Captive Supply Reform Act

Mr. President, we are having a crisis in the West. Actually, we are having a crisis anywhere that there are people who raise livestock. The crisis comes about as a result of neither fair trade nor free trade--in fact, the elimination of both. This bill is designed to make a correction in that. It is a clarification. I do not think the clarification would be necessary if enforcement were done, but this bill will clearly set out that a part of the problem can be solved.

Part of the crisis that particularly the small farmers and ranchers who raise livestock have is the drought we are having in the West. We are in the fourth year of a drought right now. That is resulting in a lot of for sale and auction signs going up on ranches. This is partly because they are not getting the proper price for their product. It is a controlled market; it is not a free market.

To bring it to a level that more people would understand, imagine trying to sell a house where the U.S. tradition might have changed so that everybody worked through a realtor, or at least 80 percent of the people worked through a realtor, and the realtor did not really show the house to other people. The realtor bought the house and then put it on the market themselves. The realtor had the capability to set the market price because of the other houses they owned.

That is what is happening with captive supply. There are a lot of technicalities to it. I sincerely hope my colleagues will take a look at it and understand it a little bit. It is very difficult. It is very detailed. It is very complicated to understand, but it is very important to understand. It is important to understand on behalf of the ranchers and consumers.

Now, one would think that if the price were being driven down for the rancher, those of us buying meat at the supermarket would get it for less. But if one tracks the price the ranchers are getting and the price the consumers are paying when the price goes down for the rancher, everything stays level for the consumer. So where is the money going? It is staying in the middle somewhere. We know where it is staying, and we know why it is staying, and it is control of the market. We do not usually allow that in the United States, but in this instance we allow it.

So 80 percent of the market is controlled by four packers, and they set the price. They set it in a way that the rancher has no control over it whatsoever. So the ones suffering this drought and suffering all the risk are the ones receiving the least money from the entire process. We do not believe in that in America. My bill is designed to change that.

Packers who practice price discrimination toward some producers and provide undue preferences to other producers are clearly in violation of the current law, but this law is not being enforced. What we are left with is unenforced laws or no laws at all to protect the independent producer. Since the Packers and Stockyards Act is not being enforced, and the cost to enforcing the law on a case-by-case basis in the courts is expensive and time consuming, today I propose the Senate take action.

Most laws require enforcement. They are like speed limits on a country road. No one pays attention to the sign unless the driver is sharing the road with an agent of the law who will enforce it--like a police car. This section of the Packers and Stockyards Act is like a sign on the road of commerce that no one is paying any attention to because the police are too busy doing something else.

The bill I am introducing today is not just another sign on the road, it is a speed bump. It does not just warn cars to go slower, it makes it more difficult for them to speed. Does it solve the whole problem? No, but it is one speed bump on the way to solving the problem.

My bill does two things to create the speed bump. It requires that livestock producers have a fixed base price in their contracts. It also puts these contracts up for bid in the open market where they belong. Under this bill, forward contracts and marketing agreements must contain a fixed base price on the day the contract is signed. Now, in other businesses, that sounds like how we already operate. But it is not the way the packer operates. Producers are only given a contract that says they will get a certain dollar above the average at the time of the slaughter. And then if the person who controls the market drives the price down, the average can be well below what they ever anticipated it would be.

Under this bill, forward contracts and marketing agreements must contain a fixed base price on the day the contract is signed. This prevents packers from manipulating the base price after the point of sale. You may hear allegations that this bill ends quality-driven production, but it does not prevent adjustments to the base price after slaughter for quality grade or other factors outside packer control. It prevents packers from changing the base price based on the factors they do control.

Contracts that are based on the futures market are also exempted from the bill's requirements. In an open market, buyers and sellers would have the opportunity to bid against each other for contracts and could witness bids that are made and accepted. That would be pretty unique if they knew what the prices were on the products, particularly when it is captive supply. Whether they take the opportunity to bid or not is their choice. The key is they have the access to do so.

I have worked on a number of bills and we have had success getting them through the Senate, and then the lobbying effort in conference knocks them out. That has sincerely convinced me there is a controlled market. Every attempt we make to provide a little speed bump is taken out and it is usually in conference. It usually passes the House, passes the Senate--not in identical form--but it has trouble in the conference committee. That is because there are a lot more lobbyists for the packers than there are for the small ranchers and livestock producers.

My bill also limits the size of the contracts to the rough equivalent of a load of livestock, meaning 40 cattle or

30 swine. It does not limit the number of contracts that will be offered by any individual. This key portion prevents small- and medium- sized livestock producers like those found in Wyoming from being shut out of deals containing thousands of livestock per contract. The more animals you have in the contract, the less likely it is that people can freely participate in the bidding process. It eliminates people.

We are sticking a small number of animals in each contract, but lots of contracts will help us to arrive at a more fair price for the livestock. Requiring a firm base price and an open and transparent market ends the potential for price discrimination, price manipulation, and undue preferences, the things mentioned in that 1921 act.

These are not the only benefits in my bill. It also preserves the very useful risk management tool that contracts provide to livestock producers. Contracts help producers plan and prepare for the future. My bill makes contracts and marketing agreements an even better risk management tool because it solidifies the base price for the producer. He is not guessing what he will sell it for; he has an exact price. Once the agreement is made, a producer can have confidence on shipping day in his ability to feed his family during the next year because he will know in advance how much he can expect to receive for his livestock.

This bill also encourages electronic trading. An open and public market would function much like the stock market where insider trading is prohibited. The stock market provides a solid example of how electronic livestock trading can work to the benefit of everyone involved. For example, price discovery in an open and electronic market is automatic. We tried a number of things to get price discovery so that the producers out there would have an idea what the true market is, whether it is being bought from other producers or being bought out of the captive supply. Every attempt we have made has been thwarted. They have found ways to put little loopholes in regulations so they do not have to report prices. That is not fair. It does not provide an open market.

Captive supply is still weighing on the minds and hurting the pocketbooks of ranchers in Wyoming and across the United States. Wyoming ranchers encourage me to keep up the good fight on this issue on every trip I make to my home State. I wish I had time to share some of the heartrending stories of the way they have been taken to the cleaners on these unique contracts they are forced to sign if they want to be able to sell their product.

The economic soul of Wyoming is built on the foundation of small towns and small businesses. All livestock producers, even small and medium ones, should have a fair chance to compete in an honest game that allows them to get the best price possible for their product. We must do everything we can to keep our small producers in business and protect the consumers. If there was a fluctuation out here on the other end where the consumer is, we might not have quite the same concern, but the consumer is not getting the benefit of this fixed market. So we need to change the fixed market.

We need to change captive supply. My bill removes one of the largest obstructions preventing livestock producers from competing, and that is formula price contracts. I ask my colleagues to assist me in giving their constituents and mine the chance to perform on a level playing field. It will help the economy of the entire United States. I ask for your help on this bill. We will be circulating some letters and further explanations so that we can have cosponsors; and pass the bill unanimously, I hope. I know that is a little difficult to obtain around here, but this is a very important issue and every State has livestock producers. It is time we took care of the livestock producers in a way that did not cost us a lot through enforcement.

I would love to see improved enforcement. I know there are other priority issues on enforcement, particularly since September 11, so I have tried to bring a little speed bump to provide accurate pricing. I ask for your help on the bill.

