[Congressional Record Volume 147, Number 164 (Friday, November 30, 2001)]
[Senate]
[Pages S12228-S12233]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             ENERGY POLICY

  Mr. CRAIG. Mr. President, I thank the ranking member of the Energy 
Committee, the Senator from Alaska, Mr. Murkowski, for allowing me this 
time on the floor.
  First, I do want to say for all of us, and for the record, a special 
thanks to Senator Frank Murkowski for the phenomenal leadership effort 
he has put into the issue of energy and the development of a national 
energy policy for our country. He truly has been relentless over the 
last good number of years, not just starting when the lights went out 
in California but long before that when he and I and others who serve 
on that important committee in the Senate began to recognize that if we 
did not start reinvesting in the energy infrastructure of our country, 
that our Nation would at some point be in trouble.
  We have watched, over the last decade, our ramping up of a dependency 
on foreign oil sources. We began to see a rapid use of the surplus of 
electrical energy that was out there a decade ago, as our country, 
through the decade of the 1990s, continued to grow 3 and 4 and 5 
percent. No one was really reinvesting in building new generating 
capacity on the electrical side.
  As many know, starting in the mid-1990s we began to encourage the 
Clinton administration to come forward with a national energy policy, 
one that dealt with this broad range of issues. We called it the market 
basket of energy: the oil side, the hydrocarbon side, the coal side, 
the electrical-generation side, the new technology side. We began to 
invest in new technologies, in wind and in solar. We put money into 
fuel cells.
  Clearly, over the last good number of years we have advanced many of 
those technologies, but they are not yet mainstream. They do not yet 
fill up the market basket of energy, and we are still dominantly 
reliant on electricity generated by coal, by nuclear, and by hydro. We 
are still dominantly dependent on hydrocarbons, gases, and, of course, 
the crude that comes from around the world. We know it is well over 50 
percent. We are sometimes 60-percent dependent on someone somewhere 
else in the world being willing to put their product into the market 
for us to buy.
  The lights began to go out in California about a year and a half ago. 
It

[[Page S12229]]

was a major wake-up call to this country. California being our largest 
State and being the largest piece of the American economy, we knew that 
if California faltered and failed it could drag the rest of the economy 
down with it. I am from Idaho. Our State is part of a regional 
electrical grid that is dominated by the impact of California action. 
The State of Oregon, the State of Washington, the State of Montana, 
parts of Nevada, parts of New Mexico, and parts of Arizona were caught 
up in the California episode. I use the word ``episode'' as it relates 
to California.
  As we watched California restructure its electrical system, there was 
not an economist out there nor a few reasonable observers who knew 
electricity who said California was doing the right thing. In fact, 
most said California was doing the wrong thing, and that at some time 
in the future California would find itself in trouble. That is exactly 
what happened.
  My State of Idaho, being in that grid, began to get in trouble, too. 
We had the least cost power. We were hydro based. All of a sudden, our 
rates started going up.
  As a little side note to the rates going up, because we are a hydro-
based State and because over the last 2 years the Pacific Northwest has 
been in a drought, we were in even worse trouble. The energy issue in 
Idaho became a very strong issue as it grew across this country.
  A new President was elected last November. While he talked about 
education and he talked about compassionate conservatism, in one of the 
first meetings I had with President George W. Bush, he stood aside 
those issues and said: The most important issue for our country at this 
moment in time is the development of a national energy policy and a 
reduction of the dependency of our country and its consumers and our 
economy on foreign sources of energy, and I am going to assemble a task 
force headed by Vice President Cheney. We are going to make our 
proposals, and we are going to lead on this issue. We want you to work 
with us so we can develop a truly national, comprehensive policy.
  That was the beginning of a strong effort on the part of the House, 
the Senate, and the administration to work on the issue of energy.
  There are a lot of side stories and a good many side notes to this 
whole effort. But there is one thing that is very clear in the minds of 
the American people: That we are not masters of our own destiny when it 
comes to energy; that we are a phenomenally dependent economy when it 
comes to an adequate, abundant supply of energy at a reasonably low 
base price in that economy; when that fails or when those prices go 
radically up because the market price drives it, our economy is in 
trouble.
  About a year ago, Alan Greenspan said the recession was beginning to 
appear as a slowing of the economy, and it was clearly evident that the 
spike in energy costs would take a full percentage point off the 
economy and would cost millions of jobs in the economy as business and 
industry offset their profitability or their costs based on an 
unbudgeted, rapid increase in the price of energy.

