To repeal the Volumetric Ethanol Excise Tax Credit.

ECONOMIC DEVELOPMENT REVITALIZATION ACT OF 2011

The ACTING PRESIDENT pro tempore. Under the previous order, the
Senate will resume consideration of S. 782, which the clerk will
report.
The legislative clerk read as follows:

A bill (S. 782) to amend the Public Works and Economic
Development Act of 1965 to reauthorize that Act, and for
other purposes.

Pending:

DeMint amendment No. 394, to repeal the Dodd-Frank Wall
Street Reform and Consumer Protection Act.
Paul amendment No. 414, to implement the President's
request to increase the statutory limit on the public debt.
Cardin amendment No. 407, to require the FHA to equitably
treat home buyers who have repaid in full their FHA-insured
mortgages.
Merkley/Snowe amendment No. 428, to establish clear
regulatory standards for mortgage servicers.
Kohl amendment No. 389, to amend the Sherman Act to make
oil-producing and exporting cartels illegal.
Hutchison amendment No. 423, to delay the implementation of
the health reform law in the United States until there is
final resolution in pending lawsuits.
Portman amendment No. 417, to provide for the inclusion of
independent regulatory agencies in the application of the
Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1501 et seq.).
Portman amendment No. 418, to amend the Unfunded Mandates
Reform Act of 1995 (2 U.S.C. 1501 et seq.) to strengthen the
economic impact analyses for major rules, require agencies to
analyze the effect of major rules on jobs, and require
adoption of the least burdensome regulatory means.
McCain amendment No. 411, to prohibit the use of Federal
funds to construct ethanol blender pumps or ethanol storage
facilities.
McCain amendment No. 412, to repeal the wage rate
requirements commonly known as the Davis-Bacon Act.
Merkley amendment No. 440, to require the Secretary of
Energy to establish an Energy Efficiency Loan Program under
which the Secretary shall make funds available to States to
support financial assistance provided by qualified financing
entities for making qualified energy efficiency or renewable
efficiency improvements.
Coburn modified amendment No. 436, to repeal the volumetric
ethanol excise tax credit.
Brown (MA)/Snowe amendment No. 405, to repeal the
imposition of withholding on certain payments made to vendors
by government entities.
Inhofe amendment No. 430, to reduce amounts authorized to
be appropriated.
Inhofe amendment No. 438, to provide for the establishment
of a committee to assess the effects of certain Federal
regulatory mandates.
Merkley amendment No. 427, to make a technical correction
to the HUBZone designation process.
McCain amendment No. 441 (to Coburn modified amendment No.
436), to prohibit the use of Federal funds to construct
ethanol blender pumps or ethanol storage facilities.
Reid (for Feinstein/Coburn) amendment No. 476, to repeal
the volumetric ethanol excise tax credit.

Amendments Nos. 476 and 411

The ACTING PRESIDENT pro tempore. Under the previous order, there
will be 4 hours of debate equally divided and controlled between the
two leaders or their designees on amendment No. 476, offered by the
Senator from California, Mrs. Feinstein, and amendment No. 411, offered
by the Senator from Arizona, Mr. McCain.
Mr. REID. Mr. President, noting there is no one on the floor, I
suggest the absence of a quorum, and I ask unanimous consent that
during the quorum the time be equally divided.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mrs. FEINSTEIN. Mr. President, I ask unanimous consent the order for
the quorum call be rescinded.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
Mrs. FEINSTEIN. Mr. President, I rise in support of the Ethanol
Subsidy and Tariff Repeal Act, which Senator Coburn and I are offering
as an amendment to pending legislation. The other cosponsors on this
amendment are Senator Webb and Senator Collins. This is identical to a
bill that we have submitted. On that bill there are more cosponsors.
They are Coburn, Cardin, Webb, Corker, Lieberman, Collins, Shaheen,
Burr, Risch, and Toomey.
I want to have the record straight that this amendment is in response
to a bill which we have crafted. On Tuesday the Senate voted on the
proposal but unfortunately we saw a process battle, which I spoke to on
the floor, which I think overwhelmed, in some respects, the debate.
That is not the case today. There are ongoing negotiations to see if it
is possible to put together a solution which can bring all sides
together on this amendment that we will be voting on at 2 o'clock. Thus
far we do not have an agreement. However, at least one of our
cosponsors of this has said to me--this is Senator Webb--that he would
very much appreciate a straight up-or-down vote on Coburn-Feinstein so
we know exactly where the Senate stands. It is still possible, even
after that cloture vote, if we can reach a successful conclusion to the
negotiation that we could have another vote and change that.
Today, this is the first vote that the Senate has taken based on the
merits of repealing the ethanol subsidy and tariff. In a nutshell, let
me give the reasons. I know of no other product in the United States
that has a triple crown of benefits: It is a mandate: oil companies
must buy this ethanol; there is a subsidy: oil companies are paid for
buying this substance; and this substance known as corn ethanol is
protected by a protective tariff which prevents other nations, such as
Brazil, from importing ethanol which actually has more beneficial
environmental effects.
As a matter of fact, corn ethanol is the least environmentally
proficient form of ethanol. Everything else is better than corn;
cellulosic is better, algae is better, and sugar is better. The bottom
line is we have a triple crown of subsidy, mandate, and protective
tariff on the least effective, least environmentally sound ethanol
there is.
More importantly, corn ethanol is now used to such an extent that it
is having a major impact on food commodity prices and in particular on
feed prices. This is particularly true in the poultry industry. I will
get to that in a few minutes.
I do want to thank Senators Klobuchar and Thune for good-faith
efforts to try to reach a compromise. As part of this compromise, at
least from my point of view, a substantial amount of the revenue must
be used to reduce the debt and deficit in addition to eliminating
wasteful ethanol subsidies and tariffs. These negotiations have been
ongoing since Tuesday. We have not yet reached an agreement. The vote
at 2 o'clock will not end these talks. I am perfectly willing to
continue to talk but I do think it is important that we have a clean
up-or-down vote on the Coburn-Feinstein amendment.
The issue at hand is a simple issue. The subsidy given to these oil
companies costs taxpayers billions of dollars every year and the tariff
actually has the effect of making us more dependent on foreign oil. Let
me explain. In 2005, the ethanol subsidy cost taxpayers $1.5 billion.
This year that number is nearly $6 billion. In just 6 years it has gone
from a cost of $1.5 billion to a cost of nearly $6 billion. There is a
reason for it, and I will get to that in a moment, but since 2005, the
total cost of this subsidy has been $22.6 billion.
Here is the increase every year: $1.5 billion in 2005; 2006, $2.6
billion; 2007, $3.3 billion; 2008, $4.4 billion; 2009, $5.2 billion;
2010, $5.7 billion; and the all-time high in these last 2 years of $5.7
billion.
However, it continues to rise. The proposal that has been made for an
extension to 2015, by some, would cost another $31 billion.
Let me be clear. The subsidy is wasteful and duplicative. It does
very little to promote the use of ethanol which oil companies already
must use under current law. The renewable fuels standard dictates oil
companies use 14 billion gallons of biofuels this year, 20.5 billion
gallons by 2015, to 36 billion gallons by 2022.
These volumes, by law, increase every year. It more than doubles by
2022. It is that doubling in volume that will ultimately cost us; we
are currently paying oil companies to follow this law.
Let me speak briefly about the tariff. The 54-cent-per-gallon tariff
on ethanol imports makes our Nation more dependent on foreign oil. The
tariff acts as a trade barrier, placing clean sugarcane ethanol imports
from friendly nations at a competitive disadvantage to

[[Page S3853]]

oil imports from OPEC. This discourages imports of low-carbon ethanol
from our allies and leads to more oil and gasoline imports from OPEC
countries, which enter the United States tariff free. So you have a
high tariff on ethanol imports but a very low tariff on oil. Sugarcane
ethanol, one of the lowest carbon fuels that is widely available,
suffers from this tariff.
This tariff makes no sense and it should be repealed. I believe that
there is very strong consensus in this body on the tariff issue. The
Ethanol Subsidy and Tariff Repeal Act repeals the 45-cent-per-gallon
ethanol blending subsidy known as the volumetric ethanol excise tax
credit on July 1. The 54-cent-per-gallon ethanol tariff is also
repealed beginning on July 1. Two parts of the three-part triple crown
of government support are covered in our bill.
The third part of the triple crown is that refineries are already
required to use ethanol under the Renewable Fuel Standard. The subsidy
pays them to use that mandated ethanol, and ethanol, again, is
protected from competition by a very high import tariff.
I think we need to address this quickly because the effects are
harmful and the costs are great. At highest risk are increased costs
for feed, corn, and other food. Today, 39 percent of the U.S. corn crop
is used to produce ethanol, according to the Congressional Research
Service. Well over a third of the corn crop is used to produce ethanol.
Corn futures reached a record $7.99 a bushel last week, this is an
increase of 140 percent over 12 months.
In this graph you can see the rise, from $2 in 2005 to $3 in 2006,
going up over 2007, 2008 to over $4, beginning to come down slightly in
2009, continues down in 2010, and then in 2010 to 2011, and 2011 to
2012, it has shot up to well over $6. This is devastating, to poultry
farms all over the country. This is devastating to cattle and this is
devastating to food commodity prices. These prices will continue to go
up if we let these subsidies continue. The annual average price of corn
has risen 225 percent since 2006. So from 2005 to today, there has been
a 225-percent increase in corn prices. Does anybody think that is good
for this Nation? Is it good for farmers who depend on corn feed? I
don't think so.

Let me give you some examples. The annual feed cost for Foster Farms
tripled over the past year, increasing costs by more than $200 million.
That is greater than the firm's largest ever annual profit. Zacky
Farms, which is a large farm, has lost $35 million over the last 3
years due to increased corn costs.
I want to read to you for a moment a summary of the impacts on Zacky
Farms. Here is the background. Zacky Farms is a family-owned,
vertically integrated producer of quality turkey products for consumers
in the retail and food service markets. The company is 55 years old but
has roots in supplying poultry products to consumers that reach back
all the way to 1928, representing three generations of commitment to
the business. Zacky currently employs over 1,000 and supplies
approximately 2 percent of the turkey consumed in the United States.
During the past 3-plus years, the growing use of corn for ethanol has
been nothing less than devastating on Zacky Farms. Why? The cost of
turkey feed represent about 60 percent of the final price of turkey
products that consumers buy in stores. Corn is roughly 50 percent of
the turkey feed formulation, making corn one-third of the cost of a
turkey. Soybean meal, usually the second largest ingredient in turkey
feed, competes for the same acreage as corn, and consequently the
pricing of soybean meal often moves in tandem with corn. The government
is sitting on acres and paying farmers not to plant soybeans, thereby
encouraging costs to rise. I didn't know that. We are paying farmers
not to plant soybeans. Recent reports show that since 1990, there are
essentially no new acres available. Ethanol use of corn is therefore
driving up other turkey feed ingredient prices also.
The increasing use of corn in ethanol--now nearly 40 percent of the
Nation's corn supply--has been a major factor in driving the price of
corn from $2 a bushel, to $4 a bushel, to $6 a bushel, and currently
$7.75 a bushel. That is what Zacky is currently paying. This dramatic
increase has all occurred since the fourth quarter of 2006. The turkey
industry has been unable to pass these cost increases along fast enough
to maintain profitability.
We were in the caucus on Tuesday, and we heard one Senator talk about
how a farm has actually collapsed because of these prices in his State,
and a second Senator reiterated his deep concern about what is
happening to the poultry interest in his State. So this is not just
Foster Farms and Zacky Farms, which happen to be in California, it is
all over.
They then go into the impact of corn for ethanol on employees,
suppliers, customers, consumers, and family ownership, and they say
they have suffered significant losses during the past 3 years, and it
has been estimated to be as much as $35 million in losses from 2008,
2009, and 2010, and their banking relationships have been shattered
after 60 years of banking. Bank of America told the company to find
another bank.
In 2008, the company was forced to implement across-the-board salary
freezes and other measures to help control these costs. Turkey prices
have jumped dramatically and will continue to increase--in other words,
the market is becoming such that turkey is going to become an
endangered species, particularly in a down market. And they stopped
promotions, such as the free Thanksgiving turkey with the purchase of a
certain dollar amount. It goes on and on. This is a very serious issue.
Let me give you another one. Paul Cameron is a commercial cattle
feeder from the Imperial Valley. He says:

My company employs 32 hard-working men and women. Many of
these employees are second and third generation to the
livestock business. Our cattle rely primarily on Midwestern
grown corn as their primary source for grain.

This is the conflict here:

This year 41 percent of our Nation's corn crop will be used
up by a heavily subsidized ethanol industry. In a year where
nationally our grain inventories have already been reduced by
adverse weather, corn has risen in price by 140 percent.
Because of this, any chance of profitability in all protein
industries has vanished.
The cattle inventory in our own operation is being reduced
and we have begun the process of laying off many of our
employees. Coming from a county with 27.9 percent
unemployment (April EDD), these good, hard-working people
will be relegated to trying to find jobs where there are
none. These are the very people that take great pride in the
fact that they not only feed a Nation, but also feed the
world.

This is what these subsidies are doing. This is actual testimony read
verbatim.
I have a letters from the American Meat Institute, California
Dairies, National Chicken Council, National Cattlemen's Beef
Association, National Meat Association, National Pork Producers
Council, and the National Turkey Federation essentially saying the same
thing:

Corn-based ethanol has distorted the corn market, and
stretched corn supplies to the point production costs have
increased significantly. Additionally, the current import
tariff on foreign sources of ethanol harms United States
consumers by retarding the development of a robust and
sustainable biofuels market.

That is a direct quote.
Mr. President, I ask unanimous consent to have printed in the Record
this testimony following my remarks.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
(See exhibit 1.)
Mrs. FEINSTEIN. Then there is a very long list in a letter to
Senators Reid and McConnell from a couple dozen agencies, both
agricultural and environmental, and I ask unanimous consent to have
printed in the Record that letter as well.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
(See exhibit 2.)
Mrs. FEINSTEIN. Thank you. Also, from the Western United Dairymen
Association and from the National Cattlemen's Beef Association as well.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
(See exhibit 3.)
Mrs. FEINSTEIN. I do this not because I want to run through it all
but because I think it is evidentiary testimony to what is happening as
a result of what is very bad and egregious public policy. At a time of
debt and deficit,

[[Page S3854]]

where we are looking to find a compromise solution, which is going to
be very difficult. If we reach one, it will have a dramatic impact on
this Nation. To continue a program which has the potential to cost tens
of billions of dollars makes no sense to me at all.
This summer, experts are predicting a mass slaughter of hogs. The
USDA predicts that U.S. corn reserves will sink to their lowest level
since the mid-1990s this summer, and rising food prices are
contributing to global poverty and instability. So we are faced with a
vote today that is very simple. The vote says: End this trifecta of
subsidy, mandate, and protective tariff. It says: Do not wait for it to
expire at the end of the year, but do it as of July 1. If we do it as
of July 1, we will produce approximately $2.7 billion to the Treasury
to ameliorate debt and deficit. I think this is an easy $2.7 billion to
save.
Now, someone might say: Well, what are you doing to all of the
producers of ethanol? Shouldn't we protect them? Well, this has been
going on for a very long time--since 2005. To have an industry develop
that then becomes dependent on this trifecta of subsidy, mandate, and
protective tariff is only going to increase costs in the future. I
understand beginning an industry with some help, giving them a leg up,
giving them a toehold. That toehold becomes a foothold, and then they
go on their own. The ethanol industry instead wants a continuation of
the subsidy that effectively goes to the oil companies--the most
profitable industry in the United States--continue the subsidy,
continue the mandate, and continue to protect ethanol.
You can be sure that if we don't do this now and we wait for it to
end at the end of 2012, there will be a fight to continue it. We are
all talking about saying no. We are all talking about that the time has
come when we have to do business differently. We have a lot of major
problems out there. We have a lot of people who need help. Would I
rather help those people or would I rather help Big Oil do essentially
what they are mandated to do anyway? The choice is easy. The choice is
clear. Would I want to continue a high, protective tariff on the least
environmentally friendly commodity, corn ethanol? It is not even algae.
It is not cellulosic. It is not sugar cane. It is the least
environmentally friendly feedstock used to produce ethanol.
I have opposed this from the beginning because I am not that
prescient, I just knew that once we started this it wasn't going to
end. Once we started it, it was going to be more, more, more. That is
the beat. If we can sell it in the next few hours with the proposal
that meets the strictures of both sides of this great institution--we
are trying to do that, but there are people who strongly believe it
should be ended quickly, and that is what this cloture vote this
afternoon will show. It would be the first consequential vote of the
Senate to say that major subsidies to oil companies, to do what they
are mandated to do, have come to an end. Protective tariffs of the
least environmentally friendly source of ethanol will come to an end,
and they will come to an end in a timely way. This is what the
government should be doing.
I would like to yield the floor at this time. I know this has been
tough. The big surprise to me has been how emotional our caucus on the
Democratic side has been, and I understand the other side's caucus, the
Republican side, was emotional as well. This appears to be much more
major than the legislation itself might signal. I am very hopeful we
will have 60 votes. That would send a very loud message from the
Senate.
Thank you very much.
I yield the floor.

