[Congressional Record Volume 152, Number 104 (Tuesday, August 1, 2006)]
[Senate]
[Pages S8482-S8492]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               GULF OF MEXICO ENERGY SECURITY ACT OF 2006

  The ACTING PRESIDENT pro tempore. Under the previous order, the 
Senate will resume consideration of S. 3711, which the clerk will 
report.
  The assistant legislative clerk read as follows:

       A bill (S. 3711) to enhance the energy independence and 
     security of the United States by providing for exploration, 
     development, and production activities for mineral resources 
     in the Gulf of Mexico, and for other purposes.

  Pending:

       Frist amendment No. 4713, to establish an effective date.
       Frist amendment No. 4714 (to amendment No. 4713), to amend 
     the effective date.

  The ACTING PRESIDENT pro tempore. The Senator from Kentucky.
  Mr. McCONNELL. Mr. President, we just heard an interesting exchange 
between the Democratic and Republican leaders about the week's agenda. 
The Democratic leader indicated that this was a do-nothing Congress and 
in the same remarks he indicated he was going to try to keep us from 
doing something this week. As the occupant of the chair has frequently 
said, block and blame. But the truth is, it must be confusing for the 
people in the gallery and for those who might be watching on television 
to try to figure out in the middle of all this what is happening. Let 
me explain it again before addressing the Gulf of Mexico Energy 
Security Act, which is my principal reason for rising at this point.
  This week, we are considering four bills, each of which enjoys 
bipartisan support: the Energy Security Act, which I will get back to 
in a minute, but also the Democratic version of the increase in the 
minimum wage, a tax extender bill that enjoys broad bipartisan support, 
and a modification and

[[Page S8483]]

permanent reduction of the estate tax which also enjoys bipartisan 
support. So the Senate will have an opportunity, as the majority leader 
pointed out, later this week to do what it is about to do at 5 o'clock 
this afternoon on this important Gulf of Mexico Energy Security Act. We 
saw a vote yesterday in which 20 Democrats joined all but one 
Republican to discontinue debate and move toward passage of an 
extraordinarily significant Energy Policy Act. And there are a number 
of heroes and a heroine who have been involved in this process.
  First, the chairman of the Energy Committee, Senator Domenici; this 
is a singular accomplishment for his leadership. He stepped into the 
breach, was able to figure out exactly what the Senate could handle and 
was willing to pass on a bipartisan basis some 3 or 4 months before an 
election and carefully crafted a compromise that will succeed this 
afternoon in making a major step forward in addressing our shortage of 
both domestic oil and natural gas.
  Another hero in this story is the Senator from Florida, Mel Martinez. 
He stepped up to the plate and protected the interests of his State by 
getting a boundary around the gulf portion of Florida that ensures, up 
until 2022, that there be no exploration and drilling. There had to be 
Democrats for this to go forward. Senator Landrieu was able to very 
skillfully line up, as of yesterday--and we assume many of those 20 
Democrats who voted for cloture yesterday will be there today--20 
Democrats for final passage. Her colleague, Senator Vitter, and, for 
that matter, all of the gulf coast Senators who reached in to this 
atmosphere and realized a significant accomplishment would be available 
on a bipartisan basis that would benefit their States. And for other 
Members of the Senate not on the gulf coast who realize that getting 
money for the Land and Water Conservation Fund is an important step 
forward, a kind of permanent revenue stream for land and water 
conservation, all of these forces came to work, and we had an example 
of the Senate working in its finest tradition on a bipartisan basis.
  We will have that opportunity again at the end of the week, as the 
majority leader pointed out, as we have our last chance this year to 
get an increase in the minimum wage, a permanent solution to the 
onerous death tax, which is coming back at a confiscatory rate in a few 
years, and a tax extender package that is widely supported on both 
sides of the aisle.
  Hopefully, the Senate will not block and blame but act in the best 
interest of the American people later in the week.
  Now let me address my remarks specifically to the Gulf of Mexico 
Energy Security Act. I know that some have said this bill goes too far 
and others have said it goes not far enough. With apologies to 
Goldilocks, I think this bill is just right.
  We have only reached the point of what I believe will be final 
passage of this bill after the negotiation I described earlier in the 
best tradition of the Senate--bipartisan negotiations producing an 
extraordinarily important piece of legislation. Senators from both 
parties have worked diligently and in good faith to craft legislation 
that could win the support of as many Senators as possible. This bill 
has the support of every single Senator from a Gulf State.
  I am pleased to be a cosponsor of the bill and to have been involved 
on behalf of the leadership in these seemingly endless discussions that 
went on for the last couple of months in order to put this together.
  I know a little something about marshaling support for a bill. 
Believe me when I say, although this bill may not have in it everything 
everyone wants, it will greatly improve our country's energy 
independence and move us toward greater economic prosperity and 
stronger national security. And it is absolutely the best bill the 
Senate could pass at this time.
  High energy costs are hitting Americans in their pocketbooks because 
of supply problems for oil and for natural gas. This bill will begin to 
alleviate our supply problems and provide us with greater independence 
from foreign sources of energy. The Gulf of Mexico Energy Security Act 
of 2006 will open up over 8.3 million acres of the Outer Continental 
Shelf for energy exploration. The Department of the Interior estimates 
that this area will yield at least 1.26 billion barrels of oil and 5.83 
trillion cubic feet of natural gas. That is more oil than the proven 
reserves in Wyoming and Oklahoma combined. That is enough natural gas 
to power nearly 6 million homes for at least 15 years.
  The price of crude oil, as recently as mid-July, reached a whopping 
$77 a barrel. Compare that with the price of $34 a barrel in July 2004. 
Increasing our domestic supply of oil is the only way, in the long 
term, to bring those prices down. The same holds true for natural gas 
prices, which also have skyrocketed in the last few years.
  As we all know, the price of natural gas is set domestically in 
America, unlike the price of oil. So we can have a direct impact on 
natural gas prices in America by increasing the supply. We all know we 
need to reduce our dependence on foreign sources of energy. The current 
strife in the Middle East and the rising level of threatening rhetoric 
from Iran all affect the price of energy in the world market. The more 
oil and gas we produce domestically, the more we can insulate ourselves 
from events over which we have little or no control.
  Rising energy prices also threaten America's economic vitality. High 
energy costs hamper our industrial competitiveness, as companies choose 
to produce goods in other countries where their costs will be much 
lower. For the goods produced here, prices are higher to take account 
of those higher energy costs.
  The National Association of Manufacturers estimates that from 2000 to 
2005, this country lost 2.9 million manufacturing jobs, due in part to 
high energy costs. Not only will this bill alleviate that problem by 
boosting America's energy supply, it will also generate revenues from 
lease sales, all of which are brand new. And 37.5 percent of those 
revenues will go to the Gulf States of Alabama, Louisiana, Mississippi, 
and Texas for coastal protection, restoration, and mitigation. Another 
12.5 percent of the revenues will go to the Land and Water Conservation 
Fund, which will distribute the money to State and local governments 
for the improvement of public parks and recreation areas.
  Finally, the remaining 50 percent will go to the General Treasury of 
the U.S. Government. Because this revenue comes from new leases, this 
will be an increase of funds--an increase, new money--to the General 
Treasury.
  I also remind my colleagues that S. 3711 ensures that we carry out 
this energy exploration without sacrificing environmental concerns. 
This bill will install a 125-mile buffer against energy development in 
waters off of the coast of Florida, thanks to the negotiations of 
Senator Martinez, as I indicated earlier. He has protected the 
coastland of his State. And the bill will extend until the year 2022 a 
moratorium on energy development in certain areas of the gulf that this 
Senate has decided are too close to the coastline. Again, that is at 
the insistence of Senator Martinez.
  This bill should garner all of our colleagues' support. It takes a 
step forward for our country's energy policy. I also thank the majority 
leader for all of his hard work to shepherd this bill to what I believe 
we are going to witness this afternoon, which is a strong, bipartisan 
vote of support. The Senate should pass it. It will reduce America's 
dependence on foreign sources of energy, while strengthening our 
economy.
  Mr. President, I yield the floor.
  The ACTING PRESIDENT pro tempore. The Senator from Illinois is 
recognized.
  Mr. DURBIN. Mr. President, I thank the Republican whip for his 
remarks. I will address them in the same context, first, the earlier 
debate, what we are considering in the business of the Senate this 
week, and finally this bill that is pending before us.
  What we have before us this week is a historic decision to make. It 
is a historic decision because, if the Republican majority prevails and 
if the bill, which they are asking us to pass, is enacted and signed by 
the President, what we will do is add dramatically to the national debt 
of America.
  This morning's Washington Post suggested that the repeal of the 
estate tax will cost us, with interest over a 10-year period of time, 
about $750 billion.