To reiterate:

Whenever there is a crisis the media has always served to focus the Nation's attention on the problem and who has been affected by it. Then it has been up to us, in the Congress, to review the problem and determine whether or not there was anything we could do to ease the suffering and repair the damage to someone's property and their livelihood.

Most of the time, when the media spots a crisis it is of such a magnitude that the pictures we see of the suffering are devastating and powerful. The images clearly cry out to us to take action and do what we can to restore, as much as possible, the lives of these people to normalcy.

We have all seen in these past few days the pictures of the devastating tornadoes that have wreaked havoc wherever they have touched down. Story after story has appeared in print and on television showing property destroyed, places of business torn in pieces, jobs in jeopardy and lives forever changed by the fury of a few moments of severe weather. Tornadoes do not last a long time, but they leave a path of devastation in their wake that leaves those affected by it forever changed.

Our thoughts and prayers go out to all of those who have been so affected and our hopes that they will be able to put their lives back together and go on as difficult as that will be to do.

As we view the devastation of those tornadoes, there are those in my State who have seen their livelihoods drastically affected by weather and unfair market policy, but they have not been so visible to us because we have not seen their faces on the nightly news or read their stories in the national newspapers. That is because not everyone who has seen their livelihood so drastically affected can be portrayed with quite the same kind of powerful images that depict those who have been touched by the ravages of severe weather patterns. Some problems that destroy livelihoods and weaken industries are far more subtle and more difficult to track.

Instead of being destroyed by a single blow, the industry I am referring to is being slowly put to death by the cruelest of methods-- thousands of small cuts brought on by the lethal combination of several years of drought, ambiguous regulations that are too easily taken advantage of and the lax enforcement of existing law which has allowed for the manipulation of the system to one group's advantage.

Our Nation's ranching industry is in trouble, and, due to the slower pace with which it has been affected, the only stark images we will see of the intensity of the problem are the ``for sale'' or ``up for auction'' signs that acknowledge the closing of a family owned ranch and the end of a family's dream that lasted for generations as the land and the business was handed down for many, many years.

Right now, as I speak, if you are a rancher in the West, you have two major problems affecting your ability to earn a living and provide for your family. The first is the continuing drought which has made it so difficult for ranchers to tend their cattle and provide them with good, affordable grazing.

The second is a regulatory nightmare that has held livestock producers captive by the chains of unfair and manipulative contracts. It is this regulatory nightmare that must be addressed, and which brings me to the floor today as I offer legislation to break the chains and require livestock contracts to contain a fixed base price and be traded in open, public markets.

So, what is this regulation that is destroying the health of our family ranchers? It's a practice called ``captive supply,'' a business practice not well known to those outside of the industry, but a practice that has had a tremendous impact on the ranchers of the West.

If you have not heard about the problem, I must point out that our ranchers have tried to bring it to our attention, but we have not fully focused on their needs. Whenever I travel to Wyoming, or hold a town meeting, or go over the week's mail that I receive from my constituents, I hear the cries for help from our ranchers in Wyoming, and throughout the West. One by one, and without exception, they are all clamoring for attention and relief so they can continue the work that so many in their family have done for so many years.

I could bring a stack of letters that come from people all across my State

about the problems they face. But, in the interest of time, I will read a small excerpt from one that will give you an idea of how bad things are in the ranching industry as our ranchers try to deal with captive supply.

A letter I received from a rancher in Lingle said that the issue of captive supply needed to be reviewed and addressed because it was ``slowly but surely putting small farmers/feeders out of business.'' He then added:

Until the existing laws are enforced in this area of

illegal activities, all other plans or laws will be of very

little consequence.

So what is captive supply and how is it harming our Nation's ranchers to such an extent? Simply put, captive supply refers to the ownership by meat packers of cattle or the contracts they issue to purchase livestock. It is done to ensure that packers will always have a consistent supply of livestock for their slaughterlines.

The original goal of captive supply makes good business sense. All businesses want to maintain a steady supply of animals to ensure a constant stream of production and control costs.

But captive supply allows packers to go beyond good organization and business performance--to market manipulation--and this is where the problem lies.

The packing industry is highly concentrated. Four companies control more than half of all U.S. hog slaughter and more than 80 percent of U.S. fed cattle slaughter. Using captive supply and the market power of concentration, packers can purposefully drive down the prices by refusing to buy in the open market. This deflates all livestock prices and limits the market access of producers that have not aligned with specific packers.

We made an attempt to address the problem of captive supply on the Senate floor, but the amendment to ban packer ownership of livestock more than 14 days before slaughter did not survive the conference committee on the farm bill. However, the problems caused by captive supplies are alive and well, just as Wyoming producers have testified to me in the phone calls, letters, faxes and emails I receive from them. Although I supported the packer ban and still do, I do not think that banning packer ownership of livestock will solve the entire captive supply problem. Packers are using numerous methods beyond direct ownership to control cattle and other livestock.

Currently, packers maintain captive supply through various means including direct ownership, forward contracts, and marketing agreements. The difference between the three is subtle, so let me take a moment to describe how they differ. Direct ownership refers to livestock owned by the packer. In forward contracts, producers agree to the delivery of cattle one week or more before slaughter with the price determined before slaughter. Forward contracts are typically fixed, meaning the base price is set.

As with forward contracts, marketing agreements also call for the delivery of livestock more than one week before slaughter, but the price is determined at or after slaughter. A formula pricing method is commonly used for cattle sold under marketing agreements. In formula pricing, instead of a fixed base price, an external reference price, such as the average price paid for cattle at a certain packing plant during one week, is used to determine the base price of the cattle. I find this very disturbing because the packer has the ability to manipulate the weekly average at a packing plant by refusing to buy in the open market. Unfortunately, marketing agreements and formula pricing are much more common than forward contracts.

In fact, the data published by USDA's Agricultural Marketing Service indicates that in the first week of May 2003, 39,149 of the cattle slaughtered were sold through a forward contract. By comparison, 207,955 of the cattle slaughtered were marketed through formula pricing marketing agreements. Packers were using five times as many formula pricing marketing agreements as forward contracts to purchase their slaughter cattle. As we can see, packers use more marketing agreements because of the advantages those ambiguous contracts give them over producers.

In the same week, 36,899 of the cattle slaughtered were directly owned by packers. These numbers demonstrate that the problem of captive supply is far more extensive than just packer ownership. In the first week of May, packer owned cattle only comprised 13 percent of captive cattle slaughtered. This is why we must act to solve the entire captive supply problem.

I realize it may be difficult to grasp the seriousness of the situation if you are not familiar with the cattle market. Most of us have not signed a contract to sell a load of livestock, but many of us have sold a house. To illustrate the seriousness of the problem, let's explore how you would sell a house using a formula-priced contract in a market structured like the current livestock market.

It is May, and you know you will be selling your home in September. As a wise seller, you want to find a buyer for your home before that time. It turns out that other people do not really buy homes from each other anymore. In fact, four main companies have taken over 80 percent of all real estate transactions. You really have no choice but to deal with one of these companies.

One of them offers you a contract, stating you will receive $10,000 over the average price of what other, similar homes are selling for in your area in September. To manage your risk and ensure a buyer, you have just been practically forced to sign a contract that doesn't specify how much you will receive for your house.

