[Congressional Record Volume 149, Number 116 (Thursday, July 31, 2003)]
[Senate]
[Pages S10469-S10526]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ENERGY POLICY ACT OF 2003
The PRESIDING OFFICER. Under the previous order, the Senate will
resume consideration of S. 14, which the clerk will report.
The assistant legislative clerk read as follows:
A bill (S. 14) to enhance the energy security of the United
States, and for other purposes.
Pending:
Campbell amendment No. 886, to replace ``tribal consortia''
with ``tribal energy resource development organizations''.
Durbin modified amendment No. 1385, to amend the Internal
Revenue Code of 1986 to provide additional tax incentives for
enhancing motor vehicle fuel efficiency.
Domenici amendment No. 1412, to reform certain electricity
laws.
Motion to commit the bill to the Committee on Energy and
Natural Resources, with instructions to report back
forthwith, with Frist amendment No. 1432 (to instructions on
motion to commit), to provide a national energy policy for
the United States of America.
Frist amendment No. 1433 (to instructions on motion to
commit), to provide that all provisions of Division A and
Division B shall take effect one day after enactment of this
Act.
Frist amendment No. 1434 (to amendment No. 1433), to make a
technical correction.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Madam President, as chairman of the Committee on
Energy, I am ready to proceed at any time. We have no amendments on the
Republican side, so the amendments are all on the Democrat side. We
stand ready to accept amendments, to debate them, to vote on them, to
get rid of them. We are on one of the sections that is clearly
definable. It has a limited number of amendments, the so-called
electricity section. We very much would like to proceed and ask the
other side if they are ready, if they could perhaps start with an
amendment on the electricity side, and let us know what the remaining
amendments are so we can see how long it will take us to complete the
electricity title of this bill.
I say that, and at the same time I put it as a question to the
minority leader.
Mr. DASCHLE. Madam President, could the Chair inform the Senate as to
what the pending business is?
The PRESIDING OFFICER. The pending question is the majority leader's
second-degree amendment to his first-degree amendment to his motion to
commit.
Mr. DASCHLE. Do I understand the Chair that the answer is the pending
business is the motion to commit the bill, not the electricity title,
is that not correct?
The PRESIDING OFFICER. The pending question is that motion and the
amendments thereto.
Mr. DASCHLE. I inform my colleagues that is the issue.
Last night, the majority leader filled the tree and made a motion to
commit, moving off of the floor for consideration of the energy title.
I will talk about that for a couple of minutes as I consider those
actions last night.
We have heard some very creative explanations from the majority about
how the Senate has gotten into the mess we are in this morning. They
are doing their best to blame Democrats, as usual. There is one simple
explanation for why the Senate has not finished its work: Politics. The
majority has been playing politics with this bill and with other
issues. That is just not conducive to reaching the good bipartisan
outcome we expect in the Senate. Republican leaders have been playing
politics so much that some Members of the Republican caucus have
themselves begun to protest.
Conservative Republicans now say their leadership could have finished
this Energy bill if the Senate had not been repeatedly distracted by
political matters. I agree.
In an article headlined ``Frist Schedules Judicial Votes, Slowing
Energy Bill'' in today's addition of Rollcall, it reported that:
Though most Republicans are publicly blaming . . .
``obstructionism'' for the sputtering energy debate, many GOP
Senators privately acknowledge that the [majority leader's]
decision to pepper this week's schedule with unrelated votes
on controversial judicial nominees has made it less likely
the Senate will pass the energy bill before the August
recess.
That is not Democrats talking; that is what Republicans have said.
The Rollcall article goes on to quote one Republican Senator:
It might have been better not to have brought [judges] up.
I think it was a mistake.
That is according to Jim Inhofe, quoted in Rollcall.
It quotes Senator Larry Craig, ``who is one of the many conservative
Republicans who have complained about Frist's unwillingness to push the
energy bill to Senate passage, [and] said the majority leader could
have avoided the time issue on judges by not bringing them up at all.
``It was unwise,'' said Craig, former chairman of the
Republican Policy Committee.
I've been in the leadership--never at [Frist's] level--but
I clearly realize the pressures put on you to do other things
in the runup to a recess.
I've also been involved in tough floor debates before, and
once you get on them, you stay on them, and you drive it
until you finish it.
Senator Craig Thomas agreed:
I wish we hadn't gone off it, frankly.
The Rollcall article went on to state that relatively few debate days
spent on energy ``have been spread out over the past three months
causing Craig and others to complain that the on-again, off-again
schedule has prevented the bill from gaining the momentum to pass.''
Again, all quotes from Rollcall this morning.
Last evening provides a good but regrettable example of how this on-
again, off-again Republican schedule has slowed the energy debate. The
Republican leadership scheduled a vote for this morning on cloture on
the nomination of one of the most highly controversial nominees we have
had in this Congress. The outcome of today's vote was never in doubt.
It was scheduled purely for political reasons, to satisfy a segment of
the far right. A schedule of this vote elicited a vote last night not
on energy but on a controversial judicial nominee. The Senate spent
from 6 p.m. yesterday until 10:17 p.m. debating something other than
energy, 4\1/2\ hours wasted on political debate brought on by
Republicans, 4\1/2\ hours that could have been spent productively on
the Energy bill.
That is not the only kind of interruption we have had this week. We
even stopped action on the Senate floor on Tuesday for 2 hours so the
Senators could attend a meeting at the White House. Guess what the
purpose of that meeting was. For the Senate to be urged to complete the
Energy bill. So we took 2 hours off of the floor debating the Energy
bill to talk about how important it was to complete it--a few blocks
from here at the White House.
Hurry up and wait seems to me to be the adage. Stop and start, switch
gears. That has been the pattern all week long. In fact, that has been
the pattern now for months. At one point we interrupted the Energy bill
on June 12th and we did not return to it until the evening of July
24th, an interruption of 5\1/2\ weeks. To make matters worse, we are
told the topsy-turvy schedule will continue tomorrow. As if the
schedule were not bollixed up enough already, Senate Republican leaders
now say we will be taking up the nomination of yet another
controversial nominee for another political vote tomorrow.
As Republican Senators said today in Rollcall, that is just not the
way to complete action on a major, complex piece of legislation.
Something else is very important about this debate. It has been
omitted from what the majority is saying this morning. It is what this
Energy bill and its debate is supposed to be all about. It is about
ensuring Americans will have a comprehensive, balanced, reliable energy
policy that protects consumers from energy market manipulation and high
energy prices. These are important issues. It takes time to get them
right. We have a duty to the American consumer to ensure that we fully
consider what our energy policy should be in the future.
[[Page S10470]]
Without further amendments, this bill, unfortunately, could be billed
``the Enron Production Act.'' Despite the massive problems experienced
in our energy markets recently, this bill fails to address some of the
most basic problems we are facing in our country today. It fails to
outlaw many of the most egregious scams and frauds that have been
perpetrated against energy ratepayers all across the country.
The round-trip trading was one of the scams used in manipulating the
markets by Enron. Round-trip trading was actually covered in the
Domenici bill and was also covered in the amendment offered by the
distinguished Senator from Washington, Senator Cantwell. Fat Boy,
hiding the profits and then making a number of different calculations
and begging for others to get involved, the Fat Boy scam is not
included in the bill. It was included in the Cantwell amendment that
came up yesterday. Ricochet, which allows Enron and other companies to
dodge the price caps, was not in the Energy bill but was in the
Cantwell amendment yesterday. Death Star, the leaking air out of tires
and then paid to tow, that, also, is something that was not covered in
the Energy bill but is covered in the Cantwell amendment. All the way
down, every single one of the scams used by Enron, except for one, was
intentionally eliminated, removed from the Energy bill.
There is no protection against the very scams that devastated
California and devastated Washington and are going to devastate the
country unless we deal with it. Why have they been left out? I can't
tell you. But they are left out, leaving consumers with the very likely
prospect they will get gouged this winter with natural gas prices and
you will see manipulation like we saw with Enron, over and over again,
because this bill is unwilling to address those key manipulation
practices that made Enron the scorn of the country that it is today.
Democrats are willing to work, as I have said 100 times on the Senate
floor over the course of this year. We are willing to work with our
colleagues to come up with a bill that works, that addresses these
scams, that addresses all the shortcomings, that provides a meaningful,
comprehensive piece of energy legislation. But to do that, we have to
address electricity in a meaningful way; we have to look at global
warming; we have to pass a renewable portfolio standard; we have to
address CAFE; we have to ensure that hydroelectric dam relicensing is
included; we have to ensure Indian energy is part of our plan, nuclear
subsidies, natural gas, energy efficiency incentives, wind energy,
carbon sequestration. All of those issues are legitimate, worthy
considerations for debate, amendment, and ultimate decision by the
Senate as to what kind of energy policy we ought to have in this
country.
These are not single amendment issues. Each one of these areas is
going to take a little time. But you don't have that time to deal with
these questions when you have debated William Pryor for 4 hours in a
prime time opportunity last night. You are not going to deal with it
today when we have to explain why Carolyn Kuhl is a nominee about whom
we have great concern. You are not going to do it, as our Republican
colleagues have said, when you get waylaid and you are taken off the
bill for days, if not weeks, at a time.
So it is no surprise that we are in this mess this morning. We faced
a very difficult time last year passing an Energy bill. But you know
what we did? We stuck to it; we stayed with it. It took us days and
days. We entertained 144 amendments. We had rollcall after rollcall on
every one of these issues. We ultimately passed the bill 88 to 11. But
that is how you work in the Senate. That is how you get the job done.
You don't bounce around taking this from that, moving from this to
that, and ultimately not having the kind of momentum it takes to finish
a bill on time.
We have only spent, realistically, 8 days on this bill--8 days. We
have only had a few rollcall votes. We have considered 102 fewer
amendments than we did last year.
I am not suggesting that somehow we have to replicate what happened
last year. I think we can do it faster than that, and I have come to
talk to the distinguished manager on more than one occasion to say we
are prepared to work with him.
I don't know of anybody who has worked harder to accommodate our
majority and to work to see that we find ways in which to work through
these amendments such as the Energy title, more than Senator Reid has,
our assistant Democratic leader. No one has worked harder than he has
to get to a point where we can actually consider these amendments one
by one. Nobody is trying to delay this bill. But it is impossible to
finish it with all of the extraordinary diversions we have had.
I will end where I started. This is politics. This is blame the other
guy. This is, we can't get it done so we will just tell everybody it is
the Democrats' fault.
I thank our colleagues for their candor in Roll Call this morning
because they have laid the facts bare. They know and we know why we
don't have this bill done. They know and we know that until we get
serious about meaningful consideration of amendments on these difficult
issues, we are not going to get it done.
We are prepared to work. But as long as we have nominations such as
we have this morning that is impossible. I yield the floor.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Madam President, first, let me say I am very
appreciative of the efforts that have been put forth by Senator Reid,
working with the Senator from New Mexico and others, as we move through
this bill.
Second, I am absolutely positive that the issues which the
distinguished leader raises, in terms of the people of our country
needing protection and his long litany--I am absolutely concerned that
when the day is done and the bill is passed, that the Senate will find
that each and every one of them are covered and they are in this bill.
We didn't work forever to leave the kinds of loopholes to hurt the
American people that are described in that litany of items that the
distinguished majority leader says remain undone. I understand. He
would rather we prove that on the floor of the Senate. I assume that is
what he is talking about, by way of debate.
But so there will be no misunderstanding, this is a good bill. The
electricity section covers every one of those issues that were raised.
The question is, How long should it take for us to get those issues
before us, debated, and completed?
I am not here to discuss the policy of our leader. He is here; our
whip is here. They can discuss that. But I know we could have
accomplished a lot more than we have as of today on the Energy bill. We
could have accomplished, in my humble opinion, without any question,
the entire electricity portion of this bill. Every reasonable amendment
anybody has could have been debated. We took 1 full day when we did
absolutely nothing because one Senator said we could not change from
one amendment to another when everybody knew that was what we were
going to do upon our return.
We had an Indian amendment that even the Democrat manager of the bill
wanted to set aside for a few changes so we could proceed, and the
whole day passed because one Senator said you will stay on it and you
can't do anything else.
I submit that 1 day, being the day of Monday, we would have completed
one, two, or even three of the sections on the most important part of
this bill, the electricity section.
Far be it for this Senator to go through each day over the last 7 or
8 and talk about what has happened by way of interruptions. But I can
say, only speaking for myself, that the Energy bill is the most
important remaining legislation that we have for this year. I say that
not just for myself, not just for my distinguished minority friend and
leader, but for the majority leader. There is no more important
legislation than the Energy legislation. And Senator, I say to you, I
don't think you have ever said it is not, and I do not imply that. It
is filled with important issues. It is filled with proposals which will
lessen our need for imported oil. It is filled with provisions which
will turn our electric system
[[Page S10471]]
into a real system instead of a hodgepodge that accomplishes little or
nothing other than each region of the country provides more and more
and the country, as a whole, is shortchanged.
It provides alternatives. It provides the energy sources we have all
been worried about being shortchanged--wind energy, bio energy, and the
like. It has a tax section which will sensitize and provide incentives
so that we will bring these kinds of energy on board.
Why do I talk about them in light of the speech which we have just
heard? Because I submit that it is easy to find reasons not to get this
bill done. It is easy to find justifications for saying we could not
get it done. But I believe it should be very difficult to justify not
proceeding.
For instance, right now we have the entire days of today and
tomorrow. Neither of these days is planned for anybody's vacation--
anybody's use. I beg the other side, let's finish the electricity
section today.
The answer is, we can't do bills in pieces. My response is why not?
The electricity section of this bill is a section that is, indeed, all
by itself. The amendments I have heard about are about two-thirds
finished. Our leader is willing to remove the impediments which are
technical in nature so we can proceed.
So I beg the minority, let's do the electricity provisions in this
bill. Let's do it now. Let's do it tomorrow. Granted, we will have more
to do, but what is wrong with doing one big piece of this bill now?
What is wrong with completing the sections, if in fact the minority
leader is correct in the chart that he showed? This Senator says he is
not, but if he is, let's talk about them today. Let's see the
amendments and let's vote on them.
It is now 11 o'clock. Even if we do not want to work very hard we can
work 7 hours today and 7 hours tomorrow. I submit you can finish five
or six amendments on electricity, Senator Lott, before that time has
elapsed, and we will not complete everybody's desires on this bill but
that is pretty important.
We can either do that or we can stand up here and say the
distinguished minority leader is correct. He has just quoted a bunch of
Republicans who are second-guessing the majority leader or who are
being misquoted--maybe they really did second-guess him, maybe they
didn't, but it looks good. The way the quotes are used, it looks as if
they are criticizing him. But, nonetheless, it does not mean we can't
get something done.
I submit it is as simple as this. If they will agree to do that, I
will get the majority leader to agree that we go home on this recess
and we return and we will take up this bill as soon as we return and
finish it.
That is a pretty bona fide offer. It is pretty fair to the Democrats
and pretty fair for the American people. Let me repeat it. Let's do the
electricity provisions now. Let's work hard and complete them. That
means we work until 7 or 8 tonight. Tomorrow night, we might not have
to work that very hard.
I saw those lists. Those are not difficult amendments. We will be
finished with what everybody says is the most complicated and most
difficult portion of this bill. Then we can ask, Where are we? Then we
can agree and say to the Senate we can go home on recess. And, Mr.
Majority Leader and Mr. Minority Leader, won't you agree that upon our
return, we come back to work? We come back on a Wednesday. We will have
a Wednesday, a Thursday, and a Friday, and we will set those three days
aside unequivocally--absolutely nothing else but the Energy bill. We
can do that. Then we can stop blaming. We can do something productive,
constructive--not completion of everything but pretty much.
What else would the minority like us to do? Would they like us to do
something about the other pending judge? Let us ask the leader about
this other pending judge, and get on with what I am just describing as
a manager of a very positive approach to this bill.
For some reason, it would appear to some that we must set aside 3, 4,
5, 6, 7, or up to 8 days and leave them there in order to consider the
Energy bill in its entirety. I see no relationship in discussing with
the American people the electricity section of this bill and a section
on clean air which might be offered at another time. They are
completely different. As a matter of fact, the second one doesn't even
belong on this bill. It could be offered 6 months from now on an
Environment and Public Works bill, to be honest. But we intend to offer
it here. It need not be done on the same day in the same week in some
kind of togetherness so we can tell the people the entire story. We can
do the biggest piece of this without any difficulty today.
I believe I am just talking because that is what is expected. But the
other side has made up its mind. I have found that sometimes when you
make a proposal that is halfway reasonable, somebody listens to it. I
am making one. The Senator from New Mexico sometimes offers
unreasonable proposals. Most of those were when I was doing the budget.
That was because people thought I didn't want to spend some money that
was patently unreasonable. But what I have just offered is not
unreasonable. I submit it should be done. I ask that it be done. I
implore the minority to let us do it. I ask that they sit down for a
moment off to the side of the Senate and agree to it.
I also ask, since the majority leader was able to put a chart up and
list seven items, if I counted right--maybe it was six--that perhaps he
could let us see six amendments on electricity, or five or seven. Who
knows? We might be able to agree on three or four of them. We can't get
that done either.
That is normally the way we do it. It is not as if we have to be
hiding these issues. They are either real or they aren't. If somebody
can really show the American people a piece of legislation that says
the electricity bill is going to hurt the American electricity user,
here is the language or not. It ought to be audible, understandable,
and clear enough so we can get it out there and look at it. I have not
been able to do that yet.
I haven't seen any amendments on the other side that clearly say the
electricity section was put together and is supported by all method,
manner, and kind of electric generating and electric distribution
companies in America. Did you know that? The section is supported by
all kinds. With one exception, it has everybody's support. It would
seem to me that it is pretty good. Let us see what is wrong with it,
and let us get those solved.
I apologize to the Senate for taking so much time. But I have a
hunch, from what I just heard, that maybe I will not be speaking for a
couple of weeks on the subject, in which event this might be the last
you will hear from me for a while about this subject. But I beg you not
to cut it off this morning, and not to leave here with some kind of a
pick and with some kind of partisan ill feeling. Just as you might have
them on your side, I am sure some have them on our side, partisan-wise.
If mistakes were made, I am sure on our side of the aisle somebody will
get up and say you have made mistakes. But please don't get up from the
Judiciary Committee when I am finished--none of you--and talk about how
we made mistakes with reference to the judges. Let us put that off for
a while to see if we can't stay on electricity for a few minutes, if
you do not mind. I beg you.
I yield the floor.
The PRESIDING OFFICER (Mr. Ensign). The Senator from North Dakota.
Mr. DORGAN. Mr. President, the Senator from New Mexico, chairman of
the committee, has great passion for this legislation, as do I. I know
that last evening I perhaps offended some in this Chamber by standing
around here and objecting to everything for a while because last
evening, at a time when I thought we should be on the Energy title, we
were preparing to move this Senate to debate on a judgeship that didn't
have to be debated. So I sat out here and objected to everything, and
it upset people. I understand that. But I had the same goal that the
Senator from New Mexico has. I thought we should be on the Energy bill
and on the electricity title. I believe we ought to do that title. I
would like us to start now and do that title.
My colleague, Senator Cantwell from the State of Washington, sat here
for 2 hours last night wanting to offer an amendment and go back to the
electricity title of the Energy bill but couldn't because we were on a
judgeship that we didn't have to do. We shouldn't have had to do that
now.
Let me make a comment. I think the way to approach this--I happen to
have
[[Page S10472]]
the same goal--is I believe we ought to go back to the electricity
title right now. I would like to have amendments offered and debated. I
am willing to stay here all night and get through the electricity
title.
I tell you how I think we should best do that. I think we should
vitiate the motion to recommit the Kuhl nomination. We don't need a
vote and debate on another judge, and especially a controversial one.
Clear those things out of the way right now and begin the next
amendment on the electricity title. I don't know what that amendment
is, but let us have a debate on it.
Let me also say that the Senator from New Mexico--in fact, both
Senators from New Mexico, the chairman and ranking members of this
committee I think provide pretty good leadership for this Chamber. I am
pleased they have the role they have.
There is a legitimate disagreement on the electricity title with
respect to the protection for consumers. That is a legitimate
disagreement.
I have a letter from Mr. Eliot Spitzer. Mr. Spitzer testified at
hearings I held in the Commerce Committee on the Enron issues and also
the Wall Street issues about 2 years ago. It is addressed to Senators
Domenici and Bingaman. I believe other Members have copies of it. He is
one side of this agreement.
He said:
I applaud your efforts to protect our energy markets from
fraud and manipulation through legislation currently under
consideration on the floor of the U.S. Senate. I am, however,
concerned that certain provisions of the proposed legislation
would make it difficult for States to protect their citizens
from such fraud and manipulation.
Then he went specifically into sections 1171 and 1173. He said:
Sections 1171 and 1173 of the proposed amendment would
undercut State law enforcement and regulatory agency efforts
to stop fraud and abuse in the energy markets.
I know Eliot Spitzer. He is attorney general of New York. He has done
extraordinary work. He has taken all of them on in behalf of consumers.
He has a view here that is very important and which we should consider
very seriously. We have different views about how we protect the
consumers.
With respect to west coast electricity manipulation--the manipulation
of the markets to the tune of billions of dollars--I assume at the end
of the day all of us want to end all of that opportunity by any company
that would manipulate the markets. If we have the same goal at the end
of the day, then, look, in my judgment, let us begin offering
amendments. Let us have the staff and the relevant Members begin
working them out and talking through compromises that are necessary,
and then finish the electric title. At least let us do that title.
But that can only be done, it seems to me, if we get rid of the
extraneous issues. We have a motion to commit. And I am told--I have
not seen that motion in detail, but I am told the motion to commit
excludes, for example, some amendments that already have been passed.
I had an amendment, and a pretty strong vote on my amendment, dealing
with targets and timetables with respect to hydrogen economy and fuel
cells. My understanding is that is not included in the motion to
commit. So the motion to commit has all kinds of issues attached to it.
Let's get rid of that, and let's get rid of the Kuhl judgeship
nomination, and then move to the electricity title, stay on it, and
finish the title. As far as I am concerned, I sign up to do that. I
would hope the majority leader would. I hope most of my colleagues
would. And I hope there is no one on the floor of this Senate who says:
Let's dig in our heels and not do this.
I happen to agree with the Senator from New Mexico, the chairman of
the committee. He does not have to beg anybody, not me, and not
anybody, I hope, on this side to want to finish this bill, beginning
with: Let's finish this title, the electricity title.
Let me say, finally, this title is critically important to this bill.
This bill is about incentivizing production. It is about conservation.
It is about efficiency. It is about incentivizing limitless and
renewable sources of energy. It is about a wide range of issues.
But in the electricity title it is also about paving the road for a
philosophy that some want dealing with ``restructuring'' in which you
will move electricity from some areas of the country to other areas and
of which consumers in areas where they enjoy low-cost power--my State,
for one--will see that power move to other parts of the country where
they now pay higher rates for power, and they want our lower cost
power, so it will be replaced with higher cost power.
A study by the Department of Agriculture some while ago said
consumers in a State such as mine, under this deregulation and
restructuring, will end up paying substantially higher electric rates.
That is not what I want for my State. So there is a lot of discussion
about whether deregulation and restructuring is appropriate.
We have been deregulated and restructured to death. We have seen it
in the airlines. We have seen it in the railroads. We have seen it in
trucking and so many areas. Every time we have been restructured, I
tell you this, the rural States lose. So we need to think through this
very carefully.
In the electricity title, especially, if we end up with concentrated
markets, fewer firms, with more muscle and more power, then consumers
need to have the opportunity to protect themselves. We must have
adequate protections in this title for consumers because we have seen
what happens without it.
I tell you, when I began to see the results of what was happening in
the west coast electrical markets and energy markets, including natural
gas, the first information we received about that was almost
unbelievable. You would read some of these internal memos that were
sent to us by people inside the companies, and you would say: Well,
this clearly can't be right. They wouldn't write a memo in which they
said: Let's construct a strategy by which we cheat, and we will put a
name on it, Fat Boy. But, in fact, the more we dug, the more we found.
And the more we found, the more disgusted we became because west coast
consumers got cheated. It was stealing. And there are now substantial
criminal investigations underway.
The interesting point about that is, the hearings that we held in the
Energy Committee during that period of time were hearings in which we
had the Federal Energy Regulatory Commission come up and testify. They
are supposed to be, remember, the referees, the people who wear the
striped shirts, the ones with the whistles, the ones who call the
fouls. They came up and sat and did their best imitations of a potted
plant, acting as if they were dead from the neck down--and neck up, for
that matter--acting as if nothing was going on. They said: Well, there
is no manipulation. There is nothing happening that is untoward. This
is the market system.
It was not the market system. It was crooked. It was criminal. It was
systematic and relentless cheating of consumers. That is why this title
is so important. We have to do this, and we have to do it right.
Now, I don't want, at the end of the day today, tomorrow, or
Saturday, or Sunday--I don't care--I don't want, at the end of the day,
for any of us to think we failed to do an Energy bill, that I think we
should do, to finish an electricity title, that I think we should
finish, because those who schedule this place said: Well, this is
urgent, but we should do this judgeship first; this is urgent, but we
should do the second judgeship next; this is urgent, but we should do
some trade bills, some free-trade amendments.
I don't understand that. If this is urgent--and the President called
us down to the White House to say it was; in the Cabinet Room he told
us, we need to get this done--if it is urgent, why all the starting and
stopping?
Mrs. BOXER. Will my friend yield for a question?
Mr. DORGAN. Why don't we start? If it is urgent, why don't we start
at this moment and get to the finish line on the electricity title?
My colleague, Senator Domenici, suggested we do that. I say, let's do
it. Two steps are required: vitiate this motion to commit and get rid
of the Kuhl nomination, which, incidentally, in my judgment, should not
come to the floor, in any event; and then let's get on electricity,
stay on electricity, and I will be here with Senator Domenici and
Senator Bingaman until we are done with that title. Then let's see
[[Page S10473]]
what is left and see if we don't find the finish line in this bill.
That is the way we should do this bill.
Now, look, I don't run this place. I understand that. Others do. We
are not the majority. Others are. But the question of what is urgent
and what is important is a function of scheduling.
I would just say to the majority leader, and others, I believe at
this moment our responsibility--if this is an urgent bill; and I do
believe it is an urgent bill--our responsibility is to clear the deck--
clear the deck--and move ahead. You clear the deck by getting rid of
this motion to commit, getting rid of the judgeship, allowing Senator
Cantwell to offer her next amendment, allowing others to offer their
next amendment, working through them, one by one by one, using a little
common sense about how we improve this Energy bill so all of us can
pass a piece of legislation that we are proud of, and one that advances
the interests of the country.
Mrs. BOXER. Will the Senator yield for a question?
Mr. DORGAN. I am happy to yield.
Mrs. BOXER. First of all, I thank the Senator for his, as usual, very
concise reasoning over where we are. We are at a bit of an impasse
because of what my colleague said.
I want to ask my friend, is he aware that for the Kuhl nomination
both Senators from her State oppose her confirmation? Is my colleague
aware of that?
The PRESIDING OFFICER. The Senator will direct her questions through
the Chair.
Mr. DORGAN. Mr. President, responding to the Senator's question, I am
aware of that. It is unusual because the rules used to be if both
Senators from a State oppose the nomination, then it would not come to
the floor. As I understand it, that was always the rule. That rule has
apparently been abrogated or at least changed with respect to this
nomination.
Mrs. BOXER. I want to further say to my friend, when Bill Clinton was
President and Orrin Hatch was chair of the Judiciary Committee, if one
of the two Senators from that particular State did not send back a
permission slip--or, as we call it around here, a blue slip--the
nomination never moved forward.
Is my colleague aware that rule is changed by the chairman and,
indeed, ignoring Senators' views? I would say through the Chair, is my
colleague aware that Senator Hatch changed that rule?
Mr. DORGAN. Mr. President, responding to the Senator from California,
I am not aware of the internal machinations of the Judiciary Committee.
I read about what that committee does from time to time. And while I
suppose it is entertaining, because there seems to be a fructus over
there on most of these issues, there has been one consistent thing that
has happened in the Judiciary Committee with respect to judgeships;
that is, the judgeships are circumstances where the President proposes
and we dispose. We have a constitutional obligation and requirement.
Normally speaking, the Judiciary Committee has relied on the judgment
of the two Senators from a State before it decides whether to move a
judgeship.
My understanding is, the judgeship that is to be moved to the floor
for a vote--a cloture vote in the middle of this Energy bill; and,
incidentally, preceding a vote I assume there has to be debate on this
judge--this particular judge has been opposed by both Senators of the
State.
There is no reason, there is no reason at all, for that to be debated
now or to have a cloture vote in the middle of an urgent piece of
business such as the Energy bill. I do not have the foggiest idea why
that is brought up, unless it is to advance some political interest
someplace. But that ought not be here.
Senator Domenici is absolutely right. What we ought to do at this
moment is go back to the starting line on electricity, and then decide
that between now and the end of the electricity title we are not going
to be interrupted--no interruptions for anything. I agree with Senator
Domenici, let's do that. I pledge I will stay here on the floor and
work with my colleagues. Let's get the electricity title done. And
let's not move off to these extraneous issues. It makes no sense, if
this is, in fact, an urgent matter, to move off it onto judgeships that
shouldn't be debated and shouldn't have to be voted on prior to the
break.
Mrs. BOXER. Mr. President, I have one last question for my colleague
through the Chair.
I just want to say, as someone from a State that has been painfully
hurt by the electricity scams that went on on the west coast--and I
think Senator Cantwell has put it best when she relays the story that
when she goes home--and I can tell her, it happens to me, too--people
say: Why isn't Ken Lay in jail--Ken Lay, the head of Enron Corporation?
They ask me about Jeff Skilling who came before the Commerce
Committee and defended these schemes. He didn't know anything about all
the schemes that came to light that hurt the people of California to
the tune of probably an $11 billion theft.
So I ask my friend, through the Chair, this question: We have no
control over when and if ever Ken Lay goes to jail or the other
scoundrels who did this to the people of the west coast by making these
phony shortages and stealing their money for things they need to
survive. We don't control that. The administration does, through the
Attorney General's Office. I hope they are moving aggressively, but it
is awful slow.
Mr. LOTT. Regular order, Mr. President.
Mrs. BOXER. What we do control is this Energy bill and this
electricity title. My friend is so right to try and protect his people
and the people from every State in the Union from what my people went
through in California and Senator Cantwell's people went through.
The PRESIDING OFFICER. The Senator yielded for a question only.
Mrs. BOXER. I am asking my question. Isn't it true, I say to my
friend, that this is the only way the Congress can assert itself since
we have no control over what happens in the courts, that we can do
something about sparing your people and the other people around this
country from what California went through?
Mr. DORGAN. Mr. President, responding to the Senator from California,
I believe that is the case. This is the place to have that discussion.
As I mentioned to Senator Domenici, there is a respectful disagreement
perhaps about what words mean and what protection might or might not
exist. But surely we can work that out, offer amendments, have votes,
and get to the end of the electricity title.
I referenced a letter that has been sent to Members of the Senate
from Eliot Spitzer, the Attorney General of New York. I ask unanimous
consent to have the entire letter from Attorney General Spitzer printed
in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
State of New York
Office of the Attorney General,
New York, NY, July 30, 2003.
Hon. Pete V. Domenici,
Chairman, Committee on Energy & Natural Resources,
Washington, DC.
Hon. Jeff Bingaman,
Ranking Minority Member, Committee on Energy & Natural
Resources, Washington, DC.
Dear Chairman Domenici and Ranking Member Bingaman: I
applaud your efforts to protect our energy markets from fraud
and manipulation through legislation currently under
consideration on the floor of the United States Senate. I am,
however, concerned that certain provisions of the proposed
legislation would make it difficult for States to protect
their citizens from such fraud and manipulation. In addition,
the failure of this legislation to remove the so-called
``Enron Exemption'' codified in the Commodity Futures
Modernization Act of 2000 will allow electronic trading and
other activity in the energy market to escape oversight.
Sections 1171 and 1173 of the proposed amendment would
undercut State law enforcement and regulatory agency efforts
to stop fraud and abuse in the energy markets. Requiring that
``any request by any Federal, State, or foreign government,
department or agency or political subdivision'' for
information from energy market participants be directed to
the Commodity Futures Trading Commission (CFTC), the proposed
legislation would hamper States' investigation of violations
of laws related to the energy markets. Interposing this
federal screen between the States and the perpetrators of
abuses is inappropriate.
In addition, by expanding the CFTC's jurisdiction over
electricity and gas markets, the amendment would inhibit the
authority of States as well as federal agencies to address
abuses in these markets, markets that, as a result of the
Enron Exemption, are not subject to CFTC oversight.
[[Page S10474]]
As the United States Senate seeks to protect our nation
from energy market abuses, I urge you not to diminish the
ability of the States and of federal agencies to prevent,
detect and eliminate threats to American consumers and
shareholders.
Sincerely,
Eliot Spitzer,
New York State Attorney General.
Ms. LANDRIEU. Will the Senator yield for a question?
Mr. DORGAN. I am happy to yield for a brief question.
Ms. LANDRIEU. I wanted to ask my distinguished colleague if I had
heard the Senator from New Mexico correctly when he suggested that one
way to proceed to move us past this very difficult hurdle would be to
take up the electricity section and try to finish that before we left?
If that is what I heard, was that a suggestion made by the chairman of
the committee, who has worked so hard to try to put a bill together,
thinking we could perhaps resolve some of those difficult issues on the
electricity section? Is that what the Senator understood the chairman
of the committee to say?
Mr. DORGAN. The chairman of the committee has great passion about
wanting to finish this bill. I serve on the committee, as does the
Senator from Louisiana. I understand that passion because I believe
energy is a significant priority. He indicated he would beg that we get
back on the electricity title and finish the title. I happen to think
that makes a lot of sense. I believe we should do that posthaste and
move through the amendments.
It is almost as if the Senate as an institution has attention deficit
disorder. We just go from one subject to another and then back. And
then we say, OK, focus, focus, this is urgent, this is important. And
then an hour later, we are off on another subject for a bit because we
have to vote on a judgeship in California; we have to vote on a
judgeship here or a trade agreement there.
I suppose in real life you could be medicated for that, but as an
institution, all we have to do is decide that we are going to focus on
that which we believe is urgent. The Senator from New Mexico has said
this is an urgent bill. He is correct about that. I have watched him
for several days. He has great frustration, I am sure, at not making as
much progress as he would like to make.
I mentioned a moment ago, I was here last evening. Senator Cantwell
was here waiting for 2 to 3 hours to offer an electricity amendment but
could not do it. Why? Because we were off debating a judgeship that
should not have been debated and didn't need to be voted on. There
needed to be no cloture vote on that. But the leadership said, you have
to be off on that.
I understand the Senator from Mississippi is waiting to speak. He is
probably going to remind all of us that the Senate isn't run by 100
Senators; somebody has to schedule. I recognize that at one point he
had to schedule this place. It is not easy. Scheduling is not easy
under the best of circumstances, but it is made much more difficult if
you have conflicting language, saying this is an urgent bill that must
get done, but then you can't stay on it because you provide all these
other issues. In the middle of this urgent situation, you decide you
want to take some time to have a seventh cloture vote on Mr. Estrada.
Is that urgent? I don't think so.
So with respect I say, let's now go to the electricity title, and
let's work through the Energy bill. We ought to get this title done
tonight. I agree with Senator Domenici; there is no reason we should
not get the electricity title done, give everybody a chance to address
those issues.
I especially think we will want to address Attorney General Spitzer's
admonition and concerns as well.
I want to be constructive. I know last night I was objecting to
people's unanimous consent requests. It was not because I had any
animus. I just wanted us to get back to the electricity title. I could
not do that. Eventually they went on and spent the whole night on the
judgeship because we had this cloture vote scheduled.
That is my frustration. I share the same frustration that I think
Senator Daschle expressed earlier and Senator Domenici expressed. The
best way for us to proceed is to clear the deck, get all the extraneous
things out of the way and decide we are going to proceed now on the
electricity title. I for one pledge cooperation to try to get this
title done. That is what we ought to do.
I yield the floor.
The PRESIDING OFFICER. The Senator from Mississippi.
Mr. LOTT. Mr. President, I tread out of these waters somewhat
hesitantly because in the past I have gotten involved in similar
situations. I know the Majority Leader will be here shortly to respond
to some of the things that have been said today. But because of some of
the things I have experienced, I would like to remind my colleagues
that Senator Dorgan is right: the Majority Leader is the leader. The
Majority Leader, working with the Minority Leader, has a tough job. He
has to juggle a lot of balls.
The idea that there is something unusual about considering two or
three or four issues intermittently, that that is something new, is
ridiculous. We have had double tracking, triple tracking. I learned it
from my Democrat predecessors when they were Majority Leaders. To
intersperse with a legislative bill executive calendar nominations is
done every day, every week. There is nothing new or unusual about that.
Until you have walked in the Leader's shoes, I urge you to be careful
about trying to second-guess him in trying to juggle these different
balls. It is a tough job.
We should be voting on judges. We should be confirming judges. I
really don't appreciate the criticism that I think is being indirectly
cast at the Leader. I am sure he is going to comment more on the days
we have spent on this and other work we need to do. Everything is
urgent all of a sudden. I know how it works. For 3 or 4 months around
here the Leader is dredging for legislation to call up. And then all of
a sudden, in May or July, everybody shows up and says: Hey, I'm ready.
I want my bill. We want to do something about class action lawsuits. We
want to do the Energy bill. We want the State Department authorization
bill which, by the way, had to be pulled down because of totally
unrelated issues. For the first time in 15 years we were about to get a
State Department authorization, and it was basically forced off the
floor because of unrelated, irrelevant amendments that were offered to
it.
We will get through this if we work together. I am worried about the
institution right now. We are fiddling while our energy is burning. For
3 years we have been hacking away at getting a national energy policy.
We don't have one. And it's absurd for us now to be pontificating,
saying we haven't made enough progress, when I don't know how many days
we have been on this bill--I think 16 days, to be exact. There is no
question this bill is being slow rolled. Everybody knows that. For some
reason, and I don't know why, the Democrats are dragging it out,
slowing it down. They don't want this Energy bill to be finished and go
to conference. That is my opinion, one Senator's opinion.
This is a bill that has ethanol in it. We had this big agreement way
back there. We thought once we got an ethanol agreement--a huge
agreement--that would grease the slides and this legislation would go
right through. Here we are, a month later, and we are not making good
progress.
I think we should quit trying to say this side is delaying or that
side is going to different issues. We need to get this done. We are
talking about production, more production in America. We need more oil
and natural gas. I don't know what the statistics are now but about 56
percent of our energy needs are coming from foreign oil. People, I
guess, want to kill the bill because they don't like the environmental
provisions, or they are afraid ANWR will be opened to actually produce
more oil. I don't quite understand the fear.
This is a balanced bill. The committee did a good job. It was a
bipartisan bill, more production--even going to the excessive ethanol
that is included in it. Conservation, it has encouragement of
conservation. It has alternative fuels to the point of being
ridiculous. It has the tax provision that came out of the Finance
Committee--a huge package of unbelievable things. We have an abundance
of desire to try to solve this problem, and I think we need to solve
it.
On the electricity section, I have some problems with that. I don't
like several pieces of it. I am not particularly happy with so-called
SMD and the
[[Page S10475]]
regional transmission organizations, RTOs. I think it is a problem for
my region of the country but I am not about to be a part of trying to
drag it out or delay this bill. It may be in my interest locally to do
that or to work to get it changed, but for our country we are going to
stand here and accuse each other of not handling this right, while
``Rome'' and Washington, DC, burns.
This is ridiculous. Now, on judges, we don't look good, my
colleagues. This is mutually assured destruction. It continues to
escalate to ``you did it to us, so we are going to do it to you.'' Now
we have employed a new mechanism; we are going to filibuster judges.
This is a huge mistake for this institution and it will not be allowed
to stand.
Now we are beginning to question each other's motives. I was
concerned about what I saw last night in the Senate. We seem to be
spiraling downward. Somebody needs to sit down and say, look, we are
going to stop these accusations, stop the filibusters, and we are going
to vote on these judges. This is personal to me because I believe Judge
Pickering of Mississippi was very badly and unfairly treated last year.
I believe the vote on him will be different this year.
Now it is Pryor. There is no reason to oppose the Attorney General of
the State of Alabama with his record--not to mention Priscilla Owen,
Miguel Estrada, and Kuhl. We have circuits now--the Sixth Circuit, I
believe, includes Tennessee, Kentucky, Ohio, Michigan--with a 25-
percent vacancy. I didn't know Senators could use a blue slip to block
a judge from their circuit. We don't pick the judges for the circuits;
the President of the United States picks those. In my circuit, they can
come from Louisiana, Mississippi, or Texas. I don't think I have a blue
slip or an ability to block a judge in that circuit that is from my
State, or from another State, even though I might not particularly like
him or her. Now we have appellate court judges being stopped in
circuits all over this country because one or two of the Senators from
the appellate circuit might want to try to stop them. I haven't served
on judiciary; maybe that is what happened some in the past. That is
another example of what is really getting to be a problem.
I urge the leadership on both sides of the aisle on the committee to
find a way to stop this because you are going to filibuster these good
men and women. Then we are going to question your motives and you will
question ours. I think the Senate needs to take a deep breath. Maybe
what we need is an August State work period--go home for a while and
cool off.
I am not going to affix blame, but I think the way this Energy bill
is being handled is a huge problem for our country. I hope we will calm
down, get an agreement to move forward, give the Leader the opportunity
that he should have to bring up judges, or other Executive Calendar
nominees, as all Leaders do, and let's have a meeting in September and
find a way to stop what is going on with judges.
I admit that I made some mistakes when I was Majority Leader in how I
handled them, too; but it has gotten worse since then. I don't think
anybody can deny that. This mutually assured destruction must stop. I
have said this before.
Heaven forbid, if we ever have another Democrat President and a
Democrat Senate, we are going to filibuster your nominees for the
courts. It will happen. Some of our colleagues may even say they want
that right. That is wrong. You have a lot of ways you can slow down or
delay hearings or judges but filibustering judges on either side is
wrong. I won't be a part of it if the tables are turned, and I was not
a part of it when I was Majority Leader. I stood right there and spoke
against filibusters when I was Leader. I voted against a filibuster and
forced votes on judges with whom I vigorously disagreed.
Two from California, Paez and Berzon, I will never really be
comfortable with what I did there. I said we are not going to
filibuster these judges on the floor of the Senate. So this is a
terrible precedent and the Leader cannot let this stand.
So, my colleagues, I sound like a schoolteacher lecturing but,
because of the experiences I have been through, I plead with the
institution to get on the Energy bill, make progress, and vote on these
judges. A couple of judges might not even get 50 votes but that is the
way it works. If you get a vote, you win; if you don't, you lose.
Mr. McCONNELL. Will the Senator yield for a question?
Mr. LOTT. Yes.
Mr. McCONNELL. The Senator raises an important point on the Berzon
and Paez nominations. I can remember the Senator, in his capacity as
Majority Leader, encouraging us to support cloture on two judges about
whom none of us were very enthusiastic. I remind my colleague that 75
percent of the Republican Senators voted for cloture.
The PRESIDING OFFICER. The Senator is reminded to address his
questions through the Chair.
Mr. McCONNELL. Mr. President, I ask the Senator from Mississippi if
he remembers that 75 percent of the Republican Senators voted for
cloture on both of those judges, and many of us voted against them once
we got to the up-or-down vote.
Mr. LOTT. I remember that very well. We did the right thing. That is
what I am asking now of my colleagues on both sides of the aisle. Let's
find a way to do the right thing on these judges. It is totally
indefensible, for instance, that on Miguel Estrada we cannot work
something out where he won't be defeated by a filibuster.
I remember other votes, too. I have said on this floor two or three
times that I voted for Ruth Bader Ginsburg to go on the Supreme Court.
I didn't agree with her philosophically at all, and I don't agree with
many of the rulings she is coming out with. President Clinton was the
President; he nominated her. But she was qualified by education,
experience, and demeanor, and I voted for her. I think we deserve that
kind of return of courtesy.
The Majority Leader is here, so I will stop. I say to the Majority
Leader, I was talking about the difficult job he has, and I know he is
going to have some statistics that will indicate what has been
occurring.
I yield the floor.
The PRESIDING OFFICER. The Majority Leader is recognized.
Mr. FRIST. Mr. President, I will be happy to follow the assistant
leader very shortly.
The PRESIDING OFFICER. The Senator from Kentucky is recognized.
Mr. McCONNELL. Mr. President, briefly, it has been said by Senator
Lott and others that there is nothing unusual about the so-called
double-tracking of issues, nothing unusual at all. The distinguished
majority leader offered to our colleagues and friends on the other side
an opportunity to have the four cloture votes on judges this week with
no debate at all. It would have taken up no time on the Energy bill.
The fact is, this is the 18th day we have been on the Energy bill
this year; that is more than any other bill. The distinguished majority
leader made the right call to go to energy this week. He made the right
call to try to bring to closure four of the President's distinguished
nominations for the circuit court benches.
I think Senator Lott is correct. We need to, as he put it, take a
deep breath, settle down here, and remember that we all came here to do
the people's business. Energy is important.
I know the Majority Leader is committed to finishing this important
legislation for the people of America. I hope there are a significant
number of our friends on the other side of the aisle who would also
like to see an Energy bill. I am confident the majority leader is going
to give all of us an opportunity at some point this year to finish this
bill.
I say to my friend, the Majority Leader, I think his scheduling
decisions for the week were excellent, correct, and consistent with the
best interests of the American people, and we support him fully in
those scheduling decisions.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The majority leader.
Mr. FRIST. Mr. President, we have worked very hard over the course of
this week to address the people's business with the schedule that was
set out weeks ago to address energy in a focused way, a way that would
allow for debate and amendment, and bring to conclusion the debate on a
bill that is important to every American listening to me now--every
American.
[[Page S10476]]
The President initially called for an Energy bill over 2 years ago
and laid down a policy 3 months ago, and the House of Representatives
has acted in delivering such a bill.
As the distinguished assistant leader has mentioned, we have now
spent 18 days debating energy policy. That is longer than any other
bill this year and, in truth, as we all know in this body, we have been
debating energy policy now for 3 years.
It is true that during the last Congress, we spent 7 weeks on an
Energy bill, and the other side of the aisle comes forward and says: We
spent 7 weeks last year, so we are going to have to spend 7 weeks or 8
weeks or more time on this Energy bill. I appreciate their concern
because I, too, want to make sure we address these issues thoroughly.
But what we have is just obstruction, flat out obstruction of our
commitment to answer to the American people when they ask: Where is our
national energy policy?
The distinguished Democratic leader said: Now we have politics
injected. I do believe that statement is disingenuous when he throws
the politics on our side and, at the same time, we have a commitment--
and I have said again and again and under the able leadership of our
managers, I know they are committed to addressing this bill and
bringing it forward to the American people who do and will continue to
suffer under skyrocketing natural gas prices.
I say that because now--and I said it last night after conversations
we had both on and off the floor--it is clear that we were not going to
be able to finish the Energy bill this week. We do not have the
amendments. We do not have the amendments, and we have had a difficult
time getting an accurate list of amendments.
When I talk to the managers, they may say we have one or two
amendments on a particular issue, and then as I talk to other
colleagues and they say: No, we have 7, 8, 9, 10 amendments. It is that
lack of pulling together that I am most disheartened about in
addressing the Nation's business.
It comes to obstruction, and I do think at this point in time the
Democrats are bringing progress on this critically important issue of
energy to a screeching halt. The fact is, we are ready to go today and
we are ready to go tomorrow, and, if they are willing, we are ready to
go the next day on the people's business on this Energy bill, and
basically they are saying no. They are hiding under the allegation: Oh,
it is judges you are bringing forward--and I will comment on that
point, but they are hiding behind that issue because they do not want a
bill.
They say: We want a bill. I say: Let's get a bill. They say: We want
a bill but it is going to be sometime off in the future.
As the former majority leader said, and as the leader on the
Democratic side said, it is tough scheduling. It is not impossible but
it is tough scheduling. But one thing that the Republican leadership
does have to demand is that people are working in good faith to
complete bills in a timely way. I am beginning to lose faith in the
other side of the aisle because they are obstructing--flat out
obstruction.
The fact is, whether they are in a cornfield in Iowa or whether they
are in a cornfield in South Dakota or in the mountains of New England,
Americans want us to pass an Energy bill, not at some vague time in the
future but right now, an Energy bill--this is what the American people
understand--that will bring down the soaring cost of energy while
ensuring an adequate supply. And that is what they are being denied by
this obstruction by the Democrats.
It has gotten to where we are hearing this term--it was used earlier
today--with ``ism'' on it, obstructionism, that we are seeing so much
obstruction today from the other side of the aisle, whether it is
bioshield, which we are trying to bring to the floor, or whether it is
the judges. All we are trying to do is get them to the floor and have
that debate and discuss them. We can't even bring them to the floor to
talk about them.
I come back on energy for one second. People are willing to watch
this obstruction go forward and not continue to push and do not
continue to push when we are trying to stay on the Energy bill today
and tomorrow, and they say: No, we can't do it; we throw up our hands;
why don't we just go home? That is not in the Nation's interest.