Exhibit 1

Hon. Tom Coburn,
U.S. Senate,
Washington, DC.
Hon. Dianne Feinstein,
U.S. Senate,
Washington, DC.
Dear Senators Coburn and Feinstein, The undersigned
livestock and poultry groups appreciate your leadership with
the introduction of ``The Ethanol Subsidy and Tariff Repeal
Act,'' which would end 30 years of tax credits for
conventional ethanol and end the tariff on imported ethanol
on July 1st.
At a time when animal agriculture is facing pressures on
many fronts, this legislation would ease the economic strain
that is heavily affecting the industries that rely so heavily
on corn to feed livestock and poultry. Corn-based ethanol has
distorted the corn market, and stretched corn supplies to the
point production costs have been increased significantly.
Additionally, the current import tariff on foreign sources of
ethanol harms U.S. consumers by retarding the development of
a robust and sustainable biofuels market.
If enacted, your legislation would save taxpayers nearly
$3.3 billion in 2011. Experts such as the Congressional
Budget Office and the Government Accountability Office have
already concluded that the subsidy is unnecessary and leading
economists agree that ending it would have little impact on
ethanol production, prices, or jobs.
This legislation will help American consumers by ending the
costly and unnecessary protection and subsidization of
converting corn into fuel. We applaud you for your leadership
on the issue and strongly encourage Congress to pass this
legislation promptly.
Sincerely,
American Meat Institute.
California Dairies, Inc.
National Chicken Council.
National Cattlemen's Beef Association.
National Meat Association.
National Pork Producers Council.
National Turkey Federation.
____

My name Paul Cameron and I am a commercial cattle feeder
from the Imperial Valley. My company employs 32 hard working
men and women. Many of these employees are second and third
generation to the livestock business. Our cattle rely
primarily on Midwestern grown corn as their primary source
for grain. This year 41% of our nation's corn crop will be
used up by a heavily subsidized ethanol industry. In a year
where nationally our grain inventories have already been
reduced by adverse weather conditions, corn has risen in
price by 140%. Because of this, any chance of profitability
in all protein industries has vanished.
The cattle inventory in our own operation is being reduced
and we have already begun the process of laying off many of
our employees. Coming from a county with 27.9% unemployment
(April-EDD), these good, hard-working people will be
relegated to trying to find jobs where there are none. These
are the very people that take pride in the fact that they not
only feed a nation, but also feed the world.
Energy independence for our nation is vital, but the
production of abundant, safe, and healthy proteins for the
world's population is every bit as important. As cattle
producers nationwide, who have never asked for a subsidy of
any kind, we only ask that ethanol production stand on its
own and allow true supply and demand dictate the real price
of corn.
____

Exhibit 2

June 13, 2011.
Hon. Harry Reid,
Majority Leader, U.S. Senate, Washington, DC.
Hon. Mitch McConnell,
Minority Leader, U.S. Senate, Washington, DC.
Dear Congressional Leaders: The undersigned diverse group
of business associations, hunger and development
organizations, agricultural groups, environmental groups,
budget hawks, grassroots groups and free marketers urge you
to support the Coburn-Feinstein amendment, No. 436, to the
Economic Development Revitalization Act (S. 782), which would
end 30 years of tax credits for conventional ethanol and end
the tariff on imported ethanol on July 1st.
Conventional ethanol is due to receive some $6 billion in
refundable tax credits this year. Continuing to subsidize oil
companies to blend ethanol--which they are already required
to do by the Renewable Fuels Standard--is wasteful and
unnecessary. This amendment will save U.S. taxpayers several
billion dollars this year and have virtually no impact on
ethanol production, jobs or prices.
Sincerely,
Action Aid USA, American Bakers Association, American
Frozen Food Institute, American Meat Institute, Americans for
Limited Government, Americans for Prosperity, California
Dairies, Inc, Clean Air Task Force, Competitive Enterprise
Institute, Defenders of Wildlife, Environmental Working
Group, Friends of the Earth, Freedom Action, Greenpeace USA,
Grocery Manufacturers Association, International Dairy Foods
Association, Milk Producers Council.
National Black Chamber of Commerce, League of Conservation
Voters, National Chicken Council, National Council of Chain
Restaurants, National Meat Association, National Restaurant
Association, National Turkey Federation, National Wildlife
Federation, Natural Resources Defense Council, Oxfam America,
Sierra Club, Snack Food Association, Southern Alliance for
Clean Energy, Taxpayers for Common Sense, U.S. PIRG, Union of
Concerned Scientists, World Wildlife Federation.

[[Page S3855]]

____
Exhibit 3

Western United Dairymen,

Modesto, CA, December 10, 2010.
Hon. Dianne Feinstein
U.S. Senate,
Washington, DC.

Dear Senator Feinstein: The plan to extend the ethanol
blenders tax credit and tariff in the tax package will add
significantly to the economic distress this country's dairy
farm families have experienced for the past two years. In
addition, if this plan goes forward, these incentives will
have been extended without debate while the country's deficit
and debt situation grows more alarming nearly every day and
responsible people disagree over the environmental benefits
of corn ethanol.
Producers are still reeling from low prices resulting from
the loss of export markets caused by the worldwide financial
crisis in late 2008. Throughout that time, dairy farmers'
production costs have remained very high. The erosion in
equity experienced by dairy farmers in this country over the
past 24 months is of staggering proportions.
Estimates are that the U.S. will use upwards of one-third
of the nation's corn crop to make ethanol this year, and that
was before the EPA recently increased the amount that can be
blended by 50%. The USDA now estimates this year's average
farm price for corn between $4.80 and $5.60/bushel. That is
up nearly 25% from the estimate just two months ago and
compares to the previous record of $4.20/bushel in 2007/08.
The blenders tax credit is also unnecessary. Mandates
requiring the use of renewable fuels will ensure significant
demand for corn ethanol for the foreseeable future.
Please oppose inclusion of corn ethanol incentives in the
tax package. An issue that is this costly, in so many ways,
deserves significant debate prior to a vote.
Very truly yours,
Michael L.H. Marsh, CPA,
Chief Executive Officer.
____

[From the National Cattlemen's Beef Association]

NCBA Supports Legislation to End Ethanol Subsidy, Import Tariff

Washington (May 3, 2011).--National Cattlemen's Beef
Association (NCBA) President Bill Donald said the Ethanol
Subsidy and Tariff Repeal Act, which was introduced today by
U.S. Senators Tom Coburn (R-Okla.) and Dianne Feinstein (D-
Calif.), would end 30 years and more than $30 billion of
taxpayer support for the corn-based ethanol industry and
would finally level the playing field for all commodities
relying on corn as a major input. The legislation would
repeal both the Volumetric Ethanol Excise Tax Credit (VEETC)
and the tariff on imported ethanol by no later than June 30,
2011.
``NCBA supports the development of renewable and
alternative fuels and we know ethanol plays a role in
reducing our dependence on foreign oil. However, we don't
support forcing taxpayers to prop up an industry that should
be able to stand on its own two feet,'' said Donald who is
also a cattleman from Melville, Mont. ``Senators Coburn and
Feinstein should be commended for their leadership on this
issue and for introducing this commonsense legislation that
will not only level the playing field for a bushel of corn
but will also save taxpayers more than $6 billion annually.''
Donald said the VEETC and the ethanol import tariff put
other end-users of corn, including cattlemen and women, at a
severe competitive disadvantage. From December 2007 to
February 2010, the cattle feeding sector of the beef industry
lost a record $7 billion in equity due to high feed costs and
economic factors that have negatively affected beef demand.
Between 2005 and 2008, corn prices quadrupled, reaching a
record high of $8 a bushel and are more than $7 a bushel
today. Donald said this volatility in the marketplace was a
result of ethanol mandates and subsidies artificially pushing
feed costs higher.
``It's no secret that supplies are tight. In fact, the U.S.
Department of Agriculture has predicted ethanol will account
for 40 percent of this year's corn crop. All we are asking is
to compete head-to-head for a bushel of corn. That's what
this legislation will accomplish,'' Donald said. ``The
federal government shouldn't be in the business of picking
winners and losers. We urge all senators to take a stand on
the side of good government and support this legislation.''

The ACTING PRESIDENT pro tempore. The Senator from Indiana.
Mr. COATS. Mr. President, I wish to say to the Senator from
California, many of the points she made are valid. I came back for the
purpose of addressing our overspending and that involves all kinds of
tax expenditures and all kinds of subsidies. It is necessary because of
our current debt and deficit situation. We have to get control of this.
It is the only reason I ran. It is the only reason I am back in the
Senate, with a commitment from the people of Indiana who supported me
that, yes, this is what needs to be done in Washington. So I am not
here to criticize the efforts of Senator Coburn or Senator Feinstein
and others to begin to address these subsidies. That is exactly what we
need to do.
I think the phrase of the Senator from California: ``This is what we
are doing in a timely way,'' goes to the heart and the essence of where
I believe we need to go. We have subsidized, for some valid reasons
early on, the production of ethanol. We did that because we said we are
not independent in terms of our energy production, and our dependence
on oil--particularly Middle Eastern oil. Our dependence is not only
costly to us from the standpoint of OPEC setting the price of oil
worldwide, based on their output, but also from the standpoint that we
have spent a lot of money in blood and treasure to continue this
dependence on oil, by placing troops in the Middle East. Would anybody
think we would pay nearly as much attention to the Middle East as we
are now were it not for the fact the oil supply that comes from there
is absolutely necessary for our economy and the world economy? I think
everyone in this Chamber would say we want less dependence on foreign
sources and more independence. So the production of homegrown energy
out of corn or other products grown in the soil which can be converted
to a form of energy, so we-use less foreign oil and more of our own
resources to drive our trucks and cars and fuel our planes, is a valid
goal.
To get that started--I wasn't here--but Congress passed a set of
subsidies in order to encourage that industry. On the basis of that,
States, private entities, public-private partnerships committed to move
forward with production of ethanol. We are at a point now where there
is essentially agreement that this subsidy has to be phased out, taken
away, and the producers of ethanol agree. Maybe it is a political
reality or for whatever reason.
As I spoke to ethanol producers across my State, I basically said we
cannot continue this subsidy in our current situation of debt. It has
always been designed to become economically feasible, and it would be
related to the price of oil. Well, the price of oil has gone up. This
gives ethanol producers a more level playing field.
The problem many of us from the Midwest have--but I will only speak
for myself--many of us from corn-growing and ethanol-producing States--
and Indiana, by the way, is one of the leading States in the Nation,
producing a significant percentage of ethanol--is that this amendment
basically says it is over now. A bipartisan group has come together
around a transition proposal Senator Thune has put forward. I am all
for a straight up-or-down vote on the best way to eliminate this
subsidy and to phase it out completely. I can't imagine anybody here
would think, as we address Tax Code expenditures, that there wouldn't
be a transition process in place for eliminating that expenditure for
an industry or for an individual in the United States.
I joined Senator Wyden, a Democrat, in a bipartisan effort for
comprehensive tax reform. Our proposal basically eliminates most of the
special provisions in the tax code, totaling almost $1 trillion. We
take away these specialized tax provisions in a way to reduce rates and
make our companies more competitive, lower individual rates and
simplify the Tax Code. But, we know that in doing so, there has to be a
transition period. We cannot just yank away from the private sector or
the public-private sector an economic basis on which they went forward
and committed to that particular entity and product. So all we are
asking for is a transition process.
I know there is talk about giving Members a vote next week on this
proposal and so forth. I don't blame Senator Coburn and Senator
Feinstein one bit for using a procedural rule--actually, Senator
Feinstein did not do that and did not support that and I think deserves
a second vote. I don't fault Senator Coburn for using procedural
methods which were maybe not necessarily something of precedent, but it
is possible under our procedures to do what was done in order to get
his vote on the floor. He has been asking for that vote for weeks, if
not months. It is an issue we ought to be debating. But there ought to
be a debate--an honest debate--between essentially the two sides of
this issue, both of which agree the subsidy ought to be removed; one of
which says we remove it today on this vote, the other says we remove it
over a period of time--3 years or so. We take the money immediately
saved and donate it to reducing the deficit,

[[Page S3856]]

but we take some of the money in order to transition away from the
subsidy, which is what Senator Thune is trying to do without getting
into all the details, which I don't need to do.
What I am here to do is to plead for an opportunity to debate both
sides of this; to have a vote on the Coburn amendment and a vote on the
Thune legislation, winner take all--that is the way it works here--and
let the chips fall where they may. But at least we will have had an
honest debate about two alternatives to try to reach the same goal. One
takes a longer period of time than the other. The Senate will vote and
the yeas will be yeas and the nays will be nays and the yeas will
prevail and we will move forward on that basis. All we have now is a
promise that maybe we will give the Senate an opportunity to bring
something up next week so we can vote on the phaseout program.
Some Members will say: Hey, this is great. I can vote for both, and
then I can go home and say, yes, we need to eliminate the subsidy and
that is why I voted for Senator Coburn's amendment. Then I can also say
the following week I voted for Senator Thune. One of these should work.
We have it both ways.
We should make a distinction between which way we want to go and what
we want to do. I happen to choose, for I think valid reasons, that we
ought to transition out of this because of the enormous financial
commitment made on the part of ethanol producers in my State, and the
enormous benefit that has come to our agriculture sector which has
grown a lot of corn and paid a lot of taxes, helping our economy grow.
But to just yank it away from them right away because we say this has
to be done right now without any transition, I don't think it is fair
to all those who have made that commitment.
Does ethanol need to be economically viable to compete with other
forms of energy? Yes. Did it need--and I wasn't here, again, but this
body of Congress, including the administration, said it needed a head
start so we could reduce our dependence on foreign oil, and they gave
them that in the form of these subsidies and in the form of a tariff
and in the form of some credits. Financially, have we come to the point
where we now need to look at this, as well as hundreds of other
subsidies and tax expenditures that we simply can no longer afford? The
answer is, yes, we have come to that point. But is the best way to do
this, particularly in this instance, where there is more than just an
interest for one or two companies, which we find in so much of the Tax
Code. There is a national security interest in this as well. Our
military says our continued dependence on foreign sources of oil is a
national security issue affecting our troops, affecting our
expenditures, affecting our deployments, where these people need to go
to keep the ceilings open, to keep the oil flowing, and so forth?
So there is a national basis on which we need to have competing forms
of energy that can lessen our dependence, and ethanol is one of those.
Does it need to be economically viable? Absolutely. How do we get
there? We can get there by pulling the rug out from them now, shutting
it down, and seeing a precipitous drop in ethanol production because it
is no longer economically viable or, as Senator Thune has tried to do
and a coalition of us who support that, we can put in place a sensible
way to reduce this subsidy to zero, to bring ethanol to a point of
economic viability on its own and immediately send a significant
amount--$1 billion--to reduce the deficit. So this could be a
transition to allow ethanol to be an economically viable part of our
ability to provide transportation energy without having to call up the
Middle East and say: Keep sending it and, by the way, we will send our
troops, we will send our money, we will send our treasure because we
absolutely have to have this to drive our economy.
I think there is compelling reason to allow the Thune amendment to be
heard on the floor, to give Members an opportunity to debate and make
their case on each side, take a vote, and we will let the chips fall
where they may. But we will at least have had the courage to stand up
and honestly say: This is where I come down, this is what I stand for,
and then the voters can decide whether they like that. But I think it
makes sense from an economic standpoint and from an energy independence
standpoint. Also, it is common sense that anybody who has been
encouraged by this body to invest in this product to reduce our
dependence on oil, to at least give them a chance to phase this thing
down so they don't necessarily put a padlock on the refining plants and
basically put them out of business. That doesn't achieve the goal--the
very reason this body put these enhancements and subsidies in place in
the first place.
Conclusion: We need to phase out the subsidy. There are other
subsidies and other expenditures out there we can eliminate now without
having this kind of adverse economic effect and without having a
negative effect on our national security, but this is not one of them.
I urge my colleagues and I urge the leadership to allow the pleas of
Senator Thune and others of us to be heard so we have an honest debate,
an honest choice, and then we accept the results.
With that, I yield the floor, and I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. Brown of Ohio). The clerk will call the
roll.
The assistant legislative clerk proceeded to call the roll.
Mrs. FEINSTEIN. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mrs. FEINSTEIN. Mr. President, I ask that I could briefly respond to
the Senator's comments. Senator Coats and I work together on
Intelligence. I have great respect for him. I understand the regional
issues involved, so I understand the Senator's thinking. My thinking
is, we get a strong vote on this today. This is simply a cloture vote.
We have 60 votes. We have some time to see if we can work something
out.
One thing I have learned in this whole line of pursuit is, if you
give your word, keep it. The only thing you have is your integrity, and
I give you my word that we will continue to try to bring both sides
together.
I know this is a long journey. I know we will be blue-slipped and we
have to come back and we will have to have a bill we can put a tax
matter on. That is for a later day. I think we are into this, and so
many people want kind of a clean vote, that if we have that, I am
prepared to give you my word to continue to try to discuss this.
My own view on these things is to do the very best we can, try to
reach a compromise when issues are like this, and march on to the next
thing. This has become far harder than I anticipated. I think we are
relatively close to a solution, to a compromise. Whether Senator Coburn
will accept it, I do not know. But I know these discussions are going
on, and all I can do is pledge you my best effort to try to get to
something that satisfies everybody.
If you come from a large ethanol-producing State, I understand what
this means. On the other hand, I also understand this is going to be
the first of many coming down the line. We have to change the way we do
business if we are going to carry out the mandate of a prudent
government, we have to make a lot of changes. None of it is going to be
easy, so we might as well get used to it now. But for whatever it is
worth, you have my word I will continue to try.
Mr. COATS. Well, Mr. President, if the Senator would yield.
The PRESIDING OFFICER. The Senator from Indiana.
Mr. COATS. I accept that fully. Having had the opportunity to work
with Senator Feinstein on the Intelligence Committee, I do not hesitate
for a second to accept her word and know she will keep it. It has been
a pleasure to work with her on that committee. We spend many hours
behind closed doors discussing issues of great importance to this
country, and she has provided great leadership in that effort.
I will look forward to working with the Senator from California,
accept fully her offer. Hopefully, we can find a good solution to this
issue. I could not agree with Senator Feinstein more that this is the
first of many things, tough decisions we are going to have to make. If
we are not flexible in making these decisions at this time of clear
fiscal distress, we are going to be judged very harshly by the markets
and by