  All of those scenarios played themselves out. All of them are 
extremely important to this country.
  The Senate began to work its will. The House began to work its will. 
Lots of hearings were held. We were beginning to shape and write a bill 
in the Senate. Frank Murkowski, Larry Craig, and a good many others had 
already introduced a bill earlier in the year. Chairman Bingaman 
introduced a bill earlier in the year. There were opposing points of 
view on energy--not dramatically different but different. That is OK. 
That is fair. That is the way the process works. But all of them were 
intended to come back to the Energy Committee in the Senate.
  Out of the effort of the Murkowski-Craig bill and the Bingaman bill, 
we were going to produce a national energy policy bill for the Senate 
which we planned to do through the months of September and early 
October after coming back from the August recess. The House had already 
worked its will with H.R. 4.
  The amendment we are offering today is the House product. But it was 
done before September, during the August recess. The House moved a 
little more quickly than we did and built a reasonably comprehensive 
bill to solve the problem I have just in a general way laid out for all 
of us.
  We came back from the August recess. The Senate began its work in the 
Energy Committee. Of course, the House had already worked its will and 
sent a very loud message to us, to the President, and to the American 
people that we could produce a comprehensive bill which included some 
very controversial but extremely important issues in it, such as 
exploration in northern Alaska as it dealt with broadening and 
developing our oil reserves.
  All of this is at hand when September 11 occurs--a dramatic and 
horrible time for our country. That incident and all of the preceding 
events have clearly reshaped the thinking of the American people about 
a lot of things. But very clearly it has reshaped the thinking of the 
American people in their attitude towards energy and energy supply.
  Let me give you an example. If you polled on the issue of oil 
exploration in northern Alaska before the September recess, a slight 
majority of the American people would have said: I don't think so. I 
don't think we ought to do that. After September 11, a substantial 
majority--from 40-plus to 60-plus--said: Yes, do it. Do it 
environmentally safe, but do it because all of a sudden the American 
people were focused as never before on our weaknesses, our dependency, 
and our inability to stand alone and stand firm. We had been struck. We 
had been hit. Thousands of Americans had been killed.
  Guess what. They came out of the Middle East. Guess where the largest 
supply of oil comes from on which we are dependent. It comes from the 
Middle East.
  Americans said: Why should that be so? Can't we be more independent? 
Can't we stand alone more strongly? We shouldn't be at risk. We are at 
risk. We were just struck on our soil, and thousands of Americans died.
  That was the thinking, and it was very clear.
  Here is an example. This is a poll taken on November 14. Ninety-five 
percent of Americans say Federal action on energy is important; 72 
percent of Americans say passing a bill is a higher priority compared 
to other actions Congress might take these days.

  The American people have elevated the energy policy issue as high as 
they have elevated airport security, as high as they have elevated 
antiterrorism, as high as they have elevated anti-biological warfare 
and anti-chemical warfare. It has become a national priority.
  Seventy-three percent of Americans say Congress should make energy a 
part of President Bush's stimulus package, and 67 percent of Americans 
say exploration for energy in the United States, including Alaska, 
should be part of a national energy policy.
  Post-September 11, some pollsters said, was the most significant 
shift in the minds of the American people in the history of modern-day 
polling. I believe that is true because Americans not only were fearful 
of what had happened but they began to reassess their own personal 
security, their families' security, their communities' security, and 
their States' security, and said: We are not secure.
  When I go to the gas pump and I fill my car, I am buying oil from 
Saddam Hussein. It is true--700,000 barrels of oil a day come out of 
Iraq, 12 million a day of your consumer dollars. Americans are paying 
$4 billion a year to an enemy so that he can further his weapons of 
mass destruction, so that he can fight a war against us and our friends 
in the Middle East. Yes, that is the reality of what we are doing. We 
did not do it consciously. We fell into it. We fell into it because 
this country has rapidly fallen into greater dependency on energy 
sources because we refuse to develop our own in a comprehensive, 
balanced, and environmentally sound way.
  Somehow there was this prohibition attitude that said, no, do not go 
there, even if there is energy there. We will buy it somewhere else. 
The environment is so valuable you cannot go there, whether it is 
offshore or onshore across America. What it did for us was open our 
soft underbelly of dependency to foreign interests, and shame on us for 
doing so. The American people are now saying that, and they are saying: 
Congress, change your attitude.

[[Page S12230]]

 Change your mind. We want to be stronger. We want to stand on our own 
two feet. We want to be able to supply a reasonable amount of energy 
for us, for our needs.
  New technologies? Absolutely. Alternative sources? Absolutely. But we 
also know for the next 25 or 30 years we are going to be dominantly 
dependent on hydrocarbons--gas and oil--we are going to be increasingly 
dependent on nuclear--and we should be; it is clean, and we ought to be 
building more nuclear facilities; we can meet our clean air standards 
if we build nuclear--and we ought to be looking at clean coal 
technology, and we have lots of coal. All of those things need to get 
done. There need not be a rush to judgment. There simply needs to be a 
systematic, methodical approach for dealing with this crisis.
  The speech I am giving today is in the backdrop of declining gas 
prices across America. I am sure there are a few of our critics out 
there saying: Oh, well, now look. They are rushing to judgment once 
again. There go those doomsdayers.