[[Page S8484]]

This Federal estate tax affects very few Americans--only those in the 
highest income categories. It is a tax that is imposed on about 2 out 
of every 1,000 people who die in the course of a year--2 out of 1,000. 
So 8,200 families each year will get a tax break if the Republican 
proposal is enacted. Those families, on average, will be spared paying 
a Federal tax, on average, of $1.4 million.
  When you project that over a long period of time, it means that we 
will be paying out--I should say not collecting--$750 billion that 
otherwise would have come into our Treasury. The responsible thing to 
do, for either side of the aisle, if you are going to take $750 billion 
out of the Treasury, is either cut spending by that amount of money or 
impose another tax, another revenue source. That would be pay-as-you-
go. So you would balance the books. You would say, for example, it is 
so important for us to reduce the taxes paid by 8,000 families a year--
the highest income families--that I would propose raising another tax 
or I would propose making a cut. But that is not what is happening.
  What is happening has become the ordinary course of business under 
our friends on the Republican side of the aisle. They continue to spend 
money and they continue to cut taxes without any concern for the impact 
on our national debt. Here is the record that Republicans have written 
on the budget: 4 years in a row of record deficits in the United States 
of America. In the closing years of the Clinton administration--and you 
can find this in the publications of our Government--we were generating 
surpluses. For the first time, we had turned the corner; we were 
reducing the national debt of America, strengthening the Social 
Security trust fund, and we had reached a point where we were moving 
forward with confidence that Social Security would be stronger for 
years to come and we would not be heaping more and more debt on our 
children. That was at the end of the Clinton administration.
  Then came the Bush administration. President George W. Bush, in the 6 
years he has been President, in the 4 years the Republicans have been 
in charge in the Senate, has seen record deficits. The debt is 
projected to soar under the Republican policies, this one-party rule in 
Washington--with the President's party in the White House, obviously, 
and in the Congress, the debt is projected to soar to more than $11 
trillion by 2011. It will more than double; their policies will more 
than double foreign-held debt in 5 years, which I will speak to in a 
moment. There will be little real revenue growth since 2000. Every 
penny of the Social Security surplus, $2.5 trillion, will be spent on 
tax cuts, such as these, for wealthy people in America; and we will 
find that we are getting deeper and deeper in debt.
  Let me illustrate that in a chart which Senator Conrad, our ranking 
Democrat on the Budget Committee, uses. This is his ``wall of debt.'' 
This indicates what has happened since 2000, when President Bush came 
to office. He faced $5.8 trillion in debt. That was the entire 
accumulated debt of America, $5.8 trillion, when President Bush was 
sworn into office. Now, by the year 2006, that number is up to $8.5 
trillion. Think about that. It went from $5.8 trillion up to $8.5 
trillion today--under the people in charge who call themselves ``fiscal 
conservatives.'' The debt of America, as projected under their 
policies, will rise to the level of $11.5 trillion by 2011.
  So by the policies President Bush and the Republicans in Congress put 
into place when they came to Washington, projected out over the 10-year 
period--that is how we do our budgeting here--it doesn't quite double 
the national debt, but it comes very close. Where do we get the money 
to do this? How can we continue to spend money we don't have? How can 
we build up all this debt? Who is going to provide the mortgage for 
America?
  Well, it turns out that this President has found a source which he 
uses, which is historic. President Bush has turned to foreign 
governments to borrow money to sustain this overspending and cutting 
taxes without cutting spending. President Bush has more than doubled 
the amount of American debt held by foreign governments in 5 years. It 
took 42 Presidents in the history of the United States 224 years to 
build up $1.1 trillion in indebtedness to foreign governments. This 
President, in 5 years, has more than doubled that amount.
  So who are our bankers? Who are America's mortgagors? When you look 
at the world's biggest borrowers, the United States dominates the 
scene. We borrow more money from around the world than anybody; 65 
percent of all of the borrowing in the world comes from the United 
States. For instance, this estate tax repeal--by heaping on another 
$750 billion of debt on America that is not paid for and could rise as 
high as a trillion dollars, we have to turn to somebody and say loan us 
the money so we can give a tax break to the wealthiest people in the 
world. And we borrow more money than any other country. Other countries 
pale in comparison in terms of how much they borrow. Who are these 
mortgagors, these bankers who come to our rescue and loan us the money? 
No. 1, Japan; 2, China; 3, United Kingdom; 4, oil exporting countries--
a recurring theme in our policy, our dependence on oil exporters--South 
Korea, Taiwan, and so forth.
  So what we are doing is asking them to loan us money so we can give 
tax breaks to wealthy people. That is what this choice is this week. 
How bad is this? Well, the General Accounting Office Comptroller, 
General Walker, chosen by the Republicans, a very bipartisan man--I 
respect him. I wasn't sure when he came in if he had a political 
agenda, but he has been proven as a leader at the GAO who calls them as 
he sees them. Sometimes his messages make Democrats happy, sometimes 
they make Republicans happy. But I believe he does his best to be 
honest and candid. He said:

       ``Our problem is our large long-term deficit, and the 
     sooner we deal with that the better,'' said Comptroller 
     General David Walker. Walker warned of a false sense of 
     security. We are in much worse shape fiscally today than we 
     were a few years ago.

  That was an interview in the L.A. Times of July of this year.
  So this week, the Republicans will make this proposal: If we will 
agree to reduce and eliminate, in some cases, the estate tax on the 
wealthiest Americans who pass away--8,200 of them each year--then they 
will agree to increase the minimum wage for workers across America.
  The difference is stark when one looks at the beneficiaries. The 
numbers tell the story: 8,200 families benefiting from a reduction in 
the estate tax to the tune of 41.4 million each family by average; the 
minimum wage affects 6.6 million beneficiaries, and their average 
benefit is $1,200. A $1,200 minimum wage increase; $1.4 million in 
estate tax relief or reduction for the wealthiest people. The ratio is 
1,000 to 1; 1,000 to 1 the benefit for the wealthier people in America 
from the estate tax versus the benefit from the minimum wage.
  And who will pay for this repeal of the estate tax? Our children will 
pay; the next generation will pay. America will go deeper into debt 
because the Republican leadership is going to add dramatically to the 
national debt of America. That is not responsible. It really doesn't 
have the best long-term interests of America in mind.
  Many of us are concerned that those who work hard every day have been 
waiting 9 years for an increase in the minimum wage. For 9 years, the 
Republicans have stopped us from increasing the minimum wage. Imagine 
for a moment, if you will, trying to live on $5.15 an hour. Who are 
these people? They are the people who cleaned your hotel room this 
morning. They are the folks who cleared the table of dishes when you 
were finished at the restaurant. They are the ones who are watching 
your children at the daycare center. They are the people who are 
probably frying the hamburgers back in the little shop where you went 
in for lunch. They are making $5.15 an hour. That comes out to about 
$10,000 a year. Can you imagine? Can you imagine trying to get by, and 
imagine still if you have a child trying to get by?
  For 9 years we said to the Republicans: Shouldn't we turn to the 
bipartisanship of increasing the minimum wage? That is just basic 
fairness, a humane approach to dealing with people. They have said no 
repeatedly. It is one of the longest stretches of time in American 
history that we have failed to increase the minimum wage.
  So now this week they have said: We have a bargain for you. If you 
will cut

[[Page S8485]]

the estate taxes on the wealthiest Americans, if you will build up debt 
for future generations of $750 billion or more, if you will cause us to 
borrow more money from foreign governments to sustain this indebtedness 
in America, if you will do that, then we will consider giving some of 
the hardest working, lowest paid Americans an increase in the minimum 
wage.
  Doesn't this tell the story? Doesn't this tell the story between the 
differences between the two parties and their approach and attitude? We 
believe that an increase in the minimum wage is good for America and 
good for people who get up and go to work every single day. We think it 
is good for families, and it is good for their children. We think it is 
good for us in the long haul to reward work and to give a decent wage 
to people who get up and go to work. The Republicans, for 9 years, have 
said no.
  We also think if you are going to cut taxes, for goodness' sake, why 
don't we start by trying to help working families? Wouldn't we be 
better off as a nation to talk about tax cuts that are limited and 
focused instead of these that are absolutely out of control? Wouldn't 
we be better off as a country saying working families, middle-income 
families could deduct the cost of college education expenses for their 
kids?
  Isn't that a much better investment in our future than saying the 
wealthiest people in America, those who have benefitted the most from 
living in this great Nation should be spared and resolved from paying 
their taxes to our Government?
  Shouldn't we be helping these working families and small businesses 
when it comes to providing health insurance? That is an increasing cost 
for most families, and certainly for small businesses. That is worthy 
of a tax break, one that means families will have peace of mind to have 
basic health insurance. These are things that most Americans would 
applaud.
  But, no, the Republican proposal is take it or leave it. You either 
give a tax cut to the wealthiest Americans at great expense to our 
Government, increasing our national debt dramatically, or the 
Republicans say: We won't increase the minimum wage for the hardest 
working workers in America.
  I think that is a terrible idea. I hope we come to our senses. I hope 
we say to Republicans there is something more to life than rewarding 
those who are the most comfortable in America.
  This is a time in America's history when we are asking for sacrifice. 
We are asking for great sacrifice from our men and women in uniform and 
their families, many of whom have given their lives for our country, 
many of whom have left behind grieving families who will never get over 
their loss.