I plead with the other side of the aisle, let's not obstruct. Let's
debate energy over the course of the day and into tonight. If there are
so many amendments on the other side--remember, on the other side--
let's address them one by one. It is simply not acceptable not to
address the amendments. I believe it is a dereliction of our duties. We
are here to pass a bill. We are ready to pass a bill. We are waiting
for those amendments, and the Democrats are obstructing.
Earlier this morning the minority leader did talk about the virtues
of the Energy bill and gave the rhetoric, and I appreciate the rhetoric
and the platitudes, but it is offensive, at least to our side of the
aisle, when at the same time we are talking these platitudes both here
and around the Nation in our own States and then we see the same side
of the aisle, the other side of the aisle, obstruct in a steady,
consistent pattern. Americans are waking up finally to this consistent
pattern of obstruction, whether it is on the judges or whether it is on
the Energy bill which we have before us.
I have mentioned to the leadership on the other side of the aisle--
they talk about judges; quit bringing up judges at this point--I said:
Let's just not do judges today. Let's put them aside. Can we finish the
Energy bill this week? Again the answer was: No, no, we are not ready
to finish the Energy bill this week. So I think in this call of crying
politics from the other side of the aisle, the Democratic leadership
really is showing their own hand. They talk about energy but do not
deliver.
It is not just about the Energy bill itself--and we have touched upon
the judicial nominees this morning, which again all we are asking for
is a simple up-or-down vote on these nominees when I have asked
consent. It is not to debate these judges now, although people come out
of the woodwork for that. It is just to get consent that at some time
in the future we will have the opportunity to talk about these judges
and give every Senator their right--and that is through advise and
consent--to have an up-or-down vote.
The Democrats--and I come back to the word--obstruct our opportunity
to advise and consent. That is all we are asking in terms of the
judges.
Obstruction--again, people do not see all that is going on. They see
what is on the floor. But right now the obstruction does fall over to
other fields--fields such as bioshield. We have worked very hard to
address an issue which does have an impact on national security, and we
cannot get consent to bring resolution to a very important initiative
that provides over $6 billion over 10 years to purchase new
countermeasures, whether it is on the biological entities, such as
botulinum, anthrax, or plague, a bill that expands research and
development so that we will be best prepared in the event terrorists
use these agents against us. It is legislation that protects us all,
but it is being obstructed.
The economy, energy, the judiciary, it is obstruction again and
again. I do not fully understand why. I think we can all only
speculate. We do have the Presidential election cycle that is
approaching. The outside interest groups may be holding sway. I do not
know. It may be obstruction for its own sake. It is not in the best
interest of the American people. The American people want us to
progress. They want us to move America forward, whether it is on any of
the issues I have talked about today, and all they hear is obstruction.
I do want to share with my colleagues once again, and those people
who are listening, and to remind my colleagues on the other side of the
aisle on the judicial nominees, the requests we have made would not
mandate in any way consideration of those nominees right now or during
the Energy bill. That is not the purpose. That is not the way the
request was put forth. Those consents to be able to bring them up at
some time in the future, not on the Energy bill, were objected to by
the other side of the aisle.
The consents would have allowed votes on the nominations at some time
in September or October, and the requests were made, lest my colleagues
forget, for 4 hours to debate these judicial nominees sometime in the
future,
[[Page S10477]]
and they said no. Then I said, these are Presidential nominations that
come to us. We are to give advice and consent. Can we bring them up and
debate them in an orderly fashion for 8 hours at some time in the
future--not on the Energy bill but sometime in the future? And they
said no. Then I asked consent if we could, sometime in the future,
debate these judicial nominees for 10 hours. Object, object.
We did schedule cloture votes this week, and they were simply that,
20-minute cloture votes. Why? Because they objected to bringing these
judges up and having adequate debate in September or October. What
alternative does one have but to file a cloture vote to bring them up?
That is a 20-minute vote.
I very specifically came to this floor and said that those 20-minute
votes could be expected in between other Energy amendment votes, 20 to
25 minutes. All the requests for debate time on those cloture votes
have come from the other side of the aisle, not our side of the aisle.
I further remind my colleagues that we tried on numerous occasions to
reach consent to have a filing deadline on Energy amendments last week.
Again, objection from the other side of the aisle. I mentioned earlier
the problem the managers are having is getting their arms around the
amendments that we are waiting for the other side to offer. Yet they
are not materializing.
So if there is any question of the commitment to finishing this bill,
I think it is clear which side of the aisle is pressing for it and
which side of the aisle is not pressing forward. It leads me to the
conclusion that we want an Energy bill, a good Energy bill, for the
American people, consistent with appropriate production, conservation,
use of renewable fuels, and tax incentives, to make sure that our
energy supply is appropriate. We want that type of Energy bill worse
and are willing to fight for it longer and harder than the other side
of the aisle.
It was the Democratic side of the aisle that refused to grant
consent--that is, obstruct--to have the debate on the electricity
title. It was the Democratic side of the aisle who refused to enumerate
the number of second-degree amendments that would be offered.
I made it crystal clear 6 weeks ago that we were going to be going to
this bill on this Monday to work Monday, Tuesday, Wednesday, Thursday,
Friday, to complete this bill. Yet, on Monday, the Democratic side of
the aisle refused to grant consent to have that debate on the
electricity amendment. That refusal really did not rob us, but it meant
we could not use Monday as productively as we should have used it.
Again, that lack of participation makes it very difficult to achieve
what is in the best interest of the American people.
The chairman of the committee, the manager, Senator Domenici, earlier
this morning indicated there are amendments on the other side of the
aisle. There is only so much we can do. We cannot really reach over to
the other side of the aisle and pull those amendments out of their
pockets or wherever they are. They have to offer those amendments for
us to consider them. So we have to sit and wait for those amendments to
come forward so that the Senate can work its business on this Energy
bill.
As has been said, we are prepared to have amendments offered. I think
it is important that we use today and tomorrow to focus on Energy. I
think we should be able to reach some sort of time agreement to bring
this bill to completion. I think we need to be working toward voting on
the issues as we go forward, and I plead with the other side that we
stay on Energy, we stay focused, and we bring this bill to completion
as we go forward.
I yield the floor.
The PRESIDING OFFICER. The Democratic leader.
Mr. DASCHLE. Mr. President, I listened with great interest to the
distinguished majority leader. I would offer him advice again, for
whatever it is worth. I have offered him advice as we have personally
and publicly discussed progress on the Energy bill. Rather than shrill
charges of obstructionism that nobody believes, I suggest that he tear
down the tree, take away all of the obstacles that he laid down last
night to considering the Energy bill, and I believe we could make
constructive progress. I think we could perhaps finish the electricity
title by the end of this week, but we cannot do that and then also do
what he is now asking of us, which is to debate one of the most
controversial nominees to be passed out of the Judiciary Committee. We
cannot do both.
He wants us to have a vote on that nominee tomorrow morning, and I
see no other option but simply to debate the nominee. He also would
like very much for the trade bill to come up. There are 6 hours of time
locked in for that. I do not know how we do the trade bill, an
extraordinarily controversial nominee for the Ninth Circuit, and then I
know he wants to do the supplemental bill as well. That is going to
take some time. So how do we do all of these?
Having been the majority leader, I must say it is one of the most
challenging parts of the job, but I think his colleagues were right;
they said publicly he made a mistake, and I think they were right in
their estimation of the schedule for this week. If we really wanted to
finish the bill, we would not have had all of these diversions. If we
can learn from our mistakes this week, I think the only answer is to
let us not repeat them. The only way one can avoid repeating the same
mistakes is to take out from underneath all of the underbrush the
obstacles, the diversions, the other priorities that the majority
leader has.
As I say, the Senator from Washington has been sitting in the
Chamber. She sat here last night for hours waiting to debate another
amendment on the electricity title. There are other Senators who have
expressed an interest in coming to the floor to debate the electricity
title.
How do we do that, No. 1, when we are not even on the electricity
title anymore? We are actually on a motion to commit. We cannot even
offer an amendment to the electricity title given the majority leader's
current parliamentary maneuvers.
Then, of course, we have this enormously controversial nominee from
California.
If I could offer one more piece of advice--and as I consider this, it
is all the more troubling. If our Republican colleagues really wanted
to get a bill, what would have been wrong with taking the bill that 88
of us voted for last year and starting with that? What would have been
wrong with saying, we spent 8 weeks on a bill last year, how about
taking that 8 weeks' of effort, that investment in time, bringing that
to the committee, and then bringing it to the floor? My guess is we
could have avoided hundreds of amendments. We could have said, what
reason would there be to offer an additional amendment because we have
now taken up the very thing the Senate passed last year? But for
whatever reason, the committee decided to pass an ``Enron protection
act.'' They wanted to be sure, apparently, that they could lock in
protection for these incredibly manipulative schemes used by Enron to
bilk consumers that changed dramatically the nature, the character, of
the bill itself.
If our Republican friends would have wanted to complete the bill or
at any time if they would want to do so in the future, we could take up
where we left off. As it is, we are left with a bill that many have not
seen. We are left with titles given to us virtually at the last minute
and expected to offer amendments under those circumstances.
I say to my distinguished colleague and friend, it is still within
our grasp to finish this bill in a meaningful and timely way. In order
to do that, we have to work at it. We have to finish this work on the
electricity title, we have to go to the other titles in a way that
accommodates Senators with amendments, and we have to stay on the
legislation. Diversions, especially ones involving issues of great
controversy, will never allow the Senate the luxury of the confidence
we need to finish this bill at any time in the foreseeable future.
I stand ready to work with him, to work with the manager of the bill,
the chairman of the committee, to work with our distinguished ranking
member and others so we can finish the bill. Shrill charges of
obstructionism will not get the job done, nor will it get the job done
to finger point and try to lay blame. We are here; they have the
majority. We are willing to work with
[[Page S10478]]
them to see under their leadership we accomplish a good deal. We have
on so many other bills already this year. We can do it on this bill if
we have the determination to show the bipartisanship it will require.
I yield the floor.
The PRESIDING OFFICER. The majority leader.
Mr. FRIST. Mr. President, I appreciate the advice and counsel of the
distinguished Democratic leader. He and I do have the opportunity to
talk which, indeed, I appreciate very sincerely. As we all know, we
have heard from three majority leaders commenting on the schedule--the
former majority leader, Senator Lott, myself, and the distinguished
Democratic leader.
We have a challenging week, remaining week with a lot to do. We have
important issues before the Senate, critically important issues. I am
delighted we have expressed that commitment to address issues, first
and foremost energy. That is our number one priority. Everything else
is secondary. I said we would have these cloture votes this week on the
judges for 20 minutes and time demands have made that expand for hours,
like last night. I am not accusing anyone of trying to delay the bill
by talking on these judges, but remember my initial consent was we want
to talk on these judges and we want to do it sometime in the future.
Just give us consent to do that. That is what has been denied.
Chile and Singapore was mentioned. Before we leave, whether it is
Friday or Saturday, the Chile and Singapore trade agreements are
important. I don't want to focus on those because I want to stay on
energy and keep driving on energy. I have the distinguished manager,
the chairman of the committee, with me. I know he will keep driving
ahead. I am delighted we will do that. It is important.
We have the supplemental, something we absolutely have to deal with.
We can deal with that tomorrow and hopefully that can be done and
wrapped up in a very short period of time.
Last night, to clarify, I did file a Frist amendment which includes
the text of S. 14 as reported by the Energy Committee. It includes the
ethanol amendment already adopted by the Senate, it includes the Bond-
Levin CAFE amendment, it includes the Domenici electricity substitute,
and the Finance Committee-reported energy tax title. That is the
amendment I put forward.
As I said earlier in the day, to facilitate the amendments which I
hope the Democrats will bring forward if they have them, I will gladly
withdraw the first and second-degree amendments to offer them, to allow
them the opportunity to offer their amendments to push this debate
forward. I would be glad to enter into time agreements on their
respective amendments in order to move forward.
I will not withdraw this cloture vote tomorrow. The more I hear the
other side mention ``politics,'' the more I realize how important it is
we have a cloture vote to see who is serious about finishing this bill
and who is not tomorrow. We will gladly have discussions so we can
consider amendments.
The Democratic leadership wants a bill. I know they want a bill. It
is really a matter of, is it some time off in the future or now. The
Democratic leader made a suggestion that is one I think is important
because we need to move ahead, we need to act today--not just talk and
talk about politics and talk about obstructionism, with rhetoric and no
action. I want a bill. I want a bill that is good, that is fair to the
American people, and that addresses the issues of supply and the
soaring costs which we feel. It is incumbent upon us to act.
The Democratic leader mentioned last year's bill was passed with a
bipartisan vote and suggested bringing that up. Let's do that. Let's
pass that bill if it is the great bill he says. We would be willing to
do that. I will turn to the manager of this bill and the chairman, but
if we have the opportunity to take that bill up, as suggested by the
Democratic leader, let's do it and pass it today and then we can move
on.
Mr. REID. Would the distinguished majority leader yield for a
question? Is the majority leader saying the bill that passed the Senate
88-11 last year, it would be brought to the floor and passed in the
form it left the Senate?
Mr. FRIST. Mr. President, because the proposal was just made, my
inclination is to basically say we would move in that direction. I want
to consult with the manager of the bill since it was just proposed, but
if that is the Democratic proposal and that is what is on the table--
the American people deserve an Energy bill.
Let me turn to my distinguished colleague, the chairman of the
committee, to comment. If so, we would proceed.
Mr. REID. If I could, briefly, before the majority leader leaves, if
the proposal is the bill that passed the Senate 88-11 last year be
brought to the Senate floor today in the form it passed, you got
yourself a deal.
Mr. DOMENICI. No amendments and passed, as is, and sent to
conference. Could we have just a few moments and come back and discuss
it with you?
Mr. REID. Yes.
Mr. DOMENICI. Mr. President, I suggest the absence of a quorum.
Mr. REID. If the Senator will yield, we have some people to speak, if
the Senator will withhold the request.
Mr. DOMENICI. I withhold.
The PRESIDING OFFICER. The Senator from Washington.
Ms. CANTWELL. Mr. President, I know my colleagues have now for the
last hour discussed the fact that we need to move on an energy plan and
yet allow Members to have some discussion of policy. While I think we
now have a proposal to discuss, it is important to point out we were
very willing to talk about an electricity title. We were very willing
last night, while the Senate wanted to debate judges--and I sat here as
my Republican colleagues spoke for hours--I was willing to offer an
amendment on electricity.
People are talking about moving ahead on an Energy bill because it is
good for our economy, because it will help with supply. While we were
sitting here wasting our time yesterday talking about judges, another
company in my State with 700 workers from Bellingham, WA, temporarily
shut down their facility. Why? Because of the high cost of electricity
in our State.
So this is not about a problem that might happen. It is a problem
that has already happened.
The parliamentary, procedural ruse that has been played on us to not
go to the electricity title has been incredible. I was standing here,
waiting to offer amendments, only to find out that we were going to go
to a judge.
Yes, the Senator from New Mexico was right; we wanted to go to the
electricity title. But we didn't even have the language from his
proposal when we left town last week on Friday night. It wasn't even
available Friday until late Friday night. So, yes, as soon as we got
that language we started poring through it.
Now the question is whether this body wants to debate an electricity
title, whether they want to consider the issues at hand.
Last night, the amendment I wanted to offer was actually shared with
the minority staff. The majority staff is now saying we don't know what
amendments are going to be offered. We had seven amendments to file
this morning, only to find out they are no longer in order because of
the motion to commit in the document that is now available only in two
copies of 800 pages, making it impossible for us to offer our second-
degree amendments.
What happened when we shared what we wanted to offer in an amendment?
We ended up getting an e-mail threat back from the majority side
saying, if you offer your amendment, we are going to do X to you. So
much for sharing ideas about amendments. It is no secret this Senator
from the State of Washington, who believes this underlying electricity
title could potentially move higher cost electricity onto the
transmission lines in my State and ultimately force my consumers to pay
a higher rate, doesn't like the electricity title and wants to see it
changed. This Senator from Washington State does not believe that my
State should be forced into that kind of regional transmission
organization planning or standard market design planning in which my
region might get charged higher electricity rates while the State of
Texas gets a sweetheart deal.
Yes, that is right. The State of Texas gets a sweetheart deal because
they are exempted from that section on regional transmission
organizations and standard market design. If this electricity title is
so good for all of America, why
[[Page S10479]]
isn't it good for Texas? That is because Texas does not want to share
in this plan. They don't want to share their power, and they don't want
to necessarily have their transmission lines with higher cost energy on
them. I don't want it in my region. But I know this: If it is good for
me, it ought to be good for them.
The bottom line is the other side of the aisle doesn't want to take
the time to hear about electricity amendments and debate them. With the
west coast economy getting a $6 billion black eye, that is $6 billion
that the ratepayers have had to pay because of increased energy prices,
when the market has been knowingly manipulated. That was admitted to by
Enron, admitted to by the Department of Justice citing Enron's
manipulation, it has been admitted by the Federal Energy Regulatory
Commission that such manipulation has happened. We ought to have our
day here on the Senate floor.
The distinguished majority leader said let's not talk about the
politics of this. But I have to say I don't want to stand here and be
part of what he is labeling as obstruction when this is the body to
which my constituents look to have their issues debated. This is the
place where we come to represent constituents. This is their
opportunity to be heard. I am their representative. I have the right to
offer amendments dealing with one of the biggest pyramid schemes,
financial crises to affect the Northwest. I deserve to be heard. My
constituents deserve to be heard.
My constituents did not get invited to a meeting at the White House
with Vice President Dick Cheney to talk about the energy plan. They
were not invited.
My constituents didn't get a password code to get on the conference
call with the Federal Energy Regulatory Commission when they discussed
with Wall Street financiers of Enron what legal standard they were
going to use in reviewing the contracts of Enron, and whether
ratepayers were going to get relief. My constituents didn't get that
password code. We didn't get to be on that call.
My constituents don't have high-paid lobbyists like the Weststar
Company, which is under Federal investigation for their donations to
various political groups that were all keyed around trying to influence
the energy policy of this body.
We may not win on our amendments about market manipulation and
improving the way energy policy is regulated, but, by God, we deserve
to be heard on this Senate floor and have a debate about electricity.
You cannot have an amendment like that of Senator Dayton that basically
is trying to stop the repeal of the consumer protection law that is
currently on the books, that the Domenici underlying title erases, and
not have a debate on that. How can you not have a debate on the Dayton
amendment that stops the repeal of the Public Utility Holding Company
Act?
As the Washington Post said yesterday in a headline on the front page
of the business section: ``Energy Monoliths Could Return.'' There was
more debate yesterday in the Washington Post about the Dayton amendment
trying to stop the return of this monolith than there has been on the
floor of the Senate.
I think the public should get their due. They paid $6 billion. Gee,
for $6 billion in increased power rates you ought to at least give them
a couple of days on the Senate floor to talk about these issues. These
issues are a significant change to current law. The whole notion of
regional transmission organizations and standard market design is a
move toward deregulation that this body ought to understand and
understand well.
Since the Federal Energy Regulatory Commission decided even though
the markets had been manipulated they were not going to give relief to
west coast ratepayers, we have not even had a hearing. We have not even
had a hearing. That was just a few weeks ago.
For 2\1/2\ years my colleague and staff member, Angela Becker-
Dippman, and myself have probably paid more attention to the energy
issue than just about anybody in this body, save maybe the California
Members. Why? Because a crisis happened in our State starting in late
2000, and we lobbied for price caps. We asked, before the Federal
Energy Regulatory Commission: Give our State relief. It took them a
year plus, a year and a half before they finally came in with any
relief.
Then people said it was all about supply and don't worry, it is all
going to get straightened out. It is not about manipulation. Nobody
manipulated anything.
Then we find out they actually manipulated something and admitted it.
They said: Don't worry, you'll have your day. It will all go before the
Federal Energy Regulatory Commission. They will take care of it.
Something will happen.
They have done nothing to protect the consumers once that
manipulation was known. They have done nothing. They have done nothing
but get on a phone call with the financiers of the Enron deal and say
to them, in private password conversations: Don't worry, you'll be
protected.
So, yes, my amendments deserve debate. We are not going to be an
apologist for Enron, nor condone their actions. But we should have a
healthy policy debate about:
No. 1, whether this country needs more deregulation of the energy
industry. Why not have that debate? Some of my colleagues on the
Democratic side of the aisle actually believe there should be
deregulation. I don't agree with them. What is wrong with having that
debate?
No. 2, we ought to debate whether we have enough consumer protection
in this legislation to protect from future market manipulation that
might happen as we continue to see the rise in natural gas prices. We
should have that debate.
No. 3, we could have a debate about whether we really understand what
regional transmission organizations and standard market design actually
do.
I can't tell you how many people in California thought it was no big
deal about how most of the legislators didn't really understand what
was going on in the legislation and went ahead and passed it only to
then find out that basically they had turned electricity over to the
free market. Electricity isn't just a commodity; it is a necessity.
People need it. They cannot be gouged by high prices. That is exactly
what has happened.
We ought to debate whether we understand what regional transmission
organizations and standard market design really do.
I am all for joining with my colleagues if they want to make this a
voluntary experiment. If they want to make this section of the
electricity title voluntary, I am happy to make it voluntary. But it is
not voluntary now. It is a mandate. The Federal Energy Regulatory
Commission came up with hearings, with pricing schemes, and with a rule
that would ultimately go into place after 2005. So wait 2 years to get
your plans in place and then implement them.
As the Senator from North Dakota adequately explained, this isn't
about whether we are going to build a national grid system and whether
cheap electricity in his region is going to get displaced by more
costly electricity from somewhere else and forced on his consumers. Why
should he agree to that? We need to have a debate about whether we
really know and understand where this title is leading us. I am happy
to do that. I am happy to do it. More importantly, I am happy to do it
on Saturday.
My constituents deserve to be heard on this issue. When they are
stuck with a 56-percent rate increase for the next 5 years because they
signed an Enron contract and they get no relief from the Federal
Government, they deserve to be heard. When Enron can turn around and
sue them to continually force my ratepayers to pay a higher rate on
manipulated contracts, they deserve to be heard.
I am not being an obstructionist. The majority leader talked about
doing something in the public interest. This is about the public
interest. This is about saying this body is going to protect consumers
from market manipulation. We are not going to guess at it. We are not
going to pretend that we know.
We are not going to pass something the Attorney General from New York
sends us a letter about basically saying, Excuse me. Thanks for your
hard work, but you are not getting it done. Your language not only
doesn't protect us enough but it might actually undermine the current
State laws that are in
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place. Or a letter from the National Securities Exchange executive
saying the same thing. The National Securities Exchange doesn't say
they think the language in the underlying bill curtails their efforts
on getting the kind of oversight that needs to happen to protect
consumers from market manipulation.
I couldn't disagree more with the majority leader. I supported the
Energy bill last year. I wanted to get it out here. I didn't like
everything in it. I was willing to compromise to move something ahead.
But a financial disaster happened in my State and it is going to
continue for years to come. This electricity title on which the
majority party has filed a motion to commit prohibits us from offering
those amendments. Maybe our leadership is in the back room working out
some sort of agreement. Maybe they are back there saying let us start
backward on the electricity title. Maybe they are bifurcating some of
these issues about supply.
But why not say to the American public we are going to make clear to
you there is no doubt that this isn't a supply issue, and we have made
sure manipulation has been taken care of?
We cannot leave here giving the American people the impression that
if you have enough money you can rely on the energy policy. Electricity
is a necessity, and we need to fight to make it affordable. This Member
will stand here for as long as it takes to make sure my constituents
have their day on these amendments.
I yield the floor.
The PRESIDING OFFICER (Mr. Graham of South Carolina). The Senator
from California.
Mrs. BOXER. Mr. President, thank you very much. I thank my colleague
from Washington for her continued leadership and information about what
is a very complicated matter. It isn't easy to understand and follow
all the market manipulation that occurred in our Western States. But
she has explained it. I intend to do so as well.
Let me say this: When the majority leader says we have to have an
Energy bill, I agree we need an Energy bill. However, we need a good
Energy bill. We don't need a bad Energy bill. If we have an Energy bill
which doesn't attack what happened in the west coast, then I want to
say to my colleagues from every State in the Union--and I will be
speaking for about 15 or 20 minutes--I will tell every colleague here
from every State in the Union their people could very well go through
what my people went through in California.
Mrs. HUTCHISON. Mr. President, will the Senator yield for a unanimous
consent request that I be allowed to speak immediately following her?
Mrs. BOXER. Absolutely.
Mrs. HUTCHISON. I ask unanimous consent to be recognized immediately
following the remarks of the Senator from California.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mrs. BOXER. Mr. President, the reason I waited for 2 hours this
morning to speak today is to send a warning to my colleagues. Read what
you are about to do. I find it incredible that instead of continuing on
the present path--which is to amend the electricity title in a way that
would make it better, in ways that would protect the American people
from the type of scam we witnessed in the west coast, which in my State
alone cost us about $9 billion, if not more, and which is responsible
for about a third of the problems we are facing financially in my
State--instead of fixing that electricity title, what do we have? We
have an amendment filed stopping our ability to make any changes to it,
and which, by the way, eviscerates all of the 21 amendments we have
worked so hard on during the 8 days we have been on this bill,
including amendments by Republicans and Democrats alike, dealing with
biomass, LIHEAP, oil independence, clean coal, hydrogen, and so on.
Even the 21 amendments we worked so hard on have been left out of
this bill which is now pending, and if we go to it, those 21 amendments
will be gone.
I also hope that leadership is working now to straighten out where we
are. We are in chaos, in my opinion, right now.
When the majority leader says we need an Energy bill, I want to say
we need a good Energy bill.
The last thing we need is a bad Energy bill. Let's look at this bill.
This bill has an electricity title which goes forward with deregulation
in the face of the disaster we had on the west coast. Why colleagues
would go ahead with this is beyond me.
But I have to say, in California, every single member of the
legislature--Republican and Democrat--years ago voted for such a bill.
It was signed by Pete Wilson, who is the one who brought it to the
legislature. And it led to a total disaster. So maybe my colleagues
don't understand the fact that this is one where you better read every
line and you better understand what you are voting for because this one
could come back to bite you really hard.
In the bill we have huge subsidies for nuclear power. We don't even
know what to do with the waste. I see my colleague from Nevada crossing
the floor. He is struggling with this. What are you going to do with
the waste that lasts thousands of years that is so dangerous? We don't
even know. But this subsidizes new nuclear powerplants.
This bill has done nothing about fuel economy--zilch. The amendment
that passed was backed, frankly, by the big auto companies, and it does
nothing, at a time when we are hoping to change our dependence on
foreign oil.
What we have is a bill that ignores what happened to us in
California. I see that my senior Senator is here. And no one knows
better than she and I what this has meant to our people. And we are
trying to be good colleagues to our colleagues to say: Wait. Stop. Time
out. Don't go down that path that we went down.
In the midst of the crisis, I got a letter from a gentleman who lives
in Bishop, CA. I ask unanimous consent to have that letter printed in
the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Zack Ranch,
Bishop, CA, April 8, 2001.
Senator Barbara Boxer,
Hart Senate Office Building.
Washington, DC
Dear Senator Boxer: I am writing to ask for your help. Our
family has owned and operated an alfalfa ranch in the Hammil
Valley since 1965. Our crop is irrigated in the summer with
water pumped from wells, by electric pumps. We have just been
informed by Edison that our power rate will double this
summer, and will possibly be raised beyond that in the
future. Since we have a narrow profit margin to begin with,
this will effectively put us out of business. Edison has told
us that there is to be no break for farmers. In the past we
have been on a ``time of use'' program in the summer where we
pump only during off peak hours, but we aren't able to find
if this program will continue. Any information you can offer,
or any help you can give us, will be greatly appreciated.
Sincerely,
Ann Zack.
Mrs. BOXER. This gentleman wrote to me. His name is Zack Ranch.
Actually, his wife wrote:
I am writing to ask your help. Our family has owned and
operated an alfalfa ranch in the Hammil Valley since 1965.
Our crop is irrigated in the summer with water pumped from
wells, by electric pumps. We have just been informed by
Edison that our power rate will double this summer, and will
possibly be raised beyond that in the future. Since we have a
narrow profit margin to begin with, this will effectively put
us out of business. Edison has told us that there is to be no
break for farmers. In the past, we have been on a ``time of
use'' program in the summer where we pump only during off
peak hours, but we aren't able to find if this program will
continue. Any information you can offer, or any help you can
give us, will be greatly appreciated.
Well, we lost so many small businesses and farmers during this
period. It would have been worse if the State did not go in. Governor
Davis, at that time, took over from the power companies and protected
the people from the types of increases that consumers in Washington
had, although we went up 25 percent, which is very hard to take,
especially for a small business that is working on a small profit
margin.
Let me show you a chart that demonstrates what happened to us at the
height of our problems. This is the Enron scam. I would say to you, Mr.
President, in this bill it is even going to be worse for your people
because this bill has done away with the one agency that protects you
against big mergers; it has essentially eviscerated the power of the
FERC.
In this situation, eventually FERC was able to step in. But what we
have done in this bill so far is not going to make that possible.
[[Page S10481]]
Let me show you what happened with the wholesale electricity prices.
It started to spike up when all these scams--unbeknownst to us; I will
go into those scams--hit. Enron led these scams. Other companies
apparently did the same. The prices peaked over here, way up here. And
then they started to go down when the rate caps were placed in.
In between this period and this period, as shown on the chart, our
people suffered greatly. This represents a theft of about $9 billion
from my people into the pockets of unscrupulous energy companies led by
Enron.
Let me tell you what happened during this period. We have an overlay
for this chart which I showed at the Commerce Committee which
investigated this matter. Just to add a little spice to it, this
overlay shows how much money Ken Lay and Jeffrey Skilling, the two
corporate leaders--if I could use that term--of Enron, made during this
period when we were being ripped off.
Mr. Lay sold $5 million worth of stock here in December 2000, $6
million worth of stock in February of 2001, and another $3 million
worth of stock in May of 2001.
Mr. Skilling made millions of dollars as well. So here we are: $3
million, $3 million, and $2 million, the number of shares they sold
into the hundreds of thousands. And the price per share, they sold out
between $85 and $54.
When it was all over, where were the employees of Enron? Flat broke.
They lost their jobs. They lost their life savings.
They knew what they were doing. They were ripping off the people of
my State and selling their stock. And they are not in jail.
What do we do in this bill? We make it possible for that to continue
because the electricity title does nothing but make matters worse by
tying the hands of the people who could stop this nonsense from
happening.
So when we get a little bit upset and emotional, it is because we
have met with the people in our State. We know how they have suffered.
We have met with the business community. We know what happened. And we
don't see Ken Lay in jail. We don't see Jeffrey Skilling in jail. Do
you know what? That is up to the administration to go after them. I
urge them to do it. They are going after Martha Stewart. They went
after Sam Waksal. Fine. Go after people who do bad things.
What happened here is a disaster. These men pocketed tremendous
amounts of money. The people who worked for them lost their jobs, lost
their retirement. People all over the country went broke with their
pension plans. And this electricity title does nothing at all to stop
this from happening.
Now, I never thought I would have to come out on the floor and bring
out these charts again because, honest to God, I thought in the Energy
bill we would come up with we would stop these shenanigans. And we
can't put Ken Lay in jail here. That is up to the courts. It is up to
the Attorney General. We can't put Jeffrey Skilling in jail. We can't
get the money back to the people. But what we can do is make sure this
does not happen again. And we are not doing it. That is why we are so
upset.
And when colleagues on the other side say let's stop talking about
this; we have talked for 16 days, the truth is we have talked for 8
days. The truth is they are putting in judges, controversial judges.
And I have one from my State the two Senators from my State oppose.
They are throwing that in the mix, when we ought to be talking about
this issue.
I want to show you one more thing before I put away this chart.
During this period of time, the California delegation, Republicans and
Democrats alike, went to seek Dick Cheney. We begged him to take
action. We begged him to take action. We said: You are an expert on
energy. You know this is a scam. We showed him a chart which showed
that plants were being taken offline for so-called maintenance at a
rate that was about 10 times higher than had been the normal case. So
we were getting shorted electricity on purpose--manipulation.
We went to Dick Cheney and we said: Can you help us? Do you know what
he said? I will never forget it. He said: Listen, I have one thing to
say to you. Your people use too much energy.
Well, let me say, my people are No. 1 in terms of the least energy
used per capita. Let me repeat that: the least energy used per capita.
And look at this chart. As we saw the spikes go up, demand was going
down. This was not a market. This was manipulation.
Demand was down; electricity was soaring. What Maria Cantwell and
Patty Murray and I and Senator Feinstein are trying to tell you is,
don't let the California experience go to waste. Look at what happened
to us. Look at the corporate thieves that pocketed millions of dollars
while our people were taken to the cleaners, while the employees of
these companies lost their jobs, lost their pensions. If I have to see
another one of these cases again, it would just be tragic. Can't we
learn from history? That is what we are supposed to do, learn from
history.
So when we stand up and say we want to fight for our amendments, we
want to make sure that the Federal Government can step in and stop this
robbery, it isn't because we are trying to derail anything. If
anything, we are trying to get an Energy bill on track that is going to
spare other States the tragedy that our State experienced.
It isn't anything about too much demand. Our demand was down, and the
prices soared. Why did that happen? Because scams were put into place.
I will just show a few of these scams.
Here is Get Shorty:
In order to short the ancillary services, it is necessary
to submit false information that purports to identify the
source of the ancillary services.
The traders are careful, however, to be sure to buy
services right at 9:00 a.m. so that Enron is not actually
called upon to provide ancillary services.
That comes straight out of the lawyer's letter.
I ask unanimous consent to print the letter in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
Stoel Rives LLP,
Memorandum,
December 6, 2000.
To: Richard Sanders
From: Christian Yoder and Stephen Hall
Re: Traders' Strategies in the California Wholesale Power
Markets/ISO Sanctions.
Confidential: Attorney/Client Privilege/Attorney Work Product
This memorandum analyzes certain trading strategies that
Enron's traders are using in the California wholesale energy
markets. Section A explains two popular strategies used by
the traders, ``inc-ing'' load and relieving congestion.
Section B describes and analyzes other strategies used by
Enron's traders, some of which are variations on ``inc-ing''
load or relieving congestion. Section C discusses the
sanction provisions of the California Independent System
Operator (``ISO'') tariff.
A. The Big Picture
1. ``Inc-ing'' Load Into The Real Time Market
One of the most fundamental strategies used by the traders
is referred to as `` `inc-ing' load into the real time
market.'' According to one trader, this is the `oldest trick
in the book' and, according to several of the traders, it is
now being used by other market participants.
To understand this strategy, it is important to understand
a little about the ISO's real-time market. One responsibility
of the ISO is to balance generation (supply) and loads
(demand) on the California transmission system. During its
real-time energy balancing function the ISO pays/charges
market participants for increasing/decreasing their
generation. The ISO pays/charges market participants under
two schemes: ``instructed deviations'' and ``uninstructed
deviations.'' Instructed deviations occur when the ISO
selects supplemental energy bids from generators offering to
supply energy to the market in real time in response to ISO
instructions. Market participants that increase their
generation in response to instructions (``instructed
deviation'') from the ISO are paid the ``inc'' price. Market
participants that increase their generation without an
instruction from the ISO (an ``uninstructed deviation'') are
paid the ex post ``dec'' price. In real-time, the ISO issues
instructions and publishes ex post prices at ten-minute
intervals.
`` `Inc-ing load' into the real-time market'' is a strategy
that enables Enron to send excess generation to the imbalance
energy market as an uninstructed deviation. To participate in
the imbalance energy market it is necessary to have at least
1 MW of load. The reason for this is that a generator cannot
schedule energy onto the grid without having a corresponding
load. The ISO requires scheduling coordinators to submit
balanced schedules; i.e., generation must equal load. So, if
load must equal generation, how can Enron end up with excess
generation in the real-time market?
The answer is to artificially increase (``inc'') the load
on the schedule submitted
[[Page S10482]]
to the ISO. Then, in real-time, Enron sends the generation it
scheduled, but does not take as much load as scheduled. The
ISO's meters record that Enron did not draw as much load,
leaving it with an excess amount of generation. The ISO gives
Enron credit for the excess generation and pays Enron the dec
price multiplied by the number of excess megawatts. An
example will demonstrate this. Enron will submit a day-ahead
schedule showing 1000 MW of generation scheduled for delivery
to Enron Energy Services (``EES''). The ISO receives the
schedule, which says ``1000 MW of generation'' and ``1000 MW
of load.'' The ISO sees that the schedule balances and,
assuming there is no congestion, schedules transmission for
this transaction. In real-time, Enron sends 1000 MW of
generation, but Enron Energy Services only draws 500 MW. The
ISO's meters show that Enron made a net contribution to the
grid of 500 MW, and so the ISO pays Enron 500 times the dec
price.
The traders are able to anticipate when the dec price will
be favorable by comparing the ISO's forecasts with their own.
When the traders believe that the ISO's forecast
underestimates the expected load, they will inc load into the
real time market because they know that the market will be
short, causing a favorable movement in real-time ex post
prices. Of course, the much-criticized strategy of
California's investor-owned utilities (``IOUs'') of
underscheduling load in the day-ahead market has contributed
to the real-time market being short. The traders have learned
to build such underscheduling into their models, as well.
Two other points bear mentioning. Although Enron may have
been the first to use this strategy, others have picked up on
it, too. I am told this can be shown by looking at the ISO's
real-time metering, which shows that an excess amount of
generation, over and above Enron's contribution, is making it
to the imbalance market as an uninstructed deviation. Second,
Enron has performed this service for certain other customers
for which it acts as scheduling coordinator. The customers
using this service are companies such as Powerex and Puget
Sound Energy (``PSE''), that have generation to sell, but no
native California load. Because Enron has native California
load through EES, it is able to submit a schedule
incorporating the generation of a generator like Powerex or
PSE and balance the schedule with ``dummied-up'' load from
EES.
Interestingly, this strategy appears to benefit the
reliability of the ISO's grid. It is well known the
California IOUs have systematically underscheduled their load
in the PX's Day-Ahead market. By underscheduling their load
into the Day-Ahead market, the IOUs have caused the ISO to
have to call on energy in real time in order to keep the
transmission system in balance. In other words, the
transmission grid is short energy. By deliberately
overscheduling load, Enron has been offsetting the ISO's
real time energy deficit by supplying extra energy that
the ISO needs. Also, it should be noted that in the ex
post market Enron is a ``price taker,'' meaning that they
are not submitting bids or offers, but are just being paid
the value of the energy that the ISO needs. If the ISO did
not need the energy, the dec price would quickly drop to
$0. So, the fact that Enron was getting paid for this
energy shows that the ISO needed the energy to balance the
transmission system and offset the IOU's underscheduling
(if those parties own Firm Transmission Rights (``FTR'')
over the path).
2. Relieving Congestion
The second strategy used by Enron's traders is to relieve
system-wide congestion in the real-time market, which
congestion was created by Enron's traders in the PX's Day
Ahead Market. In order to relieve transmission congestion
(i.e., the energy scheduled for delivery exceeds the capacity
of the transmission path), the ISO makes payments to parties
that either schedule transmission in the opposite direction
(``counterflow payments'') or that simply reduce their
generation/load schedule.
Many of the strategies used by the traders involve
structuring trades so that Enron gets paid the congestion
charge. Because the congestion charges have been as high as
$750/MW, it can often be profitable to sell power at a loss
simply to be able to collect the congestion payment.
b. representative trading strategies
The strategies listed below are examples of actual
strategies used by the traders, many of which utilize the two
basic principles described above. In some cases, the
strategies are identified by the nicknames that the traders
have assigned to them. In some cases, i.e., ``Fat Boy,''
Enron's traders have used these nicknames with traders from
other companies to identify these strategies.
1. Export of California Power
a. As a result of the price caps in the PX and ISO
(currently $250), Enron has been able to take advantage of
arbitrage opportunities by buying energy at the PX for export
outside California. For example, yesterday (December 5,
2000), prices at Mid-C peaked at $1200, while California was
capped at $250. Thus, traders could buy power at $250 and
sell it for $1200.
b. This strategy appears not to present any problems, other
than a public relations risk arising from the fact that such
exports may have contributed to California's declaration of a
Stage 2 Emergency yesterday.
2. ``Non-firm Export''
a. The goal is to get paid for sending energy in the
opposite direction as the constrained path (counterflow
congestion payment). Under the ISO's tariff, scheduling
coordinators that schedule energy in the opposite direction
of the congestion on a constrained path get paid the
congestion charges, which are charged to scheduling
coordinators scheduling energy in the direction of the
constraint. At times, the value of the congestion payments
can be greater than the value of the energy itself.
b. This strategy is accomplished by scheduling non-firm
energy for delivery from SP-15 or NP-15 to a control area
outside California. This energy must be scheduled three hours
before delivery. After two hours, Enron gets paid the
counterflow charges. A trader then cuts the non-firm power.
Once the non-firm power is cut, the congestion resumes.
c. The ISO posted notice in early August prohibiting this
practice. Enron's traders stopped this practice immediately
following the ISO's posting.
d. The ISO objected to the fact that the generators were
cutting the non-firm energy. The ISO would not object to this
transaction if the energy was eventually exported.
Apparently, the ISO has heavily documented Enron's use of
this strategy. Therefore, this strategy is the more likely
than most to receive attention from the ISO.
2. ``Death Star''
a. This strategy earns money by scheduling transmission in
the opposite direction of congestion; i.e., schedule
transmission north in the summertime and south in the winter,
and then collecting the congestion payments. No energy,
however, is actually put onto the grid or taken off.
b. For example, Enron would first import non-firm energy at
Lake Mead for export to the California-Oregon border
(``COB''). Because the energy is traveling in the opposite
direction of a constrained line, Enron gets paid for the
counterflow. Enron also avoids paying ancillary service
charges for this export because the energy is non-firm, and
the ISO tariff does not require the purchase of ancillary
services for non-firm energy.
c. Second, Enron buys transmission from COB to Lake Mead at
tariff rates to serve the import. The transmission line from
COB to Lake Mead is outside of the ISO's control area, so the
ISO is unaware that the same energy being exported from Lake
Mead is simultaneously being imported into Lake Mead.
Similarly, because the COB to Lake Mead line is outside the
ISO's control area, Enron is not subject to payment of
congestion charges because transmission charges for the COB
to Lake Mead line are assessed based on imbedded costs.
d. The ISO probably cannot readily detect this practice
because the ISO only sees what is happening inside its
control area, so it only sees half of the picture.
e. The net effect of these transactions is that Enron gets
paid for moving energy to relieve congestion without actually
moving any energy or relieving any congestion.
3. ``Load Shift''
a. This strategy is applied to the Day-Ahead and the real-
time markets.
b. Enron shifts load from a congested zone to a less
congested zone, thereby earning payments for reducing
congestion, i.e., not using our FTRs on a constrained path.
c. This strategy requires that Enron have FTRs connecting
the two zones.
d. A trader will overschedule load in one zone, i.e., SP-
15, and underschedule load in another zone, i.e., NP-15.
Such scheduling will often raise the congestion price in
the zone where load was overscheduled.
The trader will then ``shift'' the overscheduled ``load''
to the other zone, and get paid for the unused FTRs. The ISO
pays the congestion charge (if there is one) to market
participants that do not use their FTRs. The effect of this
action is to create the appearance of congestion through the
deliberate overstatement of loads, which causes the ISO to
charge congestion charges to supply scheduled for delivery in
the congested zone. Then, by reverting back to its true load
in the respective zones, Enron is deemed to have relieved
congestion, and gets paid by the ISO for so doing.
e. One concern here is that by knowingly increasing the
congestion costs, Enron is effectively increasing the costs
to all market participants in the real time market.
f. Following this strategy has produced profits of
approximately $30 million for FY 2000.
4. ``Get Shorty''
a. Under this strategy, Enron sells ancillary services in
the Day-ahead market.
b. Then, the next day, in the real-time market, a trader
``zeroes out'' the ancillary services, i.e., cancels the
commitment and buys ancillary services in the real-time
market to cover its position.
c. The profit is made by shorting the ancillary services,
i.e., sell high and buy back at a lower price.
d. One concern here is that the traders are applying this
strategy without having the ancillary services on standby.
The traders are careful, however, to be sure to buy services
right at 9:00 a.m. so that Enron is not actually called upon
to provide ancillary services. However, once by accident, a
trader inadvertently failed to cover, and the ISO called on
those ancillary services.
e. This strategy might be characterized as ``paper
trading,'' because the seller does not actually have the
ancillary services to sell. FERC recently denied Morgan
Stanley's request to paper trade on the New York ISO.
[[Page S10483]]
The ISO tariff does provide for situations where a
scheduling coordinator sells ancillary services in the day
ahead market, and then reduces them in the day-of market.
Under these circumstances, the tariff simply requires that
the scheduling coordinator replace the capacity in the hour-
ahead market. ISO Tariff, SBP 5.3, Buy Back of Ancillary
Services.
f. The ISO tariff requires that schedules and bids for
ancillary services identify the specific generating unit or
system unit, or in the case of external imports, the selling
entity. As a consequence, in order to short the ancillary
services it is necessary to submit false information that
purports to identify the source of the ancillary services.
5. ``Wheel Out''
a. This strategy is used when the interties are set to
zero, i.e., completely constrained.
b. First, knowing that the intertie is completely
constrained, Enron schedules a transmission flow through the
system. By so doing, Enron earns the congestion charge.
Second, because the line's capacity is set to ``0,'' the
traders know that any power scheduled to go through the
intertie will, in fact be cut. Therefore, Enron earns the
congestion counterflow payment without having to actually
send energy through the intertie.
c. As a rule, the traders have learned that money can be
made through congestion charges when a transmission line is
out of service because the ISO will never schedule an energy
delivery because the intertie is constrained.
6. ``Fat Boy''
a. This strategy is described above in section A(1).
7. ``Ricochet''
a. Enron buys energy from the PX in the day of market, and
schedules it for export. The energy is sent out of California
to another party, which charges a small fee per MW, and then
Enron buys it back to sell the energy to the ISO real-time
market.
b. The effect of this strategy on market prices and supply
is complex. First, it is clear that Enron's intent under this
strategy is solely to arbitrage the spread between the PX and
the ISO, and not to serve load or meet contractual
obligations. Second, Ricochet may increase the Market
Clearing Price by increasing the demand for energy
(Increasing the MCP does not directly benefit Enron because
it is buying energy from the PX, but it certainly affects
other buyers, who must pay the same, higher price.) Third,
Ricochet appears to have a neutral effect on supply, because
it is returning the exported energy as an import. Fourth, the
parties that pay Enron for supplying energy to the real time
ex post market are the parties that underscheduled, or
underestimated their load, i.e., the IOUs.
8. Selling Non-firm Energy as Firm Energy
a. The traders commonly sell non-firm energy to the PX as
``firm.'' ``Firm energy,'' in this context, means that the
energy includes ancillary services. The result is that the
ISO pays EPMI for ancillary services that Enron claims it is
providing, but does not in fact provide.
b. The traders claim that ``everybody does this,''
especially for imports from the Pacific Northwest into
California.
c. At least one complaint was filed with the ISO regarding
Enron's practice of doing this. Apparently, Arizona Public
Service sold non-firm energy to Enron, which turned around
and sold the energy to the ISO as firm. APS cut the energy
flow, and then called the ISO and told the ISO what Enron had
done.
9. Scheduling Energy To Collect the Congestion Charge II
a. In order to collect the congestion charges, the traders
may schedule a counterflow even if they do not have any
excess generation. In real time, the ISO will see that Enron
did deliver the energy it promised, so it will charge Enron
the inc price for each MW Enron was short. The ISO, however,
still pays the congestion charge. Obviously a loophole, which
the ISO could close by simply failing to pay congestion
charges to entities that failed to deliver the energy.
b. This strategy is profitable whenever the congestion
charge is sufficiently greater than the price cap. In other
words, since the ex post is capped at $250, whenever the
congestion charge is greater than $250 it is profitable to
schedule counterflows, collect the congestion charge, pay the
ex post, and keep the difference.
c. iso tariff
The ISO tariff prohibits ``gaming,'' which it defines as
follows:
`Gaming,' or taking unfair advantage of the rules and
procedures set forth in the PX or ISO Tariffs, Protocols or
Activity Rules, or of transmission constraints in periods in
which exist substantial Congestion, to the detriment of the
efficiency of, and of consumers in, the ISO Markets. `Gaming'
may also include taking undue advantage of other conditions
that may affect the availability of transmission and
generation capacity, such as loop flow, facility outages,
level of hydropower output or seasonal limits on energy
imports from out-of-state, or actions or behaviors that may
otherwise render the system and the ISO Markets vulnerable to
price manipulation to the detriment of their efficiency.''
ISO Market Monitoring and Information Protocol (``MMIP''),
Section 2.1.3.
The ISO tariff also prohibits ``anomalous market
behavior,'' which includes ``unusual trades or
transactions''; ``pricing and bidding patterns that are
inconsistent with prevailing supply and demand conditions'';
and ``unusual activity or circumstances relating to imports
from or exports to other markets or exchanges.'' MMIP,
Section 2.1.1 et seq.