That tingle of fear in the pit of your stomach becomes full-fledged panic when you close the deal in September. You see, the four real estate companies have been planning ahead. They decide to pull away from the market. All the homes selling in September that are not contracted to the companies flood the market and the price for homes in your area drops $12,000. By trying to manage your risk, you sold your home for $2,000 below average.

As a homeowner, you would be outraged, wouldn't you? You would want to know why anyone had the ability to legally take advantage of you. Livestock producers have the same questions when they lose to the market pressures applied by captive supply. Captive supply gives packers the ability to discriminate against some producers. And those producers pay for it with their bottom line. At the same time, packers use contracts and marketing agreements to give privileged access and premiums to other producers regardless of the quality of their product. These uses of captive supply should be illegal. In fact, they are.

Section 202 of the Packers and Stockyards Act states in (3) (a) and (b):

It shall be unlawful for any packer with respect to

livestock . . . to:

(a) Engage in or use any unfair, unjustly discriminatory,

or deceptive practice or device; or

(b) Make or give any undue or unreasonable preference or

advantage to any particular person or locality in any

respect, or subject any particular person or locality to any

undue or unreasonable prejudice or disadvantage in any

respect.

Packers who practice price discrimination toward some producers and provide undue preferences to other producers are clearly in violation of the law. But this law is not being enforced. So what we are left with are unenforced laws or no laws at all to protect the independent producer. Since the Packers and Stockyards Act is not being enforced and the cost of enforcing the law on a case-by-case basis in the courts is expensive and time-consuming, today I propose that the Senate take action.

Most laws require enforcement. They are like speed limits on a country road. No one pays the sign any attention unless the driver is sharing the road with an agent of the law who will enforce it--like a police car. This section of the Packers and Stockyards Act is like a sign on the road of commerce that no one is paying attention to because the police are busy doing something else. The bill I am introducing today is not just another sign on the road. It is a speed bump. It does not just warn cars to go slower, it makes it much more difficult for them to speed.

My bill does two things to create the speed bump. It requires that livestock producers have a fixed base price in their contracts. It also puts these contracts up for bid in the open market where they belong.

Under this bill, forward contracts and marketing agreements must contain a fixed, base price on the day the contract is signed. This prevents packers from manipulating the base price

after the point of sale. You may hear allegations that this bill ends quality-driven production, but it does not prevent adjustments to the base price after slaughter for quality, grade or other factors outside packer control. It prevents packers from changing the base price based on factors that they do control. Contracts that are based on the futures market are also exempted from the bill's requirements.

In an open market, buyers and sellers would have the opportunity to bid against each other for contracts and could witness bids that are made and accepted. Whether they take the opportunity to bid or not is their choice, the key here is that they have access to do so.

My bill also limits the size of contracts to the rough equivalent of a load of livestock, meaning 40 cattle or 30 swine. It does not limit the number of contracts that can be offered by an individual. This key portion prevents small and medium-sized livestock producers, like those found in Wyoming, from being shut out of deals that contain thousands of livestock per contract.

Requiring a firm base price and an open and transparent market ends the potential for price discrimination, price manipulation and undue preferences. These are not the only benefits of my bill. It also preserves the very useful risk management tool that contracts provide to livestock producers. Contracts help producers plan and prepare for the future. My bill makes contracts and marketing agreements an even better risk management tool because it solidifies the base price for the producer. Once the agreement is made, a producer can have confidence on shipping day in his ability to feed his family during the next year because he will know in advance how much he can expect to receive for his livestock.

This bill also encourages electronic trading. An open and public market would function much like the stock market, where insider trading is prohibited. The stock market provides a solid example of how electronic livestock trading can work to the benefit of everyone involved. For example, price discovery in an open and electronic market is automatic.

Captive supply is still weighing on the minds and hurting the pocketbooks of ranchers in Wyoming and across the United States. Wyoming ranchers encourage me to keep up the good fight on this issue on every trip I make to my home State. The economic soul of Wyoming is built on the foundation of small towns and small businesses. All livestock producers, even small and medium-sized ones, should have a fair chance to compete in an honest game that allows them to get the best price possible for their product. We must do everything we can to keep our small producers in business.

My bill removes one of the largest obstructions preventing livestock producers from competing--formula-priced contracts. I ask my colleagues to assist me in giving their constituents and mine the chance to perform on a level playing field.

I yield the floor.

Mr. President, we are having a crisis in the West. Actually, we are having a crisis anywhere that there are people who raise livestock. The crisis comes about as a result of neither fair trade nor free trade--in fact, the elimination of both. This bill is designed to make a correction in that. It is a clarification. I do not think the clarification would be necessary if enforcement were done, but this bill will clearly set out that a part of the problem can be solved.

Part of the crisis that particularly the small farmers and ranchers who raise livestock have is the drought we are having in the West. We are in the fourth year of a drought right now. That is resulting in a lot of for sale and auction signs going up on ranches. This is partly because they are not getting the proper price for their product. It is a controlled market; it is not a free market.

To bring it to a level that more people would understand, imagine trying to sell a house where the U.S. tradition might have changed so that everybody worked through a realtor, or at least 80 percent of the people worked through a realtor, and the realtor did not really show the house to other people. The realtor bought the house and then put it on the market themselves. The realtor had the capability to set the market price because of the other houses they owned.

That is what is happening with captive supply. There are a lot of technicalities to it. I sincerely hope my colleagues will take a look at it and understand it a little bit. It is very difficult. It is very detailed. It is very complicated to understand, but it is very important to understand. It is important to understand on behalf of the ranchers and consumers.

Now, one would think that if the price were being driven down for the rancher, those of us buying meat at the supermarket would get it for less. But if one tracks the price the ranchers are getting and the price the consumers are paying when the price goes down for the rancher, everything stays level for the consumer. So where is the money going? It is staying in the middle somewhere. We know where it is staying, and we know why it is staying, and it is control of the market. We do not usually allow that in the United States, but in this instance we allow it.

So 80 percent of the market is controlled by four packers, and they set the price. They set it in a way that the rancher has no control over it whatsoever. So the ones suffering this drought and suffering all the risk are the ones receiving the least money from the entire process. We do not believe in that in America. My bill is designed to change that.

Packers who practice price discrimination toward some producers and provide undue preferences to other producers are clearly in violation of the current law, but this law is not being enforced. What we are left with is unenforced laws or no laws at all to protect the independent producer. Since the Packers and Stockyards Act is not being enforced, and the cost to enforcing the law on a case-by-case basis in the courts is expensive and time consuming, today I propose the Senate take action.

Most laws require enforcement. They are like speed limits on a country road. No one pays attention to the sign unless the driver is sharing the road with an agent of the law who will enforce it--like a police car. This section of the Packers and Stockyards Act is like a sign on the road of commerce that no one is paying any attention to because the police are too busy doing something else.

The bill I am introducing today is not just another sign on the road, it is a speed bump. It does not just warn cars to go slower, it makes it more difficult for them to speed. Does it solve the whole problem? No, but it is one speed bump on the way to solving the problem.

