Congressional Record, Volume 153 Issue 191 (Thursday, December 13, 2007)

[Congressional Record Volume 153, Number 191 (Thursday, December 13, 2007)]
[Senate]
[Pages S15390-S15412]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

FARM, NUTRITION, AND BIOENERGY ACT OF 2007--Continued

Mr. REID. I ask unanimous consent we now move back to the farm bill.
The PRESIDING OFFICER. The farm bill is now pending.
The Republican leader is recognized.
Mr. McCONNELL. Mr. President, let me join the leader indicating there
is no reason we should not and we will pass the Energy bill today. Now
that it is clear it is not going to be a bill to raise taxes and drive
up the price of fuel at the pump, I think there is broad bipartisan
support for this bill. This is the way the Senate ought to function,
coming together behind those things that are achievable.
The bill, with the changes the majority leader has indicated we are
going to make, could be signed by the President and it will be
something we could all be proud of.
We also intend to finish the farm bill as rapidly as possible, so I
share his goals for today, and tomorrow if need be. I think we should
move forward with the farm bill and finish it.
I yield the floor.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Mr. President, before the Senator from Nevada leaves, I
wish to note first I was very pleased to accept your definition of our
relationship--good friends. We are friends. I thank you for that and I
want to say that now.
I do want to say to you about the bill we have had a long fight
about, and we just finished about as difficult a vote as we have had in
a long time, that the bill you are going to send back to the House,
this bill up here, with a few alterations and the taxes out, this bill,
I guarantee, will get signed and it will become law. It will be the
most significant act we can take to reduce our dependence on foreign
oil, all by itself. It will get passed, now that we are finished with
the hurdles, and you will be the one who will be leading it through the
remainder of its journeys and you will be there when, indeed, it
becomes the law of the land. It will be the most significant energy act
we can do.
It was done by the Committee on Commerce, led by Senator Inouye and
Senator Stevens. Because they know how to work, they passed it when we
could not pass it for years. Now it is ready to go. It is not dead. The
vote caused it to stay alive and go down its way to the President for
his signature.
I think the Senator's accomplishments in this regard are to be
commended. We are going to get a great bill and you will be part of it.
I am sorry it is not exactly what you want, and you can rest assured
there will be some of us helping you and helping the other side when it
comes to the incentives you spoke of in your remarks. Some of us think
they are important. We just don't think they belong on this bill and
they do not deserve a veto.
I thank the Senator for his kindness as we work this through. I hope
we can make a couple of changes that Senator Inouye thinks are
important before the bill is sent to the House.
The PRESIDING OFFICER. The majority leader is recognized.
Mr. REID. Mr. President, my heart is heavy, and I say that seriously,
recognizing next year at this time Senator Domenici will be in the last
few days of his 36-year service in the Congress of the United States.
During 25 years of that, I have worked with him. My next year will be
26 years. As partisan as he is and as partisan as I am, we have worked
toward meeting the demands of the State of Nevada, heavily involved in
the defense of this country for decades, as is the State of New Mexico.
In the process of our working together, we have helped the country. The
safety and reliability of our nuclear stockpile as it exists today is a
result--and I say this in no way to boast but to be factual--of what
Senator Inouye and Senator Domenici and I put into effect as members of
the Energy and Water Subcommittee on Appropriations. We do not need to
dwell on this longer than to say his dedicated service to the country
is something I recognize, the people of New Mexico and of our country
will recognize for many years to come.
Mr. DOMENICI. I thank the Senator.
I yield the floor.
The PRESIDING OFFICER. The Senator from Illinois is recognized.
Mr. DURBIN. Mr. President, I ask unanimous consent to speak as in
morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DURBIN. Mr. President, this last vote was a historic vote for
America. This was a decision about whether we were going to look to the
future to change to an energy policy and a environmental policy
consistent with America's best interests. Pitted in that vote were the
oil companies, the energy companies of years gone by, and those energy
sources for our future. The energy companies of years gone by
prevailed.
The irony is that the Republicans, Senator McConnell and others, have
stood steadfast in protecting the subsidies for the oil companies of
America. That is a time-honored tradition in the Senate. Whether you
agree with it or not, the Senate, by and large, has been very kind to
the oil companies and the oil industry throughout our history. We
couldn't have seen a vote they would have been happier with than the
last one, because in the last one, the last vote, we suggested that
subsidies for oil companies should give way to tax incentives for new
sources of energy, sources of energy that are clean, renewable,
sustainable, and that vote failed by one vote.
Isn't it ironic, at a time when oil companies in America have enjoyed
the highest profit margins in their history, that the Republican
argument is we must continue the tax subsidies for those oil companies?
Isn't it ironic, at a time when Americans are paying higher and higher
prices at the pump for gasoline, while oil companies have the highest
profits in their histories, the Republicans argue we should not
penalize these oil companies in any way or they will take it out on the
consumers? It is a craven political position. It is a position which is
devoid of leadership. It is a position which looks to the past instead
of to the future.
The future suggests these oil companies should be held accountable
like

[[Page S15391]]

every company. With $90-a-barrel oil, why in the world would they need
a Federal subsidy? Why in the world would the Members of the Senate
protect that subsidy when these oil companies are enjoying the highest
profits in the history of their industry?
I think many of us believe there is a future that is much different.
It is a future which most Americans are praying for--when we are less
dependent on foreign oil, when we are using energy sources that are
kind to the environment, and where we are reducing greenhouse gas
emissions that cause climate change and global warming. That is the
future. The future just failed by one vote. The past was preserved with
those who voted against this last motion.
The oil companies now are celebrating in their boardrooms. Not only
do they have the highest profits in history, they continue to have a
death grip on this Senate. They continue to be able to muster enough
votes to stop us from moving forward with the energy for America's
future. It may be a great political victory today for the oil
companies, but I will tell you the day is coming, and soon, when the
American people will have a voice. In the election in 2008, they can
decide whether to elect those political figures who are preserving the
past, ignoring the future, or vote for those who want real change.
I think this was a historic vote. To lose by one vote in terms of
moving us forward, to say that President Bush--who has his own history
in the oil industry--is going to dictate America's energy future, is to
condemn us, I am afraid, to a future that is not hopeful. It is a
future where this administration, having rejected Kyoto, still stands
in lockstep with the oil industry and their view of the world. That has
to change. That has to change if our future generations and our
children are going to have a liveable world, one where they can cope
with the changes in the environment and say that our generation did not
let them down. The Senate let them down with this last vote.
I yield the floor.
The PRESIDING OFFICER. The Senator from Texas.
Mr. CORNYN. Mr. President, aren't prices of gasoline high enough? Why
would we want to raise the price of gasoline for the American consumer
by raising taxes and the costs of doing business on the people who
produce oil and gasoline for the American consumer? That is exactly the
argument I think we heard from the distinguished assistant majority
leader: Taxes are not high enough on domestic producers of oil and
gasoline.
I think this vote we had was a very important vote because what we
said is we think prices are too high and should not be any higher. We
do not believe we ought to depend more and more on imported sources of
oil and gas. We believe we ought to produce more domestically, here in
the United States.
The kind of arguments we hear from the other side of the aisle so
often demonstrate a kind of schizophrenia when it comes to a national
energy policy, further burdening those who produce oil and gasoline
here domestically and then at the same time railing about the high
prices.
Congress can pass laws, Congress can repeal laws, but the one law
Congress cannot repeal is the law of supply and demand. One of the ways
we are going to find our way to a more reasonably priced gasoline at
the pump is if we increase the supply. We know we are in a global
competition for oil and gas. That is one of the reasons why the prices
continue to go up, because supply is not keeping pace. One of the
things we need to do is to take reasonable steps to open areas that are
now out of bounds to domestic exploration for these precious natural
resources--in an environmentally responsible way, as the modern oil and
gas industry is capable of doing. It doesn't do any good to rail
against big oil or to try to use any sector of the economy as a
political football when it hurts the American consumer and the American
people.
I agree with the distinguished Senator from New Mexico that it was
important that we defeat this tax increase that would raise the price
of gasoline at the pump for the American consumer. Now we can come
together and work on another important element of our national energy
policy and that is conservation. We need to conserve and to use our
natural resources more efficiently. That is what the CAFE provisions of
this bill will do. Yes, we need to explore and put money into research
and development of renewable fuels to try to find new and more
efficient ways to limit our reliance on oil and gasoline.
But in the near term, we know that is going to be part of the puzzle.
We need to explore clean nuclear energy as a source of electricity.
France produces more than 80 percent of its electricity using nuclear
power; for America, it is around 20 percent. We need to get away from
the scare tactics and using the energy companies that we are going to
have to, in part, rely upon to find our way out of where we are and
come up with a comprehensive energy strategy which says, yes, we need
to tap into all sources of energy in an environmentally responsible way
and a way that will limit carbon production and will help with the
issue of climate change at the same time. But we are not going to do it
by raising taxes on the domestic oil and gas industry.
I would just point out that the competitors, for most of the people
whom the majority wants to add taxes to, are competing with people like
Hugo Chavez and Ahmadinejad in Iran, state-owned oil companies that
would not be subject to this increase in taxes. So they are literally
targeting the domestic producers in a way that will further harm our
ability to become less dependent on imported oil and gas.
I am proud of the vote the Senate had today. I hope we will go
forward and come up with a commonsense, bipartisan resolution on the
CAFE and renewable standards portion of this bill, that we will pass
the bill and send it to the President for a quick signature. It would
be one of the very few areas where this Congress will have actually
done something positive here in the last year, and I think we ought to
not give up that opportunity but take advantage of it.
I yield the floor.
The PRESIDING OFFICER. The Senator from Tennessee is recognized.
Mr. ALEXANDER. Mr. President, sometimes here in the Senate we have so
many competing views and so many different kinds of votes, some of them
procedural, that it is hard to tell when something good happens. I wish
to talk about such an opportunity that we have right now. This is a
little bit like something my late friend Alex Haley used to say: ``Find
the good and praise it.''
We are on a path in the Congress now to do something the Senate did a
few weeks ago, which was to take a step that our country's largest
energy laboratory, the Oak Ridge National Laboratory, has testified
before our committees would be the single most important step we could
take to reduce our dependance on foreign oil. By reducing our
dependance on foreign oil, we would do something that we could actually
honestly say would help to lower the $3-a-gallon gasoline price over
time, something that we could honestly say would help deal with the
urgent issue of climate change, something that we could honestly say
would put us on a different path toward clean energy in this country.
And those are the new fuel efficiency standards.
There is a clear consensus in this body--I gather in the House of
Representatives, too--that for the first time in more than two decades,
the Congress should say to everyone who makes cars and trucks in this
country: You have to make cleaner cars; these cars have to use less oil
one way or the other. We are not really saying to them, or at least I
do not think we should say exactly how they achieve that; we are just
saying that by the year 2020 the cars and the trucks have to average 35
miles per gallon. This is a big step.
As I said, the Oak Ridge Laboratory testified in the Environment and
Public Works Committee, this is the single most important step the
Congress can take to reduce our dependance on foreign oil. We have
already voted to do it in the Senate, and we have already voted to do
it in the House, and we had a vote today to strip away the taxes that
the Senator from Texas just talked about. So we are on a path, a clear
path to send this bill back to the House and then to the President and,
before the first of the year, to take the most important step we can
take to reduce our dependance on foreign oil.

[[Page S15392]]

There is a lot of talk and genuine concern about climate change.
There is not as much commonsense talk about solutions.
On the electricity side, we know what works, and we began, in 2005
with the Energy bill, to take those steps. That bill could have been
called--should have been called--a clean energy bill because it started
with aggressive steps on conservation and then it went to a renaissance
of nuclear power.
The inconvenient truth on solutions to climate change is that
conservation and nuclear power are the only way we will be able to deal
with climate change in this generation. We hope we will be able to move
ahead to sequester the carbon from coal, but we do not have that
technology yet in a way that it can be used in a wholesale way. We hope
there will be solar thermal powerplants such as the one being built in
California, and we hope photovoltaic solar panels will cost less and
people can use them on their houses, but those renewable ways to create
electricity only produce a very small percentage of what we need. So in
this generation, on the electricity side, conservation and nuclear
power, which today produces 80 percent of all of our carbon-free
electricity, are the real ways to deal with climate change, and in our
part of the country, in the Smoky Mountains of Tennessee, the real way
to make the air clean.
In the same way, on the fuel side in this country that uses about 25
percent of all of the oil and gas, the single most important thing we
can do is what we have already voted for once in this body, the House
has voted for once, and if they take this bill and send it on to the
President, the Congress will have done it; it will be fuel efficiency
standards that say to everyone who makes and sells cars here: Your cars
and trucks have to average 35 miles per gallon by the year 2020.
So in the midst of all of the procedural votes and debating these
genuinely held differences of opinion, I simply want to put a spotlight
on the fact that this Congress is poised to send to the President the
most important thing we can do to lower prices, to reduce the
dependance on foreign oil, and to deal with the climate change. It is
the kind of result, the kind of bipartisan result that most Americans
would like to see happen here. They know we have our differences. We
will be back and forth on our votes. That is what we are here for. The
tough issues come to the Senate. That is why we are a debating society.
But in the end, we do not come here just to state our principles; we
come here to get principled solutions. We are on our way to one of the
most important principled solutions we can have in terms of energy
efficiency.
I congratulate the Senators who have been so much involved in this. I
hope we will pass the legislation that the Senator has promised, the
majority leader has promised to produce here. I hope the House of
Representatives will pass it, as well, and send it to the President. I
hope that over Christmastime, Americans will look at this Congress and
say: Good for you on energy independence, on climate change, on cleaner
air, on reducing our dependance on foreign oil. You took the most
important step you could take, and that is what we think a Congress
ought to do.
I yield the floor.
The PRESIDING OFFICER. The Senator from Idaho.
Mr. CRAIG. Mr. President, let me join with the Senator from Tennessee
in applauding an action that ultimately now will be taken by the Senate
and therefore by the Congress to add substantially to an energy policy
in this country that begins us down the road in a long march toward a
higher degree of energy independence.
I have been in the Congress 27 years. I have always supported, up
until this year, leaving CAFE or fleet standards for efficiency alone.
I got here in 1980. We had just come out of the 1970s oil crisis. We
had put policy in place that was helping transform the automobile
industry in our country to a more efficient fleet average. But over the
course of the last 5 years, I have seen it become increasingly
important that we focus on every aspect of energy in our country.
I used to be somewhat selective in what ought to be produced versus
what ought not be, where we ought to put our incentives, where we ought
to put our tax dollars to improve availability in the marketplace. But
it became increasingly obvious to me that just a few miles per gallon
per automobile in this country could make all the difference in the
world.
We now import $1 billion a day in oil, approximately; $360 billion of
America's money goes overseas to foreign nations which are, at best,
indifferent to our interests, and at worst, using the term that I call
``petronationalism,'' use the power of their energy not only to squeeze
us, but then they take that money and reinvest in our country or invest
somewhere else, in many instances not in our interests.
I have always been frustrated that a great nation such as ours could
not move toward energy independence, could not set as a goal that by a
certain time our country could and would become energy independent in
all sectors if we did the following things and if we began to drive
public policy in that direction. So this spring, Senator Byron Dorgan
of North Dakota and I did something I had never done before: We
introduced legislation for a mandatory 4-percent change in fleet
efficiencies on an annual basis. Well, you would have thought the roof
caved in.
The automobile industry came to me wringing their hands and saying:
We simply cannot do that. You have always been with us.
I said: Yes, that is right. In 27 years, I have not changed, frankly,
and in 27 years you have not changed, and it is time we do change a
little bit.
Now there are a lot of new efficiencies coming on out there, from
hybrids to flex vehicles, and hopefully we are going to see a hydrogen
fuel cell car on the market in a very short period of time that will
begin to move its way in the market. So the automobile industry
deserves a lot of credit for beginning to recognize the need to change
what we use to drive America's transportation fleet.
But the opportunity to change the industry, to cause them to move
down that road in a discernable and a direct way because it is the
public policy of this country, is something I decided to become a part
of. I believe it was with the introduction of that bill, with Senator
Dorgan and I working together, that we got those kinds of things out of
the Commerce Committee and into the Energy bill that passed the Senate.
And that was a strong energy bill. It had all of the right blends and
mixes in it to begin to create a cleaner energy consumptive world for
us and at the same time a more independent and a more efficient world.
Today's vote was critical. We are going to send an energy bill to the
President in relatively short order, I hope, that has a lot of those
things in it and that causes America's transportation fleet to move in
the right direction.
Mr. President, $3 dollars a gallon for gas is coming out of the hip
pockets of moms and dads in this country today, and if that pace
continues to go up, it is going to do more to change--I think in a
negative way--the American economy than anything we have seen. We ought
to be all about helping the average American change that equation, and
I think efficiencies do that. Conservation is critical as a component
of a total energy package because that which you save you do not have
to produce. Just a couple of miles to the gallon across America's
transportation fleet is millions and millions of barrels of oil. That
is what we ought to be about. It will be a cleaner fleet and a fleet
that will produce less carbon into the atmosphere.
All of us are concerned about greenhouse gasses and climate change,
and efficiencies and new technologies, in my opinion, are the best
direction to lead us to accomplish a cleaner world, and today a
critical vote occurred that will allow us to do that.