Should it discover such activities, the ISO tariff provides
that the ISO may take the following action:
1. Publicize such activities or behavior and its
recommendations thereof, ``in whatever medium it believes
most appropriate.'' MMIP, Section 2.3.2 (emphasis added).
2. The Market Surveillance Unit may recommend actions,
including fines and suspensions, against specific entities in
order to deter such activities or behavior. MMIP, Section
2.3.2.
3. With respect to allegations of gaming, the ISO may order
ADR procedures to determine if a particular practice is
better characterized as improper gaming or ``legitimate
aggressive competition.'' MMIP, Section 2.3.3.
4. In cases of ``serious abuse requiring expeditious
investigation or action'' the Market Surveillance Unit shall
refer a matter to the appropriate regulatory or antitrust
enforcement agency. MMIP, Section 3.3.4.
5. Any Market Participant or interested entity may file a
complaint with the Market Surveillance Unit. Following such
complaint, the Market Surveillance Unit may ``carry out any
investigation that it considers appropriate as to the concern
rasied.'' MMIP, Section 3.3.5.
6. The ISO Governing Board may impose ``such sanctions or
penalties as it believes necessary and as are permitted under
the ISO Tariff and related protocols approved by FERC; or it
may refer the matter to such regulatory or antitrust agency
as it sees fit to recommend the imposition of sanctions and
penalties.'' MMIP, Section 7.3.
Mrs. BOXER. This is a letter we got ahold of in the Commerce
Committee where the lawyers were, in essence, going into all of these
schemes and basically telling Enron they were running afoul of State
law, and yet the schemes continued. They went on and on.
Here are the rest of the strategies used that Senator Cantwell is
trying to do away with, trying to do away with these schemes. That is
why she has a number of amendments.
Death Star:
Enron gets paid for moving energy to relieve congestion
without actually moving any energy or relieving any
congestion.
This is detailed in the letter I just put in the Record.
Load Shift:
By knowingly increasing the congestion costs, Enron is
effectively increasing the costs to all market participants
in the real time market.
This is a great one. Exporting California power:
This strategy appears not to present any problems, other
than a public relations risk arising from the fact that such
exports may have contributed to California's declaration of a
Stage 2 Emergency.
They were taking power out of my State, robbing my State of its
power. Be careful. This could happen to you. As Senator Dorgan said, he
gets cheap power. In this bill that cheap power can be brought out of
his State and suddenly they are faced with a lack of power. Is this the
kind of Energy bill we need so badly, to take these schemes and allow
them to happen in your States?
Inc-ing Load:
The answer is to artificially increase (inc) the load on
the schedule submitted to the ISO.
It is all fraud. It has all been exposed. We know now why we faced
the kind of crisis we faced. Yet we can't get colleagues to listen to
Senator Cantwell, to vote for her amendment. Then we get yelled at that
we are not doing the right thing for the country.
I don't understand what is going on here. If we truly care about our
constituents as we say we do, if we truly want to fight for our
families, if we care about our small businesses, why would we pass a
bill that allows these scams to continue? Why do we have to get
lectured about the fact we are derailing something? I am trying to
spare what happened to me and my constituents in my State from
happening to you and your constituencies in your States. For that, we
are being called obstructionist.
This is another way to look at what happened. Our demand for
electricity in California during our crisis period went up 4 percent.
Remember, I told you, we were the most energy efficient. The reason it
went up 4 percent is we are growing. I must remind you, I represent 35
million people. We have the fifth largest economy in the world. So our
electricity demand went up 4 percent and our wholesale cost of
electricity went up 266 percent.
No business could survive if our State hadn't come in and taken over
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when the power companies went under. Our power companies went under.
Our electric utility companies went under. It is hard to imagine. They
had been in business for 100 years or more.
I know my friend from Texas is raring to give her statement so I
won't go on anymore.
I think before there are charges of obstructionism, we ought to take
a deep breath and think about what happened to the largest State in the
Union, when we were scammed by the private sector, by people with no
morality, by people with no ethics, by people who should be in jail. We
were scammed, and we are trying to prevent that from happening all over
the country.
Instead, what we have is a bill that makes it easier for these scams
to continue. What we have is a bill that continues on this path that
will hurt consumers all over the country.
What Senator Cantwell has been fighting for is the opportunity to
offer amendments. With what has happened here now, that is no longer
possible. So, yes, some of us are going to continue to tell the story.
Some of us are going to say: Let us learn from history. This isn't
ancient history; this is 1999 and 2000.
What we want to do is make sure we have a system that will protect
small business and will protect families and will protect us all from
robber barons who come in and set up elaborate scams, giving them
names: Death Star, Fat Boy, Get Shorty, Inc-ing, Ricochet. This isn't
just some one person who had a thought. This was a conspiracy to harm
consumers.
As Senator Cantwell said, electricity is a necessity. It is more than
a commodity. You can do without a new suit; you can do without a pair
of shoes if you already have one; but you cannot do without
electricity, if you are in business or if you live in some of the
desert areas in my State where senior citizens can get a heatstroke if
they don't have their air-conditioner on. Senator Cantwell and I and
others simply want to make sure that what happened to us does not
happen to us again and what happened to us does not happen to you in
your States.
I thank the Senate for its indulgence. I am very hopeful that our
leaders are working out a way for us to walk away from this electricity
title which is so damaging and move forward with a bill that doesn't
hurt the people we represent. None of us wants to do it. Let's not do
it.
I yield the floor.
The PRESIDING OFFICER. The Senator from Texas is recognized under the
previous order for up to 20 minutes.
Mrs. HUTCHISON. Mr. President, I think it is very important that we
revamp and talk about what is going on here because we have been trying
to pass this Energy bill, really, since May. Our leader, Senator Frist,
and the committee chairman, Senator Domenici, have asked people to come
forward and offer their amendments time and time and time again. We
have not had amendments offered; we have not had time agreements; we
have not had the momentum to move forward on this bill.
Senator Frist, as is usual around here, did allow other business to
be done in between because we were not able to make headway on this
bill. Senator Frist announced at the first of this week that we were
going to finish this Energy bill. But time and time again, it has
broken down, amendments have not come forward, we have not had time
agreements, and we have not been able to move forward.
The bill we are working on is a bill that came out of committee. It
was hammered out by the committee under the leadership of the chairman
and the ranking member--the two Senators from New Mexico. It came to
the floor in relatively good shape. There were certainly amendments in
order, and that is the right of every Senator. But it is also the
responsibility of a Senator to say what the amendments are, put them
forward, make the arguments, and let's move on. That is how you get a
bill off the floor. We have been thwarted in those efforts time and
time and time again.
We import 56 percent of the energy needs of this country. How can we
be so blind when we see what is happening in the Middle East right now?
We know the Middle East is volatile, we know it is the largest source
of our imported energy. Yet we have been working on this Energy bill
for actually 2 years and, if we don't pass an Energy bill, we are not
going to become more self-sufficient. How can we miss this opportunity?
It is an issue of consumer availability. It is an issue of responsible
regulation. It is also an issue of security for our country--that we
have the supplies that are sufficient so we will not be beholden to any
other country in the world for our energy needs, and so we will have
the ability to keep our economy strong and protect the people of our
country. At no time was that made more clear than on September 11,
2001.
We need to finish this bill. I think a fair offer has been made. It
does close out some amendments. It closes out some amendments on which
I was working. I think if we all look at the big picture, we will
determine that it is better to pass the bill that we had on the floor
last year, which passed 88 to 11, after the Senate wrote the bill on
the Senate floor. I didn't like all of it, but it was a good start at
making our country more energy self-sufficient. Furthermore, it would
have put people to work. Why on earth would we not, in this very hard
economic time, realize that we need to put our people back to work?
There are many parts of the bill that we are working on that came out
of committee. There are many parts of the bill we passed last year that
will put people back to work.
This bill is very balanced. It assures that we will have more energy
coming from our country in the traditional ways, such as oil and gas
exploration and trying to encourage clean coal, because we have an
abundance of coal and it can be used in a clean, environmentally safe
way if we enact the amendments and the bill from last year that
encourage clean coal development. It also encourages new forms of
energy--renewable energy, energy that comes from different sources,
alternative sources, such as wind and ethanol--different sources even
than we know about today--through research.
It is very important that we develop our own sources of energy.
Nuclear energy is clean energy. It has been wiped out in our country
because of the liability and the extremism that has kept anyone from
making an investment in a nuclear powerplant for about the last 15
years. But nuclear energy is a major source in many European countries,
and it is very clean and safe if it is done right.
So I think it is very important that we have this bill, or pass last
year's bill, and that we stop talking about who is delaying. We have
had the bill on the floor for a week and we have not been able to get
through all of the stalling. So I think it is time for us to fish or
cut bait before we leave. I think a fair offer has been made, and I
think it is time for us to go forward and pass an Energy bill for our
country.
Let's have the debate, let's vote up or down, and let's try to use
the good parts of this bill for the future of our country. It
encourages new and marginal well drilling. A lot of people say, well, a
13-barrel-a-day well is not going to make us more energy self-
sufficient. But, at one time, before prices got so low that the little
guys could not make it, we had 500,000 marginal wells drilling in our
country. That provided a lot of jobs, and it also equaled the amount of
oil we import from Saudi Arabia every day. But the little guys have
very low margins at 13 barrels a day, and they cannot make it when the
price of oil falls below $18 a barrel. So if we just have a mechanism
by which you get some tax relief if prices fall below $18 or $17 or $16
a barrel, then those people will know they can stay in business; they
will go out and find the oil and they will take the time and the
expense to drill. They will not take the time to drill if we don't give
them some assurances. This bill does that, and so did last year's bill.
It is very important to encourage our people to go out and look for oil
and gas resources.
The Gulf of Mexico is the second largest capability we have after
Alaska. We have been prohibited from drilling in ANWR, and that is not
in the bill. But the Gulf of Mexico is available and it is the second
largest resource we have in this bill before us, as in last year's
bill. We do have incentives that would allow people to go to the great
expense of a deep gulf drilling because they will know they will have
the capability, if they find oil or gas, to be able to afford to get it
out and keep those jobs in our country.
[[Page S10485]]
There is a reason for us to stay on this bill. The reason is the
national security of our country. That is why our leader, Senator
Frist, has said from the beginning of this week that we have already
spent 2 weeks on this bill and now is the time for the Senate to act.
There is no reason for us to leave without an Energy bill. We have
given it time. If people are sincere about wanting an Energy bill to
pass, this is a good bill. Last year's bill is a bill with which we can
work. We have already voted on a major amendment, the Bond-Levin CAFE
amendment, which will have good science in fuel efficiency standards.
The Senate has spoken on that issue.
Why don't we keep going? Why don't we close out the electricity title
to this bill? It has been very controversial, but we put all the groups
together, we have gone through all the disagreements, and we have come
to some terms. Why don't we go forward on this bill?
Yes, a few people would not be able to offer their amendments because
they did not come forward all these weeks we have had the bill before
the Senate. Some people have, and we have voted on their amendments.
We do not need to be pointing fingers. The majority brought up the
bill. Senator Domenici has been working on this bill diligently.
Senator Domenici gave up the last 2 years of his chairmanship of the
Budget Committee, which he loved, because he was dedicated and
committed to getting an Energy bill out of the Senate and to the
President's desk. He has not had the cooperation he deserves to do what
he has been trying to do all these years.
Senator Domenici put the bill through the committee. He did not
bypass the committee as was done last year. He put it through the
committee, and he worked with all of the factions and interest groups.
He deserves to finish this bill this week as we proposed to do.
We have tax incentives in this bill that will encourage the new kinds
of energy that might be what will make the difference in sufficient
energy in our country. Maybe it will be the clean coal power initiative
that will get us over the hump to gasify coal in an environmentally
safe way.
If we continue to put regulatory hurdles in front of our ability to
develop new sources of energy in a responsible way, we are going to do
two things: We are going to continue the deficit in our ability to
provide our own energy for the people of the United States of America,
and we are going to send jobs overseas at a time when unemployment is
at a high point this year. I do not see the wisdom in that, and that is
why we have been pushing all week to get this bill completed.
The United States has the 12th highest proven oil reserves in the
world. Sixty-five percent of those reserves are concentrated in Alaska
and the Gulf of Mexico. This bill will help the Gulf of Mexico, and it
will help get the resources from Alaska through a pipeline down to the
lower 48. This bill does not allow drilling in ANWR, but it does allow
us to have a direct pipeline that will take the natural resources--the
gas--out of Alaska and bring it down to the lower 48.
This is a huge job creator and a huge benefit for the consumers and
the businesses of our country that must have energy to keep their
businesses and their manufacturing operations open. I have talked with
farmers and small business people about the increasing rates of natural
gas and electricity, and it is driving their costs up at a time when
they are not able to get higher prices for their products, and that is
an alarming hit on our economy.
Why are we still talking about this bill instead of working on the
electricity title and getting this bill through the Senate or taking up
the offer that was made by the leadership that we take up last year's
bill that passed this body 88 to 11, pass it, and go to conference and
continue to work on getting a bill to the President of the United
States?
Even if everything in this bill or last year's bill is not to my
liking, which it is not, it is a major step for energy sufficiency, a
major step in conservation, and a major step in job production for our
country at a time when we need it.
I hope we will be able to move forward on this bill or on last year's
bill with the goal that we will finish this bill this week. That is
what we can do if we will stop talking--and I am talking because we do
not have an agreement yet, but I will gladly yield to anyone who comes
to the Chamber and says, We have an agreement to go forward, because I
want an Energy bill this week. That is why Senator Frist laid it before
the Senate and why Senator Domenici got it out of committee and why we
have been trying to pass this bill since last year, since early this
year, since May when it came out of committee and we first tried to
pass it. We have seen delay after delay.
I hope we will buckle down in the next hour and start the electricity
title again or enter into an agreement that we are going to pass last
year's bill, debate it, let everybody have their say, and see if we can
move forward, even if it is not 100 percent what people want. I have
not seen a bill come out of the Senate very often that is 100 percent
of what I want. That is why we have 100 Senators representing 50 States
and the required compromises that produce a bill.
I hope we will stop the delays and that we will work with Senator
Domenici. He has made every offer that can possibly be made in an
effort to move this bill forward. He has offered to keep going through
the electricity title. Let's finish that. That would be a major
accomplishment. And then let's go on to the tax title. A lot of people
could be put back to work with the tax title because it encourages more
sources of energy, and we can do that before the end of this week if we
will start working and stop the delay we have seen week after week and
month after month.
Mr. President, I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Bunning). Will the Senator withhold her
request?
Mrs. HUTCHISON. I withdraw my request for a quorum call.
The PRESIDING OFFICER. The request is withdrawn.
The Senator from Rhode Island.
Mr. REED. Mr. President, I ask unanimous consent to speak in morning
business for up to 30 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Iraq
Mr. REED. Mr. President, I wish to take this opportunity to discuss
the issues involving our ongoing conflict in Iraq. I will discuss the
issues of intelligence, planning, and the challenges ahead.
These topics are critically important in their own right. But, they
take on even more profound and consequential aspects when you recognize
that failures and missteps in Iraq could play out again as we face
future threats, the most alarming of which is the deepening crisis over
North Korea.
Today, I find myself expressing many of the concerns that I initially
stated last October when I opposed a unilateral approach to confronting
the Saddam Hussein regime. But the obligation to review our activities
in Iraq is less about the past and much more about the demanding
present, both within Iraq and around the globe.
With each passing day, the struggle in Iraq claims additional
American lives. These losses are the most tangible and poignant symbols
of the increasingly difficult burden that we have chosen to bear. Our
stunning military success in the first phase of the war gave us the
hope that our conventional victory would lead quickly to a decisive and
final cessation of hostilities. Our hopes are periodically renewed when
our forces are able to capture or kill another prominent member of the
regime. Most recently, the 101st Airborne routed Saddam's sons, Qusay
and Uday, from their hiding place and killed them in a fierce
firefight. We even seem to be closing in upon Saddam himself. Yet still
the attacks against our troops go on. Our military leaders have wisely
cautioned us that we can expect more attacks and more casualties. The
situation in Iraq will likely get worse before it gets better, and our
military presence will be of long duration.
But, also, with each passing day, several important aspects of the
preemptive attack on Iraq become clearer.
The intelligence used by the administration to justify the war was
selectively shaped to support their preconceived views of the threat
posed by
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Saddam. Their declarations of the presence of weapons of mass
destruction posing an imminent threat to the United States and their
statements linking the Iraqi regime to terrorists associated with al-
Qaida were questionable when uttered and, to date, have been
unsubstantiated. These distortions were deliberate and calculated to
sway opinion rather than to properly inform it.
Planning for occupation activities was woefully lacking. The
administration appeared to believe its own oversimplified view of Iraq;
namely, that it was a country that would welcome us with open arms once
we removed Saddam. This was the line advanced by Iraqi exiles who had
for many years been the proteges or associates of numerous
administration officials. Apparently, the view of Iraq from Paris or
London was just as distorted as the view from Washington think tanks.
Complicating this unrealistic view of Iraq was a power struggle between
the Department of Defense and the Department of State over
responsibility for post-hostility planning. The Department of Defense
won and the planning process lost. Expertise was sacrificed for
enthusiasm and loyalty. Then, with the avalanche of pressing details
concerning the pending attack, post-attack planning took a predictable
back seat.
Today, American forces are engaged in suppressing a well-armed and
well-financed insurgency. Iraq is awash in weapons. The coalition
provisional authority acknowledged the obvious when it authorized each
homeowner to retain an AK-47. Even so, it is amazing to read on a daily
basis of the seizure of hundreds of RPG's and hundreds and hundreds of
pounds of explosives. And, there appears to be a lot more that has yet
to be discovered. More serious, of course, is the daily casualties
among our troops caused by these weapons. Also, the insurgents to date
appear to have an ample supply of cash. Another amazing revelation of
my recent trip to Iraq was the frequency that our forces turned up
sizable quantities of cash and valuables as they rounded up even low
ranking members of the Saddam regime.
The insurgency in Iraq has not been transformed into a popular
movement to attack American forces and to eject us from Iraq. That is
good news. But we are in a frantic race to improve security,
reinvigorate a devastated economy and establish an Iraqi government
deemed legitimate by the people of Iraq before popular frustration and
incipient nationalism are ignited by those who do wish to attack and
eject us from the ground.
One of the more thoughtful and even-handed military analysts, Anthony
Cordesman at the Center for Strategic and International Studies, has
accurately summarized the record of the administration's intelligence
activities leading up to Operation Iraqi Freedom.
[T]here are many indications that the U.S. intelligence
community came under pressure to accept reporting by Iraqi
opposition forces with limited credibility and, in some
cases, a history of actively lying to either exaggerate their
own importance or push the U.S. towards a war to overthrow
Saddam Hussein. In what bore a striking resemblance to
similar worst case interpretations of the global threat from
the proliferation of ballistic missiles under the Rumsfeld
Commission, U.S. policymakers not only seem to have pushed
for the interpretation that would best justify military
action, but to have focused on this case as if it were a
reality, rather than a possibility. In the U.S., this
pressure seems to have come primarily from the Office of
the Vice President and the Office of the Secretary of
Defense, but it seems clear that the Bush Administration
as a whole sought intelligence that would support its case
in going to war, and this had a significant impact on the
intelligence community from 2002-onwards.
The administration did not use intelligence to help make a difficult
decision. It used intelligence to sell a preconceived notion. The long-
term, fixed view of the administration held that deterrence and
international inspectors were inherently incapable of containing
Saddam. Only the elimination of the regime could suffice. Moreover,
regime change could have the added benefit of precipitating a
transformation of the entire region.
In January of 1998, Secretary Rumsfeld, Secretary Wolfowitz and other
prominent neo-conservatives wrote to President Clinton urging him to
use military force to remove Saddam.
In their words:
The only acceptable strategy is one that eliminates the
possibility that Iraq will be able to use weapons of mass
destruction. In the near term, this means a willingness to
undertake military action as diplomacy is clearly failing. In
the long term, it means removing Saddam Hussein and his
regime from power. That now needs to become the aim of
American foreign policy.
This letter predated the attack on Iraq by 5 years. Indeed, it
predated September 11 by more than 3 years. This last point is
instructive. Recently, Secretary Rumsfeld has been defending his
judgment regarding the military campaign against Iraq as simply seeing
intelligence in light of September 11. But it seems clear that he
reached his conclusion about Iraq well before September 11, and
September 11 certainly did not change his mind.
September 11 did, however, horrifically foreshadow the gravest threat
facing the Nation: sophisticated terrorist cells armed with nuclear
weapons. And, in so doing, gave the administration the template for its
arguments. The President's assertion, that Iraq was actively seeking
uranium from Niger, was false and known to be false at the highest
levels of the administration, but it provided an irresistible element
in the case the administration wanted to make against Iraq. Similarly,
Secretary Rumsfeld made claims that he had ``bulletproof'' evidence of
active collaboration between the Saddam Hussein regime and al-Qaida. In
the weeks since the fall of the regime, no evidence has emerged to
validate this claim.
These distortions and exaggerations are a dangerous disservice. They
undermine confidence in the information that the public and decision
makers must rely upon to make difficult judgments. Moreover, they
suggest that the administration is not interested in understanding the
world, but simply changing it along lines agreed to in policy seminars
years ago.
Despite warnings of the difficulties inherent in stabilizing Iraq
after the defeat of Saddam Hussein, planning for post-hostilities was
an afterthought. The Defense Department wrested control of the process
from State and insulated the planners from broad-based collaboration.
Then it went on to bet that Iraqi gratitude, together with an exile
government, would provide for a cheap and easy exit strategy.
Defense officials point out that they planned for many events that
did not take place and executed a military plan that minimized
potential humanitarian, economic and environmental problems. In fact,
the military plan executed by CENTCOM was brilliant and did seek to
minimize collateral damage through judicious targeting as well as
actively seizing key installations, particularly oil facilities, to
avoid sabotage.
But, the further one moves away from formal military plans into the
province of policing, civil administration and economic development the
clearer it becomes that the post war planning was grossly inadequate.
The first overt sign of planning inadequacies was the initial
indifference to large scale looting. The collapse of the Iraqi police
was not compensated for by aggressive action by our military. The
systematic looting went unchecked for a prolonged period and undermined
an already fragile and antiquated infrastructure.
The failure to incorporate experts on Iraq from the State Department
and other agencies led to reliance on an ad-hoc group of retired
military and administration operatives to try to organize a political
and economic response. Initial efforts were disappointing and led to
General Garner's early departure. Ambassador Bremer has filled the
leadership void with more of a presence, but the realization is taking
hold that this will be a long and expensive process with a still
uncertain outcome.
The United States faces serious challenges in Iraq.
The preeminent challenge is security. Our forces are facing
increasingly sophisticated attacks. In the first few days of the
occupation, our troops were engaged with small arms on an opportunistic
basis. The attacks have stepped up with more organization and more
lethal weapons like RPGs. Lately, the insurgent's use of remotely
detonated landmines and explosives demonstrates an increasing
sophistication in training and planning.
A disturbing escalation in potential lethality of these attacks came
with the recent report of a man-portable
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antiaircraft missile attack on an aircraft over Baghdad International
Airport. This attack begs the question of the number of these MANPADS
in Iraq and whether any have been removed from Iraq for use elsewhere.
One or more successful attacks on aircraft would have a serious impact
on both the security climate and the closely related efforts to restore
a sense of predictability for economic investment and development.
Our military forces are aggressively attempting to preempt these
attacks. The key to any successful counter-insurgency is intelligence,
and we have begun an all-out effort to target the middle range of
former Iraqi security officials to identify the insurgents and their
support mechanisms. Nevertheless, the number of desperate and
determined regime diehards with access to weapons and knowledge of the
terrain and our dispositions indicates that these attacks will
continue. In addition, it is reasonable to assume that infiltration of
foreign terrorists will take place. This development could add an even
more lethal, sophisticated and longer-term element to the battle. Our
forces will likely face successive waves of violence over many months.
The next military challenge is to sustain our forces in Iraq. We
cannot do so over the next year without additional international
support or by activation of additional National Guard and Reserve
forces. Our quest for international support was compromised from the
beginning by the administration's insistence on an essentially
unilateral approach to Iraq. Unless the administration is able to
recruit an additional international division, the current rotation plan
will have a huge gap next February when the 101st Airborne Division is
scheduled to return. Since the administration has yet to ask NATO for
support and major European countries like France and Germany remain
estranged on this issue, likely candidates are Turkey and, perhaps,
Pakistan. Each of these countries would demand significant financial
and logistical support. And, the introduction of the Turks could cause
problems within Iraq. The introduction of Pakistani forces could
further incite domestic criticism of Musharraf at home.
The need to activate reserve forces is becoming more pressing with
each passing day. I support General Barry McCaffrey's recommendation
that we immediately activate nine National Guard Brigades, not just the
two currently planned to be activated. Such a decision cannot be
deferred much longer since these brigades must receive intensive
training before they are deployed. Given the indefinite nature of our
mission in Iraq and the potential for additional crises around the
globe, these brigades should be made part of our active force structure
and replenished through active duty recruitment.
The security challenge is matched by the need to create a functioning
government that is legitimate in the eyes of the Iraqi people. We have
begun this process through some arduous efforts in Baghdad. However,
even more difficult and controversial actions lie ahead. The selection
of a Governing Council was a start, but also revealed the problems that
we face.
First, we are still saddling ourselves with Chalabi and the exiles.
My initial instincts, that I shared with Ambassador Bremer in Baghdad,
questioned the wisdom of placing these individuals in positions of
power. Since that time, the first credible survey of Iraqi opinion
conducted by the National Democratic Institute for International
Affairs has been published. Among its conclusions is the finding that
there exists ``[c]ynicism about leaders, especially acute regarding
some exiled leaders who were objects [of] vilification campaigns led by
the previous regime. . . .''
Second, we have necessarily put off the most divisive political
decision. Who will be the ``face of Iraq''? The Council represents a
broad spectrum of Iraq, but it has yet to produce a personality that
will be that Iraqi face. The ``executive'' of the Council is a nine
member body dominated by the exiles. One member rotates as the
``Executive'' each month. Eventually, a personality will emerge. Will
that emergence set off a political crisis when disgruntled factions
realize that they will not lead Iraq? I believe that there is a
substantial likelihood of such a development and that would further
complicate our presence.
Finally, our political tasks in Iraq must be accomplished with
greater speed and a more deliberate and effective strategy to explain
our actions. After the Saddam regime, the people of Iraq are steeped in
misinformation and cynicism. According to the NDI survey, ``antipathy
for the United States and Britain is not overcome by the fact that
these two countries are responsible for the country's liberation from
the tyrant they despise.'' Moreover, ``virtually no one, excepting some
Kurds in the north, believes the United States intervention in Iraq is
motivated by a desire to help the Iraqi people. Usually people say the
U.S. `is acting in its own interest'--which is often viewed in terms of
access to Iraq's oil reserves.''
The political situation in Iraq is not without some encouragement.
According to the NDI Survey, there is no widespread support for the
attacks against our forces. However, Iraqis do want foreign military
forces to depart. There is a strong commitment to the integrity of the
Iraqi state. Nevertheless, continued security problems, economic
difficulties and political controversies can quickly sap these
encouraging signs.
The serious consequences of selective intelligence and poor planning
are playing themselves out today in Iraq. But, of equal or even greater
concern, is the effect of the administration's operating style in other
areas and issues of concern. The most notable and, to my mind, the most
dangerous of these issues is North Korea's rush to develop significant
quantities of fissile material and nuclear weapons.
In North Korea, we have, according to their demonstrated conduct and
their public declarations, the type of threat that the administration
claimed required a preemptive military attack in Iraq. Nowhere in the
world do the lines of sophisticated terrorists and nuclear material
come closer to intersecting than in the conduct of the North Koreans.
By all accounts, North Korea is one of the most persistent and
prodigious proliferators in the world. They sell military products to
the highest bidder. With plutonium, they will likely get offers from
terrorists.
The administration's response has been slow to develop and
characterized by many of the pitfalls found in the prologue to Iraq
with one other major factor. Our commitment to Iraq has seriously
strained the capacity of the Administration to deal with North Korea
and other problem areas.
The stress on our land forces inhibits a diplomatic strategy
complemented by unquestioned military power. The public preoccupation
with the turmoil in Iraq makes it very difficult to marshal the
necessary popular support to engage in another high profile
international confrontation at this time. The amount of energy and time
that is devoted to Iraq crowds out the agendas of decision makers.
Thus, the administration is in a holding pattern. It is promoting a
multinational, diplomatic approach that is laudable but not productive.
It appears that just below the surface, some of the Beltway battles
that preceded our operations in Iraq are being fought to a standstill.
Once again, it seems that dogma is clashing with diplomacy. The
doctrine of regime change is pitted against a diplomatic approach that
requires as a prerequisite the tacit recognition, at least, of non-
aggression against the North Korean regime as part of an overall,
verifiable agreement to eliminate nuclear weapons.
The effect of all of this is that crucial time is being squandered.
As former Secretary of Defense Bill Perry declared, the situation in
North Korea--
was manageable six months ago if we did the right things. But
we haven't done the right things.
The President has to address this issue now by settling the debate
within his Administration in favor of diplomacy and not dogma. He has
to take steps now to bolster our military forces to complement a
diplomatic approach.
It would be tragic if our efforts in Iraq allowed a more ominous
situation to develop in North Korea.
I yield the floor and the remainder of my time.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Mr. President, I came here after the distinguished
Senator from West Virginia, and he is my
[[Page S10488]]
senior. I am a youngster. But I wondered if I could speak before him
and he said of course.
I ask consent that I be permitted to speak for up to 7\1/2\ minutes
and that the Senator from West Virginia be the next recognized for his
comments.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DOMENICI. Mr. President, one might think, having been immersed in
this Energy bill and waiting for a possible solution to the situation,
that I rise to speak of that. But I do not.
Senator Byrd, I know the Senator is busy but I would like him to
listen to the few comments I have because, while they are not borrowed
from him, I have heard him speak about America's involvement in other
countries and I want to talk about that.
It bothers my mind, as I look at Iraq, and Afghanistan, Somalia, and
the possibility now of Liberia and other countries, and I want to talk
about some words that we Americans and our leaders have been using ever
since I was a little kid and for all the years I was here. We used to
say: we don't want to build countries. We are not in the business of
constructing countries. We don't want to be called upon to put a
country together. We don't want to be the builders of countries--
leaving the distinct impression that we want the other countries to
build themselves up.
The Senator and I would not object to that, as a thesis. That sounds
like a theology of Americans. But Mr. President, I say to my good
friend, the problem is that it almost implies that we will not put
together the ability, the capacity to help a country build itself.
We must, as a nation, it seems to this Senator, have within our
Government the capacity to help a country such as Iraq build itself
up--or a country such as Afghanistan. We can't say the Defense
Department is now in charge of Iraq and they know how to see that Iraq
gets built up. That is not plausible.
Look what goes on every day in that country. Does all of that flow
naturally to the Department of Defense for some colonel or general or
the Secretary of Defense to make the decision? Of course not. There are
issues of construction of a country, the building of an infrastructure,
putting schools back into operation, making sure health clinics that
have broken down get built. I am not suggesting that we build them in
every respect but we need to have the governing capacity to have
somebody in charge, seeing that it gets done.
I have said that in my own way to this administration and I am very
pleased that there has been some response. I said to them on one
occasion: Why don't you tell the American people what is your plan for
Iraq for the next 5 years? You know, all they are seeing is the bad
things. They don't know that in 6 months you are going to have a
certain number of policemen trained; in 1 year, you are going to have
Polish soldiers coming in; in 2 years, you are going to have all the
water done.
I have said to them: In order to do that, you have to have, not the
Department of Defense in charge, you have to have a reconstruction team
in charge. A reconstruction team is different. In fact, it might be a
layman with very big municipal authority who would be in charge. It
might be a great builder who knows how to sit in an office and delegate
so the things that have to be put together, the contracts that have to
be let, get let; the countries that have to be called upon to do
things--that it happens.
So I thought I might just share that with the Senator, since he has
shown great concern about what we are going to do.
The Senator from New Mexico is totally on this President's team. I am
totally his defender in terms of having taken over Iraq. I don't even
spend any time worrying about those 15 words on nuclear weaponry. That
is just me. I am not speaking about anybody else.
I think I ought to be listened to on some of these other issues. I
know what the average folks in my hometown are thinking about. I know
that they are reading in the paper about soldiers dying and the
Secretary of Defense responding. I think they would feel much better if
they knew there was a game plan for the reconstruction, and that
America had within its Government a capacity to reconstruct what is
needed and then kind of put the bricks and mortar and the building
blocks together and be able to tell us, our people, and the world, what
is going on month by month, 6 months by 6 months.
As an example, today I could go home to my hometown and I could speak
at lunch to some people and I could pull out the blueprint for the
reconstruction of Iraq. I could say to them: Folks, it may change here
or there but, this is what the plan is. We have a way to do it. It is
not American soldiers who are going to be over there for 5 years
carrying out all the details of every little thing that has to be done.
We are in a reconstruction mode to rebuild that country.
That part of our Government would be more credible when they tell us:
We didn't have a water works. That is why we are still over here
hurting. This fellow, Saddam Hussein, broke the water works down and
there wasn't anything there for the people to drink water from. That is
a lot different than saying our soldiers are running around trying to
find water for the people and they got killed doing it. It is a lot
different than saying we thought we had a production line to get the
oil from here to there but it had decayed and we had to bring in a
company to build another one, rather than reading a story that somebody
shot an American soldier as we were attempting to build a pipeline for
the oil and gas.
The Senator from New Mexico is totally immersed up to his head in the
subject of an Energy bill for America. I pulled myself away from it to
let other Senators talk about it. I thought I would come down to the
floor and discuss this issue. I don't do that very often. I kind of
stick to my area. But this is an important issue. We are in the
business of reconstructing that country. We can say all we want--that
we aren't and we don't want to--but we can't expect our soldiers, our
tanks, and our men with machine guns to do that. They have to be there,
of course. They are going to be there in large numbers. But we need to
have something that is a reconstruction approach. The government of our
country has to be wise enough, the great builders we are. We are the
builders. We are the builders of the world. We surely ought to be able
to put together a master plan with a master builder for the rebuilding
and reconstruction.
I yield the floor. I thank the Chair. I thank the Senate.
The PRESIDING OFFICER. The Senator from West Virginia is recognized.
Mr. BYRD. Mr. President, I thank the Chair. I thank the distinguished
Senator from New Mexico.
Mr. President, I have been asked by the distinguished Senator from
South Carolina to ask unanimous consent that he be recognized following
me.
The PRESIDING OFFICER. Without objection, it is so ordered.
Threat of the Bush Administration's Budget Deficits
Mr. BYRD. Mr. President, an apocryphal tale is often told by
professors of economics in classrooms across the country. It is a tale
about a king who asks his advisers to teach him the laws of economics.
The king's advisers return with a book on the subject. But the king
tells his advisers that his time is precious, and he asks them to
summarize the book. The king's advisers return with a single piece of
paper. But the king again tells his advisers that his time is precious
and he sends them away to summarize the lesson even further. The king's
advisers finally return with a single line, summarizing all of the
known laws of economics.
The king reads: ``There is no such thing as a free lunch.''
For most people, this is a universally accepted truism--just plain
common sense--that nothing is free. There are tradeoffs and opportunity
costs to every decision we make. Even a child can understand this most
basic economic principle. But for the Bush administration, you can beat
them over the head with their own budget and still they will not
acknowledge the tradeoffs and opportunity costs of the budgetary
decisions they have made.
On July 15, the administration released its mid-year budget and
economic forecast, the so-called ``Mid-Session Review.'' The Office of
Management and Budget revealed to the American people that the
Government would run an incredible, record-breaking $455 billion
deficit in the fiscal year 2003. Worse, the deficit will increase to
$475
[[Page S10489]]
billion in the fiscal year 2004. I daresay that is a low figure. The
administration estimates that if the Congress enacts the President's
policies, we will increase the public debt by $2 trillion over the next
6 years.
The OMB Director assured the public that these deficits were
``manageable . . . sustainable . . . not a problem.''
In other words, a free lunch.
When the Bush administration promises almost $3 trillion in tax cuts,
a prescription drug benefit, a record increase in defense spending,
more money for education and health care, claims that it will protect
Social Security and Medicare for future retirees, and asks for nothing
in return--that is more than a free lunch; it is a cost-free invitation
to a White House banquet.
The American people may recall the last free lunch this
administration tried to peddle.
Prior to the war in Iraq, the Bush administration promoted a vision
of Saddam's removal from power as a quick, easy, and bloodless
exercise. Indeed, most of the support for this war was based on the
rationale that America's tremendous military superiority over Iraq
would confine the costs of this war to a relatively painless contest
between the United States' awesome military might and the relatively
weak, conventional military of Saddam Hussein.
But now the true costs of the war are becoming more apparent. The
number of U.S. casualties in Iraq has risen to 248 soldiers--and rising
by 1 soldier per day or more--more than double the 123 deaths at the
time the President declared victory in Iraq on May 1.
Families of reservists and national guardsmen, who thought that their
sons and daughters, brothers and sisters, husbands and wives would
return after major combat had ended, are now realizing that their
family members will be in Iraq indefinitely.
Administration officials who were counting on U.S. allies to assist
in peacekeeping efforts in Iraq are now realizing that our strong arm
tactics have alienated many of our closest allies.
The United States is now committed to a long-term endeavor to rebuild
Iraq, which is costing the American taxpayer $4 billion per month.
The administration hid the potential costs in the buildup to the war.
Now, the American people are realizing that free lunch will be paid for
with our Nation's treasure, prestige, and blood.
So I take little comfort when this administration promises another
free lunch, when it describes its budget deficits as ``manageable'' and
``not a problem.''
With $475 billion in budget deficits projected for the upcoming
fiscal year, this Nation is experiencing budget deficits never before
seen. They amount to roughly one-fifth of the entire Federal budget.
This forces the Federal Government to borrow $1 out of every $5 it
spends. And much of that money will have to be borrowed from our allies
overseas--that is, those allies that we have not already alienated.
With a $475 billion budget deficit, next year, the Federal Government
will have to borrow more than the entire defense budget. For every
military operation underway right now--in Iraq, Afghanistan, Liberia,
the Balkans--and to maintain our current military defenses, the
administration will have to borrow the money to pay the equivalent of
those costs.
With a $475 billion budget deficit, the recently enacted tax cuts are
not free. Ultimately, the American people will have to repay every
dollar to balance the budget.
When the President is pinned down about the mounting deficits, he has
two replies. First, they are small and not a threat. But the deficits
assumed in his budget are the highest ever recorded, and, as long as we
are running deficits, we are not saving to ensure the solvency of the
Social Security and Medicare programs. There is no escaping that
budgetary fact--none.
Without more savings, we are endangering the Social Security and
Medicare programs.
The President tells us that we can grow out of deficits. Well that
sounds nice, but it won't happen. The Congressional Budget Office,
which is now headed by a former White House economist, formulated nine
different economic models to predict how the recently enacted tax cut
would affect the economy, and the CBO concluded that the President's
proposal would have only a negligible effect.
Even with strong economic growth, the White House budget office is
still projecting that the Nation will accumulate $2 trillion in new
debt under this administration's proposals, and that doesn't include
the $5 billion per month the administration is spending in Iraq and
Afghanistan.
So, Mr. President, we are drowning in a sea of red ink. We are
gasping for air. And all this administration can do is promise more
cost-free White House banquet dinners as they claim it is ``not a
problem.''
But it is a problem! We are already seeing these deficits eat into
our budget. Just look at the amendments that were opposed by the
administration on the recently passed appropriations bill for the
Homeland Security Department.
Under pressure from the administration, Senators voted down amendment
after amendment after amendment designed to enhance the security and
the safety of the American people. Spending for vital homeland security
functions is being denied each time with the same excuse--that our
budget doesn't allow for it. We are spending nearly $4 billion per
month in Iraq, but we could not afford a $1.75 billion amendment that I
offered to secure our ports, to equip and train our first responders,
and to secure our borders.
It is incredible! The budget that calls for astronomical tax cuts
does not allow for the safety and security of the American people
within their own borders.
Al-Qaida has not yet been destroyed. It is very much alive and
kicking. It is still alive and well, and planning attacks now, attacks
against U.S. citizens. Al-Qaida are patient, persistent killers. And,
yet, this administration continues to oppose, right here on this floor,
essential homeland security funding. Just this week, the Department of
Homeland Security issued a new advisory about the potential hijacking
of planes, and yet the administration opposed my amendment to secure
cargo on passenger aircraft. Our ports, our borders, our airlines, our
chemical facilities, our nuclear powerplants are still perilously
vulnerable.
Have we not learned anything, Mr. President?
The war on terrorism can only be won with both a strong defense and a
strong offense. And, yet, the ratio of defense to homeland security
spending is 12 to 1. That is $1 of spending to build up our homeland
defenses for every $12 spent on our military.
We are seeing only a halfhearted effort by this administration to
address the vulnerabilities in our infrastructure.
We talk about the infrastructure in Iraq. What about our own
infrastructure? The administration says they are going to do something,
but not enough to thwart terrorist attacks. It should frighten us all.
It certainly frightens me.
When I stop to think, I say to Senator Hollings, that you and I and
these people around us who are sitting at the desks--the President at
the desk, the desk of the workers here--when I stop to think that we
are alive today, in all likelihood, because there were a few courageous
men on that airplane that went down in Pennsylvania who had heard about
the attacks on the Twin Towers and the Pentagon. And because their own
plane was a little late in taking off, they heard these other things.
They knew what was happening. They knew what was happening to that
plane and they decided that plane would not reach its objective. And
from all indications that I have heard, its objective was this Capitol.
So we owe our lives to them. We would not be here today. That is the
way I see it.
Now, we also hear that these terrorists don't forget, that they are
persistent, they are patient. They take their time and they come back.
What they fail to do in the first instance, they will try again. We
better take these things seriously.
The President has established a track record for being strong on
rhetoric and short on resources. In his State of the Union, he said:
We will not deny, we will not ignore, we will not pass
along our problems to other Congresses, to other Presidents
and other generations.
Yet, according to the White House's latest deficit estimates, the
President's
[[Page S10490]]
policy is to have a deficit of $455 billion this year, $475 billion in
fiscal year 2004, and an increase in the public debt of $2 trillion
over 6 years. That is rhetoric without resources.
In May of this year, the President signed the United States
Leadership Against HIV/AIDS Act, which authorized $15 billion over 5
years to attack global AIDS and authorized $3 billion for fiscal year
2004. He traveled to Africa and pressed for the Congress to support the
$15 billion commitment. Yet, the President requested only $1.9 billion
for global AIDS programs for fiscal year 2004. That is rhetoric without
resources.
In January of 2002, the President signed the No Child Left Behind Act
with great fanfare. He said:
Today, begins a new era, a new time in public education in
our country. As of this hour, America's schools will be on a
new path of reform, and a new path of results . . . And our
schools will have greater resources to meet these goals.
And, yet, President Bush's budget for fiscal year 2004 proposes to
cut funding for No Child Left Behind Act programs by $1.2 billion below
the levels that Congress approved for the current fiscal year, to a
level that is $6.1 billion below the level authorized in the law that
he, the President, signed 18 months ago. More rhetoric without
resources.
The President has called for the National Service AmeriCorps program
to have 75,000 volunteers to tutor, mentor, and teach our children,
provide services for our elderly, and clean up our communities. This
month, the Senate approved a $100 million supplemental that would have
prevented the elimination of 20,000 volunteers, reducing the program to
30,000 volunteers. The President did not lift a finger--he did not lift
a finger--in support of the program when the House stripped those funds
from a supplemental bill last week.
The President and members of his party have passed three tax cuts,
taking $2.25 trillion out of the phoney surpluses that the President
projected in 2001. Each time the President proposed these tax cuts, he
promised that the tax cuts would create jobs. But the facts are
different. Instead, we have seen 3.1 million jobs disappear from the
private sector since the beginning of this administration, including
more than 300,000 jobs lost within the past 5 months. So, once again,
we hear rhetoric, but we see no results. More false promises.
We are seeing the same halfhearted effort when it comes to preserving
the Social Security and Medicare programs. The Bush administration
often refers to the long-term problems facing the Social Security and
Medicare programs, but the Bush administration has not set aside any
money to make them financially solvent.
In the coming decade, as the baby boomers begin to retire, the
American people are going to realize yet another cost from these budget
deficits--namely that there will not be enough money saved to pay the
benefits promised to our Nation's seniors. Our Nation's seniors ought
to take note of that, and the children of our Nation's seniors ought
likewise take note of that.
The administration's budget deficits are a problem for State
governments, as well. Federal budget deficits have contributed to a $30
billion gap in State budgets because of a lack of Federal payments to
States. This is to say nothing of the $68 billion shortfall in State
budgets that we read about in recent weeks. Without Federal support,
States are forced to cut Medicaid and health care-related programs. For
the first time ever, K through 12 education programs are being cut by
States to make up for a lack of Federal funds. This year, Oregon school
districts were forced to close some schools a month early because of
these budget deficits.
The administration vehemently opposes any increase in Federal taxes
to cover its budget deficits. But what the White House doesn't admit is
that State governments across the country are already raising taxes to
fill this budget gap. Governors in 29 States have proposed tax or fee
increases in their latest budgets.
President Bush likes to justify his tax cuts for the rich by
asserting that it's the people's money. ``It's your money,'' he says.
Well, thanks to Mr. Bush's tax cuts, we are facing a public debt of
$5.5 trillion by 2008. Do you know how long it takes to count $1
trillion at the rate of $1 per second? Thirty-two thousand years. That
is $1 trillion at the rate of $1 per second. So we are facing a public
debt of $5.5 trillion by 2008. That is $18,890 of debt for every man,
woman and child in this country. By 2008, we will be spending $260
billion on interest on that debt. In 2017, when the Social Security
Trust Fund is in the red, the 65 million Americans who expect to
receive their social security benefits, will ask, Where is our money?
They were told ``it is your money.'' They will be saying: Where is our
money?
Everything costs something. There is no free lunch. Yet the
administration continues to play the role of the savvy salesman,
handing out tax cuts and telling the American people that it will cost
them nothing in return.
The administration will be forced to reconcile the budgetary quagmire
they have created. Nothing is free. There is no such thing as a free
lunch. That much, even an apocryphal king could learn.
I yield the floor.
The PRESIDING OFFICER (Mr. Alexander). The Senator from South
Carolina.
Mr. HOLLINGS. Mr. President, I ask unanimous consent that at the
termination of my comments, the distinguished Senator from Montana be
recognized.
The PRESIDING OFFICER. Without objection, it is so ordered.
Free Trade
Mr. HOLLINGS. Mr. President, it is somewhat out of order when I make
comments on trade in that the distinguished majority leader says he
wants to do energy, he wants to do judges, he wants to do the
supplemental, and he wants to do trade. I talked to him earlier this
morning, and I said: I would be glad to fill in at any time they have a
lapse. He said: Well, it wouldn't be until tomorrow. Then later in the
exchange--there has been an intramural all morning long on procedures--
he said: Perhaps on Saturday.
So I thought once the Pastore rule had been complied with and rule
19(1)(b), the three hours had been completed--the distinguished former
leader, the Senator from West Virginia, and I are the only two that
remember the Pastore rule. Now that I have the floor, I have time to
comment in a deliberate fashion. And while my distinguished former
chairman and now ranking member of the Finance Committee is on the
floor, since I am talking about trade, I want to express a frustration
and make this observation.
The main problem we have is how to pay our bills. The President has
just put out a budget deficit projection of just a $455 billion
deficit. That is on page 1 of his report. But on page 57 of the report,
you will see the deficit will really reach $698 billion this year. As
of this minute, the public debt to the penny is $503 billion. But
second to that particular problem is the matter before us of jobs,
economic strength, and manufacturing capacity.
I will never forget Akio Morita, former chairman of the board of
Sony. Morita was visiting Chicago, and lecturing about Third World
countries. And he admonished that a Third World country had to develop
a strong manufacturing capacity in order to become a nation state. And
later on, he diverted and pointed and said to me about the United
States: That world power that loses its manufacturing capacity will
cease to be a world power.
At the end of World War II, we had 40 percent of the workforce of
America engaged in production manufacturing. Now we are down to 11.2
percent, and soon it will be 10 percent. So as a result of the scheme,
I should call it, of the Finance Committee, we will have 10 percent of
Americans working, and the other 90 percent eating or talking about it.
And I hear these big voices around saying: World power, we are the only
world. We are not a world power. No, no. We are in a very weakened
position.
Right to the point, when I came to the Senate I got on the Commerce
Committee. I had practiced customs law. I thought I was getting into
trade because the Commerce Committee used to be the Committee of
Foreign Commerce. Under article I, section 8 of the Constitution, the
Congress of the United States shall regulate foreign commerce--not the
President, not fast track, not some wavering trade minister running
around Doha saying he is
[[Page S10491]]
going to do away with dumping laws--but the Congress.
And I found out that my distinguished chairman, Senator Magnuson at
the time, was interested in exports, since he represented Boeing.