My bill does two things to create the speed bump. It requires that livestock producers have a fixed base price in their contracts. It also puts these contracts up for bid in the open market where they belong. Under this bill, forward contracts and marketing agreements must contain a fixed base price on the day the contract is signed. Now, in other businesses, that sounds like how we already operate. But it is not the way the packer operates. Producers are only given a contract that says they will get a certain dollar above the average at the time of the slaughter. And then if the person who controls the market drives the price down, the average can be well below what they ever anticipated it would be.

Under this bill, forward contracts and marketing agreements must contain a fixed base price on the day the contract is signed. This prevents packers from manipulating the base price after the point of sale. You may hear allegations that this bill ends quality-driven production, but it does not prevent adjustments to the base price after slaughter for quality grade or other factors outside packer control. It prevents packers from changing the base price based on the factors they do control.

Contracts that are based on the futures market are also exempted from the bill's requirements. In an open market, buyers and sellers would have the opportunity to bid against each other for contracts and could witness bids that are made and accepted. That would be pretty unique if they knew what the prices were on the products, particularly when it is captive supply. Whether they take the opportunity to bid or not is their choice. The key is they have the access to do so.

I have worked on a number of bills and we have had success getting them through the Senate, and then the lobbying effort in conference knocks them out. That has sincerely convinced me there is a controlled market. Every attempt we make to provide a little speed bump is taken out and it is usually in conference. It usually passes the House, passes the Senate--not in identical form--but it has trouble in the conference committee. That is because there are a lot more lobbyists for the packers than there are for the small ranchers and livestock producers.

My bill also limits the size of the contracts to the rough equivalent of a load of livestock, meaning 40 cattle or

30 swine. It does not limit the number of contracts that will be offered by any individual. This key portion prevents small- and medium- sized livestock producers like those found in Wyoming from being shut out of deals containing thousands of livestock per contract. The more animals you have in the contract, the less likely it is that people can freely participate in the bidding process. It eliminates people.

We are sticking a small number of animals in each contract, but lots of contracts will help us to arrive at a more fair price for the livestock. Requiring a firm base price and an open and transparent market ends the potential for price discrimination, price manipulation, and undue preferences, the things mentioned in that 1921 act.

These are not the only benefits in my bill. It also preserves the very useful risk management tool that contracts provide to livestock producers. Contracts help producers plan and prepare for the future. My bill makes contracts and marketing agreements an even better risk management tool because it solidifies the base price for the producer. He is not guessing what he will sell it for; he has an exact price. Once the agreement is made, a producer can have confidence on shipping day in his ability to feed his family during the next year because he will know in advance how much he can expect to receive for his livestock.

This bill also encourages electronic trading. An open and public market would function much like the stock market where insider trading is prohibited. The stock market provides a solid example of how electronic livestock trading can work to the benefit of everyone involved. For example, price discovery in an open and electronic market is automatic. We tried a number of things to get price discovery so that the producers out there would have an idea what the true market is, whether it is being bought from other producers or being bought out of the captive supply. Every attempt we have made has been thwarted. They have found ways to put little loopholes in regulations so they do not have to report prices. That is not fair. It does not provide an open market.

Captive supply is still weighing on the minds and hurting the pocketbooks of ranchers in Wyoming and across the United States. Wyoming ranchers encourage me to keep up the good fight on this issue on every trip I make to my home State. I wish I had time to share some of the heartrending stories of the way they have been taken to the cleaners on these unique contracts they are forced to sign if they want to be able to sell their product.

The economic soul of Wyoming is built on the foundation of small towns and small businesses. All livestock producers, even small and medium ones, should have a fair chance to compete in an honest game that allows them to get the best price possible for their product. We must do everything we can to keep our small producers in business and protect the consumers. If there was a fluctuation out here on the other end where the consumer is, we might not have quite the same concern, but the consumer is not getting the benefit of this fixed market. So we need to change the fixed market.

We need to change captive supply. My bill removes one of the largest obstructions preventing livestock producers from competing, and that is formula price contracts. I ask my colleagues to assist me in giving their constituents and mine the chance to perform on a level playing field. It will help the economy of the entire United States. I ask for your help on this bill. We will be circulating some letters and further explanations so that we can have cosponsors; and pass the bill unanimously, I hope. I know that is a little difficult to obtain around here, but this is a very important issue and every State has livestock producers. It is time we took care of the livestock producers in a way that did not cost us a lot through enforcement.

I would love to see improved enforcement. I know there are other priority issues on enforcement, particularly since September 11, so I have tried to bring a little speed bump to provide accurate pricing. I ask for your help on the bill.

To reiterate:

Whenever there is a crisis the media has always served to focus the Nation's attention on the problem and who has been affected by it. Then it has been up to us, in the Congress, to review the problem and determine whether or not there was anything we could do to ease the suffering and repair the damage to someone's property and their livelihood.

Most of the time, when the media spots a crisis it is of such a magnitude that the pictures we see of the suffering are devastating and powerful. The images clearly cry out to us to take action and do what we can to restore, as much as possible, the lives of these people to normalcy.

We have all seen in these past few days the pictures of the devastating tornadoes that have wreaked havoc wherever they have touched down. Story after story has appeared in print and on television showing property destroyed, places of business torn in pieces, jobs in jeopardy and lives forever changed by the fury of a few moments of severe weather. Tornadoes do not last a long time, but they leave a path of devastation in their wake that leaves those affected by it forever changed.

Our thoughts and prayers go out to all of those who have been so affected and our hopes that they will be able to put their lives back together and go on as difficult as that will be to do.

As we view the devastation of those tornadoes, there are those in my State who have seen their livelihoods drastically affected by weather and unfair market policy, but they have not been so visible to us because we have not seen their faces on the nightly news or read their stories in the national newspapers. That is because not everyone who has seen their livelihood so drastically affected can be portrayed with quite the same kind of powerful images that depict those who have been touched by the ravages of severe weather patterns. Some problems that destroy livelihoods and weaken industries are far more subtle and more difficult to track.

Instead of being destroyed by a single blow, the industry I am referring to is being slowly put to death by the cruelest of methods-- thousands of small cuts brought on by the lethal combination of several years of drought, ambiguous regulations that are too easily taken advantage of and the lax enforcement of existing law which has allowed for the manipulation of the system to one group's advantage.

Our Nation's ranching industry is in trouble, and, due to the slower pace with which it has been affected, the only stark images we will see of the intensity of the problem are the ``for sale'' or ``up for auction'' signs that acknowledge the closing of a family owned ranch and the end of a family's dream that lasted for generations as the land and the business was handed down for many, many years.

Right now, as I speak, if you are a rancher in the West, you have two major problems affecting your ability to earn a living and provide for your family. The first is the continuing drought which has made it so difficult for ranchers to tend their cattle and provide them with good, affordable grazing.

The second is a regulatory nightmare that has held livestock producers captive by the chains of unfair and manipulative contracts. It is this regulatory nightmare that must be addressed, and which brings me to the floor today as I offer legislation to break the chains and require livestock contracts to contain a fixed base price and be traded in open, public markets.

So, what is this regulation that is destroying the health of our family ranchers? It's a practice called ``captive supply,'' a business practice not well known to those outside of the industry, but a practice that has had a tremendous impact on the ranchers of the West.

