[Congressional Record Volume 145, Number 164 (Thursday, November 18, 1999)]
[Senate]
[Pages S14794-S14795]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      THE NORTHEAST DAIRY COMPACT

  Mr. KOHL. Mr. President, in the omnibus package that will be brought 
to the floor sometime this evening, there are two pieces of legislation 
on dairy that I want to spend a couple of minutes discussing because I 
think they are unfair and very much not in the spirit of the American 
economic system.
  One is the Northeast Dairy Compact. The Northeast Dairy Compact is an 
arrangement in which the New England States literally fix the price of 
milk in those seven States and no one can tamper with that price. It is 
the only price at which milk can be distributed from the farmer to the 
processor. In effect, it takes all the competition out of that product 
in that State, in all the New England States. We have never done that 
before in this country. It is contrary to everything that is 
represented by the economic system in the United States.
  The reason why we have such a great country in part is because our 
economic system provides that anybody with a good idea to develop a 
product or a service has an unfettered opportunity in all 50 States to 
market that product. That is what has made America great: competition. 
That is why we have full employment, the best economy in the world, and 
an economy that can compete anywhere in the world and succeed. That is 
because in this country we say: In order to get your share of market, 
you have to be able to provide the best product at the best price and 
market it in the best way. There are no restrictions in the 50 States 
to do that. That has been true since the United States of America was 
originated.
  The northeast dairy cartel is in contrast to that. There is nothing 
about the cartel that is American in terms of how we do business. There 
is something else about that. They say, and I have heard this from some 
of the leaders in the northeast: Can't we just have our cartel? After 
all, it represents only a fraction of the milk market in the country. 
Why can't we just have our cartel? But, obviously, if they can have 
their cartel, then everybody can have a cartel. What stops us from 
having a Southeast cartel or a Southwest cartel? What stops us from 
having a Southern cotton cartel? What stops us from having a Midwest 
corn cartel or a Plains States wheat cartel? If a cartel makes sense in 
any form, then it makes sense not only in the New England States and 
not only for milk; it makes sense anywhere, conceivably, and for any 
product.
  Now I ask the question: Does the Senate want to go on record as 
favoring this type of economic policy? I think we all know the answer 
is not yes. Nobody has defended this to me, even though it is coming 
tonight. Nobody has defended it to me. I talked with the leaders in the 
Senate. I asked them to explain why we should have this kind of 
legislation in the omnibus bill. I tell you, not a leader, not a single 
Senator, has explained to me and defended in any way that makes sense 
the idea of price-fixing cartels. Yet here it comes.
  I am told it is coming because promises have been made and 
arrangements have already occurred, and so on and so forth. On 
something as important as this, which is price-fixing cartels, it seems 
to me that saying ``promises have been made,'' and ``it has been passed 
in the House,'' or ``it is too late,'' or whatever, does not make any 
sense. May I also say I have been in dialog with the leaders in the 
Senate for months on this, so this is not a surprise. So here we are 
with this piece of legislation.

  Then we also have this milk pricing policy which, as you all know, 
arbitrates that the farther you are from Wisconsin in this country, the 
more you get for your milk if you are a dairy farmer. We all know, 
again, this was set up 50 or 60 years ago when there was no 
refrigeration to transport milk and they wanted to encourage the 
development of the dairy industry. So we provided incentives for dairy 
farmers at points distant from Wisconsin to develop the dairy industry 
and to circumvent the need for refrigerated transportation. That is no 
longer true.

[[Page S14795]]

  So what we are trying to do is not to eliminate that price 
differential because that would be too big a step to take at once. We 
are trying to reduce the price differential--not eliminate it, reduce 
it. USDA has come up with a program and 97 percent of the farmers in 
this country have voted for the change in the present milk pricing 
program. I am not suggesting we need to eliminate the price 
differential at this time. But let's accept the reduction of the price 
differential in view of the fact that the present system is archaic and 
makes no sense.
  Again, coming over from the House is legislation that continues to 
mandate that the old Depression-era pricing system be continued. May I 
also say the present system, both with respect to the Northeast Dairy 
Compact and the pricing system, was mandated to conclude on October 1, 
and we would put in a new system. But before October 1, there was a 
Federal judge in Vermont who challenged that kind of outcome. So right 
now it is tied up in the courts and nothing is going to happen. The 
present system will stay until at least the courts rule on the validity 
of a new system.
  So I suggested, and many have suggested, there be no dairy language 
in the omnibus; just don't say anything and let's let this thing roll 
because it is tied up in the courts now anyhow, and we can discuss it 
next year.
  No, promises have been made. People have been won over in one way or 
another. Other agendas are on the table. So today it comes in an 
omnibus bill, with the Northeast Dairy Compact renewed. Price fixing 
cartels, does any Senator want to vote for that? Price fixing cartels, 
not just for the Northeast, because if you accept it in the Northeast 
you accept it elsewhere; not just on milk, because a cartel is not 
uniquely suited to milk. It can be on any other commodity anywhere.
  Does the Senate want to go on record as supporting price fixing 
cartels in this country? Do we want to tear up the American economy in 
that way? That comes in the omnibus tonight. We are going to vote on 
that.
  We are also going to vote on going back to the old milk marketing 
price system which, again, is totally outmoded. The USDA has come up 
with a new system. I am very upset, obviously, and I am obviously going 
to fight that omnibus bill to its conclusion in any way I can, to 
filibuster it and to require everything be done to demonstrate to us 
and to the American people that there is a giant bill coming down the 
pike which has at least an element in it which is not acceptable, in my 
judgment, to how America is supposed to function.
  We are also considering a continuing resolution that will be brought 
to the floor momentarily, I understand. Of course, one of the options 
we have is to vote against a continuing resolution, which would, in 
effect, shut down the Government at midnight tonight. I could object to 
the CR and the Government would shut down. That is something I had 
considered. But if we do that or if I do that, obviously, it is a huge 
step, and there are many tens of thousands of people who would be out 
of a job, with enormous dislocations all across our country. It is a 
huge step one does not take easily. It is not a step I want to take. It 
is not a step I am going to take because I do not think it represents 
responsible action on my part. If some of the other people in this body 
want to act in a way I consider to be irresponsible and challenge me to 
be irresponsible--I am not an irresponsible person. Shutting down the 
Government is a huge, huge decision. One does not take it lightly. I am 
not going to make that decision over this issue.
  But I do want to point out to my colleagues that some strong-arm 
tactics are at work here. Allowing price fixing cartels is a bad thing 
for this country. I very much hope we can and will find a way to undo 
the damage of price fixing cartels in an outmoded milk marketing system 
in the very near future.
  Having said that, I yield the floor.
  The PRESIDING OFFICER. The majority leader is recognized.

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