[[Page S3857]]

our constituents. They know we are spending too much. They know we need
to make decisions, some of which will be painful. We are trying to do
this in a way that does not become Draconian, and I appreciate the
words of the Senator from California in terms of the willingness to sit
down together and work this through.
As the Senator said, this will be the first of many difficult days
ahead. But what is encouraging and ought to be encouraging to the
American people is, there is a bipartisan commitment--first of all, a
bipartisan understanding of the plight we are in--I wish we were not
here, but we are--and a bipartisan understanding, a growing bipartisan
understanding, that working together is the only solution to this.
Because if it becomes stalemate, we are doing a great disservice to the
future prosperity of the country and its impact on future generations,
including our current generation and the many people who are out of
work who need an economic recovery to take place sooner rather than
later.
I thank the Senator for her comments and look forward to working with
her, along with others, in this, the first of probably many difficult
but important and necessary discussions.
Mrs. FEINSTEIN. I thank the Senator.
Mr. COATS. Mr. President, I yield the floor and suggest the absence
of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. CARDIN. 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. CARDIN. Mr. President, I rise in support of the Feinstein
amendment that would eliminate at long last the subsidies for ethanol,
corn-based ethanol in America. In a little while, we are going to have
a chance to vote, and I would ask my colleagues to support the
Feinstein amendment.
I thank the leader for making time on the calendar so we can vote on
this issue, and I hope a majority will support this amendment. I know
we have a 60-vote threshold, and I hope we would be able to express, at
long last, that it is time to eliminate this subsidy.
This is an issue that has brought together an unusual and broad-based
support among those who are seeking to eliminate this subsidy. We have
taxpayer advocates who understand this is a subsidy that taxpayers
should not be underwriting. We have hunger and development
organizations which recognize the impact on ethanol on the corn crop is
affecting the affordability of food not only here, but it is having a
major impact around our entire country.
We have agricultural groups, including the Maryland poultry growers
and integrators, who support the repeal of the subsidy for ethanol.
That is because the poultry industry understands the impact the ethanol
subsidies are having on the poultry industry. I will talk a little bit
more about that.
We have free market groups that say: Look, let the market work. There
is no need for us to interfere with the free market. We have religious
organizations. We have environmental groups--and I will talk a little
bit more about that--that although the ethanol subsidy was originally
put on, we thought, for a positive environmental impact, it is having
the reverse impact. Because of the amount of energy that is necessary
to produce ethanol, all the good we thought was being done has been
lost.
Then we have those who are budget hawks who are saying: Look, we are
being asked to do a lot to bring the budget into balance. There are a
lot of hard decisions. Why don't we at least eliminate these
unnecessary subsidies in an attempt to bring our budget more into
balance?
The wide range of interest groups supporting this issue has fostered
wide bipartisan support for repealing this credit for ethanol. So we
have an opportunity to bring together a lot of different groups, to
work across party lines, to start the process, to bring our
agricultural programs into better balance, to have a better energy
policy, to help create jobs, and also to deal with our budget deficit.
According to the GAO, this credit ``is a wasteful and duplicative''
federally funded support program for an industry that already enjoys a
mandated market share under the renewable fuels standard.
Since 2006, the renewable fuels standard has required oil companies
to blend increasing amounts of ethanol into our gasoline. So when we
repeal this credit, when we repeal the break the ethanol industry
receives, it will not impact on the market from the point of view of
the amount of ethanol that will be available.
Especially during times of fiscal constraint, it simply does not make
sense to continue giving billions of dollars to a robust and thriving
industry from which American consumers see little benefit.
We have a huge budget deficit. The Presiding Officer understands
that. I understand that. The people of Ohio, the people of Maryland
understand that. We need to look at ways we can bring the budget
deficit down. Repealing unnecessary subsidies should clearly be at the
top of our list.
With more than 40 percent of America's corn crop going into fuel, the
increased demand has made feed extraordinarily expensive.
Let me share with you what I have heard from my poultry farmers on
the Eastern Shore of Maryland. The poultry industry is an important
part of the economic fiber of the Eastern Shore of Maryland. The
poultry industry translates into jobs for people who live on the
Eastern Shore of Maryland. It is extremely important. Yet the single
largest cost factor for the poultry industry is the corn feed that goes
into producing the poultry--feeding the chickens.
With such a high cost factor, the arbitrary demand factor for corn as
a result of ethanol has raised the cost of producing poultry in my
State, costing us jobs. The elimination of this subsidy will help us
maintain and expand jobs in the State of Maryland and around the
region.
While corn-based ethanol may be a homegrown fuel, it is an extremely
energy and water resource-intensive process to produce. So where we
thought we were producing an energy source that would be favorable to
our Nation, it takes so much energy to produce the ethanol that at the
end of the day, we have used imported energy to produce our own
homegrown energy source, and we do not benefit from the point of view
of having energy independence in America.
The energy savings are minimal when you take into consideration how
much energy it takes to produce ethanol, not to mention that ethanol
burns less efficiently in our engines than regular fuel, and the higher
the concentration, the fewer the miles per gallon the driver gets. The
result is, we use more energy, when we were trying to save energy. It
does not make sense over the long term.
A tax break for ethanol is a gift to the oil companies and the grain
producers--a gift that actually harms American consumers and our
environment.
Corn is a staple food commodity that is found in millions of American
products from food additives to livestock feed. More than one-third of
our Nation's corn is now going into the production of ethanol.
So this is causing a problem in our food stock--the amount of corn
that goes into ethanol in America. It is time we eliminate this
arbitrary subsidy that is causing a disruption, making it more
difficult for people to afford their basic products.
The increased demand for corn is raising the price of everything from
eggs to milk to soft drinks to chicken to breakfast cereals, and it is
the American consumer who is being hit the hardest with these higher
food prices.
Using corn to make ethanol also harms our environment. Once corn is
harvested, it is a costly and energy-intensive process to turn it into
ethanol fuel fit for commercial sale. We need to develop sustainable,
renewable biofuels--those that are not derived from a food-based
commodity such as corn--to make our Nation less dependent on foreign
energy sources.
I support developing the next generation of algae or cellulosic
biofuels. I do not support providing billions of dollars for a fuel
product that is driving up the cost of food, harming our environment,
and doing little to reduce our

[[Page S3858]]

consumption of foreign oil. It is time we stop subsidizing Big Oil to
produce a fuel they will produce with or without an additional $6
billion a year of subsidy.
I hope my colleagues also support the Feinstein amendment that would
eliminate this subsidy so we can eliminate this unnecessary subsidy,
help make food more affordable for the people of our Nation, and help
us develop an energy policy that does make sense for America, that will
help our security and help our economy.
For all of those reasons, I will support the Feinstein amendment. I
urge my colleagues to do so.
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. CORKER. 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. CORKER. Mr. President, I rise to speak today on behalf of a
Coburn-Feinstein amendment that we will be voting on later. It is rare
that people in this country who are receiving a tax credit tell us, as
servants of the United States, that they do not want the tax credit
they are receiving.
I think most people in this room are aware that we are spending about
$6 billion a year on something called a blenders tax credit. My
understanding is that the blenders who receive this tax credit have
shared with us that this is a waste of money, and they would like for
this to end.
So we have an amendment today--and it is at an especially fortunate
time for us, at a time when we are having tremendous fiscal issues in
this country--we have an amendment before us today to do away with this
tax credit, which seems to me to be only something of common sense.
I think most people in America know that years ago in Congress we
passed a mandate that requires a certain amount of ethanol to be used.
So this mandate is already in place. This mandate forces the use of a
certain number of gallons of ethanol in this country. But on top of
that, our country is now paying 45 cents for every gallon that is
blended. Those people who receive this have told us this is
unnecessary, that it is a waste of taxpayer money and they do not want
it.
So the Coburn-Feinstein amendment does away with it. It also does
away with a tariff--importers that import ethanol into our country now
pay a tariff--which actually raises the price of ethanol. It actually
raises what people are now paying at the pump because they have to pay
a tariff to import this into our country. It does away with that
tariff.
So this is a very commonsense amendment. I certainly thank Senator
Coburn and Senator Feinstein for offering this amendment at a time when
our country is in such financial straits. It is rare that we have
something like this, again, where those people who actually receive
this credit would like to do away with it.
I know it has been argued that at the end of this last year we all
voted for certain tax issues. That is an interesting argument--except
what happens at the end of the year is, we do these en masse. There are
minor provisions within this package that we have no opportunity to
take out. So here this massive group of tax credits comes to us, and we
have to vote up or down on a package of them. That is huge and has all
kinds of tax provisions in it.
So there are some people in this body who have said: Well, but we
just voted this in place. Well, we voted a package in place, but many
of us for years have argued that this tax credit is redundant. We have
argued that it is a waste of taxpayer money. We have argued that with
the mandates in place there is absolutely no need for this, and the
tariff that goes along with this, where we pay for imported ethanol. We
pay more because of this tariff. It is absolutely a burden to American
consumers and certainly, again, to taxpayers.
I thank the Senators for offering this amendment. I look forward to
supporting it. This is one of those amendments--sometimes we vote on
things down here that, candidly, are rather mundane. This is one of
those amendments that I not only support, I support with tremendous
enthusiasm and energy. I urge all of my colleagues in the Senate to
support this very commonsense amendment that does something that is
responsible for consumers; that does something that is responsible for
taxpayers; and, obviously, will make our country stronger if it passes.
I have a sense it may.
I urge those on the Senate floor to please consider it if they are
now middle ground and have not made a decision.
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. COBURN. 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. COBURN. Mr. President, I have spoken on this earlier in the week.
I will not spend a great deal of time today. Thanks to the majority
leader, we will have two votes this afternoon on items that I think are
representative of critical problems in our country.
The first is a vote on an amendment by Senator Feinstein and myself
that eliminates payment to the largest refining and oil companies in
this country to blend ethanol, which they have honestly admitted--and
they sent us a letter saying it--they don't want.
The second is on whether we will subsidize, with Federal tax dollars,
additional pumps to use ethanol.
The reason the votes are important is because the way we get out of
trouble as a nation is a couple of billion dollars at a time. We have a
Federal mandate that says X amount of fuel has to be blended with
ethanol every year. That will rise to 22 billion gallons in 2015. So
there is no reason for us to pay somebody to blend it when they already
have to, and we have seen the shift in the industry from small entities
to the very large. When this program started, it was about less than a
billion dollars in cost. It will now be, on an annualized basis, around
$6 billion. While we are running a $1.6 trillion deficit, we need every
penny we can get. So I am thankful this has been brought up. But it
begs the larger question--actually there are two. One, can we trust
markets--real markets--to work more effectively than Washington
mandating and dictating policies?
Throughout our history--if you look at it in total--no government can
ever do any allocation of scarce resources as well as the market can.
The markets are not perfect. There is no question, they make mistakes
and cause occasional shortages. But overall, in the long run, markets
work much better than a bureaucratic Soviet-style mandate of what we
will do and what price we will pay for it.
The second question it begs is, what is our country's energy policy?
We send a quarter of a trillion dollars a year outside this country for
oil and gas, liquids and natural gas. That is a quarter of a trillion
dollars that we could invest here and pay for our own resources.
We are the only nation in the world where our resources are owned by
the citizens and our own government limits our ability to utilize it.
The CRS just finished a study that shows that the oil and gas
reserves in the United States are greater than that of Saudi Arabia,
China, and Canada combined. So the question is, why aren't we using
ours, rather than sending money overseas and undermining our own
economy and not creating jobs?
The projections are that if we would truly utilize our resources, we
could create close to 190,000 jobs a year in the exploration and energy
business--without subsidies, without tax credits; that is what would be
the result. With oil near $100 a barrel, and we continue to send the
money out of the country instead of going after our own resources,
which are plentiful, we have to ask the question, what are we doing?
The final point I will make is, when you buy ethanol-blended gasoline
and you look at the price and you see, here is regular that has no
ethanol in it, and here is ethanol-blended gasoline that is about 20 or
25 cents cheaper, it is important that the American people understand
that you need to add $1.72 to that to get the real price you are paying
for that blended gasoline, because that is what your government has put
into the pipeline in the way of loans,

[[Page S3859]]

grants, subsidies, blenders credits, and taxes on imported ethanol. So
even though it looks cheaper, it is not. It is about $1.40 more, when
you look at all the costs taken from you as a taxpayer and put into the
pipeline and given to the special interests, in terms of what we will
have, and where we will have it, and when we will have it.
I support ethanol alternative fuel, especially now that it has 7\1/2\
percent of our market. But the best way for ethanol to survive is for
it to stand on its own two feet, without subsidies, without us spending
dollars we don't have to get something that we are going to get anyway.
I am extremely pleased with my discussions with Senator Reid. I am
thankful to Senator Cardin, as well as Senator Feinstein. She has been
working on this for a long time. She opposed this when it started. She
recognizes that what we have actually done is not help ourselves that
much. We have markedly increased the cost of food. We can say 40
percent of the corn crop this last year went for ethanol, and corn is
at historic highs. When you look at a poultry producer or beef producer
or pork producer or lamb producer or turkey producer or milk producer
or egg producer, their largest cost has doubled because of this policy.
Quite frankly, America is lucky because the worldwide demand for
grains--given our wonderful farm community and their ability to
produce--is extremely high and our farmers are extremely efficient. So
this policy will not affect farm prices significantly right now. But,
hopefully, in the future it will bring them down to a more moderate
level.
Two-and-a-half years ago, corn was at $3 a bushel and most corn
farmers made money. It is now above $7, even though their input costs
have risen somewhat with the increase of oil prices. The farms in our
country that raise grains have never been in better shape--if they can
get a crop in. I know we have areas in the country where that hasn't
happened.
So I think overall we are starting to address some of the misdirected
capital formation in this country by backing off on government picking
of winners and losers, and I am thankful for the opportunity to speak
on that.
I yield the floor, as I see the Senator from Iowa is here.
The PRESIDING OFFICER (Mrs. Hagan). The Senator from Iowa.
Mr. HARKIN. Madam President, I ask unanimous consent that upon the
completion of my remarks, the Senator from Ohio, Mr. Brown, be
recognized for his statement.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. HARKIN. Madam President, I strongly oppose both the amendment
offered by Senators Feinstein and Coburn and the one offered by Senator
McCain that we will be voting on in a couple of hours.
My message today is very simple: This assault on America's ethanol
industry is both misguided and undeserved. This is truly a homegrown
industry built on the investment and labor of many thousands of
Americans providing a product that helps us with one of our most
pressing national issues--our dependency on imported oil. Yet here we
are debating amendments that I think clearly tell the industry: You
aren't important, you don't matter, and you don't have the support of
the American people. I think that is not only the wrong message but a
misguided message to be sending, and I will tell you why.
We have been struggling with our dependency on oil for almost 40
years. One of our strategies over that period of time has been to
develop and commercialize biofuels. I am proud to have been involved
from the beginning and I continue to this day to be a strong advocate
for renewable biofuels produced from domestic feedstocks. We started
working on this, as I said, over 30 years ago. It has been a long
campaign, but it has been a remarkably successful campaign when you
think about it. It took about 20 years for ethanol to get to the point
of contributing just a few percent to our gasoline supply. In the past
10 years, biofuels, and particularly ethanol have gotten to the point
where they now displace about 10 percent of our gasoline supply. Think
about that: 10 percent of our gasoline supply, used basically for
transportation, is displaced by biofuels. I think that is a remarkable
achievement. No other alternative supply comes close.
In fact, no alternative supply provides even 1 percent of our
domestic fuel demand. Let me repeat that: No other alternative to
ethanol comes even close to displacing 1 percent of imported oil. Yet
ethanol is displacing 10 percent today. Again, a remarkable
achievement.
Our oil dependency problem is still with us. We still depend on it
from many nations that are unstable or unfriendly to us, and it is
getting worse. Oil imports are costing us on average, over the last few
years, about $100 per barrel.
I know many of my colleagues share my strong concern about oil
imports and the need to find alternatives, and that is why we passed
new CAFE standards in the Energy Independence and Security Act of 2007.
That is why we adopted a mandate for renewable biofuels in that same
bill--a mandate for their use. Going back further, that is why we began
providing tax incentives for biofuels production already in the 1970s.
That is why we promoted alternative fuels in the 1991 Energy bill. That
is why many of us today are promoting hybrid and electric vehicles. And
that is why we need to continue to support the production of ethanol
and other domestic biofuels.
Just as increasing efficiency standards have been a big success in
reducing demand, promoting biofuels has been, by far, our biggest
success on the supply side. They have gone from a few percent at the
turn of the century to about, as I said, 10 percent today. Moreover,
looking ahead, the most likely supply-side alternative to displace the
next 10 percent of our gasoline demand is biofuels. Again, we
recognized this fact in 2007 when we adopted the renewable fuels
standard 2 RFS2--that requires 36 billion gallons of biofuels by 2022--
36 billion gallons of biofuels by 2022.
Now, again, we should pay attention to the options. Let's promote
alternatives, such as electric vehicles. I am all for that. But we
should also make sure, since we are going to be using liquid fuels for
most of our transportation fleet in the next 10, 20 years and beyond
that we look at the biofuels. It is renewable--renewable and clean. Our
biofuels challenge isn't production or even economics; our challenge is
adapting our transportation markets, our fuel markets, to be able to
utilize the biofuels.
Again, as I said, most of our biofuels are in the form of ethanol.
That will continue to be our principal biofuel for many years to come.
However, today we can only displace 10 percent of our gasoline in the
form of a 10-percent blend of ethanol. It is called E10. You can go to
your gas stations--and my friend from Oklahoma was referring to the
ethanol blends, which is what we have today--and those are limited.
Most of it is E10. Again, we need to be able to use higher blends--15
percent, 20 percent, even as high as 85 percent of ethanol.
In fact, in my State, and in our neighboring State to the north,
Minnesota, we are beginning to see pumps called E85--85 percent of the
fuel that comes out of it is ethanol, and only 15 percent is gasoline.
Quite frankly, the flexible-fuel cars run just fine on that 85 percent
blend. The problem is we need more blender pumps at our filling
stations. We don't have them, but we need them. We have them in a few
States, but very few States have blender pumps. So we need to pass a
bill like S. 187, the Biofuels Market Expansion Act, which I introduced
in January.
I remember a few years ago that Senator Lugar and I had a meeting in
the Ag Committee room. We had the major oil companies come in to ask
them why they didn't put more blender pumps in their fuel stations.
Their answer was very clear and very logical.
They said: Well, why would we take up valuable space in our filling
stations for a blender pump when there are almost no flexible-fuel cars
out there that could use it? Point well taken.
So after that we called in the automobile companies. I know we had
Chrysler, Ford, GM, Honda, I believe there was, and we asked them: Why
don't you make more flexible-fuel cars? The response, from their
viewpoint, was very logical: Why should we build more flexible-fuel
cars when there aren't any blender pumps out there? Point well taken.
So here we have the chicken and the egg dilemma. The oil companies
say