  We usually say in time of war: America has to pull together; we all 
have to sacrifice together. Back in World War II, there were savings 
bond drives, collection of metals that might be important in the war 
effort, and victory gardens. People really pulled together.
  This administration and this Republican Congress see it differently. 
When they ask for the greatest sacrifice from families who provide our 
soldiers and give them the support they need, they turn around and say 
to the wealthiest people in America: You don't have to sacrifice 
anything. In fact, we will give you a tax break.
  This is the first President in the history of the United States of 
America who has cut taxes in the midst of a war, the very first. For 
obvious reasons, it makes no sense. If you faced a medical crisis in 
your family, if you faced medical costs in your family that exceeded 
your health insurance, medical costs that might wipe out your life 
savings, would you consider it responsible at that point to put an 
addition on your home or take a luxury vacation? No, you would make the 
commonsense, reasonable decision that in time of great need we cannot 
afford luxuries.
  But listen to this administration and this Republican Congress: In 
time of war, a war that costs us $3 billion a week, they are proposing 
tax cuts for the wealthiest people in America. Think of it: the debt 
that future American generations will face because of this war is going 
to be increased by this tax cut for the wealthiest people in America. 
It tells the whole story about their priorities.
  So as we bring this week in the Senate to a close before the August 
recess, I believe there is a report card which the American people 
would like to have us address. The first part of the report card is 
this: What are you going to do about the war in Iraq? The Democrats 
came together--the leadership in the House and the Senate--and said to 
the President in a letter we sent just recently that it is time to 
start bringing American troops home. We have lost 2,573 of our best and 
bravest. They are now in a crossfire of a terrible civil war where 100 
Iraqi civilians are being killed on average every single day.
  We have had promises over and over again that the Iraqis will stand 
up and defend their own country. Yet they have not done it, at least 
not to the extent where any American soldier has come home. It is time 
for that to change.
  It is time for change in Iraq. The Republicans don't want to address 
this issue. During the debate on the Defense authorization bill, they 
offered no amendments in terms of Iraqi policy. They rejected our 
effort to start bringing American troops home this year. They say: We 
are going to stay the bloody course in Iraq.
  It is sad. It is time for us to assess honestly our future in Iraq.
  The scorecard would obviously go to energy costs. As I travel around 
Illinois, and other Senators in their States, people are paying more 
for gasoline and hardships are being created. I was in Decatur, IL, on 
Saturday and had a roundtable. People came in and talked about the 
impact of gasoline costs on their lives and businesses. There were 
businesses large and small. There was a trash hauling business which 
has a lot of big scavenger trucks on the road around Decatur talking 
about increased costs. A woman came in from the UPS with 700 trucks 
that she moves around downstate Illinois and talked about the increased 
diesel costs. We had concerns, as well, from our veterans. There was a 
group that forms an honor guard and volunteers to perform an honor 
guard at military funerals. They travel about 1,200 miles a year to 150 
funerals where they present the flag and have the appropriate 
respectful sendoff for the veteran who has died, and they are talking 
about the increased cost of gasoline.
  Families and businesses, large and small, farmers--they are all 
talking about that. Yet the best we can do for an energy policy is the 
bill pending on the floor which will allow more drilling in the Gulf of 
Mexico but which will come up with only a few months' worth of natural 
gas for America and a few months' worth of oil.
  We are not addressing the larger questions--questions, for example, 
about why we don't have CAFE standards for more fuel efficiency and 
fuel economy for the cars and trucks that we drive. This Congress, this 
Republican-led Congress has not seriously engaged in that conversation.
  There is no conversation about giving businesses, small businesses 
across America and the people of this country the same basic health 
care protection that Members of Congress have.
  That is what the Democrats believe we should do and move forward to 
do as quickly as possible.
  We also believe when it comes to jobs in this country, this is an 
issue often overlooked. Our Tax Code rewards companies that send jobs 
overseas, and that has to stop. We have to have an increase in the 
minimum wage and not be held at gunpoint to say you can only have it by 
cutting the estate tax. The agenda is clear for America, but it is not 
the agenda of the Senate. That is why this November there is an 
appetite for change and leadership, a change in direction, a 
significant change for a new direction in this country.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER (Mr. Sununu). The Senator from Alabama.
  Mr. SESSIONS. Mr. President, one thing we are about to do today after 
many objections and difficulties over the years from the Democratic 
leadership is to pass a bill that will allow offshore production of oil 
and gas. It will absolutely positively affect the pocketbooks of 
American citizens.
  This is a bipartisan effort, although as one can see from my 
colleague and his polemic--political polemic--that he just completed, 
even the Democratic leadership is not comfortable with making progress, 
but many of the Members are.

[[Page S8486]]

  Before I talk about the energy bill, I want to take a moment to 
respond.
  He talked about the war. We had a vote on withdrawal from Iraq. It 
was 93 to 6 against that. We voted a year later on it again and only 13 
Democrats voted for it then.
  We need to have more bipartisan work to accomplish issues that are 
important to the American people, and we can do it. But we are being 
driven by the politics of elections, and I don't think it is healthy 
for us. That is the way it goes around here, unfortunately. We will 
continue to proceed.
  I just want to know how the Senator comes up with this number, 700-
something billion dollars of costs for the partial repeal of the death 
tax. Who knows where that number came from? The Congressional Budget 
Office which, in my view, tends to overscore, making it higher than 
reality, said it was $260 billion over 10 years. I submit that even 
this is a high number. I submit also that we have voted in this body--
and it is now the law of the United States--that in 2010 the death tax 
will be completely eliminated. It phases out and goes to zero, but if 
we don't do something about it permanently, it will go back to 55 
percent. Plus, if a State has another 5 percent, such as Alabama does, 
that is 60 percent of a person's net wealth confiscated by the 
Government. The polls show the American people are not happy with that. 
They don't think that is legitimate.
  So we spend a lot of time here figuring out how to make this death 
tax law stable so that people know what they are facing and what they 
are going to have to pay and what their families will have to pay.
  We looked at it, and we have come up now with a flat rate of 30 
percent for estates that would qualify at that level. That would be the 
maximum rate--not 55 but 30, a compromise that deals with this 
extraordinary confiscation of wealth by the Government of people who 
have worked hard, have paid their taxes, made money, paid a third of it 
to the Government, saved something for their children, and then the 
Government comes in and takes 55, 60 percent of it.
  We do not think that is fair. The American people do not think that 
is fair. Polling data shows they do not think that is fair. This is a 
matter we need to fix.
  We have this zero rate out there at 2010, about a little over 3 years 
from now, that we need to fix--a permanent fix. We are on the verge of 
doing that. We will have bipartisan support for that despite the 
assistant Democratic leader's arguments against it. We need to work on 
these things. We can and will move forward with that proposal.
  Also, our Democratic colleagues say they wanted the minimum wage 
raised, according to the Kennedy bill, and so as a compromise we 
proposed to do that and work that out. That is where the negotiations 
are going. Hopefully we will be successful in that.
  Mr. President, I will talk briefly about some good news, for a 
change.
  We have had, I have to say, Members of this body--almost entirely on 
the other side--who have blocked energy production in our country for a 
number of years. It has caused the cost of living and the price of 
gasoline, natural gas, and heating oil for Americans all over this 
country to go up.
  What have we seen in the 10 years I have been here? We have seen 
this. We have seen the proposals to produce oil and gas from the vast 
Alaskan ANWR region blocked. A substantial majority of Senators have 
voted for it, but the Democrats have been able to block it with a 
filibuster each time.
  We have had a long-term battle on nuclear power, and just this last 
fall that battle broke in the right direction. We have not had a 
nuclear plant for over 30 years in this country. We are burning a lot 
of natural gas to generate electricity when it could be produced for a 
fourth or a fifth of that cost by nuclear power with no air pollution. 
Also, it wouldn't drive up the cost of natural gas for heating our 
homes. We have had that nuclear power blocked. Finally, we passed a 
bill that gave us the opportunity for more nuclear power. We now have 
18 different preliminary requests to develop new nuclear powerplants in 
America, all filed within a year of the bill's passage. The Tennessee 
Valley Authority in my home State--and we have two nuclear plants in 
Alabama--tells me that nuclear power comes in at 1.2 cents per kilowatt 
hour compared to 1.8 cents for coal--that is 50 percent higher for 
coal--and natural gas at 6 cents, five times as much. We need more 
nuclear power. Finally, under the leadership of President Bush and this 
Congress, we have moved forward in that direction. That is positive.
  We have also passed an energy bill that enhances wind, solar, and 
ethanol, and included mandates that will cause us to utilize more of 
our domestically produced biofuels--something I support.
  I have worked with Senator Evan Bayh, Senator Joe Lieberman, Senator 
Salazar, Senator Brownback, Senator Lindsey Graham and others on this 
issue. We have a bipartisan group to treat energy production as a 
national security issue. And we should.
  It requires conservation. It requires efficiency. It requires 
biofuels. It requires enhanced production.
  Nobody suggests our demands are going down. We can do better to 
contain the growth in demand, and we should do everything possible to 
do that, but the world is growing economically and more people are 
utilizing energy and it is causing shortages and driving up the price.
  So let's celebrate a little bit. We had a vote yesterday. The 
opposition to drilling in the Gulf of Mexico has broken. It was, I 
believe, 72 to 23 against the filibuster of this bill. So I believe we 
are heading toward passage of it, and it is a fabulous thing. We would 
be so much better off today had we passed this legislation 5, 6, 7, or 
8 years ago. But we have had a moratorium on drilling in huge portions 
of the Gulf of Mexico. Around Texas, Louisiana, Mississippi, and 
Alabama--off our shores, pretty far out in the gulf in most cases are 
some 4,000 producing oil and gas wells. But a few areas of the Gulf of 
Mexico, with very large reserves, have been under a moratorium. We have 
been blocked by law from having production in those areas. As a result, 
we have sent around the world huge amounts of American wealth, the 
wealth earned by American citizens--huge amounts of that to other 
nations, many of them not friendly to us. As a result, it has made the 
price of gasoline and natural gas for American citizens higher. It has 
resulted in many of my constituents and others around the country 
paying $50 or $75 more a month for gasoline so they can go back and 
forth to work--money they didn't have to spend on that a year or two 
ago. Prices have gone up.
  We have ceased to expand our domestic production. We have had to buy 
it on the world market, 60 percent from foreign nations, many of those 
hostile to us politically and otherwise. It is not a good thing.
  One of the things we need to do is to make a step in the direction of 
producing more at home. It is overdue. I am glad my colleagues on the 
other side have moved forward.
  Once again, we had to reach a compromise. We talked with Senator 
Martinez and Senator Nelson of Florida and they have come around to 
this 125-mile buffer zone around Florida. That is far more than I think 
is necessary, but certainly there are strong feelings in Florida about 
it. Under all the circumstances involved, I think it is a good 
decision. I am prepared to go forward with that. I would like to see 
more, but this, certainly, with 8.3 million acres that could be 
produced, will provide an opportunity for us to get out there, prove 
these reserves exist, and have production there.
  I want to say one thing here. I want to be clear. This is very 
important. It is not correct it is exactly wrong, in fact--and it must 
never be the policy of this Senate, this Congress, or this Government 
to conduct drilling anywhere for the purposes of helping oil companies. 
That must never be our mission. Our mission must be to study what 
is happening in our country and in our world and to take actions that 
will help reduce the cost of energy for American citizens. That is what 
our responsibility is. That is our duty.