Amendment No. 3666

The PRESIDING OFFICER. The Senator from Montana.
Mr. TESTER. Mr. President, I rise to speak on amendment No. 3666,
which we will have a vote on at some point later in the day.
This amendment to the farm bill addresses manipulation in the
livestock industry. We have had consolidation in agribusiness over the
last many decades. In the meat packer industry, for example, there are
four major meat packers that control 80 percent of the

[[Page S15393]]

market in the United States. Being big is not necessarily bad, but it
can allow companies to manipulate and control the marketplace. We all
know a monopolistic and controlled marketplace doesn't benefit anybody.
Without competition, without that free market, we put our cow/calf
producers at risk.
The meat-packing companies have the past because of packer ownership
manipulated forward contracting and pressure on producers to distort
the supply and demand, maximizing their profits often at the expense of
the cow/calf producer. The producer ends up being price taker and not
price maker due to manipulation of the marketplace and restriction of
the free market we all expect in the cattle industry.
Way back in about 1921, this Government had the foresight to realize
the free market system was a good one and that it wasn't working quite
right, even with the antitrust laws which were deemed inadequate. So
they passed an act called the Packers and Stockyards Act. That act has
worked pretty well over the many decades since 1921. Unfortunately,
court decisions recently misinterpreted the intention of the act.
Back in 2005, a lawsuit was brought forward by a handful of livestock
producers. This lawsuit claimed market manipulation by the meat-packing
industry, thereby artificially lowering the price the cow/calf producer
would get for their cattle. A jury awarded $1.28 billion in damages.
Some time later, three judges decided to rewrite the Packers and
Stockyards Act instead of interpreting it. They overturned the decision
based on a legitimate business reason.
Amendment No. 3666 once again clarifies the Packers and Stockyards
Act to its original intent, reintroducing competition into the
marketplace, helping maintain a level and competitive playing field
between widely dispersed cattle producers throughout the country and
highly concentrated meat packers.
I don't think there is a person in this body who doesn't think the
free market system is a good one. Currently, what we have in the meat-
packing industry is four companies that control 80 percent of the
marketplace. The CEOs of these four companies could go out on the golf
course and determine how they are going to manipulate the marketplace.
We need to make sure as a government we have protection in place for
our family ranchers. That is what this amendment will accomplish. It
will reinstate the Packers and Stockyards Act to its original form
which worked so well for so many years.
We have 170 groups in favor of this amendment. There is going to be
some groups that oppose it. The truth is, if we want to have a vibrant
cow/calf producer environment and economy, we need to pass the
amendment. We need to make sure they have every market advantage they
deserve. It is tough enough on the farm and on the ranch to make a
living. Right now in Montana, I didn't check the weather this morning,
but it is probably a heck of a lot colder than it is here. In some
places in Montana, because of drought, they are out feeding cattle
right now. They are doing an honest day's work, and they should get an
honest day's pay. When you have monopolization in the marketplace, it
takes away the ability to get an honest day's pay for an honest day's
work. This amendment is going to help the folks in Montana where
agriculture is the No. 1 industry and the No. 1 issue. If we are going
to keep this industry vibrant, we need to pass this amendment.
I yield the floor.
The PRESIDING OFFICER. The Senator from Georgia.
Mr. CHAMBLISS. Mr. President, I yield 15 minutes to the Senator from
Kansas, Mr. Roberts.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. ROBERTS. I thank my distinguished colleague for yielding me time.
I rise to speak in opposition to the amendment offered by my
distinguished colleague from Montana. Despite the fact our Nation
enjoys but apparently some do not appreciate the fact that production
agriculture does provide the best quality food at the lowest price in
the history of the world to feed not only America but the world's
hungry, we have heard repeated calls for reform--and I know my
colleague thinks his amendment falls into that category--of farm
programs. While targeted and pertinent reform is certainly needed and
this farm bill does take major steps forward in answering those calls,
it seems to me we must be cautious of what lurks under the banner of
reform. We must be mindful of the unintended consequences of our
actions, and nowhere in this bill is that more evident than in the
livestock title.
I represent a State where cattle outnumber people more than two-to-
one. I have always said, usually they are in a better mood, especially
with the weather we have been having. Cattle represented 61 percent of
the agricultural cash receipts by generating over $6 billion in 2005;
obviously more in 2006. I tell you this so you understand when I say
the livestock industry is vital to Kansas and, I know, other States
that are represented very ably in the Senate and to our national
economy and our livelihoods. The underlying bill expands the scope of
the Agricultural Fair Practices Act and the Packers and Stockyards Act.
But these expansions will have major implications on the industry, and
we must proceed with caution.
In the livestock hearing held in April, witnesses referenced a study
which showed alternative marketing arrangements account for only 38
percent of the transactions in the fed cattle market. The cash market
is responsible for 62 percent. Only 4.5 percent of transactions went
through forward contracts and 5 percent through packer ownership. More
importantly, this study concluded that alternative marketing agreements
do benefit all segments of the cattle industry. It is through these
marketing agreements that consumers are able to buy specialized
products such as Certified Angus or Ranchers Reserve, or all-natural
products.

Competition issues are nothing new to this body. I agree our
producers need to be able to compete in today's markets. I share the
concern of the Senator from Montana in this regard. It is the role of
the Government to protect producers from unfair practices and
monopolies. I understand the calls from some for increased Government
involvement. At the same time, we must take careful steps to ensure
that in any action we might take, we do not suffer from the law of
unintended consequences and risk the significant gains the livestock
industry has experienced to meet our consumers' needs. Regardless of
the Senator's intent--I don't question that--I am concerned this
amendment does that.
This amendment takes away a business's ability to make decisions
freely. Let me lay out a scenario I think can be fully understood.
Let's say you are a producer who has developed a program that produces
a higher quality product than I, another producer, and both of us are
trying to sell our product to the same packer. If the packer picks you,
not me, or any other producer to fill the contract because your product
does perform better or meets the demands of the customer, under this
amendment, I can bring a lawsuit for that or that other producer can
bring a lawsuit against the packer, even though they were making a
decision based on sound business principles. The language is as clear
as day in this amendment, ``regardless of any alleged business
justification.'' Certainly, a packer can defend their cattle buying
choices as a business justification.
This amendment would allow lawsuits to be filed regardless of this
business justification. This amendment will result in all producers
being treated the same--sounds good--regardless of how efficient or
inefficient their operation may be and regardless of the quality of
product they produce.
I know it would be easy, maybe nostalgic, maybe something we would
want to do as we are sitting around having a cup of coffee, to return
to the production days of 20 or 30 years ago. The market has changed
dramatically. Production today is more efficient because of consumer
demands. In this regard, the consumer is king. They want specialized
products. They want all-natural beef. They want Certified Angus. They
want U.S. premium beef or many other products that are produced under
specified standards that meet a higher quality. Thankfully, the entire
livestock industry, from growers

[[Page S15394]]

to feeders to packers to retailers, has made great strides in recent
years to meet the demands of the marketplace. I am concerned this
amendment puts all these consumer, market-driven products and
investment at risk. This amendment does discourage innovation in the
industry. Our producers would receive no premiums for adding value to
their products. Why would anyone invest additional resources into their
production system if they were not allowed to receive a return on their
investment? This amendment, combined with the language in the
underlying bill, will spur lawsuit after lawsuit and stifle innovation.
This amendment does remove choices from producers and from processors
and consumers.
I urge my colleagues to oppose it.
The PRESIDING OFFICER. Who yields time?
The Senator from Kansas.
Mr. BROWNBACK. Mr. President, I believe my colleague had 15 minutes
yielded to him. I ask unanimous consent to use the remainder of his
time to speak on the amendment.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. BROWNBACK. May I inquire how much time remains?
The PRESIDING OFFICER. There is 8\1/2\ minutes.
Mr. BROWNBACK. Mr. President, I join my colleague from Kansas in
opposition to the Tester amendment. I appreciate my colleague from
Montana offering this amendment. I respect his background and
knowledge. He has worked in this field. He has lived this. He is living
it in his own operation in Montana. I have a lot of respect for that
and for what he is targeting. I have spent all my life in the
agricultural business. I was raised on a farm, have undergraduate
degrees in agriculture. I was Secretary of Agriculture in Kansas. I
have worked on these issues a long time. We have all wanted to get more
money in agriculture and keep more family farms operating. That is
everybody's desire. I believe that is the desire and intent of this
amendment.
However, in my State in Kansas, as my colleague has described, this
is going to hurt family farm operations, and it will hurt people who
are trying to get more money in their operation from the marketplace. I
would like to briefly describe one example I recently experienced, an
operation of a small family feed yard that does operate for a number of
different individuals in the eastern part of Kansas. It is the Knight
Feedlot. They have been operating for quite a few years in Lyons, KS.
They have an innovative program. It is an alternative marketing
program. They raise hormone-free, antibiotic-free cattle. They sell the
meat directly from this feed yard into premium grocery stores in
Connecticut and New York. It is the sort of thing many of us have been
talking about. Let's get the producer closer to the consumer and sell
the product they want. This is hormone-free, antibiotic-free beef.
Anybody in this room who has raised cattle knows that if you are going
to go hormone free and antibiotic free, you have increased your risk
and the cost of your operation substantially to meet that consumer
need. These guys are doing that. Any animal that gets sick, they have
to pull out of the program because they have to keep the animal alive.
To do it, they are going to use antibiotics, so the animal is out of
the program when that takes place. It winnows down fairly fast. When
you get weather fluctuations such as are taking place now, you get more
problems and more animals out of the program.
But eventually, because of a contractual operation they have with a
packer--because these are feeders, they are not packers--they are able
to get their animals identified through the system, they are able to
get the packer to deliver that meat to the counter in Connecticut and
New York, because my Kansas feeders are not lined up to do that, they
have a contractual arrangement to do that, and, as a result, they are
able to get a substantial premium for their beef.
The consumer in Connecticut and New York can see who produces it, and
the pictures of Kenny and Mark Knight are by the display counter on the
beef case in these stores. They have been there, and they have been
there to sell their beef. It works. It works for them, and they get a
substantial premium for this beef. The consumer likes it, and they like
seeing who has produced their beef.
That operation would be illegal under the direction of this
amendment. I believe this amendment would generate lawsuits against
that very type of operation.
I respect my colleague from Montana and his efforts to preserve the
family farm operation--family farm operations like what my parents have
and my brother is on. This amendment is not the way. It is
micromanagement from here. One of the things I have certainly seen is
you cannot micromanage America, and you should not try. The best is to
set up fair playing rules. We have rules in this system. But we should
not punish people who are trying to innovate to get more money for
their producers in innovative fashions and using alternate marketing
means and being successful at it.
The Knights had to invest a substantial amount of money to get this
arrangement set. They had to hire somebody to do the marketing. They
had to hire somebody and get enough cattle to be able to enter into a
contractual arrangement with the packer to keep these cattle identified
and keep them identified to be able to deliver to the consumers in
Connecticut and New York. Without that, they are not packers, they
cannot do this. This amendment would hurt their operation. As a matter
of fact, it would make it illegal and bring lawsuits against it.
I urge my colleagues to vote against this amendment on a number of
grounds: No. 1, it prohibits innovation, and No. 2, it really tries to
micromanage something we should not try to micromanage. It is going to
hurt my Kansas feeders.
For all those reasons, I urge opposition to the Tester amendment.
I yield the floor and reserve the remainder of the time, if there is
any on our side on this.
The PRESIDING OFFICER (Mr. Brown). Who yields time?
Mr. CRAIG. Mr. President, may I make an inquiry?
The PRESIDING OFFICER. The Senator from Idaho is recognized.
Mr. CRAIG. Are there any more who wish to debate the Tester amendment
prior to us moving to--
Mr. TESTER. Yes.
Mr. CRAIG. All right.
The PRESIDING OFFICER. The Senator from Montana is recognized.
Mr. TESTER. Mr. President, first of all, I want to thank the good
Senators from Kansas for their comments. I, too, respect your opinion.
I ask that you pay careful attention to what I am about to say. I am
actually in the specialty crop business personally. It has been well
documented, I raise organic crops. I do not raise organic beef, but I
am around people who raise organic beef and market it freely. They will
be able to continue to market it freely with the adoption of this
amendment. So the folks, the Knights you talked about, in Kansas are
still going to be able to market their hormone-free beef.
It speaks specifically in the Packers and Stockyards Act about
restraining commerce and creating a monopoly. They cannot have an
alleged business justification to do that. When you are adding value to
a product, you are increasing the value. When you are raising specialty
crops or you are specializing in grass-fed beef or specializing in
hormone-fed beef or antibiotic-fed beef, you still have access to those
premium prices.
What the Packers and Stockyards Act does is it protects the cattle
producers and those feeders you talked about. It allows them to stay in
business, to be able to get that premium price. What this amendment
does is protects them from those four packers--who control 80 percent
of the country's meat supply; and it could be fewer than that next year
controlling 80 percent of the meat supply if they buy one another out--
it protects them from those four packers setting prices by using an
alleged business justification to create a monopoly or restrain the
commerce around the meatpacking industry.
It is critically important that you know that the unintended
consequences you talk about are not going to exist with this amendment.
Those unintended consequences are simply not there. What this amendment
will do is it will reinstate the free market system in our cattle
industry.

[[Page S15395]]

The point I made earlier, in my opening statement, is where you can
literally have four CEOs of four companies that control 80 percent of
the meatpacking industry be able to manipulate forward contracts, be
able to manipulate the transactions within their business, and put on a
business justification for it, and now all of a sudden it is OK under
the Packers and Stockyards Act. That simply is not right. We ought not
go encouraging monopolization anywhere, much less in agriculture that
puts our producers at risk to driving them off the ranches in this
country.
In Montana, we have about four times as many cattle as we do people,
I believe. It is a big issue. Premiums are still going to be there.
Specialized beef is still going to be there. The ability to add value
to our meat products is still going to be there for them to get the
price they deserve for it. What this will stop is the meatpackers
from--and I read right straight from the Packers and Stockyards Act--
restraining commerce, creating a monopoly, regardless of any alleged
business justification.

Next paragraph: restraining commerce, regardless of any alleged
business justification.
The last time I heard, the last time I checked, if you are getting
paid a premium, you are not restraining commerce, you are promoting
commerce.
And it goes on: to manipulate or control prices regardless of any
alleged business justification.
There are no boogeymen in these amendments, folks. This is a good
amendment. We dealt with an amendment yesterday that talked about
producers and the kind of pressures they are under and the mental
health aspects that impact farmers and ranchers when they are put under
financial pressures. I believe we adopted that amendment.
The fact is, if you want to help farmers' and ranchers' success,
adopt this amendment. It will make them more financially vibrant.
With that, Mr. President, I yield the floor.
The PRESIDING OFFICER. Who yields time?
Mr. HARKIN. Mr. President, how much time remains?
The PRESIDING OFFICER. The sponsor of the amendment has 19 minutes,
and there is 17 minutes for the opposition.
Mr. HARKIN. We have 19 minutes?
The PRESIDING OFFICER. The sponsor has 19 minutes; the opposition has
17 minutes.
Mr. HARKIN. Mr. President, I ask the Senator, will he yield me 4 or 5
minutes?
Mr. TESTER. You bet.
The PRESIDING OFFICER. The Senator from Iowa is recognized.
Mr. HARKIN. Mr. President, I rise in support of the amendment offered
by the Senator from Montana. I am a cosponsor of the amendment.
First, I will just make an observation. In this body, out of 100
Senators, we have 2 bona fide farmers, one on the Republican side, my
colleague from Iowa, Senator Grassley, and one on our side, the Senator
from Montana, Mr. Tester. These are people who actually do farm--not
just own a farm, but they actually do farm. So when I hear them talk
about things in agriculture, I give a lot of weight to it, not that
they are always right, obviously. They would not claim that, I am sure.
But you have to give some weight to their arguments, especially when
they are making it on behalf of farmers.
So when this amendment was first offered by the Senator from Montana,
I began to look at it and consider it because I, too, had thought about
the issues raised by the Senators from Kansas about whether it would be
restrictive of a packer who wanted to provide premiums. I think he
maybe mentioned an Angus cut or a cowboy cut, Black Angus bone-in rib
eye, those that have premiums.
So I was concerned. I asked my staff: Let's look at this and make
sure we are OK on this. I think the way the amendment is drafted does,
in fact, allow those kinds of contracts to be made because they are not
manipulative of a marketplace.
What the Tester amendment really goes to, I think--and I think it is
clear in the way it is drafted--it goes to the packers who, let's say,
might engage in collusive practices that would, in fact, depress the
market price on a certain day or during a certain time and then claim
they have a pro-business reason for doing so.
I have not seen a business yet, in case after case--where they have
colluded or where there has been some dealings--where they have not
said, well, it is better for their business. Of course, if they can
increase their profits, it is always better for their business, but
increasing their profits at what expense? At the expense of a farmer
who is relying upon the livestock market.
So I think the amendment is one that really gets to the heart of the
case, the Pickett case. We all know about the Pickett case. I think the
Eleventh Circuit Court of Appeals really went riding off the range. I
do not know where they came up with some of their thoughts on that. It
is not the first time that the courts have gotten off course.
The Packers and Stockyards Act was enacted to protect producers from
packers. That was the intent, and it has been the intent ever since, to
protect producers from packers. It was never intended to be some bill
to ensure that packers are competitive or that they are competitive
with other packers. That was never the intent of the Packers and
Stockyards Act. It is to protect producers from packers to make sure
there is as level a playing field as possible out there for the market
to work.
Markets: many buyers, many sellers--that is how a market works. If
you have many buyers and one seller, no market. If you have one buyer
and many sellers, no market. You have to have many buyers and many
sellers for the market to work. That is what the Packers and Stockyards
Act aims to protect.
So, again, the amendment is not in any way intended to infringe upon
contracts or forward contracts or the kinds of contracts that were
mentioned in terms of giving premium prices for different kinds of meat
produced. It was never intended--I know the Senator talked about the
law of unintended consequences, but, again, I think the amendment is
clear. The intent is to ensure anti-competitive practices in the
marketplace are not allowed--are not allowed--regardless of a business
justification.
So, again, right now I think we have a case where the packers--I know
a lot of them--I would like to say the ones I know are honest and above
board, and they are. But that does not mean they all are. When it comes
to making a profit here, maybe dealing something on the side.
Eventually they will think they have a green light to engage in
collusive practices to manipulate the market, and all you have to do is
go into court and say: Business justification. What is the business
justification? I made more money. I made more money. But at whose
expense? At whose expense?
That is why this amendment is so important. I think it is important
we shine a light and at least clarify for our producers that the
Eleventh Circuit Court's opinion on this is not the law of the land. We
decide the law, not the Eleventh Circuit Court of Appeals.
Mr. HARKIN. Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Georgia is recognized.
Mr. CHAMBLISS. Mr. President, I rise today in opposition to this
amendment.
I, too, have great deference to those folks who till the soil and
produce products that we all enjoy as consumers from an agricultural
perspective. I am not a farmer, but I am a lawyer. I have read laws all
my life. Frankly, all you have to do is read this amendment to realize
that the amendment would prevent businesses from using legitimate
business justifications as a defense against claims of unlawful
practices under the Packers and Stockyards Act.
I would simply go to the first page, section 2, where it says on page
1232 that we are going to strike the clause regardless of any business
justification. This clearly is a determination that should be left to
the discretion of the U.S. courts and not summarily decided in advance
by Congress.
A business should be able to offer as a defense that their actions
were done legitimately as a means of conducting business. The court has
the option to