[[Page S3860]]

they don't want to put in blender pumps with no flex-fuel cars out
there, and the automobile manufacturers say they don't want to build
flex-fuel cars because there are no blender pumps.
I might point out that in Brazil almost every car built by Ford, by
GM, by Honda, or Toyota--those built in Brazil--are basically built for
flexible fuel. They will burn anything from 10 to 20 to 50 to 85
percent--actually, in Brazil, up to 100 percent--of ethanol. That is
the direction we need to go here.
With these two amendments today, we find ourselves going in exactly
the wrong direction. The Feinstein-Coburn amendment tells the ethanol
industry that it no longer has the support of Congress. The McCain
amendment would block one of the most critical things we need to do;
that is, the installation of flexible-fuel pumps.
I have said many times that we can reform our biofuels policy. I am
more than willing to give up the ethanol tax credit. I have said that
before on the Senate floor. We can give up the ethanol tax credit if
the ethanol industry has access to the market. But when we take the two
amendments together, one pulls the rug out from underneath the ethanol
industry in terms of its tax credits--and I am saying: OK, fine. That
is fine. We can do that, if we have access. Then the McCain amendment
comes along and says: No, no, you can't use any of the funds we have
put in the last Ag bill--which had tremendous bipartisan support, I
might add--for blender pumps at fuel stations.
So here we have it. Tell the ethanol industry it can't get the tax
credits, and guess what. We are going to keep them from getting access
to the marketplace. That is what we need--market access for ethanol.
You can go to Exxon and Mobile and Shell and all those gas stations. Do
you think they want to put in an ethanol pump? They are OK with 10
percent--they will do the 10 percent now--but we need them to put in
those blender pumps, and the automobile companies need to produce cars
that are flexible fueled. They do a few of them now, but every car
built ought to be flexible fuel so people can choose.
As I have said, ethanol can stand on its own two feet now, if people
have the right and the freedom and the ability to use it. But if we are
up against monopolistic kinds of filling stations that won't permit a
blender pump to be put in, then ethanol has no marketplace.
We also need to build a dedicated pipeline for ethanol. The oil
companies and the gas companies have their own pipelines. They would
not put any ethanol through those pipelines. They say it is due to
water and all that, but let's face it. They won't put any ethanol
through their pipelines. The private sector can build--not the
government but the private sector--and is willing and ready to build a
dedicated pipeline from the Midwest to the east coast. A couple of
companies have already secured most of the rights-of-way and are ready
to go. All they need is one simple thing: a loan guarantee. They do not
need money, just a simple loan guarantee so they know they can build
the pipeline and that the ethanol industry can use it and get the fuel
to the east coast, where the majority of our population is right now
and where we don't have enough ethanol in our major population centers.
So, again, we need to redouble our national commitment to expanding
the use of renewable energy and weaning ourselves off of imported oil.
But we are not going to do it with these two amendments today. The
ethanol industry just wants the marketplace to be able to accept it,
and they will stand on their own two feet. They can do that. That is
more important than the tax subsidies.
I might also add, I remember debating this issue with the then-
Senator from Texas, Mr. Gramm. We had a lot of debates on the Senate
floor back in the 1980s or 1990s, I guess, on this issue.
I pointed out at that time that if you talk about the tax credits and
support from the government the ethanol industry has gotten, it pales
in comparison to the dozens of years of tax writeoffs and benefits we
have given the oil companies in America going clear back to about 1920.
If you think about all the tax benefits we have given the oil
companies in America to drill, to produce, to ship, to pipe, to refine,
to market, and add it all up, ethanol is just a small part of that. But
the oil companies have never given up. They have never given up on
their assault on ethanol and on biofuels.
The Coburn amendment is precipitous. At the end of the year, the
ethanol tax credits are going to expire. Hopefully, before the end of
the year, we will reach some agreement, work out something where we
have more access to the marketplace, and then we can do away with the
tax credits. But we should not take an action that would slash the
value of the ethanol industry's primary product by nearly 20 percent
overnight.
Think about it this way. We have a 1-year extension of the ethanol
tax credits that goes to the end of this year. We did that. The
Congress did that. We said that to the industry. Investors have come
in, modifications in plants have been made, plants have been built. Yet
in the middle of the year we are going to say no? We are going to take
it away?
To all my friends over there who keep talking about the private
sector and how we need the private sector and don't need the
government, you are going to pull the rug out from underneath the
private sector on a guarantee that we gave them earlier this year. No
industry could survive a shock such as that, and it is wrong. It is
wrong to do that at this point in time.
We all know one thing. This afternoon, people can come down and vote
against ethanol, vote against the tax credits for the ethanol industry,
vote to cut off marketplace access to ethanol, but nothing is going to
happen. The House will blue-slip it, and then we will be on to doing
what needs to be done in a logical way; that is, to reduce the tax
credits for ethanol, which I am in favor of doing. In fact, we then can
promote market access.
Senator Lugar and I, in the past, have worked on bills together,
basically like the bill introduced this year, that would do three
things: It would mandate a certain proportion of blender pumps be
installed at the large gasoline stations, those that are owned by the
major oil companies. It would provide tax credits to the small mom-and-
pop stations that would put in the blender pump in their station, the
independents. Third, it would mandate a gradual increase over the next
few years of the number of cars produced in America and sold in America
that are flexible fueled. If we do all those things, ethanol will stand
on its own two feet.
I wished to say one last thing before I yield the floor to the
Senator and that is this. Right now, much is made of the fact that
there is $5 billion of tax credits this year going to the ethanol
industry. I understand that. However, because of the lower price of
ethanol, because we are blending 10 percent ethanol into gasoline, all
the people in America today are paying less for their gasoline than
they otherwise would if we didn't have ethanol. So if you take that
into account, the fact that the consumers of America, when they fill
their gas tank, are paying less than they would if they didn't have
ethanol, that more than offsets the $5 billion we have put into the tax
credits for ethanol support.
So, yes, we have supported the ethanol industry with $5 billion. I
dare say, we have gotten back probably twice as much as that in savings
at the gas pump for the consumers of America.
Perhaps that is what the oil companies are mad about. Maybe they
would like to have that money for themselves. I suppose that is
probably true. I understand that. But I think our obligation is to the
consumers of America and to the private sector, which is operating on a
guarantee we gave them that we would have these tax credits at least
until the end of this year, and I think on an implicit guarantee that
we gave that we would make sure there would be a marketplace that would
be open and accessible for biofuels.
So that is what we need to do, to reduce the tax credits but open the
marketplace for the ethanol with blender pumps and with flexible fueled
cars. But that is not before us today. But we will continue to work
together again toward the end of this year to make a reasonable, smooth
transition from the tax credits to access to the marketplace, and I
will take the floor again and again during the remainder of this year
on these issues.

[[Page S3861]]

I am not doing it today, but I will show the amount of tax benefits
that the oil companies have gotten over the last 80 years. Add that up
and compare it to what the ethanol industry has gotten over the last
about 30 years, and you will see that the oil companies have gotten a
lot more than what ethanol has ever received from the government.
I yield the floor.
The PRESIDING OFFICER. The Senator from Arizona.
Mr. McCAIN. Madam President, I rise in support of my amendment. I
would ask unanimous consent to speak as in morning business to speak on
Libya.
The PRESIDING OFFICER. Without objection, it is so ordered.

Libya

Mr. McCAIN. Madam President, yesterday, the President made an
announcement that I believe will strike most of my colleagues and the
Americans they represent as a confusing breach of common sense. Two
administration lawyers claimed that U.S. military involvement in Libya
is not in breach of or calls for the War Powers Resolution. In other
words, they believe our military activities in Libya do not require a
War Powers Resolution because the United States is not engaged in a
state of hostilities in Libya.
This puzzling assertion seems to be undercut by the very report that
the administration sent to Congress yesterday, which makes it clear
that the U.S. Armed Forces have been and presumably will continue to
fly limited strike missions to suppress enemy air defenses, to operate
armed Predator drones that are attacking Qadhafi's forces in an effort
to protect Libyan civilians, and to provide the overwhelming support
for NATO operations, from intelligence to aerial refueling.
I agree actions such as these don't amount to a full-scale state of
war, and I would certainly grant that I am no legal scholar, but I find
it hard to swallow that U.S. Armed Forces dropping bombs and killing
enemy personnel in a foreign country doesn't amount to a state of
hostilities.
Unfortunately, this only adds more confusion to our already confusing
policy in Libya. Our policy objective, as stated by the President
correctly, is to compel Qadhafi to relinquish power. Yet that is not
our military objective. The administration claims to have turned the
operation in Libya over to NATO, an alliance in which the United States
makes up three-quarters of the collective defense spending, as
Secretary Gates recently pointed out. The administration sought the
blessing of the United Nations, the Arab League, and NATO before using
force in Libya but still has not sought a similar authorization or
statement approval from the elected representatives of the American
people. That is wrong.
The result of all this, I hate to say, is plain to see in the actions
of our colleagues on the other side of the Capitol in the House. There
is massive and growing opposition to continuing the U.S. involvement in
Libya. There has already been one piece of legislation passed that
binds the President's authority as Commander in Chief. There could
likely be a vote soon to cut off funding for the entire operation. In
short, the accumulated consequences of all this delay, confusion, and
obfuscation has been a wholesale revolt in Congress against the
administration's policy.
I take no pleasure in pointing this out, because though I have
disagreed, and disagreed strongly at times, with aspects of the
administration's policy in Libya, I believe the President did the right
thing by intervening to stop a looming humanitarian disaster in Libya.
Amid all our present arguments about legal and constitutional
interpretations, we can't forget the main point: In the midst of the
most groundbreaking geopolitical event in two decades, as peaceful
protests for democracy were sweeping the Middle East, with Qadhafi's
forces ready to strike at the gates of Benghazi, and with Arabs and
Muslims in Libya and across the region pleading for the U.S. military
to stop the bloodshed, the United States and our allies took action and
prevented the massacre that Qadhafi had promised to commit in a city of
700,000 people. By doing so, we began creating conditions that are
increasing the pressure on Qadhafi to give up power.
Yes, the progress toward this goal has been slower than many had
hoped, and the administration is doing less to achieve it than I and
others would like. But the bottom line is this: We are succeeding.
Qadhafi is weakening. His military leaders and closest associates are
abandoning him. NATO is increasing the tempo of its operations and
degrading Qadhafi's military capabilities and command and control. The
Transitional National Council is gaining international recognition and
support and performing more effectively, and though their progress is
uneven, opposition forces in Libya are making strategic gains on the
ground.
I know many were opposed to this mission from the very beginning, and
I respect their convictions. But the fact is, whether people like it or
not, we are engaged in Libya and we are succeeding. So I would ask my
colleagues, is this the time for Congress to begin turning against this
policy? Is this the time to ride to the rescue of the man whom
President Reagan called the mad dog of the Middle East? Is this the
time for Congress to declare to the world, to Qadhafi and his inner
circle, to all the Libyans who are sacrificing to force Qadhafi from
power, and to our NATO allies who are carrying a far heavier burden in
this military operation than we are--is this the time for America to
tell all these different audiences that our heart is not in this, that
we have neither the will nor the capability to see this mission
through, that we will abandon our closest friends and allies on a whim?
These are questions every Member of Congress needs to think about
long and hard but especially my Republican colleagues. Many of us
remember well the way that some of our friends on the other side of the
aisle savaged President Bush over the Iraq war, how they sought to do
everything in their power to tie his hands and pull America out of that
conflict with far too little care for the consequences their actions
would have on our friends, our allies, our interests, and our moral
standing as the world's leading power. We were right to condemn this
behavior then, and we would be wrong to practice it now ourselves
simply because a leader of the opposite party occupies the White House.
Last week, Qadhafi wrote a personal letter of thanks to the Members
of Congress who voted to censure the President and end our Nation's
involvement in Libya. Republicans need to ask themselves whether they
want to be part of a group that is earning the grateful thanks of a
murderous tyrant for trying to limit an American President's ability to
force that tyrant to leave power.
The goal for all of us in this body, Democrats and Republicans alike,
should not be to cut and run from Libya but to ensure we succeed. In
the very near future, Senator Kerry and I, along with a strong senior
bipartisan group of our colleagues, will introduce an authorization for
the limited use of military force in Libya. The administration may
assert that we are not engaged in hostilities in Libya, but the Senate
should go on record as authorizing these operations. We are in a state
of hostilities, and the only result of further delay and confusion over
Congress's role in this debate will be to continue ceding the
initiative to the strongest critics of our actions in Libya.
We plan to introduce the authorization soon. I urge the majority
leader to schedule a vote on it quickly. The Senate has been silent for
too long on our military involvement in Libya. It is time for the
Senate to speak. When that time comes, I believe we will find a strong
bipartisan majority that is in favor of maintaining our current course
in Libya, that supports our seeing this mission through to success, and
that is willing to continue standing in the breach with our allies
until the job is done.
Madam President, amendment No. 411 would prohibit the U.S. Department
of Agriculture from funding the construction of ethanol blender pumps
or ethanol storage facilities--the latest request from the ethanol
lobby. By prohibiting funding for these pumps and storage facilities we
will prevent American taxpayers from spending over $20 billion to
convert the 20,000 gasoline pumps currently under construction.

[[Page S3862]]

During Tuesday's cloture vote on the ethanol tax credit amendment,
some members that voted against cloture cited concerns with the
procedural tactics used to bring up the vote; the ``unfairness'' of
ending the subsidy in midyear, therefore ``pulling the rug'' out from
underneath the ethanol industry; and that it was somehow premature to
end over 30 years of subsidies unless it was coupled with further
funding for ethanol infrastructure construction.
I hope my fellow critics of the ethanol tax credit have taken notice
of this new tactic over the past few weeks. For ethanol supporters,
this debate has been about where and how to prop up the industry in the
future--not whether the ethanol industry deserves future taxpayer
support.
It is time to say enough is enough; this industry has been collecting
corporate welfare for far, far too long. For those of us who have been
fighting against these handouts over the last two decades, it has been
far too long since we have had a full debate on this issue.
As a reminder to some of my colleagues of how this debate and support
of corn-ethanol handouts has shifted over the years, I would like to
read a portion of a floor statement on ethanol subsidies I delivered on
March 11, 1998.

Mr. President, let me just take a moment and try to explain
why we have such generous ethanol subsidies in law today. The
rationale for ethanol subsidies has changed over the years,
but unfortunately, ethanol has never lived up to the claims
of any of its diverse proponents.
In the late 1970s, during the energy crisis, ethanol was
supposed to help the U.S. lessen its reliance on oil. But
ethanol use never took off, even when gasoline prices were
highest and lines were longest.
Then, in the early 1980s, ethanol subsidies were used to
prop up America's struggling corn farmers. Unfortunately, the
usual ``trickle down'' effect of agricultural subsidies is
clearly evident. Beef and dairy farmers, for example, have to
pay a higher price for feed corn, which is then passed on in
the form of higher prices for meat and milk. The average
consumer ends up paying the cost of ethanol subsidies in the
grocery store.
By the late 1980s, ethanol became the environmentally
correct alternative fuel.
Unfortunately, the Department of Energy has provided
statistics showing that it takes more energy to produce a
gallon of ethanol than the amount of energy that gallon of
ethanol contains. In addition, the Congressional Research
Service, the Congressional Budget Office, and the Department
of Energy all acknowledge that the environmental benefits of
ethanol use, at least in terms of smog reduction, are yet
unproven.

These facts are as true today as they were 13 years ago. In fact, we
now have a better understanding of the negative effects corn-ethanol
has on both the environment and food prices than we did 13 years ago.
But it is important to note that while attention is being paid--and
rightly so--to eliminating the unneeded and wasteful ethanol tax
credit, the corn-ethanol lobby is seeking a new ethanol-stimulus
package by attempting a congressional runaround to continue bilking
American taxpayers out of their money.
Instead of seeking approval from Congress, lobbyists have convinced
the USDA to change the rules of the Rural Energy for America Program to
pay for new gas station pumps at retail stations at the expense of
solar, wind, and energy efficiency projects. In fact, the President has
announced his goal to fund the construction of 10,000 ethanol blender
pumps and tanks within the next 5 years--a down payment on future
ethanol-stimulus spending.
Supporters of ethanol corporate welfare are happy to tell you that if
they get their way, these 10,000 blender pumps and tanks will be the
tip of the iceberg for billions in new federally funded corn-ethanol
infrastructure development.
To be perfectly clear: Not content with government support to
subsidize ethanol, protect it from competition, or require its use,
lobbyists now want American taxpayers to pay for the construction of
pumps and holding tanks at retail gas stations.
Of course, the U.S. Department of Agriculture is happy to comply with
the industry's request to fund infrastructure construction. On April 8,
2011, Secretary Vilsack issued a rule that would classify blender pumps
as a renewable energy system qualifying it for funding under the Rural
Energy Assistance Program.
When Congress created the Rural Energy Assistance Program it had no
intention of paying gas station owners to upgrade their infrastructure,
further subsidizing the ethanol industry.
Furthermore, as a bonus to any gas station owners that take advantage
of the grant program, once the Federal Government has built the
blending pumps and holding tanks, retailers will be eligible to receive
the ethanol tax credit, double dipping in the Federal Treasury.
How expensive will this ethanol stimulus be if the special interest
lobby gets its way? According to the U.S. Department of Agriculture an
ethanol blender pump and tank cost an average of $100,000 to $120,000
to install. With over 200,000 fuel pumps currently operating in the
U.S. it would cost over $20 billion to convert them all. This is one
stimulus project that we cannot afford.
And for those concerned about the lack of support for wind and solar
projects, a recent Congressional Research Service--CRS--report
indicates that tax credits and subsidies for solar, wind and geothermal
power will cost $8.62 billion from 2008 to 2012; the ethanol tax credit
alone would cost over three times more--$26.5 billion. Allowing the
Rural Energy for America Program to continue funding blender pumps and
tanks will only continue this trend.
For my colleagues that really wanted to end the corporate welfare
handouts to the corn-ethanol industry but were concerned over the
process issues surrounding the ethanol tax credit vote or concerned
about the fairness of ending the tax credit in midyear, you can rest
assured that those concerns to not apply to this amendment.
It is time Congress takes a step towards ending unneeded and
unnecessary payouts to a robust and strong industry. In a time of
fiscal constraint, when all are being asked to make a sacrifice, we
should expect more from leaders in the private sector than continuing
to seek handouts--``stimulus projects''--from the Federal Government.
I was disappointed, obviously, in the vote that we took concerning
the ethanol subsidies and I know probably how the vote on this
amendment will turn out. The message is: Americans, we are not serious
about heeding the mandate of last November to stop spending, to stop
wasteful projects, to stop the unnecessary projects such as ethanol
subsidies. We are going to spend 20 billion of your tax dollars in your
local gas station to install a pump.
No wonder the American people, according to recent polls, are
disillusioned, disappointed, and pessimistic about our future. This
vote on this amendment will confirm an ample and adequate reason and an
understandable reason for that pessimism.
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. McCONNELL. Madam President, I ask unanimous consent the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. McCONNELL. Madam President, I know we are scheduled to have two
votes around 2 o'clock today on the ethanol issue. Once we are past
those amendments, we have a number of other important issues to be
debated and hopefully scheduled for votes. Senator Hutchison, for
example, has one on health care lawsuits, Senator Portman on unfunded
mandates, Senator Brown on withholding payments, Senator DeMint has an
amendment on the death tax and the renewable fuels standards. In
addition, our ranking member and manager, Senator Inhofe, has a couple
of amendments as well.
I will be talking to the majority leader during the next votes to see
how we can begin to schedule votes on these and other amendments that
may need to be considered before we move to final passage.
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. CORKER. Madam President, I ask unanimous consent the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. CORKER. Madam President, I arrived today to speak to the McCain

[[Page S3863]]

amendment. I noticed my colleague from Arizona was just on the floor. I
wanted to say I appreciate him offering this amendment. As with the
Coburn-Feinstein amendment, I support his amendment.
I also wanted to make reference to the comments he made regarding our
conflict in Libya. I agree with him--these are my words--that it is
bizarre the administration sent over a letter yesterday, referring to
the fact that we are not involved in hostilities in Libya. It is really
totally bizarre when you look at what is going on in the air in Libya
right now. I have no idea why Mr. Coe would have offered this argument.
I know we are going to have a hearing in Foreign Relations in the next
couple of weeks to look at this issue.