If you have not heard about the problem, I must point out that our ranchers have tried to bring it to our attention, but we have not fully focused on their needs. Whenever I travel to Wyoming, or hold a town meeting, or go over the week's mail that I receive from my constituents, I hear the cries for help from our ranchers in Wyoming, and throughout the West. One by one, and without exception, they are all clamoring for attention and relief so they can continue the work that so many in their family have done for so many years.

I could bring a stack of letters that come from people all across my State

about the problems they face. But, in the interest of time, I will read a small excerpt from one that will give you an idea of how bad things are in the ranching industry as our ranchers try to deal with captive supply.

A letter I received from a rancher in Lingle said that the issue of captive supply needed to be reviewed and addressed because it was ``slowly but surely putting small farmers/feeders out of business.'' He then added:

Until the existing laws are enforced in this area of

illegal activities, all other plans or laws will be of very

little consequence.

So what is captive supply and how is it harming our Nation's ranchers to such an extent? Simply put, captive supply refers to the ownership by meat packers of cattle or the contracts they issue to purchase livestock. It is done to ensure that packers will always have a consistent supply of livestock for their slaughterlines.

The original goal of captive supply makes good business sense. All businesses want to maintain a steady supply of animals to ensure a constant stream of production and control costs.

But captive supply allows packers to go beyond good organization and business performance--to market manipulation--and this is where the problem lies.

The packing industry is highly concentrated. Four companies control more than half of all U.S. hog slaughter and more than 80 percent of U.S. fed cattle slaughter. Using captive supply and the market power of concentration, packers can purposefully drive down the prices by refusing to buy in the open market. This deflates all livestock prices and limits the market access of producers that have not aligned with specific packers.

We made an attempt to address the problem of captive supply on the Senate floor, but the amendment to ban packer ownership of livestock more than 14 days before slaughter did not survive the conference committee on the farm bill. However, the problems caused by captive supplies are alive and well, just as Wyoming producers have testified to me in the phone calls, letters, faxes and emails I receive from them. Although I supported the packer ban and still do, I do not think that banning packer ownership of livestock will solve the entire captive supply problem. Packers are using numerous methods beyond direct ownership to control cattle and other livestock.

Currently, packers maintain captive supply through various means including direct ownership, forward contracts, and marketing agreements. The difference between the three is subtle, so let me take a moment to describe how they differ. Direct ownership refers to livestock owned by the packer. In forward contracts, producers agree to the delivery of cattle one week or more before slaughter with the price determined before slaughter. Forward contracts are typically fixed, meaning the base price is set.

As with forward contracts, marketing agreements also call for the delivery of livestock more than one week before slaughter, but the price is determined at or after slaughter. A formula pricing method is commonly used for cattle sold under marketing agreements. In formula pricing, instead of a fixed base price, an external reference price, such as the average price paid for cattle at a certain packing plant during one week, is used to determine the base price of the cattle. I find this very disturbing because the packer has the ability to manipulate the weekly average at a packing plant by refusing to buy in the open market. Unfortunately, marketing agreements and formula pricing are much more common than forward contracts.

In fact, the data published by USDA's Agricultural Marketing Service indicates that in the first week of May 2003, 39,149 of the cattle slaughtered were sold through a forward contract. By comparison, 207,955 of the cattle slaughtered were marketed through formula pricing marketing agreements. Packers were using five times as many formula pricing marketing agreements as forward contracts to purchase their slaughter cattle. As we can see, packers use more marketing agreements because of the advantages those ambiguous contracts give them over producers.

In the same week, 36,899 of the cattle slaughtered were directly owned by packers. These numbers demonstrate that the problem of captive supply is far more extensive than just packer ownership. In the first week of May, packer owned cattle only comprised 13 percent of captive cattle slaughtered. This is why we must act to solve the entire captive supply problem.

I realize it may be difficult to grasp the seriousness of the situation if you are not familiar with the cattle market. Most of us have not signed a contract to sell a load of livestock, but many of us have sold a house. To illustrate the seriousness of the problem, let's explore how you would sell a house using a formula-priced contract in a market structured like the current livestock market.

It is May, and you know you will be selling your home in September. As a wise seller, you want to find a buyer for your home before that time. It turns out that other people do not really buy homes from each other anymore. In fact, four main companies have taken over 80 percent of all real estate transactions. You really have no choice but to deal with one of these companies.

One of them offers you a contract, stating you will receive $10,000 over the average price of what other, similar homes are selling for in your area in September. To manage your risk and ensure a buyer, you have just been practically forced to sign a contract that doesn't specify how much you will receive for your house.

That tingle of fear in the pit of your stomach becomes full-fledged panic when you close the deal in September. You see, the four real estate companies have been planning ahead. They decide to pull away from the market. All the homes selling in September that are not contracted to the companies flood the market and the price for homes in your area drops $12,000. By trying to manage your risk, you sold your home for $2,000 below average.

As a homeowner, you would be outraged, wouldn't you? You would want to know why anyone had the ability to legally take advantage of you. Livestock producers have the same questions when they lose to the market pressures applied by captive supply. Captive supply gives packers the ability to discriminate against some producers. And those producers pay for it with their bottom line. At the same time, packers use contracts and marketing agreements to give privileged access and premiums to other producers regardless of the quality of their product. These uses of captive supply should be illegal. In fact, they are.

Section 202 of the Packers and Stockyards Act states in (3) (a) and (b):

It shall be unlawful for any packer with respect to

livestock . . . to:

(a) Engage in or use any unfair, unjustly discriminatory,

or deceptive practice or device; or

(b) Make or give any undue or unreasonable preference or

advantage to any particular person or locality in any

respect, or subject any particular person or locality to any

undue or unreasonable prejudice or disadvantage in any

respect.

Packers who practice price discrimination toward some producers and provide undue preferences to other producers are clearly in violation of the law. But this law is not being enforced. So what we are left with are unenforced laws or no laws at all to protect the independent producer. Since the Packers and Stockyards Act is not being enforced and the cost of enforcing the law on a case-by-case basis in the courts is expensive and time-consuming, today I propose that the Senate take action.

Most laws require enforcement. They are like speed limits on a country road. No one pays the sign any attention unless the driver is sharing the road with an agent of the law who will enforce it--like a police car. This section of the Packers and Stockyards Act is like a sign on the road of commerce that no one is paying attention to because the police are busy doing something else. The bill I am introducing today is not just another sign on the road. It is a speed bump. It does not just warn cars to go slower, it makes it much more difficult for them to speed.

My bill does two things to create the speed bump. It requires that livestock producers have a fixed base price in their contracts. It also puts these contracts up for bid in the open market where they belong.

Under this bill, forward contracts and marketing agreements must contain a fixed, base price on the day the contract is signed. This prevents packers from manipulating the base price

after the point of sale. You may hear allegations that this bill ends quality-driven production, but it does not prevent adjustments to the base price after slaughter for quality, grade or other factors outside packer control. It prevents packers from changing the base price based on factors that they do control. Contracts that are based on the futures market are also exempted from the bill's requirements.

In an open market, buyers and sellers would have the opportunity to bid against each other for contracts and could witness bids that are made and accepted. Whether they take the opportunity to bid or not is their choice, the key here is that they have access to do so.

My bill also limits the size of contracts to the rough equivalent of a load of livestock, meaning 40 cattle or 30 swine. It does not limit the number of contracts that can be offered by an individual. This key portion prevents small and medium-sized livestock producers, like those found in Wyoming, from being shut out of deals that contain thousands of livestock per contract.