  Congress has created laws that put a moratorium from production on 
areas where large reserves exist. I don't know what oil companies may 
desire to produce there. Most of them out there, I understand, are 
independent firms doing the production, but regardless, whoever 
produces it, that is not whom I am trying to help.

[[Page S8487]]

  If we produce more natural gas in our domestic system, we help drive 
down the cost of natural gas. In fact, this production could have a 
larger impact on natural gas than it is likely to have on gasoline. It 
should really have a positive impact on both.
  Let me show this chart. I didn't realize this originally. I met a 
businessman in Alabama. He has a big chemical company, an international 
company. He was telling me how much his natural gas costs have gone up 
and he said it is hurting him. It is putting his business in a position 
where they might have to close it or cut back.
  I said, Why? Aren't other places in the world paying more?
  He said, No.
  I suppose that is the first time I realized that fact. You know, for 
gasoline, we pay $3 a gallon here. It is $7 or $8, or more in Europe--
more in Japan, I think. So I have always thought we were cheaper.
  But look at this chart. In the United States we are now at $8.85 per 
million Btus of natural gas. Lots of Americans heat their homes with 
natural gas. Lots of American electricity is generated by natural gas. 
Lots of businesses utilize great amounts of natural gas in their 
chemical and other processes that they need to be successful.
  But look at these numbers. In Trinidad it is $1.60. Bolivia is $1.65. 
Even in England--the United Kingdom, it is $7. In Belgium, $6.95; in 
Russia, $1.20; Ukraine, $2.70. In the Gulf States, it is a little over 
$1. Even in China, it is $5.05. In Japan, it is $6.05.
  If you are a business and you make fertilizer with natural gas--we 
make fertilizer, plastics and other things from natural gas--it is 
clear that our corporations and businesses that hire Americans are 
having to pay more, as are consumers of natural gas, than many areas 
around the world.
  I say that to say this has a potentially significant positive impact 
for our economy if we can knock down the price of natural gas. Natural 
gas goes into pipelines. It is moved by pipelines throughout our 
country. We have the pipeline infrastructure. We have the pipelines on 
the coast. We have a pipeline right now that runs from Mobile, AL, 
across the gulf to take our natural gas that we produce--that Florida 
does not produce--to Florida so they can generate electricity or do 
other things with it in Florida. They can have their air conditioning 
running and live near the beach and be comfortable.
  Somebody has been producing it. We have been producing it on the 
western part of the gulf. We need to produce it further toward the 
East.
  Natural gas is not easily transported. Only 2 percent of our natural 
gas comes from LNG, liquefied natural gas. That gas is cooled 
tremendously, it becomes a liquid instead of a gas, it is put in a 
ship, and it is brought to the United States. Then it has to be heated 
up, returned to its gaseous state, and then put in the pipeline.
  That is what we do. We do very little of that because natural gas is 
primarily a domestic product. So the more natural gas we can produce in 
the gulf, the more likely we will see these prices decline. If we have 
more nuclear power to generate our electricity with rather than natural 
gas, we could also see a decline.
  What I am saying is that I am not here, and the people in support of 
this bill are not here, to say we want to help energy companies.
  We want to create a market out there that would contain the rising 
cost of gasoline and natural gas.
  I will note that it is a good thing for me that after all these 
years, some 40 years of production in the gulf, some 4,000 wells that 
are offshore, that for the first time the Gulf States that have been 
bearing the brunt of this effort will receive some funds from it, 37.5 
percent--a little more than a third of the value. Two-thirds will go to 
the Federal Government, 63 percent will go to the Federal Government 
through either the Land and Water Conservation Fund, which will be 
spent all over the country on environmental matters, or for the General 
Treasury.
  I think that is a good mix. I think it is fair. It will be limited, 
however, to be spent in the Gulf States for things that benefit the 
environment and the Nation. We have people from all over the Nation who 
come and enjoy our coast. The funds will be utilized for coastal 
protection, mitigation in damage to fish, wildlife, and natural 
resources, implementation of federally approved marine, coastal, or 
comprehensive conservation management plans, and mitigation of offshore 
drilling activities through funding of offshore infrastructure 
projects.
  Yes, for the first time there will be some sharing with the States on 
this offshore production, but it is not a huge amount, No. 1.
  No. 2, the funds are to be used for conservation-type programs that 
will benefit the entire Nation.
  In conclusion, I believe that what we are doing now is a direct 
response to the cries of Americans working citizens and middle-class 
Americans who are concerned about their high heating costs. They are 
concerned about their high gasoline costs. They are concerned about our 
wealth being transferred overseas--$200 billion a year is what we pay 
for oil and gas around the world. If we can produce more at home, we 
can help contain the cost of gasoline and natural gas, and maybe even 
reduce it. We can keep that wealth right here at home. We can create 
good, high-paying jobs here. And those citizens with those high-paying 
jobs will pay taxes to the Government so that we can have money in the 
U.S. Treasury instead of spending it in Venezuela and having it go into 
Hugo Chavez's treasury.
  I am excited about it. It is historic. I thank Senator Landrieu, and 
I thank other Democrats on their side that are now coming around to 
support it. Senator Landrieu has been our most knowledgeable supporter 
on this issue for many years.
  I believe we are going to make it happen today. It is going to be 
good for America. It will be a bipartisan act, and we need to do more 
of that around here.
  I thank the Chair. I yield the floor.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. ALEXANDER. Mr. President, I thank the Senator from Alabama for 
his statement about the efforts we are making today to reduce the price 
of natural gas and to use the revenues to pay the bills of the Federal 
Government, while at the same time to spend some of those dollars for 
conservation purposes, which is a subject that the Presiding Officer, 
the Senator from New Hampshire, has advocated both as a Member of the 
House and while he has been in the Senate.
  I would like to speak today to the Energy bill, the Gulf of Mexico 
Energy Security bill. I would like to speak on three points.
  The first is to emphasize why it is important, exactly what are we 
doing, and why is it important to the blue-collar workers, the chemical 
workers, the autoworkers in Tennessee and in Michigan, to people who 
are trying to pay their home cooling bills as the temperature soars 
above 100 degrees, and to farmers who have seen their fertilizer prices 
double in the last several years all because of the high price of 
natural gas.
  Second, I would like to put this single piece of legislation into 
some perspective and reemphasize why it is the rest of the story. Most 
of what we are doing to try to reduce the price of natural gas came 
with the comprehensive Energy bill last summer. This finishes the job--
not completely. We have more to do, but this is something we should 
have done a year ago. We couldn't command 60 votes then. We didn't have 
a formula for passing it in the Senate last year, so we left it undone. 
This finishes that part of the job.
  Third, I would like to say a word about what I like to call the 
outdoor recreation and conservation royalty that this legislation 
establishes to help create soccer fields and city parks with what we 
call the State side of the Land and Water Conservation Fund. This Fund, 
for 40 years, has provided modest but very important Federal dollars to 
help Americans enjoy our outdoor spaces.
  First, why is this so important? We hear a lot of talk about the high 
cost of gasoline because we are reminded of it all the time when we 
fill up our tank. It is $3 a gallon, or $2.80 or $3.10. We hear it 
might go higher. All across the country in American restaurants people 
are eating out a little less and thinking a little bit more about long 
drives because of the high price of gasoline.
  What if the price of the gasoline at the pump were $7 a gallon? What 
do