[[Page S15396]]

examine this defense and gauge it against those practices deemed
unlawful under the Packers and Stockyards Act.
If a producer believes a packer has conspired to create a monopoly,
he has a right to sue that packer. What if the packer's decision was
made not as an effort to create a monopoly but as an effort to secure
higher quality cattle from a consistent supplier? The courts simply
must have the discretion to make this determination.
Including language in the Packers and Stockyards Act that enumerates
unlawful practices and adds the phrase ``regardless of any alleged
business justification'' is simply prejudicial against American
businesses.
I am sympathetic to producers who are concerned about their evolving
role in the livestock marketplace, but this amendment is overreaching
and will inject uncertainty into legitimate business decisions.
Let's not attempt to stack the deck on behalf of one party over
another. We should allow the courts all due discretion in determining
if the actions of American businesses are justified under the Packers
and Stockyards Act.
I urge my colleagues to vote against this amendment.
Mr. President, I am happy to yield to the Senator from Kansas, Mr.
Brownback.
Mr. BROWNBACK. Mr. President, how much time remains in opposition?
The PRESIDING OFFICER. The opposition has 15 minutes remaining.
Mr. BROWNBACK. Mr. President, I wish to use 5 minutes of that time.
I respect those who do farm. My dad does, and I have a lot of respect
for him. I have a brother who farms as well, and it is tough. It is a
hard life.
I went to law school, and in my background I taught agricultural law.
I have written two books on it, if anybody is interested. I don't think
they are still for sale because they never sold very well.
But my point in saying that is one of the key things which is always
talked about in agriculture is the Packers and Stockyards Act. It was
developed back in the 1920s and 1930s because of this imbalance that
was developing and was really heightened at that point in time even
more so than today between the packers and producers. There were a lot
more producers that were a lot smaller at that point in time and taken
advantage of by packers. It was a very unscrupulous setting, and they
passed the Packers and Stockyards Act. It was a very important piece of
legislation, particularly in farm country, and it did have a
substantial impact and continues to have a substantial impact today.
The situation today is different than it was back then. What you have
now are a number of producers that are, in many cases, of a larger
scale and trying to get closer to the consumer. You have small
producers as well, such as my family, who are small producers and who
often will link up with bigger sized producers and feed yards to try to
get more money for their cattle. Everybody is trying to get more money
for their cattle, and that is what I want to take place: more money for
the producer for the cattle.
Unfortunately, because of the way this is drafted and because of
being a lawyer and being somebody in the agricultural industry--and you
are taking away: regardless of any alleged business justification. So
my family says we are going to try this hormone-free, antibiotic-free
beef, but we have to pool together at a feed yard that is big enough to
negotiate with the packers to do this, and so they do that. We have
1,000 head of cattle from everybody--all 20 or more people who are
doing this--and then they are going to market it directly on forward.
That is a business justification to pay my family more for their
cattle. That is a business justification for them to do it.
But we have taken it right out of here. We have said: regardless of
any alleged business justification.
So, now, while my family is trying to move with this packer group
through the feed yard to get closer to the consumer to take advantage
of this, which is a business justification, this says, no, you can't
assume that in the Packers and Stockyards Act. So somebody on the other
side of this, or somebody just wanting to be ornery about it says:
Look, you can't do that. You can't do it. It is right here.
I know the author's intent is not that intent. I also am a lawyer.
This is something you can do under this draft of it. I appreciate the
sentiment with which this is made. I appreciate the history of the
Packers and Stockyards Act. It has been important. It remains important
today. This isn't the way to get at this. This is going to cause people
to have to go back to a generic marketplace for beef. You can say:
Well, I am fine with a generic marketplace for beef--most people are--
but there are a lot of people who like specialty beef. That is where
the producer gets in and gets a bigger slice of the pie is when he goes
at the narrow marketplace for a specialty-type product and segments his
marketplace. This, I honestly believe, is going to cut off these types
of arrangements for farm families in my State, and I believe a lot of
other places, to be able to get into them.
I understand the intent. I look at it on the surface, and we could
probably say good idea, but this is something whereby lawyers who
practice in this field are going to see a real opportunity to shut
something off, and I think there are plenty of people who are desirous
of doing something like that. I would urge my colleagues to vote
against this amendment.
I retain the remainder of our time.
The PRESIDING OFFICER. Who yields time?
Mr. GRASSLEY. Would the Senator from Montana yield me some time,
please?
Mr. TESTER. Yes.
Mr. GRASSLEY. Why don't you say how much I can have.
Mr. TESTER. How much do you want?
Mr. GRASSLEY. I would like to have 5 minutes.
Mr. TESTER. I yield 5 minutes to the Senator from Iowa.
The PRESIDING OFFICER. The Senator from Iowa is recognized for 5
minutes.
Mr. GRASSLEY. Mr. President, what the Senator from Montana is trying
to do has to be done if we are going to have justice for the family
farmer. We have been involved in suits regarding the packing houses for
20 years. I remember when I first came to Congress, we were trying to
overturn the Illinois Brick case because it stood in the way of the
family farmer getting justice in business. So you end up fighting the
National Manufacturers Association and the U.S. Chamber of Commerce to
bring justice to family farmers.
Finally, in a lawsuit down in Alabama, we get a jury who says the
family farmer is right, but you get a judge who overrules the jury.
Now, I want to speak about not just this particular case, because
Senator Tester is doing that, but I hope everybody in this Senate
remembers that on several different occasions, everybody in the food
chain beyond the farmer's gate was lining up against the farmer. I will
cite just a recent example in regard to food and fuel and the ethanol
issue and corn going to $4 and the price of food going up and every
farmer getting blamed for it. Every person in the food chain outside of
the farmer's gate was involved in that conspiracy that had nothing to
do with the price of food rising, but the family farmer got blamed for
it when food went to $4--or when corn went to $4. But when the price of
corn went down to $2.85, I didn't see the price of food go down. But
the conspiracy exists.
This court case and this judge and this ruling on the Packers and
Stockyards Act is contributing to that conspiracy. We need to get
behind it and get some justice for the family farmer.
Now, if you want to know why there is a justification in doing what
we are doing, all you have to do is go to a statement that a CEO of a
major corporation made a few years ago--a little bit unrelated to this,
but somewhat related to it--which is: Why do slaughterhouses and
packing companies own livestock? We own livestock, the answer was, in a
very candid way; we own livestock because when prices are high, we kill
our own, and when prices are low, we buy from the farmer.
What we need is a marketplace that has a great deal of transparency.
We fight, trying to get information on sales from these packing
companies under price discovery. We pass legislation to make price
discovery real. Then we get regulations from the U.S. Department of
Agriculture--we get regulations from the U.S. Department of

[[Page S15397]]

Agriculture to the extent that we do not meet the goals of the
legislation, and we don't get as much information under the regulations
of the Department.
I had a staff person who just wanted to go back to Iowa and work for
the Department of Agriculture. He is going to work for the Packers and
Stockyards Act. I said to him: You know, you want to go there because
you don't want to do anything, because they don't do anything to help
the family farmer. I didn't change his mind. He is still there working,
and I hope he is doing a good job. He knows how I feel about it. Maybe
he will actually get something done.
But we have to get rid of this attitude that you are going to let
everybody beyond the farmer's gate gang up on the farmers, particularly
when there is a court case where the jury is giving justice to the
farmers.
We have to pass this amendment so we get justice for the family
farmer.
I yield the floor.
The PRESIDING OFFICER. Who yields time?
Mr. CHAMBLISS. Mr. President, can I inquire as to how much time is
remaining?
The PRESIDING OFFICER. The supporters of the amendment have 7 minutes
30 seconds; the opponents have 10 minutes 40 seconds.
Mr. CHAMBLISS. I yield 5 minutes to the Senator from Kansas, Mr.
Roberts.
Mr. ROBERTS. Mr. President, let me say to my good friend from Iowa
who is shaking the hand of my good friend from Montana that justice and
conspiracy are in the eyes of the beholder. I thank him for his feeling
for agriculture and his passion for all of agriculture and all that he
represents. He is an outstanding champion of agriculture. However, in
this particular case, I don't agree.
I am going to use an example. Instead of cattle, I am going to use
hogs. If producer A contracts with five neighboring producers to supply
his contract with packer A, but he decides he only wants to buy from
neighbor 1 and 2 because the others are currently having animal health
issues, as referenced by my distinguished colleague from Kansas, the
others are having these health issues impacting that producer A's
performance and pricing. Neighbors 3 and 4 and 5 under this amendment
can sue producer A because--yes, they have been injured because they
are no longer selling hogs to producer A. So producer A's business
defense is that animal disease issues in the barns of neighbors 3, 4,
and 5 are producing weak performers, and he made a business decision to
not buy from them.
The Tester amendment simply takes away that defense. This is hogs,
not cattle. So producer A will lose and have to pay damages and
attorney's fees. I don't think that is the road we want to go down.
Now, 20 years ago the beef industry lost market share. There have
been a lot of studies as to why. Many livestock associations, State by
State by State, knew they were losing market share while producing what
is now defined as a generic commodity. Through innovation and
management of genetics, premium products have been developed, and the
consumer has responded. I mentioned the variety of products the
consumers wish to buy and do buy. To return to this market scenario of
20 years will be a loss to consumers, a loss to producers, and, quite
frankly, I am going to warn, there will be a movement to increase
imports to meet these demands. If, in fact, this packer cannot get this
particular product for a consumer demand and we have a generic
commodity and we will not produce that, he will go overseas. He will
ask for beef imports. That will be one of the laws of unintended
effects.
I urge the defeat of the Tester amendment.
I yield back the remainder of my time.
The PRESIDING OFFICER. Who yields time?
The Senator from Montana is recognized.
Mr. TESTER. Mr. President, I thank the Senators from Kansas for their
time. I appreciate a good discussion on the amendment. If they would
not have come to the floor, we would not have had this good discussion.
I also thank Senators Grassley and Harkin for cosponsoring this
amendment. I particularly thank Senator Harkin for his comments on the
floor, and also Senator Grassley for his comments.
Senator Grassley and I are arguably the two folks in the Senate who
are in production agriculture. I am very proud of that fact personally.
I know Senator Grassley is, too. I know everybody in this body wants to
make sure that people in production agriculture get a fair shake--not
over and above what they deserve but a fair shake. That is what the
farmers want and what this bill is supposed to be about.
In this body, we all know you can only make good decisions if you
have good information. We also know if you take just three words--and I
will admit this is called the ``no justification amendment.'' But if
you take those three words and set aside all of the other words around
it, they don't mean a heck of a lot. You can interpret them to mean
anything you want. I am not an attorney. I respect those in this body
who are and folks around this country who are. But you need to take the
entire bill and look at the language as it is inserted into the bill.
If a farmer or rancher has health issues with their herd, whether it
is pork, chickens, beef, or any other livestock they are marketing for
food purposes, they don't have to buy it. That isn't restraining trade
or commerce. That is not creating a monopoly. That is what those words
revolve around--those three words--``no business justification.'' You
have to take at least the segment before, if you are going to get an
idea of what it says. It says the effect of restraining commerce or
creating a monopoly ``regardless of any alleged business
justification.''
If you want to put the boots to the ranchers--it won't happen all the
time, and let's hope it happens very little. In fact, if they don't put
this amendment on the farm bill to make the Packers and Stockyards bill
what it was when it was originally passed in 1921, you are not going to
have a free market system. You are going to have a system where the
four major packers can manipulate the marketplace when they feel like
it. They may never feel like it. But if times get tough, what the heck,
make a few extra bucks and keep the stockholders happy.
It was talked about today that it is going to make beef or pork into
a generic commodity. I led the charge on country-of-origin labeling in
Montana. We passed it in 2005. I want our products to be different. I
am all in favor of certified Angus beef and grassfed and all those
specialized things that the consumer wants. This bill doesn't take that
ability away. If you have sick cattle, you don't have to buy them. If
you have Angus certified beef, you can market it that way, as long as
it meets their criteria--certified Angus beef I am talking about, not
stockyards.
In fact, this is good for production agriculture. Senator Grassley
talked about farm gate prices. If you want to hold them artificially
low and keep putting in subsidies, these are the kinds of things you
do. If you want to have a free market system where people get a fair
price for a fair day's work for the product they worked so hard to get
on the market, the family farms and ranchers--cow/calf operators, in
this particular case--this amendment needs to be passed.
How much time do I have?
The PRESIDING OFFICER. The Senator has 3 minutes 10 seconds.
Mr. TESTER. In closing, there are no unintended consequences here.
This is straightforward. If you read the language as it goes in the
Packers and Stockyards Act, it can be interpreted no other way other
than if a company wants to restrain commerce or create a monopoly,
period.
It will stop packers from, as Senator Grassley talked about, dumping
cattle when prices are high. It will make the market work better.
In closing, I again thank the Senators from Kansas. I thank Senator
Grassley and Senator Harkin. I ask this body to take this amendment for
what it is. It is an amendment that will indeed support family farm
cow/calf producers on the ranches of this country.
Thank you, Mr. President.
The PRESIDING OFFICER. Who yields time?
The Senator from Georgia.
Mr. CHAMBLISS. Mr. President, how much time do we have remaining?
The PRESIDING OFFICER. Two minutes. The opposition has 7 minutes 40
seconds.

[[Page S15398]]

Mr. CHAMBLISS. We have a couple more speakers who are on the way. As
soon as they arrive, we will yield time to them.
Mr. TESTER. Mr. President, I will speak after they get done, so I
will retain my 2 minutes.
Mr. CHAMBLISS. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. CHAMBLISS. 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. CHAMBLISS. Mr. President, I yield 5 minutes to the Senator from
North Carolina.
The PRESIDING OFFICER. The Senator from North Carolina is recognized.
Mr. BURR. Mr. President, I appreciate the generous offer from the
ranking member.
This is tough. Senator Tester is a friend, but he is misguided. The
fact is that the law today has served us well in this country. I think
it is vitally important for all Senators to realize that agriculture is
a business that reacts and changes to market demands.
We have put legislation into place that allows the markets to
operate, and these laws serve as guidelines for farmers in how they
make their business plans for the future. As a matter of fact, we are
the envy of the rest of the world. The agricultural markets in this
country, the hogs raised and sold and eaten, the chickens and the
turkeys--and in North Carolina's case, we rank extremely high; we are
No. 2 in hogs and turkey production. I daresay every person in the
room, and even in America, has eaten pork from North Carolina at one
point or another. One of the reasons hog farmers in my State have been
able to grow and produce the best pork in the world is the regulatory
forces that govern the livestock industry.

What we are being asked to do in this amendment is to turn that on
its head. Today, current law says if a producer wants to bring suit
against a processor for injuries to the producer's business, they have
to show that they have actually been injured. Let me restate that.
Current law says if a producer wants to bring suit against a processor
for injuries to the producer's business, they have to show they have
actually been injured. That is a threshold that ought to be for
everything that a suit is brought on.
Let me put in practical terms exactly what the Tester amendment would
do. It would say that a company that contracts with a producer, a
grower, and because they have determined that that grower has exceeded
the minimum standards, has done things that technologically enhanced
the products they are going to purchase, that if they reward them by
paying them more money because the product is better, they are now
susceptible to a grower who may not be dealing with 10,000 hogs, he may
be dealing with 10 hogs. He might not adapt his surroundings to the new
technologies; therefore, the meat is not as good. But if they are not
paid the same, he will go to court and sue that he should have been
paid the same thing as the contract for 10,000.
What is the net result of it? If I were in a State that had smaller
producers who felt disadvantaged from a price, I might look at it
differently, but what is the impact? The impact is that companies are
not going to raise everybody's boat, they are going to lower
everybody's boat. They are going to pay every producer less. There will
be no incentive for new technologies to go into agriculture--
specifically hogs, turkeys, and chickens. There will be no choice for
consumers between grades of products, some that taste better than
others, because we will now dumb down to what this new standard is, and
that standard will be to make sure you are not susceptible to lawsuits.
Everybody, regardless of size, regardless of the quality of the
product, will be paid the same.
I will say that again. Regardless of the quality, regardless of the
size of the purchase, because of this one little change, which is that
you have to prove you were injured, producers will be obligated. You
might say it is their choice; but if a choice is between being sued
every time there are contracts that say different things, or accepting
one standard and applying that to everybody, they are going to accept
one standard and apply it to everybody because they cannot pass on the
litigation costs of these foods.
Please tell me when 1 minute is left.
The PRESIDING OFFICER. The Senator has 30 seconds remaining.
Mr. BURR. I hope my colleagues here understand that the law, as
currently written, works. It has served this country well and it has
produced choice, it has produced quality, and it has fairly reimbursed
all who entered into it. Let's not change it, and let's make sure the
products that America has chosen and continues to choose in the
marketplace are driven by the marketplace, not manipulated by this body
in Washington.
The PRESIDING OFFICER. The Senator's time has expired.
Mr. TESTER. Mr. President, I thank the Senator from North Carolina,
my comrade in the Russell Building. I appreciate his comments. You have
to have good information to make a good decision. There are a couple of
things I need to point out. First, in production agriculture, we are
not price makers, we are price takers. When you have 80 percent
consolidation in the meat
packing industry, you don't have much choice when they don't have this
language in the Packers and Stockyards Act.
If you are talking about rewarding a grower because they have less
fat, or bigger ribeye size, or leaner beef, this doesn't stop that from
happening. I believe there are enough attorneys in the room that if you
read this Packers and Stockyard Act in its entirety, which is about a
page, you will find out that the alleged business justification applies
to when you are restraining commerce or creating a monopoly. If you
want a free market system, which you talked about, this body needs to
pass this amendment so there is a free market in the pork, poultry,
beef industry. Pork, by the way, is more consolidated than beef.
Chickens are worse yet. All I want for farmers and ranchers and the
people in production agriculture--the cow/calf operators, in
particular--is that they get a fair shake.
If we pass this amendment No. 3666, you will allow those cow/calf
operators to get a fair shake in the marketplace and be able to become
financially viable, so this Government doesn't have to talk about
subsidies, and they can get their paycheck from the marketplace, and it
is a fair paycheck.
With that, I ask the Senate to vote for this amendment. I thank my
fellow Members for the good debate.
The PRESIDING OFFICER. The Senator's time has expired. All time has
expired.
The question is on agreeing to the amendment.
Mr. CHAMBLISS. Mr. President, have the yeas and nays been requested
on this amendment?
The PRESIDING OFFICER. They have not.
Mr. CHAMBLISS. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The yeas and nays were ordered.
Mr. BROWNBACK. Parliamentary inquiry as to whether this could be a
voice vote so we can move on. We have a number of amendments. I inquire
as to that issue. I will suggest the absence of a quorum to sort this
issue through. We might be able to save the body some time. I wish to
speak with people about it.
I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. HARKIN. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
Mr. ROBERTS. I object.
The PRESIDING OFFICER. Objection is heard. The clerk will continue
with the call of the roll.
The legislative clerk continued with the call of the roll.
Mr. HARKIN. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.