  What they ought to be saying is, because our economy has fallen 
almost on its face, there is a lessening demand for energy. We are not 
using as much in the airlines. We are operating at 60 percent there. 
Americans are doing less. Industry is doing less. We all know those 
figures.
  This week, for the first time, our agencies declared we were in 
recession. That is a large part of why we have seen declining usage. So 
if we have this moment of opportunity to bring more energy on line and 
lower the costs, it is, and it can be, one of the greatest stimuli to 
the economy of this country, if we do it and do it right.
  That is the scenario. That is where we are at this moment. And 
throughout all of this, something strange has happened. About a month 
ago, the majority leader of the Senate, Tom Daschle, picked up the 
phone and called Chairman Bingaman and said: Shut your Energy Committee 
down. I don't want you to mark up a comprehensive energy bill in 
committee.
  Why did he do that? I believe I know, but he has not told me 
personally. It was an unprecedented action.
  In the backdrop of all of this new national attention on the need for 
a greater sense of strength and energy, the leader of the Senate 
reaches out to his committee and shuts it down--the very committee that 
would craft the energy bill. I will tell you why he did it. Times have 
changed. He was behind the curve. America said explore in Alaska as a 
part of a comprehensive policy, and he had an environmental political 
debt to pay, and he is going to pay it. The way to do that is not to 
allow that vote on the floor, not to allow that vote, when the American 
fervor of self-reliance is high and when the American fear of foreign 
dependency is higher. We hope that will settle out, I think he thought. 
And next year--next year--sometime we will do a national energy policy 
and maybe then we can win the vote on ANWR.
  What he failed to recognize was that before the crisis in September, 
the House had already passed a bill with Alaska exploration in it. It 
has only increased, since September 11, the attitude toward that kind 
of exploration.
  So because the majority leader of the Senate shut his committee down 
in an unprecedented act and denied them the right to mark up a bill in 
the appropriate bipartisan way, we are on the floor today, using a 
tactic that is procedural and appropriate but somewhat unprecedented 
when it comes to offering up a major national energy policy.
  The bill we would have produced, the bill that Chairman Bingaman 
would have produced had he been allowed to, had he not been forced to 
shut down his committee, would have been a much stronger bill and a 
broader bill than the H.R. 4 bill that we have on the floor today, the 
amendment that we are going to try to attach to railroad retirement 
because we have been given no other alternative on this critically 
important issue.
  I support railroad retirement. Railroad retirement will be strong if 
railroads can buy reasonably inexpensive diesel to fuel those big 
trains out there. But if diesel were to go to $3 or $4 a gallon, 
railroad retirement and the financial stability of the railroads would 
not be worth much. That is why it is appropriate to put an energy bill 
that will keep costs to the rails down and costs to the consumer down 
as it relates to their need for energy and attach it to this 
legislation.
  But the reason we are doing it is because the majority leader of the 
Senate has denied us no other approach. In fact, he has denied the 
right of the Senate to work its will, to do what the American people 
want, what 95 percent of the American people say is now necessary, what 
72 percent of the American people now say is a critical priority that 
ought to be included in President Bush's stimulus package to improve 
the state of the economy.