[[Page S8488]]

you suppose the reaction would be in the United States if the price of 
gasoline at the pump were $7 a gallon? That is exactly what the 
situation was in terms of natural gas last year. The price of natural 
gas went up to $14 a unit.
  Testimony before the Energy Committee showed that if we translated 
that into gasoline prices, it would be the same thing as if gasoline 
prices were $7 a gallon.
  That is how big the hurt is. Where does the hurt apply when the price 
of natural gas is too high, when it is $14?
  Let's start with manufacturing jobs in this country. We hear a lot of 
speeches being made about manufacturing jobs. Let's not send them 
overseas, people say. I agree with that. We don't want them to go 
overseas. What will send them overseas in the chemical industry? There 
are 1 million blue-collar and white-collar jobs--jobs at Eastman 
Chemicals in east Tennessee. I have spoken about this many times on the 
Senate floor. My uncle used to work there. For three or four 
generations, Eastman Chemicals has been a part of east Tennessee and 
the Great Smokey Mountains. People came to depend on Eastman Chemicals. 
It led to strong families, high wages, good schools, and low crime 
rate. It is hard for people to imagine what life would be like in the 
Appalachian Mountains in upper east Tennessee if Eastman had not been 
there for three or four generations.
  But how long is Eastman going to stay in upper east Tennessee if the 
price of natural gas is at $14? Not long, if what it does is make 
chemicals. The chief executive of Dow Chemical testified that when the 
price is that high, his raw material cost is 40 percent of his costs.
  When the price, as the Senator from Alabama was saying, of natural 
gas in other parts of the world is $2, $3, $4, or $5 a unit, and it is 
$14 here, where do you suppose the new chemical plants are going to be 
built? Not here, not in Tennessee, not in New Hampshire, not in Kansas, 
not anywhere. In fact, there are about 100 new chemical plants being 
built around the world today. One is being built in the United States.

  There are several reasons for that, but a primary reason is the 
unpredictable and high cost of natural gas. It is $7 or $8 today per 
unit. But our economy was built on $2 natural gas. Every little 
addition to costs in the manufacturing process increases the likelihood 
that a job, or a plant will go to Mexico or some other place. It is 
incumbent upon us to do everything we can to keep the prices down: 
First, to stabilize and then begin to keep the price down.
  That is why it is important to begin with manufacturing jobs, and not 
just the chemical industry.
  At a roundtable I had with the Farm Bureau in Tennessee, the chief 
executive of Saturn, the auto manufacturing plant, said to me: We have 
done about all we can to save on costs by efficiency. The price of 
natural gas is raising the price of our cars. If you raise the price of 
cars and the supply parts are made in the United States, where do you 
suppose they are going to be made? They are going to be made in some 
other country where the price of natural gas is a lot less than it is 
in the United States.
  One-third of all the manufacturing jobs in Tennessee are automotive 
jobs. In Tennessee, there are not just manufacturing jobs and 
automotive jobs but jobs in our agricultural community. The Tennessee 
Farm Bureau was helping to sponsor that natural gas roundtable because 
in every part of a production-oriented enterprise, which agriculture 
is, energy adds to cost. It especially adds to cost when we are talking 
about the price of fertilizer.
  As with Eastman Chemicals, natural gas is the main raw material in 
making fertilizer. So we can begin to see pretty quickly why it is 
difficult for our economy, on us as families and individuals for the 
price of gasoline at the pump to be high. I would argue that it is even 
worse for us for the price of natural gas to be too high because of the 
effect of high natural gas prices on our jobs and because of its effect 
on agriculture.
  Finally, we are today reminded, certainly in Tennessee and in 
Washington with the heat going over 100 degrees, of the cost of heating 
our home in the winter and cooling our home in the summer, which many 
people do with natural gas.
  The price of natural gas is tremendously important. This legislation 
opens up the most promising new area for the most rapid large amount of 
new natural gas that is under the control of the United States to come 
into our system: 8.3 million acres in the Gulf of Mexico where we are 
already busy producing a lot of oil and gas, where we know what we are 
doing.
  There are a lot of ways to talk about it, but one is to say it is 
enough to heat and cool nearly 6 million homes for 15 years. Will this 
by itself stabilize the price of natural gas, by itself lower the price 
of natural gas back to $3 or $4? No. But it is an important part of the 
whole picture--a part that was left undone last year when we passed the 
comprehensive Energy bill.
  That is my second point. Some have said we can't drill our way out of 
this problem of high gasoline prices and high natural gas prices. I 
think we agree on that. Nobody is suggesting that we do so, which is 
why we passed the comprehensive Energy bill last year. Here is what we 
did.
  We started with conservation. In fact, the name of the bill probably 
should have been the Natural Gas Price Reduction Act of 2005 because 
that is the way we began to think about it. We were looking for ways to 
produce large amounts of clean, low-carbon, or carbon-free energy.
  The United States of America uses 25 percent of all the energy in the 
world. We are not on some desert island. We need a lot of energy. We 
increasingly understand that it has to be reliable energy. And we 
increasingly understand it has to be less expensive energy. Now we 
understand it has to be clean energy.
  In the Great Smoky Mountains National Park in east Tennessee where I 
live, we have too much sulfur, too much nitrogen, too much mercury in 
the air. That produces asthma, that produces particulate matters which 
harms our health. The Smokies has become the most polluted national 
park in the country. So clean air is important.
  A great many people are concerned about global warming--a majority of 
this Senate is. That is why we in our bill said let's have more carbon-
free, low-carbon energy.
  What did we say?
  First, we had major incentives for conservation and efficiency. 
Conservation is the place to start in any effort to have large amounts 
of reliable, low-cost, carbon-free energy.
  Second, nuclear power. There is a renaissance of nuclear power in 
this country. Hopefully, it will continue. Nuclear power not only 
produces 20 percent of all of our electricity, it is 70 percent of our 
carbon-free electricity.
  If you care about global warming, for example, it is not enough just 
to care about it--we need to do something about it. The two ways to do 
something about it are conservation and nuclear power--at least in the 
next generation.
  Third, we had major incentives in the Energy bill last year for clean 
coal. Many people prefer that as a strategy because it doesn't run into 
some of the problems in waste disposal and the possibility of nuclear 
proliferation that nuclear power might.
  But there are significant problems with clean coal. One is it is 
dirty. Even clean coal production is dirtier than nuclear power.
  Finally, we don't know exactly what to do with all of that carbon we 
produce.
  We have some inventing to do in order to sequester and recapture the 
carbon and perhaps bury it.
  Because we wanted to get on with natural gas price reduction, we also 
made it easier to bring in natural gas from other places in the world--
freeze it, bring it in, unfreeze it, put it in terminals, and put it 
back into our pipelines.
  That is an elaborate process. But for the next 5 or 10 years, we are 
going to have to rely on that.
  We did some things to make it easier for refineries to operate. There 
are a variety of other things we did. Last year, we did conservation, 
nuclear power, clean coal, liquefied natural gas--a number of other 
things. But the one thing we didn't do enough about was more natural 
gas supply. We are not going to drill our way out of this problem. We 
are trying to reduce our dependence on foreign oil and lower the price 
of natural gas in a variety of ways.
  In this transition period, it helps to take the most obvious area of 
supply

[[Page S8489]]

and take it and do something with it, which is what we are doing here.
  My second point is we have to finish the job that we started last 
year. I suspect--I know--there is much more to do. We should be more 
aggressive with conservation and efficiency, more aggressive in support 
of nuclear power, more aggressive in research for clean coal. I would 
like to see us accelerate our efforts for hydrogen fuel cell production 
and give more incentives for fuel-efficient cars as a way of dealing 
with reducing our supply of oil on the transportation side. Here we are 
doing what we need to do to finish the job.