Foreign commerce had reverted over to the Finance Committee. They had
the reciprocal trade agreement. They had the Special Trade
Representative. And indirectly, I became a sort of a study of the
Finance Committee. I had a fellow named Claude Wilde from Texas come up
to me, when I was just a freshman Senator. I was taken to the third
floor of the old Statler Hilton. And he said: Yes, we are going to get
rid of that fellow Yarborough. We are going to get that fellow Bentsen
up here because he is better on oil.
I said: On oil.
He said: Oh, yes, that Finance Committee, we oil boys run it. We look
out for oil.
So the farmers are smarter than the oil boys. They have moved in with
the Senator from Montana and the Senator from North Dakota and all the
rest of them.
I notice my distinguished ranking member. He put out a complaint to
the WTO on agriculture. I have lost 61,000 textile jobs since he
proposed NAFTA. He didn't ask the WTO about the special provisions for
textiles. But he wants to petition. He immediately becomes alert. I
have had to fight agriculture, I have had to fight the oil boys, I have
had to fight that Finance Committee to sober up this Congress and let
us go to work on producing jobs.
The policy at this minute is to export jobs, eliminate jobs, get rid
of all jobs--not just textile, not just hard manufacture, not just
service jobs, not just high-tech jobs, but all jobs, except politicians
and the press. If we started importing politicians and press, I believe
we would finally stop, look, and listen, and we would begin to
understand the problem.
We have to struggle in order to debate trade as a result. It is easy
to fix the Finance Committee--and they are fixed. They get their little
amendments in there, and everything else like that. I am ready to vote
for the Chile trade agreement. I have been saying that for 5 years,
except they put on immigration.
Mr. BAUCUS. We didn't.
Mr. HOLLINGS. You didn't, but you didn't knock it off. They had a
vote 3 years ago on the H-1B visas, with that Silicon Valley crowd.
They wanted to get all the Indians and Chinese cheaper, and bring them
in to take American jobs. The vote was 99 to 1. I was the one against
that immigration. I am against this immigration, and if you didn't have
fast track, Mr. President, I could put up a little amendment, like any
Senator, and we would have the normal process, and we would have an up-
or-down vote, and I probably could pass it. I notice, on the other side
of the aisle, some Republican colleagues are concerned about the
immigration provision. Chile is better than us. Chile has a free market
economy; they have labor laws; they have environmental laws; they have
a respected judiciary; they have a balanced budget.
Even when they brought up NAFTA, I said, why not Australia? They are
the best friend we have; they immediately supported us in Iraq, in
Afghanistan, in Vietnam, and in Korea--the best friend we have and we
don't have a free trade agreement with them.
Now they want us to have a free trade agreement with a corporate
state, Singapore. I said long ago I could compete with any company in
Japan, but I could not compete with the country of Japan. So here I am
being asked to give the country, which is really a corporate State,
free trade status. The government of Singapore owns the port; shipping
and logistics; property; the airlines, telecom, media, banking, and
financing services industries; powers, utilities, technology,
engineering, and the rail.
Mr. President, I ask unanimous consent to have this list printed in
the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
State-Owned Corporations in Singapore
Investment: Temasek Holdings, Ltd.
Port: PSA Corporation.
Marine: SembCorp Marine and Keppel Offshore & Marine.
Shipping and Logistics: SembCorp Logistics and Neptune
Orient Lines.
Property: CapitaLand.
Airline: Singapore Airlines.
Telecom and Media: Singapore Telecoms and Media Corporation
of Singapore.
Banking and Financial Services: DBS Bank.
Power and Utilities: Singapore Power, PowerSeraya, Senoko
Power, and Tuas Power.
Technology: Chartered Semiconductor Manufacturing and ST
Assembly Test Services.
Engineering: SembCorp Industries and ST Engineering.
Rail: SMRT Corporation.
Mr. HOLLINGS. Mr. President, that is a corporate state. There isn't
any question that what we have here is a loading dock, a veritable
loading dock from Indonesia. Let me read this. Here is a headline:
Officials tout manufacturing services benefits from U.S.-
Singapore FTA.
U.S. Ambassador to Singapore Frank Lavin this week said the
greatest economic benefits to U.S. companies from the
recently-concluded U.S.-Singapore free trade agreement would
come in the areas of financial services, intellectual
property and manufacturing in the electronics sector.
Lavin said that in the long run, the ``most significant
aspect of this FTA'' could be provisions allowing products
assembled in the two Indonesian out-islands to be counted as
Singaporean in origin for the purposes of the FTA. That would
allow U.S. electronics manufacturers to take advantage of low
wage rates on those islands to assemble components from
Singapore into electronic products that can enter the U.S.
duty free, Lavin said.
Mr. President, where are we? Here we are trying to create jobs, and
our good friend, Don Evans, the Secretary of Commerce, is running all
over, jobs and growth, jobs and growth, jobs and growth, and we will
give you a tax cut, jobs and growth as if that's going to help.
My distinguished friend on the House side--the smartest fellow
perhaps in the Congress is John Spratt from South Carolina, the ranking
member of the Budget Committee. He voted for NAFTA. I said, John, for
Heaven's sake how could you? And he said he had a promise that we can
get 500 additional Customs agents. He said we need them badly, and he
was right. We needed them badly.
We never got the 500 Customs agents. They keep cutting that budget
particularly. They need help. In Charleston, we have to lend the local
sheriff's sniffing dog to the Customs agents. My office is in the
Customs building. I keep up with them and I know what is going on down
there.
Mauritius, the little island off the coast of Africa, was inundating
us with imported textiles, but they didn't have a textile plant. It was
all made in China, and coming through Africa to South Carolina. These
transshipments, Customs people will tell you, are to the tune of $5
billion. When you go to them and ask them, wait a minute, can't you
enforce the law, they say: Senator, you want me to enforce the law now
on terrorism or textiles? I said: Heavens, no, on terrorism. Do you
want me to enforce the law on drugs or textiles? Oh, no, I want you to
enforce the law on drugs.
So we have lost 61,000 textile jobs, and who is leading the way? The
Department of State is leading the way in Singapore. I hate to say that
about Singapore because I have visited there and I have the greatest
respect for anybody in the Far East, specifically the former Prime
Minister, Le Quan Yu.
As a young Senator, in the early 1970s, I went there and Senator
Mansfield, the majority leader, said: Fritz, you have to call on him.
He is the wise man of the East. I had the most interesting conversation
just the year before last. I called on him again, with the
distinguished chairman of the then Intelligence Committee, Senator
Shelby, because I wanted the Prime Minister to relate a particular
observation he had made to me back then with respect to the defenses
and the concerns we had in the Far East, which is another subject for
debate. I was prepared to vote for Singapore. But we got fast track.
With fast track you cannot say anything; you cannot do anything. You
have to disrupt the Senate, in the middle of the energy debate, to be
heard. We have fast track on jobs in America. We fast track jobs
offshore--that is what it is. If we did not have fast track, I could
put up a little amendment to strike the provision in the Singapore
agreement that they couldn't have transshipments from the Malaysian
Islands. This will just open
[[Page S10492]]
the door for everything in the Malaysian Islands to come through
Singapore. Listen to what the State Department ambassador said:
With fast track, you have to disrupt the orderliness of business
around here.
I apologize to both leaders who have had a very difficult time
getting business back on track today, but, Mr. President, I can tell
you now, I do not apologize to anybody about the importance of this
particular subject. It is not discussed, it is not debated, and it is
not considered. It is fixed.
I know something about trial lawyers, and I have seen some fixed
juries that I have had to go up against. If there has ever been a fixed
jury, it is this U.S. Congress. And I do not speak in a partisan
fashion. I remember NAFTA. We had that beat until President Clinton
went out and picked up 23 votes. He gave a golf round here for this
particular Congressman, a golf round there. Jake Pickle, the
Congressman from Texas, my good friend, got a cultural center. Another
Congressman down in Texas got two C-17s. Oh, yes, the White House has
the power. I do not speak loosely or lightly. I speak authoritatively.
It has been reported in the press. They fixed the vote.
This vote was already fixed, unbeknownst to the members of the
Finance Committee, so that when the treaties got here, they found this
hidden provision on immigration and we cannot vote on it.
Finally, they put in a provision with respect to the transshipments
to Singapore, and we cannot amend it. So the Senator from South
Carolina under fast track is forbidden from voting his will with
respect to these particular trade agreements.
I am really worried. I just mentioned to the distinguished Senator
from West Virginia about production in this country. I go right back to
Morita. We were talking about manufacturing. That has been the strength
of Japan. It is now the unquestioned strength of China. We think we are
strong. We passed a resolution in the United Nations at the end of the
eighties for the General Assembly to have hearings on human rights in
China. China went around us, to the leadership in Africa, in the
Philippines, in Malaysia, in Australia, and in New Zealand. They picked
up the votes, and we never had a hearing on human rights, even though
we had it adopted in that particular committee.
One can say under domestic politics, it's the economy, stupid; one
can say under foreign policy, it's the economy, stupid, because it is
the economic strength of our Nation that is in question here.
I just finished reading a book, ``An Army at Dawn'' by Rick Atkinson.
He reminded me of the strength we had in World War II and how we really
won that war. I have been on several panels, having been a 3-year
veteran starting out in Africa and ending up on V-E Day in Austria. As
much as anyone, Rosie the Riveter won that war. I hope in this big
ceremony they have for World War II that they will have a statue for
Rosie the Riveter because I can tell you right now, it was the American
production that won that war. As has been said, we did not defeat the
Germans in North Africa, we overwhelmed them because we had that kind
of production.
As I said earlier, at the end of World War II, we had 40 percent of
our workforce in manufacturing, in production. As of yesterday
afternoon, my check showed it was 11.2 percent, and we are going to get
new figures on Friday, and probably it will be down some more. For the
last 3 years the manufacturing strength and economy of the United
States has diminished.
What happens is, we have 10 percent of the people producing and we
have 90 percent of the people eating and talking about it. That is not
a country. Let's not run around here about energy, and run around here
about judges, and run around here about supplemental bills, and
whatever else. Let's sober up and start rebuilding this country,
rebuilding jobs, and quit exporting them. Let's put a tourniquet on
this outflow hemorrhage of jobs to any and everywhere but the United
States.
We have a 6.5 percent unemployment rate. The real unemployment rate
is not just the 6.5 percent.
Mr. President, there are those who have not applied, so it is a real
unemployment rate of some 10 percent.
My colleagues can see why I am worried when we see ``The Jobless and
Hopeless May Quit the Labor Force.'' That is how we get to 10 percent.
This is another Times article dated April 26.
Mr. President, if you think I am worried, let's go to Mort Zuckerman,
the editor in chief of U.S. News and World Report. I quote:
The statistics are enough to make an incumbent assume the
fetal position: 2.7 million fewer private-sector jobs than
two years ago; the longest decline (32 months) in industrial
employment since the Great Depression: the longest continuous
decline in jobs in more than 50 years. Making matters worse,
the stock market has been off by double digits for three
years in a row. That's the first time that happened since the
1930s. The markets' plunge wiped out over $5 trillion in
value, including the retirement savings of millions of
Americans.
As if all that were not enough, the $5.6 trillion Federal
surplus we saw during the 1990s has been turned upside down
into an estimated $4 trillion deficit. Business activity is
as weak as it has ever been outside of a recession, and we do
not know whether this signals the onset of another recession,
the dreaded double dip.
That is Mort Zuckerman.
Some might say, Hollings, you are all wound up about Texas. I am not
wound up about Texas. I am wound up about the country. We are in the
worst shape I have ever seen, and they are running around here with tax
cuts for jobs and growth. We have lost 2 million jobs since we passed
the tax cut. We have lost 2.7 million since President Bush has taken
office, according to Mr. Zuckerman.
The Wall Street Journal on July 21: ``Laid Off Factory Workers Find
Jobs Are Drying Up For Good.''
I ask unanimous consent that the article be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Wall Street Journal, July 21, 2003]
Laid-Off Factory Workers Find Jobs are Drying Up for Good
(By Clare Ansberry)
Butler, PA.--The two Karenbauer brothers and their cousin,
Danny Mottern, have worked alongside each other for much of
their lives. Working with their hands comes naturally to all
three. As young boys they were dispatched to feed the cows
and plant corn on their grandfather's 134-acre farm.
Later, they all ended up in the same Trinity Industries
Inc. factory, building parts for railroad cars. Brad
Karenbauer, 39 years old, was a tool and die man. Mr.
Mottern, 42, was a welder. Jim Karenbauer, 60, ran the forge
shop. They found challenge and satisfaction in their ability
to take a rought piece of metal and fashion it into the door
or roof of a sturdy railroad car that could whisk people,
coal and grain across the country.
``I was making something. I had something to show for
myself at the end of the day,'' say Mr. Mottern.
But Trinity started laying off workers in 2000 and a year
ago, in a bid for efficiency, shut down the Butler factory
where the Karenbauers and Mr. Mottern worked. After, the
three men have begun scrounging for work. They moved from job
to job--shoveling snow, stocking a Wal-Mart Supercenter--but
nothing has added up to the pay or fulfillment of their old
jobs.
While hundreds of factories close in any given year,
something historic and fundamentally different is occurring
now. For manufacturing, this isn't a cyclical downturn. Most
of these basic and low-skill factory jobs aren't liable to
come back when the economy recovers or when excess capacity
around the world dissolves.
Railroad cars, unlike buggy whips, are still needed, as are
toys, appliances and shoes. But the task of making these
goods is increasingly being assumed by more efficient
machines and processes. Or they've been transferred to
workers who earn less and live in another country. While
these changes have been going on to a limited extent for
years, the economic slowdown has greatly accelerated and
broadened this historic shift. By some estimates, roughly 1.3
million manufacturing jobs have moved abroad since the
beginning of 1992, the bulk in the past three years to
Mexico and East Asia.
Other plants around Butler also have closed, including one
that fabricated steel and another that made vinyl siding.
Hundreds of manufacturing workers have been left without jobs
and their options for similar work have narrowed
significantly in this city of 15,000, and hour north of
Pittsburgh.
``For people who work with their hands, there isn't going
to be much out there for them for long,'' says Brad
Karenbauer.
After he was laid off last summer, he couldn't keep up with
the rent of his apartment. He moved with his girlfriend, Lisa
Schnur, and their infant daughter into a trailer owned by Ms.
Schnur's aunt.
Meanwhile, a landscaper gave Mr. Karenbauer odd jobs,
moving lawns and putting down mulch, paying him under the
table. That lasted until the snow fell. He doesn't mind
getting dirty or working outside and admits he's not
comfortable behind a desk. ``That's just not my cup of tea,''
he says. ``Hands on is what I like to do. I like to
[[Page S10493]]
work hard. Growing up, if there was work to do, you did it.
After a while, you just got used to it.''
Now he finds himself stranded in the labor pipeline along
with a generation of assemblers, welders, and tool and die
men who learned their trade on the job and know little of
computer-driven machines and new age manufacturing
techniques. In June, manufacturing cut 56,000 jobs, the 35th
consecutive monthly decline and the longest string of layoffs
in that industry since World War II.
``We're saving corporate jobs by moving production jobs to
lower-cost areas,'' says Daniel Meckstroth, chief economist
with the Manufacturers Alliance, a public policy and business
research group in Arlington, Va.
The shift also means income for secretaries, maintenance
workers, and counter people in lobby coffee shops and staff
parking garages. Furthermore, off-loading much of the low-
skill production work saves money and makes companies more
competitive. That means they can focus on innovation and
potentially create other jobs.
Stan Donnelly, whose Alexandria, Minn., company makes
plastic parts for big equipment manufacturers, imports tools
from China to save money. In the long run, bypassing U.S.
toolmakers is a mistake, he believes. Those kinds of jobs
helped create and sustain the middle class, and he's not sure
displaced workers will learn new skills and become higher
paid. ``Look, we've got millions of people who have failed to
get through high school. If their minds are not their
salvation, what's wrong with letting their hands be their
salvation?'' asks Mr. Donnelly. ``Over the last two
centuries, America has developed a balanced society, with
opportunities for a large cross section of people. We're
gutting that.''
In Brad and Jim Karenbauer's childhood home, work was part
of the natural rhythm of the day, filling the space between
school and supper and most daylight hours during weekends. If
they weren't helping around their own house, they were
dispatched to their grandparent's farm, as were Danny Mottern
and other cousins. They plowed fields and stacked hay.
Surrounded by John Deere tractors, they learned how to take
machines apart and put them back together.
Their grandmother fried up homemade sausage in her iron
skillet to welcome them back from the fields. Afterward, they
relaxed under an oak tree, with a bobble of pop and, when
older, a cold beer.
The Karenbauers' father worked in a small fabrication shop,
welding steel for bridges and buildings. With six kids, money
was tight, but they never felt poor. They had a half a cow in
the freezer. ``If you didn't have it, you didn't need it,''
says Brad Karenbauer. College wasn't an option. Even if they
had the money, he wouldn't have gone: ``I was not a school-
oriented person,'' he says.
In their community, working with machines was nothing to be
ashamed of and there were plenty of opportunities to make a
comfortable living. Brad Karenbauer took three years of
welding in high school and after graduation in 1981 worked
16-hour days for a brother-in-law who had a boiler-repair
business. ``It was a blast,'' he says. ``My brother-in-law
didn't believe in an eight-hour day. You went to a job and
stayed until it was done. I was bringing home more money than
I could spend.''
Then as now, manufacturing paid more and had better
benefits than many other jobs. In Butler County, population
174,000 about 20 percent of the work force is in
manufacturing, but those jobs contribute 30 percent of the
county payroll. Nationwide, manufacturing jobs averaged
$54,000 in pay in 2000--20 percent higher than the average of
what all American workers earn, according to the National
Association of Manufacturers.
One of the prized jobs in Butler County was building
railroad cars, an industry with a storied past. A century
ago, the flamboyant Diamond Jim Brady, who made a fortune
selling railroad parts, and engineer John Hansen built the
world's largest freight-car plant, half a mile long, in
Butler, according to local historian Ralph Goldinger.
Inside, more than 1,110 welding machines melted steel
pieces together, producing at its peak 27,000 railroad cars a
year. At first it was called Standard Steel Car Co., but the
company merged with Pullman Inc. of Chicago, to become the
well-known Pullman-Standard Co., whose posh cars made
comfortable cross-country travel a reality.
Civic-minded Pullman donated its eight-acre ballpark to
Butler in the 1940s. The New York Yankees sometimes played
exhibition games there, giving locals a chance to cheer
Whitey Ford, Joe DiMaggio and Lou Gehrig. Streets were named
after the company founders. Mr. Hansen built a mansion with
seven fireplaces on West Pearl Street. It still stands today.
Jim Karenbauer started at Pullman in 1965, when he was 22
years old and fresh out of the Air Force. He worked in the
storeroom, then transferred to the forge department
because he could learn and earn more. Eventually, he
became foreman, earning $32,000 a year when Pullman closed
its doors in 1982.
Jobs were scarce, but he found one with the Butler Township
zoning department, inspecting buildings and property. He quit
after three years. ``I couldn't take the politics,'' he says.
He sold insurance for a while, walking up and down Butler's
streets, knocking on doors.
Two years after Pullman closed, Trinity came in and started
making replacement parts for railroad cars in the same
factory. Jim Karenbauer got a call in 1987 asking him to run
the plant's forge operation. ``They got the old Pullman guys
who knew how to run that stuff,'' he says. About six months
later he brought home applications for his younger brother
and cousin.
While Jim Karenbauer made the coupling rods that hook
together railroad cars, Mr. Mottern welded chutes for coal
and grain cars. Brad Karenbauer moved around the floor
adjusting machines that were clogged or not working properly.
He learned the tool and die trade, the craft of making the
tools that form parts, from his supervisor. ``He took a
liking to me and taught me,'' Mr. Karenbauer says. That sort
of informal teaching was invaluable to companies and workers
who couldn't afford other education. And for generations, it
sufficed.
A die, or mold, shapes metal part much as a waffle iron
shapes a waffle. Brad Karenbauer's job of maintaining them
was critical and he was paid relatively well. At the time he
was laid off last year, he earned $14.50 an hour.
For him, the challenge of figuring out how to fix problems
was as rewarding as the pay. ``I loved my job. I never did
the same thing every day. I'd build a new die. Or fix the old
one that died,'' he says. Co-workers voted him ``employee of
the month,'' which was noted on a sign outside the plant and
acknowledged with a $150 gift certificate from Sears. ``I
bought a couch with that,'' he says.
Once he was invited to Trinity's headquarters in Dallas to
explain his solution to a glitch that had been causing many
pieces of a metal post to be scrapped. He figured out that
the post was moving slightly when it was in the press,
causing a wrinkle. He built a device to hold it firmly. His
cousin, Mr. Mottern, came up with a design to replace a part
that had been made by welding two pieces of metal together.
That eliminated the welding, and helped the department make
twice as many pieces of higher quality.
His employers gave him a framed certificate and a grainy
video of his talk, which he still shows visitors. ``All the
bigwigs were down there,'' he says.
Trinity closed the Butler plant and in 2002 and one other,
citing the slowdown in the rail industry. ``We no loner
needed to maintain all the facilities previously supporting
our parts business,'' it said in a statement. The company,
which has operations in Mexico, the Czech Republic and
Romania, said the Butler work would be done at its plant in
Texas.
``We'll never find a job like that,'' says Mr. Mottern.
While working at the Trinity factory, he was able to buy 40
acres of land. He cleared a hilltop and built a tidy ranch
house at the end of a long driveway, flanked by tiny
evergreen saplings. A barn is filled with a half-dozen pieces
of John Deere equipment, including a 1952 model he and his
cousins rode on their grandparents' farm.
``I'm not going to lose this,'' he says. ``I'm willing to
work so I know someone out there is going to hire me. I
always figured I could just go and work with my hands.
It's all I know,'' says Mr. Mottern.
After Mr. Mottern was laid off last summer he worked for a
landscaper. That winter he shoveled snow and ran errands for
an elderly judge. Mr. Mottern doesn't want to leave Butler
because his family and girlfriend are here.
He and Brad, his cousin, sometimes meet for a breakfast of
eggs-over-easy and home fries at Eat'N'Park restaurant. they
often discuss their growing fear that they are becoming
obsolete. Both feel they are behind on computer technology,
which is increasingly important in factories. Brad Karenbauer
recently saw a John Deere tractor with a computerized panel
in the engine. ``It was way out of my league,'' he says.
Prospects for workers with their skills are dim.
Pennsylvania has lost one out of 10 manufacturing jobs, or
90,300 jobs, in the past three years. Industrial cities such
as Butler have been disproportionately hit by job loss.
Earlier this year, unemployment in the county jumped to 7.3
percent the highest level since 1994.
Moreover, even though inflation-adjusted output by
manufacturers nationally is expected to grow 36 percent over
the next decade, employment is expected to grow only 3
percent, or by 577,000 jobs, according to the Manufacturers
Alliance. The bulk of the new jobs will be given to those
with computer, mathematics and management skills, while
production workers are expected to decline as a share of all
manufacturing occupations.
The Butler Eagle carries some ``help wanted'' ads, but the
skills and pay don't fit their levels. United Plate Glass
Co., with 45 employees, plans to expand, but it can't afford
these workers. ``They have 10 to 12 years with a company and
I can't afford the salary level they have reached,'' says
President William Cully.
It's especially tough for midcareer workers with family
responsibilities. Almost 40, Brad Karenbauer has three kids.
Along with his 14-month-old, he is supporting a 17-year-old
daughter and 13-year-old-son. He passed over a job paying
$6.50 an hour. Another paid $8 an hour, but involved
industrial chemicals, which he thought would be dangerous.
Mr. Karenbauer has a friend from Trinity who went to work for
the township, making $13 an hour. ``I'd take a job that makes
that,'' he says.
So far, though, he hasn't found one. The $7,000 in his
401(k) is gone. He used it to buy
[[Page S10494]]
a car and pay off debt. With his unemployment running out and
in need of health insurance benefits, he finally took a job
in April at Harmony Castings, a 60-person foundry that paid
$8.85 an hour. He drove 45 minutes to get to the foundry and
worked a midnight shift.
Standing in one spot eight hours a night, he took one
aluminum part after another and grinded off burrs to smooth
them. ``To be honest with you, I'm not liking it at all,'' he
said shortly after taking the job. ``It's repetition and I
hate repetition.''
For challenge and additional cash, he buys broken weed
eaters and lawn mowers at yard sales to repair and sell at a
profit. He recently bought one for $15, put in a new spark
plug and sold it to a friend--for $15. ``They were in the
same predicament I'm in,'' he says.
His cousin, Mr. Mottern, lucked out and landed a job, also
in April, working on a railroad track crew. It pays $12 an
hour, a $1.30-an-hour pay cut from his old job at Trinity,
but after a winter of shoveling snow and summers of
planting trees by the highway, he is thrilled. The job
also has the potential for benefits. ``I'm going to go
down and bust my rear end fro them,'' he says.
Most of the available jobs have been at malls. Mr.
Karenbauer's older brother, Jim, now works at the Wal-Mart
Supercenter, which opened last year. ``There's four or five
of us here now,'' says Jim Karenbauer, referring to his
former Trinity co-workers. He refinanced his house a few
years ago to pay for his daughter's college, and lost a chunk
of his retirement savings when the stock market sank, so he
can't retire.
He'd prefer work in a forge department but couldn't find a
job in one. At Wal-Mart he makes $6.25 an hour, half of what
he earned at Trinity. He stocks shelves with VCRs and rings
the cash register. He wheels televisions sets out to the
parking lot on a dolly. ``Lifting them into the car is the
hard part,'' the 60-year-old says. ``They get pretty heavy.''
After a month at the casting foundry, Brad Karenbauer
recently gave up his job. He couldn't juggle the night shift
and taking care of his daughter, while his girlfriend worked.
A landscaper put him to work mowing lawns and doing odd jobs
for cash. The work will dry up again once winter arrives, so
he's still looking.
He doesn't regret not going to college, or working with his
hands. ``I think I've done better than my father,'' he says.
``I just wonder where things are going. That trade of working
with your hands is just about gone now.''
Mr. HOLLINGS. I picked up my August 4 issue of Time magazine: ``Where
The Good Jobs Are Going. Forget Sweatshops. U.S. companies are now
shifting high-wage work overseas, especially to India.''
I ask unanimous consent that this article be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From Time Magazine, Aug. 4, 2003]
Where the Good Jobs Are Going; Forget Sweatshops, U.S. Companies Are
Now Shifting High-Wage Work Overseas, Especially to India
(By Jyoti Thottam with Sean Gregory)
Little by little, Sab Maglione could feel his job slipping
away. He worked for a large insurance firm in northern New
Jersey, developing the software it uses to keep track of its
agents. But in mid-2001, his employer introduced him to Tata
Consultancy Services, India's largest software company. About
120 Tata employees were brought in to help on a platform-
conversion project. Maglione, 44, trained and managed a five-
person Tata team. When one of them was named manager, he
started to worry. By the end of last year, 70% of the project
had been shifted to India and nearly all 20 U.S. workers,
including Maglione, were laid off.
Since then, Maglione has been able to find only temporary
work in his field, take a pay cut of nearly 30% from his
former salary of $77,000. For a family and mortgage, he says,
``that doesn't pay the bills.'' Worried about utility costs,
he runs after his two children, 11 and 7, to turn off the
lights. And he has considered a new career as a house
painter. ``It doesn't require that much skill, and I don't
have to go to school for it,'' Maglione says. And houses, at
least, can't be painted from overseas.
Jobs that stay put are becoming a lot harder to find these
days. U.S. companies are expected to send 3.3 million jobs
overseas in the next 12 years, primarily to India, according
to a study by Forrester Research. If you've ever called Dell
about a sick PC or American Express about an error on your
bill, you have already bumped the tip of this ``offshore
outsourcing'' iceberg. The friendly voice that answered your
questions was probably a customer-service rep in Bangalore or
New Delhi. Those relatively low-skilled jobs were the first
to go, starting in 1997.
But more and more of the jobs that are moving abroad today
are highly skilled and highly paid--the type that U.S.
workers assumed would always remain at home. Instead Maglione
is one of thousands of Americans adjusting to the unsettling
new reality of work. ``If I can get another three years in
this industry, I'll be fortunate,'' he says. Businesses are
embracing offshore outsourcing in their drive to stay
competitive, and almost any company, whether in manufacturing
or services, can find some part of its work that can be done
off site. By taking advantage of lower wages overseas, U.S.
managers believe they can cut their overall costs 25% to 40%
while building a more secure, more focused work force in the
U.S. Labor leaders--and nonunion workers, who make up most of
those being displaced--aren't buying that rationale. ``How
can America be competitive in the long run sending over the
very best jobs?'' asks Marcus Courtney, president of the
Seattle-based Washington Alliance of Technology Workers. ``I
don't see how that helps the middle class.''
On the other side of the world, though, educated Indian
workers are quickly adjusting to their new status as the
world's most sought-after employees. They have never been
more confident and optimistic--as Americans usually like to
think of themselves. For now, at least, in ways both tangible
and emotional, educated Americans and Indians are trading
places.
Uma Satheesh, 32, an employee of Wipro, one of India's
leading outsourcing companies, is among her country's new
elite. She managed 38 people who work for Hewlett-Packard's
enterprise-servers group doing maintenance, fixing defects
and enhancing the networking software developed by HP for its
clients. Her unit includes more than 300 people who work for
HP, about 90 of whom were added last November when HP went
through a round of cost-cutting.
``We've been associated with HP for a long time, so it was
an emotional thing,'' Satheesh says. ``It was kind of a mixed
feeling. But that is happening at all the companies, and it's
going to continue.'' Satheesh says that five years ago,
computer-science graduates had one career option in India:
routine, mind-numbing computer programming. Anything more
rewarding required emigrating. ``Until three years ago, the
first preference was to go overseas,'' she says. Nowadays her
colleagues are interested only in business trips to the U.S.
``People are pretty comfortable with the jobs here and the
pay here''--not to mention the cars and houses that once
seemed out of reach. Employees in her group earn from $5,200
a year to $36,000 for the most experienced managers.
And as American companies have grown more familiar with
their Indian outsourcing partners, they have steadily
increased the complexity of work they are willing to hand
over. Rajeshwari Rangarajan, 28, leads a team of seven Wipro
workers enhancing the intranet site on which Lehman Brothers
employees manage personal benefits like their 401(k)
accounts. ``I see myself growing with every project that I do
here,'' Rangarajan says. ``I really don't have any doubts
about the growth of my career.''
Her experience with a leading brokerage will probably help.
Financial-services companies in the U.S. are expected to move
more than 500,000 jobs overseas in the next five years,
according to a survey by management consultant A.T. Kearney,
and India is by far the top destination. U.S. banks,
insurance firms and mortgage companies have been using
outscouring to handle tech support for years. Now these firms
are using Indian workers to handle the business operations--
say, assessing loan applications and credit checks--that the
technology supports. Kumar Mahadeva, CEO of the thriving
outsourcing firm Cognizant, explains the appeal: ``It becomes
logical for them to say, `Hey, you know everything about the
way we do claims processing. Why not take a piece of it?''
The next logical step, says Andrea Bierce, a co-author of
the A.T. Kearney study, is jobs that require more complex
financial skills such as equity research and analysis or
market research for developing new business. Evalueserve, a
niche outsourcing company in Delhi, already performs research
for patent attorneys and consulting firms in the U.S. In
April, J.P. Morgan Chase said it would hire about 40 stock-
research analysts in Bombay--about 5% of its total research
staff. Novartis employs 40 statisticians in Bombay who
process data from the drug company's clinical research.
But as educated workers in India are finding new
opportunities, those in the U.S. feel the doors closing. Last
week Bernie Lantz drove 1,400 miles from his home in Plano,
Texas, to begin a new life in Utah. He is 58 years old, a
bachelor, and had lived in the Dallas area for 24 years.
``I'm leaving all my friends,'' he says with a sigh. ``It's
quite an upheaval.'' Lantz used to earn $80,000 a year as a
troubleshooter for Sabre, a company based in Southlake,
Texas, whose software powers airline-reservations systems.
But over the past two years, Sabre has gradually standardized
and has centralized its software service. As Sabre began to
outsource its internal IT services, Lantz says, he became
convinced that jobs like his were becoming endangered. He was
laid off in December. (A company spokesman denies that
Lantz's firing was related to outsourcing.)
Discouraged by a depressed job market in Dallas, Lantz
realized he would have to do something else. In the fall he
will begin teaching computer science a Utah State University
in Logan, and in the meantime he has learned a lesson of his
own: ``Find a job that requires direct hands-on work on
site,'' Lantz advises. ``Anything that can be sent
overseas is going to be sent overseas.''
Pat Fluno, 53, of Orlanda, Fla., says she, like Maglione,
had to train her replacement--a common practice in the
domestic outsourcing industry--when her data-processing unit
at Germany-based Siemens was
[[Page S10495]]
outsourced to India's Tata last year. ``It's extremely
insulting,'' she says, ``The guy's sitting there doing my old
job.'' After 10 months of looking, she is working again, but
she had to take a $10,000 pay cut.
To protect domestic jobs, U.S. labor activists are pushing
to limit the number of H-1B and L-1 visas granted to foreign
workers. That would make it harder for offshore companies to
have their employees working on site in the U.S. ``Those
programs were designed for a booming high-tech economy, not a
busting high-tech economy,'' says Courtney of the Washington
Alliance of Technology Workers. Courtney and his allies are
starting to get the attention of lawmakers. Several
congressional committees have held hearings on the impact of
offshore outsourcing on the U.S. economy, and lawmakers in
five states have introduced bills that would limit or forbid
filling government contracts through offshore outsourcing.
Stephanie Moore, a vice president of Forrester Research,
says companies are concerned about the backlash but mainly
because of the negative publicity. ``The retail industry is
very hush-hush about its offshoring,'' she says. But within
the boardroom, such outsourcing enjoys wide support. In a
June survey of 1,000 firms by Gartner Research, 80% said the
backlash would have no effect on their plans.
The advantages, businesses say, are just too great to
ignore. They begin with cost but don't end there. Jennifer
Cotteleer, vice president of Phase Forward, a Waltham, Mass.,
company that designs software for measuring clinical-trials
data for drug companies, has for the past two years used
offshore employees from Cognizant to customize the
application for specific drug trials. Lately she has been
relying on their expertise to develop even more-tailored
programming. ``I certainly couldn't have grown this fast
without them,'' Cotteleer says. Her company is growing 30%
annually, on track to reach $65 million in revenue this year.
``What I've been able to do in very tough economic times is
manage very directly to my margins,'' she says. ``I'm
providing job security for the workers I do have.''
Creative use of offshore outsourcing, says Debashish Sinha
of Gartner Research, offers benefits that outweight the
direct loss of jobs. In an economy that has shed 2 million
jobs over two years, he contends, the 200,000 that have moved
overseas are less significant than the potential for cost
savings and strategic growth. But he concedes that ``when
you're a laid-off employee who can't find a job, that's hard
to understand.''
Perhaps some will follow the example of Dick Taggart, 41,
of Old Greenwich, Conn. After 18 years in financial services,
most recently at J.P. Morgan Chase, he now works for Progeon,
an affiliate of the Indian outsourcing giant Infosys, as its
man on Wall Street. One week out of every six or seven, he
takes securities firms to India to show them the savings that
are possible. He knows the transition is painful for the
workers left behind, but he has seen it before. ``It was the
same thing when we moved from Wall Street to New Jersey and
then to Dallas,'' he says. ``Guess what? This is next.''
Mr. HOLLINGS. What happens is that when we used to argue for
manufacturing jobs, they said, oh, don't worry, the service economy
will produce jobs. Then when the service economy was leaving, they said
high tech, will be the motor of growth. Then there was Y2K, that was to
be the next motor of growth.
The high-tech jobs are gone. The service jobs are gone. As they told
England at the end of World War II, do not worry, instead of a nation
of bronze, you are going to be a nation of brains; instead of providing
products, you are going to provide services; instead of creating
wealth, you are going to handle it and be a financial center.
Of course, England has gone to economic hell in a hand basket.
Downtown London is an amusement park. Let's not go that way. We have to
produce.
As they crown the queens and bring out the kings and everything else
of that kind, we are in a position where we do not make anything
anymore. For example, footwear, 83.6 percent of our shoes are imported;
70 percent of our clothing is imported.
Ceramic household articles, 87 percent is gone; cooking and kitchen-
ware, gone. And I can read on and on, right on down the line.
I ask unanimous consent that this list be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
------------------------------------------------------------------------
Percent import
Item penetration
------------------------------------------------------------------------
Footwear................................................ 83.6
Ceramic household articles.............................. 87.0
Cooking and kitchenware................................. 58.4
Industrial thermal-processing equipment and furnaces.... 60.6
Household appliances, including commercial applications. 44.3
Textile machinery....................................... 86.5
Metal forming machine tools............................. 49.6
Semiconductor manufacturing machinery................... 52.3
Boilers, turbines, and related machinery................ 56.6
Electrical transformers, static converters, and 49.7
inductors..............................................
Aircraft engines and gas turbines....................... 42.2
Office machines......................................... 51.7
Consumer electronics (except televisions)............... 89.8
Television receivers and video monitors................. 79.2
Radio and television broadcasting equipment............. 77.3
Electrical capacitors and resistors..................... 75.7
Computers, peripherals, and parts....................... 59.8
Optical goods, including ophthalmic goods............... 53.9
Handbags................................................ 88.8
Musical instruments and accessories..................... 64.6
Bicycles and certain parts.............................. 68.8
Toys.................................................... 84.0
------------------------------------------------------------------------
Mr. HOLLINGS. We do not make anything anymore. We are just jabbering
to each other. We are not producing.
The Secretary of Commerce is burdened with the duty--and the current
occupant of the chair would be interested in this--of listing some 500
critical articles to our national security for defense purposes. We
have a $5 billion deficit in the balance of trade. We had to wait 5
months before we went into Desert Storm to get mainframes from the
Japanese. Now we have to go to other countries before we can go to war.
We do not make those things anymore. We have an advanced technology of
a $2 billion a month deficit in the balance of trade, over $24 billion
a year, in advanced technology.
The Japanese have given up. They moved their advanced technology and
research to Shanghai. The most modern automotive research is in
downtown Shanghai. General Motors put it there. We can go right on down
the list. The Chinese are saying before anyone can come with factories,
they have to bring their research.
The technology community of the United States is concerned about our
technological capability. We do not have as many Americans engineers as
there are in China. We maintain our security by a superiority of
technology, and we are draining the tub of technology just as fast as
we can. Yet in this Chamber, we want to talk about an Energy bill, want
to talk about a judge--don't we want to talk about trade? Put fast
track on the Energy bill. Why not? Unless, by gosh, we get serious and
start talking about jobs in America, the economic strength, the
industrial backbone of this Nation.
Tax cuts loses jobs. Free trade loses jobs. We have a race to the
bottom to Mexico. In South Carolina we have lost 61,000 jobs--
incidentally, we were supposed to get 200,000 jobs in America by
signing NAFTA. That is what NAFTA was going to create for us.
Nationally, we have lost 450,000 jobs to Mexico, but not for long
because those same Mexican jobs formerly in America are now going to
China.
It is different than what Henry Ford said. Henry Ford said, I want
the man making that automobile to be able to buy it. He produced a
minimum wage and he produced health benefits. So we built up middle
America. Now, instead, with a trade policy of free trade, like monkeys
on a string, there is no such thing as free trade. That is an oxymoron.
Trade is something for something. If it is free, it is a gift. But with
that particular policy, we have to race to the bottom in the United
States of America.
I have an article from the New York Times, July 20, that I wanted to
read, which points out our tremendous difficulty. I ask unanimous
consent to have this article printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the New York Times, July 20, 2003]
Economic View; Producing Abroad Is Harming Recovery
(By Louis Uchitelle)
For nearly 29 months, the nation has struggled through a
recession and a weak recovery. That is a long struggle, a new
form of hardship for many Americans, who are tantalized with
incessant forecasts that a decisive upturn is about to
happen. But as the months wear on, the dogged optimism
detaches from reality.
For starters, the forecasters seem not to grasp how much
the American economy has deviated from the standard business
cycle and the standard cures. A major reason for the
deviation is the mobility of American companies, particularly
the ease with which they now shift operations to China and
India. ``The wholesale movement of jobs and production
overseas is handcuffing the recovery,'' said Mark M. Zandi,
chief economist at Economy.com.
In other downturns since World War II, the economy moved
from healthy growth to contraction and back to healthy
growth, all in less than two years. The downward swings were
relatively easy to fix. The swings began when companies found
themselves producing more goods and services than people
bought.
[[Page S10496]]
Inventories built up, particularly in manufacturing, and
companies responded by cutting output until it was below
demand. Rather than produce more, companies filled orders
from stockpiles. As output declined, unemployment rose and
wages stopped increasing. Capital spending also suffered.
After all, why expand when the capacity to produce already
exceeds demand?
But the damage did not last long. The Federal Reserve
stepped in, cutting interest rates to encourage spending.
Unemployment insurance, public spending, and sometimes tax
cuts, helped resurrect demand. As spending picked up and
inventories disappeared, prices began to rise, which
encouraged more production. Hiring resumed, as did capital
spending.
These various remedies are being used now, and there is
some strength in spending. Yet inventories have failed to
diminish, so prices, production, hiring and capital spending
do not rise.
The difficulty is that companies have a choice that was not
as available in the last downturn 12 years ago. Rather than
halt production at home, they shift it abroad to cut costs,
particularly labor costs. They feel compelled to do this. If
they did not, their competitors would upstage them with their
own lower-cost, overseas production that takes away sales
back home.
In the process, the mechanism for restoring our economy to
healthy growth--by reducing inventories and excess capacity--
fails to function properly. Inventories may seem to
diminish when only ``Made in America'' is counted. But in
the new global economy, what's made in America and what's
made abroad both contribute to inventories and capacity.
The total does not shrink, and the economy flounders month
after month.
Still, there is some relief. Super-low interest rates,
mortgage refinancing, stepped-up military spending and some
of the Bush tax cuts augur a temporary pop in economic
growth. But temporary is the operative word. The more
enduring pressure on the economy is downward, not upward.
The biggest beneficiary appears to be China. Abundant
transportation has made China an ever-easier place for
American companies to shift production of goods and services
for sale in the market back home.
The nation's trade deficit, the excess of our imports over
exports, has risen by 31 percent since the recession began in
March 2001. The increase, totaling $114 billion, would add
one percentage point to American economic growth--enough to
turn a weak recovery into a strong one--if the rise in output
were at home, not abroad. One-third of the total increase
represents imports from China, Mr. Zandi says. Honing the
figures, Steven S. Roach, chief economist at Morgan Stanley,
finds that China's total exports have tripled since 1994, and
that 65 percent of the $244 billion increase comes from
foreign companies in China.
``We are criticizing the Chinese as if they were cleaning
our clock and the only part of China that is cleaning our
clock is the part that we put there,'' Mr. Roach said.
What is to be done? If we do anything, we are likely to
pressure the Chinese to float their currency. A floating yuan
would rise against the dollar, making Chinese exports more
costly in the United States. Pressure is already coming from
Congress for the Bush administration to negotiate the float.
We could also force American companies, through
regulations, to stay out of countries that fail to observe
minimal labor and environmental standards. Regulation is not
popular in America. But it could regain its popularity, if
the alternative is a continual loss of jobs in every state.
Mr. HOLLINGS. Of particular significance, the article quotes Steven
Roach, the chief economist of Morgan Stanley. He finds that China's
total exports have tripled since 1994, that 65 percent of the $244
billion increase comes from foreign companies in China, most of them
United States.
Then I want you to listen to this economist about the economy, Mr.
Mark M. Xanely. Before I quote him, let me say I am not an economist
but I finally found one that is going to correct Alan Greenspan,
because Mr. Greenspan is looking to consumer demand.
But before you can have consumer demand, you have to have consumers.
Before you have consumers, you have to have producers. Before you have
producers, you have to have jobs. Here is what he says:
For starters, the forecasters seemed not to grasp how much
the American economy has deviated from the standard business
cycle and the standard cures. A major reason for the
deviation is the mobility of American companies, particularly
the ease with which they now shift operations to China and
India. The wholesale movement of jobs and production overseas
is handcuffing the recovery.
Why do they have a jobless recovery? Because the economy of the
United States is handcuffed with this silly cutting of the taxes, jobs
and growth, jobs and growth, free trade, free trade, free trade.
Maybe it is not jobless growth, it is just jobless in the United
States. This tax incentive, this stimulation is not going to create
jobs in downtown Nashville, TN. The jobs will be in Shanghai, China. If
you are in Nashville, TN, and you get a good fat tax break, the
question arises, should you build the plant in Nashville? No, your
competition has gone to China. If you are going to meet the
competition, you are going to have to put that new plant, use that tax
break, that stimulation--not to invest in the United States but to
invest in China.
We are missing the point of history when everyone talks of this free
trade nonsense. I remind them of Alexander Hamilton, a good Republican.
Some of them want to replace him with the inventor of voodoo I, Ronald
Reagan, on the $10 bill. You got some crazy things going on in this
town. Imagine putting Ronald Reagan on the $10 bill rather than
Alexander Hamilton--one of the greatest of the great. Hamilton not only
helped with the Constitution, not only helped Madison with the
Federalist Papers, but created a ``Report on Manufacturers.'' I have it
right here.
What happened was the fledgling colony had just won its freedom when
the British corresponded with us back in New York, because that is
where the Capitol was at the time. They said what you ought to do back
in the colonies since you won your freedom, was to trade with us what
you produce best and we will trade back with you what we produce best.
The doctrine was David Ricardo's, the economic doctrine of comparative
advantage. It was Alexander Hamilton who won out. He even persuaded
Madison, who voted for it.
He issued the ``Report on Manufacturers.'' It is too long to include
in the Record. The original copy is at the Library of Congress. It can
be expressed in one expression: Hamilton told the British to bug off.
We are not going to remain your colony, shipping to you our
agriculture, our foodstuffs, our rice, our cotton, our indigo, our
coal, our iron ore. We are not going to remain a colony; no, we will
become a nation state.
The first bill to ever pass Congress was for the seal of the United
States--but the second bill on July 4, 1789, that passed this Congress
was protectionism, a tariff bill of 50 percent on 60 articles.
We built this country over a 160-year-period with protectionism. I
will never forget, every time they would tell me: Senator, you are
nothing but a protectionist.
I am for free trade, free trade. The opponents do not know what the
heck they are talking about. I feel sorry for them. Protectionism built
the country. We did not even have the income tax until 1913. We built
it on tariffs.
After Hamilton came Lincoln. People told Lincoln that to build the
transcontinental rail we ought to get steel from England. The father of
the Republican Party said: No, no. We are going to build our own steel
mills and when we get through we will not only have the rail equipment,
we will have our steel production.
Then Roosevelt in the depth of the Depression protected agriculture.
People do not think I know anything about farming. But I get the farm
vote every time I run. I love campaigning out in Iowa. I can tell you
right now Roosevelt protected agriculture. And Eisenhower protected oil
in the 1950s with quotas. We built the country with protectionism.
I will never forget when we had to have President Reagan's second
inauguration right out here in the Rotunda. He raised his hand and he
said, ``preserve, protect and defend.'' Then we came back here and we
debated something on trade. I said something about protection and the
majority jumped all over me: You are a protectionist, protectionist.
We have the Army to protect us when the enemy is out. We have Social
Security to protect us from old age. We have Medicare to protect us
from ill health. We have environmental laws, clean air and clean water,
to protect the environment. The fundamental foundation of government is
to protect.
Let's say you wanted to start an Alexander Manufacture Company. But
before you can open Alexander Manufacture, you have to have a minimum
wage. You have to have clean air; you have to have clean water; you
have to have Social Security; you have to have Medicare; you have to
have Medicaid; you have to have safe machinery; you have to have a safe
working place; you
[[Page S10497]]
have OSHA coming around looking at you; you have to have plant closing
notice; you have to have parental leave. I could go on and on. Or you
can open a plant in China for 60 cents an hour, and have none of that.
So companies go to China.
I will never forget, I had a friend who organized his own company out
in California. I saw where he was very successful and I said: I helped
you. I got your water and sewer lines when you came to South Carolina,
when you had an expansion. I want you to give us that plant in South
Carolina.
He said: I don't build anything in the United States. He said: I do
it in China. I got research, I got sales--for 10 percent of the costs.
He did not say this but I know it: They build the factory. They
provide the employment. They give people a year-to-year contract. They
don't have to worry about the cycle that the economists talk about. If
the cycle goes down, they do not have to renew the contract next year.
They cannot lose. We are in one dickens of a fix.
I was reading the book ``Theodore Rex,'' the patron saint of my
Republican friends. He is one of my heroes, too. In the book, on page
20, let me read at the turn of the century what we really had was
protectionism.
The United States was already so rich in goods and services
that she was more self-sustaining than any industrial power
in history. Indeed, it could consume only a fraction of what
it produced. The rest went overseas at prices other exporters
found hard to match. As Andrew Carnegie said:
The nation that makes the cheapest steel has other nations
at its feet.