Amendment No. 3720 Withdrawn

Mr. HARKIN. Mr. President, I ask unanimous consent that the Schumer
amendment No. 3720 be withdrawn.

[[Page S15399]]

The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Idaho is recognized.

Amendment No. 3640

Mr. CRAIG. I ask unanimous consent that the pending amendment, the
Tester amendment, be set aside and amendment 3640 be called up.
The PRESIDING OFFICER. Is there objection? The Senator from Iowa.
Mr. HARKIN. Will the Senator yield?
Mr. CRAIG. I will be happy to yield.
Mr. HARKIN. The yeas and nays have been ordered on the Tester
amendment. I ask unanimous consent that the vote on or in relation to
the Tester amendment occur at a time to be determined later.
The PRESIDING OFFICER. Without objection, it is so ordered.
Is there objection to the unanimous consent request from the senior
Senator from Idaho, Mr. Craig? If not, the amendment is once again
pending. The Senator from Idaho.
Mr. CRAIG. Mr. President, earlier on, we thought we had a 40-minute
time agreement. We are going to start the debate on this amendment.
Some of our colleagues want to discuss it. With that in mind, let me
open the debate on amendment No. 3640, an amendment we think is
critical to America's farmers and ranchers and the value of private
property.
Ever since the Supreme Court in 2005 decided on the Kelo decision, I
have felt and many others have felt, including the American Farm
Bureau, that America's farmers' and ranchers' property is now at a
greater risk today than ever before by the issuance of eminent domain,
or the broadening of the power of Government as it relates to that
issue.
I debated this amendment earlier. Several of my colleagues are on the
floor and want to debate this amendment. Let me now turn to my
colleague from Colorado, the senior Senator, Mr. Allard, and yield to
him 10 minutes for the purpose of debate on this amendment.
The PRESIDING OFFICER. Without objection, it is so ordered. The
Senator from Colorado is recognized.
Mr. ALLARD. Mr. President, I thank the Senator from Idaho for his
leadership on this particular issue. I am involved because farmers and
ranchers all over the country are being impacted by their land values
since the Supreme Court's ruling in Kelo.
As was stated by the Farm Bureau, farmers and ranchers have been
particularly vulnerable to States or local municipalities taking their
land for private economic uses, open space or other purposes.
Farmlands in several States have already been taken for open space
purposes. The Farm Bureau goes on to say the amendment would strongly
discourage the exercise of eminent domain for open space purposes.
I have a strong record of supporting limitations on eminent domain. I
have to rise on behalf of my farmers and ranchers in Colorado in
support of Senator Craig's amendment. This amendment would protect
farmland and ranchland throughout this great Nation from land
condemnation for use as open space.
I wish to be clear at the outset that this amendment would not affect
uses of eminent domain that have been found to be justified. There are
a few legitimate uses for eminent domain powers. Necessary use of
eminent domain for items such as utility corridors or military and
national security needs would not be affected.
America's farmers and ranchers are some of the best land managers
around. Not only do they manage their land in a manner making it the
most productive in the world but also in a way that makes it some of
the most scenic land in our country and certainly a valuable way of
keeping open space because of the nature of their operations.
The vistas of rural America possess some of the most remarkable
scenery in the world. However, while their beauty is remarkable, their
true value lies in the foods and fibers they produce.
An unsettling trend is now unfolding in small towns and rural
communities from coast to coast. The use of eminent domain to condemn
working agricultural lands or lands that will be transferred from one
private property owner to another. This is an expansive use of eminent
domain.
This condemnation results not only in weakening our national security
by threatening our food supply but harms the economies of rural America
and steals--yes, steals--private land from rightful owners.
Senator Craig's amendment, which I support, along with Senator
Brownback, would discourage this disturbing occurrence. It prohibits
access to Federal financial assistance for a period of 5 years to any
State or unit of local government choosing to exercise the use of
eminent domain to take working agricultural ground for the purpose of
open space.
This reasonable and measured approach would help protect America's
agricultural land by making governments weigh the need of taking land
against their desire for Federal funds.
Senators should remember the right to own property was one of the key
principles on which this Nation was founded. I daresay that if the
Founding Fathers were here today, they would support passage of Senator
Craig's amendment.
As Thomas Jefferson noted in 1775 in the Declaration on Taking Up
Arms:

The political institutions of America, its various soils
and climates, opened a certain resource to the unfortunate
and to the enterprising of every country and insured them the
acquisition and free possession of property.

Let me say this again: ``The free possession of property'' is the
principle the Craig amendment supports. I have a long legislative
record of supporting the rights of the private property owner. The
State of Colorado also has a long record of opposition to the taking of
private property. As a Senator, I believe it is important to ensure
that private property owners are able to retain possession of their
land. There is a right way and a wrong way to do things. Working with
willing sellers is the right way. Condemning working agricultural land
for open space is the wrong way. I urge my colleagues to listen to
their conscience and support this amendment.
I yield the floor.
The PRESIDING OFFICER. Who yields time? The Senator from Idaho is
recognized.
Mr. CRAIG. We are operating under an open time agreement. With that
in mind, I yield 10 minutes to our agricultural counsel from the great
State of Kansas, Senator Brownback.
The PRESIDING OFFICER. The junior Senator from Kansas is recognized.
Mr. BROWNBACK. Mr. President, I am the senior Senator from Kansas to
Senator Roberts. I wanted to acknowledge that on the floor.
Mr. CRAIG. I said ``counsel.''
Mr. BROWNBACK. I was called the junior Senator from Kansas.
The PRESIDING OFFICER. The Chair's mistake. I apologize.
Mr. BROWNBACK. I thank the Presiding Officer. I appreciate that
greatly. I always need to watch my junior Senator and make sure he is
in his place.
Mr. President, I note, properly, my junior Senator is the dean of the
Kansas delegation, even if he is the junior Senator.
I rise in support of the Craig amendment. I wish to make comments
that I think are pertinent and germane to the farm bill because I
believe this admendment is pertinent and germane to the farm bill. I
know colleagues are looking at this amendment saying it is a private
property rights issue, it belongs in the Judiciary Committee and this
is an issue we should track through that committee. This is an issue
involving agricultural lands, which I think is wholly appropriate for
the farm bill.
Also, private property issues are so key and central to farming in
the United States. It is in many places dominantly private property
issues. In the West, there are a lot of public lands and agricultural
use in public lands areas. But private rights dominates throughout the
agricultural system of our country. There was a shock sent out with the
Kelo case when the Court said you now don't have to have this
justification of a public use for private property to be taken and can
condemn it.
Many were shocked on all sides of the aisle--right, left, middle,
people in urban areas, people in rural areas. I wish to say
specifically people from rural areas were particularly struck by this
decision because they all feel an

[[Page S15400]]

attack frequently from people in governmental entities to take lands
for power lines, parks, land that should go back to them in some cases,
if it is a railroad line that has been abandoned and the deed said the
land will revert to the farmland owner and then it is taken for a
trail. People are saying wait a minute, I thought we had private
property rights, basic in our constitution, basic in our philosophy,
basic to agriculture.

This is a narrow issue to get at the Kelo decision. It is well
crafted by the Senator from Idaho to support those private property
rights. The amendment will deter States and local governments from
taking working agricultural land against the will of the landowner only
to designate that same land as open space. Here I think you can look at
that and say, well, obviously, that is something we should protect,
that private property right. If there is to be eminent domain, it has
to be listed on a public purpose, like we have had eminent domain laws
for some period of time now, and not just taking it to keep an open
space. If that is to take place, there needs to be a different set and
a different system rather than what is being allowed or expanded after
Kelo by local or State units of government.
This narrows the decision of Kelo back to what it was prior to Kelo--
a protection of private property rights. I think that is important. I
think it is a key issue and one that is a top priority to agriculture
and landowners. Indeed, the President of the American Farm Bureau
Federation said after Kelo:

No one's home or farm and ranch land is safe from
government seizure because of this ruling.

Well, let's make sure their land is safe. We can do that, and this is
an amendment that helps to do that. I think it is an important
amendment to help to do that. If you voted in support of private
property rights, I would hope you would support the Craig amendment,
whichever side of the aisle you are on, and say there is an appropriate
way and there is an inappropriate way and the appropriate way to make
sure you have eminent domain is for a public purpose and not just
taking agricultural lands to maintain open spaces and reducing the
value of that land or its workability as agriculture.
This is an important, good amendment, and I urge my colleagues to
support it.
I yield back to the sponsor of the bill.
The PRESIDING OFFICER (Mrs. McCASKILL). The Senator from Idaho.
Mr. CRAIG. Madam President, it is important for my colleagues to
understand this is a private property rights debate. For some who have
said, well, this is in the jurisdiction of the Judiciary Committee--and
I understand the other side is going to ask for a 60-vote threshold--
one of the reasons we are on the floor in a post-Kelo decision
environment is because things are beginning to happen out there that
frustrate all of us.
My colleague from Kansas echoes the sentiment of the American Farm
Bureau and their president, speaking out about the risk now that open
space property, farming property, ranching property has as a result of
Kelo. Some would say on the floor it doesn't appear to be a problem.
Let me suggest it is.
In Scattaway, NJ, a family protested its eviction from their 75-acre
farm the town had seized under eminent domain for an open space
designation. That happened in New Jersey. In Woodland, CA, in Yolo
County, CA, the board of supervisors decided to seize a large area of
farmland using eminent domain and declared the property open space. So
here a government entity steps in and says: We are going to take open
space and make it open space and we are going to use our power to do
that--no willing seller, no willing buyer, a new shaping of eminent
domain.
Eminent domain, as we knew it pre-Kelo, said, public use for a
legitimate public use, and that usually almost always fell into rights
of way, roads, power lines, and those kinds of things where, for the
public good, access was being denied.
Kelo tipped that upside down.
New Brunswick, NJ. New Brunswick moved forward to condemn, using its
power of eminent domain, a 104-acre farm. Open space again. Telluride,
CO. The senior Senator from Colorado was on the floor supporting our
amendment. The town decided to use its power of eminent domain to take
about 570 acres of an 800-acre ranch and designate the property as open
space. Once again, the power is being used.
That is why America's farmers and ranchers and America's agricultural
organizations that represent them grow increasingly alarmed.
Sussex County, NJ. The State of New Jersey used its power of eminent
domain to take 17 acres of working agricultural property to create a
wetlands. Open space again.
Matthews, NC. York County, PA. York County, PA, was the one I used as
I introduced this amendment a couple days ago, where the family fought,
invested lots of money, and took on the county. As a result, two county
supervisors were defeated in the election because they were going after
private property for an open space designation, and the county said:
Oh, no, you don't; you are out. Ultimately, the family won but at great
expense defending their right of private property.
That is why the American Farm Bureau has said this is a high priority
for us.
Madam President, Justice Sandra Day O'Connor, dissenting in Kelo v.
the City of New London, which has tipped this eminent domain issue
upside down, said this in her dissenting views, and it is so clear
today the vision of this justice.

The outfall from this decision will not be random. The
beneficiaries are likely to be those citizens with
disproportionate influence and power in the political
process, including large corporations and development firms.
As for the victims, the government now has license to
transfer property from those with fewer resources to those
with more.

She spoke with great wisdom, particularly about the victims--those
are the property owners--because that is exactly what is happening out
there.
Is open space necessary? You bet it is. Does open space have value?
You bet it does. There is no question in an urbanizing environment,
parks and parkland and open space is critical. Why not willing seller/
willing buyer? Why not go into the market as a city that has taxing
power or a county that has taxing power ought to do and say, you know,
we are going to raise a bit to go out and buy a piece of open property,
instead of taking it? Now, yes, they compensate in eminent domain, but
they basically establish the price. They do not have to compete.
So Kelo tipped us upside down, because in New London, as we remember,
the city used their right to take away private property and gave it to
a private developer because there was someone who was holding up a
development. They were trying to hold onto their land. This is a
critical private property rights debate and so very necessary.
I mentioned the family in Pennsylvania. For over 3 years, in
Pennsylvania, that family fought their local government. How do you do
it? You hire attorneys. Attorneys are expensive. You do the battle, you
set up the legal case, because the county--in this instance the county
government--wanted to take the land. As I mentioned, it didn't sit well
with the citizens. Most citizens respect the right of private property.
Most citizens understand that under our Constitution, there is a
legitimate purpose for taking, and it was called eminent domain when
the public good and the public value was clear.
That is the issue. It is quite simple. Now, is it a judiciary issue?
Yes, it is. It is also an agricultural, farm bill issue. The reason I
am on the floor with the amendment is because this taking is beginning
to accelerate across our Nation and our Judiciary Committee has done
nothing, to date, to reshape the Kelo decision, to protect the rights
of the private property owner beyond the legitimate public good, and it
is an important thing we do. That is why we are speaking out at this
moment, and that is why it is important.
I yield to the chairman of the Senate Ag Committee.
Mr. HARKIN. Will the Senator yield for a question?
Mr. CRAIG. Sure.
Mr. HARKIN. I have read the Senator's amendment. I have sat and read
the whole thing.
Mr. CRAIG. It is quite simple.
Mr. HARKIN. It is quite simple. It doesn't take a lot of time to read
it. Then I listened to the Senator talk about the Kelo decision.

[[Page S15401]]

I am not a fan of the Kelo decision either, but it seems to me the
way the amendment is written--and I ask the Senator this--if someone,
if a private farmer had farmland, and a private developer came in and
got the local jurisdiction to condemn that farmland and take it for
private development, that would be allowed under your amendment?
Mr. CRAIG. Our amendment speaks to open space versus open space.
Mr. HARKIN. I ask the question, though.
Mr. CRAIG. I do not disagree with your interpretation of the current
amendment.
Mr. HARKIN. That is what I wanted to make clear; that the Kelo
decision----
Mr. CRAIG. Well, I would like to have gone further than that. The
concern we had, and what appears to be most visible today in the new
use of Kelo, is open space for open space. Municipalities and counties
are stepping out--with the cases I gave, Mr. Chairman--and saying that
for purposes of parks, we find this is a new tool. Historically, parks
were willing seller/willing buyer, and wetlands, and now other broader
interpretations of ``public good.''
But Kelo, being specific and relating to private government entities
taking property for private development, we do not speak to that. We
think it is a broader issue that the judiciary ought to speak to.
Mr. HARKIN. I thank the Senator for yielding and engaging in this
colloquy. I was listening to the Senator talk about the Kelo decision,
but the Senator's amendment doesn't reach the Kelo decision.
Mr. CRAIG. Oh, I disagree totally.
Mr. HARKIN. Well, if you allow----
Mr. CRAIG. Madam President, let me respond. When the Senator says we
don't reach the Kelo decision, we reach a portion of the Kelo decision
that is now most frequently impacting farms and ranches, and that is
open space for open space.
Municipalities and counties and in one instance, as I cited, a State,
prior to Kelo, were not using these powers of eminent domain to acquire
open space. They were going out and buying it in the market and
competing for it. Now they are. So Kelo, in fact, is being used for
this purpose. That is why we are addressing this.
Mr. HARKIN. I will have more to say about that later, but let me ask
another question.
Under the Senator's amendment--I wish to make sure I read it
correctly--if a local jurisdiction--planning and zoning--decided to
condemn some land or to take land for a park, if the amendment were
adopted and put into law, that would mean that jurisdiction, whatever
that jurisdiction is--it could be a county or a State--couldn't even
get any money for education. No title I money for education. They could
not get special education money. Let's say, money for special
education, they wouldn't be able to get that either; is that a correct
reading? For 5 years, they couldn't get that?
Mr. CRAIG. If it were open and currently operating farmland and/or
pasture land.
Mr. HARKIN. Yes.
Mr. CRAIG. For agricultural purposes, and they did that for open
space purposes, there would obviously, if this were law today, be a
great debate in that community. That community would say, you cannot
use this power and put our educational monies at risk.
We say, yes, Government monies, Federal Government monies. So it
would clearly have a dampening effect. You and I both know, because we
have been at those different levels of government, that there are
thresholds by which a planning and zoning entity of a county or a
municipality can and cannot operate. Would it have a chilling effect?
Yes. It would stop them from doing that. That is the intent. Would it
put the educational money in jeopardy? No, it wouldn't because they
wouldn't put it in jeopardy.
You can use scare tactics, you can create, if you will, stalking
kinds of arguments. But you and I both know, in practicality, they are
not going to put those other values at risk. Sewage and water money and
all of the kinds of other things that you and I work hard to get for
our communities--that is not going to be put at risk because what is
going to happen is they are going to quit using the Kelo decision. They
are going to quit using eminent domain in its broadest sense until this
Congress gets back in the business of shaping it again. That is why we
are doing what we are doing here.