  Finally, I will say a word about where the money goes. Before the 
money goes into the Federal Treasury, it first goes into two important 
royalties. Royalties are not a new concept. Land owners get royalties 
when someone finds oil or gas. Then the money goes to the production 
company or to the State or the Federal Government. The idea of State 
royalties is not a new concept. If you are drilling for oil in Wyoming, 
the first 50 cents of a dollar goes to the State for various purposes. 
If you are drilling in Alaska, 90 cents goes to Alaska and the other 10 
cents to the Federal Government.
  Senator Domenici and the Framers of this piece of legislation wisely 
said the first 50 cents of the money we get from this deep sea 
exploration will go to the States. States along the gulf coast get the 
bulk of it, 37\1/2\ percent for wetlands, coastal renewal, and 
conservation purposes, and the other 12\1/2\ percent goes to the State 
side of the Land and Water Conservation Fund.
  The Land and Water Conservation Fund was created by the Outdoor 
Recreation Resources Review Commission. It was recommended in 1958. It 
was called the Rockefeller Commission, headed by Laurance Rockefeller. 
Congress enacted it in 1965. The idea was very simple. When we spend an 
asset, we create another asset.
  In 1977, Congress authorized that one of the sources of funding for 
the Land and Water Conservation Fund would be receipts from the Outer 
Continental Shelf mineral lease--in other words, the kind of revenues 
from the oil and gas drilling we are authorizing today. Congress has 
authorized in the law that we spend $450 million a year on the State 
side. It goes to States for city parks, soccer fields. The amount of 
money has gone up and down over time, so in 1985 and 1986 President 
Reagan's Commission on Americans Outdoors, which he asked me to chair, 
and I did, recommended we make some of that money permanent. So for the 
first time in 40 years, this legislation does just that: 12\1/2\ 
percent of the revenues go for the State side of the Land and Water 
Conservation Fund.
  Exactly what are we talking about? Since 1964, the State side has 
created improved parks and forests in all 50 States, helped to create 
more than 40,000 athletic and playing fields, 12,000 hiking trails, 
20,000 family picnic locations, 5,000 campgrounds, 10,000 swimming and 
boating facilities, and 600 hunting and nature areas.
  In Tennessee, since 1965, our State has received 170 Land and Water 
Conservation Fund grants totaling $67 million in Federal dollars. It 
has been vital to stretch local matching dollars to fund the 
acquisition of parks, ballfields, trails, and playgrounds across 
Tennessee.
  The funding has been modest. The new funding in this bill is modest, 
but it is important. It will grow over time. It has been recognized by 
those who have worked for a long time to support the Land and Water 
Conservation Fund.
  I have a letter from Patrick Noonan and Henry Diamond. Mr. Noonan is 
the founder of the Conservation Fund and is chairman emeritus. Henry 
Diamond is the former commissioner of New York Parks and Environment 
and was involved in the writing of the original Land and Water 
Conservation Fund in 1962. They say:

       If the precedent of a conservation royalty can be 
     established, it would be an important first step in the right 
     direction, one that we have spent 40 years attempting to 
     achieve.

  I ask unanimous consent to have printed in the Record the letter from 
Mr. Noonan and Mr. Diamond, written in their individual capacities.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                               Washington, DC,

                                                    July 21, 2006.
     Hon. Lamar Alexander,
     U.S. Senate,
     Washington. DC.
     Hon. Ken Salazar,
     U.S. Senate,
     Washington, DC.
       Dear Senators Alexander and Salazar: We are writing to 
     express our strong support for the concept of permanent 
     federal funding for the state side of the Land and Water 
     Conservation Fund. If the precedent of a conservation royalty 
     can be established, it would be an important first step in 
     the right direction, one that we have spent 40 years 
     attempting to achieve.
       We and others have long advocated the principle that some 
     of the funds from offshore oil and gas drilling should become 
     in effect a royalty for conservation and outdoor recreation, 
     providing a reliable and permanent stream of funding for the 
     Land and Water Conservation Fund. This basic concept was put 
     forward by the Rockefeller Commission to President Kennedy 
     and the Congress in 1962 and was also a primary 
     recommendation of President Reagan's Commission on Americans 
     Outdoors in 1986. Unfortunately, during the last 40 years, 
     the Land and Water Conservation Fund has been subjected to 
     the unreliable annual appropriations process. During recent 
     years, those appropriations have averaged less than $100 
     million for the state side of the Land and Water Conservation 
     Fund and this the Administration recommended zero.
       Our goal is full funding for both the federal and state 
     side of the Land and Water Conservation Fund, each of which 
     is authorized at $450 million per year. At a minimum, we 
     believe there should be $125 million a year available for the 
     state side now and $450 million no later than 2017.

     Sincerely,

     Patrick F. Noonan.
     Henry L. Diamond.

  Mr. ALEXANDER. Mr. President, I salute Senator Domenici, Senator 
Sessions, Senator Landrieu, Senator Vitter, Senator Martinez, and many 
others who have worked hard on this piece of legislation.
  Two years ago, the idea of giving additional authority for offshore 
drilling for oil and gas was an unmentionable subject around here. No 
one would bring it up in polite conversation.
  Last year, with the price of natural gas reaching $14 a unit, we had 
about 50 Senators who would support it, but that wasn't 60. Yesterday, 
I believe we had more than 70 on the cloture vote.
  We recognize there are environmentally sound ways to go a long way 
offshore, as we are here, where we cannot see it from the shore, and 
look for oil and gas. We have learned to do that in a way that is so 
safe that less oil and gas seeps into the ocean from that process than 
comes from natural seepage out of the ground. We have learned to do 
that and to do that well.
  We have also come a long way in recognizing that it is good policy to 
say if we are going to spend an asset--and by that I mean create an 
environmental burden--drilling for oil and gas, we ought to create an 
asset and spend some of the money for wetlands in the more affected 
States and through the State side of the Land and Water Conservation 
Fund in all of the other States.
  This is an important piece of legislation. It helps blue-collar 
workers. It helps farmers. It helps homeowners who are paying 
skyrocketing bills to deal with 100-degree heat. It helps reduce our 
reliance on parts of the world such as the Middle East where we should 
not be importing as much oil and gas, and it establishes for the first 
time good clear policy about how and when we take initial steps of 
offshore drilling. We not only should do it in an environmentally sound 
way, but we should use some of the revenue to create other conservation 
and outdoor recreational assets.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. CONRAD. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. Mr. President, we heard debate start this morning on 
permanently cutting the estate tax. I heard some of my colleagues again 
this morning refer to it as the death tax.
  There is no death tax in America. We have no tax that applies at 
death. We do have an estate tax. We have a tax on wealthy accumulations 
that occur in families. That tax does not affect an individual unless 
they have at least $2 million. For a couple, that would be $4 million 
before they face any estate tax.

[[Page S8490]]

  Of course, my colleagues know there are many ways you can further 
reduce the taxes that apply to wealthy estates. But the first thing we 
ought to say clearly and directly to the American people is, there is 
no death tax. There is no tax that applies at death. None.
  One of the most interesting stories I have heard was a colleague of 
mine who was at the airport. A baggage handler said to him: My God, you 
have to get rid of that death tax. That is going to affect my family.
  And my colleague said to him: Unless you have at least $4 million as 
a family, you do not have to worry about any death tax because there is 
no death tax.
  This baggage handler was completely shocked to hear there was no 
death tax. He has heard over and over and over there is a death tax. He 
believed it. Everyone in this Senate knows there is no death tax.
  What is most extraordinary about the proposal before this Senate is 
the context in which it occurs. Our country is deep in debt--deep in 
debt. Now our friends on the other side, their idea in the last week we 
are in session for the next month is to come out here and put us deeper 
in debt. Dig the hole deeper and deeper and deeper. What an 
extraordinary proposal that is.
  And for what purpose? To help the struggling middle class? No, no, 
they are out of this. This is not even the upper class. This is the 
wealthiest among us. That is who this is designed to help.
  Here is our current circumstance. The deficit last year was $318 
billion. The deficit for this year is now projected to be just under 
$300 billion, some modest improvement in the deficit.
  But that completely misses the point because at the same time the 
deficit is showing some modest improvement, the increase in the debt is 
getting much worse. Last year, the debt increased by $551 billion. This 
year, we now project the debt will increase by almost $600 billion.
  Someone out there listening might say: How can that be? How can it be 
the Senator is saying the deficit is less than $300 billion, but the 
debt is going to increase by almost $600 billion? How can that be?
  That is largely because under the President's plan, they are also 
taking hundreds of billions from Social Security to use to pay other 
bills. All of it gets added to the debt. None of it gets counted for 
the deficit.
  This chart shows the deficit for 2006 just under $300 billion. Here 
is the amount added to the debt--almost $600 billion. And you can see 
the biggest difference between the deficit and the increase in the debt 
is the amount of Social Security money that is being taken to be used 
for other purposes: $177 billion in this 1 year alone, Social Security 
money taken to pay other bills. And, of course, it all gets added to 
the debt. None of it gets counted to the deficit.