  And where is our majority leader headed? In the other direction, away 
from what the American people are asking for, and what our President is 
pleading with us to get done before we leave town for Christmas.
  The Senator from Texas has come to the Chamber and wants to speak. 
Let me mention just a few other things about a national energy policy.
  One item in a comprehensive bill deals with exploration in Alaska--
one item--and yet if you listen to the debate or you listen to the 
critics, you only hear one item: Alaska.
  Let me talk about a few other things. H.R. 4, the amendment that we 
want to put on here, that we are going to be voting on on Monday, 
reauthorizes Federal energy conservation programs and directs the 
Federal Government to take leadership in energy conservation with new 
energy savings goals--produce more but use less. It means you can have 
a growth economy and an abundance of energy. It isn't all conservation, 
and we know it. It expands Federal Energy Savings Performance 
Contracting authority. It increases Low Income Home Energy Assistance 
Program--what we call LIHEAP--and Weatherization and State Energy 
Program authorization levels to meet needs of low-income families. Most 
of us want that and think it is appropriate. That is a part of it.
  It expands the EPA/DOE Energy Star Program and directs the EPA and 
DOE to determine whether Energy Star labels should be extended to 
additional products. That is called causing and promoting industries 
out there to produce instruments and equipment and usages for consumers 
that consume less energy. That is called conservation.
  It directs DOE to set standards for appliances that are on ``standby 
mode'' energy use. A lot of energy is being used today by the new high-
tech economy. We are asking--and causing by promotion and credit in the 
marketplace--that industry, as it grows, that it should produce 
products that consume less energy.
  That sounds like a pretty good idea. It reduces light truck fuel 
consumption by 5 billion gallons over the next 6 years, improves 
Federal fleet fuel economy, and expands use of hybrid vehicles. That is 
new technology. Those of our friends who are critics about exploration 
on the public and private grounds of Americans say: You can lead out of 
this with just the new technology. We are saying: Let's do both. Let's 
put the new technologies on line. While the old technologies are being 
replaced, let the marketplace work and the infrastructure that supplies 
these new technologies build over time. And it will, as they become 
viable.
  About a year ago I went to Dearborn, MI. I drove a new Ford fuel cell 
electric car. It was a beautiful car. I had it out on the racetrack, 
roaring around the track with an engineer. He said: Feel the thrust. He 
didn't say: Step on the gas, he said: Step on the pedal. There was no 
gas in that car. It was a hydrogen fuel cell car. I kind of slipped on 
one corner because it was raining. He said: You better be careful; this 
car costs $6 million. I had never driven a $6 million car. His point 
was it was a prototype. It is very expensive. As it comes on line in 
the market and the market expands, the price will go down dramatically.
  In order to build an assembly line to produce a hydrogen fuel cell 
car, it would compete in the market with other cars, but then where 
would you fuel it? You have to build fueling stations around the 
country. The gas station that we drive into today is a product of 70 
years of building up an industry to supply an American need. Not 
overnight do we replace that with a new industry that could fuel a 
hydrogen fuel cell car.

[[Page S12231]]

  That is my point about working to bring new technologies on line 
while building the resource of the current technology and the current 
energy.
  I could go on through the long list of items that are in H.R. 4. The 
point is simple. While the public's attention will be directed toward a 
single item in a major comprehensive bill, called exploration in 
northern Alaska, what the rest of the world needs to hear is that there 
is a lot more to talk about and a lot more to get done.
  Let me close by saying: Tom Daschle, 95 percent of the American 
people are asking you to help us produce a national energy policy. The 
President and the Republican Senate and 73 percent of the American 
people are saying: Mr. Daschle, allow it to be a part of the economic 
stimulus package. It is that important. Senator Daschle: Why don't you 
lead us and help us get there instead of blocking us and trying to stop 
us from getting there?
  I yield the floor.
  The PRESIDING OFFICER (Mr. Nelson of Florida). The Senator from Texas 
is recognized.
  Mr. GRAMM. Mr. President, let me identify myself with the excellent 
remarks of our colleague who just spoke. We are going to have an 
opportunity on Monday to determine whether or not we want to debate 
energy policy in America and whether we want to deal with the problem 
of human cloning. That will come on the cloture vote. If cloture is 
invoked on the railroad retirement bill, those two issues will be 
sheared off and we won't get an opportunity to vote on them. If cloture 
is not invoked, we would get an opportunity to vote yes or no on them, 
and then they would go forward as part of the railroad retirement bill, 
if they were adopted. I identify myself with the excellent remarks that 
were given.
  I must be getting 300 or 400 calls a day about railroad retirement. I 
am getting lots of letters--I am not getting the letters; they are 
coming, and I am going to get them some day when we get through with 
this anthrax business and I will be able to answer them. It frustrates 
me.
  I would like to try, as briefly as I can today, to explain this issue 
on railroad retirement at least as I see it. I will try to present the 
facts. We are all entitled to our own opinion, but we are not all 
entitled to our own facts.
  The first way, the best way to start this discussion is to explain 
how I became involved in the debate. About a year ago, I had 
representatives of the rail labor unions and the railroads come to see 
me to talk to me about a proposal they had to ``reform railroad 
retirement.''
  I guess other things being the same, I am for reform. But when it 
became clear that they were talking about taking the sterile assets 
that are now sitting in a meaningless IOU in the Federal treasury and 
investing it in stocks and bonds and real wealth, out of which they 
were going to be able to pay benefits to railroad retirees, I think it 
is fair to say that even for an old jaded politician, I was excited 
about this bill. Into my office came all of these people, representing 
these major interests, very knowledgeable, very intelligent people who 
were there to lobby me on behalf of it.
  I guess it took me about 5 minutes to figure out that something 
didn't add up. Let me offer a little information to set the predicate 
for that.
  As everybody who has not been hiding under a rock somewhere for the 
last 25 years knows, Social Security is in trouble. We have gone from 
42 workers per retiree, when we started paying Social Security 
benefits, to 3.3 workers today per retiree. We are in sheer panic--I 
am--about what we are going to do as baby boomers start to retire, and 
we move from 3.3 workers per retiree to 2 workers per retiree.
  While I may be the strongest proponent on the planet of taking the 
Social Security surpluses we have and investing them in real wealth to 
bring in what Einstein called the most powerful force in the universe, 
the power of compound interest, I have never claimed, nor has anyone 
ever claimed, that for the next 25 years that even the best investment 
program imaginable by the mind of man could enable us to raise Social 
Security benefits now, to lower the retirement age for Social Security 
benefits now, or to cut Social Security taxes now.
  I have not been here forever, but I didn't just come in on a turnip 
truck yesterday. I started with this knowledge that in Social Security, 
with 3.3 workers per retiree, we are looking at dramatic increases in 
taxes or dramatic reductions in benefits, and maybe both, and that an 
investment component could mean less in the way of reductions in 
benefits and less in the way of increases in taxes. But not by any 
imagination that I have could I have believed that we could with any 
kind of investment program in Social Security raise benefits today and 
cut taxes today knowing that in Social Security there is only 3.3 
workers per retiree. And yet these people come to my office and tell me 
that we can have a railroad retirement investment program and that we 
can immediately slash taxes that are going to fund railroad retirement. 
We can immediately increase benefits. We can immediately change the 
retirement age.