Requiring a firm base price and an open and transparent market ends the potential for price discrimination, price manipulation and undue preferences. These are not the only benefits of my bill. It also preserves the very useful risk management tool that contracts provide to livestock producers. Contracts help producers plan and prepare for the future. My bill makes contracts and marketing agreements an even better risk management tool because it solidifies the base price for the producer. Once the agreement is made, a producer can have confidence on shipping day in his ability to feed his family during the next year because he will know in advance how much he can expect to receive for his livestock.

This bill also encourages electronic trading. An open and public market would function much like the stock market, where insider trading is prohibited. The stock market provides a solid example of how electronic livestock trading can work to the benefit of everyone involved. For example, price discovery in an open and electronic market is automatic.

Captive supply is still weighing on the minds and hurting the pocketbooks of ranchers in Wyoming and across the United States. Wyoming ranchers encourage me to keep up the good fight on this issue on every trip I make to my home State. The economic soul of Wyoming is built on the foundation of small towns and small businesses. All livestock producers, even small and medium-sized ones, should have a fair chance to compete in an honest game that allows them to get the best price possible for their product. We must do everything we can to keep our small producers in business.

My bill removes one of the largest obstructions preventing livestock producers from competing--formula-priced contracts. I ask my colleagues to assist me in giving their constituents and mine the chance to perform on a level playing field.

I yield the floor.

Mr. President, last week, some of our colleagues came to the floor to discuss the President's recent appearance on the USS Abraham Lincoln and the propriety of that appearance. I, however, come to the floor today to discuss some of what the President said on the Lincoln, especially with regard to the fight against terrorism.

Mr. President, I rise today to talk about the fight against global terrorism--an effort that is surely our highest national security priority. I want to spend a few minutes talking about the fight against terrorism today because it is not at all clear to me that we are as focused on this mission as we should be. I fear that our mission has become obscured and our approach unfocused. I also fear that this confused approach will undermine our goal rather than enhance our security.

I had planned to make these remarks even before yesterday's terrible terrorist attacks in Saudi Arabia. Early reports indicate that those deplorable

attacks killed several, including at least 10 Americans. Many more innocent people were wounded. Al-Qaida is strongly suspected to be responsible. Of course, my heart and all of our hearts go out to all of the families who are grieving today and to those who are left with the terrible uncertainty as they wait to hear news of loved ones.

More information will surely be emerging shortly, but Secretary Powell has already pointed out one of the most important conclusions that can be drawn from this incident in Saudi Arabia, and that is that those forces who would have us live in fear have not been destroyed.

I have no doubt that everyone in this Chamber was gratified to hear the recent better news about Pakistan's arrest of several members of an important al-Qaida cell, including a Yemeni man believed to be involved in the October 2000 attack on the U.S. warship Cole in Yemen. I look forward to more information about this development. But I also look forward to more information about another related matter.

The President reminded us on the USS Lincoln that he has pledged that terrorists who attacked America ``would not escape the patient justice of the United States.'' I think the country expects nothing less. But how many people noticed when, according to reports, 10 men escaped from a prison in Yemen on April 11--10 men who apparently were being held on charges of involvement in the terrorist attack on the USS Cole that killed 17 American sailors, including one from my home State of Wisconsin?

I want to know--is this so? If so, how did they escape? Did they have assistance? Critically, why are we not hearing more about this? This escape occurred, apparently, just as our brave troops were entering Baghdad--at least in part in the name of stopping the threat of terrorism. But no one seems to be discussing at all this potentially dangerous lapse in Yemen. Did the perpetrators of the murder of 17 Americans on the USS Cole escape or not? And what does this mean? Americans pledge every day to never forget September 11, 2001. We pledge this to ourselves, to each other, and to the rest of the world, but I fear that the administration and the Congress are losing sight of our most important goals and priorities.

September 11 is invoked in some surprising and, I think, largely unrelated contexts. Sometimes the very idea of terrorism is used by some on the right and some on the left as a politically convenient attack on whomever or whatever they do not agree with. Rhetoric about September 11 and the fight against terrorism seems to be everywhere, and our distinguished colleague, the senior Senator from West Virginia, raised this very same issue in his remarks last week.

In many ways, the actual business of combating the terrorist organizations or organization responsible for the attacks on our embassies in Kenya and Tanzania, for the attack on the USS Cole, for the horror of September 11, and now possibly for last night's attacks in Riyadh, seems to be lost in the shuffle.

A few days ago, from the deck of the USS Lincoln, our President told the American people that ``the battle of Iraq is one victory in a war on terror that began on September 11, 2001.'' And polls indicate a majority of the American people believe the Saddam Hussein regime was involved in the September 11 attacks. But I have never--I have never-- not in hearings, not in classified briefings, I have never heard once our officials assert we have intelligence indicating this is the case.

President Bush was, of course, right to praise our dedicated service men and women during that speech for they have performed their duties with skill and bravery and superb professionalism. I enthusiastically join the President in thanking them and in welcoming those who are now coming home.

But I cannot and will not join in any attempt to blur what must be the necessary and principal focus on the international terrorist threat by too easily merging it with different issues, including the issue of Iraq.

Last October, I was not able to support the resolution authorizing the President to use force in Iraq. I felt that in terms of the constantly shifting justifications for an invasion and in terms of the mission and the plan for the engagement's aftermath, I felt the administration had not made a sufficiently compelling case for Congress to grant war powers to the President.

I had no problem granting such power to the President to make war on those who attacked this country on September 11, but Iraq was a different issue which, of course, is why it required its own resolution authorizing force. If, in fact, there was a connection in planning together for the 9/11 attack by Saddam Hussein and his agents and the perpetrators of 9/11 and al-Qaida, then I believe there was no need for additional authority and resolution.

The administration had and continues to have all the authority required to go after the perpetrators of 9/11, but Iraq was and is a different issue. In fact, many of us feared it would be a distraction from the urgent task of fighting terrorism. I said on the floor in October, right after the President's famous speech in Cincinnati, the administration's arguments regarding Iraq did not add up to a coherent basis for a new major war in the middle of our current challenging fight against the terrorism of al-Qaida and related organizations.

Of course, a majority of my colleagues in this Chamber voted in favor of authorizing the President to use force in Iraq. We did proceed, and the brave men and women of the United States military answered the call to service and performed brilliantly.

It is certainly my understanding when the Senate voted to authorize the use of force, and it remains my understanding today, that most Senators were convinced by the most compelling argument that the administration put forward. That is the one relating to Iraq's failures to comply with its obligations to verifiably dismantle and destroy its weapons of mass destruction program.

All of us recognize this as a serious issue, but now we are talking less and less about those weapons, it seems, and there is less and less clarity about this matter. So before returning to the principal issue of the fight against terrorism, let me spend a few minutes on the issue of WMD in Iraq.

I raise this issue not in an attempt to revisit the debate about our wisdom in the approach in Iraq and not because I am searching for a smoking gun. I raise it because it does matter whether or not we find WMD. Most importantly, it matters because if those materials were in the country in the first place and we cannot find them now, that is a security problem. Where did they go? Whose hands are they in? These are, obviously, very serious questions, and accounting for these materials cannot be written off as some sort of distraction or legalistic irrelevance.