Thirdly, I would like to point out one of the reasons we are in this
situation right now where Congress has not authorized anything in the
administration--I sent a letter to the administration, Secretary Gates
and Secretary Clinton, 9 weeks ago just asking five questions about our
engagement in Libya. I received last week a letter from an Acting
Assistant Secretary that gave me half an answer on one of those five
questions.
I think most people in this body are aware that Senator Webb and I
then authored a resolution asking 21 questions of the administration
regarding Libya. I thank them for transmitting to us some information
on Libya yesterday. We have not yet gotten access to the classified
versions of it. We have, obviously like everyone else here, I am sure,
read the unclassified version. But I think the reason we find ourselves
in the place we are is we just have not been able to get information
from the administration regarding this conflict.
I know the Senator from Arizona and the Senator from Massachusetts
are working on an authorization request, a limited authorization. I
hope they will potentially wait until we have the answers to all 21
questions, the same questions to which many of the House Members wanted
the answer. I share with them the frustration that Congress has not
taken any action and would say I am really stunned by the fact that the
administration has chosen not to give responses to questions until
yesterday. And really this was done in response to I know what they saw
was a movement in Congress just wondering why in the world they would
be so resistant to answering basic questions regarding a conflict.
But then secondarily, again, just the bizarre answer that we are not
involved in hostilities--I mean, you can't tell Senators one thing in
private, the same Senators, and tell them something else in public and
expect Senators to feel any degree of credibility regarding those
statements.
I thank the Senator from Arizona for the comments he has made. We
have had an amicable relationship regarding this discussion. We have
had like thoughts on several aspects of this conflict, and we have had
probably some differing thoughts, but I am here today to say I agree
with him that his amendment is an amendment that needs to be passed. I
agree with him that it is incredible that we have not acted as a
Congress, and I would say the big reason for that is just the lack of
information. For some reason, the administration has gone to seek
approval from the United Nations but has not shown any desire to seek
approval from Congress. It is just, again, odd.
Then thirdly is just the bizarre nature of this administration saying
that what we are doing there does not involve hostilities when in their
unclassified version that the whole world has the ability to see, there
is no way the engagements they have said in an unclassified document
are occurring in Libya do not involve hostilities. That is just
absolutely categorically not possible.
I do hope that very soon Congress will take action. I hope that all
the questions we have asked for answers to have been answered, and I
think all of us will know very soon when we actually gain access to the
classified versions of what has been sent over.
I yield the floor.
The PRESIDING OFFICER. The Senator from Minnesota.
Ms. KLOBUCHAR. I see I am joined by the Senator from Iowa, who I know
will speak shortly and has been a leader in biofuels and energy for
many years.
I rise to speak about the votes we will have later today on the
amendments that would immediately cut off support for our homegrown
energy industry with I guess a few days' notice. I did not think there
was precedent for this decision. If this were to ultimately pass--I am
not certain this is the vehicle that would allow it to go into law, but
if it were to pass, we would have made a decision that is different
from the decision in January affecting an industry that employs nearly
500,000 people.
I wish to talk about the amendment offered by my friend, the Senator
from California. And I would hope, I would say first, that if we were
voting twice on an amendment in just a few days, it would be something
that creates jobs or decreases our dependence on foreign oil, but that
is not the case here. We are talking about pulling the rug out from an
industry that provides 10 percent of the Nation's fuel supply and
supports nearly 500,000 jobs. I don't think people quite understand
that about biofuels. I think they think it is some boutique industry.
Madam President, 10 percent of our Nation's fuel supply at a time when
gas is up near $4 a gallon.
We know there is support for phasing out the current ethanol tax
credits. I have a bill to do that. Senator Grassley has another bill to
do that. We understand that at a time when our country is facing severe
budget constraints. But the question is not if we should do it--we
will--it is when and how.
We all know homegrown energy has played an important part in reducing
our dependence on foreign oil and supported thousands of jobs. We also
know that as we continue to move our Nation toward energy
independence--by the way, we actually are moving up in terms of our own
energy independence, which is a goal that I believe every Member
strongly supports, and that is that homegrown energy will be a
significant part of our solution. We need a glidepath and not a cliff
for the only alternative to oil.
Immediately ending all support for the biofuels industry, as the
amendments we are considering propose to do, would stifle investment in
not only the existing ethanol industry but also the newly developed
cellulosic--yes, that is part of this--cellulosic, algae, and the next
generation of biofuels, which I think holds the most hope for this
country. In fact, many of the first advanced biofuel plants are co-
located with corn ethanol plants. You cannot promote next-generation
fuels by ending a tax policy for existing biofuels 6 months into a 1-
year extension with only a few days' notice.
Again, the real debate is not about whether we end this tax credit--
we know we should do it, and I believe we should do it with oil, too,
but right now we are on biofuels--it is about how we do it. That is why
the Senator from South Dakota, Mr. Thune, and I continue to work toward
the bipartisan compromise to reduce our deficit and offer a reasonable
way to reform the biofuels industry and achieve significant deficit
savings immediately. And I appreciate our colleagues talking to us. We
have had many meetings, and we are working very hard to get this done.
We need to work toward a pragmatic solution that reforms the ethanol
industry without harming jobs or driving up gas prices at a time when
gas is over $3.70 a gallon.
An article in the Chicago Tribune underscored the fact that if we
cease to produce the 13 billion gallons of ethanol we make every year,
it will drive up prices at the pump by as much as $1.40 per gallon in
the short term. Does the Senate actually think we can afford to raise
gas prices by $1.40? Do my colleagues think we can afford $5-per-gallon
gas?
I look forward to working with my colleagues on a more responsible
option that will reduce the deficit and not suddenly disrupt an
industry that supports $3 billion in economic activity in my State
alone.
I also wish to say a few words in opposition to the amendment offered
by my friend from Arizona, Senator McCain. Our current policies provide
incentives for many different kinds of fuel-dispensing technologies--
from hydrogen to natural gas, to electric hookups, to ethanol--but the
McCain amendment singles out only biofuel

[[Page S3864]]

blender pumps and proposes to cut all incentives for investment in
these pumps at a time when we need to be expanding our fuel supply
options, not limiting them to oil from Saudi Arabia. We should be
investing in the farmers and workers of the Midwest and not the oil
cartels of the Mideast.
What the McCain amendment does is focus on limiting those blender
fuel pumps. Blender pumps do not require customers to use ethanol. That
is why they are blender pumps. They give consumers a choice at the pump
and help lower gas prices for all consumers, even those who do not use
the higher blends of ethanol.

From 2000 to 2010, competition from ethanol reduced wholesale
gasoline prices by an average of 25 cents per gallon, saving American
consumers an average of $34.5 billion annually. During the gasoline
price runup in 2010, the impact of ethanol and gasoline prices was
substantially larger, reducing gasoline prices by a national average of
89 cents per gallon.
Giving consumers a choice of using higher blends of renewable fuel
has allowed the country of Brazil to become energy independent, and we
can do the same here.
The McCain amendment would also do more than limit consumers' options
at the pump. I know North Carolina is a good military State. This would
prohibit the U.S. military from constructing blender pumps or storage
tanks that can use more fuels that would be more resilient in case of a
fuel supply cutoff from OPEC or other disruptions in the global fuel
supply.
Our dependence on foreign oil has been widely recognized by our
military and diplomatic leaders as a major strategic vulnerability. To
respond to this, we have taken important steps in recent years to
encourage U.S. Government and military fleet vehicles to be fuel
flexible as part of our efforts to reduce both our spending on fuel and
our dependence on foreign oil. Shouldn't we allow our homegrown ethanol
to compete with foreign oil to fuel these vehicles?
I urge my colleagues to oppose the McCain amendment. At a time when
families and businesses across the Nation are battling high fuel costs,
we should be giving them more options at the pump, not less.
Today's votes on the Feinstein amendment and the McCain amendment are
part of a process. We all know it is not the final result. While I
strongly oppose both amendments, I also know that regardless of the
outcome today or even the outcome of that vote 2 days ago, we still
have work to do.
I appreciate the willingness of the Senator from California and the
Senator from Oklahoma to continue to negotiate with Senator Thune and
myself. These are serious ongoing negotiations. I am hopeful that in
the coming days we can reach a bipartisan compromise. It is not just
about one amendment on a bill that is not the vehicle where we can get
this done, but, in fact, we actually have a bipartisan compromise that
balances our need to continue to support homegrown biofuels with our
need to reduce our deficit and to do this in a way that actually puts
money right now back to our government to pay off this debt.
I see Senator Grassley, who knows a little bit about finances with
his major role on the Finance Committee, and also, as a farmer, a
little bit about the biofuels industry.
I yield the floor.
The PRESIDING OFFICER (Mr. Manchin). The Senator from Iowa.
Mr. GRASSLEY. I compliment Senator Klobuchar on her leadership in
trying to find, first of all, leadership in supporting biofuels and
alternative energy but also working very hard for the last few weeks to
find a compromise on this issue that is a very difficult issue and very
divisive here within the Senate.
So we are voting at 2:00 today on these amendments to which Senator
Klobuchar has already referred. The first is an amendment by Senators
Feinstein and Coburn repealing the incentive for domestically produced
ethanol. I emphasize ``domestically produced'' because we do not have
to worry about oil sheiks robbing us of all of our resources when you
burn ethanol the way you do when you burn imported gasoline. The second
amendment is offered by Senator McCain, prohibiting the U.S. Department
of Agriculture from using funds for the installation of blender pumps.
These amendments won't lower the price of gasoline at the pump. That
is what people today are concerned about--the price of gas at the pump.
These amendments won't lessen our dependence on foreign oil. We spend
$835 million every day importing oil. And these amendments won't create
a single job in the United States. In fact, they will do just the
opposite. They will raise the price of gasoline, make us more dependent
on foreign oil, and they won't create a single job. Most importantly,
these amendments also won't save the taxpayers any money because they
stand little chance of being enacted. Even if the amendments were to
pass today, they won't get out of this Chamber because of our
Constitution that says that revenue measures must originate in the
House of Representatives. So when this bill, if it passes the Senate,
goes to the House, they are going to reject it, or they use the term
``blue slip'' this bill, and it is going to come back to the Senate. So
this bill, with these amendments, is dead on arrival in the other body.
It is also dead on arrival at the White House. We have had
indications in a statement that President Obama opposes repealing the
incentives and is open to new approaches that meet today's challenges
and save taxpayers money.
I remember one of the first policy discussions I had with then-new
Senator Obama. I was chairman of the Finance Committee. He came up, and
we talked about what we could do working together to promote ethanol as
an alternative energy. His idea was incorporated into a piece of
legislation that became law. I was glad to work with him on it. So I
thank President Obama for the statement he recently gave--again, now,
as President of the United States--supporting alternative energies,
biofuels, and, in this case, specifically ethanol.

The votes at 2 o'clock, then, are a fruitless exercise. So in a sense
we are in political theater here as we debate these issues. We have
already had this vote, and it was defeated 40 to 59.
Everybody knows oil is now hovering near $100 a barrel, and everybody
knows, as we hear once a month or maybe are reminded every day,
unemployment is 9.1 percent. So why has the Senate taken a full week,
voting twice, on the same amendment that will increase prices at the
pump, increase dependence upon foreign oil, and lead to job loss, or at
least do nothing about the unemployment rate?
We should be having this debate in the context of a comprehensive
energy plan. This debate should include a review of the subsidies for
all energy production, not just singling out ethanol. Nearly every type
of energy gets some market-distorting subsidy from the Federal
Government. An honest energy debate should include ethanol, oil,
natural gas, nuclear, hydropower, wind, solar, biomass, and probably a
lot of other alternative energies I don't think of right now. By
discussing it in the context of an overall energy policy instead of
singling out ethanol right now, we would be able to then make sure we
have a level playing field for all forms of energy because the
government shouldn't be choosing between petroleum and alternative
energy, as an example.
When the oil and gas subsidies were targeted, as the ethanol
subsidies are being targeted right now and oil and gas subsidies were
targeted last month, the president of the National Petrochemical and
Refiners Association had this to say:

Targeting a specific industry, or even a segment of that
industry, is what we would consider punitive and unfair tax
policy. It is not going to get us increased energy security,
increased employment, and it is certainly not going to lower
the price of gasoline.

Well, those very same words could be said about the ethanol debate we
are having right now because it would surely increase our energy
insecurity, it would increase unemployment, and it is certainly not
going to lower the price of gasoline.
So it seems to me that the old saying about what is good for the
goose ought to be good for the gander applies. So what is good for a
subsidy on petroleum and the people who defend that--why would we want
the inconsistency we are demonstrating here? Because

[[Page S3865]]

that gets back to how I voted on that provision about a month ago. I
voted that we ought to deal with oil and gas and ethanol and all of
those things in the same context and make sure they fit into an overall
national energy policy.
In December 2010, Congress enacted this 1-year extension of VEETC,
the volumetric ethanol excise tax credit, also known as a blenders'
credit. We extended it for 1 year. That is what is being repealed in
the Coburn amendment. This 1-year extension has allowed Congress and
the domestic biofuels industry to determine the best path forward for
Federal support of biofuels and for the phasing out of that subsidy.
As a result of these discussions, Senator Conrad and I introduced
bipartisan legislation on May 4 that is a serious, responsible first
step to reducing and redirecting Federal tax incentives for ethanol.
Our bill will reduce and phase out VEETC over a period of a few years.
It also would extend through 2016 the alternative-fuel refueling
property credit, the cellulosic producers' tax credit that deals with a
second generation of ethanol from things other than grain, and the
special depreciation allowance for cellulosic biofuels plant property.
Earlier this week, I joined Senator Thune and Senator Klobuchar in
introducing another bipartisan bill to immediately reduce and reform
the ethanol tax incentive. It includes many of the same features as the
bill I introduced last month with Senator Conrad, but it enacts these
reforms this year, right now. Senator Thune's approach also leads to
significant deficit reduction.
The legislation we have introduced is a responsible approach that
will reduce the existing blenders' credit and put those valuable
resources into investing in alternative-fuel infrastructure, including
alternative-fuel pumps or, as Senator Klobuchar used the term, blender
pumps. It would also make significant investments in advanced and
cellulosic ethanol. That is the second generation of ethanol. That is
where we want to go so we are not using grain for fuel. It is a
forward-looking bill that deserves widespread support.
The Thune-Klobuchar bill of which I am a cosponsor will responsibly
and predictably reduce the existing tax incentive and help get
alternative-fuel infrastructure in place so consumers can decide which
fuels they prefer. We shouldn't pull the rug out from under this
industry that has made these enormous investments. We need to provide a
transition.
I know that when American consumers have the choice, they will choose
domestically produced, clean, affordable, renewable fuel. They will
choose fuel from America's farmers and ranchers, rather than from oil
sheiks and foreign dictators.
Both of the ethanol reform bills I mentioned are supported by the
ethanol advocacy groups. In an almost unprecedented move, the ethanol
industry is advocating for a reduction in their Federal incentives. No
other energy industry has come to the table to reduce or eliminate
subsidies. No other energy lobby has come to me with a plan to reduce
their Federal support. For sure, Big Oil hasn't come forward with any
suggestions on reducing their subsidies.
The best way to get deficit reduction that gets to the President's
desk with a Presidential signature is a responsible transition such as
the one offered by Senator Thune and Senator Klobuchar. Otherwise, this
exercise today and these two votes today are a waste of time. This vote
will simply put many Members of this body on record in support of a
$2.4 billion tax increase.
I would encourage those who wish to reduce incentives and save
taxpayers' money to work with Senators Thune and Klobuchar and the rest
of us on a responsible transition that has a chance of being enacted
and, most importantly, signed by the President; therefore, I urge my
colleagues to oppose these two amendments.
I have always said that ethanol shouldn't be singled out, that it
ought to be talked about in the context of an overall energy policy.
But one of the reasons it has been able to be separated from all of the
rest of the alternative energy as well as from all the rest of our
energy policies we have for this country is because there is a great
deal of ignorance about ethanol. We can tell that in this town when we
hear a lot of people mispronounce the word ``ethanol'' with a long
``e.'' So I want to refer to some of these things, and I am going to
use statements from the sponsor of the bill and refute some of these
things I think are really wrong.
The first one:

We can save $3 billion if we eliminate the VEETC blending
subsidy.

Well, there are a lot of numbers thrown around about how much this
incentive costs and how much the Coburn amendment would save. I have a
letter from the Joint Committee on Taxation with a score of the Coburn
amendment. The fact is, the amendment, if enacted on July 1, 2011,
would increase revenue to the Federal Treasury by $2.4 billion, not $3
billion as the author stated. Again, the Coburn amendment, if enacted,
would be saving $2.4 billion. That is from the Joint Committee on
Taxation; that is not my estimation. That is the estimation of the
people who score for the Congress of the United States what impact
various tax bills have.
Another statement:

All the blenders of gasoline in the United States--all of
them--have called and written and said: ``We do not want the
$3 billion for the rest of the year.''

I have a letter from the Society of Independent Gasoline Marketers of
America--and they go by the acronym SIGMA--to the Senate majority and
minority leaders opposing efforts to prematurely and abruptly eliminate
the blenders' credit, contrary to the statement I just read that all
the blenders want to do away with this.
The letter states:

As the leading marketers of ethanol-blended fuel at the
retail level, SIGMA members and customers are the
beneficiaries of VEETC. Simply put, SIGMA opposes recent
moves to prematurely or abruptly end the subsidies without
any consideration for future fuel and fuel-delivery costs. To
end this incentive immediately would no doubt result in
immediate spike in consumers' fuel costs.

That is the end of the quote from the Society of Independent Gasoline
Marketers of America.
So I hope somebody will put that in their pipe and smoke it because
the fact that all of these people, we have been told here on the floor
of the Senate, don't want this--well, that is an incorrect statement.
Another statement:

According to the U.S. Department of Agriculture, 40 percent
of last year's corn crop was utilized, converted to ethanol.

It is true that almost 40 percent of the corn crop went into the
ethanol plant to produce ethanol. But what it doesn't tell us is that
out of a 56-pound bushel of corn, there are 18 pounds of animal feed
left over that is more efficient in fattening animals than even the
original corn. That is called dried distillers grain. So I do not want
people of this body to come to me in their ignorance and tell me we are
using too much corn and saying it is 40 percent of the corn crop when
18 pounds out of every 56-pound bushel of corn is for very efficient
animal feed. So I am going to take credit for that 18 pounds and refute
this statement that 40 percent of last year's corn crop was utilized
and converted to ethanol.
One bushel of corn produces nearly 3 gallons of ethanol and 18 pounds
of high-value animal feed. In 2010, 4.65 billion bushels of corn were
used to produce 13 billion gallons of ethanol. But ethanol production
uses only the starch from the corn kernel. More than one-third, or 1.4
billion bushels of dry distillers grain, is left over available as a
high-value livestock feed.
On a net basis, ethanol production used only 23 percent of the U.S.
corn crop--far less than the 40 percent that Senator Coburn claims.
According to the U.S. Department of Agriculture, feed use consumed 37
percent of the U.S. corn supply, much more than the 23 percent consumed
by the ethanol production.
The next statement that is incorrect:

The American people ought to take into consideration when
they go buy a gallon of fuel today--you already have $1.72
worth of subsidy in there. It does not have anything to do
with oil and gas drilling.

I believe Senator Coburn is referring to a report from the
Congressional Budget Office. For the record, that report relied on the
questionable assumption that only a tiny fraction of ethanol
consumption is attributable to the ethanol tax credit. Regardless, I am
glad he raised this point about subsidies and oil and gas drilling.