Mr. HARKIN. I think, then, we get to the crux of this issue. What the
amendment of the Senator does is it has the Federal Government telling
a local entity, a local government or a State government what it can
and cannot do within its own jurisdiction.
This is a very powerful Federal Government, a heavy hand coming in
telling people that we know better than they what they should be doing.
Mr. CRAIG. The Senator knows as well as I do that, with wetlands,
with endangered species, you name it, the Federal Government, by law,
by statute, by regulation, by Clean Water Act, does a lot of things. It
is hard to deny that we do because local entities operate under those
laws. We are simply asking local entities, in their exercise of eminent
domain, to operate within the law. This amendment, broadly supported by
American agriculture for fear of taking of their land, and by the
livestock industry, and by the Public Land Council and others, says:
No, don't do that.
You can point out, if you will, those kinds of arguments. But they
are hollow in the sense that we constantly do that, and we have done
that. Local governments operate under both local jurisdiction, local
law, State and Federal law. So I do not see that as a problem. It can
be argued, but it is not precedent setting in any sense of the word.
Mr. HARKIN. I say to my friend from Idaho that all of the things he
mentioned--the Clean Water Act and all that kind of stuff--we can get
into that, but, yes, if a local entity violates that, they are subject
to certain sanctions, usually fines.
Mr. CRAIG. Yes.
Mr. HARKIN. They are not subject to losing all their Federal money
for education, for health, for transportation, for everything else--
nothing like that. I know of no instance like that in any Federal
legislation. If the Senator can find one for me I would appreciate it.
I can't.
Mr. CRAIG. I will not disagree with the Senator. I believe the taking
of a person's wealth--and you and I in farm and ranch company know the
assets of a farmer and rancher are tied in the land. It is their bank.
It is their savings. It is their retirement. Some even like to pass it
down generationally.
To have a municipality flex a new muscle that grew out of a decision
at the Supreme Court level because of an entity in Connecticut using it
is ominous and needs to have powerful teeth in it to say to that local
municipality or county: Thou shalt not, for these very narrow purposes,
use eminent domain.
I am saying you and I come from farm country. We know how valuable
that land is. It is that farmer's or that rancher's savings. It is
their retirement, should they choose to sell it, and they can sell it
to the city for a park if they want to. But for a county or city to
step in and take the land when you want to hand it to your daughter or
your son or your grandson, generationally, to pass it down through for
agricultural purposes--there ought to be teeth, very powerful teeth. I
think counties and cities ought not be allowed to do it, period.
Mr. HARKIN. But it seems to me, I say to my friend, those are the
governments that are closest to the people, rather than some distant
government in Washington telling them what they can and cannot do.
Plus, I say to my friend from Idaho, with all due respect, this did not
grow out of the Kelo decision. Local governments have had the power of
eminent domain probably going back to the founding of our Republic. I
was trying to find out exactly when, but probably the early 1800s,
maybe the 1700s.
Mr. CRAIG. I have under the Constitution for ``the defined public
good,'' and the defined public good was very clear, and we defined it
in statute.
Mr. HARKIN. But I say to my friend, defined public good has been
parks and recreation areas and things like that.
Mr. CRAIG. But they have not--excuse me. Senator?
Mr. HARKIN. I say to my friend from Idaho I am sure he has visited
Gettysburg. Gettysburg National Park would not be a national park were
it not for

[[Page S15402]]

the power of the State of Pennsylvania to have the right of eminent
domain because that is what they used. They had to use it in order to
get that land together for Gettysburg Park. I say to my friend, with
all due respect, it is a national historical monument. But that is what
they had to use to do it.
Should Washington have been able to tell them no, you can't do that?
Mr. CRAIG. Right in the middle of Gettysburg is a private operating
farm today. The reason it is there is because they would not allow it
to be condemned, and they did not meet the threshold price of a willing
seller, willing buyer. The State of Pennsylvania, for rights-of-ways of
road, but other than that in almost every instance in my knowledge as
it relates to Gettysburg, bought it, acquired it, and they used Federal
money to get it and they used the Federal Park Service and a variety of
other tools.
No, there is something new happening out there in a post-Kelo
environment. You need to talk to your Farm Bureau in your State, and
others, and your cattlemen and other farm organizations. Something new
is happening in farmland, especially those lands adjacent to rapidly
expanding urban environments. It is happening in a post-Kelo
environment. That is why we are addressing it today on the Senate
floor.
Mr. HARKIN. I say to my friend, again, the amendment doesn't even go
to Kelo because my friend admitted a local government could condemn,
eminent domain, take private farmland for a private developer. Under
his amendment they can still do that.

Mr. CRAIG. We don't speak to that. We speak to the issue at hand
today: taking private farmland in municipalities and urban areas,
counties and States, for the purpose of open land, and that is a post-
Kelo phenomenon.
Mr. HARKIN. It has been that way, as I say, going back to Gettysburg.
They did use eminent domain in Gettysburg.
Mr. CRAIG. They did use some, yes, I don't deny that.
Mr. HARKIN. They carved out some sections where they didn't think
they needed them, but they did on some other sections. So it has been
that way forever. Kelo didn't open floodgates. What it did was open
floodgates for private, and that I find anathema; that you could use
eminent domain for some private purpose. But for a public purpose such
as parks and recreation and things like that, it has been this way
since the founding of our Republic, I say to my friend.
My friend, I know is a conservative. It seems to me conservatives are
always looking askance at the Federal Government coming in,
heavyhanded, and telling local jurisdictions what they can and cannot
do. This, it seems to me, would be the heaviest hand that I have seen
in my years here.
My friend is right. We, a lot of times, do pass laws, Clean Air Acts,
things like that that he mentioned, and we impose fines if they don't
do something. But we don't say if you violate it, we are taking away
your education money, your health money, your transportation money, and
everything else. I just know of no other case like that in Federal law.
The PRESIDING OFFICER. The Senator from Idaho is recognized.
Mr. CRAIG. Madam President, we have not yet a time limit. I have
expressed the will and concern of those who are cosponsors of the
amendment. I put into the record the expression of our largest national
farm organization that sees the threat as clearly as I do, maybe less
clear than the chairman sees it because there is a pattern rapidly
growing out there in a post-Kelo environment--open space taken for open
space purposes. They are taking it from the private landowner. We think
there ought to be strong teeth here.
With that, I retain the remainder of my time. Others are here to
debate the issue.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. HARKIN. Madam President, I just have a few minutes. I know we
want to get to the Brown amendment. The Senator from Ohio has been very
patient, waiting a couple of days to get to his amendment. I appreciate
that. I have just a couple of things I wanted to respond to.
First, regarding the Craig amendment, I have here a letter dated
December 11 from the National League of Cities, the National Conference
of State Legislatures, the U.S. Conference of Mayors, and the Council
of State Governments, all writing in opposition to the Craig amendment.
It says--I just want to read what they said in this letter:

This amendment is not only ill-advised, but it is also
unconstitutional. Amendment No. 3640 would preempt state and
local land use laws by prohibiting any federal funding that
goes to state and local governments from being used for
acquiring ``farmland or gracing land for the purpose of a
park, recreation, open space, conservation, preservation
view, scenic vista, or similar purpose.'' This would severely
chill state and local historical preservation, community
service, and environmental efforts.
Under this amendment, if a state or locality were to use
the power of eminent domain for virtually any public purpose,
even if such action was completely in accordance with its own
statues and land use development ordinances and regulations,
the state or locality could lose all applicable federal
funding. The 5th Amendment of the U.S. Constitution expressly
permits the taking of private property for public use
provided just compensation is provided to the owner of the
property.
The power of eminent domain has always been, and should
remain, a state and local power. The state power to use
eminent domain for public purposes is fundamental to a
state's and locality's ability to provide for the community
needs of its citizens, to protect unique and scenic areas of
a state by creating parks, and to preserve wildlife and
topography of a significant nature.
Again, we urge you to reject the Craig Amendment No. 3640
because it preempts state and local law and thwarts valid
state and local efforts to preserve their natural resources
for the use and enjoyment of all citizens.

I ask unanimous consent the letter representing the National League
of Cities, the National Conference of State Legislatures, U.S.
Conference of Mayors, and the Council of State Governments be printed
in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

December 11, 2007.
Hon. Tom Harkin,
Chair, Agriculture, Nutrition and Forestry Committee, U.S.
Senate, Washington, DC.
Dear Senator: On behalf of the undersigned organizations,
we write in strong opposition to the amendment offered by
Sen. Larry Craig (No. 3640) to H.R. 2419, the ``Food and
Energy Security Act of 2007,'' which is scheduled for floor
debate today. This amendment is not only ill-advised, but it
is also unconstitutional. Amendment No. 3640 would preempt
state and local land use laws by prohibiting any federal
funding that goes to state and local governments from being
used for acquiring ``farmland or gracing land for the purpose
of a park, recreation, open space, conservation, preservation
view, scenic vista, or similar purpose.'' This would severely
chill state and local historical preservation, community
service, and environmental efforts.
Under this amendment, if a state or locality were to use
the power of eminent domain for virtually any public purpose,
even if such action was completely in accordance with its own
statues and land use development ordinances and regulations,
the state or locality could lose all applicable federal
funding. The 5th Amendment of the U.S. Constitution expressly
permits the taking of private property for public use
provided just compensation is provided to the owner of the
property.
The power of eminent domain has always been, and should
remain, a state and local power. The state power to use
eminent domain for public purposes is fundamental to a
state's and locality's ability to provide for the community
needs of its citizens, to protect unique and scenic areas of
a state by creating parks, and to preserve wildlife and
topography of a significant nature.
Again, we urge you to reject the Craig Amendment No. 3640
because it preempts state and local law and thwarts valid
state and local efforts to preserve their natural resources
for the use and enjoyment of all citizens.
Don Borut,
Executive Director, National League of Cities.
Carl Tubbesing,
Deputy Executive Director, National Conference of State
Legislatures.
Tom Cochran,
Executive Director, The U.S. Conference Of Mayors.
Jim Brown,
Washington Director, Council of State Governments.

Mr. HARKIN. I have a letter of December 11 from a number of
environmental and wildlife groups: National Audubon Society, Defenders
of Wildlife, National Resources Defense Council, Sierra Club, the
Wilderness Society, the World Wildlife Fund and others, in opposition
to the Craig amendment.

[[Page S15403]]

I ask unanimous consent that letter be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

December 11, 2007.
Re Oppose Craig Farm Bill Amendment.

Hon. Tom Harkin,
Chairman, U.S. Senate Agriculture, Nutrition & Forestry
Committee.
Hon. Saxby Chambliss,
Ranking Member, U.S. Senate Agriculture, Nutrition & Forestry
Committee.
Hon. Patrick Leahy,
Chairman, U.S. Senate Judiciary Committee.
Hon. Arlen Specter,
Ranking Member, U.S. Senate Judiciary Committee.
Dear Senators: On behalf of our members and supporters, we
strongly urge you to oppose the amendment Senator Craig (R-
ID) has introduced to the Food and Energy Security Act of
2007 that would prohibit all state, local, and federal use of
eminent domain to take farmland or grazing land into public
ownership for the purposes of a park, recreation, open space,
conservation, preservation view, scenic vista, or similar
purposes. It would impose severe sanctions on any state or
unit of local government that uses eminent domain for these
purposes--a five-year loss of financial assistance and all
federal funds appropriated through an Act of Congress or
otherwise expended by the Treasury. The Craig amendment
arbitrarily imposes absolute bans on certain longstanding
uses of eminent domain for public use while totally excluding
others, including prisons, public utilities, roads or rights
of way open to the public or common carriers, pipelines, and
similar uses.
Acquiring land by purchase or donation is preferable, but
there are times when eminent domain is necessary and
appropriate, both for the public uses that would always be
banned by the Craig amendment and those that would always be
allowed.
Congress and the courts have repeatedly recognized that
local, state, and national parks and recreation, open space,
conservation, preservation view, and scenic vistas are
clearly valuable public uses that justify eminent domain. For
example, the Congressional Research Service's Annotated
Constitution cites laws and cases upholding eminent domain,
including an 1896 Supreme Court decision confirming the right
to condemn in order to ``promote the general welfare'' by
preserving an historic site (the Gettysburg Battlefield)
for public use and protection.
``E.g., Shoemaker v. United States, 147 U.S. 282 (1893)
(establishment of public park in District of Columbia);
Rindge Co. v. Los Angeles County, 262 U.S. 700 (1923) (scenic
highway); Brown v. United States, 263 U.S. 78 (1923)
(condemnation of property near town flooded by establishment
of reservoir in order to locate a new townsite, even though
there might be some surplus lots to be sold); United States
v. Gettysburg Electric Ry., 160 U.S. 668 (1896), and Roe v.
Kansas ex rel. Smith, 278 U.S. 191 (1929) (historic sites).
When time is deemed to be of the essence, Congress takes land
directly by statute, authorizing procedures by which owners
of appropriated land may obtain just compensation. See, e.g.,
Pub. L. No. 90-545, Sec. 3, 82 Stat. 931 (1968), 16 U.S.C.
Sec. 79 (c) (taking land for creation of Redwood National
Park); Pub. L. No. 93-444, 88 Stat. 1304 (1974) (taking lands
for addition to Piscataway Park, Maryland); Pub. L. No. 100-
647, Sec. 10002 (1988) (taking lands for addition to Manassas
National Battlefield Park).''
The Craig amendment would be a draconian infringement on
federalism by the federal government into the traditional
rights of state and local governments. It would even ban uses
of eminent domain to clear title when no one objects.
The Craig amendment would devastate the ability of states,
localities, and the Federal governments to create and protect
public parks, to provide for conservation of essential
resources and recreation, and to preserve open space.
Sometimes, the ability to require a property owner to sell
property at a fair price is needed to deal with an
unjustifiable ``hold out'' who seeks to stop a worthy public
project, or to extort a monopolist's profits from the public.
Finally, as the Congressional Research Service explained
about a different proposal, there does not: ``seem to be any
proportionality requirement between the prohibited
condemnations and the length and scope of the federal funds
suspension. If Congress' Spending Power includes a
proportionality requirement for conditions on federal funds,
as the [Supreme] Court suggests, the absence of
proportionality in some of the bill's applications may raise
a constitutional issue.''
For all these reasons, we urge you to oppose the Craig
amendment.
Sincerely,
Jason Jordan, Government Affairs Manager, American
Planning Association; William Snape, Senior Counsel,
Center for Biological Diversity; Brian Hires, Colorado
Field Coordinator, Center for Native Ecosystems; Bob
Dreher, Vice President for Conservation Law, Defenders
of Wildlife; Anna Aurilio, Director, Washington DC
Office, Environment America; Brian Moore, Director,
Budget and Appropriations, National Audubon Society;
Karen Wayland, Legislative Director, Natural Resources
Defense Council.
Linda Lance, Vice-President for Public Policy, The
Wilderness Society; Doug Kendall, Executive Director,
Community Rights Counsel; Martin Hayden, Legislative
Director, Earthjustice; Sandra Schubert, JD, MA,
Director of Government Affairs, Environmental Working
Group; Julie M. Sibbing, Senior Program Manager for
Agriculture and Wetlands Policy, National Wildlife
Federation; Ed Hopkins, Director, Environmental Quality
Program, Sierra Club; Jessica McGlyn, Senior Program
Officer, World Wildlife Fund.

Mr. HARKIN. Madam President, I think the Craig amendment, about which
I just engaged in a colloquy with my friend from Idaho, the Craig
amendment really is the heaviest of heavy hands I have ever seen
proposed for the Federal Government. First, I do believe also, as I
just stated, it does violate the fifth amendment to the Constitution.
Also, it doesn't even get to the Kelo decision.
As the Senator himself admitted, even under his own amendment we
would have the oddest of all situations. It would then be permissible
for a local entity to condemn private land for private use, but it
would not be permissible for a local entity to condemn private land for
public use. That is the oddest of all circumstances. Again, to say to a
local entity that you cannot use the power of eminent domain, granted
to you by the Constitution of the United States, for a park or
recreation area or whatever it is, a public use for future generations
to enjoy--to me, that is an interference in local government and local
government decisions.
My friend talked about, yes, somebody may want to pass farmland on to
future generations and things like that. I am very sensitive to that.
Yes, they should be able to. But shouldn't also a local entity or a
State devise parks and recreation areas, also for future generations?
There seems to be some thought if a State uses its power of eminent
domain, they can just take the land away. The fifth amendment of the
Constitution says, no, you have to have just compensation. That is
where you get into courts a lot of times.
We have seen eminent domain used for power lines, for example, to go
across the State. Again, the amendment of the Senator, I don't know if
it would reach the power lines.
Mr. CRAIG. Will the Senator yield for that?
Mr. HARKIN. Yes.
Mr. CRAIG. It is important to state for the record this amendment
touches none of the standard uses of eminent domain and historic uses,
and I said so and all the other Senators speaking to it said so.
Rights-of-ways--this is open space land only. It is very clear, it is
very targeted. It does not touch any other area of historic use of
eminent domain. OK?
Mr. HARKIN. Madam President, well, I say to my friend, one of the
historic uses of eminent domain has been for parks. When was Central
Park in New York set aside? The power of eminent domain was for Central
Park in New York. I think that has been over a hundred years.
Mr. CRAIG. And a lot of people had their land acquired and purchased;
eminent domain was used.
Mr. HARKIN. I say to my friend, I do not have a catalog----
Mr. CRAIG. I think the Record is replete now with the fact that there
has been an acceleration of counties and cities using it post-Kelo.
Mr. HARKIN. But my point----
Mr. CRAIG. I know what your point is; I know we should be speaking
through the Chair for that purpose. In my opinion, it is a broadening
of the definition of public use in a post-Kelo environment that has put
America's agricultural land at risk in a greater way than ever before.
That is why this amendment is brought to the floor.
Mr. HARKIN. I say to my friend from Idaho, that is the point I was
trying to make, that you could still have condemnation purposes for a
private power line. Maybe a farmer does not want that power line going
over his land; he does not like those big cables going over his land.
The State can come in and say: Here is your compensation.
I do not like it.
OK. We use power of eminent domain. We will go to court, and they
will build that power line right across your land.
The amendment of the Senator from Idaho would still permit that to
happen, would still permit that to go on, still permit that to happen,
but it would not permit a local entity to say:

[[Page S15404]]

We have a lot of land; we want to preserve a park for future
generations. We have some of this land here that is in there, and we
need that for the park, and it is generally accepted by the public. You
may have one person reticent to do that. So they say: OK, we use the
power of eminent domain to do that. But that does not mean they get the
land; that means they have to go to court to decide what is just
compensation under the fifth amendment.
I say to my friend from Idaho, if he really wants to pursue this, he
ought to introduce an amendment to overturn the fifth amendment of the
Constitution. Let's have a constitutional amendment. Who knows what it
might be next. You think of this as a precedent. What is next? What is
next that we might not agree with? Maybe we do not agree with speed
limits. I say to my friend from Idaho, maybe we do not agree with what
a State's speed limits are, so if you do not adhere to Federal
standards on speed limits, we are going to take away all of your
education and transportation and health money. How about education
policy? Let's say we do not agree with the local school board. We do
not agree with the local school board as to what its education policy
is. It has to be what the Federal Government says, and if you do not
adhere to it, we are going to take away your education money, your
health money, your transportation money, and your community development
money. We will take it away just because you do not agree with the
Federal Government's policy on education. Zoning and other areas like
that--think of what kind of a path we are going down if we adopt this
amendment.
Again, I say this amendment would again intrude the Federal
Government into the local and State jurisdictions that have been
preserved by the Constitution of the United States. We ought not to go
there.
Madam President, I hope now we are ready to turn to the Brown
amendment. I thank the Senator for his patience.
The PRESIDING OFFICER. The Senator from Ohio.