  We are in the process now of raising the retirement age for Social 
Security from 65 to 67. And in walk these people saying to me: Look, 
with this little investment program, we can today change the retirement 
age in railroad retirement from 62 to 60.
  While I wouldn't have believed that for Social Security, let me give 
one more set of facts. Today in Social Security we have 3.3 workers per 
retiree. In the railroads, we have one worker per three retirees. The 
railroad retirement program is in nine times worse shape than the 
Social Security program. We have three workers per retiree in Social 
Security, they have one worker for three retirees in railroad 
retirement. And yet these people, highly paid, highly intelligent 
people came in to my office. They were lobbyists. I don't begin to act 
as if something is wrong with lobbying. The Constitution guaranteed 
them the right to come make this pitch to me. But with a straight face, 
they came in my office and said: If you will let us take $15 billion, 
we will invest it, we will raise benefits, we will lower the retirement 
age--and I am not talking about way off in the sweet by and by, I am 
talking about today--we will raise benefits, we will lower the 
retirement age to 60, we will cut taxes on the railroads that fund 
railroad retirement, and it will just be great.
  Now, I am sorry to say, I don't know what their pitch was to the 74 
Members of the Senate who signed on as cosponsors, but that was their 
pitch to me. I didn't believe it. And I was right. I will explain to 
you why I was right. I didn't believe it because it didn't make any 
sense. And now that we have the railroad retirement board to work out 
all the numbers, let me tell you what the plan is and then show it in 
terms of the numbers and talk about the danger it creates.
  What must have happened is--and this is just theoretical, but it 
seems to me this is what happened--our railroads have had problems 
really since their formation because they got lots of assistance from 
the Government. They negotiated labor agreements that didn't make 
sense. They had massive featherbedding. When they started competing 
against trucks in the 1930s, they were forced to reduce their labor 
force. So they had this huge number of people, they have huge severance 
pay packages, and they have very high retirement benefits. So they got 
in financial troubles.
  I am sure that sometime last year, or the year before, somebody with 
the railroad said: Look, we have over $15 billion of real assets in the 
railroad retirement program. You need to realize that railroad 
retirement has never been self-sufficient; the Federal taxpayer heavily 
subsidizes it, and there is no private retirement program that could 
run with the benefits it is paying out, with a trust fund as small as 
their trust fund. So it has never been self-sustaining; the Government 
has always been a very heavy contributor to it.

  But what must have happened last year, or the year before, is 
somebody with the railroad said: Wouldn't it be great if we could get 
some of that money out of that trust fund? We would like to have it.
  But they could not figure out, to save their lives, how they could 
raid the railroad retirement trust fund without the unions going 
absolutely crazy. So it looks to me as if some really smart lawyer, 
lobbyist, economist--somebody--came up with the idea that the