[[Page S3866]]

Our colleagues may be interested to learn of the hidden cost of our
dependence upon foreign oil. And these are not my estimates. I am going
to give you references for you to look up.
A peer-reviewed paper published in Environment Magazine in July 2010
concluded that `` . . . $27 to $138 billion dollars is spent annually
by the U.S. military for protection of Middle Eastern maritime oil
transit routes and oil infrastructure, with an average of $84 billion
dollars per year.''
Isn't it convenient to forget those costs of our national defense,
such as keeping oil lanes open so we can get oil to the United States
that we spend $835 million every day to import oil?
I wish to refer to another one.
Milton Copulos, an adviser to President Ronald Reagan, a veteran of
the Heritage Foundation, and head of the National Defense Council
Foundation, testified before Congress in a recent year on the ``hidden
costs'' of imported oil.
Mr. Copulos stated that by calculating oil supply disruptions and
military expenditures, the hidden costs of U.S. dependence on petroleum
would total up to $825 billion per year. The military expenditure is
equivalent to adding $8.35 to the price of a gallon of gasoline refined
from Persian Gulf oil. There is no hidden--this is important about
ethanol--because there is no hidden U.S. military cost attributable to
homegrown, renewable, environmentally good ethanol.
Here is another statement I wish to refute:

There is a big difference between a subsidy that is a tax
credit and allowing someone to advance depreciation because
they are going to write it off anyhow.
The net effect to the Federal Government's revenue, if you
take all of those away, is still zero.

That statement wants you to believe that all the tax benefits the oil
industry gets are just tax benefits; they are not a subsidy. Well, my
response is, I have to refer to a September 2000 report by the
Government Accountability Office. But that report concluded that the
Federal Government has granted tax incentives, direct subsidies, and
other support to the petroleum industry. They describe tax incentives
as Federal tax provisions that grant special tax relief designed to
encourage certain kinds of behavior by taxpayers or to aid taxpayers in
special circumstances.
According to the Government Accountability Office, the tax break
allowing for the expensing of intangible drilling costs began in 1916.
The percentage depletion allowance was enacted in 1926.
The Government Accountability Office estimated that these two tax
incentives led to a revenue loss of as much as $144 billion between the
time studied by the Government Accountability Office, which goes from
1968, to when the report was given in the year 2000.
I would say to my colleagues that those figures I just gave you are a
far cry from the zero revenue effect that Senator Coburn claims for the
oil industry. These are the Government Accountability Office's words
and figures. They refer to them as tax incentives that resulted in the
loss of revenue of more than $100 billion to the Federal Treasury over
a 32-year period.
I have heard Senator Coburn on the floor on many occasions talking
about the dire fiscal situation our country is in. I find myself voting
with Senator Coburn most of the time. But on this issue, I disagree.
Yet on this issue, it sounds as though he is arguing about semantics.
One is a ``subsidy,'' yet the other is a ``legitimate business
expense.'' In other words, in the case of ethanol, it is a subsidy. In
the case of Big Oil and their taxes, it is a legitimate business
expense.
I am not sure this argument over terminology will give our children
and grandchildren much comfort when they are picking up the trillion-
dollar tab over the next couple of decades.
The last statement I wish to refute is this:

Corn prices are at $7.65 a bushel.

Well, that had to be a couple days ago because I get a report every
day on corn prices at my local elevator in New Hartford, IA. They were
$7.10 yesterday. But let me quote again.

Corn prices are at $7.65 a bushel. They are 2\1/2\ times
what they were 3\1/2\ years ago. [Ethanol] has been, this
last year, the significant driver.

Let me suggest, first of all, that he is right, 3\1/2\ years ago,
corn was about $7 a bushel. But 6 months later, it was $3.58 a bushel.
So anybody who thinks corn is going to stay at this historically high
price is not very smart. And if farmers are spending money according to
that, they better slow up because they are going to be caught off guard
and out of business like they were in the 1980s.
So this is my response, in addition to what I said about corn going
down to $3.58: Grain used for ethanol accounts for approximately 3
percent of the world's coarse grain. Let me reflect on that statement
for a minute, because you get the opinion, when they say 40 percent of
U.S. corn is used in ethanol, that, ye gods, what are people going to
eat? But worldwide--and the grain market is worldwide--the global
marketplace decides the price of grain. And worldwide, only 3 percent
of the coarse grain--and corn is one of the coarse grains--is used for
fuel. Because of the increased corn production, the amount of grain
available for non-ethanol use is growing.
In the year 2000, there were 2.4 billion metric tons of grain
available for uses other than for ethanol. Even with the growth of the
ethanol industry, last year there were 2.6 billion metric tons of grain
available for uses other than for ethanol.
It is also important to review the cost of corn in retail food
prices. The corn price today: The corn cost in a gallon of milk is
about 46 cents. The cost of corn in a pound of chicken is 34 cents. One
pound of beef takes 92 cents worth of corn. One pound of pork requires
39 cents.
So you have all these excuses coming from the food manufacturers of
the United States that ethanol is the cause of food prices rising. But
you can see in the figures I just gave you that what the farmer gets
out of a dollar's worth of retail food is about 21 cents. And you could
cut this in half, and it will be cut in half, like it was 3\1/2\ years
ago. But when the price of corn goes down, you are not going to see big
food manufacturers reducing their cost of food by 20 percent because
they need ethanol as a scapegoat to raise the price of food.
That is all I have to say about ethanol. But I do have an amendment I
am submitting to this bill that is before us that is unrelated to
ethanol, but it also brings up the same point: that there are a lot of
places in this budget we can save money.
Senator Johnson of South Dakota and I are submitting this amendment
that pertains to setting limits that any one farmer, including this
farmer, can get from farm program payments.
I have been pushing for reform of farm program payments for many
years. Some folks from outside of Iowa unfamiliar with this issue may
be surprised that I am the Member who keeps pushing these reforms. They
may think: Iowa's economy relies heavily on agriculture. Why would a
Senator from a farm State such as Iowa want a hard cap on farm
payments?
But Iowa farmers understand why I continue pushing for a hard cap.
This is about making sure the farm programs provide what they are
supposed to provide: a safety net for those who need it; basically,
farmers who have the economic incapability of overcoming natural
disasters and political issues and international politics that they
have no control over that affects the impact of farm income. Those are
small and medium-sized farmers. They are not these megafarmers that are
10 percent of farmers getting 70 percent of the benefits out of the
farm program.
These small and medium-sized farmers--as, of course, bigger farmers
do--play a vital role in supplying our Nation and world with food.
However, they are continually, as small farmers, faced with the
challenge of rising land prices and cash rents. Many times, young and
beginning farmers cannot compete because of high land prices and rents.
There is no doubt the rise in commodity prices is part of the reason
for higher land prices and cash rents.
But, currently, farm program payments are also placing upward
pressure on land prices. This is not how it is supposed to work. What I
just said means we are subsidizing big farmers to get bigger. There is
nothing wrong with big farmers getting bigger. I do not argue with that
in any segment of our economy. But we should not be subsidizing big
farmers to get bigger.

[[Page S3867]]

The farm program was put in place to provide a safety net for
farmers. It is meant to help them get through tough times. The farm
program was not created to help big farmers get bigger. Let me repeat
for you--because it cannot get enough emphasis--10 percent of this
Nation's largest farmers receive 70 percent of the farm program
payments.
These large farms do not need these program payments to get through
tough times. Small and medium-sized farmers do not need nonmarket
factors driving up the land prices and cash rents.
This amendment is a commonsense solution to this problem. Reform the
farm program so it works as a true safety net for those it was intended
for. We can do that by placing limits on how much a single farm
operation can receive in program payments. The government should stay
out of subsidizing the growth of large farms.
In addition, this amendment tightens the requirements for people to
be considered an actively engaged farmer. For too long, people have
gamed the system and received farm payments that the law did not
intend.
There have been a number of amendments submitted to the EDA bill
before us in the name of saving taxpayer dollars. The ethanol
amendment--supposedly that is one of the motives behind it.
By setting hard payment caps, and making these other reforms, we will
save the U.S. Treasury approximately $1.5 billion over 10 years.
The headlines around here are dominated by the problems of the
budget. Many of my colleagues have come to this floor in recent weeks
and discussed government spending and the big debt.
If this body is going to be serious about cutting spending, then this
amendment I am laying before you as a limitation on farm payments is a
continuation of that effort. Instead of spending time debating the
merits of programs that assist the renewable energy industry, an
industry that, by the way, helps us wean ourselves off our need for
foreign oil, why do we not agree to make cuts in areas we should be
able to have an agreement?
This is a simple and commonsense way for us to save money, while at
the same time making sure the farm program accomplishes what it is
supposed to.
I yield the floor.
The PRESIDING OFFICER. The Senator from South Dakota is recognized.
Mr. THUNE. Mr. President, how much time remains?
The PRESIDING OFFICER. There is 9 minutes 37 seconds remaining.
Mr. THUNE. Mr. President, I wish to join my colleague from Iowa, who
has been a great leader over the years on the issue of biofuels, in
trying to transition our country away from the dangerous dependence we
have on foreign oil and over the years has worked to put in place
policies that have helped build an industry literally from the ground
up. The ethanol industry, in its inception many years ago, sort of
started with just a few farmers getting together. Today they are
producing about 13 billion gallons of ethanol. It represents 10 percent
of our entire fuel supply. There is not any other fuel in the country
that provides the alternative to traditional gasoline ethanol does.
That is the result of a lot of investment, a lot of hard work by a
lot of people over the years. It has also been as a result of a
dependance upon what has been fairly stable public policy. Now there is
a debate about whether that public policy ought to change. That
certainly is a debate we can have. I do not wish to get into the merits
of the individual elements of ethanol policy because obviously people
are going to disagree about that.
But I am going to point out that we put this policy in place in
December of last year. In December of last year, we told this industry,
which represents--these are 204 American-owned plants. These are
American companies that employ almost 500,000--indirectly or directly--
American jobs and American workers in this country. So we told them, in
December of last year, 81 Senators--81 Senators, many of whom are now
saying, I am going to vote to do away with this particular tax policy--
81 Senators voted for it. We had 81 votes in the Senate in December
that said these are going to be the rules of the game until December of
this year.
So now we have this effort to completely change the rules in the
middle of the game. I have not been here all that long. I served three
terms in the House of Representatives. I am in my seventh year in the
Senate. But I do not recall an occasion where we have ever done
anything such as this, where the Congress has put policy in place, made
commitments to American businesses--in this case, people who employ
American workers--and then tell them 6 months later, I am sorry, we are
going to pull the rug out. You are out there on your own now.
It would be one thing if these decisions were made in a vacuum. But
most of these businesses made investment decisions based upon public
policy that was put in place by this Congress. We cannot, in good
faith, now go tell them we are just going to jerk this policy out of
the way. Does our word mean anything around here?
To start with, we have an issue with this particular amendment
because it is unconstitutional. We cannot originate a tax measure in
the Senate. So it will be blue-slipped in the House of Representatives,
which makes everything we are doing right now largely symbolic. This
bill is not going anywhere.
But there seems to be people who are intent upon making some sort of
statement, I guess, or trying to send some sort of a message. But the
end result, if what they were trying to accomplish today were to become
law, is we would raise gas prices because we are talking about a $2.4
billion increase in taxes on people who inevitably are going to pass it
on. So why would we want to start raising gas prices at a time when we
have historically high gas prices and people are already being pinched
at the pump?
So we single out a specific industry. I have heard people get up
today and say: Well, we voted for tax extenders last year, but you know
what, they were part of a bigger package. We did not have to agree with
all of it. Well, then, do not vote for it and, surely, have the debate
then. Why were we not debating the issue last December? If people had
issues with this, they should have been brought out then when we put
this policy in place.
What, in effect, we are doing is singling out an industry and saying:
We are going to punish you by changing the rules in the middle of the
game because we do not like your industry or because we do not like
this particular tax provision.
Well, we had a similar debate a few weeks ago. There was an effort to
do something on oil and gas tax provisions. The argument that was made
at the time, myself included, was why would we single out a specific
industry? If we are going to do this, let's do this in a comprehensive
way when we look at all types of policies, tax expenditures, favorable
tax treatment that various industries in this country get, and let's
examine them all together. Let's make some changes.
This is selectively singling out a specific industry and changing a
tax policy in the middle of the year. There has been a statement made
on the floor that people who get the benefit or the blenders credit do
not want it. It strikes me at least, if they do not want it, they do
not have to take it. They have to file for it. They have to file with
the IRS. If they do not want the blenders credit, they do not have to
take it. But most of the people who file for the blenders credit, it is
assumed, are going to pass it on to the retailer, to the gas station,
and ultimately to the consumer so it will result in lower prices.
Most of the refiners anyway are large, integrated oil companies that,
frankly, do not want the competition that is represented by the ethanol
industry. They do not have to take the blenders credit. They have to do
something to get it. They have to file with the IRS in order to receive
it.
One other point I wish to make, because there has been some talk as
well about ethanol and the environmental benefits, there are certain
States in the country that perhaps would like to have even higher
standards. But if we compare ethanol to traditional gasoline, according
to the EPA, in terms of greenhouse gas emissions--lifecycle greenhouse
gas emissions--it is 20 percent lower, corn-based ethanol. When we get
to cellulosic ethanol, which is the next generation of biofuels--if we

[[Page S3868]]

can get there, if we do not completely do away with the platform we
have today with corn-based ethanol--it will have a 60-percent lifecycle
greenhouse gas emission advantage over traditional gasoline.
So corn-based ethanol, 20 percent cleaner burning than traditional
gasoline; cellulosic ethanol, 60 percent cleaner burning than gasoline.
That is according to the Environmental Protection Agency, which does
not take a particularly favorable view of these fuels because they like
to include in their calculation types of elements, such as indirect
land use in other countries around the world, which, frankly, we do not
think ought to be part of the calculation, but even with that 20-
percent cleaner burning than traditional gasoline for corn-based
ethanol and 60 percent for cellulosic ethanol.
I wish to read, if I might, from a letter that I received from an
organization called ACORE. That is the American Council on Renewable
Energy. This organization is about 500 deep, represents about 500 other
organizations; in some cases, American companies, universities, members
such as Walmart, such as DuPont. This is what they say:

Current domestic ethanol production is also laying the
groundwork and infrastructure for the more advanced biofuels
of the future including cellulosic ethanol, algae-derived
fuels, and drop-in fuels. We have already crossed the
threshold of these homegrown biofuels meeting a substantial
portion of transportation fuel demand for cars and light duty
trucks; but they cannot be further developed without the
infrastructure investments that are fostered by current
ethanol production today.

They go on to say that:

The Thune-Klobuchar amendment ensures ethanol production
will continue, while directing limited government resources
to support infrastructure development and the transition to
advanced biofuels.
The ethanol tax credit has been critical to increased
domestic ethanol production and corresponding economic
growth, job creation, enhanced energy security and lower gas
prices. We urge you to oppose the Coburn amendment, which
would prematurely terminate support for our domestic ethanol
industry while failing to invest in critical infrastructure
and advanced biofuels. We ask for your support of the Thune-
Klobuchar amendment.

The Thune-Klobuchar amendment--we are working with the Senator from
California, Mrs. Feinstein, the Senator from Oklahoma, Mr. Coburn, on a
solution that would hopefully lead us to a result. It would do what
many of the folks in this Chamber want to see done. It would do away
completely with the blenders credit, effective July 1, and with the
ethanol tariff. It would also put money back into debt reduction.
We think that is a better way to do this. I hope those discussions
will lead somewhere. But this vote today is going to be a largely
symbolic vote for reasons I just mentioned: It is unconstitutional. It
will be blue-slipped in the House of Representatives and, therefore, it
makes absolutely no sense for us to be having this vote in the first
place. It certainly does not make any sense for us to be sending a
message to this industry that we want to do away with it.
I understand my time has expired.
I yield the floor.
The PRESIDING OFFICER. The Senator from New Jersey.
Mr. MENENDEZ. Mr. President, I rise to speak in favor of the
Feinstein amendment. I am a proud cosponsor of this proposal because it
will save us money, reduce food prices and do so in a responsible
manner.
Ethanol enjoys truly unprecedented support from the Federal
Government. First there is the renewable fuels mandate that requires
ethanol to be blended into gasoline.
Second, there is a 45-cent-per-gallon subsidy to blend ethanol into
gasoline that is costing the Treasury nearly $6 billion per year.
Third, there is a 54-cent-per-gallon tariff on imported ethanol
protecting the domestic industry from any serious competition.
And to top it all off the Federal Government spends billions every
year to subsidize the growth of corn for ethanol.
In a time of fiscal constraint we simply cannot afford to prop up an
industry with such enormous supports.
And these supports are not just costing taxpayers money, but they are
also causing food prices to rise and harming our environment.
The USDA estimates that 40 percent of this year's corn crop will be
used for ethanol. This is raising grain prices worldwide, especially
hurting the needy.
For these reasons, the Feinstein amendment has the support of
taxpayer rights groups, religious groups looking out for the needy,
budget hawks concerned about our deficit, livestock growers who use
grain as feed, the grocers and restaurants who are seeing food prices
increase, and the environmental community who understand that corn
ethanol requires enormous amounts of fossil fuels to be produced.
My support for the Feinstein amendment is not just because it is the
right thing to do for our country and our Federal budget, but because
it is the right thing to do for my home State. New Jersey has over
120,000 flex fuel vehicles, but does not have a single E85 ethanol pump
in the entire State. 120,000 cars that are built to allow automakers to
game fuel economy standards but may never see a drop of E85 fuel.
I know that this issue is important to our friends in the Midwest,
but ethanol producers already have a guaranteed market for their
product as a result of the Federal mandate. Now we have an opportunity
to help families across the country by ending this failed ethanol
policy and providing relief both in terms of their taxes and their food
prices.
For these reasons, I will be voting in favor of the Feinstein
Amendment and urge my colleagues to do the same.
I also think this vote is important for the larger debate over the
deficit.
Our friends on the other side of the aisle have said revenues cannot
be a part of the strategy to reduce the deficit. I think this vote and
the one earlier this week in which 34 Republicans voted to end these
wasteful ethanol tax breaks show there is bipartisan support for
cutting wasteful tax subsidies and loopholes and that these revenue
expenditures must be part of any solution on the deficit.
As I speak about that, let me end on another item I think should be
on the table, one I have been promoting. The first place to start in
terms of tax expenditures is oil subsidies.
A bipartisan majority of 52 Senators voted recently to end these tax
breaks. If these 34 Republicans come into the fold, we could work
together to make some real progress. Oil companies do not need these
subsidies--I am talking about the big five--with oil trading at nearly
$100 per barrel. They have all the incentive they need in the
marketplace. But cutting these subsidies, we can cut the deficit by $21
billion. This year alone these companies are projected to earn up to
$144 billion in profits--not proceeds but profits. If they can simply
live with a mere $142 billion in profits, then they can do their share
to reduce the deficit without raising gas prices.
It is time to come together across party lines and to end wasteful
tax subsidies and lower the deficit. This vote is an important first
step, and I think by doing so we will--notwithstanding the issues about
blue slips and constitutional impediments--send a clear sense of the
Senate that will move us in a direction that will end the ultimate
subsidies and help us reduce the deficit. I think ending oil subsidies
will get us on a path to a bipartisan solution that is critical for the
Nation.
Mr. HATCH. Mr. President, I rise today in support of Senator McCain's
amendment to prohibit the use of Federal funds for the construction of
ethanol blender pumps and ethanol storage facilities. My vote today is
not a vote against ethanol as a transportation fuel. I strongly support
the greater use of alternative transportation fuels and alternative-
fuel filling stations in the United States. In certain cases, I have
even advocated for government support of these goals. But government
support for a source of energy should create a temporary boost, not a
long-term Federal dependency. It is just as foolish to attempt to build
an economy on subsidized energy as it is to build a house on the sand.
I have been criticized for opposing a Democratic proposal to raise
taxes on domestic oil producer, but there is a difference in the size
of the Grand Canyon between allowing oil companies to keep a portion of
their own profits, which they use for more domestic energy production,
versus handing out