Amendment No. 3819

Mr. BROWN. Madam President, I thank the chairman for his outstanding
work.
Madam President, I call up amendment 3819.
The PRESIDING OFFICER. Is there objection to setting aside the
current amendment? Without objection, it is so ordered. The amendment
is pending.
Under the previous order, there will now be 60 minutes of debate
equally divided between the sides.
The Senator from Ohio is recognized.
Mr. BROWN. On behalf of Senators Sununu, McCaskill--who is
presiding--McCain, Durbin, and Schumer, I am proud today to offer the
Reduction of Excess Subsidies to Crop Underwriters--or the RESCU--
amendment to the farm bill.
Our bipartisan amendment takes dollars from where they do not belong,
from oversubsidized crop insurers, and invests them in priorities with
a return for the United States of America, such as nutrition programs
and conservation programs and initiatives that create sustainable
economic development in other countries and our own, which, after all,
is the key to strong export markets and also to deficit reduction.
The RESCU amendment is based on a simple premise: When resources are
limited, we simply cannot afford to waste them. We cannot afford to
overpay crop insurers with tax dollars while underinvesting in programs
that pay for themselves, programs that preserve farmland and deploy
U.S. resources strategically in the global arena.
Our amendment does not increase the cost of crop insurance for any
farmer. I repeat: Our amendment does not increase the cost of crop
insurance for any farmer. In fact, it has no effect on premiums at all.
It does not, as some will claim, dramatically reduce the margin for
crop insurers, jeopardizing access to crop insurance. It draws from
huge, bloated overpayments and astounding profit margins, making them a
little less huge and a little less astounding.
Crop insurers will have no incentive to leave a business that
continues to reward them so generously, as this Federal program does
with these tax-dollar subsidies. They will have no incentive to leave a
business that continues to reward them so generously for their
involvement. I can assure you that before and after this amendment, if
it is enacted, crop insurers will continue to be generously rewarded
for their activities.
This amendment simply seizes an opportunity to do some good while
doing no harm. It is a fiscally responsible amendment that reroutes
insurance overpayments to accomplish several beneficial goals. Some of
the dollars go toward deficit reduction, some of the dollars honor
faith-based missions throughout the world by contributing to a like
program that feeds hungry children in developing countries, and some of
the dollars help family farmers become better stewards of our land and
our natural resources. This amendment is not glamorous or earth-
changing; it is simply an opportunity to move forward and to do the
right thing.
I know some of my colleagues do not want to take any money from crop
insurers. They want to continue to shovel more taxpayer dollars to crop
insurers. As I mentioned, some of them are worried that taking these
dollars will put crop insurers out of business. They are not really
worried; that is what they will say. But you just can't get there from
here. This amendment is not going to break the backs of those insurers;
it is just going to mean slightly less huge profits for those insurers.
Let's face it, this amendment does not take crop insurers to the
cleaners; this amendment takes a little drop from their rather large
bucket.

Federal crop insurance is an essential part of the farm safety net,
as it should be and as it will continue to be. However, billions of
dollars that are intended to benefit farmers are instead siphoned off
by large crop insurance companies.
Listen to this number for a moment. Since 2000, farmers received
$10.5 billion in benefits from the Crop Insurance Program, but it has
cost taxpayers $19 billion to provide those benefits--$10 billion in
benefits for farmers, $19 billion in taxpayer subsidies to get that $10
billion to the farmers. That is because the crop insurance companies
have had such huge overpayments, huge profits during those 7 years.
So where does the difference go? According to GAO, crop insurance
companies take 40 cents out of every dollar that Congress appropriate
to help farmers. Think about that, 40 cents out of every dollar. No
place operates that way. Medicare does not operate that way, Medicaid
does not operate that way. No other insurance company does that well.
Look at this chart. Private property and casualty insurance profits,
8.3 percent; Federal crop insurance profits more than double that, 17.8
percent. So slicing a little off here, they are still going to be close
to double the profits of other private property insurance companies,
property and casualty insurance companies.
In the same report, GAO found that crop insurance--this was a GAO
report--company profits are more than double insurance industry
averages. Again, over the past 10 years, crop insurance companies have
almost an 18-percent return, while most of the rest of the private
insurance market has an 8-percent return.
This amendment also reduces the exorbitant--I mean exorbitant
administration fees crop insurance receives. For each policy they sell,
the GAO report shows that the per-policy subsidies to insurance
companies will be triple what they were less than 10 years ago. This is
the money crop insurance companies receive. A&O is administration and
operations. So whatever the premiums are, the Government then--already
profitable for the crop insurance company--the Government then pays
them a percentage--roughly 20 percent, slightly more than that--in
addition so that they can administer and operate this insurance
program.
Look, as prices have gone up, as the price of corn, for instance, and
soybeans--which I have a huge growing crop, huge corn and soybean
production in my State, one of the leading States in the country--the
crop insurance companies make more and more money the higher the prices
are because the premiums are then higher. If you think the price of
corn is high, you are going to buy more insurance, the premiums are
going to be higher, and

[[Page S15405]]

the A&O--administration and operations--subsidy is 20 percent of an
increasingly higher number. That is why you see from $497 million, to
$591 million, to $700 million, to 830 million, to, in 2007, $1.172
billion for these administrative bonuses, if you will. These delivery
subsidies have tripled because they are linked, as I said, to the total
premiums and thus the rising price, particularly of corn and soybeans.
This amendment will reduce the administrative subsidies for each
policy to the national average of 2004 and 2006. This level is still
well above every year prior to 2006. We are not taking them back to
these numbers; we are just modestly bringing them back to this number.
This number still was historically the highest ever. It is historically
very generous to the crop insurance companies as a subsidy.
This amendment, I repeat, is no threat to the crop insurance
industry. It is a threat to something--it is a threat to complacency.
Instead of taking the painless route and leaving the crop insurance
industry be, we can simply apply a dose of reason and do a world of
good. We can help feed children in impoverished nations. We can help
restore the McGovern-Dole Program--two of the most respected Members to
have served in this distinguished body. We can help bring down, by
hundreds of millions of dollars, something near and dear to the heart
of Senator Conrad, I know--we can bring down the Federal deficit.
Simply put, we can do the right thing. I hope Members on both sides
of the aisle will support the amendment.
I yield the floor, and I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. CHAMBLISS. I ask unanimous consent that the order for the quorum
call be rescinded.
The PRESIDING OFFICER (Mr. Brown). Without objection, it is so
ordered.
Mr. CHAMBLISS. Mr. President, I yield to the Senator from Kansas, Mr.
Roberts, 15 minutes, followed by Senator Grassley for up to 5 minutes.
The PRESIDING OFFICER. Is there objection?
Mrs. McCASKILL. Mr. President, I know the Senator from Georgia has
yielded to the Senator from Kansas. I am supposed to be presiding now.
The kind Senator from Ohio assumed the chair to allow me to speak on
our amendment. I hate to hold up the Senator from Ohio who has to
leave. If I may, I ask unanimous consent to speak for a couple of
minutes on this amendment.
The PRESIDING OFFICER. Is there objection?
Mr. CHAMBLISS. Mr. President, we are fine with that.
The PRESIDING OFFICER. The Senator from Missouri is recognized.
Mrs. McCASKILL. I appreciate the courtesy shown by the Senator from
Georgia and, importantly, by my friend from Kansas who, although we
disagree about football, I know we agree about protecting taxpayers.
Mr. President, we spend a lot of time here talking about whether we
can afford things and trying to save money. My father was in the
insurance business. In fact, he was commissioner of insurance in the
State of Missouri when I was in high school and college. I have no
problem with insurance companies making a profit. They are businesses;
they should make profit. But we have to take a close look when it is
taxpayer-subsidized profit. We are not talking about the normal profit
of a private business. We are talking about taxpayer-subsidized profit.
I don't care how you look at this insurance industry in this particular
niche, this is a wildly profitable insurance industry right now,
billions and billions of dollars in profit over the last several years.
You have to ask yourself: Isn't there a way we can continue to make
sure that crop insurance is readily available? Keep in mind this
amendment does nothing whatsoever to cause costs to go up for the
farmers. The premium subsidies remain the same.
What this does is say: We can't continue with the deficits we have.
We can't afford to do children's health insurance. The President vetoes
that. We can't afford another $11 billion for domestic spending. The
President threatens a veto on that. We can't afford to do anything
except make sure we subsidize a very profitable insurance industry.
We have to stop some of the ability of this particular niche
industry. They don't even have to worry about antitrust laws because we
have written that into the law for them.
This is a modest attempt. If our amendment had been in place in 2006,
the companies still would have received $797 million in underwriting
gains alone in comparison to the $885 million they actually received.
We are not talking about putting anybody out of business. We are
talking about doing what is right in terms of watching taxpayer
dollars.
This is about priorities. I want the billions in subsidized profits
to go where the needs are. There are many in this farm bill. That is
where they are directed. There is also a great attempt to do something
about these mind-numbing, jaw-dropping deficits. It seems a lot of our
friends on the other side of the aisle don't want to pay for anything.
They don't want to pay for AMT. They don't want to pay for anything in
the Energy bill. If we keep going down this road, we should do away
with an attempt to pay for anything and just print money, see how that
works.
It is time we do the right thing on this particular taxpayer-
subsidized profit and find a middle ground where we can continue to
make sure crop insurance is available and affordable, which this
amendment will do, but allow some of the taxpayer money to go to more
urgent needs than major profits in this industry.
I thank my colleagues for their courtesy.
The PRESIDING OFFICER (Mrs. McCaskill). Who yields time?
Mr. CHAMBLISS. Madam President, I yield 15 minutes to the Senator
from Kansas.
The PRESIDING OFFICER. The Senator from Kansas is recognized.
Mr. ROBERTS. I thank the Presiding Officer and my friend from
Georgia. I see the Senator from Missouri is the Presiding Officer. I
wish her well in the Cotton Bowl against Arkansas, as we in Kansas go
to the Orange Bowl. I hope she wishes us well.
Despite what has been said, I am rising in strong opposition to the
Brown amendment which I think, bluntly put--and I will say it the way I
think it is--would kill the crop insurance program, especially in
certain sections of the country and, as a result, endanger a great many
farmers. I have often said it is more important to prevent the passage
of bad legislation--counterproductive legislation, if you will--than it
is to add more legislation to the books, regardless of the argument.
This amendment certainly falls into that category.
I am always amazed at the number of people who criticize a program
that benefits our farmers and ranchers, some of whom do their speaking
with their mouths full. It is truly a paradox of enormous irony: Those
who enjoy the safest, most affordable food supply in the world,
compliments of America's farmers and ranchers, with good intentions or
not, do great harm to the very programs that support our producers in
providing the bounty that is the modern miracle of American
agriculture. It is time to stop. I understand the support for the
programs that this amendment alleges by cutting crop insurance or using
crop insurance as a bank. Let me go over those programs.
Other than the Conservation Reserve Program, the Environmental
Quality Incentives Program is the most popular conservation program in
Kansas. Obviously, I am for that program. Obviously, I am for
reasonable funding for that program. I have been one of the strongest
supporters in the Senate of the McGovern-Dole, or what we call in
Kansas the Dole-McGovern, international school lunch program. In fact,
I was the Senator who led efforts to get all 100 Senators serving at
the time to sign a letter urging them to keep the program under the
jurisdiction of the Department of Agriculture. I was the House
Agriculture Committee chairman who saved the Food Stamp Program when
many wanted to block grant it. The Governors wanted the money, but they
didn't want to operate the Food Stamp Program. So I have a little blood
pressure, if you will, and heartburn when folks try to tell me my
producers don't understand or care about these programs. Just the
opposite is true. I take offense at saying the

[[Page S15406]]

funding for these programs should be increased on the backs of our
farmers and ranchers which will happen if this amendment passes.
I get frustrated when we get amendments that will inflict great harm
for the simple fact that some--good intentions aside; I don't question
that at all--do not truly understand how a program works, and they
don't want to take the time to get their facts straight. We have
already increased nutritional spending by $5.5 billion in this bill. We
have increased conservation spending by, as the ranking member knows
and as anybody who represents farmers and ranchers knows, $4 billion,
all the while cutting $6 billion from traditional commodity programs,
including $4.7 billion from crop insurance. Haven't we already
extracted our pound of assistance and flesh from our farmers and
ranchers? Note that I say the crop insurance program directly affects
the wherewithal of farmers and ranchers. It is inseparable.
I will tell my colleagues why I think the authors of this amendment
have their facts wrong, but first I want to make it clear what will
happen if this amendment passes. This amendment does propose to
increase the amount of quota share that companies must cede to the
Government from 5 percent to no less than 15 percent. It could go
higher, a lot higher. Quota share, pardon the vocabulary of agriculture
program policy, is the percentage of underwriting earnings that a crop
insurance company must cede back to the Federal Government. Currently
that is 5 percent of earnings. Put another way, it is an additional 5-
percent tax companies must pay to the Government prior to expenses
being figured. In addition, if this amendment had been in place for the
2007 crop year, it would have also reduced the administrative and
operating expense reimbursement to the companies by an additional 30
percent beyond what is already in the committee-passed bill. If we do
the proposed changes in underwriting gains in this program, we will be
ceding additional reinsurance risk from the private market, and it will
go to the risk management agency of the USDA--that is the outfit that
runs the crop insurance program--and the U.S. taxpayer. I don't think
we want to do that.
Additionally, we will make it more expensive for companies to service
the program and provide it to producers, so much more expensive and
risky that it may well cause some companies to pull out of higher risk
or underserved States. That is the big issue. You might want to reform
it in ways that will not affect your home State where basically you get
a lot of rain but don't have a lot of risk and you don't farm--the seed
just comes up--as opposed to high-risk areas. That means we may have
States where crop insurance would not be available or, at the very
least, there may be fewer options available from which producers can
purchase crop insurance. If producers can't get crop insurance, it
means they will be back here asking for ad hoc disaster aid. For
everybody who votes for this amendment, if it passes, I want you to
help me to come back here in regard to ad hoc disaster aid. Kansas is
now frozen over with yet another blizzard.
Even if we have a permanent disaster package in this bill, which we
do, it also means we would be making it harder for many farmers,
especially young ones, to get the operating loans and financing they
need for their operation. Why would it be harder for them to get
financing? It will be harder because most lenders and a good number of
landlords require crop insurance as part of their business agreement.
So if you take away crop insurance, you hit those young farmers who
don't have a lot of equity built up in their operations.
On the other hand, I am sure there are those who say: Well, look at
the GAO study on crop insurance. It is important to go over why this is
a completely flawed study. Personally, if you presented it in the
private business world, I think your job might be in danger. First, it
takes into account none of the increases in the participation in the
program that have occurred since the passage of the Agriculture Risk
Protection Act of 2000, reforms to the crop insurance program that I
helped lead in this body, along with our great former Senator Bob
Kerrey. We worked hard, and it took us 18 months. We reformed the
program. Those efforts have led to increased participation, not only in
the plains States but all throughout the country, more especially in
the South and for specialty crops and everybody involved in
agriculture. As I said, especially in the southern region, represented
by our outstanding ranking member, Saxby Chambliss, but also in regions
that grow specialty crops or that have been considered underserved by
the program in the past. We fixed that. This increased participation
increases the ability to make profits for the companies, but it has
also led to a significant increase in the amount of risk they are
insuring in this program.

First, the study was ordered in the House--I am talking about the GAO
study--by those who, shall we say, have been less than friendly to the
crop insurance program and to our farmers and ranchers. That is
probably the understatement of my remarks. Second, the GAO study, I
believe, is counterproductive because everyone here knows you can get a
GAO study to say whatever you want. I have been committee chairman
three times. You ask the questions right, they respond with the answers
you want. This GAO study claims that crop insurance companies are
making huge amounts of money--we just heard that from previous
speakers--and are much more successful than traditional property and
casualty insurance companies. The first flaw in this study is that they
pretty much compared apples and oranges. When looking at the business
relationships between crop insurance and traditional property and
casualty companies, they compared a 5-year period for the crop
insurance program that represented what happens to be 5 of the lowest
crop loss years nationally in the history of the program. At the same
time they included a time period for looking at the business numbers of
the property and casualty industry that included both the 9/11 attacks
and Katrina--in other words, one of the worst 5-year business periods
in the history of the traditional property and casualty business. If
you take a comparison that shows one of the best 5-year periods in
history in terms of insured losses for one sector of the industry and
you take one of the worst 5-year periods for another sector of the
industry, what do you think the numbers are going to look like?
Additionally, this GAO report claims that the companies are making
substantial underwriting gains on the premiums they collect which the
GAO then assumes is all complete profit. That is one of the arguments
that has just been made. Yes, companies do make underwriting gains on a
portion of their premium that is collected, if there are not losses.
That is the factor that has not been brought up. What the GAO fails to
mention is that were a major loss to occur this year--i.e., the 1988
drought, what we have been through in Kansas, or the 1993 flood--the
companies would also be responsible for these underwriting losses.
In addition, the GAO report makes the assumption that any
underwriting gains by the companies are pure profit. This is
ridiculous. There are expenses that are paid out of those underwriting
gains. The largest of these expenses is for costs to pay private
reinsurance companies for the amount of risk they underwrite for the
insurance companies.
Let me explain this in plain English. It is called ``show me'' in
Missouri. All lines of insurance, as the Presiding Officer knows,
protect their investments by insuring their own risk with private
reinsurers. That is the way it is done. Crop insurance companies do the
same thing. If they did not do it, again, the risk management agency of
the USDA and U.S. taxpayers would have to act as the reinsurers for the
program, thus greatly increasing the risk for additional cost for
taxpayers. We don't want to go down that road. So if you subtract this
and other expenses to obtain net underwriting gains, which the GAO did
not do, the numbers look a heck of a lot different.
In addition, the private reinsurance industry has serious concerns
with the proposed increase in quota share from 5 percent to a minimum
of 15 percent that, again, must be ceded back to the Federal
Government. Again, in simple terms, this requirement will force
companies to cede an additional minimum of 10 percent of underwriting
gains--