More than half the world's cotton, corn, copper and oil
flowed from the American cornucopia, and at least one-third
of all steel, iron, silver and gold. Even if the United
States were not so blessed with raw materials, the excellence
of her manufactured products guaranteed her dominance of
world markets. Current advertisements in British magazines
gave the impression that the typical Englishman waked to the
ring of an Ingersoll alarm, shaved with a Gillette razor,
combed his hair with Vaseline tonic, buttoned his Arrow
shirt, hurried downstairs for Quaker Oats, California figs,
Maxwell House coffee, commuted in a Westinghouse tram, body
by Fisher, rose to his office in an Otis elevator, worked all
day with his Waterman pen under the efficient glare of Edison
lightbulbs. ``It only remains,'' one Fleet Street wag
suggested, ``for us to take American coal to Newcastle.''
Behind the joke lay real concerns. The United States was
already supplying beer to Germany, pottery to Bohemia,
oranges to Valencia. As a result of this billowing surge in
productivity, Wall Street was awash with foreign capital.
Carnegie calculated that America could afford to buy the
entire United Kingdom and settle Britain's national debt into
the bargain. For the first time in history, transatlantic
money currents were thrusting more powerfully westward than
east. Even the Bank of England had begun to borrow money on
Wall Street. New York City seemed deemed to replace London as
the world's financial center.
Mr. President, you can see exactly what happened. We built it up. At
the end of World War II, my dear friends, we had the only economy. In
order to prosper, we had to spread prosperity. The way we did that was
very sanguine: the Marshall plan. And it worked. We sent over money,
80-some billion in today's dollars. We sent over the equipment, the
finest machine tools, automotive equipment and otherwise. We sent over
the expertise, and we rebuilt Europe, we rebuilt the Pacific rim, and
capitalism defeated communism. It worked.
Our trouble is it worked too well for these eager-beaver
manufacturers. I remember them well because I have been in this thing,
now, for 50-some years. I can see them--Oh, I get jet lag; I hate to
go; oh, man, I don't want to go; and everything else of that kind.
No more, not with the computer, not with the Internet. You can send
some young, aggressive executive to Shanghai to run your plant. You can
set it up on your computer. You can see what is happening daily. You
can be in touch on the Internet. You can run it from the 32nd floor on
Sixth Avenue in New York and, man, you have it made. And they are all
doing it.
So what happened with the Marshall plan? We not only spread that
prosperity but we really taught these people a bad lesson because they
don't think about the country. You know, you and I are supposed to
think about the country. They are supposed to think about profits. They
do not have a duty.
Of course, being Americans, you would think they would be a little
bit more patriotic. Their organizations are against us. Now who is the
enemy? in other words.
The toast of the town, Jack Welsh of GE, he believed in squeezing the
lemon.
This says:
One of General Electric's CEO's, Jack Welsh's favorite
phrase is ``squeeze the lemon'' for wringing out the cost. To
help them meet the stiff goals, several of GE's business
units, including aircraft engines, power systems, industrial
systems, have been prodding suppliers to move to low-cost
Mexico where the industrial giant already employs 30,000.
That was 4 years ago.
GE even puts on supplier migration conferences to help them
make the leap.
He goes on:
Welsh's widely admired status in corporate America has lent
legitimacy to a model of business success that is built on
job and wage cuts.
This is Business Week. This is the bible of the business community,
the weekly bible. Here it is, and I am quoting:
The internal report, a copy of which Business Week
obtained, says: ``GE set the tone early and succinctly:
`Migrate or be out of business; not a matter of if, just
when'. This is not a seminar just to provide information. We
expect you to move and move quickly.''
The followup: Even though GE's profits were up 80 percent at that
particular time, they wanted more. You know, they are not just Jesse
Jackson in civil rights. This is Jack Welsh in Business Leadership: I
want it all. My time has come. I want it all.
So the 80 percent didn't suit him. But you don't jump on poor Jack;
he has gone now, and he has had other troubles. Let's go to last month.
General Motors and Ford: Automotive News.
I ask unanimous consent to have this article printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
(From Automotive News, June 23, 2003)
Ford, GM Push Vendors Toward China; `World Price' Frenzy Threatens U.S.
Jobs
(By Robert Sherefkin, David Sedgwick)
Ford Motor Co. and General Motors are pressuring their
North American suppliers to join the great migration to
China.
Embroiled in a price war with their foreign rivals, Ford
and GM have delivered an ultimatum: Suppliers must match a
``world price'' that is increasingly set in China, or they
must build factories in China.
Megasuppliers such as Delphi Corp., Visteon Corp. and Denso
International already operate in China. Now smaller suppliers
are joining them. One such company is Hella North America
Inc., the American unit of German lighting manufacturer Hella
KG Hueck & Co.
Hella, which supplies all of the Big 3, already owns four
subsidiaries in China. Now its North American operation
``continues to receive pressure from our customers to source
some of their components from China,'' says company CEO Joe
Borruso. ``We are working with them to develop a sourcing
plan.''
China will generate a flood of exports, but domestic
Chinese parts makers will be minor players (see related story
on page 39). They cannot compete with international suppliers
that are spending billions on joint-venture factories in
China.
Only international suppliers that have built factories in
China have the clout to influence world prices.
The shift to Chinese production eventually will cost
hundreds of thousands of manufacturing jobs in the United
States. And it will put more pressure on smaller, cash-
strapped suppliers to make a risky investment on a distant
continent.
Both Ford and GM are offering a two-continent deal. If a
supplier builds a factory in China, it can sell parts to a
Ford or GM assembly plant in China, then export parts to the
automaker's North American assembly plants.
Those deals are starting to add up. According to the U.S.
Department of Commerce, total imports of Chinese auto
components totaled $2.2 billion last year, nearly triple the
volume of imports in 1997.
China will dwarf the impact Mexico has had on the U.S. auto
industry, says Detroit economist David Littmann. From the
perspective of North America's purchasing mangers,
Littmann says, ``china is vastly more encouraging than
Mexico.''
Asian migration
For automakers, China looks like a bargain. For suppliers,
that price can be steep. In the years to come, segments of
the U.S. supplier industry may migrate to Asia. For example,
U.S. mold and die makers already have lost an estimated 6,000
jobs to Chinese rivals in recent years.
The shift toward parts buying in China is following one
transition that already is well under way. Automakers and
suppliers have shifted tool-and-die purchasing to China,
damaging the fortunes of companies such as Commercial Tool &
Die Inc. of Grand Rapids, Mich.
For 50 years, the family-owned company manufactured molds
that automotive suppliers use to produce interior trim. But
Ford
[[Page S10498]]
and other customers have instructed suppliers to seek bids
from Asian mold makers.
Company owner Doug Bouwman has two sons that are 19 and 20
years old. ``They would both like to work in the business and
possibly take it over,'' Bouwman says. ``When I got in, it
was a long-term career. It's not clear it will be that way in
the future.''
The overall erosion of industrial jobs will dwarf the
losses experienced by the tool and die industry. By the end
of the decade, China's expansion could cause the loss of
900,000 industrial jobs in North America, predicts Craig
Fitzgerald, an analyst for the consulting firm Plante & Moran
in Southfield, Mich.
No apologies
The instigators of this great migration--the automakers
themselves--offer no apologies.
At an April briefing in Detroit, GM executives told
suppliers that the automaker's annual purchases of Chinese
parts soon will top $10 billion, according to a major
supplier who attended the meeting. That goal represents a
sharp increase from current purchasing levels; GM's parts
purchases in China last year totaled $1.1 billion.
While most of those parts are used to build vehicles in
China, many will end up in U.S. assembly plants.
Last week, a GM spokeswoman declined to specify when GM
expects to reach the $10 billion goal. One GM supplier's
estimate: three to five years.
GM imports only 3 percent of the components that it uses in
North America. But that understates China's true role: North
American suppliers now are expected to match Chinese prices--
whether or not they have plants in China.
And that is true for suppliers to Ford and Chrysler, not
just GM. The Chrysler group ``is clearly investigating
China,'' says Peter Rosenfeld, who becomes Chrysler's
executive vice president for procurement and supply in
December.
The Chrysler group already has issued a ``world price''
order to suppliers.
This year the Big 3 are picking up the pace. GM has formed
80 ``creativity teams''--consisting of engineers, purchasers
and quality control experts--to analyze the cost of its
components.
Following one team's suggestions, the automaker decided to
import radios from China.
Last year, Ford intensified its search for Chinese
suppliers after President Nick Scheele told of plans to
import $1 billion worth of Chinese parts to North America in
2003. By 2010, Ford expects its purchases to rise to $10
billion.
If so, it will represent a big portion of Ford's North
American parts purchases, which totaled $45 billion last
year. If Ford hits that target, it would represent a sharp
year-to-year increase. Last year, Ford's worldwide purchases
of Chinese components were less than $100 million.
core group
To reach its goal, Ford is counting on a core group of 75
to 100 suppliers. Many of them are clustered around Ford's
Chongqing assembly plant, which will produce the Fiesta. Half
of those suppliers are joint ventures with Chinese partners,
and foreign suppliers wholly own 20 percent. Only 30 percent
are traditional Chinese suppliers.
To augment that group, Ford has begun asking smaller Tier 1
suppliers to build factories in China. The automaker also is
using the ``China price'' to demand lower prices from
suppliers in North America.
``In some instances we are seeing best-in-class prices from
suppliers'' in China, says Andrew Hinkly, Ford's director of
global commodity management. ``So they are indeed setting the
world parts price. There is a lot of momentum.''
tough choices
Suppliers who don't want to migrate to China are feeling
the heat. Consider the plight of Wescast Industries, Inc.
Wescast, of Wingham, Ontario, controls 70 percent of the Big
3's exhaust manifold business in North America. Ford told
Wescast this year that it would transfer $50 million of its
purchases from Wescast to Chinese factories, according to an
industry source.
Wescast CEO Ray Finnie declined to comment on Ford's plans.
But he said the Big 3 ``are asking for very significant price
reductions because it is a matter of their survival.''
Tier 1 vendors are not the only suppliers affected by the
China price. The Big 3's focus on China is beginning to
cascade through the supply chain. Tier 1 suppliers are
starting to transfer their supply chains to China.
Poised to exploit that trend is former Wall Street banker
Jack Perkowski, who is based in Beijing and runs Asian
Strategic Investment Corp., a company backed by U.S.
investors that operates 15 Chinese factories.
The company exports a variety of components such as brake
seals, diesel injector bodies and engine blocks. This year,
Asian Strategic Investment projects sales of $250 million and
says exports to North America will account for 20 percent of
that.
Ford's billion-dollar import target was a wake-up call,
says company Vice President Matt Snyder. ``Eight months ago,
the Tier 1 suppliers were not interested,'' he says. ``Today
they are calling me.''
60 cents an hour
For manufacturers of labor-intensive components, China is
an attractive location. According to Chinese government data,
manufacturers in Shanghai typically pay workers $1 an hour,
plus 42 cents an hour in benefits. Factories in rural areas
generally pay wages of 60 cents an hour.
That is significantly lower than pay in Mexico, which range
from $2 to $2.50 an hour, including wages and benefits,
according to Richard Sinkin, managing director at
InterAmerican Holdings Co., a San Diego consulting firm that
focuses on Mexican manufacturing. He also is part owner of a
Mexican parts marker.
But suppliers cannot afford to be mesmerized by China's low
wages. Unwary newcomers who choose the wrong partners often
are saddled with unexpected costs. Consider the plight of
a Fortune 500 automotive parts supplier that recently set
up a Chinese factory.
This U.S. supplier had assumed it would pay its unskilled
workers $1 an hour. But its Chinese partner threw in various
employee subsidies--for heating oil allotments, medical care,
a housing allowance, free lunches and even a clothing
allowance.
The venture's $1 hourly labor costs quickly ballooned to $3
an hour, says a U.S. vice president assigned to uncover the
joint venture's hidden costs.
Among the hidden costs was a car allowance for company
managers. ``They neglected to tell us about the two new
Buicks they bought so they could claim a car allowance,'' he
says. ``You have to be insistent as hell. We're still
digging.''
Exodus
While many suppliers are preparing to join the migration to
China, one portion of the auto industry--tool and die
makers--already has been decimated.
This is an industry dominated by small family-owned
businesses--companies that are ill-equipped to expand into
China. Commercial Tool & Die's plight illustrates the trend.
The company's 150 employees once made molds for toys and
appliances. In the 1990s, Bouwman lost that business to Asian
rivals. Now he's losing automotive customers, too.
To stay competitive, Bouwman purchased expensive tooling
and computers to design his molds. But he cannot match the
labor costs of his Asian rivals. A Chinese engineer is paid
about $5,500 per year; Bouwman's health care premiums alone
average $7,000 an employee.
Bouwman is thinking about setting up operations in China.
``We're feeling the pressure,'' says Bouwman, 50. ``China is
taking jobs out of the U.S. And they won't be back.''
Mr. HOLLINGS. Mr. President, just this last month:
Ford Motor Company and General Motors are pressuring their
North American suppliers to great migration in China.
Embroiled in a price war with their foreign rivals, Ford and
GM have delivered an ultimatum. Suppliers must match a world
price that is increasingly set in China, or they must build
factories in China.
How do you like that? That is not textiles, that is the automotive
backbone of the United States of America. I voted for the Chrysler
bailout, so now Daimler can own them. The foreigners own all the
foodstuffs. They are going to have all the banks. Now they are going to
have all the automobile business.
I wish Don Evans was up in Michigan. He would tell them you get a tax
cut, you get $300. What are you going to do? We are going to have
growth, growth, and jobs.
Here, within the week, the Automotive News says you have to go to
China and you are going to lose 900,000 industrial jobs.
Go up into Indiana, Ohio, and Illinois to what I call the rust belt.
The automotive parts makers are gone. By 2010, Ford expects its
purchases of parts from China to rise to $10 billion. Last year, Ford's
worldwide purchases of Chinese components was less than $100 million.
I quote further:
Suppliers who do not want to migrate to China are feeling
the heat. Consider the plight of Wescast Industries. Wescast
controls 70 percent of the Big Three's exhaust manifold
business in North America.
Ford told Wescast this year that it would transfer $50
million of its purchases from Wescast to Chinese factories,
according to the industry source.
Don't give me the service economy. I know about it. My light bill in
Charleston, SC, is administered in Bangalore India. My insurance policy
is administered in Dublin, Ireland. That is the service economy. Here
is the automotive, hard machine tools industry.
I quote further:
For manufacturers of labor-intensive components, China is
an attractive location. According to the Chinese Government
data, manufacturers in Shanghai typically pay workers $1 an
hour, plus 42 cents an hour in benefits. Factories in rural
areas generally pay wages of 60 cents an hour.
That is significantly lower than pay in Mexico which ranges
from $2 to $2.50 an hour, including wages and benefits. Here
is the
[[Page S10499]]
poor Senator from South Carolina fussing about 61,000 textile
jobs lost to Mexico. But we find now that the Mexican jobs
they got from South Carolina are now on the way to 60 cents
an hour with no benefits in the rural areas of China. It is
beg thy neighbor; a race to the bottom. That is the trade
policy. That is the job policy. That is the economic policy.
Don't worry about energy policy.
Heavens above, why can't we catch Kenny Boy? I raised the question at
that particular time when Larry Thompson became Deputy Attorney
General. He is in charge of corporate corruption enforcement and
violations enforcement. Before he came to Justice, he worked in a law
firm in Atlanta. His firm was representing who? Kenny Boy Lay, of
Enron. So I raised the question of a conflict of interest. What did he
say? Oh, he didn't work on that particular client. He didn't have
anything to do with it.
But I run a firm, and you make money, and I make money.
Come on. Here it is 2\1/2\ years later--and we have gotten everybody,
including Martha Stewart--for one little stock thing. This fellow,
Larry Thompson, wants to know what he should be indicted for. I can
draw it up for him. We had the hearing in California before the
Committee on Commerce, Space, Science and Transportation.
I turned to the witness, David Freeman. I said: Now, Mr. Freeman, you
say all this happened with Enron, and Kenny Boy may not have known
anything about it. I said: In fact, this morning on television I saw
Mrs. Lay, his wife, and she said Kenny Boy didn't know anything about
it.
Mr. Freeman said he was the architect. He knew all about it. He
designed it. Take that testimony of the knowledge of what is going on,
the Enron fraud of California, the wrecked economy, and they are now
calling for a recall of the Governor because of the problems Enron
helped create in that state.
I heard my distinguished colleague from Idaho. He said the economy
went from a surplus to a deficit, and the Governor didn't do anything
about it.
Let us transfer that to Washington. The President started off with a
surplus. He said he even had a $1 trillion rainy day fund. The budget
was $53 billion in the red when he talked on February 27, 2001 to the
Congress. He talked about the $2.6 billion he would set aside for
Social Security. He said there was $2 billion for the budget needs in
defense security, and he said he had $1 trillion left over. He was in
the red then. But we have Enron accounting here in Washington. If he
has gone from a $5.6 trillion surplus to a $4 trillion deficit, is
anybody asking for the recall of the President? Of course not.
But they think that is par for the course out there in the political
intramurals in California. Come on. What is going on.
It is not just GE. It is not just Ford. It is not just General
Motors, or IBM--Big Blue.
This was last week, July 22, from the New York Times: ``IBM Explores
Shift of Some Jobs Overseas.''
I ask unanimous consent to have it printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the New York Times, July 22, 2003]
I.B.M. Explores Shift of Some Jobs Overseas
(By Steven Greenhouse)
With American corporations under increasing pressure to cut
costs and build global supply networks, two senior I.B.M.
officials told their corporate colleagues around the world in
a recorded conference call that I.B.M. needed to accelerate
its efforts to move white-collar, often high-paying, jobs
overseas even though that might create a backlash among
politicians and its own employees.
During the call, I.B.M.'s top employee relations executives
said that three million service jobs were expected to shift
to foreign workers by 2015 and that I.B.M. should move some
of its jobs now done in the United States, including software
design jobs, to India and other countries.
``Our competitors are doing it and we have to do it,'' Tom
Lynch, I.B.M.'s director for global employee relations, said
in the call. A recording was provided to The New York Times
recently by the Washington Alliance of Technology Workers, a
Seattle-based group seeking to unionize high-technology
workers. The group said it had received the recording--which
was made by I.B.M. and later placed in digital form on an
internal company Web site--from an I.B.M. employee upset
about the plans.
I.B.M.'s internal discussion about moving jobs overseas
provides a revealing look at how companies are grappling with
a growing trend that many economists call off-shoring. In
decades past, millions of American manufacturing jobs moved
overseas, but in recent years the movement has also shifted
to the service sector, with everything from low-end call
center jobs to high-paying computer chip design jobs
migrating to China, India, the Philippines, Russia and other
countries.
Executives at I.B.M. and many other companies argue that
creating more jobs in lower cost locations overseas keeps
their industries competitive, holds costs down for American
consumers, helps to develop poorer nations while supporting
overall employment in the United States by improving
productivity and the nation's global reach.
``It's not about one shore or another shore,'' an I.B.M.
spokeswoman, Kendra R. Collins, said. ``It's about investing
around the world, including the United States, to build
capability and deliver value as defined by our customers.''
But in recent weeks many politicians in Washington,
including some in the Bush administration, have begun voicing
concerns about the issue during a period when the economy is
still weak and the information-technology, or I.T., sector
remains mired in a long slump.
At a Congressional hearing on June 18, Bruce P. Mehlman,
the Commerce Department's assistant secretary for technology
policy, said, ``Many observers are pessimistic about the
impact of offshore I.T. service work at a time when American
I.T. workers are having more difficulty finding employment,
creating personal hardships and increasing demands on our
safety nets.''
Forrester Research, a high-technology consulting group,
estimates that the number of service sector jobs newly
located overseas, many of them tied to the information
technology industry, will climb to 3.3 million in 2015 from
about 400,000 this year. This shift of 3 million jobs
represents about 2 percent of all American jobs.
``It's a very important, fundamental transition in the I.T.
service industry that's taking place today,'' said Debashish
Sinha, principal analyst for information technology services
and sourcing at Gartner Inc., a consulting firm. ``It is a
megatrend in the I.T. services industry.''
Forrester also estimated that 450,000 computer industry
jobs could be transferred abroad in the next 12 years,
representing 8 percent of the nation's computer jobs.
For example, Oracle, a big maker of specialized business
software, plans to increase its jobs in India to 6,000 from
3,200, while Microsoft plans to double the size of its
software development operation in India to 500 by late this
year. Accenture, a leading consulting firm, has 4,400 workers
in India, China, Russia and the Philippines.
Critics worry that such moves will end up doing more harm
to the American economy than good.
``Once those jobs leave the country, they will never come
back,'' said Phil Friedman, chief executive of Computer
Generated Solutions, a 1,200-employee computer software
company. ``If we continue losing these jobs, our schools will
stop producing the computer engineers and programmers we need
for the future.''
In the hourlong I.B.M. conference call, which took place in
March, the company's executives were particularly worried
that the trend could spur unionization efforts.
``Governments are going to find that they're fairly limited
as to what they can do, so unionizing becomes an attractive
option,'' Mr. Lynch said on the recording. ``You can see some
of the fairly appealing arguments they're making as to why
employees need to do some things like organizing to help
fight this.''
The I.B.M. executives also warned that when workers from
China come to the United States to learn to do technology
jobs now being done here, some American employees might grow
enraged about being forced to train the foreign workers who
might ultimately take away their jobs.
``One of our challenges that we deal with every day is
trying to balance what the business needs to do versus impact
on people,'' Mr. Lynch said. ``This is one of these areas
where this challenge hits us squarely between the eyes.''
Mr. Lynch warned that with the American economy in an
``anemic'' state, the difficulties and backlash from
relocating jobs could be greater than in the past.
``The economy is certainly less robust than it was a decade
ago,'' Mr. Lynch said, ``and to move jobs in that environment
is going to create more challenges for the reabsorption of
the people who are displaced.''
The I.B.M. executives said openly that they expected
government officials to be angry about this trend.
``It's hard for me to imagine any country just sitting back
and letting jobs go offshore without raising some level of
concern and investigation,'' Mr. Lynch said.
Those concerns were pointedly raised on June 18, when the
House Small Business Committee held a hearing on ``The
Globalization of White-Collar Jobs: Can America Lose These
Jobs and Still Prosper?''
``Increased global trade was supposed to lead to better
jobs and higher standards of living,'' said Donald A.
Manzullo, an Illinois Republican who is the committee
chairman. ``The assumption was that while lower-skilled jobs
would be done elsewhere, it would allow Americans to focus on
higher-skilled, higher-paying opportunities. But
[[Page S10500]]
what do you tell the Ph.D., or professional engineer, or
architect, or accountant, or computer scientist to do next?
Where do you tell them to go?''
The technology workers' alliance is highlighting I.B.M.'s
outsourcing plans to help rally I.B.M. workers to the union
banner.
``It's a bad thing because high-tech companies like I.B.M.,
Microsoft, Oracle and Sun, are making the decision to create
jobs overseas strictly based on labor costs and cutting
positions,'' said Marcus Courtney, president of the group, an
affiliate of the Communications Workers of America. ``It can
create huge downward wage pressures on the American work
force.''
Mr. Mehlman, the Commerce Department official, said
companies were moving more service jobs overseas because
trade barriers were falling, because India, Russia and many
other countries have technology expertise, and because high-
speed digital connections and other new technologies made it
far easier to communicate from afar.
Another important reason for moving jobs abroad is lower
wages.
``You can get crackerjack Java programmers in India right
out of college for $5,000 a year versus $60,000 here,'' said
Stephanie Moore, vice president for outsourcing at Forrester
Research. ``The technology is such, why be in New York City
when you can be 9,000 miles away with far less expense?''
Company executives say this strategy is a vital way to
build a global company and to serve customers around the
world.
General Electric has thousands of workers in India in call
center, research and development efforts and in information
technology. Peter Stack, a G.E. spokesman, said, ``The
outsourcing presence in India definitely gives us a
competitive advantage in the businesses that use it. Those
businesses are some of our growth businesses, and I would say
that they're businesses where our overall employment is
increasing and our jobs in the United States.''
David Samson, an Oracle spokesman said the expansion of
operations in India was ``additive'' and was not resulting in
any job losses in the United States.
``Our aim here is not cost-driven,'' he said. ``It's to
build a 24/7 follow-the-sun model for development and
support. When a software engineer goes to bed at night in the
U.S., his or her colleague in India picks up development when
they get into work. They're able to continually develop
products.''
Mr. HOLLINGS. Mr. President, a California IBM employee relations
executive said:
. . . three million service jobs were expected to shift to
foreign workers . . . I.B.M. should move some of its jobs now
done in the United States, including software design jobs, to
India and other countries.
I could read on and on. But you can see it. It is in the Record.
You have Business Week, ``High-Tech in China.'' I don't want to
include the magazine itself. But this is a quote from a Business Week
article from earlier this year:
Is Your Job Next? A new round of globalization is sending
up-scale jobs offshore. They include chip design, engineer,
basic research, financial analysis. Can America lose these
jobs and still prosper?
You have not just Business Week but Fortune magazine from June of
this year. Here is one of the executives quoted here:
``I've been in this business for over 20 years, and it's
the worst I've ever seen'', says David Hoffmann, CEO of DHR
International, a Chicago-based recruiting firm. ``Nothing
even comes close to this.''
. . . relocation of the jobs to offshore sites. Machines--
or low-wage foreigners--could just as easily do their work.
. . . shifting jobs to cheaper locales like India and the
Philippines. It's not just call centers anymore. Indian
radiologists now analyze CT scans and chest X-rays for
American patients in an office park in Bangalore, not far
from where Ernst & Young has 200 accountants processing U.S.
tax returns. E&Y's tax prep center in India is only 18 months
old . . . but the company already has plans to double its
size. Corporate America is quickly learning that a cubicle
can be replicated overseas as easily as a shop floor can.
Irwin Kellner, who is now at Hofstra University, was at Manufacturers
Hanover. We have had him before committees of the Congress year in and
year out. I quote:
``White-collar workers and college graduates are in a state
of shock,'' says Kellner. ``It appears these job losses are
permanent. They're not necessarily coming back when the
economy does.''
Mr. President, we are in deep trouble. We are into a real trade war.
We are into a thing of national survival.
Let me see here. Quoting:
At the University of Chicago Graduate School of Business,
96 percent of grads in 2000 had an offer when they collected
their sheepskin. Only 72 percent of last year's grads were as
lucky--and this year isn't shaping up any better. Even at
Harvard the percentage of grads without job offers has gone
from 3 percent in 2000 to 13 percent now. For schools further
down the food chain, almost half the class will graduate
without even one offer.
Quoting further:
. . . in the past two or three years companies have turned
to India and the Philippines for much more sophisticated
tasks: financial analysis, software design, tax preparation,
even the creation of PowerPoint presentations.
Quoting still further:
And how cheap. Starting pay for an American accountant,
says Kline, typically ranges from $40,000 to $50,000 [in the
United States]. In Bangalore the accountants are paid less
than half that.
Another quote from the article:
. . . Forrester Research predicts that 3.3 million service
jobs will move to countries like India, Russia, China, and
the Philippines.
The firm of A.T. Kearney talked about shifting 500,000 jobs, or 8
percent of the U.S. workforce, abroad by 2008.
I quote:
Any function that does not require face-to-face contact is
now perceived as a candidate for offshore relocation.
So, Mr. President, I could go on and on. But let me just say, we are
in a struggle for our economic survival. I have talked to you that free
trade is a loser. We are losing all those jobs. And who is the enemy?
Not just General Motors, not just IBM. I say it authoritatively because
I know who wants this losing trade bill--you can start with the
National Association of Manufacturers. I got into a struggle with
Victor Schwartz there in the 1970s, 25 years ago. But it is not only
the National Association of Manufacturers. It is the Business
Roundtable, the Conference Board--yes, my dear colleagues, the United
States Chamber of Commerce.
The United States Chamber of Commerce is no longer interested in main
street America. It was. I won U.S. Chamber of Commerce awards during my
1992 race. Bob Thompson of Greenville, SC, was the president. And I was
the poster boy of the United States Chamber of Commerce. We had stopped
labor law reform. We had eight cloture votes. My distinguished friend
Russell Long was chairman of the Finance Committee, and we agreed the
eighth vote would count. That would decide it. We would not go any
further. And up until about 20 minutes before the vote, he had me beat.
I heard from a friend that I might be able to persuade Ed Zorinsky of
Nebraska, and I raced over to the fourth floor of the Russell Building.
The rollcall had already been called. And I saw Ed coming down the
hall, and I said: Ed, I need your help. And he said: I will help you,
Fritz.
And we called that roll, and we won the eighth rollcall vote on
cloture. This crowd gets steamed up over two or three cloture votes. So
let's get to the record. I helped defeat an eighth cloture vote myself.
And as a result, I was the poster boy of the United States Chamber of
Commerce.
Now, Tom Donohue--a nice fellow, absolutely honest--I worked with him
when he represented the truckers. He knows nothing about international
trade, but he is going for the money. He is for tort reform. I never
heard him mention a bit about tort reform when he represented the
truckers. But now he is, by gosh, the expert on free trade, free trade.
When I ran in 1998, they put out pamphlets against me. They endorsed
my opponent, even though I had been their poster boy. I had not changed
my vote. I was the same way in trade in 1998 as I was in 1992. But you
can see how this crowd is. They headed for the overseas barn. I can
tell you that right now.
So you have the National Association of Manufacturers, you have the
Business Roundtable, you have the Conference Board. You have the United
States Chamber of Commerce. I have won about six of these National
Federation of Independent Business small business awards, but now they
are being taken over. The U.S. Chamber and the Business Roundtable have
gotten hold of them and said: Oh, we are going to get you some
writeoffs, some tax breaks, too. So they are for free trade now.
To increase consumer demand, you have to have consumers. In order to
have consumers, you must first have producers. And in order to have
producers, you have to have jobs. And we are losing them hand over
fist.
I have been the author of five textile trade bills that have passed
the Senate. Four of those bills have gone to the President of the
United States. Four have been vetoed--vetoed. President
[[Page S10501]]
Carter vetoed one. President Reagan vetoed two. And President George
Herbert Walker Bush vetoed the last one. And we came within two votes
over on the House side of over turning the veto. We had a majority, but
we did not have the two-thirds necessary to override.
The other enemy is the Retail Federation. They order so many hundred
thousand dozen shirts, or whatever it is, from China. Then, if the
market is good, and they run short, they call up New Jersey quick and
get another hundred thousand dozen.
Now, what they get from New Jersey and what they get from China is
not the same price. They get a much greater profit on the Chinese
import than they do on the New Jersey shirt. I know because I got a New
Jersey shirt on. Yes, sir, I believe in domestic production.
Years ago, I used to represent Pontiac folks, and a bunch of other
automobile dealers. Once I bought a new car, and I was so careful to
buy a domestic car; no foreign car. My neighbor said: Fritz, how much
did you pay for this new Pontiac? I was looking at the sticker price,
when I see on the sticker: FOB Montreal. I had bought a foreign car. I
had bought a foreign car and didn't even know it. Pontiac had gone to
Canada to make it because they saved $800 on the health bill on every
car.
So you can understand, this has been going on for years. But we are
draining the swamp. There aren't jobs left in America.
And you cannot find a hometown newspaper that has endorsed
protectionist trade--I don't mind saying the word.
You have to protect your standard of living. We Republicans and
Democrats, we say: Clean air, clean water, minimum wage, Medicare,
Medicaid, plant closings, parental leave. If you put that requirement
on manufacturers, you have to protect it. You can't just go over where
they have none of those protections and 60 cents an hour.
The newspapers make a majority of their profit on retail advertising.
So the retail federation and all the big stores call the main
advertisers. They go down to the editors and they give them a handout.
I have compared the editorials in different parts of the country. They
give them the handout, and they write the editorial. Free trade, free
trade--they think they are being wise.
Free trade loses jobs. We are losing the jobs right and left. But
everyone is for free trade: the hometown newspaper, the Business
Roundtable, the Conference Boards, the United States Chamber, the
retailers, all of K Street. Have you ever had a K Street lawyer come
here and ask you to vote against free trade? You can't find one.
You and I are paid to protect the jobs of America. We are not paid to
make a profit. But come on, you can't find a K Street lawyer who wants
to protect jobs.
In the Administration they think this is wonderful. They can open up
the islands of Indonesia and transship through Singapore the electronic
parts back into America from cheap labor. So they are all working
against us.
It is not just President Bush. President Clinton was for free trade,
free trade. He is the one who passed NAFTA. He was the one who was
going to open up and create 200,000 jobs. He impoverished the State of
South Carolina, I can tell you that. We have lost 61,000 textile jobs
in my little State. Where we have a BMW plant, 3 years ago we had 3.2
percent unemployment. It is over 8 percent unemployment now.
Don't tell me about free trade, free trade. I have watched the
outflow here. So you have the Government against us. Then if everyone
is against us, who could be for us, asks the Good Book? Us. That is all
I am trying to do, is wake my colleagues up to get out of this
nonsense. I see the Senator from Wisconsin. I know the plants out
there, too. I did work for them. I carpetbagged a few of those plants,
too. I brought them to South Carolina.
But we have to move to rebuild America. We have to stop whining: I am
for fair trade. I am for balancing the field, leveling the field.
That is all garbage. That is baloney, if I have ever heard it. We
have to start and compete in the international economy. It is a trade
war. It is very viable. It is very fair. It is very understandable. We
have to get in there. Having rebuilt Europe and the Pacific rim, we
have to, by gosh, get in there, and in order to remove a barrier, raise
a barrier. Then remove them both, go by their rule book. We are Goody
Two-shoes, and we want to set the good example like we have done for 50
some years. And we have lost our shirt in manufacturing.
We can go right to the tax law. I am going down the list now. We can
go to the tax law that says if you manufacture overseas and keep your
profit, you can build a new plant. You don't have to pay taxes on that
profit. Or we can turn around and go along with Charlie Rangel on the
House side--I have the bill in on the Senate side--and say if you
manufacture and keep your jobs in America, you get a tax credit. If you
go overseas, you lose. You get a tax increase.
That is what we ought to do. Make it so rather than trying to revive
Europe and the Pacific rim, we have to revive the United States.
Mrs. BOXER. Will the Senator yield for a question?
Mr. HOLLINGS. I am delighted to.
Mrs. BOXER. It is very interesting that you said this because when we
heard from Mr. Wolfowitz in front of the Foreign Relations Committee
where we had a hearing on the rebuilding of Iraq, the first thing he
said matched what Mr. Bremer said, who is in charge of the rebuilding.
He said: Those people over there need jobs. They need to get the
economy going. They need jobs.
And I say to my friend, isn't there something ironic about that, that
there is a total understanding of what the folks in Iraq need, when I
could say in my State and yours and all through America, this should be
the priority of the President in this country.
Mr. HOLLINGS. Certainly, it ought to be. That is our duty here in the
Congress. Article I, section 8 of the Constitution says not the
President but the Congress of the United States shall regulate foreign
commerce. But what have we done? We have got in a fix through the
Finance Committee and Ways and Means. They got fast track. And I would
like to vote for Chile because Chile has a free economy, a market-based
economy, a revered judiciary, labor rights, environmental laws, and a
balanced budget. But I can't vote with that immigration thing included.
Under fast track, I can't amend. I can't debate. I can't discuss. I
can't do anything.
Let me bring up a red herring that will excite everybody. I
introduced it in January. I said: Good gosh, we are going to war, and
we don't have a way to pay for it. We paid for the Revolutionary War
with a property tax. That is the first property tax that passed in this
country. We got to the Civil War, and Abraham Lincoln put on an estate
tax and a dividend tax. And we were running around here talking about
taking off the estate and dividend tax.
I said, come on, we paid for World War II. We paid for Korea. We paid
for Vietnam. We paid for the gulf war. The Saudis did a good bit of
that, as we all know.
I said, I am going to put in a value-added tax. Every industrialized
country has a value-added tax. Why? Why do I want to do that? It is
twofold: One, if I take and manufacture this desk in Washington, DC, I
have to pay all the income, sales, corporate taxes. And when I ship it
over to Paris, France, I add on a 17 percent VAT.
If I manufactured that same desk in Paris, France, when it leaves the
port of La Havre to come to Washington, we rebate the 17 percent. And
so it is a 17 percent advantage to manufacture in Paris rather than in
Washington. I want to reconcile that differential immediately with a
value-added tax. I want to pay for the war. That is the trouble this
country is in.
Bill Clinton brought the budget deficit down. He put in an increase
in tax. I voted to increase Social Security. I voted to increase the
gasoline tax.
I voted to increase the top payer income tax. We voted also to cut
spending, and we had an 8-year economic boom. And now we just had three
quarters of recession in 2001, a bad economy all through 2002, and they
kept blaming it on the war. The war in Iraq only costs $4 billion a
month. That is $48 billion year, and when the President talked on
February 27, he said: I have $1 trillion for unforeseen needs.
The tax cuts have wrecked the economy. Everybody knows it. They are
[[Page S10502]]
running around--jobs and growth, jobs and growth--like a bunch of
children trying to sell that nonsense. So we ought to pay for the war,
reconcile this trade differential and manufacturing differential. We
ought to, by gosh, enforce our dumping laws. The competition is not for
money or profit. The competition is for market share.
When the Japanese sell below cost in the United States and make it up
in the domestic market in Tokyo, we have to enforce dumping laws. The
special Trade Representative runs out to do that and says we are going
to do away with the dumping laws. That is loss leaders.
I had an antitrust case and carried it to the Supreme Court on a loss
leader. I know the law of loss leaders. That is what you have in
international competition. There are a bunch of loss leaders and they
keep taking over, even this year, a greater share of the American
automobile market. So we have to enforce our dumping laws. We have to
eliminate the Trade Commission. That is another gimmick put in by the
Finance Committee.
The Finance Committee--when you have a dumping violation, you file it
before the International Trade Administration. They investigate and
make a finding. After they make a finding, they have a sweetheart deal.
They kick it over to the International Trade Commission, and they never
find injury. I can tell you they have two or three exceptions since I
have been talking about it, but we can save $43 million and let the
finding entity, the International Trade Administration, that gives the
penalty on what is to be done. We can save money there.
We need more Customs agents, and we need a department of trade. We
have the Department of Manufacturing in the Commerce Committee. We can
gear up for the trade war. Don't worry about the Afghan war. I think we
may have created more terrorists than we have gotten rid of. The jury
is out in Iraq, as to whether or not we can work out the peace. I can
tell we don't have any friends in downtown Baghdad. It is a shooting
gallery. They are killing our soldiers every day.
What we have to do is get into this trade war and compete.
Now, finally, the administration says they are going to get up
consumer confidence. They have passed three voodoo tax cuts. Of course,
Ronald Reagan passed voodoo 1, and George Herbert Walker Bush is the
one who called it voodoo. How are you going to cut your revenues and
increase your revenues? You never do that. You will never find a
government doing that. But come to Washington, and they know everything
up here. So they are going to increase the consumer confidence with tax
cuts they had in 2001, 2002, and already this year.
With those three tax cuts of over $3.1 trillion, here is the news
that came out yesterday: the consumer confidence index dropped 7 points
to 7.6 in July, a sharp and unexpected drop.
We have a $698 billion budget deficit projected for this year. It is
already $503 billion.
(Mr. CRAPO assumed the Chair.)
Mr. President, you can see the effects. You can see Wall Street is
frozen. They are not going to invest when the interest rates are on the
increase.
The Concord Coalition, headed up by former colleagues, Senator
Kerrey, Senator Nunn, and Senator Rudman and now chaired by none other
than a Republican, Pete Peterson, former Secretary of Commerce under
President Nixon, released its report on fiscal responsibility. Overall,
you have the Republican chairman of the Concord giving them an ``F.''
So there we are. We don't want to compete. We have a job policy in
the U.S. Congress of actually eliminating jobs like gangbusters.
Our security is like a three-legged stool. We have the one leg of the
values that we have as a nation. Everyone in the world--at least until
Iraq--knew that we stood for human rights, individual freedom, and
democracy. That second leg, military, is unquestioned. The third leg,
economic, is fractured--intentionally so with the Marshall Plan. But we
prevailed with capitalism over communism in the cold war. It worked.
But now we have taught corporate America a bad lesson, and in order
to compete and make even greater profits, whether it is high-tech or
service or hard manufacture, they are leaving the Nation in droves. We
are sitting by talking about a little Energy bill or a judgeship.
The country is going to hell in an economic hand basket and we are
the ones responsible under the Constitution and we are not doing
anything about it.
I yield the floor.
The PRESIDING OFFICER. The Senator from Wisconsin is recognized.
Mr. FEINGOLD. Mr. President, I ask unanimous consent that I may speak
in morning business, and then be followed by the Senator from
California, Mrs. Boxer.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
U.S. Policy in Iraq
Mr. FEINGOLD. Mr. President, I enjoyed the comments very much of the
Senator from South Carolina, and I agree so much with his comments
about our trade policy. I think it is possibly the leading issue in the
country right now.
Mr. President, I rise to comment on U.S. policy in Iraq. We have
heard much about the President's reference in the State of the Union
Address to intelligence suggesting that Saddam Hussein had recently
attempted to secure uranium from Niger. Now we know our own
intelligence agencies did not believe that information to be credible.
It was employed in a reckless effort to sell the American public on a
predetermined policy course.
I do applaud President Bush for taking responsibility for his words,
but for weeks this administration reacted with a combination of denial
and spin, and by choosing to make the Central Intelligence Agency, and
then much later the Deputy National Security Advisor, the scapegoats
for this incident.
I wish to state for the record that in all of the briefings leading
up to the decision to go to war in Iraq, I found the CIA to be among
the most straightforward and the most professional of those making
presentations to help Members of Congress understand the facts. The
facts in the briefing room never matched the public rhetoric of the
administration's hard sell.
The hard sell was an encompassing thing. It included an array of
justifications for taking up arms that seemed to shift from day to day
and week to week. Today we find the administration returning to that
menu of reasons for invading Iraq, claiming that whatever happened with
the State of the Union, Saddam Hussein was a brutal dictator and so at
any case we did the right thing.
Saddam Hussein was a brutal dictator, and I join the vast majority of
the world in being happy to see him removed from power. But that was
never the bottom line. The bottom line was the regular invocation of
the line: ``We don't want the smoking gun to be a mushroom cloud.'' The
bottom line was weapons of mass destruction. To pretend otherwise now
is to suggest to the world that the United States of America will
invoke one pretext for invading another country and then conveniently
drop the subject later. That suggestion is so far from what this
country's foreign policy should ever be about, so removed from what I
firmly believe to be the intentions and desires of the vast majority of
Americans, that it must be repudiated. But I fear that the hard sell,
the use of debunked intelligence, the implied linkages to other issues
have fostered that perception around the world, and that will make it
harder for others to cooperate with us on the real foreign policy
priority. The real foreign policy priority is the fight against
terrorism.
The administration's hard sell recognized that fighting terrorists
who attacked this country on September 11, 2001, is the most important
national security issue for Americans. So even though they were selling
us something else--selling us an invasion and occupation of a major
Middle Eastern country even though intelligence did not reveal solid
ties to al-Qaida--the administration, nonetheless, incorporated
reference to al-Qaida in its hard sell, and they still do.
President Bush told us in his speech on the USS Lincoln that the
battle of Iraq was won in a war that began on September 11. But this
administration has never made any kind of compelling case to suggest
that one had anything to do with the other.
This week, before the Senate Foreign Relations Committee, Deputy
Defense
[[Page S10503]]
Secretary Paul Wolfowitz suggested that Iraq--Iraq--rather than
Afghanistan is the ``central battle'' in the fight against terrorism,
and he claimed that al-Qaida attacks occurred in part because the
United States was pursuing a policy to contain Saddam Hussein.
Secretary Wolfowitz did not say that the Iraqi Government had
anything to do with the planning of the attacks on Khobar Towers or the
attack on the USS Cole, but there these things are, in the same breath,
in the same context. The rhetorical linkages continue because the hard
sell is a hard job, especially now as the magnitude of the task before
us is becoming clearer.
Five American soldiers were killed in Iraq over the weekend and
another was killed on Monday and another on Wednesday and another on
Thursday, marking 51 United States combat deaths and over 100 United
States troops killed since the President declared the end of major
combat operations in Iraq in May. We can all hope and pray that these
attacks will decrease in their frequency and lethality, but there is no
certainty that the attacks will let up anytime soon.
Despite the ``triumphant mission accomplished'' rhetoric in which the
administration indulged several weeks ago, the friends and families of
our men and women in uniform are living with the possibility of the
knock on the door, the horrible news coming home. They are suffering
with every news story, with every report, desperately worried about
their husbands and wives, sons and daughters, and fathers and mothers.
While, of course, they feel proud of their loved one's service, they
also feel tremendously worried.
Yes, across America, there is a growing sense of unease--unease about
the hostility our troops are facing; unease about the fact that the
United States and the United Kingdom are nearly alone in trying to take
this on, having alienated potential allies in the lead-up to war;
unease about the giant task that lies ahead and the tremendous
resources that will be required in terms of manpower, in terms of time,
and in terms of money to see this through; unease about intelligence
suggesting that the terrorists are planning more hijackings this
summer, just as we read reports about insufficient homeland security
resources forcing cuts in the number of flights that will have Federal
air marshals on board. The fact is, many Americans do not feel more
secure today; they feel vulnerable.
Months ago, I found I could not support a march to war without
getting real answers to some basic questions about the cost and
commitments we would be undertaking in the name of the American people.
And I could not support a march to war when it appeared that our
unilateral approach to Iraq would harm the progress of the fight
against terrorism. But I want to tell you, Mr. President, I was deeply
concerned about the issue of weapons of mass destruction. So I kept
asking about the plan for securing such weapons and the means to make
them so that they would not slip away in the chaos of war, secreted
across borders or sold off to the highest bidder. No matter how hard I
tried, over and over, I never got a real answer. And today we still
have not found this material, a plain fact that raises very serious
security concerns.
At some point in this debate, some seemed to be under the impression
that asking questions and demanding that questions be answered
signified something less than full support for our Armed Forces and
something less than a complete commitment to the security of the United
States of America. They were dead wrong. Asking questions, demanding
answers, and exercising our judgment are just what the American people
send us here to do. It is how we protect our interests. It is how we
ensure that the brave men and women of our military do not find
themselves in harm's way without an adequate explanation of their
mission, without adequate training for the task before them, without
the sense of futility or confusion that makes it that much harder to
cope with constant threats and pervasive danger.
Now that we are beginning to get some answers, now that we are
hearing that our military presence alone is costing about $1 billion a
week, now that it is clear that rosy scenarios about reconstruction in
Iraq will be self-financing are revealed to be the worst kind of self-
deluding, wishful thinking, it is now that we need to look at the facts
and adjust our course accordingly. Now we have GEN Tommy Franks'
successor, General Abizaid, acknowledging that our troops are facing a
``classical guerrilla-type campaign'' that is ``getting more
organized.''
Do you know what is happening? The hard sell is giving way to the
hard truth. These probably are not the answers the American people were
expecting when their questions were met with evasion or with vague
exhortations to ``just trust us.'' I did not support the decision that
led us to this place, but I wholeheartedly support the troops who are
in the hot seat now, and I support their families. I support the next
generation of Americans who deserve better than to be saddled with
massive debts, in part because their Government was unwilling to do
what it takes to get capable partners on board to help us shoulder the
burden that now weighs so very heavily on this country.
I believe we must keep the questions coming. We must get real
answers, and we must all work together to move toward a wiser approach.
I do not want to hear a hard sell anymore. I want to hear the answers
to the hard questions, and I want to work on the hard problems and the
hard choices that are before us.
Mr. President, I yield the floor.
Mrs. BOXER. I ask unanimous consent that at the completion of my
remarks, Senator Baucus be recognized for as much time as he may
consume.
The PRESIDING OFFICER. Without objection, it is so ordered.
Funding For Iraq
Mrs. BOXER. Mr. President, before Senator Feingold leaves the
Chamber, I thank him for his comments. Since he is my seatmate on the
Foreign Relations Committee, which in itself is an honor for me, I
recall that we were very skeptical from the start about going it
essentially alone in Iraq. He and I have pressed very hard to work
through the U.N. weapons inspectors and to have the whole world
breathing down Saddam's neck. Now, as it turned out, we essentially did
it alone and we are bearing the burden of these tragic deaths every
day, deaths that are almost going, I hate to say, unnoticed now,
although some of us talk about the brave soldiers we are losing.
When it comes to the funding of this war, we are up to $45 billion to
$50 billion a year, even without the rebuild. As my friend knows,
because he has been a major force for fiscal responsibility, we cannot
even share that burden. Even when countries such as the Poles come
forward, and we are grateful to them for sharing the burden on the
ground, we are paying for it. How can we sustain these costs at a time
when our deficits are skyrocketing?
So we are in a bit of a mess, and I hope the President will move more
forcefully toward internationalizing the rebuilding of Iraq and sharing
the burden because that is the answer. That is what a real leader has
to do.
We all said that the 21st century would be America's century but that
does not mean we do it alone. It means we lead the world against
tyrants and against the war on terror. So I wanted to thank my friend
before he left the Chamber.
Nomination of Carolyn B. Kuhl
Mrs. BOXER. Mr. President, I rise today to talk about a judicial
nomination that has gotten no attention on the Senate floor thus far
and yet we are going to have a vote on this nomination, as I understand
it, tomorrow, the nomination of a woman from California which was ill
advised from the start because there was no advice and consent done at
all from this administration, at least to this Senator.
