ____02. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) the protection of the public health and welfare, the 
     preservation of national security, and the regulation of 
     interstate and foreign commerce require that electric power 
     imported into the United States be priced fairly and 
     competitively;
       (2) the importation of electric power into the United 
     States is a matter vested with the public interest that--
       (A) involves an essential and extensively regulated 
     infrastructure industry; and
       (B) affects consumers, the cost of goods manufactured and 
     services rendered, and the economic well-being and livelihood 
     of individuals and society;
       (3) it is essential that imported electric power be 
     priced--
       (A) in a manner that is competitive with domestic electric 
     power and thereby contribute to robust and sound national and 
     regional economies; and
       (B) not at a rate that is so high as to result in the 
     imminent bankruptcy of electric utilities in a State; and
       (4) the purchase of imported electric power by the Vermont 
     Joint Owners under the Firm Power and Energy Contract with 
     Hydro-Quebec dated December 4, 1987--
       (A) is not consistent with the findings stated in 
     paragraphs (1), (2), and (3); and
       (B) threatens the economic well-being of the States and 
     regions in which the imported electric power is provided 
     contrary to the public policy of the United States as set 
     forth in the findings stated in paragraphs (1), (2), and (3).
       (b) Purposes.--The purposes of this title are--
       (1) to facilitate the public policy of the United States as 
     set forth in the findings stated in paragraphs (1), (2), and 
     (3) of subsection (a);
       (2) to remove a serious threat to the economic well-being 
     of the States and regions in which imported electric power is 
     provided under the contract referred to in section 
     ____02(a)(4); and
       (3) to facilitate revisions to the price elements of the 
     contract referred to in section ____02(a)(4) by declaring and 
     making unlawful, effective 180 days after the date of 
     enactment of this Act, the contract as it exists on the date 
     of enactment of this Act.

     SEC. ____03. UNLAWFUL CONTRACT AND AMENDED CONTRACT.

       (a) In General.--Effective on the date that is 180 days 
     after the date of enactment of this Act, the contract 
     referred to in section ____02(a)(4), as the contract exists 
     on the date of enactment of this Act, shall be void.
       (b) Amendment of Contract.--This title does not preclude 
     the parties to the contract referred to in section 
     ____02(a)(4) from amending the contract or entering into a 
     new contract after the date of enactment of this Act in a 
     manner that is consistent with the findings and purposes of 
     this title.

     SEC. ____04. EXCLUSIVE ENFORCEMENT.

       (a) In General.--Only the Attorney General of a State in 
     which electric power is provided under the contract referred 
     to in section ____02(a)(4), as the contract may be amended 
     after the date of enactment of this Act, may bring a civil 
     action in United States district court for an order that--
       (1) declares the amended contract not consistent with the 
     findings and purposes of this title and is therefore void;
       (2) enjoins performance of the amended contract; and
       (3) relieves the electric utilities that are party to the 
     amended contract of any liability under the contract.
       (b) Timing.--A civil action under subsection (a) shall be 
     brought not later than 1 year after the date of the amended 
     contract or new contract.

  The PRESIDING OFFICER. Without objection, the amendment is agreed to.
  The amendment (No. 2648) was agreed to.
  Mr. LEAHY. Mr. President, in reference to the bankruptcy bill, I am 
pleased that the Senate has offered the managers' amendment. It greatly 
improves the underlying bill and will improve the suggestion from both 
sides of the aisle.
  I am pleased we passed the Kohl-Sessions-Grassley-Harkin amendment on 
homestead exemption.
  I wish the drug amendment, which was adopted by a 50-49 vote earlier 
this afternoon, had not been agreed to. I think it was the wrong 
direction to go. But the Senate voted.
  I regret that the Senate rejected the Dodd amendment. But I note that 
with the efforts of the Senator from Iowa and the Senator from Utah, 
the Senator from New Jersey, Mr. Torricielli, and myself, we narrowed 
the number of amendments from over 300 to approximately 30. We are 
working through them.
  I should note just for the schedule that we have a number of 
Democrats who have offered short time agreements on their amendments to 
expedite getting their votes.
  I thank Senators Feinstein, Schumer, and Dodd for their cooperation 
in getting very short time agreements on their amendments. I compliment 
the Senator from Iowa. He and his staff worked with me and my staff, as 
well as Senator Hatch and Senator Torricelli. We have cleared out an 
awful lot of what looked to be a totally unmanageable bill with the 
number of items we had before us.
  I yield the floor.
  Mr. HELMS. Mr. President, protecting America's children, our most 
vulnerable future leaders, is one of the highest obligations of 
government. Foremost among the reasons for waging a war on illegal 
drugs is the threat drugs pose and the damage they inflict on the 
children of America.
  At the core, it has always been understood that drug policy is 
primarily a federal responsibility. The vast majority of illegal drugs 
consumed in the United States are produced outside of our borders, 
smuggled into the country, transported across state lines, and 
distributed via a complex multi-faceted criminal network. If we hope to 
combat the spread of this cancer effectively, the federal government 
simply must take the lead role.
  The able Senator from Georgia, Mr. Coverdell, expressed that view 
well when he said:

       [W]hile our schools are the responsibility of states and 
     local communities, the federal government has a 
     responsibility to lead. . . . We must act now to ensure that 
     every child has the opportunity to learn in a safe and drug-
     free school. . . . The message we send our children on drugs 
     is a real problem. When the message is anything short of zero 
     tolerance for drugs, we encourage drug usage by kids.

  Mr. President, I agree absolutely. This recognition led me, along 
with several other Senators, to introduce a bill in the past two 
Congresses to extend the provisions of the Gun-Free Schools Act to 
illegal drugs. A modified version of that bill was also introduced as 
an amendment to S. 254 earlier this year; that version was unanimously 
agreed to by the Senate.
  Today, I am reintroducing that amendment as part of the Hatch-
Ashcroft-Abraham drug amendment, of which I am a proud cosponsor.
  I am thankful for the opportunity once again to allow Senators to go 
on record in support of the eradication of illegal drugs from our 
classrooms. Simply put, my amendment conditions receipt of federal 
education funds on state adoption of a policy of ``zero tolerance'' for 
student drug dealers. By zero tolerance, my amendment would require 
that drug traffickers be expelled from school for not less than one 
year.
  Anyone who thinks this policy unduly harsh should consult the 1998 
CASA National Survey of Teens, Teachers and Principals. Prepared by the 
National Center on Addiction and Substance Abuse at Columbia University 
under the direction of President Carter's former HEW Secretary, Joseph

[[Page S14511]]

Califano, the report states under the heading ``Drug Dealing in Our 
Schools'':

       For too many kids, school has become not primarily a place 
     for study and learning, but a haven for booze and drugs. . . 
     . Parents should shutter when they learn that 22% of 12- to 
     14-year-olds and 51% of 15- to 17-year-olds know a fellow 
     student at their school who sells drugs. . . . Indeed, not 
     only do many of them know student drug dealers; often the 
     drug deals take place at school itself. Principals and 
     teachers may claim their schools are drug-free, but a 
     significant percentage of the students have seen drugs sold 
     on school grounds with their own eyes. . . . In fact, more 
     teenagers report seeing drugs sold at school (27%) than in 
     their own neighborhoods (21%).

  The report goes on to detail that students consider drugs to be the 
number one problem they face, that illegal drugs are readily available 
to students of all ages, and that illegal drugs are now cheaper and 
more potent than ever before. According to CASA, ``one in four 
teenagers can get acid, cocaine or heroin within 24 hours, and given 
enough time, almost half (46%) would be able to purchase such drugs.'' 
Clearly, eliminating illegal drugs from America's classrooms is a 
required first step to restore order.
  Impossible to calculate--the ill effects, disruptions, and violence 
associated with the drug trade are not limited to those who are active 
participants. The lives and futures of children who want to learn are 
often sacrificed by those disruptive students who seek to victimize 
their classmates.
  A clear link between school violence and drugs was found by the PRIDE 
survey, conducted by the National Parents' Resource Institute for Drug 
Education, when it reported that:

       Gun-toting students were 23 times more likely to use 
     cocaine; gang members were 12 times more likely to use 
     cocaine; and students who threatened others were 6 times more 
     likely to use cocaine than others.

  The connection between drugs and school violence is apparent.
  Mr. President, the devastation wrought by illegal drugs crosses all 
geographic, political and economic boundaries. It is not confined to a 
region of the country or a class of individuals. As one example, 
according to the North Carolina State University's Center for the 
Prevention of School Violence (a remarkable organization that tracks 
the incidence of school crime in North Carolina and suggests 
preventative measures), ``possession of a controlled substance'' has 
been either the first or second most reported category of school crime 
in my home state for the past four years. Regrettably, I suspect that 
many other states share that dubious distinction as well.