[[Page S12232]]

railroads should go to the unions and say: Look, if you will let us 
take $7.5 billion out of this retirement fund, we will let you take 
$7.5 billion out of it, and we will leave the Federal Government on the 
hook for paying this benefit.
  Now that is literally what happened. Today it is typical of the news 
coverage--and this is an article in the Roanoke Times. I don't know why 
my clipping service got it. They are talking about my opposition and 
Senator Domenici's and Senator Nickles', and they say we argue that 
taxpayers would be left holding the bag because the railroads and the 
unions want to take the money out of Government funds and invest it.
  It is not investing that I am against. It is pilferage that I am 
against. If they were investing the money, I would be saying hallelujah 
choruses right here before Christmas. I am for investing it. It is 
stealing it that I am against.
  How can I say such a thing? Let me tell you how. It is true. It is 
just that simple. What I have done here is taken the data from the 
railroad retirement board--and I am not a member; this is not my data; 
these are the facts. According to this line right here on the chart, 
over the next 25 years the trust fund balance of railroad retirement 
would look like this under the current system. They are closing in on 
$25 billion now, and that would rise over the next 25 years from about 
$20 billion to about $35 billion--still a very modest trust fund for a 
retirement program the size of railroad retirement. But we rejoice in 
it.
  Now if you listen to the proponents of this bill, they say: Look, all 
we want to do is take this money and invest it. They assume--and I 
grant them the assumption because I believe it is true that over the 
long term they can get 8-percent return on investment. Currently, they 
are not getting it on government bonds; it is an IOU from the 
Government itself. It is not really an investment. Investing it would 
be a good thing. I am for it. Wouldn't you believe that if you were 
getting no return now, and you had 8 percent after inflation, the value 
of the trust fund would go up? I mean, what investment can you imagine 
that--if you were getting an effective zero rate of return today and 
you started getting 8 percent, don't you think the investment would 
grow in value? Yes, it should be getting bigger. But what happens, if 
we adopt this bill, is the trust fund will start falling and will fall 
dramatically until the emergency provisions of the bill kick in and 
taxes are automatically raised on the railroads.
  What literally happens--and I want people to listen to these 
figures--under this bill is that the $15 billion is not invested, it is 
pilfered. What happens under this bill is that over the next 17 years, 
despite the fact that we are getting a higher rate of return on the 
money, the balance actually falls by $15 billion.
  How do you get a higher rate of return and end up with less money? 
You end up with less money because, before anything is invested, before 
one penny is invested, we are going to slash taxes on the railroads 
from 16.1 percent to 14.75 percent to 14.20 to 13.1, and we are going 
to lower the retirement age for beneficiaries, we are going to cut the 
time for vesting in pensions in half, and we are going to raise the 
value of many pensions.

  So what we are literally doing is this, if you work out the numbers. 
If it doesn't smell like a political deal to you thus far, it will when 
I give you the numbers. How much of the $15 billion do you think goes 
to the railroads? How much do you think goes to the employees? You 
would think, if it were just accidentally distributed by some program, 
one might get a penny more than the other and it might be a little bit 
different. Incredibly, over the 17 years, $7.5 billion of this pension 
fund goes to the railroads and $7.5 billion goes to the union members.
  Now what happens when suddenly you have a program where, despite the 
fact that you are getting interest, which you didn't before, over the 
next 17 years you have $15 billion less, because before you have 
invested a penny, you have cut taxes and you have raised benefits--what 
happens? The program starts having big-time problems. In fact, under 
their own numbers, what happens is, while the tax rate on the railroads 
gets down to 13.1 percent by 2004, by 2025, just to cover the portion 
for which they are liable under this bill, their tax rate would have to 
be up to 22.1 percent.
  The reason this trust fund does not go right through the floor is 
there is a provision in the bill that says if the trust fund is, for 
some reason, used up, and the reason is pilferage, that while taxes are 
being cut on the railroads now and raising benefits now, in the future 
taxes on the railroads are going to have to be raised to make up the 
difference, and that tax is capped at 22.1 percent.
  Imagine when we have been cutting taxes and increasing benefits and 
all of a sudden the railroad retirement program is in dire straits and 
the railroads have to raise the percentage of wages they put into the 
retirement program from 13.1 percent to 22.1 percent in 3 years, what 
is going to happen? They are going to run to Congress and say, we are 
going to go bankrupt. We are going to have to shut down every railroad 
in America. There is no way we can go from 13.1 percent of our wage 
bill going into this retirement program in 2019 to 22.1 percent going 
into it in 2025.
  We have let the railroads come in and take $7.5 billion. We have 
given the employees $7.5 billion. The Federal Government is 
guaranteeing this retirement program now. We get out to 2022, the 
bottom is falling out of the program, and so the trust fund, which 
would have been up here, would have been almost $40 billion under the 
current system, but now it is down below $10 billion.
  Remember, they invested the money. They are getting 8 percent, and 
the trust fund has gone from almost 40 to below 10? How could that 
happen? Because they are taking money out of the trust fund and giving 
it to the railroads and giving it to the retirees.
  To fill up this gap, let me give a figure. The year is 2026, 25 years 
from now. Now we have passed a railroad retirement bill that is loved. 
The railroads are for it. The retirees are for it. The unions are for 
it. It is wonderful. It has this cloak that says we are going to let 
them invest this money, but when we look at the numbers they are not 
investing the money. They are spending the money.