When I was notified that this nomination was going forward, I had
several meetings with the Bush administration people and I asked, why
are you choosing someone who is so far out of the center and so far to
the extreme right, when the President said he would govern from the
center?
In fact, I will never forget the night he declared victory, after the
Supreme Court made their ruling, and the President came out, very
appropriately, and I thought somberly, and said, I am going to bring
this country together and I am going to govern from the center. I took
him at his word.
When President Clinton was in office, I got a pretty stern lecture
from Chairman Orrin Hatch, for whom I have
[[Page S10504]]
great respect. He said, Barbara, I want you to know that if you
recommend any judges that are outside the center, forget about it. It
is not going to happen. We are not going to let it happen. We want
moderates.
I do not understand why that does not apply now. It applied to
President Clinton. It ought to apply to President Bush. When President
Bush said, I want to govern from the center, I took him at his word.
When the Constitution says the Senate shall be part of the advice and
consent function, that does not mean we roll over and play dead to any
President, be he or she Democrat or Republican. It means the President
should seek our advice and must win our consent.
So when we see a judicial nominee come to this floor, where one of
the home-state Senators never even sent back what we call the blue
slip, which is sort of the permission slip, giving permission to move
forward, when we see that being ignored after it said for many years on
the slip, this nomination will not go forward unless you send back the
slip--I ask unanimous consent that the blue slip be printed in the
Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
U.S. Senate,
Committee on the Judiciary,
Tuesday, August 1, 2000.
Dear Senator: You will kindly give me, for the use of the
Committee, your opinion and information concerning the
nomination of: to be .
Please return this form as soon as possible to the
nominations office in Dirksen G-66. No further proceedings on
this nominee will be scheduled until both blue slips have
been returned by the nominee's home state senators.
Respectively,
Orrin G. Hatch,
Chairman.
Via courier to:
REPLY
To: Senator Hatch, Chairman
______ I approve
______ I oppose
Comments:__________
__________
U.S. Senator.
Mrs. BOXER. There is a note from Senator Hatch when he was Chairman
of the Judiciary Committee during the Clinton administration, which I
would like to read. The blue slip we used to receive from Senator Hatch
said: ``Please return this form as soon as possible . . . No further
proceedings on this nominee will be scheduled until both blue slips''--
that means from each Senator--``have been returned by the nominee's
home State Senators.''
That is what we all used to receive from Chairman Hatch. That was his
former policy. Then all of a sudden it changed when the President
changed.
So on process, this was a nomination that should not be before us.
Then the bar kept being raised. Senator Feinstein said, let's have a
hearing on this nominee and let me see whether I think she ought to
move forward. Senator Feinstein listened, asked deep questions,
pondered, and then said, no. And she will express for herself why she
said no.
So we have two home State Senators against this nomination. What
happens? The nominee is coming to the floor for a vote. We have not
even debated it or discussed it.
I wanted to apologize to my friend from Montana, because I know he is
talking on another subject, but this is crucial. I predict this Senate
will not give the go-ahead to this nominee and I want to make the
record clear as to why.
It is pretty clear that if we look at the values shared by the
American people on such matters as privacy, civil rights, women's
rights, access to the courts, whistleblower protection, legal
intimidation, the right to the disabled and the environment, on every
single one of these very key American values this nominee is way
outside the mainstream. There are years of actions that prove what I
have said.
I do not relish this situation. Everyone who knows me knows that I
fight so hard for women's rights and for women to move forward and to
break the glass ceiling, but when we see the record of this nominee, I
have no choice. I do not deserve to be here if I do not make the case
against this nomination and why I believe the proceedings should not
move forward.
So let me first show how many groups are against this nominee and how
controversial this nomination is. I am going to go through these. I am
not going to read every name on it but I want to give a sense of this
list: the AFL-CIO, the Alliance for Justice--I am skipping some--Asian
Pacific American Labor Alliance, Association of Flight Attendants,
Breast Cancer Action--and I am going to explain why--Breast Cancer
Fund, California Women's Law Center, Clean Water Action, Committee for
Judicial Independence, Communications Workers of America, Defenders of
Wildlife, Earthjustice, Feminist Majority.
Let's go to the next chart. I am skipping many of these because of
the time constraints I feel but let me continue. Foundation for a
Smoke-Free America--and I will explain why they got involved--Friends
of the Earth, Japanese American Citizens League, International
Federation of Professional and Technical Engineers, Los Angeles African
American Women's Political Action Committee, Mineral Policy Center,
MoveOn.org, NARAL Pro-Choice America, National Center for Lesbian
Rights, National Council of Jewish Women, National Employment Lawyers
Association, National Organization for Women, National Women's Law
Center, Natural Resources Defense Council. Again, I am reading a
partial list here.
Another list, and this is incredible. This is one judicial nominee
that is coming before us the day before we leave when we are in the
middle of an Energy bill that the other side says is so important. They
are throwing at us one of the most controversial nominees one could
find. Office and Professional Employees International Union,
Progressive Jewish Alliance, San Francisco Board of Supervisors, San
Francisco La Raza Lawyers Association, Sierra Club, Smokefree
Educational Services, the Foundation for Taxpayer and Consumer Rights,
UNITE, United American Nurses, United Farm Workers, United Food and
Commercial Workers International Union. Again, I am reading a partial
list.
The last chart: Union of Needletrades, Industrial and Textile
Employees; Wilderness Society; Women's Committee, Labor Committee for
Latin American Advancement; Women's Leadership Alliance; Women's
International League for Peace and Freedom, and a number of members of
the California delegation. This gives a sense of the breadth of
opposition.
Let me start off telling a story why so many people are so upset
about this nomination. It has to do with a case Judge Kuhl decided in
the California courts that deals with a woman who is a cancer victim. I
will read this woman's public statement.
My name is Azucena Sanchez-Scott. I am a survivor of breast
cancer and Judge Kuhl's courtroom. I stand before you now
because I want to tell my story so that other people will
never have to re-live it.
This is a woman who was harmed by Judge Kuhl in a way she will never
forget for the rest of her life.
Nothing about my cancer is easy. Not the chemotherapy, not
the fear, and certainly not the emotional pain or
disfigurement. As a person battling cancer, each visit to the
doctor brings questions about my future and my health. That
is where I was when my doctor and a stranger walked in. The
doctor offered no introduction and proceeded to examine me
and asked that I disrobe. It was only when I left the office
and inquired with the receptionist that I learned that the
stranger was a sales representative for a drug company with
no medical reason for being there.
She continues:
As a cancer survivor, I trusted that my doctor would make
decisions in my best interest and my doctor violated that
trust. The injustice, however, did not end there.
Judge Kuhl heard my case and found no fault in the doctor's
actions. She ruled that it was my obligation to protect my
privacy in his exam room. That I should have battled cancer
and my doctor's judgment at the same time. And, she denied my
request to allow a jury trial to determine if the intrusion
was highly offensive to a reasonable person.
We were taught not to question our doctors and I know as a
medical health professional that I have an obligation to
protect my client's privacy. I was shocked to find that the
doctor did not honor this obligation and I think that is why
Judge Kuhl's decision was unanimously reversed on appeal. If,
however, there is any duty for a citizen to ask questions as
a standard to protect our rights to privacy, it lies with the
Judiciary Committee.
The point is, a woman has breast cancer. She goes to the doctor for a
[[Page S10505]]
brutally difficult exam. She is humiliated in the office of that doctor
by a total stranger, a drug salesman she later finds out, and Judge
Kuhl rules against this woman, against her privacy rights, and tells
her she should have asked, she should have known to ask who this
stranger was that her doctor brought into the room.
This is someone the Bush administration wants to promote and give a
lifetime judgeship to?
I can tell you what the breast cancer groups say. They normally do
not get involved in these fights, but they are involved in this one.
This is from Breast Cancer Action:
On behalf of Breast Cancer Action and our over 8,000
members in California, I am writing in support of your
opposition to the nomination of Judge Carolyn Kuhl to the
Ninth Circuit Court of Appeals.
They say:
Based on Kuhl's refusal to protect fundamental woman's
rights in cases such as this, the BCA opposes her nomination.
This is highly unusual.
We have another letter from another organization I want to share.
How can anyone be so cold and heartless as to tell someone suffering
like this that they have to ask, Who is in the room? in a doctor's
office?
The Breast Cancer Fund wrote:
Quite simply, Judge Carolyn B. Kuhl does not show the level
of sound judgment necessary for an appellate court judge.
I know we have mostly men in the Senate, although we are moving
forward with about 14 women. But any woman in the Senate will tell you,
going for that type of an exam, even if you are totally healthy and not
just coming out of a breast cancer operation, it is very difficult, it
is very nerve racking, it is very embarrassing.
To have a woman judge rule against Ms. Sanchez-Scott's privacy is
extraordinary to me. To have these kinds of letters from groups like
this is extraordinary, and it ought to be extraordinary to every single
Senator who should vote not to allow this nomination to go forward.
I will quickly go through the other issues where Carolyn Kuhl is
outside the mainstream. We mentioned she is outside the mainstream on
privacy rights. She is outside the mainstream on civil rights.
Kuhl urged the Reagan administration to adopt a position
that would grant tax-exempt status to Bob Jones University.
More than 200 lawyers in the Justice Department's civil
rights division signed a letter in opposition to this
position. The New York Times (May 26, 1983) characterized her
as part of a ``band of young zealots'' who urged the legal
switch.
She went forward and defended tax-exempt status for Bob Jones
University even though it discriminated on the basis of race. Is this
someone we want to elevate? She is outside the mainstream on civil
rights.
She is also outside the mainstream on access to the courts. What
makes our country so great is that we have the ability to go to the
courthouse door and get into that courtroom. We have that right as
Americans.
She argued that organizations do not have standing to sue in Federal
court on behalf of their members. She called on the Supreme Court to
reject the principle of associational standing, effectively undermining
the ability of unions to enforce labor laws.
So if you believe, as she does, that a union does not have a right to
sue on behalf of the members, that even, say, the NRA, the National
Rifle Association, does not have a right to sue, whether the Chamber of
Commerce should not have the right to sue, whether an environmental
organization should not have the right to sue on behalf of its members,
then go ahead and support her. But that undermines a basic, fundamental
principle of our laws that organizations have standing to sue on behalf
of their members. Whether it is the PTA or any other group, they should
have the right and have their day in court.
Carolyn Kuhl is outside the mainstream on women's rights. As I go
through this, I hope everyone understands it is not as if there were
not other people who could have been nominated in California, great
people who were Republicans in my State. And I begged the
administration to do it. They said: Send a list. And I sent them a list
of several wonderful Republicans in my State who would have been great
nominees. No, they were going to go forward with this extreme
nomination--whatever their reasons, I cannot say--even in the face of
the two home State Senators' opposition.
Carolyn Kuhl supported a gag rule on title X funds, filing an amicus
brief on behalf of the American Academy of Medical Ethics, an
organization which represents more than 25,000 doctors who oppose
abortion. She argued for restricted access to contraception, imposing
additional requirements on recipients of title X funds.
We all know our country is divided on the right to choose. My State
is very strongly pro-choice, that is true. But in the country it is
split. I cannot believe we are split on the issue of contraception.
Here we have a nominee who is for limiting access to contraception.
This is outside the mainstream on women's rights. She ruled against a
rape victim in favor of an insurance company when she had the
opportunity to rule in favor of that victim and get that victim
support.
She supported a restriction on access to abortion and urged reversal
of Roe.
This is when she worked for the Department of Justice. This is what
she said:
. . . Roe v. Wade is so far flawed . . . that the Court
should reconsider that decision and . . . abandon it.
That is what she argued.
On the environment, Kuhl represented a large oil company that wanted
to avoid cleaning up polluted land.
Is that an American value, to stand on the side of a polluter and say
let the people take care of it if an oil company polluted their land? I
say it is outside the mainstream on the environment.
Legal intimidation--and this is very serious:
Kuhl ruled against an individual subjected to intimidation
and legal costs as a result of speaking out against Medicare
and insurance fraud. In unanimously overturning Judge Kuhl's
decision--
Unanimously overturning Judge Kuhl's decision--how far out of the
mainstream can you be when a court that is dominated by Republicans
overturns you unanimously?--
the California State Court of Appeals found her ruling
``would prolong both the [individual] defendant's predicament
and the [corporate] plaintiff's outrageous behavior.
Outside the mainstream on tobacco.
Kuhl was part of a team representing a tobacco company in
its effort to manipulate public policy.
That was the case State of Minnesota et al v. Philip Morris et al. On
the wrong side, out of the mainstream.
She was out of the mainstream on exposing corporate fraud. Kuhl
challenged the ability of whistleblowers to expose fraud against the
Government.
Imagine, instead of taking the side of the whistleblowers--and who
are whistleblowers? People who are willing to come out and tell the
truth. She challenged the ability of whistleblowers to expose fraud
against the Government. The case was United States ex rel Jason R.
Madden v. General Dynamics Corporation.
She also misrepresented the U.S. Government's position on the
constitutionality of the Federal whistleblower law in United States ex
rel Rohan v. Newert, in 1993.
Outside the mainstream on rights for the disabled. She argued airline
carriers do not have to abide by antidiscrimination statutes relating
to the disabled.
Do you know whom she took on in this case? The Paralyzed Veterans of
America.
It is hard for me to believe this record. It is hard for me to
believe you are going to have to vote to move this nomination along.
Why do we have all these groups very upset? Because they understand
what her record has been. Fighting on the side against paralyzed
veterans--it is unbelievable. Let me just say we will have a little
more debate on this tomorrow, but I want my colleagues to understand
that the way this nomination came to this Senate was just plain wrong.
It went against Senator Hatch's own rules that he laid down when
President Clinton was President. He said you had to have both Senators
sending back their slips to allow this to go forward. Senator Hatch has
changed that rule now that we have a different president.
Then, when we had two Senators against this nomination--we never
expected it would be here--when I spoke to the President's men, they
said:
[[Page S10506]]
``Give us some ideas of some mainstream people you might support. I was
happy to do it. I sent them a list of wonderful people.
As a matter of fact, one of the people I recommended is known to the
Senator from Oregon. One of the people I recommended for this position
was known to the Presiding Officer.
Instead of reaching out to the Senators from California and coming in
with a consensus nominee, for whatever reason the President chose to
continue with this nomination. I can tell you, in all my years, I have
never seen such an outcry from the people of this country.
I will close. A letter was sent to Senator Feinstein on May 6, 2003,
by Shirley Hufstedler, a former Ninth Circuit judge, and the first U.S.
Secretary of Education. She said:
I do not question Judge Kuhl's skill as a highly trained
lawyer. I am troubled by her lack of candor before her Senate
hearing and by her apparent insensitivity to the impact her
rulings have on some of the people who have come before her
as a judge.
That is an important point about which I didn't tell you. There were
a number of statements Judge Kuhl made before the committee that, when
asked in further detail after the hearing, she had to correct and
clarify what she had said to the members of the Judiciary Committee.
She said, Oh, I made a mistake. I was wrong. I didn't exactly say it
right.
So whether you look at her performance before the Judiciary
Committee, her actions within the Department of Justice during the
Ronald Reagan years, her actions as a private lawyer, or her actions as
a California judge, it all adds up to outside the mainstream, way
outside the mainstream. And it goes against what I believed President
Bush made as a commitment to the American people--that he would govern
from the center.
I have voted for many judges here, probably 90 percent, maybe high
80s. Many were judges I did not agree with, who were conservative, who
would not view the world as I view it. It is very rare--very rare--that
I have taken to the floor to make this point. I do not do it lightly.
This is not a personal attack. I have met Carolyn Kuhl. She is
delightful to talk to. But this is not about personalities and it is
not about gender and it certainly is not about religion. It is about
whether or not the advice and consent of the Senate was really sought
in this. It is about how Senators were disregarded, the home State
Senators who wanted to cooperate, who put forward names, and it is
about her lifetime of fighting for everything that is outside the
mainstream of America.
I do not think, after that decision on the breast cancer victim, and
that alone, that someone who would be that insensitive to say to
someone who was fighting breast cancer that you have to come in and you
have to ask your doctor who is in the room with you, that it is your
job--that kind of decision fails the test of compassion, sensitivity
and, above all, the law. She was wrong on the law. She was overturned
on the law.
For all those reasons, I beg my colleagues to stop this nomination
from going forward. Let's get another nominee, a Republican nominee, I
am sure--which President Bush has every right to do--but one who comes
from the mainstream, with mainstream values and mainstream life.
Mr. President, I yield the floor.
The PRESIDING OFFICER (Mr. Smith). The Senator from Montana.
Mr. BAUCUS. Mr. President, I thank my good friend from California,
Senator Boxer, for the statement she just made. For some, it is not
easy to stand up on the floor of the Senate and oppose the nomination
of a judge nominated by the President of the United States. For others,
it is not quite as difficult. But for the Senator from California, I
admire her for the clarity of her thinking and the position she has
taken because, frankly, I agree with it.
All of us in this body took an oath of office to uphold the
Constitution of the United States. The main framework of that
Constitution is the separation of powers with its powers allocated
equally among the legislative, executive, and judicial branches. When
our Founding Fathers wrote that Constitution, they were unsure about
what to do about judges. They debated. One of their proposals was that
the Congress send the names of potential judges to the President and
that the President choose from among those judges which one the
President wanted, and that is the one that would be named. It was a
very difficult issue to resolve. Why? Because the two branches of
government would be deciding which people would have lifetime
appointments serving in the third branch of Government; that is, the
judicial branch.
Why is this so important? It is so important because judges must be
impartial, and they must be fair. They have a very difficult job of
trying to interpret laws and interpreting the Constitution. We as
Americans feel much safer and we feel much better the more we know that
the judges in the district courts, the courts of appeal, and the
Supreme Court are people of the highest caliber.
Let me tell you that one of the greatest privileges I believe we have
as Members of the Senate is to recommend the names of potential
judicial nominees to the President of the United States. I have been
able to do that several times. It is very much a privilege to me
personally. In the exercise of that privilege, this is the process I
followed. I think it is one that honors the position of the judge in
either district court or the United States Courts of Appeals.
I asked in each instance seven or eight people in my State of
Montana--Republicans, Democrats, it didn't make any difference, some
lawyers, some law professors, businesspeople, people who I respected as
some of the best and smartest and most able in my State--to come up
with three names, one for the district court and one for the circuit
courts of appeal. I asked them to give me the three very best people in
my State. I don't care whether they are Republicans, Democrats, whether
they are known as conservatives, whether they are known as liberals,
just give me the best. And they did. I sat down with each of the three
and interviewed each of the three for several hours.
I can tell you it was a very difficult decision because they are
tremendous people.
Finally, I decided after a lot of thinking about all of this to
recommend to President Clinton the name of Don Malloy. Thankfully, he
nominated Don Malloy to the Federal District Court in the State of
Montana. He is a terrific Federal judge.
Why do I say terrific? I say terrific because both the plaintiffs bar
and the defense bar think he is just super. He is tough, he is fair, he
runs that court well, and he works very hard. Both plaintiffs and
defense attorneys think he is very fair and a very good judge. That
says a lot to me.
I did the same in the other case. When we had the opportunity to
recommend to President Clinton the nominee for the Ninth Circuit Court
of Appeals, it was the same process. I asked for the best. I didn't
care whether they were Republicans or Democrats. It didn't make any
difference. Who were the best? The group I selected came back with
three people--all just terrific people. You would be very proud of all
of them, Mr. President.
Again, I had a hard time deciding which one was the best. But I made
a decision. That person now serves on the Ninth Circuit. His name is
Syd Thomas. He has the reputation of being one of the best judges on
the Ninth Circuit Court of Appeals.
It is very important that we get the best judges. These are people
who are nominated and serve for life. That is extremely important. It
is important so they can maintain their independence. It is also
important since once they are confirmed, they are there forever.
We self-destruct. As Senators we self-destruct every 6 years. House
Members self-destruct every 2 years--some Governors 4 years and some
2--to go back and face the people, as we should go back and face
reelection. Should we be continued in these offices, if we seek them,
or not? It causes us to be very close to the people. In some cases, we
are more attuned to the political currents that flow in our respective
States. Not so judges. Judges are not to be attuned to political
currents. They are to be independent, to be impartial, to go beyond
politics, to do what is right according to what the law says
[[Page S10507]]
and what the Constitution says. That is who we want.
This is no light matter. One of the strengths of America is our
independent judiciary. That is not true in most other countries. Most
peoples in the world live where the continent might be under a system
where the judiciary is not independent of the executive branch, not
independent of the legislative branch; rather, it is under the thumb of
one or the other. They are not independent.
That is one reason why this country has grown so strongly, why it has
prevailed, and why we have risen so quickly and so far. It is because
we have an independent judiciary, by and large, of judges who are
extremely capable men and women. It engenders confidence so when people
go before a judge they have the feeling this person can be fair and
this person can be honest. They may not like the outcome, but at least
it is a fair process. At least the President or the Governor didn't put
his thumb on this judge and it wasn't a political decision. It was a
decision a person made on the merits.
I say this because we as Members of the Senate have a higher
obligation in passing upon judges than we do of other nominations--
certainly of other executive branch nominations. When the President
nominates somebody to be Treasury Secretary or somebody to be Secretary
of State, or someone to be Defense Secretary, those are important jobs,
very important. But they are executive branch nominations, and they are
people who will be working for the President, and by and large the
President should have people with whom he can work. We should, in my
judgment, not have quite the same standard for executive nominations as
we do for judicial nominations.
For judicial nominations, the standards should be of the highest.
What should they be, roughly? They should be people who have the
highest integrity and honesty. They should be people who are extremely
competent, who know the law, and people who basically don't have an ax
to grind or an ideological ax to grind; that is, they are basically in
the mainstream. America is a mainstream country. We are not a country,
hopefully, of ideologues, of people who have axes to grind, of people
who want to work with each other and who live with each other. We
should have judges who reflect America and in fact set the highest
standards for America.
In my opinion, it is not even a close question. It doesn't even begin
to be a close question. Some of the nominees before the Senate do not
rise to those standards. They don't begin to. Some do. Most do. But
some don't. Where they don't, we in a sense should also forget the
politics and just do what is right. Is this nominee a person so
qualified that he or she should be a district court judge or a judge on
one of the courts of appeal? That should be the test.
It is easy for us to decide what is best and what is not best. We
should not push pell-mell to follow the political flood and rush on
either side of the aisle just because the President appointed the
person, or because a group came out against their nominee we should or
should not confirm that person.
This is a high solemn obligation we have, Mr. President. I urge all
of us to take this responsibility under the Constitution, the
Constitution which we all swore to uphold, very carefully.
Mr. President, turning to another matter, I would like to speak about
an amendment I intended to offer today on the Energy bill that I think
promotes a good commonsense solution to an issue that I think is very
important to my constituents in Montana, and that is, protecting
Montana's magnificent Rocky Mountain Front.
What is the Front? The Front, as we call it back home, is one of the
largest and most intact wild places left in the lower 48 States. We
call it the Front because that is kind of what it is; it is a front.
Anyone driving across the State of Montana, driving westward, first
encounters open plains and prairies; and then, suddenly, out in the
distance, the Rocky Mountains, the Continental Divide just seems to
jump out of the plains--this huge mountain range--and that is what we
call the Eastern Front.
That is the eastern side of the Rocky Mountains which kind of juts
out from the plains. It is magnificent. It is one of the largest and
most intact wild places left in the lower 48 States.
This map I have is not a good map to show the beauty of it. But,
rather, this is a map that shows where the Front is with respect to the
Blackfoot Indian Reservation, the oil and gas leases, and some of the
wilderness areas there. But to the north of the Front is an area here.
This is the Blackfoot Indian Reservation. Glacier National Park is over
to the northwest on this map. The area shaded in red is called Badger-
Two Medicine. It is call Badger-Two Medicine in large respect because
the Blackfoot Indian Reservation has ancestral rights and claims. It is
a very special area to the Blackfoot. It is also a gorgeous area. I
have hiked it many times. I think it is a very special place in the
United States of America. This is sacred ground, Badger-Two. It is the
area on the map that is shaded red located next to Glacier Park.
In January 2002, portions of the Badger-Two area, known as the
Badger-Two Medicine Blackfoot Traditional Cultural District, were
declared eligible for listing in the National Register of Historic
Places.
If you turn just south of the Badger-Two, the Front includes about a
400-square-mile strip of national forest land and about 20 square miles
of BLM lands. The BLM lands are scattered in through here, as shown on
this map. These include three BLM Outstanding Natural Areas. As I
mentioned, they are located right through this area shown here.
Now, the Front harbors the country's largest bighorn sheep herd--the
country's largest--and the second largest elk herd in the entire
country. That is on the Front.
The Rocky Mountain Front supports one of the largest populations of
grizzly bears south of Canada and is the only place in the lower 48
States where grizzlies still roam from the mountains to their historic
range on the plains, just as they did when Lewis and Clark came across.
Actually, they crossed right up through here. Marias Passway is over
here. So Lewis and Clark, when they came up, saw that area. Actually,
they came the south. One of the groups came across Marias Pass.
Because of this exceptional habitat, the Front offers unsurpassed
hunting, fishing, and recreational opportunities. Sportsmen, local
landowners, local elected officials, hikers, local communities, and
many other Montanans have worked for decades to protect and preserve
the Front for future generations for nearly a century.
Now let me show you a couple of pictures of the Front so you get a
sense of the feel for this magnificent landscape. This is a photograph
of Ear Mountain. It is supposed to be shaped like an ear. If you have a
good imagination, maybe you can see the ear. Frankly, a couple summers
ago, I hiked up to the top of the ear with a good friend, Rick Graetz,
and another friend, Jim Scott, and Jamie Williams, and it was just a
gorgeous climb.
When you get to the top of the Ear--this picture, of course, was
taken a little more in the wintertime, but at the top of the Ear, if
you look east, you can see forever. It is wonderful.
We feel very strongly about the Front. The majority of Montanans
believe very strongly, frankly, that oil and gas leases on the Front
and throughout Montana's Rocky Mountain Range just don't mix. We think
that because the habitat is too rich, the landscape too important to
subject it to the roads and the drills and the pipelines and the
industrial equipment and the chemicals and noise and human activity
that come with oil and gas development.
Let me show you a couple for photos of the Front before I proceed.
This is typical--and I mean typical. I am not exaggerating. This is
what Montana looks like. It is what the eastern Front looks like. It is
gorgeous.
Here is another picture. This gives you a sense of the pristine
nature of the area. It is special. We are known as the Big Sky State.
And when you are out here, you can understand why we call Montana the
Big Sky State.
Those are some of the photographs.
To give my colleagues some idea of what the area might look like if
oil and gas were developed, I show you a picture of extensive oil and
gas development along the Canadian Rocky Mountain Front in Alberta.
[[Page S10508]]
This is the Front. If you were to continue from Montana up north,
this is what it would look like--with the roads and the development of
the oil and gas leases.
So we believe such development is not warranted and it is not needed
in Montana.
The administration recently completed an inventory of onshore oil and
gas reserves on Federal lands at five basins in the interior West,
including the Rocky Mountain Front, which is part of the Montana
overthrust belt. The administration's study found that the overthrust
belt area contains the smallest volumes of potential oil and gas
resources of all five of the western inventory areas.
In addition, the administration's study concluded that in reality the
vast majority of Federal lands in the interior West are available for
leasing with few, if any, restrictions; that is, there are not many
restrictions in the vast majority of the Federal lands of the interior
West. And that is, we are not talking about the Front, we are talking
the interior of the United States.
Although a large percentage of Federal lands in the Front are
currently unavailable for leasing, many of those lands are unavailable
in the Front because they lie under Glacier National Park, they lie
under Indian lands, and already established wilderness areas. These
areas comprise much of the Federal land in the Front.
As shown on the map, here is the Scapegoat Wilderness Area, Bob
Marshall Wilderness Area, Great Bear Wilderness Area, Glacier National
Park, Badger-Two, and the Blackfoot. So much of this is already
restricted. So not only is the Front relatively poor in terms of oil
and gas reserves, many of those reserves, by congressional mandate,
Executive order or treaty, will never be available for leasing. So
there is no oil or gas bonanza on the Rocky Mountain Front.
My amendment builds upon local conservation efforts in Montana that
started nearly a century ago; that is, back in 1913. It also builds on
previous congressional initiatives championed by former Members of the
Montana congressional delegation, such as Congressman Pat Williams and
the late Senator Lee Metcalf.
I ask unanimous consent that a time-line of these efforts be printed
in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
A Conservation History of Montana's Rocky Mountain Front
Montana's Rocky Mountain Front has been the focus of
conservation efforts for over 90 years:
1913--The Montana state legislator takes the first step in
protecting the wildlife habitat of the Rocky Mountain Front
by designating the Sun River Game Preserve.
1928--Bob Marshall takes his first hike into the wild
country which will bear his name, starting the Swan Range at
Jewel Basin and walking over 100 miles to Holland Lake.
1940--Secretary of Agriculture H.A. Wallace signs an order
uniting three Forest Service ``primitive areas'' and
additional lands into the Bob Marshall Wilderness Area.
1947--The Sun River Game Range, first of five state and
private wilderness reserves, is established on the Rocky
Mountain Front. Choteau rancher Carl Malone put up the money
for the purchase, until the state Fish and Game Department
could raise funds.
1950s--Hunters and ranchers fended off Bureau of
Reclamation proposals for the Sun Butte Dam, which would have
flooded a vast portion of the upper Sun River.
1953--Flathead sportsmen initiate campaign to add portions
of the Swan Range, Spotted Bear, and upper Middle Fork
Flathead River to the Bob Marshall Wilderness.
1972--Conservationists persuade Congress to add the
Lincoln-Scapegoat area to the Bob Marshall Wilderness. This
was the first citizen-established wilderness in the country.
1973--Blackfeet Tribal Council passes resolution declaring
the entire Badger-Two Medicine area of the Rocky Mountain
Front as ``sacred ground.''
1978--The Great Bear Wilderness is designated, and a
portion of the Teton-Birch Creek area of the Rocky Mountain
Front is added to the Bob Marshall Wilderness.
1983--At the urging of Rep. Pat Williams, the U.S. House
Natural Resources Committee orders an emergency withdrawal of
the Bob Marshall Wilderness from oil and gas leasing.
1984-1994--In ten separate bills Congress adds lands to the
Bob Marshall Wilderness complex.
June 1993--Secretary of Interior Bruce Babbitt establishes
a moratorium on oil and gas development within the Badger-Two
Medicine area. Later extended to 1996.
May 1994--The U.S. House of Representatives passes H.R.
2473 which includes additions to the Bob Marshall Wilderness
complex, wilderness study area designation for the Badger-Two
Medicine, and mineral withdrawal of lands near Gibson
Reservoir.
February 1997--Montana's Senate Natural Resources Committee
rejects an industry resolution urging extensive leasing of
public lands within the Rocky Mountain Front.
September 1997--Lewis and Clark National Forest Supervisor
Gloria Flora issues a historic decision to remove all
national forest lands within the Rocky Mountain Front from
further oil and gas leasing for the next 10 to 15 years.
January 2001--All national forest land in the Rocky
Mountain Front is withdrawn from mineral entry to hard rock
mining for 20 years.
May 2001--The 9th Circuit Court of Appeals upholds Flora's
1997 decision to ban new oil and gas leases in the Rocky
Mountain Front (the decision had been appealed by industry).
Mr. BAUCUS. Most recently, in 1997, following significant public and
private investment and an extensive public comment process, the Lewis
and Clark National Forest decided to withdraw 356,000 acres in the
Front of any new oil and gas leasing. This was a significant first step
in protecting the Front from development, and I wholeheartedly
supported it.
However, in many parts of the Rocky Mountain Front, oil and gas
leases do exist, and they predate that 1997 decision, or they are
located on BLM lands.
Many of the leases that predate the 1997 decision are located in the
Badger-Two Medicine area. That is shown up here on the map, close to
the Blackfoot Reservation. And that has been under an administrative
lease suspension since 1996, pending review of the Blackfoot
Traditional Cultural District.
This lease suspension could be lifted at any time now that the
Blackfoot Traditional Cultural District has been declared eligible for
listing in the National Register of Historic Places.
All of these existing leaseholders have invested time and resources
in acquiring their leases. I understand that and am sympathetic.
Several leaseholders have applied to the Federal Government for permits
to drill.
In fact, the BLM and the United States Forest Service plan to begin
analysis of about four leases in the Blackleaf Area of the front this
fall.
These leases are subject of the study proposed in my bill.
However, history has shown that energy exploration and development in
the front are likely to result in expensive and time-consuming
environmental studies and litigation. It will take forever. This
process rarely ends with a solution that is satisfactory to the oil and
gas lessee. There are so many interests involved.
For example, in the late 1980's both Chevron and Fina applied for
permits to drill in the Badger Two Medicine portion of the Front. After
millions of dollars spent on studies and years of public debate,
Chevron abandoned or assigned all of its lease rights, and Fina sold
its lease rights back to the original owner. It was not worth it.
We should obviously be fair to those leaseholders. We want them to
continue to provide for our domestic oil and gas needs, and we want to
encourage them to find new domestic supplies. But they are going to
have a long, difficult and expensive road if they wish to develop oil
and gas in the Rocky Mountain Front.
My legislation would direct the Interior Department to evaluate for
study, non-producing leases in the Rocky Mountain front and look at
opportunities to cancel those leases in exchange for allowing
leaseholders to explore for oil and gas somewhere else, namely in the
Gulf of Mexico or in the State of Montana. In conducting this
evaluation, the Secretary would have to consult with leaseholders with
the State of Montana, the public and other interested parties.
When Interior concludes this study in 2 years the bill calls for the
agency to make recommendations to Congress and the Energy and Natural
Resources Committee on the advisability of pursuing lease exchanges in
the front and any changes in law and regulation needed to enable the
Secretary to undertake such an exchange.
Finally, Mr. President, my bill would continue the current lease
suspension in the Badger-Two Medicine Area for three more years. This
lease suspension would only apply to the Badger-Two Medicine Area, not
the entire front.
This suspension will do two things: First, it will give the Secretary
adequate time to conduct this study and
[[Page S10509]]
make recommendations to Congress; second, it will give the Blackfeet
Tribe some breathing room to negotiate with the Interior Department
about the long-term protection of Blackfeet historic and sacred sites
in the Badger-Two Medicine area.
That's it. That is all my amendment would do. It doesn't predetermine
any outcome. It doesn't impact any existing exploration activities or
environmental review processes.
It just creates a process through which the Federal Government, the
people of Montana and leaseholders can finally have a real, open and
honest discussion about the best way to resolve the status of oil and
gas leases along the Rocky Mountain front. My amendment is balanced and
fair to all parties.
We look for ways to fairly compensate leaseholders for investments
they've made in their leases if they decide to leave the front rather
than waste years and millions fighting to explore for uncertain--and
small--oil and gas reserves. And, a lot of Montanans, including me,
just don't want to see the front developed, and they will fight to
protect it.
Here is the alternative: So, developers can wait years, or decades,
or most likely never, for oil and gas to flow from the front.
Or we can look at ways to encourage domestic production much sooner,
in much more cost effective, appropriate and efficient ways somewhere
else.
Let me quote from an editorial in the Missoulian, a Montana paper
based in Missoula, MT, that emphasizes what I hope my bill will
accomplish. They said:
One of the things we ought to do, as part of setting our
national energy policy, is quit squandering our own energy
fighting the same old battles that will never yield a single
BTU. Montana's Rocky Mountain Front has for too long been a
battlefield for just that sort of energy-sapping conflict. .
. There are no known reserves of oil and gas in there--just
speculation that it might, based on the fact that similar
geology north of the Canadian border has proved productive.
That editorial concluded by stating that my amendment ``acknowledges
the property rights of lessees, but also the reality that they likely
will be stymied indefinitely in any attempt to drill along the front.
This is a proposal that protects a place Montanans so clearly desire to
preserve. And it offers an opportunity to focus public and private-
sector energies on actually producing useful energy.''
Montanans have spoken loudly and forcefully on this issue. We don't
want any drilling in the front.
Montana is a natural resource-rich State and we are proud of our
natural resource heritage. Montana has made, and continues to make,
tremendous contributions to this Nation's economy through the
development of its precious metals like copper, platinum, palladium and
gold, through development of its coal, its oil and gas, its timber, and
other natural resources. We will continue to do so because that's the
right thing to do for Montana's economy and the Nation.
But the front is special to Montanans. Because we're also proud of
our outdoor heritage, of preserving special places to take our kids
hunting and fishing and hiking, just like we did when we were kids. We
balance these two Montana priorities all the time. In this case,
Montanans determined that the resources that might be under the front
just don't justify endangering the front's unparalleled landscape.
That's why this amendment is so important, so we can strike the right
balance in Montana on the Rocky Mountain Front. Let's listen to the
locals.
I ask my colleagues for their support.
The PRESIDING OFFICER. The Senator from Alaska.
Mr. STEVENS. Mr. President, I would like to utilize the time
allocated to me on H.R. 2738, the United States-Chile free-trade
agreement.
The PRESIDING OFFICER. Without objection, it is so ordered.
U.S.-CHILE FREE-TRADE AGREEMENT
Mr. STEVENS. Mr. President, I objected to the consideration of this
bill by unanimous consent because I wished to make this statement
concerning the salmon fishing industry.
The U.S. salmon fishing industry is facing an economic crisis. Chile
has dramatically increased their production of farmed fish and flooded
the U.S. market with pen-raised, chemically altered farmed salmon. Last
year the United States imported $400 million in farmed salmon from
Chile--a 100 percent increase from 1997. In 1998 Chile exported 51,000
metric tons of farmed salmon to U.S. markets. By 2002 Chile's farmed
salmon production capabilities doubled and exported over 100,000 metric
tons of farmed salmon fillets to U.S. consumers.
This farmed salmon comes into the U.S. each year largely unrestricted
and considering a study that was released this week on the high levels
of PCBs and other pollutants in farmed salmon, we may want to consider
greater testing of this product. Additional analysis may be needed to
determine the levels of contamination in farmed salmon and warn
consumers of any potential health risks.
It is these factory-scale farms that have developed contaminated,
genetically altered fish and created a glut in the domestic salmon
market, causing prices for wild-caught salmon to plummet. Increased
competition from farmed salmon has significantly impacted the
livelihoods of the men and women that participate in the salmon
fishery. The U.S.-Chile free trade agreement will not address any of
the adverse economic impacts faced by the U.S. salmon industry.
These adverse effects are not limited to the salmon industry alone.
In my state of Alaska, the economy has taken the brunt of this crisis
with processing plant closures, lost jobs and fishing boats that
remained tied up at the docks. The Alaska commercial fishing industry
as a whole is feeling the effects of deflated price in salmon.
Alaska's commercial fishing industry is a primary employer, providing
47 percent of private sector jobs, and is second only to the oil
industry in generating revenue to the state. In 2001, the fishing
industry in Alaska provided tax revenues to the State of over $51
million, down roughly $8 million from 2000. The Division of Commercial
Fisheries in Alaska reports that more than 4.7 billion pounds of fish
and shellfish with an ex-vessel value of $871 million were harvested in
waters off Alaska in 2001. Of this amount the ex-vessel value for
salmon in 2001 was $229 million.
The Alaska Department of Fish and Game reports the ex-vessel value of
Alaska's 2002 salmon season was roughly $140 million for a catch of 130
million fish.
This continues a trend of declining season values for salmon. The
Bristol Bay sockeye salmon catch received its lowest value since 1977,
receiving approximately $25 million for 10 million fish. At 40 cents a
pound, Bristol Bay salmon in the 2002 season were at prices lower than
those received nearly 30 years ago.
Western Alaska fishing-dependent communities were extremely hard-hit
by the depressed prices in salmon and declared an economic disaster
area by the State of Alaska. The administration recognized this
situation and last fall directed the Economic Development
Administration, under the Department of Commerce, and the Labor
Department to assist these communities experiencing sudden and severe
economic dislocation.
Several antidumping investigations were initiated against Chile.
There appeared to be strong spikes of increased imports of Chilean
farmed-salmon during the summer months, the only time of the year that
fishermen can deliver fresh wild-caught salmon to market. This is
obviously unfair advantage taken of these exporters in the United
States. The International Trade Commission ruled that there was a
reasonable indication that material injury was caused to U.S. producers
of salmon. Subsequently, antidumping orders were placed on various
Chilean companies. These cases involved U.S. aquaculture concerns that
were ultimately bought out by foreign companies and are strong evidence
that the U.S. salmon industry has been adversely affected by
unrestricted imports of Chilean farmed salmon.
Considering this history of bad acts and numerous concerns raised by
the Alaska delegation and Alaska seafood producers, the U.S. trade
representative was put on notice about the problems faced by the
domestic salmon industry. However, the trade representative only
negotiated recommendations that Chile make their trade practices more
transparent.
[[Page S10510]]
The fact is, U.S. fishermen are treated far differently than other
contributors to the domestic economy. Last year we passed an
unprecedented farm bill that provided significant relief for U.S.
farmers; the steel industry benefits from tariffs on imported steel;
tariffs are levied on Canadian timber; and tariffs have increased
substantially on imports of farmed catfish. The salmon industry does
not receive any such protections, and it should have received a greater
recommendation from our trade negotiators.
The reality for the salmon industry is they must go it alone and hope
they can weather this dramatic change in world markets for salmon. My
ardent hope is for this fishery to survive, and it can only survive if
the trade representative and the other negotiators for the United
States wake up.
This year, we have not taken any further efforts to block this bill.
We will not do so. I want to put the Senate and administration on
notice that this is the last year this will be allowed to continue.
With the increased information we now have concerning the harm that
this fish causes to our consumers--and we know the harm that is already
caused to fishermen--it is time for the Congress and administration to
work to protect our wild salmon production, and to help it get to
market and not face this unreasonable competition.
I point out, the spikes in their imports take place when our fish are
available. They are destroying the price by flooding the market with
their product, which is a tainted product. Something ought to be done
about it soon.
Mr. President, I yield back the remainder of my time and suggest the
absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Ms. MURKOWSKI. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Cornyn). Without objection, it is so
ordered.
Ms. MURKOWSKI. Mr. President, in 2002, Congress passed legislation
providing more than $270 billion for farmers over a 6-year period. This
included price support programs for commodities such as: wheat, cotton,
rice, oilseeds, dairy products, peanuts, sugar, wool, and honey, just
to name a few. This is not to mention other programs in existence today
that buoy the price of products like lamb meat and apples.
Our Nation's farmers receive subsidies for their product through the
Commodity Credit Corporation, to ensure their economic livelihood when
market prices are low.
Overall, in 2000, corporate credit payments reached a record $32.3
billion for all farm-related programs and activities.
Also in 2002, the President imposed safeguard tariffs of up to 30
percent on a broad range of steel products. There were anti-dumping and
countervailing duties of 29 percent slapped on imports of softwood
lumber from Canada.
Taken together, 2002 was a banner year for industries seeking relief
from foreign competition.
Just recently, the U.S. International Trade Commission upheld a
determination to impose import duties on Vietnamese catfish--actually,
basa--of up to 64 percent, a victory for domestic catfish farmers.
Unlike those other industries in the United States that face foreign
competition, America's salmon fishermen are not on the receiving end of
Federal largess. There are no safeguard tariffs put in place, nor are
price supports implemented to aid this important industry. Suppliers of
imported salmon do not face tariff rate quotas that benefit so many
other domestic industries.
In 2002, America's salmon fishermen faced imports of nearly $400
million worth of Chilean salmon, the vast majority of which is farm-
raised, which we consider to be a distinctly inferior salmon to the
wild-caught salmon that comes from Alaskan waters. By comparison, in
1997, Chile imported less than $200 million worth of salmon. The amount
of imports from that country has sky-rocketed in the past few years.
There is a direct correlation between the increasing amount of
imported Chilean salmon and the decline in price that fishermen receive
for their catch.
Between 1998 and 2002, Chilean salmon exports to the United States
more than doubled from just less than 51,000 metric tons to over
102,000 metric tons. During the same time period, the price of sockeye,
or red salmon, fell from $1.23 a pound to $0.55 a pound.
Now, while Alaskan fishermen are being put out of work by these
increasing imports, Congress is set to provide preferential trade
status to Chilean companies, to provide Chilean companies with greater
access to the United States' marketplace.
I fully support the concept of free and fair trade. I recognize the
benefits that trade gives to developing nations: strengthening a market
economy; growing a middle class; and promoting the seeds of democracy.
Trade provides the American consumer with the ability to purchase a
quality product at a reasonable price.
I also appreciate that many American companies support this
preferential trade agreement as a means to level the playing field with
Canadian and European competition. I am concerned, however, that this
trade agreement is not fair to the State of Alaska and Alaska's
fishermen.
This past April, I wrote to U.S. Trade Representative Bob Zoellick
outlining my concerns about the impact a Chile Free Trade Agreement
would have on Alaska's fishermen. The response I received suggested
that the provisions of this preferential trade agreement ``strike a
reasonable balance between the very strong export interests of Chile,
and the concerns of Alaskan salmon producers.''
I have to ask, at what point are the concerns of Alaska's salmon
producers ever addressed in this trade agreement? How is eliminating
all tariffs on imported salmon a reasonable balance to putting Alaskan
fishermen out of work?
I am told that Chile will eliminate all of its duties on fresh and
prepared seafood products--that the United States is Chile's seventh
largest supplier of fresh and frozen seafood--that this is a reasonable
balance.
For a reality check, let's look at the numbers. And these numbers
come from the U.S. Department of Agriculture, Foreign Agriculture
Service.
Again, in 2002, Chile exported nearly $400 million worth of salmon to
the United States. Over 100,000 metric tons.
On the other side of the equation, in 2002 the United States exported
just $3,000--not millions--worth of canned salmon and zero dollars
worth of salmon not in a can. So we have $3,000 versus $400 million.
In whose book is this a reasonable balance for America's salmon
fishermen and Alaska's fishing-dependent communities? It is not just
the salmon we are talking about. In 2002, Chile imported a total of
$809 worth of fishery products from the United States, the vast
majority of which fell under the catchall category of ``other fishery
products.''
And while we are busy putting Americans out of work, they have
nowhere to turn to seek relief. Alaska fishermen are not generally
eligible for traditional trade adjustment assistance programs. They are
self-employed and not part of a firm or group of workers.
Many fishermen independently own and operate their vessel with the
help of their family, selling their catch to the local fish processor
or cannery. They do not work for a company or firm, nor do they receive
unemployment benefits when they are unable to fish.
In essence, America's fishermen have been, for too long, treated like
a second-class citizen when compared with America's farmers or steel
workers. While these workers have their income supplemented by federal
dollars, fishermen face foreign competition to the best of their
ability. And trade agreements like this, only deepen their plight.
As a result, I cannot support granting preferential trading rights to
Chilean companies.
Not when Alaskan fishermen are being put out of work because of
increasing imports of farm-raised salmon. Alaskan fishermen will tell
you receiving TAA benefits would be nice, but it is not the same as
being able to do their jobs, to put food on their tables to feed their
families, to ensure that their children are cared for and have a future
filled with hope.
Our fishermen face an uphill battle in keeping their jobs when faced
with the
[[Page S10511]]
onslaught of imported Chilean salmon. Maybe the rest of the nation
benefits from this trade agreement. Alaska suffers.
I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Cornyn). The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. JEFFORDS. I ask unanimous consent that the order for the quorum
call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. JEFFORDS. Mr. President, I send to the desk a resolution.
The PRESIDING OFFICER. Is the Senator asking the resolution be
introduced and referred?
Mr. JEFFORDS. It is my intention to have the resolution introduced,
that is correct.
The PRESIDING OFFICER. The Senator from Vermont is recognized.
Mr. JEFFORDS. I thank the Chair.
(The remarks of Mr. Jeffords pertaining to the submission of S. Res.
209 are located in today's Record under ``Submission of Concurrent and
Senate Resolutions.'')
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. CONRAD. Mr. President, we are in this very odd circumstance where
we are waiting to learn what the decision will be with respect to the
Energy bill. As one member, I send a message to those who are
deliberating that if the best we can do is pass last year's bill, let's
do it. We have a circumstance in which our energy dependence continues
to grow. We are now more than 50 percent dependent on foreign sources
of crude oil. That makes America vulnerable.
While last year's bill is not perfect, it did have broad bipartisan
support and clearly will improve the energy situation in this country.
I believe last year's bill passed on a vote of 88 to 12, or very
close to those numbers. It received long and careful attention on the
floor. I believe there were over 140 amendments considered. I believe
there were over 30 rollcall votes. I think there were actually 35
rollcall votes on that bill. We spent weeks deliberating the provisions
of the Energy bill last year.
I would be the first to say I would prefer that we had concluded work
on the Energy bill this year. I, for one, don't know why we wound up
spending hours and hours talking about judges and engaging in what last
night I thought was a very ugly scene on the floor of the Senate.
Frankly, I was embarrassed for the Senate, to watch some of the
statements being made last night. That did not reflect well on this
body.
There should not be a religious test in any way for any position in
the United States of America. This is a country dedicated to religious
freedom. Whether people choose to be actively engaged in a church or
not should play no role in the consideration for positions of
responsibility in this country.