[[Page S15407]]

prior to expenses even being calculated--back to the Federal
Government.
Now, the authors of this amendment and the USDA call it a quota
share. I simply call it a tax because that is what it is when you force
any company to provide an additional 10 percent or more of their
earnings to the Federal Government.
Private reinsurers know the crop insurance business can be very
risky. Yes, you can have several profitable years if you do not have
widespread weather problems. But if you have a major crop loss across a
broad area of the Nation--and I can tell you that has happened again
and again and again.
I see Senator Conrad over there on the other side of the aisle.
Senator Conrad, for Lord knows how many years, had to undergo all sorts
of bad weather, all sorts of weather-related tragedies. He had the
famous chart of the famous cow named Bossy, that was, unfortunately,
legs up and had undergone a rather tragic experience. I kept saying to
the Senator: My Lord, I cannot understand this. You have had floods,
you have had blizzards, you have had drought. I even told him one time:
You ought to move.
That is not an answer.
If you have a major crop loss across a broad area of the Nation--more
especially in high-risk Plains States, where we do produce, by the way,
in Kansas 350 million bushels of wheat every year or 400 million; that
is the other side of the thing in regards to what we actually
contribute to the country--why then, if you are in the crop insurance
business, you could have a substantial loss in the program, and some
have.
Now, reinsurers worry that the increased quota share, or the tax,
will make it harder for companies to meet the expense of this insurance
and will make them more susceptible to losses. Thus, some reinsurers
may pull out of doing business with the crop insurers.
If private reinsurers pull out of crop insurance, then under the
terms of the Standard Reinsurance Agreement between the companies and
RMA, additional risk will be shifted to the U.S. taxpayer. It is as
simple as that.
In addition to the quota share, the reduced administrative and
operating expense reimbursement--yet another reduction--will increase
company costs. The average A&O reimbursement--again, the administrative
and operating expense is currently 20 percent. We have several studies
that have indicated the actual cost for the companies of administering
the program is around 26.5 percent.
The PRESIDING OFFICER (Ms. Klobuchar). The Senator's time has
expired.
Mr. ROBERTS. Madam President, I ask for 3 additional minutes.
The PRESIDING OFFICER. Is there objection?
Mr. CHAMBLISS. Madam President, could we have unanimous consent that
we get 3 additional minutes on both sides?
Mr. CONRAD. Madam President, there would be no objection on our side.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. CHAMBLISS. The Senator shall have 3 additional minutes.
Mr. ROBERTS. I thank the Senator.
Yet this amendment proposes taking that reimbursement down even
further.
These companies are businesses. Like any good business, if you make
the risk too high or increase the costs too much, you will leave the
business. Now please listen to this: There are only 16 companies now
participating in the crop insurance program today--16. When I first had
the privilege of serving in the House of Representatives and serving on
the Agriculture Committee, 20 years ago, the number was 60. It went
from 60 to 16. If this amendment is adopted, I do not know where it is
going. Some companies will not serve certain sections of the country.
Perhaps it is not as profitable as some might claim? If this
amendment is adopted, there may well be entire regions of the country
where companies will simply no longer provide this service.
If you add additional costs, I think there is a very real risk that
the companies will either leave the business completely or at the very
least begin to pull out of higher risk States and also those States
that are classified as ``underserved'' by the Department of
Agriculture.
Bottom line: If you are a Senator representing a higher risk State or
specialty crops, I would be very nervous about the impact this
amendment could have on producers being able to get adequate crop
insurance service in your State.
For those who think companies would not pull out, I would remind you
that under the operating contract the companies sign with the
Government, they are not required to sell in all States. They can pick
which States they do business in.
I know some are going to say: Well, OK, but then why are we doing
these A&O expense reimbursements when traditional property and casualty
companies do not get them?
That is a question with an easy answer. In the traditional property
and casualty business, companies are not required to do business with
you or me. If they do so choose to do business with us, they get to
determine the rates they should be charging on their policies. They get
to load expenses into those rates. And they can require us to pay
premiums upfront, premiums that can be reinvested and build the
economy.
Crop insurance is different. Similar to the property and casualty
business, crop insurance companies do not have to do business in all
States. But once they decide to do business in a State, they have to do
business with any producer who wants to work with them. They are not
allowed to cherry-pick.
Crop insurance companies do not set their rates. They are all
calculated and established by the Risk Management Agency. In addition,
producers do not pay their premiums upfront. Depending on the crop they
raise, and changes in this underlying bill, they will either pay their
premiums within 30 days after harvest or by September 30 of each year.
So the companies float the cost of doing business until these premiums
come in. What if a producer fails to pay their premium? The company is
responsible.
Now, that is a major concern. Out in western Kansas, where we went
through 5 consecutive years of drought, in some places a lot of
producers and their lenders have told me if it was not for crop
insurance and direct payments, they would not still be in business,
especially our young producers and small banks.
If you adopt this amendment, you are not punishing the crop insurance
companies, you are punishing all the producers and farm families out
there who are operating on the margins, while providing this country
with the most affordable and safe food supply in the world.
I urge my colleagues to vote against this amendment that I truly
believe would kill crop insurance for our young farmers and ranchers.
I yield back the remainder of my time.
The PRESIDING OFFICER. The Senator from Ohio is recognized.
Mr. BROWN. Madam President, how much time do I have?
The PRESIDING OFFICER. The Senator from Ohio has 21 minutes; and
there is 13 minutes in opposition.
Mr. CONRAD. Madam President, might I ask unanimous consent by both
sides to make a unanimous consent request at this time on behalf of the
leadership of both sides?
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. CONRAD. Madam President, I ask unanimous consent, on behalf of
the combined leadership, that the Senate stand in recess today from 2
to 3 p.m.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Georgia.
Mr. CHAMBLISS. Madam President, there was an understanding that
Senator Grassley would be recognized for up to 5 minutes following
Senator Roberts.
Mr. BROWN. Madam President, I reserve my right to object. Rather than
have three or four speeches in a row in support of this amendment, I
would like to--particularly since I have more time remaining--at least
use a couple minutes now. I will not give a long speech, but I would
like to use a couple minutes responding to Senator Roberts and then go
back and forth, if that would be acceptable to the Senator from Iowa,
or if the Senator from Iowa has somewhere to go, I am fine with him
speaking now. But I would like to speak afterwards.

[[Page S15408]]

Mr. GRASSLEY. Madam President, I would like to speak for 5 minutes.
Mr. BROWN. Madam President, I am fine with that. I would like to be
recognized after Senator Grassley, if that is OK with the Senator from
Georgia.
Mr. CHAMBLISS. The Senator is correct. The normal procedure would be
to go back and forth. After Senator Grassley, Senator Brown will be
recognized, and then I ask that Senator Conrad be recognized after
Senator Brown.
Mr. BROWN. I thank the Senator. I certainly will reserve my time.
The PRESIDING OFFICER. The Senator from Iowa is recognized.
Mr. GRASSLEY. Madam President, it would be easy to say I associate
myself with the remarks of the Senator from Kansas and let it be that
way. But I was around when we set up the Federal crop insurance
program. I wish to reflect on the rationale behind it and then,
consequently, why I am going to vote against Senator Brown's amendment.
Remember, for decades of a farm program, we may have had some crop
insurance through the Government--and for hail through the private
sector--that farmers could buy for some protection, but, for the most
part, against natural disasters people relied upon the political whims
of Congress to vote for or not to vote for disaster aid.
So this crop insurance program was put in place to give farmers the
ability to manage their risk, let the individual farmer make some
determinations so he can take risks out of farming, out of the natural
disasters that are connected with it--even now, you can take some of
the price questions out that are involved with it--and manage his own
risk as opposed to relying upon the Senators and the Congressmen to
vote or not to vote or when to vote for disaster relief.
So we put this in place. In order for it to be successful, you have
to have a network to carry it out. This network is a private-sector
network. I think it is working very well. I think it is in jeopardy if
the Brown amendment is adopted.
So I have some concerns about the amendment. It could have some very
detrimental impacts on the crop insurance program that is so valuable
to rural America. So I urge my colleagues to oppose this amendment
because I do not believe the amendment is reform. It moves us back to a
time when there was more of a reliance upon the political whims of
Washington to devote disaster relief.
The amendment seeks to further cut support of the Federal crop
insurance program by several billion dollars simply to fund other
projects. Additional cuts beyond what the Agriculture Committee has
already adopted will prevent the program from providing assistance to
America's farmers that is so vital to risk management.
Over the years, Congress has insisted on having the Federal crop
insurance program reach out to all farmers, especially small,
beginning, and limited-recourse farmers. This is to be done in a fair,
equitable, and nondiscriminatory manner, serving as an effective risk-
management tool that all can use.
According to the Department of Agriculture, the program is succeeding
at this objective. Additionally, crop insurance has become essential to
many farmers in securing credit from a bank, rental agreements, as well
as providing confidence to more effectively market their crops through
the futures market where they can capture higher prices.

The farmers in my State and across the country have used this tool
over and over. It must be effective or they would not be using it and
paying the premiums each year.
The Senate Agriculture Committee reported a farm bill that contained
a two-point cut to the administrative and operating reimbursement, a
cut that represents nearly $750 million in reduced program cost. Any
cuts to the A&O reimbursement rate beyond those two points that were
agreed upon by the committee will likely undermine the program by
threatening the service America's farmers both need and deserve.
Further cuts could also jeopardize the continued viability of the
private delivery system that is vital to the program's success. This
could put private-sector employees out of work and result in the hiring
of new Federal employees to serve farmers. Private-sector delivery is
efficient and results in good services.
Approximately 30,000 jobs are created by this industry. Those would
be in jeopardy, and we would not have small farmers and ranchers
serviced the way they are now.
Further, the amendment's proposal to increase the quota share could
weaken the crop insurance program and may result in private insurers
exiting the program.
In fact, increasing the quota share is counter to the Federal policy
of the past 25 years, which successfully has shifted more risk to the
private sector for two primary reasons. First, private companies do a
better job at loss adjustment. Both the Inspector General and the GAO
have repeatedly focused on that point. Second, by shifting more risk to
the private sector, Federal costs should be lower over time, as
companies have more financial responsibility for indemnities.
It has taken more than 25 years, and we do not want to lose that 25
years.
As a matter of transparency, I wish to tell everybody in the Senate
that I participate in a crop insurance program. My constituents ought
to know it, and my colleagues voting on it ought to know that as well.
The PRESIDING OFFICER. The Senator from Ohio.
Mr. BROWN. Madam President, I thank the Senator from Iowa for adding
his knowledge to this debate.
After listening to the Senator from Kansas, I think we might think
the sky is falling in Kansas or in Ohio or in Iowa or in Georgia, that
the sky is falling on the crop insurance companies.
But when I hear the opponents of this amendment say crop insurance
companies may go out of business because of this amendment, or a new
argument today, that the reinsurer might go out of business--
reinsurance companies that insure the crop insurers--I think you
should, again, look at this chart.
On this chart is shown the number of dollars per policy that the crop
insurance companies are paid. In the last 10 years, it slowly went up,
until about 2004. So a crop insurance company writing a policy would
get $591, 4 years ago. They would get this A&O subsidy, this
administrative and operating subsidy. Then it went to $700, stayed
around $700. Then it went up to $800 in 2006, the highest number in
crop insurance program history. Then, this year, it is close to $1,200
per policy of the subsidy. In addition to everything else with crop
insurance, we don't need to get into the inner machinations of the
subsidies in other ways. But this over-the-top subsidy--I have been
very involved in Medicare issues. Medicare is about 2 percent of
administrative costs that the Government pays them to operate the
Medicare Programs in the 50 States. I don't make the comparison,
generally, because it is a very different program. But we give them
$1,100 for every policy they write--almost $1,200. Our amendment simply
says: Let's go back to the last record-setting year, which is $830 per
policy.

So for Senator Roberts to claim they may go out of business--all we
are doing is going back to the very profitable year they had when they
were getting $830. This is all taxpayer dollars. These are private
insurance companies making huge profits--making huge profits from our
tax dollars. Again, I go back to the profit levels of these Federal
crop insurance companies. These are private companies getting financing
profits from taxpayers--twice the profits of the average private
insurance property and casualty companies.
Then I hear my friend from Kansas, Senator Roberts, talk about how
business is going to be bad for farmers. Understand, no premium
increase. This amendment increases no premiums; it doesn't touch
premiums for farmers. But then he makes the case that--he does the
oldest trick in the book, making the farmers' interests coincident with
the insurance company interests. If you buy car insurance as a driver,
you don't think your interests are always the same as the car insurance
companies. When you get your health insurance plan, you don't think
your interests are exactly identical with your health insurer. So to
believe our taking some of the oversubsidized profits--taxpayer
dollars--from the private crop insurance companies, that that means we
are going after the farmers or that is going to hurt the farmers simply
doesn't pass the straight-face test, and here is why.

[[Page S15409]]

We spent, if you recall from my earlier comments, $10 billion in
subsidies in the last few years which go to the farmers for crop
insurance--a $10 billion benefit for farmers, but it took $19 billion
of taxpayer dollars to get them those $10 billion. So in other words, a
majority of crop insurance spending, this spending is taxpayer dollars.
A majority of crop insurance spending goes to insurers, not the
farmers. The farmers and the insurance companies don't have identical
interests. I am very supportive of family farmers in my State. Most of
the agriculture in my State is corn and soybeans. Most of the crop
insurance premium dollars are insuring corn and soybeans in this
country. Some 75 percent, if I recall, of crop insurance is about corn
and soybeans. I am very supportive of those farmers. I will continue to
be. I don't want to see taxpayers, whether they are taxpayers in rural
Lexington, OH, or whether they are taxpayers in more urban Youngstown,
OH, I don't want to see them giving all of these subsidies to insurance
companies.
Again, more than half the spending on crop insurance--more than half
the spending--goes to the crop insurance companies, not the farmers. We
are not touching the 46 percent that goes to farmers. We are not
touching those dollars. We don't want those premiums to increase. We
are saying, take a little bit away from the crop insurance companies.
Go back to their 2006 levels of $830 per policy. They had huge profits
in 2006. The crop insurance companies were thriving. The farmers were
benefiting from these programs. Why give them the extra $342 per policy
when that money could go to programs such as conservation for farmers;
EQIP--an important program in Kansas--or go to McGovern-Dole or go to
hundreds of millions of dollars in deficit reduction.
So we are taking those taxpayers' dollars, giving them to these
private insurance companies so their profits can absolutely go through
the roof. Instead, I want those dollars to be used wisely. We are
stewards of taxpayer dollars, as my farmers are stewards of their land.
I want to support the farmers. I want to support the conservation
programs. I want to support the feeding programs. I want to help reduce
the Federal deficit. That is why the Brown-Sununu-McCaskill amendment
makes so much sense.
I reserve the remainder of my time.
The PRESIDING OFFICER. Who yields time? The Senator from Georgia is
recognized.
Mr. CHAMBLISS. I yield 10 minutes to the Senator from North Dakota.
The PRESIDING OFFICER. The Senator has only 7\1/2\ minutes left.
Mr. CHAMBLISS. Did that include the additional 3 minutes we got?
The PRESIDING OFFICER. Yes.
Mr. CHAMBLISS. I ask unanimous consent for an additional 5 minutes
for both sides.
The PRESIDING OFFICER. Is there objection? Without objection, it is
so ordered.
The Senator from North Dakota is recognized.
Mr. CONRAD. Madam President, I rise to address the amendment of
Senator Brown, the Senator from Ohio, proposing further cuts to crop
insurance.
First, I wish to acknowledge what a valuable Member Senator Brown is
of the Senate Agriculture Committee. He has made a real contribution to
the work of the committee in bringing this bill to the floor. I respect
him for this amendment. He has offered this amendment because he thinks
we need to beef up other parts of the farm program--nutrition and
conservation--and at the same time he thinks there is more money going
to the crop insurance industry than is warranted.
Let me give an alternative view. The amendment before us would cut
crop insurance by another $1.8 billion, in addition to the substantial
reductions that have already been made in the committee bill. I would
like to caution my colleagues about making even more cuts to crop
insurance. As the bill stands now, we have already taken $3.6 billion
over 5 years, $4.7 billion over 10 years from crop insurance to address
other priorities in the bill. This amendment would increase those cuts
by more than 50 percent. It would go well beyond what the House did,
and it could have a very negative effect on producers' ability to
insure their crops.
Let's look at the reforms already contained in the committee bill.
The committee bill reduces the loss ratio from 1.075 to 1; it reduces
catastrophic insurance and noninsurable--or it has fee increases for
catastrophic insurance and the noninsurable program; it has reduced
reimbursement for area plans; it has a 2-percent reduction for
administrative and operating expenses; and it has total crop revenue
offsets of $3.6 billion. That is not insignificant in terms of savings
out of this program.
When I look at the proposals of this amendment, I am concerned about
the unintended consequences. Specifically, if we act hastily and
unwisely without benefit of hearings in the committees of jurisdiction,
we could lose participation of private insurance companies, smaller
crop insurance companies that rely on reinsurance could exit the
business, and producers would have fewer choices. Rather than having
competing companies delivering a product, we would be begging them to
stick around.
The loss of participating insurance companies is only one part of the
story. Reduced reimbursement for delivery of the program would result
in agents abandoning the program as well. Where and how far will our
producers have to travel to obtain coverage? I don't particularly like
the prospect of farmers and ranchers calling my office telling me their
agent has quit and they can't find someone to explain to them crop
insurance. I think that might be the outcome if we adopt this
amendment.
Proponents have been quoting the GAO's May report as justification
for further reductions. I read the report. I also read a report
completed by the respected accounting firm of Grant Thornton. Frankly,
I am concerned that when GAO made its comparisons of crop insurance
profitability to property and casualty insurers, they were comparing
apples and oranges.
The GAO compared profitability over 5 years, showing crop insurance
at 17.8 percent return compared to 6.4 percent for property and
casualty. Of course, that comparison included the only loss year for
property and casualty and relatively good years for multiperil crop
insurance. Grant Thornton instead looked at a 14-year period. Their
analysis shows something quite different, with crop insurance
profitability at 12.2 percent compared to 17.4 percent for property and
casualty. Further, Grant Thornton notes that crop insurance expenses
have fallen short of administrative and operating reimbursements since
1997. That is quite a different story.
Grant Thornton's report suggests the GAO didn't make fair comparisons
because they chose nonrepresentative years and did not account for
significant differences between property and casualty insurance and
crop insurance. Frankly, there is a dramatic difference between crop
insurance and what is required in order to provide it and other
insurance products. There are more administrative expenses to
administer a crop insurance program than most of us understand. Agents
are constantly being trained and retrained to keep up with the new
Government rules we pass. They need to understand not only government
regulations but company rules, loss adjustment, and maintain production
history records.
In addition, loss adjustments occur on a much greater frequency than
for any property and casualty company. I have actually had perhaps the
misfortune of studying insurance in college. Crop insurance is a
totally different insurance coverage than other insurances that have
been referenced on the floor. It is no wonder Grant Thornton reported
crop insurance expenses have exceeded administrative and operating
reimbursement every year since 1997. I might add, while the GAO
outlined what they believe are vulnerabilities for fraud, waste, and
abuse, this amendment doesn't do anything about those questions. In
fact, because it reduces available resources for administration, I am
inclined to think this proposal may make the fraud and abuse situation
worse.
While I applaud my colleagues for trying to increase resources for
conservation and nutrition, I would point out the bill before us
increased conservation by over $4 billion above the baseline, increased
nutrition by $5 billion above the baseline, and we did it largely by
taking money from crop insurance already. This is a double hit.
We have taken nearly $7.5 billion from the commodity programs. We
have taken $4.2 billion directly from