  So 2026 comes. We have a crisis in railroad retirement. The taxpayers 
are guaranteeing it. What kind of payroll tax would there have to be on 
January 1, 2026, to put the system back where it would have been had we 
never passed this bill that has 74 cosponsors? Listen to this. Hold 
your hat. We would have to have a payroll tax of 153 percent of wages 
on January 1, 2026, to put back the money that has been pilfered out of 
railroad retirement.
  In other words, if a person is paid $1,500 a month--or say they are 
being paid $1,000 a month. I guess they do not hire anybody at $1,000 a 
month, but it makes the arithmetic simple. If somebody is being paid 
$1,000 a month, $1,530 would have to be put into railroad retirement 
from the first paycheck in January of 2026 to get the trust fund 
balance back to where it would have been before the $15 billion was 
stolen.
  Does anybody believe that on January 1, 2026, the railroads are going 
to be able to pay a payroll tax of 153 percent? Nobody believes that. 
Nobody believes they are going to be able to pay the payroll tax of 
22.1 percent, which the bill would require them to pay. Given the 
figures of the Railroad Retirement Board, if we pass this bill, the 
amount of money going into the pension fund from the railroads would go 
down from 16.1 to 14.75, 14.2, 13.1, and it would be at 13.1 in 2019. 
So we are right here. The bottom is falling out of the program.
  The law starts requiring money to be put back. So within a 6-year 
period, this payroll tax to fund this program has jumped from 13 
percent to 22 percent, and we still are nowhere near where we would be 
if we had never passed this bill. In fact, as I noted, we would have to 
have a 153-percent payroll tax to get us back to where we were if we 
had never done this.
  That is not going to happen. Neither one of those payroll taxes are 
going to happen. What is going to happen is we are going to pass this 
bill and, boy, it is going to be loved. This is consensus. The 
railroads are for it. The retirees are for it. The workers are for it. 
It is true, if one looks at the numbers they are taking $15 billion 
right out of the

[[Page S12233]]

trust fund. But it is a victimless crime, right?
  In fact, as one of the railroad executives says in the paper today, 
``It is our money.'' It is their money. Well, what if we were taking 
money out of the Social Security trust fund and giving it away? After 
all, probably the guy who gets it, it would be their money.
  The point is, however, the Federal Government is on the hook to pay 
these benefits. There is nowhere near enough in the trust fund today to 
pay the benefits. When we give this $15 billion away, we are putting 
the taxpayer on the hook and come 2019, when the bottom falls out, the 
railroads--I am not going to be here. I do not know how many people are 
going to be here when it happens, but it is going to happen if we pass 
this bill. When the bottom falls out, the railroads are going to run in 
and say, we cannot operate and pay these kinds of taxes.
  Nobody is going to say, well, you should have thought about that when 
you participated in stealing $15 billion out of this trust fund. They 
do not say that.
  They are going to say, well, look, we cannot let the railroads go 
broke. So what we are going to do is we are going to have the Federal 
Government pay an even larger share of the cost of this retirement 
program.