[[Page S3869]]

very large amounts of taxpayer cash to ethanol companies. Ethanol
companies not only have a lower tax rate than oil companies on average,
they also benefit from the ethanol excise tax credit, from government
handouts for ethanol filling infrastructure, a large Federal mandate
forcing refineries to produce ethanol whether it makes economic sense
or not, and an ethanol import tariff.
I cannot conceive of any justification for a program that hands out
taxpayer funds for an activity as it does for ethanol blender pumps and
storage facilities when it already has a Federal mandate forcing it
into what used to be the free market. In my book, there is no greater
subsidy than Federal mandate, and that alone is more than ethanol
deserves.
I have supported broad-based incentives for alternative fuels in the
past, but enough is enough, and in the case of ethanol, it is more than
enough by far. Affordable energy is basic to a strong economy just as a
healthy blood supply is basic to human life, and a long-term handout is
no substitute for affordability.
I will continue to support reducing our dependency on foreign oil by
increasing domestic energy production, increasing the efficiency of our
transportation sector, and increasing the diversity of our
transportation fuels. But those goals should focus on energy sources
that can compete in the free market. Reliance on noncompetitive energy
sources will only drag down our economy.
Mr. President, I urge my colleagues to support more competitive
America by voting for Senator McCain's amendment.
Ms. COLLINS. Mr. President, I am pleased to join Senators Feinstein
and Coburn supporting an amendment to repeal the ethanol excise tax
credit and the ethanol import tariff. These policies are fiscally
irresponsible, environmentally unwise, and economically indefensible.
Today we have another opportunity to take action to end them.
Historically, our government has helped a product compete in one of
three ways: we subsidize it, we protect it from competition, or we
require its use. Right now, ethanol may be the only product receiving
all three forms of support.
The ethanol tax break is extraordinarily expensive. The Government
Accountability Office has found that the tax credit costs American
taxpayers a staggering $6 billion annually. This is quite a sum to prop
up a fuel that is causing land conversion for corn production,
commodity and food prices to rise, and is barely putting a dent in our
Nation's dependence on foreign oil. With our amendment, we have the
opportunity to immediately save American taxpayers nearly $3 billion
for the remainder of 2011 alone.
Ethanol use is mandated under the renewable fuels standard, RFS,
which guarantees market for corn ethanol. Collectively, the first
generation biofuels industry will receive tens of billions in
unnecessary subsidies through the year 2022. If the current subsidy
were allowed to continue for five years, the Federal Treasury would pay
oil companies at least $31 billion to use 69 billion gallons of corn
based ethanol that the RFS already requires them to use. We simply
cannot afford to pay the oil industry for following the law.
The data overwhelmingly demonstrate that the costs of the current
ethanol subsidies and tariffs far outweigh their benefits. Just last
summer, the Center for Agricultural and Rural Development at Iowa State
University estimated that a 1-year extension of the ethanol subsidy and
tariff would lead to only 427 additional direct domestic jobs at a cost
of almost $6 billion, or roughly $14 million of taxpayer money per job.
While expanding our capacity to generate alternative, domestic fuel
sources is an important step toward becoming less dependent on foreign
oil, I have serious concerns about the effects of increased ethanol
use. There are other alternative sources of energy that make far more
sense.
The energy, agricultural, and automotive sectors are already
struggling to adapt to the existing ethanol mandates. I have concerns
with the partial waiver issued by the Environmental Protection Agency
for the use of E15, a blend of gasoline containing 15 percent ethanol.
Many residents in my state have already experienced difficulties using
gasoline blended with just 10 percent ethanol, finding that it causes
problems in older cars, snowmobiles, boats, and lawn mowers. The EPA's
E15 waiver fails to adequately protect against misfueling and will add
unnecessary confusion at the gas pump for consumers. We simply cannot
place so many engines in jeopardy.
These first generation biofuel mandates also present environmental
concerns as they could result in energy efficiency losses and increased
air pollution because the mechanical failures can jeopardize the
effectiveness of engine emission controls.
Over recent years, we have also seen food and feed prices increase as
crops have been diverted for the production of corn-based ethanol. We
should be raising food crops for food, not for fuel. Senate Homeland
Security Committee chairman Joe Lieberman and I held a series of
hearings in 2008 to examine the impact of corn based ethanol on food
prices and we found that it certainly had a negative impact.
The cost of this policy to our Nation and its taxpayers, particularly
given our current fiscal crisis, can no longer be ignored. At a time
when we are projecting a deficit this year alone of $1.5 trillion, how
can we justify spending $6 billion to subsidize ethanol?
I urge my colleagues, especially those who questioned the process
used to bring an identical amendment to the floor just a couple days
ago, to join me today in supporting the Feinstein-Coburn amendment to
repeal these fiscally indefensible corn-based ethanol subsidies.
Ms. MIKULSKI. Mr. President, I rise in favor of ending lavish and
unneeded ethanol subsidies. This is the second opportunity that my
colleagues and I have to end unnecessary subsidies to one of the most
profitable and wealthy industries in the world. In May, I voted to end
$2 billion a year in tax breaks to the five biggest oil companies that
made more than $36 billion in profits in the first 3 months of 2011.
And today I will vote to end $6 billion a year subsidies for ethanol
blenders.
While the Nation is facing record deficits and families and
businesses in Maryland are getting crushed with high gas, corn and food
prices, ending $6 billion a year in tax breaks for ethanol producers is
a no-brainer. The numbers speak for themselves. This subsidy doesn't
help the chicken farmers on the eastern shore of Maryland who are
paying corn costs that are three times higher than they were 5 years
ago. It isn't making us less dependent on foreign oil. And it certainly
isn't reducing the deficit. The only thing this subsidy is doing is
padding the pockets of oil companies who blend ethanol. These companies
don't need taxpayer help to survive--let alone thrive.
At a time when Congress is considering devastating cuts to FIRE
grants for our first responders, home heating oil assistance for
seniors, and nutritious foods for pregnant women and newborns, it makes
no sense to preserve a $6 billion a year tax break for an industry that
doesn't need it. If we are serious about the deficit, we have to make
smart decisions, Ending these subsidies is a long overdue answer to
getting this country back on track to fiscal sanity, and not in a way
that hurts middle class families or traditional industries in Maryland.
Ethanol blenders have hit the trifecta of government support. First,
the law requires that ethanol be used in gasoline. Second, blenders get
a 45-cent-per-gallon tax credit. And third, it is protected by a tariff
which discourages the import of cheaper, more efficient, and more
environmentally sound types of ethanol. The Feinstein amendment does
not change the requirement that ethanol be used in gasoline. It simply
ends the unneeded and lavish subsidy to oil companies that blend the
ethanol.
It is time to stop filling up oil industry profits while draining
taxpayer's wallets. Ending these subsidies will right a wrong in the
tax code and ensure that middle class families aren't on the hook for
more giveaways. Let's pass this bill, end these subsidies, and put our
efforts into additional ways to reduce the deficit.
Mr. LEVIN. Mr. President, I will vote to oppose both the amendments
offered today.

[[Page S3870]]

I share many of the concerns of Senator Feinstein and others in this
body about the impact of the volumetric ethanol excise tax credit. I am
particularly concerned that this credit may increase the price that
Americans pay for food, something few families can afford these days.
But I cannot support Senator Feinstein's amendment, for three
reasons.
First, I fear that her amendment, while addressing tax credits for
corn-based ethanol, would also remove support for other, non-corn
sources. While I applaud Senator Feinstein for maintaining support for
cellulosic ethanol production, we should not reduce support for other
non-corn sources that have potential to help reduce our dependence on
imported oil without affecting food prices. For example, companies in
my state and elsewhere are working on production of biofuels from
algae. I believe any attempt to address tax credits for corn-based
ethanol should leave intact support for these non-corn sources.
Second, I fear that ending this credit now, more than 6 months before
it is set to expire, would unfairly burden business that have made
plans with the assumption that the credit would remain in place at
least until then. These businesses have a right to expect that Congress
will not pull the rug out from under them.
Third, I am concerned that by attaching this amendment to an
important piece of legislation, we endanger passage of that
legislation. I support the underlying bill, which would reauthorize the
Economic Development Administration. The EDA is an important resource
for communities across the country, and at a time when jobs should be
our top priority, we should support programs with proven records of job
creation. But by attaching a revenue measure to EDA bill, the House
will almost certainly ``blue slip'' the bill and thereby doom it.
I also will oppose the amendment offered by Senator McCain. I believe
that we should support the creation of infrastructure that will support
alternative energy development. By prohibiting Federal funding for
creating infrastructure to support ethanol production and use--
including cellulosic ethanol and other non-corn sources--Senator
McCain's amendment would make it more difficult for us to develop these
new sources of energy, sources we need to end our dependence on
imported fossil fuels.
Mr. JOHNSON of South Dakota. Mr. President, I rise today to discuss
two amendments to the underlying bill: amendment No. 411 offered by
Senator McCain and amendment No. 476 offered by Senators Feinstein and
Coburn.
I oppose these amendments. Abruptly pulling support for ethanol, as
these amendments attempt to do, runs counter to vital efforts to reduce
dependence on foreign oil. The ethanol industry supports over 400,000
American jobs, offers consumers a choice at the pump, lowers fuel
prices, and displaces millions of gallons of foreign oil with a
homegrown alternative.
Amendment No. 476, offered by Senators Feinstein and Coburn, would
eliminate the blender tax credit for the use of ethanol and end the
tariff on imported ethanol that ensures tax incentives are limited to
domestically produced renewable fuels. Senator McCain's amendment, No.
411, would block federal efforts to promote ethanol blender pumps or
ethanol storage facilities. Last fall, Agriculture Secretary Vilsack
announced a goal of installing 10,000 blender pumps nationwide over 5
years to help give consumers a choice at the pump. Senator McCain's
amendment would end this type of important initiative to promote
renewable fuel infrastructure.
While I support responsible efforts to reform and significantly
reduce the cost of tax incentives for ethanol, we must focus on
developing our ethanol infrastructure that will facilitate the
transition toward advanced biofuels and cellulosic ethanol. The
renewable fuels industry, and ethanol in particular, has played an
important role in addressing our energy needs. Our support of renewable
fuels to date has brought us to a point where ethanol displaces
millions of gallons of oil. Unfortunately, this amendment would not
only hinder our existing ethanol industry, but it would also stall the
development of the next generation of biofuels like cellulosic ethanol.
Ethanol also has been shown to reduce prices at the pump. A recent
study by the Center for Agricultural and Rural Development, CARD, found
that the increased use of ethanol reduced wholesale gasoline prices by
an average of $0.89 per gallon in 2010. At a time when high fuel prices
are having a detrimental impact of the budgets of millions of
Americans, it is important that we not hastily take steps that will
further increase those prices.
Rather than voting to abruptly end the current incentives for
ethanol, I have worked with colleagues on an alternative proposal that
would transition from the existing blender credit to targeted
investments, while also reducing the deficit. This effort, led by
Senators Klobuchar and Thune, would end the current form of the
volumetric ethanol excise tax credit and redirect a portion of the
estimated savings toward deficit reduction and the remaining toward
renewable fuels infrastructure, a safeguard credit for ethanol should
oil prices fall below certain points, and continued support for small
producers and development of advanced biofuels.
I support efforts to reform incentives that promote our renewable
fuels industry and reduce the deficit, but I oppose these amendments. I
hope that my colleagues will continue to discuss further alternatives
that ensure we continue to have a strong renewable fuels industry.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. THUNE. 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. THUNE. Mr. President, I want to speak for a couple of minutes,
until another speaker arrives on the other side. If I might, I want to
elaborate on where these discussions are that we have been having with
regard to getting a result and a solution that I think actually could
get enacted and become law.
Since we first had this vote a couple days ago, I have been in
conversations, along with Senator Klobuchar from Minnesota, Senator
Coburn, and Senator Feinstein, the sponsors of this amendment, to see
if there isn't some way we can find something we could actually do that
would accomplish what probably many of them would like to see
accomplished but doing it in a way that is not disruptive, that is a
thoughtful approach to the future of the biofuels industry, and that
actually does something meaningful in terms of dealing with the debt
and deficit.
Those discussions continue. I think we continue to get closer and
closer to an agreement. I hope my colleagues will continue to talk and
discuss this matter. We will continue those discussions after the vote
at 2 o'clock. I say that to let my colleagues know that even though
this particular vote is going to amend a piece of legislation that
perhaps isn't going to go anywhere--and certainly this amendment,
because it is a blue slip and has a constitutional issue, isn't going
to go anywhere--there are earnest discussions going on that I hope will
yield a result.
Again, in my view, there is a better way to do this. Obviously, there
are people who feel strongly and deeply, and we have heard the emotion
of this debate over the last few days about this subject. But there is,
in my view, a right way and wrong way to do this. The right way is to
do it so that we are not pulling the rug out from under an industry
after we already put in place policy that they have relied on in terms
of their investment issues.
I hope we can get that agreement, and I certainly hope my colleagues
will bear that in mind. There are a number of Members here who
obviously are very supportive of the legislation that Senator Klobuchar
and I introduced earlier this week, and we heard Senator Grassley speak
to that point and others who are cosponsors.
We continue to work with the sponsors of the Coburn-Feinstein
amendment to see if there isn't a path forward that will enable us to
pass something through the Senate. I wanted to let my colleagues know
that and apprise them of the status of those discussions. I hope we can
come to a conclusion that will get a result and not

[[Page S3871]]

simply have a vote that ends up being largely symbolic. We will
continue to have discussions, and I will continue to keep my colleagues
apprised of the discussions.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. REID. 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. 476, as Modified

Mr. REID. Mr. President, I ask unanimous consent to modify the
pending Feinstein amendment with the changes at the desk.
This modification is to correct a drafting error made by legislative
counsel.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
The amendment, as modified, is as follows:

At the end, add the following:

TITLE __--ETHANOL SUBSIDIES AND TARIFF REPEAL

SEC. _01. SHORT TITLE.

This title may be cited as the ``Ethanol Subsidy and Tariff
Repeal Act''.

SEC. _02. REPEAL OF VEETC.

(a) Elimination of Excise Tax Credit or Payment.--
(1) Section 6426(b)(6) of the Internal Revenue Code of 1986
is amended by striking ``December 31, 2011'' and inserting
``the later of June 30, 2011, or the date of the enactment of
the Ethanol Subsidy and Tariff Repeal Act)''.
(2) Section 6427(e)(6)(A) of such Code is amended by
striking ``December 31, 2011'' and inserting ``the later of
June 30, 2011, or the date of the enactment the Ethanol
Subsidy and Tariff Repeal Act''.
(b) Elimination of Income Tax Credit.--The table contained
in section 40(h)(2) of the Internal Revenue Code of 1986 is
amended--
(1) by striking ``2011'' and inserting ``the later of June
30, 2011, or the date of the enactment of the Ethanol Subsidy
and Tariff Repeal Act'', and
(2) by adding at the end the following:

``After such date.................................       zero    zero''.

(c) Repeal of Deadwood.--
(1) Section 40(h) of the Internal Revenue Code of 1986 is
amended by striking paragraph (3).
(2) Section 6426(b)(2) of such Code is amended by striking
subparagraph (C).
(d) Effective Date.--The amendments made by this section
shall apply to any sale, use, or removal for any period after
the later of June 30, 2011, or the date of the enactment of
the Act.

SEC. _03. REMOVAL OF TARIFFS ON ETHANOL.

(a) Duty-Free Treatment.--Chapter 98 of the Harmonized
Tariff Schedule of the United States is amended by adding at
the end the following new subchapter:

``SUBCHAPTER XXIII
Alternative Fuels
----------------------------------------------------------------------------------------------------------------
Rates of Duty
--------------------------------------------------------------------
Heading/Subheading    Article Description                         1
----------------------------------------------           2
General                Special
----------------------------------------------------------------------------------------------------------------
9823.01.01            Ethyl alcohol          Free                   Free                   20%''.
(provided for in
subheadings
2207.10.60 and
2207.20) or any
mixture containing
such ethyl alcohol
(provided for in
heading 2710 or
3824) if such ethyl
alcohol or mixture
is to be used as a
fuel or in producing
a mixture of
gasoline and
alcohol, a mixture
of a special fuel
and alcohol, or any
other mixture to be
used as fuel
(including motor
fuel provided for in
subheading
2710.11.15,
2710.19.15 or
2710.19.21), or is
suitable for any
such uses...........
----------------------------------------------------------------------------------------------------------------

(b) Conforming Amendments.--Subchapter I of chapter 99 of
the Harmonized Tariff Schedule of the United States is
amended--
(1) by striking heading 9901.00.50; and
(2) by striking U.S. notes 2 and 3.
(c) Effective Date.--The amendments made by this section
apply to goods entered, or withdrawn from warehouse for
consumption, on or after the later of June 30, 2011, or the
date of the enactment of this Act.

The PRESIDING OFFICER. All time is yielded back. The question is on
agreeing to the Feinstein-Coburn amendment No. 476, as modified.
Mr. REID. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
Under the previous order, the amendment requires 60 votes for its
adoption.
The clerk will call the roll.
The bill clerk called the roll.
The PRESIDING OFFICER (Mr. Sanders). The result was announced--yeas
73, nays 27, as follows:

[Rollcall Vote No. 90 Leg.]

YEAS--73

Akaka
Alexander
Ayotte
Barrasso
Baucus
Begich
Bennet
Bingaman
Blumenthal
Boozman
Boxer
Brown (MA)
Burr
Cantwell
Cardin
Carper
Coburn
Collins
Coons
Corker
Cornyn
Crapo
DeMint
Enzi
Feinstein
Gillibrand
Graham
Hagan
Hatch
Heller
Hutchison
Inhofe
Inouye
Isakson
Johnson (WI)
Kerry
Kyl
Landrieu
Lautenberg
Leahy
Lee
Lieberman
Manchin
McCain
McConnell
Menendez
Merkley
Mikulski
Murkowski
Murray
Nelson (FL)
Paul
Pryor
Reed
Reid
Risch
Rockefeller
Rubio
Sanders
Schumer
Sessions
Shaheen
Shelby
Snowe
Tester
Toomey
Udall (CO)
Udall (NM)
Vitter
Warner
Webb
Whitehouse
Wyden

NAYS--27

Blunt
Brown (OH)
Casey
Chambliss
Coats
Cochran
Conrad
Durbin
Franken
Grassley
Harkin
Hoeven
Johanns
Johnson (SD)
Kirk
Klobuchar
Kohl
Levin
Lugar
McCaskill
Moran
Nelson (NE)
Portman
Roberts
Stabenow
Thune
Wicker
The PRESIDING OFFICER. On this vote, the yeas are 73, the nays are
27. Under the previous order requiring 60 votes for the adoption of
this amendment, the amendment is agreed to.