[[Page S15410]]

commodities, and over $3.6 billion from risk management. Where did the
money go? The money went to nutrition and conservation. They were the
big winners. It is like people have completely forgotten what occurred.
This is a chart that shows the sources and uses of funds. Thirty-four
percent of the money--the new money--provided in this bill came out of
commodities. Thirty-two percent--almost a third--came out of crop
insurance. We have already tapped them. Where did the money go? Forty
percent of it went to conservation, and 47 percent went to nutrition.
Now, when is enough enough? When is there a fair balance?
I wish to emphasize, we have hit the commodity title for $7 billion
already. When does it stop? When is enough enough? When is fair fair?
Sixty-six percent of this bill is going to nutrition. Sixty-six percent
of this bill is going to nutrition. Nine percent of this bill is going
to conservation.
Commodity programs are less than 14 percent. Let's be clear. When we
wrote the last farm bill, it was estimated that three-quarters of 1
percent of Federal spending would go to commodity programs. But that
isn't what happened in the real world. We didn't get three-quarters of
1 percent of Federal spending; we got one-half of 1 percent of Federal
spending in the current farm bill for commodities. You know how much we
are going to get in this farm bill? Not three-quarters of 1 percent,
not one-half of 1 percent, but one-quarter of 1 percent. That is what
is going to go for commodities in this bill.
This amendment says let's take another $1.8 billion and give it to
the parts of the bill that have already been the big beneficiaries, the
part of the bill that already has had the biggest increases--
conservation that got 40 percent of the new money, nutrition that got
47 percent of the new money.
This amendment ought to be defeated. There are questions raised by it
that are legitimate and they ought to be the focus of a hearing. The
House already agreed to do so. The Senate ought to follow suit, but we
ought not to make a rash, hasty decision that can endanger crop
insurance, which is critically important for our producers.
I yield the floor.
The PRESIDING OFFICER (Mr. Whitehouse). Who yields time?
The Senator from Ohio is recognized.
Mr. BROWN. Mr. President, will the Chair let us know how much time
remains on each side?
The PRESIDING OFFICER. The Senator from Ohio has 17\1/2\ minutes, and
the Republican side has 2 minutes.
Mr. BROWN. I thank the Chair.
Will Senator Roberts take his last 2 minutes?
Mr. CHAMBLISS. I am sorry, what is the question?
Mr. BROWN. I have a good bit of time left. You have a couple of
minutes. I want to close, but I want to make some comments first.
Mr. CHAMBLISS. The Senator can talk and we will take our 2, and then
he can close.
Mr. BROWN. I thank the Senator. I think we should wrap this up.
I appreciate the comments of my friend from North Dakota, who has
fought more effectively and passionately for his farmers in North
Dakota than perhaps anybody in the Senate. But this debate is not about
how much money has gone to conservation, to nutrition, or in or out of
direct payments. This amendment is the subsidies, the taxpayer dollars,
that go directly into crop insurance, the huge, bloated subsidies, the
taxpayer dollars, that go to these companies that, by any measurement,
are the most profitable insurance companies in America--Federal crop
insurance, with 17.8 percent profits; and private property and casualty
insurance, with 8.3 percent.
I know crop insurance is different; they have Federal rules. But in
the end, this profit is all about taxpayer subsidy. This is the same
kind of profit that a private property and casualty insurance company
has. It is taxpayer dollars from taxpayers in Providence, RI; Topeka,
KS; Columbus, GA; and Mansfield, OH.
I heard Senator Conrad's discussion of a Grant Thornton analysis over
the last dozen or so years. I don't know who paid for that study. It
doesn't matter. I know who paid for the GAO study, and I know about the
professionalism, even though called into question by my friend from
Kansas, when the audits don't come out the way some people want them
to. I know about their professionalism and what they said about crop
insurance, and I know what they said about overpayments and
profitability.
Most importantly, that study from Grant Thornton looks over a period
of many years. I probably would not have offered this amendment in
1999, 2000, 2001, or 2002. But look at where we are today. Look at the
subsidies we provide to crop insurance from taxpayer dollars. I repeat
that these are taxpayer dollars, the subsidies to these crop insurance
companies: $723, $696, $830 per policy with the subsidy, leading up to
this year, when the policy jumps to a $1,172 subsidy.
All we are saying is to take this huge overpayment from this year and
go back to the already very profitable year in 2006. This is not a
debate about what farmers get. Farmers' premiums don't increase. They
will get the same services. Farmers will still have the same access, in
spite of what some people say, to these crop insurance policies. So it
is a matter of whose side you are on. Are you on the side of the
farmers or the taxpayers and the side of conservation and nutrition? Or
are you on the side of a very small number of crop insurance companies
that are reaping huge profits, getting huge subsidies, getting bloated
numbers of dollars from taxpayers in their pockets? Whose side will you
be on? We should be on the side of the family farmers and taxpayers.
I reserve the remainder of my time, and I will close after Senator
Chambliss uses his last couple of minutes.
The PRESIDING OFFICER. The Senator from Georgia is recognized.
Mr. CHAMBLISS. Mr. President, crop insurance has experienced
tremendous growth and success since the enactment of the 2000 crop
insurance bill, which increased premium subsidies to producers and made
other program improvements. In my State of Georgia, we were not a big
user of crop insurance in years past. In 1994, only 38 percent of
eligible acres were insured; whereby, in 2006, 89 percent of eligible
acres were insured. This is a valuable tool that our farmers now have
available to them, and it saves the taxpayers money by decreasing the
amount of annual emergency disaster programs we have to come and ask
for relative to agriculture.
In the committee-approved farm bill, over $4.7 billion has been taken
out of the crop insurance program to fund other farm bill priorities.
These savings were achieved to answer criticisms of the program, some
of which were raised by Senator Brown, and are directed to improve
operational efficiency. We have tried to manage these funding
reductions in a way that will not unduly harm the program or the
delivery system.
Twenty-one agricultural organizations have sent a letter opposing the
Brown amendment. I ask unanimous consent that that letter be printed in
the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

December 12, 2007.
Hon. Saxby Chambliss,
U.S. Senate,
Washington, DC.
Dear Senator Chambliss: We urge you to vote ``no'' on the
Brown-Sununu-McCaskill amendment that is said to ``reform''
the federal crop insurance program.
The Senate Agriculture Committee has already carefully
considered the crop insurance program and adopted manageable
changes that reduce costs and improve efficiency while
capturing nearly $4 billion in savings to fund other farm
bill priorities.
The public-private partnership responsible for managing and
implementing the program has responded very well over the
years to Congress' desire to have a federal crop insurance
program that reaches out to farmers across the nation,
especially small, beginning and limited-resource farmers, in
a fair, equitable and non-discriminatory manner to provide
effective risk management. There is very tangible evidence
the program is achieving this objective. For example, farmer
risk protection is projected to reach at least $65 billion in
2007, providing protection to more than 80 percent of the
insurable acreage.
With this magnitude of expansion, crop insurance has become
essential not only for individual farmer risk management, but
also, in many cases, to borrow money or rent land. Without a
crop insurance safety net that is fairly and effectively
available, many family farms will not be able to rent land
and obtain credit to produce a crop. Furthermore,

[[Page S15411]]

the crop insurance program helps farmers have the confidence
to more effectively market their crops through the futures
market where they can capture higher prices and increase
their annual income.
We are concerned the changes that would be made to the crop
insurance program by the Brown amendment have not been
thoroughly and effectively analyzed by the Agriculture
Committee and will cause unintended harm to the availability
and delivery of a vital farm security program.
To protect what it has taken Congress more than 25 years to
build, we urge you to vote ``no'' on the Brown amendment.
Sincerely,
American Soybean Association.
American Sugar Alliance.
Corn Producers Association of Texas.
Minnesota Corn Growers Association.
National Association of Wheat Growers.
National Barley Growers Association.
National Cotton Council.
National Farmers Union.
National Sorghum Producers.
National Sunflower Association.
New Mexico Peanut Growers Association.
North Carolina Peanut Growers Association.
Oklahoma Peanut Commission.
Peanut Growers Cooperative Marketing Association.
Southwest Council of Agribusiness.
USA Dry Pea & Lentil Council.
USA Rice Federation.
US Canola Association.
US Rice Producers Association.
Virginia Peanut Growers Association.
Western Peanut Growers.

Mr. CHAMBLISS. Mr. President, these organizations recognize the
importance of a solid crop insurance program, and in the letter they
state:

Without a crop insurance safety net that is fairly and
effectively available, many family farms will not be able to
rent land and obtain credit to produce a crop.

They express concern that changes proposed by Senator Brown will
cause unintended harm to the availability and delivery of this vital
farm security program.
With that, I urge a vote against the Brown amendment.
I yield back our remaining time.
The PRESIDING OFFICER. The Senator from Ohio is recognized.
Mr. BROWN. Mr. President, I will not use all my time. I have a couple
of points. Several of the speakers have said that the committee already
made substantial cuts in crop insurance subsidies from the Government.
That is not quite true. There was a bit of a cut, but the cuts were
much less than the House of Representatives had in their bill. The
House made cuts in the shared risk and the A&O, the administration and
operating expenses. They say the crop insurance companies were already
cut by $3.5 billion. The vast majority of these savings were due to the
sleight of hand, the shifts in time. The CBO cost estimate indicates
that only $700 million were actually cut.
According to the CBO, the supplemental disaster package adds an
additional $2.1 billion to crop insurance. So they took a little here
and added more there. It adds up to a net gain of $1.5 billion to crop
insurance companies. Their lobby is strong and they are doing well.
They have a lot of influence on this body. But the fact is, in the end,
this is about one thing: This chart shows that the majority of crop
insurance spending goes to insurers, not family farmers or large
farmers--not to farmers, period. A majority of this money--the
underwriting gains paid to companies was $840 million. Administrative
subsidies paid to companies was $960 million. Fifty percent of crop
insurance spending goes to crop insurance companies, not to farmers.
About $10.5 billion in the last 7 years has gone to farmers
benefiting from the crop insurance program, but it took $19 billion
from taxpayers to pay them that $10 billion. What kind of program is
that? We get $10 billion in public benefits, but it takes $19 billion
to provide those public benefits. No other Federal program does it that
way. If it were Medicare, we would bring them in here and have hearings
and destroy them if they were spending that much of the services they
are supposed to provide, with that much in administrative costs. Again,
over 50 percent--more than half--of crop insurance spending goes to
insurers, not farmers.
The Brown-Sununu-McCaskill amendment will do what we need to do. It
will say no more bloated, oversubsidized spending, no more taxpayer
dollars of this magnitude will go to the crop insurance companies.
Let's use that money for nutrition, for conservation--and, again, don't
forget, hundreds of millions of dollars from the Brown-Sununu-McCaskill
amendment will go to reduce the national debt. Taxpayers save, family
farmers are better off, and the natural resources in this country--
something Senator Harkin has worked so effectively on for so many
years--will make all of the difference in this. I ask my colleagues to
vote for the Brown-Sununu-McCaskill amendment.
I yield the floor.
Mr. HARKIN. How much time remains?
The PRESIDING OFFICER. There is 10 minutes.
Mr. BROWN. Mr. President, I will yield whatever time I have left to
Senator Harkin.
Mr. HARKIN. Mr. President, I take a back seat to no one in my support
for the crop insurance industry. I was here, as Senator Grassley said,
on the House Agriculture Committee when we set up this system. I was on
the Conservation and Credit Subcommittee. I remember why we did this.
We had a bad system before, with the Government putting these policies
out, relying upon ad hoc disaster payments. Eventually, we went to all
crop insurance delivered through the private sector. I was one of the
initial supporters of that. I fought very hard for the private sector
to get this business, for obvious reasons. No. 1, we had our private
companies out there already insuring houses, cars, and different
things, such as equipment, for farmers. Why should they not also
provide crop insurance? It made logical sense.
I think the years have proven us right. The private crop insurance
industry in America has worked well. It has done an outstanding job. It
has met all of the things we expected them to do when we created this
program in 1982. So I have followed this all these years, and I have
supported this industry and what they have been doing all these years.
I still do. I take a back seat to no one.
I will be frank; when the Senator from Ohio first came up with his
proposal on crop insurance in my discussions with him, I thought this
was too big of a cut. I thought it was a little bit too heavy. I
thought they were too harsh. But I do think that over the weeks, in
working with Senator Brown and in moderating the size of the cuts and
to shape the message about what needs to be done to reform the
financial incentives provided to crop insurance companies, I think he
is on the right path. I think the Senator from Ohio makes valid points
about the problems with the current mechanism for reimbursing private
crop insurance companies for the expenses they incur in delivering the
Federal crop insurance program for farmers.
No one who is knowledgeable about how the program works--and I
believe I am very knowledgeable about it--can deny that the significant
increase in total premiums over the last few years has been driven by
the increase in commodity prices, especially corn, wheat, and soybeans,
which has resulted in an increase in A&O reimbursement per policy. That
surge generated higher revenues for the companies that have not
necessarily had an increase in expenses over the same period.
So we have had a system whereby the reimbursements are tied to
commodity prices. Well, we have seen this huge increase in commodity
prices in the last few years. In fact, I penciled out here that we went
from about $3.5 billion to more than $5 billion in just a few years.
The insurance companies get, as we know, 21 percent of that amount.
That is the reimbursement rate, 21 percent. That is a huge increase.
The Senator from Ohio pointed out on his chart the increases in those
years.
What the Senator is proposing is that we take the average of, I
believe, it is 2004, 2005, and 2006, and we cap it at that level. It
does not apply to the crop-year of 2007, and it would not apply to
2008, if I am not mistaken. I think it starts in 2009. It does not
apply to 2007 or 2008. It does not start until 2009.
I have told some of my friends in this industry that I think this
approach may be better for them in the long run to base it on those
levels rather than to roll the dice. We have seen crop prices go up,
and we have seen them go down. Obviously, I would like to see them stay
up. But that is ignoring history.
I said to my friends in the industry: Look, this is not a bad deal.
We cap the highest levels we have seen, except for

[[Page S15412]]

this year, obviously, for 2007, and that is the reimbursement rate. I
think it might in the long run be better for them.
I don't see this as onerous on crop insurance. Some say there is
going to be this big cut, but that does not apply to 2007 and 2008. By
the time we get to 2009, there may not be any cuts at all, as a matter
of fact, depending upon what happens with prices. In fact, it may be
better. It actually may be better.
In exchange, what we do get is some more money for conservation, for
EQIP. We need more money in the EQIP program, the Grasslands Reserve
Program, the Farmland Protection Program, as well as the McGovern-Dole
Food for Education Program. I think it is a pretty fair tradeoff. If I
thought for 1 minute this was going to devastate, destroy, unduly harm
the crop insurance industry, I could not support it. But I believe it
is a fair and equitable approach and, quite frankly, I think the
methodology is much better in the long term. ``Long term,'' what do I
mean? Five years? Probably 5, 7, 8 years. It may be better for the crop
insurance industry than hooking onto commodity prices.
Quite frankly, thinking back over the years, I find it hard to argue
why it should be connected to commodity prices. What does that have to
do with reimbursement? What does that have to do with policy numbers?
We should have something that will protect our insurance people from
undue happenings and events such as that, and I think that is what this
methodology does. We took the average of those 3 years and capped it at
that. In conference, we can look at putting in an inflation factor.
It seems to me that makes much more sense for the future of the
program. As I said, for that we get more money for the conservation
programs, the McGovern-Dole International School Lunch Program, and it
also lifts the sunset provision on our nutrition program. Right now the
increases we put in the Food Stamp Program with the standard deduction
and minimum benefit sunset in 5 years.
Someone in the Democratic Caucus said recently to me: Why are we sun-
setting in 5 years the programs that go to the poorest people in our
country, yet we don't sunset the programs that go to some of the
wealthiest people in our country? Fair question. So in order to lift
this sunset, we need additional money, and the money we would save
would go to lift the sunset provisions on both the standard deduction
and the minimum benefit.
For those reasons, I support the amendment.
Mr. President, I yield the floor.
Mr. BROWN. Mr. President, I yield back our time on the amendment. I
thank the Senator from Iowa.
Mr. ROBERTS. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. HARKIN. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Brown). Without objection, it is so
ordered.
Mr. HARKIN. Mr. President, I ask unanimous consent that at 3 p.m.
today, the Senate proceed to conclude the debate with respect to the
Klobuchar amendment No. 3810, and that the previous order with respect
to the vote threshold remain in effect; that upon the use or yielding
back of time, the Senate proceed to vote in relation to the Klobuchar
amendment; that upon disposition of that amendment, the Senate then
vote in the relation to the amendments listed below in the order
listed; that there be 2 minutes of debate equally divided and
controlled prior to each vote; that after the first vote, the vote time
be limited to 10 minutes; with no second-degree amendment in order to
any of the amendments covered under this amendment, prior to the vote;
that the amendments covered here be subject to a 60-vote threshold;
that if any of these amendments achieve an affirmative 60 votes, it be
agreed to and the motion to reconsider be laid upon the table; that if
it does not achieve that threshold, it be withdrawn: Coburn amendment
No. 3530; Tester amendment No. 3666; Brown amendment No. 3819, and that
the managers' package of cleared amendments be considered and agreed
to, and the motion to reconsider be laid upon the table.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HARKIN. Mr. President, I guess we are going to be in recess for
an hour, from 2 to 3 p.m. We will come back at 3 p.m. and finish debate
on the Klobuchar amendment. We will have that vote, and at the
conclusion of that time, we will have three other votes. There should
be four votes in sequence at that time.

____________________