  That is basically where we are. We have a proposal before us that 
claims it is reforming the program. It claims it is earning interest on 
the assets of the railroad retirement program. But if it is earning 
interest, why are the assets going down instead of going up? Because 
before one penny is invested, before one penny is earned, it slashes 
the amount of revenue going into the pension fund. It vastly increased 
the benefits being paid out.
  The railroads are for it because they get $7.5 billion. Railway labor 
is for it because they get $7.5 billion. Who pays the $7.5 billion? The 
taxpayer.
  Let me sum up by noting what we ought to do. I want to state a 
paradox. America loves consensus. I have to say when I go to my State, 
the people are sweeter to me now than they have been in a very long 
time. I think they are because they sense we are pulling together. We 
had this terrible thing happen on September 11, and I think for about 6 
weeks we did have a pretty good consensus, and I was proud of it.
  Bipartisanship and consensus are not always good things. Let me 
repeat it because it is a pretty startling statement. Bipartisanship 
and consensus are not always good things. In fact, the Founders 
understood checks and balances. When labor and business get together, 
it is not always in the public interest.
  What we have in railroad retirement is literally a proposal to 
pillage $15 billion out of the railroad retirement trust fund over the 
next 17 years, give half of it to the railroads, half to the union, and 
the taxpayer ends up in a very deep hole in supporting railroad 
retirement.
  They will claim when you hear the debate: But when it goes to hell, 
the taxes on the railroads are automatically raised. They are, but only 
up 22.1 percent. To get back in the year 2026 where we would be if we 
never let the money be taken out, there must be a payroll tax of 153 
percent. Obviously, this is not going to happen.
  What should we do? First of all, nobody wants to hear this stuff. 
When all the people came in to our offices, this sounded as if 
Christmas had come early, so 74 Members of the Senate signed onto it 
and gave it a big fat kiss. Now nobody wants to know the problem. 
Nobody wants to fix it. Here is how we can fix it and still 
dramatically improve the well-being of the railroad and the retirees. 
Take the $15 billion and invest it; don't pilfer it, invest it. Then 
out of the interest that we earn on the investment, once the money is 
earned, look at strengthening the trust fund, look at these very high 
taxes railroads have to pay, and look at benefits. But don't go out and 
spend the money first. Invest the money first, earn on the investment, 
and then look at using that to make the system safe and sound, first; 
and then to improve it, second.
  I would change the program by requiring, before any taxes are cut, 
before any benefits are increased, we make the investment and we 
actually have the money in hand. I do believe there is a very real 
problem of what we are doing--even if you have the money, and it is 
clear you don't.

  Here is another figure: To just fund the new benefits promised, even 
with the interest rate you could earn by investing the money, you would 
have to raise payroll taxes by 6.5 percent more. It would have to be 
6.5 percent higher each year, for the next 25 years, just to pay for 
the lower retirement age, the quicker vesting and the more generous 
pensions. We are not raising payroll taxes when we increase the 
benefit; we are lowering them.
  We need to fix this bill. We are going to have cloture on it. I hope 
we have a chance to debate energy, which is a crisis issue, and too 
human cloning, because I believe the Senate would vote overwhelmingly 
to at least have a 6-month pause to look at it. That would also give an 
opportunity to come up with a rational way to improve railroad 
retirement. This is almost too good to be true, because it is too good 
to be true. There is no investment scheme that has ever been derived 
that would let you do what is being done here. If you look at the trust 
fund, it is clear it is too good to be true because it is not true. I 
hope, even at this late date, even though people are signed on to this 
bill, that people will look at it and give us a chance to fix it.
  I am going to offer a series of amendments. One of them will say 
don't cut taxes, don't raise benefits until you have made the 
investment and earned money to pay it from. Don't just draw down the 
trust fund, because right now we have a trust fund. Don't use it up now 
so we don't have it when retirees need it.
  Another amendment I will offer would be to not let the money be taken 
out of the Social Security trust fund to pay for these new benefits. 
These are things that need to be addressed.
  I have come today to basically explain how it is possible to be 
against this bill. It appears that everybody is for it, but it is a bad 
bill. It is a dangerous bill. It is a bill that puts the taxpayer in 
mortal danger. It is a bill that doesn't make any sense on its face. I 
don't know how anybody could have ever sold it. I am sure whoever came 
up with this whole deal of giving half of it to labor, half to 
management, and selling it to Congress as a reform based on 
investment--even though the trust fund goes down like a rock--I am sure 
whoever devised this stuff made millions. And they should have.
  The problem is, this isn't some kind of game. This is real public 
policy. The idea that we would have a bill that will literally pillage 
the trust fund of railroad retirement funds is a startling thing. This 
may pass. It probably will pass. I would rather it not pass on my 
watch. I am going to vigorously oppose it. I hope my colleagues, even 
at this late date, will look at these things. If somebody wants to 
debate this, if somebody wants to come over and present their figures, 
if they will let me know, I will come over and debate them on this 
subject. However, I haven't seen anybody present the argument for the 
other side. I believe there is no argument for the other side.
  What we are seeing is basically misinformation. The idea that we have 
railroads saying, ``All we want to do is invest the trust fund,'' when 
billions of dollars are being taken out of the trust fund despite 
interest that is supposedly being earned, obviously something is very 
wrong.
  I urge my colleagues, I urge people that follow these issues, to look 
at these facts, verify what I am saying and raise these issues.

  People writing about this in the media, don't be confused. I am not 
concerned about investing $15 billion. That is God's work. I am for 
investing $15 billion. What is happening, when the trust fund is 
projected to look like this line, and it is turning out to look like 
this, that is not investment. That is pillaging. That is taking money 
out of the trust fund.
  We need people to start asking: Why are we doing this when the 
taxpayer is liable: If they start asking, maybe we can fix it.
  I appreciate the indulgence of the Chair. I yield the floor.
  The PRESIDING OFFICER (Mr. Wyden). The Senator from Alaska.

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