  When one looks at what is happening to the debt, here is what one 
sees: We are building a wall of debt that is extraordinary. At the end 
of this President's first year in office, the debt was $5.8 trillion. 
We do not hold him responsible for the first year. But at the end of 
this year, the debt will have climbed to $8.5 trillion. And if the 
President's plan is put in place, for the next 5 years, the debt will 
go over $11.5 trillion.
  The debt under this President has taken off like a scalded cat, and 
at the worst possible time. The debt is increasing before the baby boom 
generation retires.
  What are the implications of this rapidly rising debt? Well, one of 
them is that increasingly we are borrowing this money from abroad. 
Increasingly, we are going, hat in hand, all around the world borrowing 
money. This chart shows that it took 42 Presidents--all the Presidents 
pictured here--224 years to run up $1 trillion of debt held abroad. 
This President has more than doubled that amount in just 5 years. That 
is a completely unsustainable course. You go back to President Clinton, 
you go back to the previous President Bush, you go back to President 
Reagan, President Carter, President Lyndon Johnson, and all the other 
Presidents--224 years of American history--they ran up $1 trillion of 
external debt. This President, in just 5 years, has run up more than $1 
trillion of U.S. debt held abroad.
  So what we see are these countries to which we now owe money. We owe 
Japan $638 billion. We owe China $326 billion. We owe the United 
Kingdom almost $200 billion. We owe the oil exporters over $100 
billion. My favorite down here, the Caribbean banking centers, we owe 
them over $60 billion. Mexico now is on the top 10 list of countries 
that we owe money. We owe Mexico $43 billion.
  I asked my staff the other day: What do we see in terms of our 
borrowing compared to other nations borrowing? Sometimes that is a good 
way to get a sense of where we stand. They came back with this answer. 
It is not their numbers; it is the International Monetary Fund. It 
shows the percent of world borrowing by country. These are the world's 
biggest borrowers. And who is No. 1? Our country. We borrowed over 65 
percent of the money that was borrowed by countries last year--65 
percent borrowed by our country. Turkey borrowed about 2 percent. I see 
the United Kingdom borrowed about 4 percent. Spain was the next biggest 
after the United States. We borrowed 65 percent of all the money that 
was borrowed by countries last year. The next biggest was Spain at 6.8 
percent; then the United Kingdom at just under 4 percent; then 
Australia, just over 3 percent; France, under 3 percent; Italy, just 
over 2 percent; Turkey, just under 2 percent. The United States, 65 
percent.
  With all of this occurring, with the deficit skyrocketing--that is by 
historical comparison; yes, it improved somewhat over last year, but 
these are the biggest deficits our country has ever run--and the debt 
taking off like a scalded cat, what do our colleagues do in the last 
week before we break for a month? They come out here and propose to 
virtually eliminate the tax on wealthy estates. Now, there is an idea 
whose time has come. While we cannot pay our bills now, while we are 
borrowing money from Japan and China, their answer is: Let's go give an 
enormous tax break to the wealthiest among us. And where will we get 
the money to fill in the gap because we cannot pay our bills now? Let's 
go borrow some more money from Japan and China. Let's go borrow some 
more money from Japan and China. You would think you were in a movie--
not even a very good movie--that somebody had dreamt up if you were to 
describe what is going on here.
  Our country is the biggest debtor nation in the world. Our colleagues 
have cut the revenue, cut the revenue, cut the revenue, increased the 
spending, increased the spending, increased the spending; and now their 
answer is: Let's cut the revenues some more, and let's cut it on the 
wealthiest of the wealthy, the top three-tenths of 1 percent of the 
estates in this country, because they are the only ones who are paying 
the estate tax now.
  Our friends say: Oh, no, my goodness, let's cut them some more. Let's 
cut them some more. The wealthiest among us have already gotten the 
greatest benefit of the tax cuts that have been enacted--by far. Now 
they say: Let's cut their taxes some more and borrow the money from 
China and Japan. This is a farce--a farce--which is occurring here. And 
it is a disaster for the economic strength of our country.
  Here is what the size of estates has to be before they pay any tax. 
We are in 2006. These are the estate tax exemption levels under current 
law for a couple. Couples have to have $4 million before they pay a 
penny of estate tax--$4 million, not of gross assets, of net assets. 
They have to have $4 million free and clear before they pay a dime. And 
in 2009, that will go up to $7 million.
  Our friends on the other side of the aisle say: Whoa, that is not 
nearly enough. Let's jack this thing up dramatically. Let's lower the 
rates. Let's increase the exemptions. And let's borrow the money from 
China and Japan. Now, there is a format to strengthen America.
  The number of taxable estates is already falling very dramatically 
under current law. In 2000, there were 50,000 taxable estates in the 
whole country. This year, there will be 13,000 in the whole country.
  Now, people say there is a death tax. There is no death tax. There is 
no tax that attaches to anybody at death in this country. The estate 
tax applies to

[[Page S8491]]

people who have accumulated wealth. Good for them. I am glad for their 
success. But does a further tax cut on multi-million dollar estates 
make any sense for our country? Does it make any sense at all when we 
cannot pay our bills now that we would go out and dramatically cut 
taxes on the very wealthiest among us who already have tax cut after 
tax cut after tax cut--let's give them one more--when we have to borrow 
the money from China and Japan?

  In 2009, the estimates are that there will only be 7,000 estates 
taxable in the whole country. In 2009, only two-tenths of 1 percent of 
estates will be subject to tax. That is under current law. Under 
current law, 99.8 percent of estates will not pay a penny of tax--99.8 
percent. Our colleagues say: That is not good enough. Let's cut it some 
more. Even though we cannot pay our bills now, let's give another big 
tax cut to the wealthiest among us and go borrow the money from Japan 
and China and Great Britain and the oil exporting countries--because 
the money is gone. The money is gone. There are no surpluses here. We 
cannot pay our bills. We are borrowing 65 percent of the money that is 
being borrowed in the world today by countries. We are borrowing 65 
percent of it.
  This is insanity. This is irresponsible. This is reckless. And not 
just a little bit reckless, this is totally reckless. Now our friends 
come with a proposal to virtually eliminate the estate tax. Full repeal 
from 2012 to 2021 would cost just over $1 trillion. This proposal costs 
$753 billion from 2012 to 2021.
  Now, our friends on the other side say: Hey, Social Security is short 
$4 trillion. They say: Medicare is short $29 trillion. And they are not 
doing anything about that. What they are doing is digging the hole 
deeper. Let's get rid of another $750 billion we do not have--that we 
have to borrow from Japan and China and all the other countries in the 
world, even Mexico, because we now owe Mexico $43 billion--let's do 
that so we can cut the taxes on the very wealthiest among us.
  What earthly sense does this make? I will tell you for whom it makes 
sense. It makes sense for--as this article in the New York Times on 
June 7 says, it is ``A boon for the richest in estate tax repeal.'' 
Over the last decades, 18 of the wealthiest families in the country 
have spent more than $200 million lobbying to repeal the estate tax. 
Eighteen families have put up $200 million to repeal the estate tax. 
How happy they must be on this day. How happy they must be. The wealthy 
families include the Mars candy family; the Gallo wine family; the 
Wegman supermarket family; the Dorrance family, which controls 
Campbell's Soup; and the Waltons, who control Wal-Mart.
  I applaud people who have been successful, but people who have been 
successful have succeeded not only because of their own hard work and 
creative approach to solving problems; no, in part they have succeeded 
because they are part of this country. How incredibly fortunate we all 
are to be born in America.
  Many very wealthy people I know believe they have an obligation to 
give back. We just saw an extraordinary example of that with Warren 
Buffett. Warren Buffett, the second wealthiest man in America, worth 
some $40 billion, just decided to give virtually all of his wealth to 
Bill Gates's foundation, who is the wealthiest person in the country, 
in order to do good works, in order to give back, in order to make a 
difference for others.
  What is being said here on the floor of the Senate? No, that should 
not be the test--giving back, helping others, making a difference to 
improve this world, understanding that part of each of our success is 
because we had the good fortune to be born in America. This proposal is 
all about me, all about me. I have it. I am keeping it. I am not giving 
it away. What is the result? Well, our country will have to go borrow 
more tens of billions and hundreds of billions of dollars from Japan 
and China and Great Britain and the oil exporting countries, and even 
Mexico. That is what is going to happen. Or our friends on the other 
side will, at some point, just shred Social Security and Medicare. That 
is where this is all headed. Make no mistake. That is where this is all 
headed because America cannot pay its bills now.
  Hurricane Katrina put the estate tax repeal in some perspective.
  The chairman of the Finance Committee said this:

       It's a little unseemly to be talking about eliminating the 
     estate tax at a time when people are suffering.