Just yesterday the New York Times reported that the nuclear expert for the Army's Mobile Exploitation Team Alpha was unaware of any U.S. policy as to how to handle radioactive material that may be found in Iraq, material that could be used to make a dirty bomb. On Sunday, the Washington Post reported that the group directing the U.S. search for weapons of mass destruction in Iraq is ``winding down operations'' after a host of fruitless missions.

For months, I and others asked the administration: What is the plan for securing these weapons? We tried to understand how we would use the intelligence that was shared in the briefing room to quickly secure weapons of mass destruction and the means to make them. We asked the question for good reason. We were concerned that in the midst of the disorder and disarray likely to accompany military action and the fall of Saddam that WMD could be spirited out of the country or sold to the highest bidder, compounding the threat to the United States rather than eliminating it.

We were right to ask about this issue, and today it appears we either had a problem with our intelligence or we had an inadequate plan. Either way, we are talking about a serious problem that should be examined carefully and one that should not be repeated.

I also think the issue of weapons of mass destruction matters in terms of how the rest of the world and history will understand this undertaking in Iraq. Those perceptions and judgments do affect our security and global stability. We cannot afford to have the world believing the United States will

conjure up pretexts to wage wars and overthrow governments around the world at will. That is not who we are, and it is not in our interest to be perceived in that fashion.

Do not misunderstand me, I am not suggesting at all this was conjured up. There is no doubt that Iraq was not in compliance with Security Council Resolution 1441 when this conflict began, but I think we need to continue to focus on disarmament to keep from muddying the waters with regard to our intentions, and I believe we should accept credible and qualified international assistance in this regard. Yes, what the rest of the world thinks surely matters.

Turning back to the paramount issue of the fight against terrorism, I believe we have to keep this truth about how we are perceived throughout the rest of the world in mind. Perhaps the most important form of American power projected over the last century has been the power of our ideas and our values. If we lose our capacity to lead in that sense, then all of us in Government will have presided over the greatest loss of power in American history, regardless of how much we spend on our mighty and admirable military forces. And we will have put ourselves at a great disadvantage, likely a decisive and crippling disadvantage, in the fight against terrorism, which is our first national priority, which is our first priority in terms of national security.

I recognize many issues are interlinked, that our approach to one policy issue may affect the course of the campaign against terrorism. There can be no doubt about our primary responsibility and our most important security concern. We should be having a more focused dialog and exercising our oversight responsibilities in a more focused way.

A tremendous number of questions came to the surface on September 11. How can we win a war against a shadowy network of nonstate actors? How can we define success? How will we know when we have been victorious? All of us, Democrats and Republicans, the Congress and the executive branch, waded through these questions recognizing that some answers would take time to take shape.

So today many questions remain. Where are we in this fight against terrorism? Our colleague Senator Graham of Florida, one of the most respected Members of this body, suggested recently on the Today show that the war on terrorism has been ``essentially abandoned over the past year,'' and that it is ``a fundamental mis- characterization'' to describe the war in Iraq as part of the fight against global terrorism.'' Both issues should be the subject of intense focus in Congress. How are we finding our way in this new kind of conflict? How stable and robust is the multilateral coalition committed to combating terrorism of global reach?

The task at hand is difficult enough without obscuring the issues. Recently when Secretary Powell testified before the Senate Foreign Relations Committee, he noted that Americans have concluded that terrorism must be eradicated. But, he said:

Some in Europe see it differently. Some see terrorism as a

regrettable but inevitable part of society and they want to

keep it at arm-length and as low key as possible.

At this point, I am uncertain as to how to interpret this. Are our European partners really unconvinced of the need to fight terrorism? Which partners is he talking about? What steps are they unwilling to take to combat international terrorist organizations? These are real issues and the Secretary is quite right to raise them. But I am left uncertain. Are we conflating policy divergence on Iraq with divergence on international terrorism? Is that what we are talking about?

The President has asserted that:

Any person involved in committing or planning terrorist

attacks against the American people becomes an enemy of this

country, and a target of American justice. . . . Any person,

organization, or government that supports, protects, or

harbors terrorists is complicit in the murder of the

innocent, and equally guilty of terrorist crimes.

But if it is our policy to eradicate terrorist networks of global reach, then what does it mean when U.S. forces sign a cease-fire agreement with a designated foreign terrorist organization, as they did on April 15 with the Iraq-based Iranian organization known as the People's Mujahedeen or more formally as the Mujahedeen Khalq, the MEK? Are we making peace with terrorist organizations? For what purpose; to what end? Is there a question about the way we apply the terrorist organization designation? Now we read that the organization is surrendering weapons to U.S. forces in a reversal of the April 15 decision. What are the terms of this new agreement? The issues are difficult, but the elected representatives of the American people should be working on shaping the answers together, not picking up hints about ad-hoc decisions by scanning the wires.

Few would argue with the fact that this administration is intensely secretive. And, in this atmosphere of tightly controlled information, too often the elected representatives of the American people are stifled in our ability to fulfill Congress's very important oversight role. With only vague information at our disposal, it is difficult to assess progress or the wisdom of our policy course. The absence of clarity and the absence of data are dangerous. I think it endangers the American people.

The President was right when he said that we have not forgotten the victims of September 11. We have not, and we cannot. But in the same vein, we must not allow the mission that we accepted in the aftermath of that day to become an ever-shifting idea, one that we can never pin down in order to evaluate our performance and take stock of our needs. Let us hear less rhetoric and more about disturbing reports, such as the possible escape of the perpetrators of the dastardly attack on the USS Cole. That surely relates to the fight against terrorism. We certainly cannot permit the fight on terrorism, this most serious of issues, this horror that unites all Americans in resistance and resolve, to become a matter of rhetorical convenience. Our national security is at stake. We need clarity, we need focus, and we need candor. The American people deserve nothing less.

I yield the floor.

Mr. President, I rise to introduce the Low-Level Radioactive Waste Act of 2003. I am pleased that the Ranking Member of the Energy and Natural Resources Committee, Senator Bingaman, is a cosponsor of this important legislation. Our bill will address the efforts made by the Department of Energy, DOE, to recover and dispose of thousands of domestic Greater-than-Class-C, GTCC, radiological sources. These have the highest radiation levels and, in general, pose the greatest concern in terms of being used in a so-called ``dirty bomb.''

Since September 11, we have faced the possibility that a terrorist could use a dirty bomb in an attack in the United States. A dirty bomb combines conventional explosives with highly radioactive materials. When exploded, it would disperse the radioactive materials, reducing the impact from radiation. But, if set off in the downtown of a major city, it could still contaminate a wide area with radiation, cause death and destruction due to the explosion, and panic and substantial economic damage could result. It is not surprising that the Department of Homeland Security has chosen as one of its training scenarios a simulated ``dirty bomb'' attack on an American city.

Secretary of Energy Spencer Abraham told an International Atomic Energy Agency conference in March, ``Radioactive sources can be found all over the world, and terrorist are seeking to acquire them.'' CIA Director George Tenet told Congress in February that he was concerned about Al Qaeda's attempts to build a dirty bomb. He said, ``construction of such a device is well within Al Qaeda capabilities-- if it can obtain the radiological material.''