Thomas Jefferson, who played such a critical role in the formation of
our Nation and its institutions, had written on his gravestone what he
believed were his greatest accomplishments. One of those was the
religious freedom that was part of the Constitution of the State of
Virginia, a commitment to religious freedom which he thought was
fundamental to the United States.
I hope cooler heads are going to prevail when we return in September
and we are not going to see the kind of personal invective that
infected this floor last night. That was an ugly scene. That is not the
road we should go down as an institution. It is not the road we should
go down as a country.
We can have a strenuous debate on candidates for judges. We do not
have to slip over into a discussion of religion or who is a good
Catholic or who is not so good a Catholic. My goodness, what is going
on around here? That is not the Senate.
Returning to the Energy bill, we have an obligation. We have an
obligation to reach a conclusion and, if the vehicle that allows us to
reach a conclusion is the bill that was passed last year, let's do it.
Let's do it on a bipartisan basis. Let's do it now. That bill had a lot
of good and productive provisions in it that will make a meaningful
difference over time.
No, it is not a perfect bill. It is the product of compromise. That
is what this system is about. We do not all get our own way. None of us
gets our own way. But if we work together, we can make meaningful
progress.
I think last year's bill represents that. I urge my colleagues, we
are not going to complete the bill that was out here. There are still
hundreds of amendments pending. I have amendments pending on that bill.
I have amendments pending I would like to have considered that I think
are serious, productive amendments. But I am willing to forgo the
opportunity to offer those amendments to get a bill passed.
When we get to September we are going to have appropriations bill
after appropriations bill demanding our attention. The end of the
fiscal year comes at the end of September. I plead with my colleagues
on both sides, let's end this session on a productive and bipartisan
note. Let's end the squabbling and the personal invective that has
infected this body in the last 48 hours. It is not healthy. It is not
productive. It does not build momentum for the work that faces us in
the fall.
Let's get back to attempting to produce legislative outcomes that are
positive for this country and that reflect well on this body. We have
an opportunity to do it.
I say to my colleague from Vermont, who has deep feelings about
energy policy and environmental policy, and has been a leader in this
body on these issues, I say to him and others of our colleagues,
please, let's come together and pass last year's bill and move it to
conference and there try to improve it further. That strikes me as the
only responsible course now remaining before us. There is no
conceivable way we can finish work on the Energy bill that we have been
contemplating. It is not going to happen.
I believe it would be irresponsible to leave here without finishing
action on a bill. We have a bill on which a tremendous amount of time
was spent last year. It does improve the energy circumstance for this
country and we ought to pass it.
I hope somebody is paying attention. I thank my colleagues for
listening. I hope we can move this ball off dead center and reach
conclusion.
I yield the floor.
The PRESIDING OFFICER. The Senator from Vermont.
Mr. JEFFORDS. Mr. President, I intend to use an extensive length of
time on the Chile-Singapore free-trade agreements. I see my good friend
from Iowa. If he would desire to precede me, I would be happy to yield
to him.
Mr. GRASSLEY. No, go ahead.
Chile-Singapore Free-Trade Agreements
Mr. JEFFORDS. Mr. President, I rise today to express my strong
opposition to the implementing legislation for the Chile-Singapore
free-trade agreements. I do so not because I oppose these trade
agreements but because I have serious concerns about the effect of
these agreements on congressional authority over immigration and the
negative effects it will have on the needs of our unemployed and
underemployed citizens.
I know the importance of trade on our country and my State. In fact,
trade with Canada and the rest of the world is an important part of
Vermont's economy, which has led me to be a strong advocate of free-
trade agreements in the past.
During my time in Congress, I have worked to promote free trade with
other countries, both near and far. For example, I voted for the North
American Free-Trade Agreement. I did so not because I believed it was
crucial that we begin to integrate the economies of North America. I
was concerned about the disparities in the economic opportunities
available to Mexicans and Americans. I thought that only by giving our
southern neighbors access to the engine of the American economy could
we address important issues such as poverty, immigration, and
exploitative labor practices.
I am aware, though, of the downside of international trade. When
factories are closed or jobs move offshore because of more liberal
trade policies, constituents have taken me to task because of my
support for free trade. I do not blame them. Our trade policy must
include strategies to help those adversely affected by the trade.
I have long supported a vigorous trade adjustment assistance program.
In addition, I believe it is important that trade agreements include
strong environmental and labor provisions.
[[Page S10512]]
Expanded trade should not lead to an ``environmental race to the
bottom'' resulting in relaxation of environmental or labor standards
that give our trading partners a competitive advantage over US
businesses subject to more rigorous regulation. Because of its
provisions guarding against relaxation of environmental controls and
labor standards, I supported the Jordan Free Trade agreement during the
last Congress.
I have also voted in favor of fast track procedures. I appreciate
that foreign trade negotiators will never put their best offers on the
table if they have to worry that Congress will endlessly amend a
negotiated trade agreement. But when I supported fast track procedures,
I expected them to be limited to areas related to trade. In giving up
our rights to debate and amend trade legislation, I expected and
intended that those concessions would relate to issues that are
specifically trade-related.
However, the free trade agreements we face today violate this belief.
My opposition to these agreements is not based on what I consider to be
the crux of free trade agreements, the reduction of tariffs, it is
based on something more. My stance today is based on my concern with
the erosion of Congress' constitutional power, and the treatment of our
nation's un- and under-employed.
As I mentioned earlier, I supported the imposition of fast-track
procedures for trade agreements when it passed Congress in 2002.
However, what I see in front of us today, and the rumor that these
agreements are to be the template for future agreements, makes me
reconsider this support.
The reason for this change lies squarely in the provisions of this
free trade agreement that affect our immigration laws. These agreements
create new categories of visas with different standards than currently
exist in our immigration law, a law that has been considered and passed
by Congress.
I have looked in my copy of the Constitution and it clearly states in
Article 1, Section 8, Clause 4 that Congress has the power to establish
a uniform rule of naturalization. Congress, not the United States Trade
Representative, has this authority. What we have in front of us today
is the executive branch telling Congress what the nation's immigration
policy should be, and I for one could not let this go unchallenged.
In addition, this policy that is being forced upon Congress is not in
any way uniform. These bills create new categories of visas, modify the
standards and requirements of existing limits, and do so for people
from only two countries. Is this any way to make immigration policy?
Rhetorically, I will answer that it is, if you work in an executive
branch that is interested in usurping Congressional power for
yourselves, and can do so by replicating these provisions in future
free trade agreements.
Finally, and what I consider to be the greatest insult to
Congressional power over immigration, Congress has very limited ability
to change these provisions in the future. Congress could decide, with
the full support of the administration at that time, that the need for
temporary H-1B visas no longer exists. However, Congress could not
modify or remove the provisions contained in these free trade
agreements without the assent of Chile and Singapore.
We need to wake up in Congress to what enactment of these provisions
means. Ultimately, if we keep passing this type of legislation there
will be no immigration law for Congress to oversee, it will all be
negotiated by the United States Trade Representative with other
countries.
We need to make a stand and let the administration know that this
type of negotiating will not be accepted.
While it is commendable to pass, and I fully support, a Sense of the
Senate resolution stating that future trade agreements should not
contain similar type provisions, we need to change the fast track
authority to ensure that power-hungry administrations can no longer put
the Congress in this quandary. I pledge to work today with all
interested members to ensure that the constitutional right and power of
the Congress over immigration law is protected.
I would like to take this opportunity to more fully inform my
colleagues on how these free trade agreements differ from current law
and what they will be enshrining permanently in our immigration law if
the Senate passes these bills.
The Chile and Singapore Free Trade Agreements create an entire new
category of visas for professional workers separate from the existing
H-1B program. This legislation would allow 6,800 professional workers
into the United States under this new visa each year with 5,400 coming
from Singapore and 1,400 from Chile. Yet, under the current H-1B
program 4,000 workers from these two countries are already coming into
the United States each year. In addition, as we are not currently
hitting the cap of the current H-1B program, why do we need to create a
new type of visa for another 2,800 workers? I believe the differences
between the current H-1B program and the new type of visa will answer
that question.
First of all, the proposed Chile and Singapore agreements do not
require H-1B dependent employers to make attestations that they are:
No. 1, seeking to recruit U.S. workers; and No. 2, that they are not
displacing U.S. workers. These two provisions in current law help
ensure that employers do not negatively impact the U.S. labor market,
and yet they are completely missing from the Chile and Singapore
implementing legislation. They are missing.
This omission will enable employers of foreign workers to operate
with less oversight from the Department of Labor. The legislation goes
so far as to deny the department the right to self-initiate
investigations based on information of abuse or fraud in the Chile and
Singapore visa programs. This will allow employer abuse to go
unchecked.
Secondly, the Chile and Singapore legislation does not explicitly
forbid employers from demanding that their employees reimburse them for
the $1,000 H-1B visa application fee. Beyond this, if Chile or
Singapore decides to challenge the fee the agreements stipulate that a
panel of international trade lawyers and not the administration or
Congress makes the decision on what fees are allowed.
Another crucial difference between the impending legislation and
current law is that the Chile and Singapore agreements do not limit the
number of times that an individual is able to renew his or her visa,
enabling the non-immigrant to remain in the United States on a
permanent rather than temporary basis.
This stands in sharp contrast to the current H-1B program that puts a
6-year limit on non-immigrant visas. Consequently, an employee with one
of the new visas could legally remain in the United States
indefinitely.
Finally, the agreements define the term ``specialty occupation''
differently than current H-1B law. The new visas will only require that
the nonimmigrant have knowledge that is ``specialized'' as opposed to
the ``highly specialized'' knowledge demanded by the current H-1B law.
This could be a substantial lessening of the requirements professional
workers currently have to meet to be able to escape our immigration
law.
What needs to be remembered concerning the substantial differences
between this new visa category and the current H-1B program is that
these provisions can not be changed by Congress. That may sound
unusual. I think it is, so hopefully it will not ever be allowed. But,
anyway, that is the way it is stated.
These provisions to our immigration policy are in effect a permanent
change to our immigration law that was negotiated by the United States
Trade Representative and not considered in the normal process by
Congress.
My concern with these immigration provisions extends beyond its
impact on Congress' constitutional authority, to its affect on our
Nation's unemployed and underemployed. The United States has a serious
problem right now with our economy.
The current unemployment rate is at a 9-year high of 6.4 percent. Mr.
President, 15.3 million people are unemployed, underemployed in part-
time jobs, or have given up looking for work. In June, the United
States lost 56,000 manufacturing jobs, bringing the total to 2.4
million manufacturing jobs that have disappeared since January 2001.
Finally, the Nation's economy has shed 3.1 million private sector jobs
[[Page S10513]]
since President George Bush took office. That is 3.1 million private-
sector jobs lost since President Bush took office.
The preceding statistics lay out a serious problem, but are we
considering legislation to address these problems today? No, to the
contrary, we are considering these free trade agreements that will
exacerbate an already terrible crisis. We should be expanding the
Federal financial commitment to education and job training initiatives,
not expanding the number of foreign workers allowed in this country.
This is where our answer lies. Since this Nation was founded in the
late 1770s, we have struggled with the roles the various parts of our
Government should play in our education delivery system. In the late
1940s, with the creation of the GI Bill, the percentage of the entire
federal budget dedicated to education was 10.7 percent. Some 50-plus
years later, that amount has dwindled to slightly less than 3 percent,
which includes elementary, secondary, and higher education.
The first significant financial influence by the Federal Government
into elementary and secondary education occurred in 1965. Under the
leadership of President Johnson, the original Elementary and Secondary
Act came into existence. The original purpose was to distribute money
to compensate for inequality of educational opportunity and to
stimulate plans for school integration.
Throughout the last 38 years, that purpose has continued to be the
foundation of the Elementary and Secondary Education Act. However,
sufficient funding has never been provided and the purpose has yet to
be fulfilled. Since its inception in 1965, Title 1--the heart of the
ESEA law has served less than 50 percent of the children who should be
served under the program.
Horace Mann, who is often credited with developing the American
public school system said--and I am paraphrasing--that every human
being that comes into the world has the right to an education. Horace
Mann made that statement in the 19th century. Two centuries later, we
seem to still be baffled as to how we provide a quality education to
all who seek it. I don't believe the answer is that complicated.
First and foremost, the Federal Government must increase its role in
funding. It must reach back into history and return to dedicating 10
percent of the entire Federal budget to education.
Right now, in this fiscal year, the Federal Government is providing
$50 billion in discretionary funding for education. This compares to
almost $400 billion for defense programs.
Providing sufficient funding for defense is very important. However,
it is just as important to provide sufficient funding and leadership to
have the world's greatest education system. And we do not.
Some may ask, where can we find the money for education? We can find
the money when we all finally understand that it will be a severe
detriment to the survival of this Nation if we do not.
By vastly improving the Federal Government's monetary responsibility
to education, we would go a long way to provide the resources needed
to: first, serve every student who needs title I assistance; next,
cover many of the mandates included in the No Child Left Behind Act--
the President's new law--next, provide for quality early childhood
education; also, provide additional funding for Pell Grants and other
student financial aid programs to improve access to postsecondary
education; in addition provide quality professional development for all
school personnel, with a special emphasis on math and science; and
provide the full Federal share for the Individuals with Disabilities
Education Act, IDEA.
When I first arrived in Congress in 1975, one of the first bills I
worked on was the law that created special education, now known as the
Individuals with Disabilities Education Act, IDEA. The purpose of this
legislation is to ensure that children with disabilities receive the
special education and related services they need and are
constitutionally entitled to receive.
We recognized that children with disabilities often require
specialized services and that educating children with disabilities
could be twice as costly as educating children without disabilities.
Therefore, we authorized the Federal Government to pay up to 40 percent
of each State's excess cost of educating children with disabilities.
Unfortunately, we have failed to actually provide the States with that
40 percent we promised. We are currently only providing slightly over
17 percent of the 40 percent we promised 28 years ago. That promise is
far from being fulfilled.
Our education system is also stressed at the postsecondary level. We
have a higher education system that is the envy of the world. However,
many in this country are unable to pursue postsecondary education
opportunities, not only because of not being prepared academically, but
also because of the astronomical financial burden.
One-third of all seniors graduating from higher education
institutions graduate with more than $20,000 in Federal loan debt. The
financial strain is having a direct impact on our job market.
Almost every community is facing a teacher shortage. How many
graduates leaving college with at least a $20,000 debt are willing to
sign up for a teaching job that pays on average a beginning salary of
about $25,000 to $35,000?
The cost of higher education is a particular problem for the high-
tech industries and the health care industries. A number of jobs in
these two areas require postgraduate work. Many do not go on to
graduate programs because they can't finance the first part of it. This
has been a factor in the dramatic increase over the last decade of the
number of H-1B visas that have been issued, which I talked about
earlier. Our country is lacking the skilled workforce necessary to
address many of our needs.
One initiative designed to address our job training needs is the
Workforce Investment Act, which provides job-training activities for
adults and youth. Unfortunately, Federal funding for job training
programs have dropped $1.63 billion since 1985. These funds have
dropped at the time when they have been needed the most and we are
cutting.
Mr. President, these are the initiatives that we should be focusing
on to ensure that our citizens are prepared for and qualified for these
jobs, not legislation that is going to fill these jobs with foreign
workers.
The Senate needs to take a stand today. We need to make this stand
not only for the protection of Congressional authority, but also for
the protection of our unemployed and underemployed citizens.
Mr. President, I reserve the remainder of my time and yield the
floor.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Mr. President, would I be in order to speak on the
Chile and Singapore free-trade agreements?
The PRESIDING OFFICER. Without objection, the Senator may use his
time for that purpose.
Mr. GRASSLEY. Mr. President, I rise in strong support of these two
trade bills.
The Chile and Singapore trade agreements are state-of-the-art
agreements that will provide real economic and strategic benefits to
America's workers, farmers, consumers and industry.
S. 1416, the U.S.-Chile Free Trade Agreement Implementation Act,
implements into law our first bilateral free trade agreement with a
South American country. And I think it is appropriate that Chile be one
of the first.
Chile's open economy is a model for much of Latin America. Because of
its free market philosophy, Chile is one of the fastest growing
economies in the world. Over the past decade it has established itself
not only as a strong democracy, but also as a leading advocate of free
trade.
Chile already has trade agreements with sixteen other countries,
including Mexico, Canada, Mercosur, and the European Union. As a
result, its trade with these economies has grown while the U.S. share
of Chilean imports has dropped over 30 percent between 1998 and 2002.
Years of delay in reaching a free trade agreement with Chile has
reportedly cost U.S. companies over $1 billion in lost export
potential. Clearly, it is time for us to get back in the game.
I also want to note how pleased I am about the strong agriculture
market access provisions found in the U.S.-Chile FTA. More than three-
quarters of U.S. farm goods exported to Chile will be duty free within
4 years of the agreement's implementation. Immediate elimination of
tariffs on U.S.
[[Page S10514]]
products will provide up-front gains to U.S. exporters and,
importantly, will level the playing field for our farmers, ranchers and
workers as they compete with products from the EU and Canada. These
provisions are complemented by the removal of unnecessary sanitary and
phytosanitary barriers to U.S. agriculture exports.
But this agreement doesn't just benefit U.S. agriculture. It also
provides groundbreaking market access across the board. The agreement
will immediately eliminate tariffs on more than 85 percent of all U.S.
goods, with most of the remaining tariffs eliminated within four years.
The U.S.-Chile FTA also opens new opportunities for U.S. banks,
insurance, and telecommunications services. It provides new protections
for U.S. investors and high levels of intellectual property rights
protection. The U.S.-Chile FTA can also strengthen momentum in the
ongoing negotiations to create a Free Trade Area of the Americas. In
short, the agreement vastly enhances our economic opportunities in a
growing and important region of the world.
S. 1417, the U.S.-Singapore Free Trade Agreement Implementation Act,
implements into law our first free-trade agreement with an Asian
Pacific nation. Singapore is our largest trading partner in Southeast
Asia and our twelfth largest in the world. Singapore is also a strong
ally in the war against terrorism.
The U.S.-Singapore FTA is good for America. It opens up new markets
and creates new opportunities for many sectors of our economy.
This FTA will guarantee fair and non-discriminatory treatment for
U.S. services firms. This benefits our service industries, such as
banking, insurance and the telecommunication industries.
The agreement also includes state-of-the-art provisions on e-
commerce, transparency and competition, and strong intellectual
property rights protection. This agreement continues our goal toward
greater trade liberalization and higher standards, not only in the
Pacific, but throughout the world.
Both agreements we are discussing today are the first to be
considered under Trade Promotion Authority, or TPA, procedures. This is
the first time in our history that the Senate has approved two free
trade agreements in a single day. The fact that we were able to achieve
this goal is a testament not only to the high quality of these
agreements, but also to the power of Trade Promotion Authority.
It was almost a year ago today that the House and Senate gave final
approval to the conference report for the Trade Act of 2002. This
historic piece of legislation empowered the President, for the first
time in almost a decade, to negotiate free trade agreements utilizing
Trade Promotion Authority procedures. Today, with the passage of these
two agreements, we are using TPA to take some of our first steps toward
reengaging the world through international trade. It is a welcome
development.
A fundamental part of TPA procedures is consultations. The TPA act
requires that the Administration consult closely with Congress
throughout the negotiating process. I know the Bush administration took
these consultation requirements to heart. A number of modifications to
the agreements and to the implementing legislation were adopted as a
result of these procedures. That is the way the process is supposed to
work--a partnership between the Congressional and executive branch
to craft the best trade agreements for the American people.
Like any partnership, the more you put into it, the more you get out
of it. I am disappointed that some of my colleagues who did not engage
on these agreements early in the process are now complaining about some
of the provisions they contain. I hope we can avoid similar problems as
we work on future agreements.
Without Trade Promotion Authority, the United States fell behind on
trade. But now we are back on track. The goal of TPA is to knock down
barriers to trade and allow U.S. companies to compete on a level
playing field around the world. These two agreements achieve that goal
and more. I strongly urge my colleagues to join with me today and vote
to approve these two solid agreements.
Mr. President, at this time I wish to highlight a number of the ways
in which we stand to benefit from the United States-Chile Free Trade
Agreement and the United States-Singapore Free Trade Agreement. I have
spoken previously on how our farmers will benefit from improved market
access for our agricultural exports as a result of these agreements. I
want to elaborate on the benefits to agriculture, particularly with
respect to sanitary and phytosanitary measures. I also want to take a
moment to focus on some of the other benefits of these agreements,
specifically the benefits of the telecommunications, services, and
intellectual property provisions in the agreements, as well as the
benefits for U.S. exporters of manufactured goods. Finally, I want to
clarify how the short supply mechanisms for textiles will operate in
these agreements.
With respect to agriculture, the agreement with Singapore commits
Singapore to maintain its current open market for the importation of
farm products from the United States, while the Agreement with Chile
removes numerous barriers that previously limited U.S. exports of
agricultural goods to that country. Chilean tariffs on 75 percent of
U.S. agricultural products will go to zero within four years. These
products include soybeans, corn, pork, and beef, all of which are major
Iowa commodities.
Chile is committed to removing its price band on edible vegetable
oils, wheat, wheat flour, and sugar under the FTA. Chile used its price
band mechanism to protect its domestic producers of these products by
keeping domestic prices within a predetermined range through the use of
additional duties. As recently as 2000, this price band caused
effective tariffs on wheat imported into Chile to rise as high as 90
percent. With the implementation of the agreement, Chile will eliminate
its price band mechanism with respect to U.S. exports over a 12 year
period.
U.S. agriculture will benefit in yet other ways under the Chile
agreement. For example, up until now, the failure of Chile to recognize
U.S. beef grading programs effectively blocked U.S. beef in consumer
cuts from entering the Chilean market. This situation will change with
the implementation of the agreement, as Chile is committed to recognize
the equivalency of U.S. beef grading programs.
As a result of talks held in conjunction with negotiations of the
free-trade agreement, Chile agreed to remove various non-science based
barriers to imports of U.S. agricultural products. Of particular
interest to Iowa's hog and cattle producers, Chile agreed to recognize
the equivalency of the U.S. meat inspection system. Prior to this
decision, Chile prohibited the importation of pork, beef, and lamb from
U.S. facilities unless those facilities paid for Chilean inspectors to
travel to the United States to inspect and certify them. Given the
costs involved with this process, few U.S. plants were eligible to
export meat to Chile.
With Chile's new meat inspection equivalency policy, and with duties
going to zero under the agreement, barriers to the entry of U.S. pork,
beef, and lamb into Chile will be removed. Following further review of
its sanitary and phytosanitary, SPS, measures in conjunction with talks
with the United States, Chile also agreed to permit the importation of
grapefruit from Florida and cherries and stonefruit from California.
Achieving the removal of unjustified SPS measures through talks with
Chile demonstrates that enhancing our trade relations with other
countries can indeed provide the impetus for our trading partners to
remove non-science based barriers to imports of U.S. agricultural
products. Our experience with Chile creates an important precedent for
other trade agreements the United States is negotiating, such as the
Australia FTA, the Central America FTA, and the Free Trade Area of the
Americas. The fact is, without the removal of scientifically unfounded
barriers to trade, duty-free treatment under future trade agreements
will mean little. I'm pleased that talks with Chile led to the lifting
of these unjustified SPS measures.
With respect to telecommunications, these agreements introduce an
important new concept on flexibility of choice and technology
neutrality. Under Article 13.14 of the agreement
[[Page S10515]]
with Chile, and Article 9.13 of the agreement with Singapore, Chile and
Singapore will endeavor to not prevent suppliers of public
telecommunications services from having the flexibility to choose the
technologies that they use to supply their services, including
commercial mobile wireless services. This technology neutral approach
to the regulation of commercial wireless mobile services is consistent
with the practices of the U.S. Federal Communications Commission, FCC,
which neither promote nor impede the use of particular wireless
technologies in the U.S. market.
These provisions constitute an important first step. They introduce a
key regulatory concept into free trade negotiations that can help to
enhance competition and consumer choice. These provisions can also
create export opportunities for U.S. manufacturers of communications
equipment and thereby preserve U.S. jobs that depend on trade in
technology products.
However, I view these provisions as only a first step because they
are non-binding commitments. As such, they should be viewed as a floor,
and not a ceiling, on standards for future free trade agreements. Going
forward, we should strive to negotiate binding and enforceable
commitments in our free trade agreements, to ensure that suppliers of
commercial mobile wireless communications services are not prevented by
governmental action from using the technology of their choosing to
provide such services. Only then will we guarantee that U.S. technology
suppliers enjoy market opportunities and benefits similar to those that
foreign suppliers receive in the U.S. market.
Services are another critical component of our economy. Services now
account for 65 percent of the U.S. economy, and 28 percent of the value
of our exports. With respect to services, the agreements establish an
important precedent by adopting a comprehensive ``negative list''
approach, whereby any exception to the liberalization obligations
contained in the agreements must be specified. This broad approach is
preferable to that contained in the WTO General Agreement on Trade in
Services GATS, whereby countries specify their commitments rather than
exceptions. The negative list approach means more obligations for Chile
and Singapore to liberalize their services exports and more jobs right
here in the United States. The agreements also broaden commitments, so
that they apply to government-owned or government-controlled
enterprises.
With respect to intellectual property protection, these agreements
generally set out among the highest standards of protection and
enforcement for copyrights and other intellectual property yet to be
achieved in a bilateral or multilateral trade agreement. These
protections will permit the growth of trade in digital technologies and
products while still protecting the legitimate rights of copyright
owners. Strong enforcement provisions require the application of
criminal procedures and penalties in cases of trademark counterfeiting
or copyright piracy on a commercial scale, and both Chile and Singapore
commit to seize, forfeit, and destroy counterfeit and pirated goods and
the equipment used to produce them. These protections will apply to
goods-in-transit and mandate both statutory and actual damages under
Chilean and Singaporean law for intellectual property rights
violations.
The agreements also incorporate a principle of ``first in time, first
in right'' to trademarks, whereby the first to file for a trademark is
granted the exclusive right to that name, phrase, or geographical place
name. This approach creates an important precedent that we should seek
to replicate regionally and globally, particularly in the face of
efforts by the European Union to unduly expand protections for
geographical indications in the WTO.
With respect to manufactured goods, Chile's commitment to eliminate
tariffs immediately on 85 percent of U.S. exports, including such key
sectors as computers and other information technology products,
provides immediate benefits to U.S. manufacturers. By entering into
this agreement, Chile will embrace the duty reduction commitments
reflected in the 1996 Information Technology Agreement. These
commitments can create new export opportunities for our manufacturers,
which is critical in this period of increasing unemployment.
The National Association of Manufacturers has estimated that the
absence of a free trade agreement with Chile has cost us about 20,000
job opportunities annually, and over $1 billion dollars in export
potential. Well, that's about to change with the implementation of this
agreement. And that is just the start. We need to aggressively pursue
additional free trade agreements that will expand market access
opportunities for our farmers and our manufacturers, to help add jobs
to our economy and reverse the current trend in unemployment.
Finally, I note that the Finance Committee has received inquiries
regarding the textile commercial availability provisions in the Chile
and Singapore Agreements. I asked the Office of the United States Trade
Representative to clarify the operation of the short supply provisions
in these agreements, and I want to share that clarification today.
All products designated as not commerically available prior to
November 2002 under the African Growth and Opportunity Act, AGOA, and
Caribbean Basin Trade Partnership Act, CBTPA, preference programs would
be deemed as not commercially available under the Singapore agreement.
The Chile agreement does not incorporate such a provision. In the
future, for both the Chile and Singapore agreements, to designate an
item as not commerically available would require consultations under
the provisions for revision of the rules of origin contained in each
agreement. These provisions require the parties to consult, upon
request, to consider whether particular goods should be subject to
different rules of origin to address issues of availability of the
supply for fibers, yarns, or fabrics in the free trade area, and
require the parties to endeavor to conclude their consultations within
60 days. I hope that this clarification proves helpful.
In sum, I strongly support the Chile and Singapore free-trade
agreements. I support them because they open markets for U.S. exports
of agricultural products and manufactured goods. I support them because
they open markets for U.S. exports of a wide array of services. I
support them because they will create opportunities for job growth here
in the United States. I support them because they enhance protections
for intellectual property rights holders here in the United States. And
I support them because they establish important precedents for future
negotiations. For these reasons, I urge each of my colleagues to
support the implementing bills before us today.
Mr. President, I rise to address the benefits to U.S. agriculture
from the United States-Chile Free-Trade Agreement. U.S. agriculture
needs trade agreements to expand sales and farm incomes. Since 96
percent of the world's population resides outside the United States,
access to foreign markets is essential for the continued growth and
viability of U.S. agriculture. Bilateral agreements such as the Chile
FTA are essential because they provide strong benefits to U.S. farmers.
This agreement will provide America's farmers and ranchers new access
to Chile's market of 15 million consumers. This agreement is
comprehensive, calling for eventual duty-free, quota-free access for
all products.
On tariffs, more than three-quarters of U.S. farm goods exported to
Chile will be duty free within 4 years of the agreement's
implementation. Let me just name some of the specific U.S. products
that will benefit. Under the FTA, Chile will provide immediate duty-
free access for soybeans and pork, two major Iowa products. Chile will
also immediately eliminate its tariffs on U.S. apples, pears, cherries,
breakfast cereals, pasta, and bread. Corn grown in Iowa and other
States will receive duty-free treatment in 2 years. The agreement
provides for duty-free access for beef offal immediately, and for all
U.S. beef products within 4 years.
Under the FTA, Chile commits to recognize U.S. beef grading programs.
I should note as well that, through talks held in conjunction with the
FTA negotiations, Chile agreed to recognize the equivalency of the U.S.
meat inspection system. Chile's recognition of the equivalency of U.S.
meat inspections
[[Page S10516]]
and U.S. beef grading should greatly facilitate the export of U.S. pork
and beef to Chile.
Chile's price band mechanism has been a major concern to many U.S.
agricultural exporters. Well, under this agreement Chile will not only
allow U.S. exports of durum wheat and pasta to enter duty free, but
will also eliminate its price band mechanism for common wheat and flour
in 12 years. This will open Chile's market to U.S. exporters for wheat
and wheat flour.
American agriculture recognizes a good deal when it sees one. Let me
read an excerpt from a July 9 letter from 32 agriculture organizations:
Mr. Majority Leader, the undersigned organizations urge
your support and vote for the Free Trade Agreement with
Chile. The U.S.-Chile FTA, provides new market opportunities
for U.S. agriculture products and resolution to outstanding
trade concerns that U.S. producers have experienced with
Chile.
And the letter is signed by such groups as the American Farm Bureau,
the American Soybean Association, the National Corn Growers
Association, the National Pork Producers Council, and many, many
others.
This is a strong agreement for American agriculture. It sets a new
standard for what we can achieve for American agriculture in a free-
trade agreement. I urge my colleagues to do the right thing for
American agriculture and support this strong trade agreement.
I yield the floor.
The PRESIDING OFFICER. The Senator from Arkansas.
Mrs. LINCOLN. Mr. President, I ask unanimous consent that after I
complete my statement, the Senator from Louisiana be recognized for 15
minutes, and then the Senator from Texas, Mr. Cornyn, be recognized.
The PRESIDING OFFICER. Is there objection?
Mr. HARKIN. Reserving the right to object, I understand the consent
request is for the Senator from Arkansas, then the Senator from
Louisiana, and then the Senator from Texas. For how long is the Senator
from Texas going to speak?
Mrs. LINCOLN. Fifteen minutes.
Mr. HARKIN. Mr. President, I would like to amend that request so that
after the Senator from Texas speaks, this Senator from Iowa be
recognized for 15 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Honoring Our Armed Forces
Mrs. LINCOLN. Mr. President, in March, Senator Hutchison from Texas
and I joined to coordinate a daily tribute to the troops in recognition
of the men and women serving in combat in Iraq. We developed these
tributes as a way to honor the sacrifices of the soldiers serving in
the Middle East as they fought to depose the brutal regime of Saddam
Hussein.
The response was impressive, and I thank Senator Hutchison for
working with me on this initiative, not to mention all of our
colleagues who contributed, who came to the floor to share with one
another, as well as the rest of this Nation, the incredible sacrifices
being made by the service men and women of this country.
Given recent developments in Iraq, I wish to take a few minutes today
to revisit the tribute to the troops.
On Tuesday, I learned that Jonathan Marshall Cheatham, an Army PFC
from Camden, AK, assigned to the 498th Engineer Battalion, died in Iraq
on Saturday.
Jonathan's convoy came under attack by enemy forces firing rocket-
propelled grenades while traveling near Baghdad. Jonathan was killed in
the attack. He was 19 years old. Our thoughts and our prayers--all of
ours, not just mine as a Senator from Arkansas, but from all of the
U.S. Senators--are with his mother Barbara Prochia and with his family
and friends at this time of loss.
Jonathan was one of 51 American soldiers who have been killed in
combat since the President declared an end to major combat operations
on May 1.
In all, 164 U.S. soldiers have died in combat in Iraq. This is a
stark and vivid reminder that, even though the major combat portion of
the war may have been declared over, our troops are still fighting and
they still face grave threats.
Let us not forget the challenges that these troops are encountering.
Marine Cpl Jason Smedley of Little Rock, who worked in my office
prior to his service in Iraq, was wounded in combat on March 28.
I am happy to report that Jason has recovered from his injuries and
has returned to work as a member of my staff here in Washington, DC
this week.
Jason has regular contact with his friends and comrades with whom he
fought in Iraq. Some have returned home.
Many have spent months thousands of miles away from their homes and
families, stationed in a desert where the mail does not flow regularly
and where they receive little news of what is happening at home.
For many of these young men and women, the undependable nature of
communication causes tremendous stress and anxiety.
Many of them, trained for combat, are frustrated that they lack the
training and tools to meet the challenges of a peace-keeping mission.
Others tell of the difficulties of being separated from their
families.
Jason tells me of one Marine, Sergeant Eric Johnson, whose wife gave
birth to a child in February. Only recently did Sergeant Johnson hold
his five-month-old son for the first time.
I have no doubt that there are many other families trying to cope
with similar difficulties.
Among the reservists who are serving in Iraq, there are other
pressures.
Many of the troops serving in the Reserves have now been on active
duty for up to 6 months or longer, meaning that they have been drawing
only reserve pay over that time.
Their families are struggling to make ends meet, but they have no
idea when their tour of duty will end or when their financial
difficulties will be alleviated.
The sacrifices that these young men and women are making for their
country are simply astonishing, and it is unlikely that we will ever be
able to adequately repay the debt we will owe them.
Earlier this month, I received word from a doctor, a native of
northeast Arkansas, who is currently serving in Iraq.
He and his unit were traveling to a military hospital about 45 miles
north of Baghdad, where he would treat U.S. casualties.
He wrote of a vehicle traveling in front of his in traffic being hit
by a rocket-propelled grenade, killing one person and injuring three
others critically.
Upon arrival at the hospital, his camp received mortar fire three
times in one night. He noted that ``luckily, the Iraqis are poor
shots.''
On the Fourth of July, this young man was flown on short notice back
to Baghdad, where extra surgeons were needed.
He noted that after he departed for Baghdad, his camp was attacked
yet again, and that a tent about 100 meters from his was hit by mortar.
Ten casualties resulted from that attack, he reported.
I point to this dramatic narrative because it illustrates a couple of
important points I hope we do not lose sight of.
First, the war in Iraq is far from over.
I will note that each of the communications we have received from
this brave young doctor, he has talked about coming under mortar fire
from Iraqi irregulars, or watching coalition forces launch counter-
attacks.
A good part of his labor centers on treating men who have been
wounded in combat.
Clearly, even if the end of combat operations has been declared, the
threat to our troops is ongoing.
As casualties mount and our troops continue to face daily dangers, it
is important that we redouble our efforts to stabilize the country and
help Iraq on the way to become a democracy.
Secondly, we should all recognize that, although our troops are faced
with extremely difficult conditions, they continue their mission with
courage and with a sense of duty and commitment. And they are making
progress.
We learned last week that Saddam Hussein's brutal sons and
presumptive heirs were killed by coalition forces in a firefight near
Mosul.
Since then, coalition soldiers have received more tips and more
information which will lead to the capture or elimination of Baath
party holdouts and Iraqi guerrilla fighters.
[[Page S10517]]
Indeed, each day brings news that the noose may be tightening around
Saddam Hussein himself, as bodyguards, aides, and others close to the
former dictator are captured and interrogated.
We should do all we can to ensure that this progress continues, and
we should ensure that our armed forces have the troops, materiel, and
supplies they need to get the job done.
Finally, I would like to note that a National Guard unit from
Arkansas, the 39th Infantry Brigade from Little Rock, is expected to be
deployed in Iraq in April of next year, to augment security and to
allow for troop rotation so that troops currently stationed in Iraq can
be relieved.
With 3,400 people in the brigade, it is expected to be the largest
deployment of National Guard troops from Arkansas in our State's
history.
These men and women are preparing to spend a year in Iraq, at great
sacrifice to themselves and to their families, so that we can look
forward to a more secure future.
We owe all of them a tremendous, tremendous debt for their service.
All of us in this body are proud of the service men and women who are
serving under incredible circumstances, in incredible times, and doing
the best they can possibly do. We wish them the best, and we wish they
are able to finish the job and return home as soon as possible.
I know my colleagues join me in again paying tribute to the troops,
recognizing the incredible service of these service men and women who
serve our Nation so proudly from each of our States. The different
soldiers who are going out into battle, who are putting themselves in
harm's way, we are lifting them up daily in our prayers, as well as
their families, their needs, and their concerns. We hope we can bring
this to a speedy end and we can make sure that they are all brought
home as safely.
I yield the floor.
The PRESIDING OFFICER. The Senator from Louisiana.
Ms. LANDRIEU. Mr. President, I associate myself with the remarks of
my colleague from Arkansas who, along with our colleague from Texas,
has organized and continues to organize a very appropriate tribute to
our troops to let them know that while we work, while we try to fashion
an Energy bill, while we pass trade legislation, while we attempt to
pass the 13 appropriations bills that fund this Government, including
the Department which funds their operations, we keep them in our minds.
They are on our minds in the morning, at noontime, the early afternoon,
and early evening, as it is today. I thank my colleague for her
remarks, and I know she wishes the troops from Arkansas well and that
they return home safely, as I do those from Louisiana, as does our
whole Nation. So I thank her.
I will spend a few minutes speaking about the major issue at hand,
and that is our Energy bill and our attempts to fashion an energy
policy for our Nation. For a great part of the time since last Friday,
the Senate has been engaged in a very important debate on this very
complicated and far-reaching subject. That debate has followed along
several weeks of intense debate and hard work done on the part of
Democrats and Republicans on the Energy Committee to try to fashion a
bill a majority of the Senators could support.
I have been in meetings myself all day on and off the floor about
that very subject, and hopefully those meetings are proceeding well,
trying to come up with some compromises to move us forward, to proceed
so we do not get stalled on this energy legislation.
I remain very hopeful at this hour that those negotiations will be
fruitful so we can continue our push, our bipartisan effort, to fashion
a bill that increases supply, reduces demand, puts new measures in
place that require conservation and that also will protect consumers in
a new, more deregulated way.
Those are high goals, but they are important goals because if we do
it right, consumers can save a great deal of money. If we do it right,
we can save jobs. If we do it right, we can help this economy to get a
strong foothold toward recovery. If we do it right, we can help our
industries be more competitive and, in doing so, save and preserve jobs
in the United States and increase prosperity.
I wanted to take a moment, while we had this time, to focus on one of
the most important aspects of an energy policy, and, first, to
recognize that most of the debate this week has rightly been Senators
expressing their outrage at what went wrong in the last 12 or 15
months: The description brought again so vividly to the Senate floor by
the Senator from Washington, Ms. Cantwell; the comments made by Senator
Feinstein; the comments made by other Senators on the travesty that
occurred in California and the outrage of the constituents there
because of the doubling and tripling and quadrupling of energy prices.
I most certainly understand. We, ourselves, in Louisiana have been
experiencing higher prices for different reasons. I understand that
frustration.
As much as I support some--not all but some--of their efforts to
remedy that situation, I will spend a few minutes talking about one of
the real causes of that problem. While there was deception, there was
manipulation, there was wrongdoing--and people like Ken Lay and others
need to be on their way to jail, and we hope the prosecution will be
vigorous for that wrongdoing--we would not be giving our constituents
the whole picture if we did not talk for a minute about the underlying
cause of that debacle. It is simply a lack of supply.
We have for the last 20 years implemented policies in this Congress
that have mandated a dramatic increase in natural gas. Yet we have also
mandated the same policies or allowed policies to develop that
decreased our chances of producing natural gas.
As my chart shows, our main energy problem--what has happened and the
reason we are spending weeks, and if we have to spend months, so be
it--is we have to close this gap between natural gas demand and natural
gas availability. That is what is causing the price of natural gas to
be at historic highs and, quite frankly, at dangerous levels because it
undercuts this economy.
Let me give a few specifics. Natural gas provides nearly 25 percent
of the energy that powers our $10.5 trillion economy. I repeat: 25
percent of our entire economy rests on our natural gas policy. It is
out of whack. When it is out of whack, it causes serious problems and
serious consequences. That is what we are experiencing. More than 55
percent of residential customers use natural gas.
Visualize walking along any neighborhood in the country. In New
Orleans, along Napoleon Avenue where I grew up; think about walking
down Grand Isle, little Main Street on an island. I was just there a
few weeks ago. Maybe you are in a suburb right close to Washington or
maybe right on East Capitol Street. Every other house--50 percent of
residential consumers--has natural gas access.
We have a shortage. When there is a shortage, prices go up. This
country will see an increase, it is estimated, from $534 in 1999 to
$900 in 2003. That means consumers--every other house, basically--will
pay $70 billion more for gas in 2003 than they did in 2002. We gave a
tax cut of $340 billion. Average it over 10 years, it is $34 billion.
We are giving a tax cut of $34 billion. Yet because of our energy
policy, we are taking $70 billion out of the pockets of residential
customers.
It makes no sense. That is why people can say: Thanks for the tax
cut, but I am not really feeling it because you are giving it on the
one hand and taking it away on the other.
We have a solution. Natural gas is not only a fuel but an essential
raw material for feedstock. Each year, the U.S. chemical industry
converts 20 percent or $20 billion of natural gas-based fuel and
feedstock into more than $200 billion of essential consumer products.
When people say to me, Senator, your State is a natural gas State, you
are concerned about natural gas, I am concerned about natural gas
because, of course, it fuels every other house in the country, but also
because it fuels so many of the plants that create all of the products
we use for a variety of our entities, a variety of goods in our economy
that we use every day, from plastics to chemicals to fertilizers. More
than a million people work daily in the U.S. chemical industry, and 5
million people work in dependent jobs; that is 6 million jobs.
If I have to stay on the Senate floor all day today, all day
tomorrow, if I
[[Page S10518]]
don't leave for the August recess, it is fine with me because we need
to get people back to work. I know that even if we passed the most
well-crafted tax policy, no matter if we pass the most well-crafted
trade laws, no matter what we pass, if we do not pass an Energy bill
that gives some vision for the future, confidence to the market and an
increased supply and conservation, we are not going to be able to do
anything else here that will save these jobs or create jobs for
Louisiana or for the Nation as a whole.
This is not just an Energy bill; it is a jobs bill. At a time when
our economy is weak, this Senate needs to be about jobs. That is why I
hope these negotiations will be fruitful. We need a good bill.
In my State of Louisiana, ammonia plants in particular are feeling
the effects. For these plants, the cost of natural gas represents 70 to
90 percent of the total cost of manufacturing. If I cannot get them
relief on their price of natural gas, if I cannot help get this bill
through, and we do not have some relief in sight, these plants will
close, thousands of jobs will be lost, they will move overseas, and
they are not coming back.
It is not like closing an office temporarily until conditions improve
and then everyone shows up a few months later. These plants are huge.
There is a tremendous amount of steel and processing equipment. When
they close, they are not going to reopen.
We have gone from nine companies employing more than 3,500 people to
three companies employing less than 100.
There is a solution: Improving our drilling opportunities in
appropriate places for natural gas--out West, in the gulf coast, and
importing liquefied natural gas is a start.
In my last 3 minutes I will explain one basic issue that gets to the
heart of what I am trying to communicate. Again, let me say so that no
one can say that Senator Landrieu is not concerned about deception and
manipulation and scams that went on, I promise, the manipulation,
deception, and scams were not the primary cause of our dilemma today.
It was a cause, it was a significant cause, and it was criminal in many
cases, but it was not the primary cause.
The primary cause is some States, in the last 20 or 30 years,
consumed a lot of energy, but do not produce energy. I have a chart
illustrating statistics from our Energy Department, including all types
of fuels and energy: Nuclear, hydrogen, geothermal, wood, wind, waste,
solar, oil, natural gas, and coal. This is from the U.S. Department of
Energy, the Energy Information Agency. This includes all types of
energy minus consumption. The States in dark red on the chart are the
States that consume much more energy than they produce. And they are
rated from the top, which is California; the second is New York; third
is Ohio; and fourth is Florida. And it goes down to the States that
produce more than they consume. They become net exporters of energy,
the best State being Wyoming, then Louisiana, then West Virginia,
Alaska, and it goes up.
Let me be quick to point out, because this is a very important chart,
the country can never be energy independent until these States, and the
regions they are in, become energy independent. One of the things the
chairman, the Senator from New Mexico, has been trying to help this
Congress understand is that you cannot even begin to be energy
independent until these States and these regions come to terms with the
fact that they are consuming huge amounts of energy and they are not
producing. They have two choices: They can either cut their
consumption, they can cut their consumption and can conserve anything
they want, or they can produce more energy.
So that is part of what our chairman and ranking member, both from
New Mexico, have been trying to explain to us.
I am going to submit this for the Record.
We have an energy deficit in this Nation. No matter how you look at
it, no matter how many people you put in jail, no matter how much
consumer regulation you put in place, we have a serious energy deficit.
Until this is corrected, no matter what we do, we are still not going
to have the kind of energy policy in this Nation that will help us keep
jobs in America and strengthen our economy.
In conclusion, I want to say how proud I am that Louisiana is a
producing State and we not only consume what we produce but we export
energy. We are proud to do that, and we will continue to do that in
appropriate, environmentally sensitive ways.
I yield the floor.
The PRESIDING OFFICER. The Senator from Texas.
Mr. CORNYN. Mr. President, I have a few remarks I would like to make
on the free-trade agreements with Chile and Singapore. Before that, I
have some matters of housekeeping.
Mr. President, I ask unanimous consent that the time Senator Hollings
consumed be counted against the time he controlled on H.R. 2738 and
H.R. 2739, the trade agreements.
The PRESIDING OFFICER. Without objection, it is so ordered.
free-trade agreements with chile and singapore
Mr. CORNYN. Mr. President, I rise today to speak in favor of the free
trade agreements with Chile and Singapore.
These agreements are consistent with the longstanding policy of the
United states to negotiate agreements that reduce foreign trade
barriers, increase export opportunities for American businesses, and
create jobs for American workers.
I understand the concerns of my colleagues about certain immigration
provisions contained within these two agreements. I recently helped
chair a Judiciary Committee hearing where representatives of the United
States Trade Representative's office explained the reasoning for such
provisions. I also had the opportunity to discuss this issue with
Ambassador Zoellick last week in person.
The fact is that our lack of a free-trade agreement with Chile today
costs American exporters an estimated $800 million per year in sales,
affecting approximately 10,000 U.S. jobs. That's an enormous amount and
that's just one of the reasons I am in favor of these free-trade
agreements, because I believe they will be good for American markets,
American businesses and American workers.
Immigration policy is the responsibility given to Congress under the
Constitution. I assure my colleagues that enactment of these agreements
does not infringe in any way on that authority or responsibility.
The United States Trade Representative has been very responsive and
open to the concern of Senators. On at least seven occasions since
October of last year, USTR provided formal briefings to Judiciary
Committee staff about the immigration sections in these treaties. USTR
has welcomed the input of Senators on immigration and other issues
covered by these treaties.
Over the past several months, some of my colleagues have expressed
reservations about the temporary nature of the visits under these
agreements, as well as the funding for the new visa program, time
limitations for these temporary visas, and numerical limitations.
The legislation we are being asked to vote on today represents the
results of negotiations between the members of both parties on the
Judiciary Committee and the USTR. With respect to the substance of the
immigration provisions, there was bipartisan consensus about the
content. All of us want to promote trade, but we also want to protect
American workers from those who abuse our immigration laws.
Ambassador Zoellick recently expressed to me that he does not
approach negotiations with the intention of including immigration
provisions. Circumstances vary according to each negotiation and each
country involved. Negotiating flexibility must be maintained to produce
agreements that provide maximum benefits to American workers.
The inclusion of the immigration provisions protects the interests of
U.S. businesspeople and will better enable them to pursue overseas
opportunities to increase American exports. In most immigration
matters, the United States expands the number of visas for foreign
workers without receiving reciprocal assurances from other countries
for access for Americans.
The Chile and Singapore free-trade agreements will enable an
unlimited number of American businesspeople to
[[Page S10519]]
reside in these two countries while capping the number of annual
entries at 1,400 from Chile and 5,400 from Singapore.