  He said that last year. People are suffering this year as well, 
suffering the aftermath of Katrina--I have been with families suffering 
from losses in Iraq and Afghanistan--but also suffering because our 
country is in deep trouble. Our country is living on the credit card. 
Our country is borrowing money at a rate unprecedented in our history. 
We are borrowing 65 percent of all the money that was borrowed by 
countries of the world last year, our country. And who did we borrow it 
from? It used to be when we ran deficits we borrowed the money from 
ourselves. We issued bonds and Americans bought them. It has all 
changed because now more than half of the bonds that we sell are going 
to foreigners. Every time we have another month where we spend more 
than we take in, we have to borrow more money. Over half of it now we 
are borrowing from Japan, China, Great Britain, the oil exporting 
countries, and the Caribbean banking centers. What sense does this 
make?
  Now we are told: Do you know what we should do? Here is a good idea. 
Just before we take a break for the month, let's go out and dig the 
hole deeper. Let's go out and have a plan that will reduce taxes on the 
wealthiest among us by $753 billion for a 10-year period--not million, 
$753 billion--and put that on the charge card. Boy, we will have a real 
party in August.
  The cost of the proposal before us absolutely explodes, because they 
have a clever device called a phase-in that hides the long-term cost. 
It is not in full effect until 2015, and then the cost goes up like a 
scalded cat, as this chart depicts. The cost between 2012 and 2021 is 
about $600 billion plus an additional $154 billion of interest cost, 
because, after all, where is the money coming from? Is it coming out of 
the Treasury of the United States? No, it is all going to have to be 
borrowed. And who are we borrowing from? Increasingly, we are borrowing 
from abroad.
  And what is going to happen? Some in this town say deficits don't 
matter. Go ask the Germans about that. Ask the Germans what happened 
after World War I when they were on a course like this, borrowing, 
borrowing, borrowing, increasingly borrowing from abroad. How did they 
try to get out of it? They inflated their currency until the German 
mark was virtually worthless. If you wanted to buy a pair of shoes, you 
had to fill up a wheelbarrow with German marks and go to the store 
because the currency had so little value. That is one way out. It is a 
disastrous way out, but many countries have tried it.
  The other way out is, you have to cut spending and raise taxes. That 
is tough. That is hardly popular politically, go out and tell people: 
Gee, none of this adds up. We have been spending money we don't have in 
your name. It is your debt. The President likes to say it is the 
people's money. He is exactly right, it is the people's money. It is 
also the people's debt. This debt is being run up in the people's name. 
This debt is owed and is going to have to be paid.
  The cost of the House proposal, if you compare it with the cost of 
extending the middle-class tax cuts, is very interesting. Over the 
first 10 years of this proposal, it costs $268 billion; from 2012 to 
2021, it costs $753 billion. But in just the first years, it dwarfs the 
cost to extend the child tax credit. That would cost $183 billion. It 
dwarfs the money to extend the marriage penalty; that would cost $46 
billion. It totally overwhelms the cost to extend the college tuition 
deduction; over that period that would cost $19 billion. Those are tax 
reductions and tax relief that do benefit the middle class. This is one 
of the most irresponsible proposals to come before the body in the 20 
years I have been here. It is completely and totally irresponsible.

  I was a conferee on the conference committee to deal with the issue 
of pensions. Last Thursday the conferees were to meet at 6 o'clock. We 
were there. House Republicans did not appear. They asked us to come 
back 2 hours later. They needed some more time. We came back at 8. They 
still did not appear. At that time they apparently made the decision to 
forget about

[[Page S8492]]

the conference committee. The conference committee worked since March 
of this year in good faith to deal with the pension crisis, and they 
added to that package the so-called extenders, those tax provisions 
that are about to expire that are critically important to the country. 
We were prepared to pass that package. The leaders from the conference 
on the other side decided, no, they didn't want to have that discussion 
in the public. Instead they didn't appear, and they hatched this other 
plan to have a pension bill come out of the House freestanding and this 
other package that includes elimination of the estate tax and an 
increase in the minimum wage for some States.
  I was with the Senator from California, Mrs. Feinstein, who informed 
me in her State the so-called minimum wage increase will actually 
reduce the minimum wage for millions of workers because of its 
provisions. They put together the Abandoned Mine Lands Act in this 
package in order to try to get the support of Members here, and they 
have wrapped it all in a big package to try to get this body to do 
something that makes absolutely no sense for the fiscal future of this 
country. That is, without question, the most irresponsible package I 
have seen offered here in my 20 years in the Senate. It is not just a 
little bit irresponsible; it is wildly irresponsible. This is reckless, 
the course this country is being taken on, utterly reckless.
  Why do I say that? Because sometimes you wonder if anybody is paying 
attention. Here is what is happening to the debt of our Nation: $5.8 
trillion in 2001; $8.5 trillion at the end of this year. If the budget 
the President proposed is followed, the debt will rise to $11.5 
trillion in 2011. If this proposal is adopted, it will be even worse. 
From 2012 to 2021, this proposal that is before the body will take 
another $750 billion and add that to the amount this country will have 
to borrow. It is unbelievable.
  This President has taken us on a reckless course. Forty-two 
Presidents took 224 years to run up a trillion dollars of our debt held 
abroad. This President has more than doubled that amount in only 5 
years.
  So what is before the body now? A plan to go out and put another $750 
billion on the charge card, because this money has to be made up from 
somewhere. We can't pay our bills now. If you reduce the revenue that 
is scheduled to come in, the debt goes up. You have to have more 
borrowing, more going to the Chinese, more going to the Japanese, and 
asking them for more money. How are we going to pay it back?
  Our friends say this is a tax cut. I don't think so. I think what 
this is an enormous tax shift. Because at some point we are going to 
have to start paying our bills. And when we do, I have a feeling I know 
what they are going to do. They are going to come out here and they are 
going to say: All of us have to contribute. All of us have to 
participate. We are going to have to cut spending. We are going to have 
to raise revenue.
  I can see their proposal now. They will be coming right at the 
middle-class people who are the bulwark of this economy. They will 
either cut programs that are important to them, such as Social Security 
and Medicare, or they will raise taxes on them, all so that we could 
give a big reduction to the very wealthiest among us, the people who 
have benefitted most from the genius of the American economy.
  Many of the wealthiest people I know say: Don't do it in my name. 
Don't do that in my name. I don't need another tax cut. I do need a 
country that pays its bills. I do need a country that isn't borrowing 
more and more money from China and Japan and Great Britain and Mexico.
  I can't think of a more consequential fiscal decision that will be 
made than this one. Are we going to keep digging the hole deeper and 
deeper? Or are we going to head in a new direction and get serious 
about getting America back on track?
  I thank the Chair and yield the floor.
  The PRESIDING OFFICER (Mr. Burr). The Senator from Arizona.
  Mr. KYL. Mr. President, in response to my friend from North Dakota, I 
would note that the difference between the position he articulates--and 
it is a position a lot of people in Washington hold--and the position 
that a lot of the rest of us hold is between those who worry a lot 
about how much money the Government has versus those of us who think it 
is a better idea to let people keep more of what they earn, that they 
are probably in a better position to make good judgments about how that 
money should be spent, and especially when it comes to their death and 
their loved ones who have to face the difficult choice of deciding how 
to pay the death tax that, unless something is done, is going to go up 
to effectively 60 percent. Can anybody imagine a 60-percent tax rate? 
It is actually on the books at 55 percent, but because of the way the 
Code works, it can be as much as 60 percent. Can you imagine a 55-
percent or 60-percent tax rate? You cannot pay it unless you sell the 
farm or sell the business. I know people to whom that has applied. So 
it is a difference between those who worry how much money Washington 
has and those of us who are concerned about people keeping more of what 
they earn.

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