Radiological sources are used widely in industry, agriculture, medicine, and research. Appropriately, Secretary Abraham has made it priority for the Department of Energy to help other countries secure their radiological sources. But as the United States works internationally to secure dangerous radiological sources, we also must be sure our own house is in order.

As chairman of the International Security Subcommittee of the Senate Government Affairs Committee, I held hearings in the fall of 2001 that covered the threat posed by dirty bombs. I also requested that GAO examine U.S. efforts to secure radioactive sources within the United States.

GAO recently finished their inquiry, and I am sorry to report that GAO found our house is not in order. Many of you may have seen the report on NBC Nightly News last night that featured GAO's investigation.

GAO's report shows that not only the former Soviet Union, but also the United States does not keep track of or account for its radioactive sources in a reliable manner. There is not a precise count of GTCC sources in the United States. Some quarter to half a million are estimated to exist. Some 24,000 new GTCC sources are being produced each year.

A central issue is what is being done with unwanted radioactive devices. We don't have an accurate account of unwanted devices in this country, and the program for recovering and securing them is proceeding too slowly.

In 1985, Congress authorized DOE to provide a facility for disposing of GTCC waste, including GTCC sealed radiological sources that were no longer wanted by their owners. GAO found that after 18 years, DOE still has not developed a facility for storing GTCC wastes.

DOE assumes a facility for receiving GTCC sealed sources will be available by FY 2007. But DOE has not taken serious steps to insure this facility will be built.

Instead, DOES has an interim program for collecting and holding unwanted radiological sources. In 1999, DOE created an Off-site Source Recovery Project, or OSR, in the Office of Environmental Management for these purposes.

The OSR Project has recovered about 5,3000 sealed sources. Another 4,400 sources, held by 328 different owners across the United States, are known to be in need of recovery. DOE estimates a further 4,600 sources will need to be recovered by 2010, when the OSR Project is scheduled to end because the permanent storage facility should be operating.

Thousands more sources, however, will need to be recovered outside the OSR project once a depository opens.

Every State in the Union has radioactive sources that need to be recovered, according to the GAO report. States with more than a 100 sources to be recovered include Arizona, California, Illinois, Maryland, New York, and Texas. Another 25 States have between 10 and 100 sources to be recovered.

The GAO report notes that many of these are small sources with small amounts of radiation but hundreds are larger sources with large amounts of radioactivity.

Alarmingly, the question of dirty bombs aside, there are almost two nuclear bombs worth of unwanted plutonium-239 sources that DOE cannot recover because they lack storage space. GAO reports that universities that have this material want to give it up, but cannot, because the DOE does not have the space to store them.

We are concerned that the program to recover, secure, and store GTCC radiological sources is not receiving the

priority it deserves. The disposal of thousands of radiological sources must be addressed. But DOE will not be prepared to dispose of these sources permanently in the next seven years because DOE has not identified the type of facility or provided a cost estimate and time- line for its construction.

This bill will address these concerns. To insure the permanent disposal program gets the attention it needs within DOE, our legislation requires DOE to designate a responsibility entity within DOE to develop a facility for disposal of GTCC wastes.

It also requires the DOE to report to Congress on the current situation and future plans for the disposal of GTCC radioactive waste. After the completion of this report, the DOE must submit to Congress a report on the cost and schedule to complete an environment impact statement and record of decision on a permanent disposal facility for GTCC radioactive wastes. Finally, before the year is out, DOE must deliver to Congress a plan to provide for the short-term recovery of the GTCC radioactive waste until a permanent facility is available.

I am also concerned that the short-term Offsite Source Recovery Project may lack the funding required to ensure that all designated radiological sources are safety and securely recovered in a timely manner. The program apparently will be funded adequately through the end of FY04. The FY02 emergency supplemental budget provided ten millions dollars, and the President requested about two millions dollars in his FY04 budget proposal. But I caution Congress to keep an eye on this program to guarantee sufficient funds are requested in the FY05 budget when it is submitted to Congress next year.

Thousands of sealed sources await disposal, some requiring security measures greater than those in place at current storage sites. The problem posed by these sources will not go away by itself. Universities and industry do not have the means or facilities to secure these materials and are asking the federal government for help.

When the United States began non-proliferation efforts in the former Soviet Union, one of the first jobs was to begin consolidating nuclear weapons and fissile materials in secure facilities to await disposal or destruction. As Secretary Abraham has said, due to worries about terrorists acquiring dirty bombs, the DOE now is working to secure radiological sources overseas.

I support these efforts. The bill Senator Bingaman and I have introduced will give radiological sources and waste on American soil the same consideration. Collecting and securing these sources was once a matter of public safety. It is now a national security concern that deserves the attention of Congress.

I ask unanimous consent that the text of the bill be printed in the Record.

Mr. President, I rise today to introduce a piece of legislation that is of paramount importance to the State of New Mexico and many other Western States. This bill will address the mounting pressures brought on by the growing demands throughout the West of a diminishing water supply.

A water crisis has ravaged the West for 4 years. Drought conditions are expected to expand into the upper Midwest this year. Last year snow packs were abnormally low, causing severe drought conditions. Snow pack conditions this year are still low, but marginally better in the Southwest. The rest of the West does not look any more promising.

I know that the seriousness of the water situation in New Mexico becomes more acute every single day. This drought has affected every New Mexican and nearly everyone in the West in some way. Wells are running dry, farmers are being forced to sell livestock, many of our cities are in various stages of conservation and many, many acres have been charred by catastrophic wildfires.

The drought conditions also have other consequences. For example, the lack of stream flow makes it very difficult for New Mexico to meet its compact delivery obligations to the State of Texas.

The bill that I am introducing today deals more specifically with the issue of in-stream water flows. To compound the drought situation, New Mexico is home to a vast amount of salt cedar. Salt cedar is a water- thirsty non-native tree that continually strips massive amounts of water out of New Mexico's two predominant water supplies--the Pecos and the Rio Grande rivers.

Estimates show that one mature salt cedar tree can consume as much as 200 gallons of water per day; over the growing season that's 7 acre feet of water for each acre of salt cedar. In addition to the excessive water consumption, salt cedars increase fire, increase river channelization and flood frequency, decrease water flow and increase water and soil salinity along the river. Studies indicate that eradication of the salt cedars could increase river flows. Increasing river flows could help alleviate mounting pressure to meet compact delivery obligations--both on the Pecos and the Rio Grande.

The drought and the mounting legal requirements on both the Pecos and Rio Grande rivers are forcing us toward a severe water crisis. Every river in the intermountain West seems to be facing these same problems. Solving such water problems has become one of my top priorities.

I ask unanimous consent that a copy of the bill be printed in the Record.

I am happy to yield.

This map which we just showed indicates that your problem is not just yours, my problem is not just mine. All the States that are green on the chart have tamarisk or one of these foreign plants such as salt cedar, that have infested the area, sucking up their water for no good use.

Estimates show that a mature salt cedar tree can consume as much as 200 gallons of water a day over the growing season or 7 acre feet of water for each acre of salt cedar.

In addition to the excessive water consumption, the salt cedar increases fire, increases river channelization, flood frequency, decreases water flow, increases water and soil salinity over the various river basins.

They are good for nothing.

I thank the Senator for joining me.

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.