These limits will protect American business interests and American
workers. And I applaud the U.S. Trade Representative's office for its
efforts in reaching these agreements with Chile and Singapore.
At the same time, I believe this initial experience with this new
authority which Congress has conferred on the President, to negotiate
these agreements subject to an up-or-down vote in the Congress, has
given the U.S. Trade Representative an increased appreciation for the
need to actively consult with Congress on matters as sensitive and
significant as immigration issues. Failing that, there is no question
in my mind that future free-trade agreements are unlikely to receive
Senate approval, and that would be a shame.
The United States-Chile free-trade agreement will provide numerous
opportunities for United States workers and manufacturers.
U.S. companies currently operate at a disadvantage because
competitors such as Canada, Mexico, and the European Union already have
free-trade agreements with Chile. As I said before, our lack of an
agreement costs American exporters an estimated $800 million per year
in sales, affecting approximately 10,000 U.S. jobs.
The agreement with Chile will eliminate tariffs immediately on more
than 85 percent of consumer and industrial goods, and most remaining
tariffs will be phased out within the next 4 years. The result will be
a $4.2 billion increase in the US GDP and a $700 million increase in
Chile's GDP.
The U.S.-Singapore free-trade agreement will have a similar effect on
trade and economic liberalization in Southeast Asia.
Despite its small size, the economy of Singapore is robust and highly
competitive. Roughly 1,300 American firms have a significant presence
in Singapore, including 330 regional headquarters for American
businesses. The establishment of a free-trade agreement with Singapore
will further increase opportunities for American workers through
improved access to this important market.
I believe these free-trade agreements will be good for American
markets, American businesses and American workers, and I will vote
accordingly. I respectfully ask my colleagues to do the same.
I yield the floor.
The PRESIDING OFFICER. Under the previous order, the Senator from
Iowa is recognized for 15 minutes.
Mr. SESSIONS. Mr. President, I wonder if the Senator from Iowa would
allow me to proceed for 2 minutes.
Mr. HARKIN. Mr. President, I ask unanimous consent that the Senator
from Alabama be recognized for 3 minutes after which I then be
recognized for my 15 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Alabama.
Mr. SESSIONS. Mr. President, I very much thank the Senator from Iowa.
I have been inclined to be supportive of these two treaties with
Singapore and Chile. They came up in the Judiciary Committee. I was
very surprised to see we will be amending immigration law. As I
listened to the debate from other members of the committee, I concluded
at that point I could not support the treaties. I voted no. I don't
think there were a large number of people in the committee who voted
no. But I did not like the fact that the first fast-track treaty had
come up with amended immigration law which is under the plenary power
of the Congress, and it is not capable of being amended. It is not
capable of being changed. I think it is a bad mistake to do that.
Subsequent to that, we have worked hard to put in as part of the
passage of this treaty a sense of the Senate. That sense of the Senate
says:
Trade agreements are not the appropriate vehicle for
enacting immigration-related laws or modifying the current
immigration policy; and future trade agreements to which the
United States is a party and the legislation implementing the
agreements should not contain immigration-related provisions.
This is really an important issue. I want to support this treaty. I
hope to be able to support this treaty. Maybe I will be able to support
this treaty. But I certainly respect the people of Singapore and
respect the people of Chile. They are allies and friends. We want to
work with them and improve trade. Hopefully, we will be able to do
that.
In my home State of Alabama, Singapore has a 1,000-personnel company
that is doing great business. I am proud of their work and enjoy
getting to know those people. It is an important part of the community
of which I am a part, which is an example of some of the good things
that come from trade.
But we are concerned. A lot of the Members of this body are
concerned. This crystal-clear sense of the Senate without equivocation
says do not bring us any more treaties with these kinds of amendments
on them. If you do, they are going to be in danger.
Immigration Provisions in the Singapore and Chile Free Trade Agreements
While I want to support agreements, the inclusion of immigration-
related provisions in the legislation before us is deeply troubling.
Let met tell you what has happened-The U.S. Trade Representative,
USTR, by implementing new immigration provisions in treaty
negotiations, has encroached on the role of the legislative branch,
without consent from this Congress.
The ``temporary entry'' sections that are in the Singapore and Chile
trade agreements should not be there. Because of the fast-track
process, Congress is not allowed to take out the immigration provisions
that we don't like, no amendments are allowed. We are only allowed to
vote up or down on these agreements.
The inclusion of immigration provisions in the Free Trade Agreements
with Chile and Singapore has directly interfered with Congress' plenary
power to regulate the nation's immigration policy. The power to make
immigration law belongs to Congress alone and includes both the
temporary and permanent admissions of foreign nationals into the United
States.
Article I, Section 8, clause 3 of the Constitution authorizes
Congress ``to regulate Commerce with foreign Nations, and among the
several States'' and Article I, section 8, clause 4 of the Constitution
provides that Congress shall have power to ``establish a uniform Rule
of Naturalization.''
The Supreme Court has long interpreted the Constitution to grant
Congress plenary power over immigration policy. As the Court found in
Galvan v. Press, 347 U.S. 522, 531 (1954), ``the formulation of
policies [pertaining to the entry of aliens and their right to remain
here] is entrusted exclusively to Congress has become about as firmly
imbedded in the legislative and judicial tissues of our body politic as
any aspect of our government.'' And, as the Court held in Kleindienst
v. Mandel, 408 U.S. 753, 766 (1972) (quoting Boutilier v. INS, 386 U.S.
123 (1967)), ``[t]he Court without exception has sustained Congress'
`plenary power to make rules for the admission of aliens and to exclude
those who possess those characteristics which Congress has forbidden.'
''
At the hearing before the Senate Judiciary Committee on these
agreements, the witness for the U.S. Trade Representative, Mrs. Regina
Vargo, was asked what legal authority the U.S. Trade Representative,
USTR, was relying on as a basis for including immigration law
negotiations in trade treaties.
The USTR witness responded by differentiating between temporary and
permanent entries into the United States, stating that because the
Chile and Singapore Free Trade Agreements only contained provisions
regarding temporary entries of foreign persons, the USTR was acting
within the bounds of its negotiating authority.
This assumed authority was again stated by the USTR in the written
answers that they submitted to the written questions submitted by
members of the Judiciary Committee. This is not the case and I want to
make it clear to the USTR that they do not have the authority to
negotiate immigration law on behalf of the Congress. By negotiating and
including immigration law provisions in a binding bi-lateral treaty
that Congress does not have the power to amend, the USTR has
established a dangerous precedent that will not be tolerated in future
trade agreements.
Instead of changing the immigration law under these agreements for
citizens
[[Page S10520]]
of Singapore and Chile, it would have been especially appropriate for
the USTR to ensure that employers who repeatedly use the visa programs
established under these trade agreements abide by all current U.S. laws
governing the entry of these foreign workers.
As a Senator of this committee, which has jurisdiction over
immigration policy, it is my duty to preserve the plenary power of
Congress to make immigration policy. I am dedicated to opposing any
erosion of that power. After the Judiciary Committee Hearing, I, along
with Senator Graham of South Carolina and Senator Feinstein, sent a
letter to the USTR asking them to withdraw the trade agreements and
submit them again without the temporary-entry/immigration provisions.
Before we vote on the Chile and Singapore Trade Agreements, this
Senate will unanimously pass a resolution I introduced. The resolution
states that it is the sense of this Senate that:
Trade agreements are not the appropriate vehicle for
enacting immigration-related laws or modifying current
immigration policy; and future trade agreements to which the
United State is a party and the legislation implementing the
agreements should not contain immigration related provisions.
I am glad that a strong statement defending Congress' authority over
immigration law will be made today. I fully intend to defend that
statement and ensure that future trade agreements comply with the
unanimous desire of this body.
One reason I am so concerned about the inclusion of the immigration
provisions is that four visa categories are permanently affected by the
agreements. The legislation before us today effects four types of
current visas:
No. 1. The H-1B--``highly skilled worker'';
No. 2. the B-1--business visitor;
No. 3. the E-1--treaty trader or investor visa; and
No. 4. the L-1--intra-company transfer visa.
H-1B requirements under the Chile and Singapore agreements are weaker
than the requirements for other H-1B workers. The agreements require,
without numerical limit, that business persons in the other three visa
categories be entitled to entry. Under the H1-B category, this
legislation permits the admission of up to 5,400 professionals from
Singapore and up to 1,400 professionals from Chile each year.
This legislation also permits the almost unlimited renewal of the H1-
B visas each year, which could have the effect of turning a temporary
entry visa program into a permanent visa program; and
These agreements also require that dependent spouses and children be
allowed to join the H1-B professionals that enter under these
agreements--with no numerical cap.
I am concerned about including permanent immigration changes in trade
agreements when we have unemployment among U.S. workers. I am dedicated
to preserving the jobs of U.S. workers whenever possible. I welcome,
when appropriate, foreign industries within our borders, and, when
appropriate, I fully support foreign workers coming here to work.
But, I also believe that the suspected abuse surrounding some
immigration visas should be examined--such abuse is possibly
contributing to the level of unemployment in the U.S.--including the
record unemployment level for U.S. high-tech workers. The only way to
protect the job market for American workers is to preserve Congress'
plenary power to make laws that affect the ability of foreign workers
to displace American workers from their jobs. That is why the Judiciary
Committee has hearings to oversee how the visa programs we have enacted
are working. Just this week we held a hearing to examine the L-1 visa,
one of the visa categories affected by these trade agreements.
After that hearing, Congress may decide that we need to reform the L-
1 visa category. Any provision of a future trade agreement that
restricts the ability of this Congress to reform such programs and to
therefore protect U.S. jobs will not be looked upon favorably. If the
U.S. Trade Representative continues to negotiate treaty terms such as
the ones before us today, I will be unable to support them.
I deeply desire to support Chile and Singapore and had fully planned
on voting for the Free Trade Agreements at every turn. I look forward
to working with colleagues from each nation, but in particular, the
businessmen and women who are engaged in the expansion of trade between
our respective business communities. In Alabama we are indeed fortunate
that several companies from Singapore found opportunities in Alabama--
opportunties they developed into thriving businesses.
One such business is located in my home town of Mobile, Alabama.
Mobile Aerospace Engineering--MAE--is Singapore owned, but more
importantly it is a vibrant business employing over 1,000 local
workers. MAE is a community leader not just in the number of its
employees, but in its community outlook and community involvement. My
visits have revealed that Singapore is indeed a valued economic partner
and trusted ally.
I believe the Governments of Singapore and Chile clearly understand
the message my colleagues and I have communicated to the USTR. Our
commitment to trade is not diminished; our message however is quite
clear: trade agreements are not the appropriate vehicle for enacting
immigration-related laws or for modifying current immigration policy.
I thank so much the distinguished Senator from Iowa for his courtesy.
I yield the floor.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. HARKIN. Mr. President, I am a long-time supporter of policies
designed to open foreign markets to our Nation's exports through new
trade agreements. I have fought to break down the barriers that many
other countries have erected to block our exports, and I have sought to
reduce the practices by which many of them seek to compete unfairly in
world markets. More fair trade can create jobs here at home, and
American consumers can benefit from the resulting competition.
In 1991, I took a trip to Chile to gauge the prospects of entering
into a free trade agreement with Chile, and I returned favorably
disposed. I thought that we should negotiate a free trade agreement
with Chile before doing so with Mexico, and I communicated that to the
President at the time.
However, trade is not just about commercial transactions and whether
or not imported products become cheaper and exporting companies
increase their profits. Trade policy and the consequences of trade are
linked with the preservation of the natural environment in both
countries that are party to an agreement, as well as the legal rights
and working conditions of workers. I take these matters into
consideration when I determine whether or not to support a given trade
agreement, as well as the economic gains that may be generated.
I am aware that U.S. groups representing a considerable variety of
agricultural products support the Chile FTA. A total of 32 farm groups,
producer groups, and agribusiness interests signed a letter in July,
urging support for the agreement. Even some of those organizations have
concerns about market access for specific products, or about addressing
trade reform through a bilateral, rather than a multilateral agreement.
Over the 1998-2001 period, U.S. companies shipped an average of $125
million worth of agricultural goods to Chile, accounting for about 10
percent of their total agricultural imports. Until now, or major
competitors in the hemisphere, Argentina and Brazil, have had an
advantage in the Chile market because of their proximity and Chile's
status as an associate member of Mercosur, the South American regional
trade agreement. This FTA should help to level the playing field,
although the cost of shipping goods more than 5,000 miles to the Chile
market will always be a factor in determining the attractiveness of
U.S. products.
Both of the trade agreements we are considering--the Chile and the
Singapore agreements--also are good for the U.S. financial services
sector. The president of Principal International, Norman Sorensen,
testified recently before the Senate Finance Committee, and he listed a
number of benefits for Principal and for other financial services
companies. I note that Principal Financial Group is a major private
employer in my State of Iowa.
Trade agreements--on the right terms--promise many benefits and
opportunities. Notwithstanding these
[[Page S10521]]
benefits, we have increasingly come to realize in recent years that
issues previously not considered to be trade issues in fact are trade
issues intellectual property being one of those most prominent. That is
why I have worked hard to improve the labor provisions in various trade
measures, concentrating particularly on abusive and exploitative child
labor. I want trade agreements to promote fair trade, fair competition,
environmental protection and good labor conditions in all countries.
That means trade agreements that support and reinforce existing
international child-labor standards, not undercut them.
In examining any trade agreement, we must weigh the balance of these
considerations. In the cases of the agreements now before us, I have
reluctantly concluded that the benefits do not outweigh the potential
harm.
As many of my colleagues know, I have been working on reducing
abusive and exploitative child labor around the world for over a
decade. I first introduced a bill on this issue in 1992. According to
the best estimates by the International Labor Organization--ILO--there
are at least 352 million child laborers between the ages of 5 and 17
who are engaged in today's global economy.
Of these 352 million child laborers, 246 million have never seen the
inside of a classroom. These 246 million powerless children are working
in the most hazardous conditions in mines in fishing operations and on
plantations. It is appalling that this is still occurring in the 21st
century. These children are robbed of their childhoods. Many are denied
any hope for a brighter future. In this new century, they will grow up
illiterate and exploited, creating a wellspring of future social
conflict and strife.
We have made some progress over the years by increasing funds for
programs to rehabilitate child laborers through our contribution to the
ILO's International Programme for the Elimination of Child Labor--IPEC.
In 2000, I and Senator Helms successfully amended the Trade and
Development Act with a provision directing that no trade benefits under
the Generalized System of Preferences--GSP--be granted to any country
that does not live up to its commitments to eliminate the worst forms
of child labor. We required that the President submit a yearly report
to Congress on the steps being taken by each GSP beneficiary country to
carry out its commitments to end abusive and exploitative child labor.
I want to explain clearly to my colleagues what I mean when I refer
to abusive and exploitative child labor. It is not children who work
part-time after school or on weekends. There is nothing wrong with
that. That is not the issue. What I am referring to is the definition
set out by ILO Convention 182 on the Worst Forms of Child Labor.
This is not just a Western or a developed world standard; it is a
global standard that has been ratified by 138 countries. It has been
ratified by Chile. It has been ratified by Singapore. The United
States, I am proud to say, was the third country to ratify this
convention. Unfortunately, the implementing legislation now before the
Senate for free trade with Chile and Singapore actually would take us
and the world a step backward when it comes to protecting children.
That is right. This freetrade agreement with Chile, which replaces GSP
provisions in governing the trade between our two countries, will take
us backward with respect to abusive and exploitative child labor.
Under GSP, the President must report to Congress annually regarding
Chile's child labor practices. And under GSP, if Chile is not meeting
the obligations that Chile undertook as a signatory to the ILO
Convention 182, if Chile is not acting to eliminate the worst forms of
child labor, then trade sanctions are available to us to require
enforcement in Chile of internationally recognized child labor
standards. That is so that our companies, and our workers here in
America, are not subjected to the unfair competition that abusive
exploitation of children allows.
Under this new implementing legislation for free trade that we have
before us now, if it is enacted, neither of those things I just
mentioned will be true. The President will not be required to report on
Chile's practices or Singapore's. And even if egregious violations of
international child labor standards are reported, no trade remedy will
be available. This new agreement merely allows voluntary cooperation
between the two countries on issues such as abusive and exploitative
child labor.
Our trade negotiators, for some reason, in this agreement before us,
explicitly weaken existing protections against abusive and exploitative
child labor.
They took us from mandatory Presidential reporting, with trade
sanctions available, to the mere possibility of voluntary cooperation
with no recourse to trade sanctions as enforcement.
My colleagues, we voted here in the Senate 96 to 0 in the year 2000
to include these protections. Senator Helms and I offered that
amendment to the GSP. This Senate voted--with our eyes open, ears
open--96 to 0 to include these protections in the GSP. It received
unanimous, bipartisan support.
None of us in this body have voted for, and I am sure none of us have
sought to have, those child labor protections undercut by our trade
negotiators in an agreement with Chile or Singapore or any other
country. But that is what they have done. And now, thanks to fast-track
rules, which don't allow us to amend this legislation, we will not even
be able to restore the protections we voted for 3 years ago in this
agreement. If we vote for this trade agreement, we are voting to remove
the protections that all of us here--96 Senators--voted 3 years ago to
put into place to end the practice of abusive and exploitive child
labor.
I would like to support a free-trade agreement with Chile. As I said,
I went there 11 years ago to help promote a free-trade agreement. But I
cannot vote for this because our negotiators took away from us the one
thing we put in 3 years ago to end abusive and exploitative child
labor.
This takes us in the wrong direction with respect to the world's
children. Supporting abusive and exploitative child labor abroad does
not help create jobs in America, it is just the opposite; it hurts that
effort. Our workers and our local businesses should not be competing
with the worst forms of child labor abroad. Our trade negotiators
should not be weakening protections that we in Congress put in place to
ensure that free trade can be consistent with respect for international
child labor standards. What our negotiators did is wrong.
It has been said that these trade agreements with Chile and Singapore
can be a model for future trade agreements, for example, with Central
American countries. In the area of abusive and exploitative child
labor, I hope that is not the case. A better model would be the free-
trade agreement with Jordan, which we adopted in September of 2001.
That agreement had broad support from business and labor. I supported
it. In that case, we successfully moved the issue of abusive and
exploitative child labor and other labor rights right into the body of
the agreement where they rightfully belong. I cannot understand why we
would turn back from that agreement and from the GSP provisions.
I am sorry to say this is not an academic or rhetorical issue in the
case of labor practices in Chile. Chile is far from the worst
government, even in our hemisphere, when it comes to meeting its
international obligations to protect its children.
I don't mean to single Chile out. In fact, Chile has done a great
thing in getting rid of the Pinochet dictatorship and returning
democracy and free markets to Chile. But there is broad agreement among
international observers--our own Department of Labor, the Department of
State, UNICEF, the International Labor Organization--that the problem
of abusive child labor persists in Chile. Approximately 65,000 Chilean
children between the ages of 12 and 17 are working rather than
attending school as they should. This is according to the ILO, UNICEF,
and our own State Department. These kids are engaged in mining,
agriculture, including street children, domestic workers.
The Government of Chile may be seeking to reduce the problem, as it
should. But we should not be weakening our sole existing trade
mechanism that allows us to monitor their progress and to back up the
international standard with trade action. That is not the way forward
for free and fair trade. That is not the way to lift up the Chilean
economy or working families in the United States. Abusive
[[Page S10522]]
child labor perpetuates the cycle of poverty across generations. No
country has achieved broad-based economic prosperity on the backs of
working kids. Weakening our existing protections against the worst
forms of child labor certainly should not occur in an agreement that
might be a model for free trade with Central America.
Lastly, I am also concerned about the selective changes in
immigration law on these trade agreements. These trade agreements would
allow 1,400 foreign workers from Chile per year and 5,400 workers from
Singapore per year to obtain 1-year visas to work in the United States,
visas which are renewable indefinitely. That is a significant change
from our current H-1B visa policy, where workers are granted 3-year
visas that can be renewed only once. We should not be promoting the
importation of skilled foreign workers for indefinite stays in the
United States when there are 9 million Americans currently out of work.
I have a further concern with a provision inserted in the Singapore
free-trade agreement. The integrated sourcing initiative, or ISI,
allows predominantly information technology goods produced in third
countries to be treated as if they had been produced in Singapore for
the purpose of satisfying rules-of-origin provisions.
This ISI provision could allow goods produced in countries that
routinely violate workers' rights, such as Indonesia, and possibly
Burma, to be transshipped through Singapore in order to avoid United
States limitations and bans. That is in the Singapore free-trade
agreement.
I regret that our negotiators have presented us with flawed
agreements. In the case of Chile, it is either sloppy work or they
deliberately changed the child labor provisions. By allowing third
countries to transship through Singapore, again, it is either sloppy
work or deliberately trying to undercut United States limitations and
bans on certain countries.
I particularly hoped that I could support an agreement for free trade
with Chile. I started working for that over 10 years ago. But I do not
believe trade can be called free when it promotes the exploitation and
abuse of children by weakening our existing protections against the
worst forms of child labor.
I yield the floor.
The PRESIDING OFFICER. The Senator from Idaho.
Mr. CRAIG. Mr. President, I yield myself time under the time allotted
for Senator Sessions.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. CRAIG. Mr. President, I, too, rise this evening to express
concern over the pending free-trade agreements with Chile and
Singapore. My colleague from Iowa has just spoken to that. I will
approach it from a slightly different manner but with the same
concerns.
These trade agreements should have been focused largely on trade
issues because our trading partners in this case need a relationship
with us, and we have worked hard over the years to develop one with
them. We have heard that our agreement with Chile would expand the GDP
of this country by $4.2 billion and allow 75 percent of U.S. farm goods
to enter Chile tariff free within 4 years. Both the Senator from Iowa
and I would have to agree that is the way it ought to be. Certainly, I
applaud our trade ambassador for working in that direction.
Unfortunately, during negotiations, our representatives went beyond
the issues of free trade and threw our immigration laws on the table
for negotiating purposes. As a result, the agreements with Chile and
Singapore contain immigration provisions that I think raise very
troubling issues.
Let me be the first to acknowledge that these immigration provisions
may arguably benefit some U.S. companies, including companies in my
home State. I have already visited with many of those companies.
However, there are also problems with these provisions, problems with
how they came into being in the first place, problems with their
substance, and problems with their potential impact. What intensifies
our dilemma today is that we run the risk that similar provisions would
be included in future trade agreements, as the Senator from Iowa has
already said, and I say here. Why? Because our trade ambassador has
said it.
What we deal with tonight are templates or foundations from which we
will deal with other countries in establishing free-trade agreements.
Those negotiations are already underway with Australia and Morocco and
South Africa, Central America, and 34 countries in the western
hemisphere we are currently engaging with in free-trade agreements. I
will tell you, if this is a template and if he plans to negotiate
immigration law in the midst of a free-trade agreement, this is one
Senator who will work very aggressively to block them until our trade
ambassador understands that he is outside his prerogative.
Many of my colleagues will remember that last year more than 60
Senators expressed concern about our U.S. trade remedy laws being
negotiated away and changed by our U.S. Trade Representatives without
congressional consent or input. As we all know, once these trade
agreements are sent to Congress, they cannot be changed or amended.
Again, more than 60 Senators expressed concern about items that are
within congressional purview and should be guided by Congress, not
unelected officials down at the Trade Representative's office. These
same fears and concerns apply to immigration provisions within the
free-trade agreement.
It is Congress and not our trade negotiators that should be making
changes in U.S. immigration law. Senators have been rightly concerned
about how much consultation should be done with Congress before these
provisions are finalized. It is my understanding that the USTR
consulted with six private sector advisory committees when negotiating
terms of the free-trade agreement, including the labor advisory
committee which was critical to the temporary entry provisions. The
USTR published a Federal Register notice soliciting comments on both
agreements.
However, under the Trade Promotion Authority Act, the administration
is required to consult with Congress while conducting negotiations. In
this case, consultation was brief and given on very short notice,
certainly with regard to the Judiciary Committee of which I am a
member.
But what troubles me more--and would have been resolved had Congress
been meaningfully consulted--is the substance of the proposed
immigration provisions themselves and Congress' limited ability to
amend the provisions even in the face of fraud or abuse that could
occur within this trade agreement.
The free-trade agreement addresses four specific categories of
temporary nonimmigrant admission currently governed by U.S. immigration
law. These are business visitors, or B-1; treaty traders and investors,
the E-1s and E-2s; intracompany transferees, the L-1s; and professional
workers, the H-1Bs.
The potential for fraud in these visa programs is substantial. The
free-trade agreement is specific that neither party may ``as a
condition of temporary entry, require prior approval procedure
petitions, labor certification tests, or other procedures of similar
effect. . . .''
Yet labor certification requirements ensure that foreign workers do
not displace or adversely affect the working conditions of Americans.
Current H-1B law requires attestation of H-1B dependent employees in
order to reduce potential fraud. This requirement is necessary to
prevent repeat users of H-1B visas from using temporary foreign labor
as a strategy to avoid paying higher salaries to American workers. This
requirement is not mentioned in the implementing language.
Also, while the administration has included a cap on the number of
professionals entering under the H-1B category, there are no such
limitations on the number of temporary workers entering under other
visa categories, including the B-1 visa, the E-1 visa, and the L-1
visa. None of these categories are numerically limited under the
agreement and, once enacted, Congress may not subsequently impose caps
on these categories for national entry.
This is particularly problematic within the context of the L-1 visa
category. Neither of the FTA agreements requires workers to be citizens
of either Chile or Singapore. They can be from any country as long as
they are working for a company located in either Chile or Singapore.
[[Page S10523]]
Many employers are exaggerating the specialized product knowledge of
their professional workers so they qualify as L-1 visa applicants. As a
result, the L-1 visa program is receiving an increased amount of
scrutiny by the State Department, as we speak. The Department of
Homeland Security is looking at it as we speak. Members of Congress and
the General Accounting Office are doing the same. GAO is also
investigating the L-1 visa program. And the Judiciary Committee
recently held hearings on this issue.
What Congress must realize is that because the proposed legislation
is implementing a free-trade agreement between the United States and
Chile and Singapore, Congress' power to amend the proposed legislation
is minimal even when Americans are being adversely affected.
Only those amendments that do not conflict with the free-trade
agreement can be amended without violating the agreement. This is the
interesting catch-22 of what we are about to do. In fact, when asked
whether Congress would be able to enact laws making changes in the H-1B
or the L-1 visa programs that affect Chilean and Singaporean
nationalities, once Congress approved the implementing language, the
USTR, in a written response to questions submitted during a Judiciary
Committee hearing, stated: ``[the United States] may make modifications
to the immigration law that was amended by the proposed legislation to
the extent consistent with the obligations of the United States Under
the Chile and Singapore Agreements.
This means that the United States ability to protect against fraud or
protect U.S. workers from displacement by Chilean and Singaporean
workers is reduced. The USTR states that ``neither agreement precludes
the United States from modifying its law and regulation related to
temporary entry after the Agreement enters into force, as long as those
modifications do not unduly impair or delay trade in goods or services
or the conduct of investment activities under the Agreements.''
However, the USTR has also stated that ``the international mobility of
business persons, whether in their personal capacity or as employees
providing services, has become an increasingly important component of
component of competitive market for suppliers and consumers alike.''
This means that any restriction on visas may be viewed as unduly
impairing or delaying trade in goods or services or the conduct of
investment activities under the Agreements because employee services
are so valuable.
As we have witnessed in this post-September 11th world, our
immigration laws are a delicate work in progress as we try to find a
solution to many of our immigration problems. As we continue to work on
immigration provisions to further protect our nation we now have a new
roadblock--a provision created and placed in these free trade
agreements.
Should Congress, in the future, try to amend or change any of our
current immigration provisions we must now always keep an eye on the
provisions contained in these trade agreements. Why? Because should
Congress change any of our immigration laws to adapt in this new
world--and change any immigration laws that are subsequently also
contained in these agreements--those new laws may in fact violate these
very trade agreements--cause a tremendous problem. The problem is
embodied within the provision.
As a result, Chile or Singapore, or any future country we negotiate
with, could challenge us by challenging our immigration laws in an
international court.
In other words the Senate of the United States, within these
provisions, could be found in violation of the agreement, and therefore
has lost control of its own ability to change our laws.
Having our immigration laws challenged in an international court is
something I firmly believe Americans do not want questioned or subject
to an international body. It is simply called national sovereignty.
Many of my constituents have always been concerned that, as we
increasingly internationalize our economy, somehow we would lose our
own ability to legislate and govern ourselves and control domestic
policy. Tonight, with passage of these free-trade agreements, we have
made a step, I believe, in that direction.
Effectively, the immigration provisions contained in these FTAs are
tying the hands of Congress as it relates to ensuring American workers
are not displaced or working conditions are adversely affected. Should
something happen in the United States where Congress deems it
absolutely necessary to change our immigration laws in the interest of
National Security--I say good luck without incidentally dragging these
trade agreements down and throwing the entire agreement into question
or into an international tribunal, where we could easily be out-voted.
Many should be seriously asking the question why our Trade
Representative is now our point person on immigration laws. The
safeguards our Trade Representative left in these agreements in regards
to the immigration provisions is minimal. Do these trade agreements
allow the United States to block certain individuals of interest who
are tying to come to this country under these new provisions? Yes it
does. However, we did not negotiate a safeguard to suspend these new
provisions without throwing the United States into violation of a Free
Trade Agreement.
The bottom line is Congress has its hands tied. Should we try to
correct an immigration law in the future, we may also be creating an
additional problem while trying to correct another.
If these laws were vital to the free-trade agreement, I am certain
the USTR, or those parties who have an interest in them, could and
should have brought them to Congress as a freestanding amendment to our
immigration laws and proposed them to us as a critical part of passing
a free-trade agreement. That was not done. They were incorporated in
the free-trade agreement because our trade ambassador knew they could
not be amended once they were embodied. We would have to take them in
part and in parcel.
However, under this agreement, now our hands are tied. I don't
believe the American people want our hands tied when it comes to
immigration law. They want us to be flexible, they want us to regain
control of our borders, they want us to protect our workforce, while at
the same time expanding where necessary, and an international workforce
is needed. Clearly, in this country and in the future, that will be
necessary. I hope we move in that direction. I will oppose these
tonight because of that.
With that, I yield the floor.
The PRESIDING OFFICER. The Senator from Utah is recognized.
Mr. HATCH. Mr. President, as I understand it, the Presiding Officer
would like to deliver his remarks. I ask unanimous consent that he be
permitted to speak and then I be permitted to speak.
The PRESIDING OFFICER. Is there objection?
Mr. REID. Mr. President, I wasn't able to hear that.
Mr. HATCH. I asked that the Senator from Texas, who is now presiding,
be able to speak and then that I may speak immediately thereafter.
Mr. REID. The leaders are wishing to get the floor. How long will it
be?
Mr. HATCH. Not very long.
Mr. REID. I have no objection.
The PRESIDING OFFICER (Mr. Craig). The Senator from Georgia is
recognized.
Mr. CHAMBLISS. Mr. President, I thank my friend from Utah for letting
me do this.
I rise in support of the resolution offered by our colleague from
Alabama, Senator Sessions. I have always been a supporter of free-trade
agreements, as long as those free-trade agreements were fair.
My State has been a huge beneficiary of trade agreements. We are a
strong economic factor in the United States. We want to continue to be,
and we will continue to benefit from trade agreements as long as those
agreements are fair.
But there is a problem here tonight with the two agreements we are
going to be voting on--the agreements with Singapore and Chile. We are
in very difficult economic times in this country. As a result of those
difficult economic times, we have seen unemployment in this country
reach the level of 6 percent, and actually now a little above 6
percent. My State has suffered just as every other State around the
country with our fair share of those unemployed individuals.
[[Page S10524]]
Part of the displacement of those individuals is due to the
immigration policies we have in effect in our country today, which
allow people from other countries who want to come to America to work.
We have always had an open-door policy, and we should continue to have
an open-door policy, welcoming people from other countries to come to
the U.S. to improve the quality of life for them and their families.
At the same time, with that open-door policy, we should not have a
policy that displaces American workers when the American workers want
and need the jobs they are losing because of individuals coming into
this country.
As chairman of the Subcommittee on Immigration and Border Security of
the Judiciary Committee, I held a hearing this week on one of our visa
programs. It is called the L-1 program whereby individuals can come
into this country on a visa from anywhere around the world and be put
in a position that supposedly is not being used to displace an American
worker.
As we found out at our hearing this week, it is happening over and
over where the situation in the system is being taken advantage of,
which results in abuses of that program that has the effect of
displacing American workers.
We are going to hold another hearing in that subcommittee in
September on the H-1B program. This has been a very valuable program to
our country and particularly the high-tech industry that needed, during
the nineties, an increase in the caps under the H-1B program to
accommodate the technicians they needed to operate their businesses
successfully.
What we found is that these individuals who come in under the L-1 and
H-1B programs are being paid at lower rates than American workers they
are displacing. With the slowdown in the economy and with the increase
in unemployment, we are seeing that those H-1B and L-1 visa individuals
who are coming into the United States are maintaining their jobs while
Americans have been displaced. In part because of the abuses, the
Americans, having been paid at a higher rate, are losing their jobs,
and that is not right.
Lo and behold, with an agreement that is supposed to be an economic
stimulus creating trade with Chile and Singapore, what do we see but
the Office of the U.S. Trade Representative negotiating as a part of
these agreements with Chile and Singapore a policy change in our
immigration law which now allows some 5,400 individuals from Singapore,
and 1,400 individuals from Chile per year, over and above all of the
limits which are presently in place under H-1B, L-1, and L-2, and every
other visa program we have in place, to come into the United States
with no provision in these trade agreements for any kind of attestation
that these people will not be allowed to come in from Singapore and
Chile if they are displacing American workers. That is not right. That
is also not the function of the Office of the U.S. Trade
Representative.
It is the function of the U.S. Congress to set policy when it comes
to the immigration laws of this country. We should not allow the U.S.
Trade Representative to usurp that power and that authority which is
given to Congress.
I rise tonight in strong support of the resolution offered by Senator
Sessions. I think we need to send a shot across the bow telling the
Office of the U.S. Trade Representative that we are not going to let
him usurp the authority and the power that is given to the Congress of
the United States by law in our immigration policy. It is our
obligation to set that policy and not the obligation of the Office of
the U.S. Trade Representative.
I have very grave concerns about these two agreements. I understand
there are other agreements that are already being negotiated that have
these same provisions in them. It was never the intention of any of us
who voted to grant fast-track authority to the administration that the
administration would be allowed to set immigration policy. It is wrong
and it should not happen. Therefore, I strongly support the resolution
of the Senator from Alabama.
The PRESIDING OFFICER. The Senator from Utah is recognized under the
unanimous consent agreement.
Mr. HATCH. Mr. President, I ask unanimous consent that the remaining
time of the distinguished Senator from Alabama, Mr. Sessions, be
yielded back.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HATCH. I ask unanimous consent that immediately following my
remarks on these two speeches, that Senator Max Baucus from Montana be
permitted to speak.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HATCH. Mr. President, I rise today to speak in support of
legislation implementing the free-trade agreements that have been
negotiated between the United States and Chile, S. 1416, and between
the United States and Singapore, S. 1417. I appreciated the remarks of
my colleague who is the chairman of the Immigration Subcommittee of the
Senate Judiciary Committee. I have great admiration for him, and I
believe he has given an appropriate warning to the Trade Representative
and the administration with regard to some of the criticisms that have
been lodged against these agreements.
Let me begin by commending the Bush administration for negotiating
these agreements with Chile and Singapore. Both Chile and Singapore are
countries that represent economic stability and growth in their
respective region of the world. These trade agreements will provide new
market access for American workers and products including agricultural,
manufactured products, telecommunications equipment and other high-
technology products.
Let me also commend Senators Grassley and Baucus for bringing these
agreements through the Finance Committee in the same bipartisan fashion
that has characterized all of the recent congressional actions with
respect to international trade. I am pleased to work with them on trade
matters in the Finance Committee.
As chairman of the Judiciary Committee, I note that both of these
agreements contain chapters on matters of great importance to our
Committee. These include: intellectual property; antitrust; e-commerce;
telecommunications; and, last and certainly not least, immigration. In
many ways, the substance of the negotiations on matters that fall
within the jurisdiction of the Judiciary Committee focused on ways to
encourage our trading partners to harmonize their law with current U.S.
standards. We should take pride in this dynamic.
Let me turn first to S. 1416, the United States-Chile Free Trade
Agreement. Despite its status as a relatively new democracy, Chile is
regarded by many to be a model for the successful implementation of
market-oriented economic reform measures since its first democratic
elections in 1989. Although we have seen a slight trade deficit emerge
in our trade with Chile over the past few years, I believe a free trade
agreement between our countries is likely to stimulate growth in both
economies.
The United States-Chile FTA will provide new market opportunities for
United States workers and businesses. American companies currently
operate at a competitive disadvantage in terms of trade with Chile,
because many key foreign competitors, such as Canada, Mexico and the
European Union already have executed free trade agreements with Chile.
In fact, the National Association of Manufacturers estimates that
without an FTA with Chile, U.S. exporters lose roughly $800 million per
year in sales, which affects approximately 10,000 American jobs. With
the adoption of the Chilean agreement, America would see an immediate
elimination of tariffs on more than 85 percent of consumer and
industrial goods. This will help eliminate the current trade deficit
and will provide for increased export opportunities for U.S. companies.
Some estimates place the potential annual economic benefits of the
United States--Chilean Free Trade Agreement at an impressive $4.2
billion annual increase in the U.S. gross domestic product and a $700
million increase in the Chilean GDP.
The Chilean FTA will provide numerous economic opportunities for my
State of Utah, which is important to me. Currently, Utahns export
approximately $657 million worth of consumer
[[Page S10525]]
goods to Chile every year. The major sectors of Utah's economy that
will benefit most from a Chile FTA are manufacturers of computer
machinery and components, high-tech computer software developers,
manufacturers of medical devices, and dietary supplement companies.
Tariff-free trade with Chile will also result in expanded markets for
America's farmers and ranchers, with more than 75 percent of U.S. farm
goods becoming tariff-free within 4 years after enactment of the
agreement. The agreement would also provide greater access for U.S.-
based financial service companies to operate in the Chilean financial
markets. This will result in new growth opportunities for U.S. banks,
insurance companies, securities firms, and telecommunications
companies.
Before entering into trade negotiations with the United States, Chile
was required to adopt all provisions required for membership in the
World Trade Organization. This includes the Trade-Related Aspects of
Intellectual Property Rights Provisions, the so-called ``TRIPS''
provisions. The TRIPS provisions protect U.S. patent, copyright, and
trademark owners.
The United States-Chile Free Trade Agreement is a very important step
in building stronger political and economic ties, not only with Chile,
but with all of South America. As I see it, Chile is a strategic ally
in South America. Chile provides a strong economic and political base
in a region of the world that is currently experiencing extreme
economic hardships. The adoption of the Chile FTA is an important first
step toward the expansion of hemispheric wide-open trade relations
throughout North and South America through the proposed Free Trade
Agreement of the Americas.
The United States-Singapore Free Trade Agreement, S. 1417, would have
a similar effect on trade and economic liberalization in Southeast
Asia. Like Chile, Singapore is a leader in its region for free trade-
oriented reforms. It is very important to note that the United States-
Singapore Free Trade Agreement is the first free trade agreement that
the United States will have negotiated with an Asian nation.
Singapore is a relatively small nation geographically. It encompasses
only 246 square miles and has a population of only four million people.
Its economy is robust and highly competitive. It is one of the most
open, well-regulated and secure markets for investment in Asia.
Approximately 1,300 American firms have a significant presence in
Singapore and all indications are that the establishment of an FTA with
Singapore will provide additional opportunities for American industries
through increased market access.
An FTA with Singapore also provides an opportunity for expansion in
Utah's economy. Singapore currently receives almost 6 percent of Utah's
international exports, amounting to more than $263 million. The top
exports to Singapore from Utah include electronic machinery, plastics,
perfumery, cosmetics, and telecommunications services and equipment.
The United States-Singapore Free Trade Agreement provides for
reciprocal levels of market access, eventually eliminating the few
remaining tariffs on American goods and services, and eliminating or
reducing all non-tariff barriers to American exports. The Singapore FTA
also requires observation of the TRIPS provisions.
The agreement with Singapore will provide opportunities for economic
expansion and encourage free trade throughout Southeast Asia. This
agreement merits the support of the Senate.
The Senate will soon have a chance to vote for, or against, both of
these important free trade agreements. Last year a broad bipartisan
group of 66 Senators voted for trade promotion authority. One of the
chief reasons for adopting fast track procedures is to prevent trade
treaties from death by amendment and procedural delays. Although no
amendments are in order under the fast track rules, all Members of the
Senate retain their ultimate authority to accept or reject any treaties
or implementing legislation that the Administration proposes.
Because the Trade Act of 2002 calls for up or down votes without
opportunity for amendment, it is important that Congress be fully
consulted. This should occur at each step of the process. I know that
this inability to amend the implementing language of these agreements
has concerned many members of the Judiciary Committee.
From the perspective of the Judiciary Committee, I can tell my
colleagues that the most controversial provisions of these trade
agreements are those addressing the temporary entry of professional
workers and intra-company transfers. Many members of the Judiciary
Committee, Republicans and Democrats alike, have expressed their dismay
over the immigration provisions.
Many Senators have unequivocally stated their objections to the
manner in which the temporary entry provisions were transmitted to
Congress. I share many of their concerns. The administration must
consult with Congress, and specifically with the Judiciary Committee,
on all matters within our committee's jurisdiction. At our mark-up on
this implementing language, many members of the Committee made it plain
that individual trade agreements are not the best forums for raising
matters of general immigration law and policy. I trust that USTR will
heed this message in the future.
To be fair to USTR, I understand that there were six briefings at the
staff level prior to the transmission of the final implementing
language. In addition, USTR briefed the committee staff on the proposed
implementing language before it was finalized. There were also numerous
additional informal consultations among committee staff on both sides
of the aisle, and between committee staff and USTR and other
administration officials over the last few weeks. Most, although not
all, members of the Judiciary Committee sent representatives to these
meetings.
Finally, the Judiciary Committee held a hearing on July 14 to allow
the members of the committee to question USTR's principal negotiators
on the draft implementing language for thee two agreements.
USTR worked to address the concerns expressed by Judiciary Committee
members. Three main issues surfaced: first, time limits on the
professional workers' visas; second, numerical limits on such
professional workers; and, third protection of American workers. I want
to discuss how these matters were resolved in the legislation.
With respect to the concern that there is a lack of a time limit for
the professional workers' category, I note that contrary to how some
may read the implementing language, the legislation does not allow
indefinite stays. While it is true that the professional visa provision
in the trade bills does not set a time limit, it does have to be
renewed every year and is subject to section 214(b) of the Immigration
and Nationality Act. This means that at each renewal, the applicant
must show that the stay in the US is temporary and that there is not
immigrant intent. In that sense, the safeguard against someone
circumventing the permanent residence requirements is arguably greater
than the safeguard contained in the traditional H1-B visa, which is
expressly exempted from section 214(b).
Withe respect to the numerical cap, I would emphasize that the
allocations for Chile and Singapore come under the overall cap for
current H1-B visas. Therefore, there is no net increase of foreign
workers because of these agreements. Moreover, the annual limits for
Chile and Singapore, set at 1,400 and 5,400 respectively, are statutory
ceilings. Our Government does not have to allocate the full amount
every year.
Some of my colleagues are concerned about the fact that these
agreements do not allow labor certification. First of all, I want to
clarify that currently there are no labor certification requirements in
our immigration laws for any visa category comparable to the ones
described in the trade agreements. However, for the temporary
professional workers, there is a requirement for certain employers to
complete labor condition attestations. Before hiring a foreign worker,
the employer must attest, among other things, that prevailing wages
will be paid and the foreign workers will not be used as leverage in
any labor dispute. In fact, if there is a strike or lock-out, foreign
workers are not even permitted to come into the United States.
The implementing language also provides appropriate penalties for
errors
[[Page S10526]]
and fraud in the attestations. Contrary to the suggestions made by some
of my colleagues, the implementing language does indeed authtorize the
Department of Labor to initiate random investigations of anyone who has
failed to meet a condition of the attestation. The implementing
language does expressly prohibit displacing American workers through
lay-offs within 90 days of the filing of a visa application. As for
labor certification or numerical limitations on business visitors,
traders and investors, or intra-company transferees, we must understand
that these visas, if used properly, are not intended to threaten
American jobs at all. In fact, business visitors are not even permitted
to receive a salary in the U.S. and may only remain for a few months
just like tourists.
I appreciate the reality that some unscrupulous American employers
have used the visa categories I just described to commit immigration
and labor fraud. The visas have become ways for some to hire cheap
foreign labor, and that has unfairly hurt American workers. I am
sensitive to the difficulties faced by out-of-work Americans and their
families. However, we need to understand that the existence of
temporary worker visas in our laws is not the problem. The problem is
the misuse of these visas by those who do not respect our laws.
We should not tolerate fraud and abuse of our immigration and labor
laws. We should take appropriate actions to curb fraud and abuse in
this area.
I understand that the Labor Department already has the authority to
investigate visa fraud of this nature if a complaint is filed. But, if
conferring more investigative authority upon the Labor Department is
the key to solving the problem, then Congress should examine that
option notwithstanding the lack of any labor certification. I was
informed by USTR that the implementing language excluded some language
in the current H1-B scheme because those provisions are due to sunset
at the end of this fiscal year, but if those provisions are extended,
they certainly may be applied to these treaty visas.
I would also like my colleagues to keep in mind that these agreements
are reciprocal. Every gesture of courtesy extended to Chilean and
Singaporean citizens is extended to American citizens. The same is true
for all restrictions. A good illustration is the provision calling for
disputes to be resolved in a so-called ``international review panel.''
The panel does not bind the U.S. government, and does not interpret
U.S. law. It is a forum, however, where American businesses can address
their grievances before an impartial reviewer. As Assistant USTR Ralph
Ives testified before the Judiciary Committee the July 14 hearing,
these review panels do not take the place of U.S. courts, and do not
even review individual cases. Instead, they review allegations of
patterns or practices by either party of the trade agreements.
Finally, some have raised a very good question about whether the
Trade Act of 2002 confers authority to include matters of immigration
in trade agreements. As early as the Commerce and Navigation Treaty
with Great Britain of 1815, immigration provisions have been included
in trade agreements that allowed for the entry of foreign nationals to
conduct trade. Moreover, section 2102 of the Trade Act of 2002 calls
for the President to reduce barriers to trade in services. Implicit in
that authority is the mandate to provide access for U.S. businesses,
including small to mid-size businesses, to foreign markets.
It is clear to me that the language we consider today has benefited
from the interaction between Congress and the executive branch. Despite
these improvements, some friction remains on the matter of taking up
matters affecting general immigration policy as part of the
negotiations on particular trade agreements.
Anyone present at either the Senate Judiciary Committee or House
Judiciary Committee mark-up of the immigration implementing legislation
for the Chile and Singapore FTAs got the message: Tread lightly and
consult heavily.
Before I close, I want to reiterate that I have faith in the American
worker. I have no doubt that with the right training, our workers can
compete with the best in the world. I also believe that competition is
good for America. We have no reason to fear foreign competition in the
global economy so long as we are all playing by the same rules and on a
level playing field.
I introduced The American Competitiveness in the Twenty-First Century
Act that authorizes funds collected from H1-B visa application fees to
be invested in training American workers in the fields where we have
traditionally relied on foreign workers. I ask my colleagues to join me
in efforts and prepare American workers to fill the needs of our job
market, especially in the fields of math, science, and high technology.
It is my hope that, in due time, we will no longer rely on foreign
workers to help fill our needs in any sector of the job market.
In a global marketplace, American workers and firms must be given the
opportunity to conduct business abroad. Indeed, we live in a world
economy where free trade is vital to our economy. As I see it, the
flexibility to send essential personnel from the United States to
another country in order to provide much-needed, service-oriented
support is an essential part of international commerce. Consequently,
within the parameters of sound immigration policy, the United States
must reciprocate the courtesy that we expect our trading partners to
extend to American citizens working and trading abroad.
I support these two implementing bills. the FTAs with Chile and
Singapore are good treaties. On balance, this legislation, despite some
of the sensitivities in the area of immigration, will help bring the
benefits of these trade treaties to the American public.
I think that a review of the record shows that after extensive
discussion with both the Senate staff and the House staff, the
administration satisfactorily addressed the vast majority of the
concerns expressed by Republican and Democratic members of the
Judiciary Committee.
When all is said and done, these are good trade agreements. One of
the lessons I hope the administration has learned is that including
immigration-related provisions in individual trade agreements that
raise General matters of immigration policy is a very, very sensitive
issue to us up here. In the future, I expect the administration will
avoid negotiating immigration matters in trade agreements unless the
Congress is broadly supportive of the provisions. If there are
compelling circumstances to negotiate such agreements, I expect
extensive consultation between the administration and Congress at both
the Member level and staff level so that all of our concerns can be
adequately addressed.
The issue of immigration aside, I believe there is a wide consensus
that, overall, we have two good trade treaties and two good
implementing bills. I urge every Member to vote in favor of the United
States-Chile and United States-Singapore Free Trade Agreement
implementing language.
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