Vote on Amendment No. 411

The PRESIDING OFFICER. Under the previous order, the question is on
agreeing to the McCain amendment No. 411.
Mrs. HUTCHISON. Mr. President, I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second? There is a
sufficient second.
Under the previous order, this amendment will require 60 votes.
The clerk will call the roll.
The legislative clerk called the roll.
The result was announced--yeas 41, nays 59, as follows:

[Rollcall Vote No. 91 Leg.]

YEAS--41

Alexander
Ayotte
Barrasso
Blumenthal
Boozman
Brown (MA)
Burr
Chambliss
Coburn
Collins
Corker
Cornyn
Crapo
DeMint
Enzi
Graham
Hatch
Heller
Hutchison
Inhofe
Isakson
Johnson (WI)
Kyl
Lee
Lieberman
Manchin
McCain
McConnell
Murkowski
Paul
Portman
Risch
Rockefeller
Rubio
Sessions
Shelby
Snowe
Toomey
Vitter
Webb
Wicker

NAYS--59

Akaka
Baucus
Begich
Bennet
Bingaman
Blunt
Boxer
Brown (OH)
Cantwell
Cardin
Carper
Casey
Coats
Cochran
Conrad
Coons
Durbin
Feinstein
Franken
Gillibrand
Grassley
Hagan
Harkin
Hoeven
Inouye
Johanns
Johnson (SD)
Kerry
Kirk
Klobuchar
Kohl
Landrieu
Lautenberg
Leahy
Levin
Lugar
McCaskill
Menendez
Merkley
Mikulski
Moran
Murray
Nelson (NE)
Nelson (FL)
Pryor
Reed
Reid
Roberts
Sanders
Schumer
Shaheen
Stabenow
Tester
Thune
Udall (CO)
Udall (NM)
Warner
Whitehouse
Wyden
The PRESIDING OFFICER. On this vote, the yeas are 41, the nays are
59. Under the previous order requiring 60 votes for the adoption of
this amendment, the amendment is rejected.

[[Page S3872]]

Under the previous order, the motions to reconsider the previous two
votes are considered made and laid upon the table.
The majority leader.
Mr. REID. There will be no more rollcall votes this week. We will
work on next week's schedule later today. I ask unanimous consent that
the Senators from Massachusetts, Mr. Kerry and Mr. Brown, be recognized
for up to 10 minutes each, and following that time I be recognized.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Massachusetts.

Hockey Championship

Mr. KERRY. Mr. President, before Mayor Menino ques the Duckboats for
the victory parade on Saturday, I want to take a moment with my
colleague on the Senate floor to celebrate an extraordinary victory by
the Boston Bruins. After a grueling 39 years of so many ups and downs,
heartbreaking misses and almosts, the Stanley Cup is coming back to
Boston. That is thanks to the extraordinary grit of a special hockey
team, a team that had remarkable character. I have to say--and I say
this, I hope, cautiously because I know pride comes before a fall.
Nevertheless, we in Massachusetts are blessed with an embarrassment of
riches right now because last night's heart-stopping 7th game victory
against the Vancouver Canucks is now allowing us to celebrate our
seventh championship for our city in the last decade. Again, I know
pride comes before the fall, but sweeping the Yankees a weekend ago and
now winning this isn't too bad.
As a lifelong hockey fan and a guy who still tries to get around the
rink occasionally when my hips allow me to do that, the Bruins' win
last night was one of the sweetest ever. That is partly because it was
in such a long time coming, but it is also because of the determination
this team showed in getting there. Not since 1972 have the Bruins
brought home a coveted Stanley Cup; and not since the 1970 championship
of the legendary Bobby Orr's flying goal has there been so much for
Boston hockey fans to cheer about.
This Boston Bruins team made history not just in the championship but
in the way they got there. They are the first team in NHL history to
win a game 7 three times in the same postseason. They did it with a
kind of hard-nosed, selfless, remember-the-fundamentals, play the
basics, gritty kind of teamwork that we in Boston admire so much.
During the Bruins' run to the championship, we got to witness a very
special kind of pride and encouragement that came from our city. It was
a black and gold Bruins jersey on the statue of Paul Revere, and before
game 7 everybody got to see our injured forward, Nathan Horton, pouring
a bottle of Boston water onto the Vancouver ice. This team couldn't and
wouldn't lose at home, and last night Horton's magic water turned
Vancouver into our home ice. Today all of New England is home to the
world's champion, the Boston Bruins.
I have to say with last night's victory, yet another Bruin legend was
born, goalie Tim Thomas. In seven spectacular games, again and again,
Tim turned back Vancouver and held the Canucks to eight goals the
entire series. In the final shutout, Tim had 37 saves. So it was more
than appropriate that he was named the playoff's Most Valuable Player.
I would say what Curt Schilling was to the 2004 Red Sox as Tim Thomas
is to the Bruins today.
This Stanley Cup win is a victory for everyone in Massachusetts who
has ever laced up a skate and braved the black ice on frozen ponds
early in the morning, for every parent who has packed their kids into a
minivan at 4 in the morning to get to practice. For everyone who
remembers their heart skipping a beat when Bobby Orr sailed through the
air in victory, for everyone who never stopped rooting for this team
over a four-decade drought, we hear our own voices and the words of Tim
Thomas last night when he proclaimed:

You've been waiting for it a long time, but you've got it.
You wanted it, you got it. We're bringing it home.

Just as it was for the Red Sox for a long time, some people said this
day was never going to come. Just as it was for the Red Sox, and a
curse that we no longer hear much about, some even blamed fate for the
drought. But after last night, Mr. President, Boston proved once again:
Never underestimate an underdog. So, final score: Bruins 1, Fate, 0.
I am proud to offer my congratulations to the Bruins players, the
coaches, and the front office for a great series, for a great season,
and for being great champions. This team never quit. They never lost
focus. They believed in themselves as individuals. Above all, they
believed in themselves as a team. So we cannot wait for Saturday when
we will see the city of Boston's reflection in the polished silver and
nickel of Lord Stanley's Cup. Welcome back to Boston.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. BROWN of Massachusetts. Mr. President, I am honored to be able to
speak as well with my friend and colleague, Senator Kerry, to celebrate
this victory. I was 11 years old when it last happened. I come to the
floor to recognize the Boston Bruins and their thrilling season and 4-0
victory in game 7 over Vancouver in the Stanley Cup finals.
I enjoy not being an avid skater like Senator Kerry. I am amazed at
the way they go all out and then just slam each other up against the
boards and actually get up. I find that amazing. Obviously, they are
bringing the Cup back, as Senator Kerry said, for the first time since
1972.
We actually have a couple of Boston fans with us today. As my
colleagues know, it is also the home of the Beanpot tournament and some
of the best college hockey in the country.

The Bruins made history last night by becoming the first team in the
NHL to win three deciding game 7s in a single playoff run, twice
rebounding from being down two games to none. For Bruins fans,
including myself and everybody I was with last night, we were very
excited about the victories over the rivals from Montreal and then
Philadelphia, Tampa, and finally Vancouver. It made for a memorable
month.
Being the big underdog before the series began, the Bruins played
inspired hockey to win Lord Stanley's Cup, and they did it as a team.
They played outstanding defense against one of the best offensive teams
in the NHL. Bostonians will never ever forget the sight of Captain
Chara standing 6 feet 9 inches tall, which I find truly amazing,
accepting the Stanley Cup and lifting it high above the ice. Chara led
the incredible defensive effort in that series.
It was also an unforgettable moment for NHL veteran Mark Recchi.
Playing in his final NHL game last night, Recchi capped a great career
the way most professional hockey players can only dream about--with the
Stanley Cup in his hands moving around the ice. Last night, he said it
was one of the best groups of players he has ever played with. For
those of us who watched, we can attest that it was one fun team to
watch. It was a lot of fun. Everyone was so excited, regardless of
whether they were a Bruins fan, just to see the intensity with which
the series was played.
It was a mixture of youth and experience, hard physical play and
great scoring touch that helped put together this run. Brad Marchand, a
Bruins rookie, has become a household name also with hockey fans after
scoring an impressive 11 goals throughout the playoffs, setting the
record for the most playoff goals by a Boston rookie and tying for
second most in NHL history.
Patrice Bergeron, coming back from an injury that cost him two games
earlier in the playoffs, scored the first goal in game 7 that set the
tone. As Senator Kerry said, our clutch goalie, Tim Thomas, took home
the Conn Smythe Trophy as the most valuable player during the playoffs.
I didn't know a body could move like that, quite frankly. He was the
consummate professional, literally unbeatable, with shutouts in games 4
and 7.
Behind the bench, as my colleagues know, Coach Claude Julien led the
``Bs'' with quiet confidence, even as his team faced daunting deficits
and the devastating loss of forward Nathan Horton in game 3 of the Cup
finals. The home team had won each of the first three games, so while
he couldn't play, Horton was there to, as was referenced, take some
Boston water and put it on the ice to make it our home ice. This is
vindication for team president Cam

[[Page S3873]]

Neely, a Bruins great for so many years; Peter Chiarelli, the general
manager who put this great team together; and owner Jeremy Jacobs and
his team as well.
With the Bruins' Stanley Cup victory, the city of Boston can, in a
classy manner, celebrate this victory, as we have done before. As
Senator Kerry also pointed out, we are very blessed in Massachusetts
and in New England to have the Patriots, Red Sox, and Celtics to round
out a decade that includes many world championships. Upon the arrival
of the Stanley Cup in Boston today, the Bay State has hosted all four
major championship trophies since 2005. As we all know, since 2002, the
Patriots have won the Lombardi Trophy three times, the Red Sox have
captured the World Series Trophy twice, and the Celtics have earned the
O'Brien NBA Title Trophy once. That is an unprecedented run in sports
history.
No longer left out, the Bruins can join a highly decorated group of
teams that has never been matched. I didn't come down to the floor to
brag about Boston's reputation as the home of the greatest champions in
professional sports. No, I have to say that the evidence is pretty
compelling on its own.
So with great pride as the junior Senator from Massachusetts, today I
also honor the 2011 Boston Bruins for their remarkable season and
commend them for their relentless pursuit of Lord Stanley's Cup.
Another championship banner will hang from the rafters of the TD Bank
Garden, and I am very optimistic it will not be the last one for
Boston, the hub of hockey.
I thank the Chair.
I yield the floor.
The PRESIDING OFFICER (Mrs. McCaskill). The Senator from
Massachusetts.
Mr. KERRY. Madam President, before our time expires, listening to my
colleague from Massachusetts, he reminded me about Captain Chara, the
defenseman who raised the Stanley Cup last night, the tallest person
ever to play in the National Hockey League. So that reminds me that,
therefore, we are also making history because never has the Stanley Cup
been held so high over the ice.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. Madam President, I am happy to be here to listen to my
friends talk about hockey, and I will talk for just a minute about
hockey. I was raised in the desert. When I came back as a Member of
Congress, I wanted my boys to watch a hockey game. I wanted to watch
one. I had never watched one. So we went to a hockey game. I tell my
colleagues, it is a game you have to learn something about. For me,
with no hockey experience, it was pretty difficult. They are on the ice
just a few minutes and then off, back and forth, and it is hard to keep
track of it. But I did have the opportunity twice to watch the great
Gretzky and that was a great experience.
One of my most difficult, scary experiences of my life: There was a
time when--well, they still do--Las Vegas had a minor league hockey
team. I was asked to go out in the middle of that ice and drop a puck.
I don't do very well, as demonstrated when a few weeks ago I slipped
and fell and dislocated my shoulder on regular dirt. So to walk out on
that ice was something that was frightening to me, and I have never
forgotten that. So to have those men rushing up and down those rinks
the way they do is truly astounding. My only heroism in hockey was my
own heroism in convincing myself I should go out there.
Mr. President, our staffs have been working diligently for days now
to find a path that would allow the Senate to complete action on the
jobs bill which is now on the floor. They have worked so hard on this
bill because it is legislation to reauthorize the successful Economic
Development Administration, which has been so important to this country
since 1965. It is not an Obama piece of legislation. It was started by
Lyndon Johnson, and every President since then, Democratic and
Republican, has wrapped their arms around this legislation because it
is so good for our country.
The Economic Development Administration has created jobs where they
are most needed--in economically distressed communities. In just the
last 5 years, for $1.2 billion of investment, we have created 314,000
jobs. The merits of reauthorizing this job-creating administration are
so very clear. EDA works with businesses, universities, and leaders at
the local level, so it creates jobs from the bottom up. For every $1 we
invest as a government, we get $7 in return. It helps manufacturers and
producers compete in the global marketplace, and it is a great
investment. Every $1 from EDA, as I have indicated, attracts $7 in
private sector investment. That is a pretty good return.
Because of this agency's success and because each Senator is on
record talking about the importance of creating jobs, including Senator
Boxer in her capacity as the chair of that most important committee,
the Environment and Public Works Committee, she has produced this bill.
She has shown me statements by virtually every Senator in this Chamber
about the merits of this bill--Democrats and Republicans alike. So this
is the kind of bill that should pass on a bipartisan basis, if not
unanimously, and it has passed in the past unanimously. In the past,
that is what would have happened. We would have done this so quickly--
but no more.
Now we find ourselves struggling just to bring it up for a vote. I
heard the Republican leader this morning speak earlier about the state
of play on the EDA bill. He said we have gotten this done. We have this
to do and this to do and this to do.
Here is a brief review for our colleagues, so far, of what we have
had on this bill. We have already had votes, again, on matters totally
unrelated to this bill, including swipe fees, regulatory reform,
ethanol--three votes on that. We have 70 amendments that have been
filed. We have pending now a number of amendments relating to the debt
limit, to Wall Street reform, health reform, Davis-Bacon, and 66 others
that could be pending.
In addition, Senators have filed amendments that are related to
immigration reform, the border fence, E-Verify, the estate tax, right-
to-work laws, gainful employment regulation, a series of amendments
dealing with endangered species, light bulbs and other energy-efficient
provisions. There has been not a single amendment that has anything to
do with this bill, not a single thing that is germane to this bill.
So I am going to continue to work with the Republican leader and
hopefully find a way to complete action on this extremely important
bill. But it seems, so far, to be a never-ending process. It is
filibuster by amendment--amendment after amendment after amendment--
amendments that have nothing to do with the legislation.
We can't continue this. This process has to end so we can pass this
bill, let the private sector create jobs the American people need, and
let the Senate move on to other pressing matters. I hope we can work
something out, but in the meantime, I have no alternative as the leader
of this Senate but to file cloture on this bill.

Cloture Motion

Madam President, I send a cloture motion to the desk.
The PRESIDING OFFICER. The cloture motion having been presented under
rule XXII, the Chair directs the clerk to read the motion.
The legislative clerk read as follows:

Cloture Motion

We, the undersigned Senators, in accordance with the
provisions of rule XXII of the Standing Rules of the Senate,
hereby move to bring to a close debate on S. 782, a bill to
amend the Public Works and Economic Development Act of 1965
to reauthorize that act, and for other purposes.
Harry Reid, Barbara Boxer, Frank R. Lautenberg, Thomas R.
Carper, Sherrod Brown, Sheldon Whitehouse, Robert P.
Casey, Jr., Christopher A. Coons, Jon Tester, Benjamin
L. Cardin, Tom Udall, Jeanne Shaheen, Debbie Stabenow,
Patty Murray, Kent Conrad, Richard J. Durbin, Joe
Manchin III.

REIP Act

Mr. CARDIN. Mr. President, today I rise to engage the Senator from
South Dakota in a colloquy to discuss the Reduce Excessive Interest
Payments Act, the REIP Act, which is a stand-alone bill that the junior
Senator from Georgia and I introduced in March, and which we offered as
an amendment, Senate Amendment No. 407, to S. 782, the pending
legislation. The REIP Act protects homeowners from paying additional
interest on their Federal Housing Administration-backed mortgages once
they have repaid the loan's principal.

[[Page S3874]]

At present, FHA allows lenders to charge interest on a mortgagor's
loan through the end of the month, even if the mortgagor pays the loan
off at the beginning of the month, to cover the contractual obligation
to pay investors in mortgage backed securities for the full month.
Mortgagors with conventional mortgages or with Veterans Administration-
backed mortgages stop accruing interest once the principal is repaid,
despite there being a similar contractual obligation to pay such
investors. I have deep concerns about the impact these excess interest
payments have on FHA borrowers, who typically have limited resources,
but may end up paying more interest on their loans than other
borrowers. While some might argue that this is merely an issue of
educating the borrowers to encourage them to repay their principal at
the end of the month, I am skeptical about whether the FHA mortgagors,
who often repay their loans through selling their homes or refinancing
their mortgages, have much ability to choose the day on which their
transaction closes and the principal is repaid.
I understand that the Banking Committee and the Department of Housing
& Urban Development, HUD, are willing to work with Senator Isakson and
me and our staffs to further understand this issue and make sure that
FHA policies regarding interest charges protect borrowers to the extent
possible. Is that right?
Mr. JOHNSON of South Dakota. Yes, that is correct. My understanding
is that HUD has been working to determine the impact of a change in how
interest is accrued on FHA loans and the Department is committed to
working with the junior Senator from Maryland on this issue. At the
Banking Committee, my staff and I will also continue to study the issue
and work with the Senator's staff and various stakeholders to discern
the impact that such a change would have on interest rates and on the
mortgage-backed securities market. With help from the Department and
the junior Senators from Maryland and Georgia, we will move this
process forward to bring about the best outcome for FHA borrowers.
I want to assure the junior Senator from Maryland that I share his
concern for FHA borrowers and am committed to pursuing policies that
protect borrowers while also ensuring robust real estate and mortgage
markets. I thank my colleague for bringing this issue to the attention
of the Senate and I look forward to working with him.
Mr. CARDIN. I thank the distinguished Senator from South Dakota for
his consideration, and I compliment him for the excellent work he has
done thus far in working to strengthen the real estate market and the
economy in general during the economic downturn. I am sure the Senator
will be pleased to learn that HUD committed to me and my staff that it
would deliver within the next 2 to 3 weeks an analysis of how many
borrowers are affected by the current interest policy and are required
to pay excess interest. The last data published are from 2000 to 2003
but indicate what is at stake. Total excess interest payments from that
period, according to the National Association of Realtors, amounted to
more than $1.3 billion. If hundreds of thousands of FHA borrowers could
save hundreds of millions of dollars in excess interest payments each
year, those savings could provide an economic stimulus in communities
across the Nation that would not cost taxpayers anything. Additionally,
in the next 60 to 90 days, HUD will complete a study on the impact of
changing interest calculations on its systems, and those of large and
small lenders, and share those results with the Banking Committee and
me.
Mr. President, with these assurances and commitments from the
chairman and from HUD firmly in place, I will withdraw the amendment I
offered on behalf of myself and the junior senator from Georgia, Senate
Amendment 407, at the appropriate time.

____________________