  In recognition of the federal obligation to foster safe schools, the 
Congress passed and the President signed the Gun-Free Schools Act in 
1994. Many commentators have, at least in part, credited that act with 
reducing the number of guns brought to our schools.
  It is time to provide a logical and common sense extension of that 
act by focusing not merely on the gun but on why students take guns to 
school in the first place. We must acknowledge that many children take 
guns to school either because they are involved in illegal activity or 
because they seek to protect themselves from those who are. A 
comprehensive effort to rid our schools of weapons must eliminate the 
reasons why students arm themselves not merely prohibit the possession 
of weapons.
  This realization is not lost on those who are on the ``front lines'' 
of our war on drugs. When surveyed, students, teachers, and parents 
express overwhelming support for the adoption of a zero tolerance 
policy for drugs at schools. In fact, the closer they are to the 
problem, the more enthusiastic they are in support of zero tolerance.
  For example, the CASA study that I mentioned earlier found that 80% 
of principals, 79% of teachers, 73% of teenagers and 69% of parents 
support zero tolerance. Additionally, 85% of principals, 79% of 
teachers, and 82% of students believe this policy effective at keeping 
drugs out of schools and believe that adoption of the policy would 
actually reduce drugs on their campus. In conclusion, the CASA report 
stated:

       If these students believe them [zero tolerance policies] so 
     effective, these policies must make an impact on their 
     decisions to not bring drugs on campus. Given this, it seems 
     that schools . . . should implement and strictly enforce zero 
     tolerance policies.

  Mr. President, this policy is firm but fair. The drug trade and its 
violence have no place in America's schoolhouses. Schools should be a 
safe haven for our children, fostering an environment that is conducive 
to learning and supportive of the vast majority of students who are 
eager to learn. At the very least, our children and teachers deserve a 
school free of fear and violence.
  President Clinton, in his 1997 State of the Union address, stated 
``[W]e must continue to promote order and discipline, supporting 
communities that remove disruptive students from the classroom, and 
have zero tolerance for guns and drugs in schools.'' Echoing that view, 
Texas Governor George W. Bush, in a major education speech last week, 
called for zero tolerance policies for disruptive students, stronger 
enforcement of federal laws on bringing guns into schools and greater 
accountability from schools that receive federal money for drug and 
safety programs.
  Mr. President, it is obvious that the need to set high standards to 
protect our children from the scourge of illegal drugs should be a 
subject of broad bipartisan consensus. I hope that the Congress will 
heed President Clinton and Governor Bush's calls and that the Senate 
will once again send a strong signal to all that we intend to give our 
children the support they need to grow up safe and drug-free.
 Mr. McCAIN. Mr. President, I regret that I was unable to be 
here for the votes yesterday on the minimum wage.
  In the past, I have opposed increases in the minimum wage because of 
my concern about the impact on small businesses, as well as the 
combined effects of the 1996 minimum wage increase on jobs and the 
economy. Many small enterprises operate on a very thin margin, and the 
imposition of additional costs could result in the closure of 
businesses and the loss of jobs. Such an outcome would serve only to 
hurt the very people we are trying to assist.
  I understand how difficult it is to make ends meet in today's 
economy. Many families are struggling and many small business people 
who create the vast majority of new jobs are clinging to solvency. I 
believe Congress must work to enact measures to strengthen the small 
business sector, bolster job creation, and enhance job security, 
including further responsible tax and regulatory relief.
  I oppose the Kennedy amendment because it combines a minimum wage 
increase with an additional tax burden on the very businesses that will 
face higher personnel costs. I support the Domenici amendment to 
incrementally increase the minimum wage because it also provides real 
tax and regulatory relief for small business owners who may be 
adversely affected by the additional costs they will incur.
  The Domenici amendment allows minimum-wage workers to earn a better 
living. At the same time, it provides $18.4 billion in tax relief over 
five years to small business people across America to help them offset 
the increased employee costs of this minimum wage increase. Small 
businesses will now be allowed to increase their expensing to $30,000, 
and benefit from a permanent extension of the Work Opportunity Tax 
Credit and a repeal of the temporary Federal Unemployment Tax Act 
surtax. Furthermore, this amendment allows 100-percent deduction for 
self-employed health insurance, phases in health-insurance and long-
term care above-the-line deductions, and makes pension reform proposals 
to increase employees' financial security. This tax relief is entirely 
paid for by closing corporate tax loopholes in the first year and then 
using a small portion of the projected non-Social Security surplus in 
the ensuing years, without dipping into the Social Security Trust Fund.
  One aspect of the Domenici amendment that troubles me is the 
increased deductibility of business meals and entertainment costs. I 
have always opposed allowing a tax deduction for the so-called ``three-
martini power lunch'' for corporate executives, although this amendment 
limits the benefits of this tax deduction to small businesses and self-
employed individuals. I question whether this tax deduction is the 
highest priority of small businesses, or whether there are other more 
broadly

[[Page S14512]]

beneficial tax breaks that could have been included in this bill to 
assist those businesses most likely to be affected by the minimum wage 
increase.
  Mr. President, because the Domenici amendment combines a $1.00 
increase in the minimum wage with tax and regulatory relief to offset 
the negative impact of increased personnel costs on small businesses 
and the economy as a whole, I would have voted for the 
amendment.

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