Irrigation Subsidy Reduction Act of 2005

Mr. President, I rise today to introduce a bill designed to ensure the Department of Defense releases both to the Congress and to the Base Realignment and Closure Commission all of the information used in generating its recommendations in the current BRAC round.

First, I want to thank the bill's sponsors for their support in this effort--Senators Thune, Collins, Sununu, Murkowski, Domenici, Lieberman, Dodd, Gregg, Lott, Johnson, Corzine, and Bingaman. I appreciate their recognition of the critical importance of ensuring we are given the information it is only right we have with regard to this base closure process.

Under the current Base Closing and Realignment statute, the Secretary of Defense shall make:

all information used by the Secretary to prepare the

recommendations under this subsection available to Congress,

including any committee or member of Congress.

The Secretary owes this same obligation to the BRAC Commission and to the Comptroller General of the United States.

Moreover, the Secretary of Defense is required to produce the data justifying their base closing decisions within 7 days--7 days. The 2005 BRAC list was released on Friday, May 13. Here we are, nearly two weeks later, and the Department of Defense continues to flout a key requirement of the very BRAC statute that gives it base closure authority in the first place. This amounts to a blatant refusal by the Pentagon to back up its highly questionable decisions to close a number of military facilities that are absolutely irreplaceable and indispensable to our national security.

Closing bases--or effectively shuttering them through massive realignment--of the magnitude that we are dealing with could only have been made by ignoring or misapplying BRAC criteria. The Defense Department's subsequent refusal to release the very data on which such decisions were made effectively shrouds the entire process in secrecy, depriving the bases and communities impacted, as well as the BRAC Commission, from gaining access to the very data needed to review the Pentagon's decisions.

What type of data am I talking about? To us a few examples from my own office's experience, the Department of the Navy has yet to release a detailed breakdown of cost of closure assessments, including factors applied by the COBRA model if they did not do actual cost estimates. We have yet to see all of the options considered by the Chief of Naval Operations or the Vice Chief of Naval Operations to reduce excess capacity in shipyards, including

closure, realignment, workload shifts and private sector capacity. We have still not received a detailed breakdown of cost of operations assessment, including shipyard and base costs.

These are just a few specific examples of what has not been provided. Other general categories would include data on the economic impact on existing communities, the degree to which the Defense Department looked into the ability of Maine's bases to accommodate future mission capabilities, and the impact of costs related to potential environmental restoration, waste management, environmental compliance restoration, readiness, future mission requirements. There are a number of such issues that are included in the base closing statute that requires the Defense Department to consider in making its evaluation and making, as well, its original determination, in terms of which bases they would recommend for closure or realignment.

The Defense Department's stall tactics are most acutely felt by those currently preparing to make presentations before realignment or closure of their specific bases. Here we are, on May 25, almost 2 weeks after the release of the base-closing list, and yet this critical data is still being sequestered behind Pentagon walls, and the communities affected by these closures are now forced to fly blind as they make their cases before the base-closing commission.

How hamstrung are these advocates, including many of my colleagues in the Senate and in the House of Representatives? Allow me to elaborate.

The first base-closing hearings are expected to take place in Salt Lake City on June 7, less than 2 weeks from now. How are the advocates for Mountain Home Air Force Base in Idaho or Defense Finance and Accounting Service stations in Kansas City and St. Louis supposed to prepare for a case, for a hearing in less than 2 weeks with this critical data being withheld?

The scheduled base-closing hearings to follow are no less forgiving. In fact, between June 15 and June 30, base-closing commission hearings will be held in the following cities: Fairbanks, AK; Portland, OR; Rapid City, SD; Dallas, TX; Grand Forks, ND; Clovis, NM; Buffalo, NY; Charlotte, NC; and Atlanta, GA.

In my case, in the State of Maine, in Portsmouth, NH, for Portsmouth Naval Shipyard, for Brunswick Air Force station, for the Defense Accounting Service in Limestone, ME, those will be scheduled on July 6 in Boston.

We are all working feverishly, as many of my colleagues are, along with State governments and all officials, to get our presentations for these most vital and critical hearings in order. Yet given the current blackout of backup data, that task is akin to defending one's self in a criminal case without the prosecutor putting forth the supposedly incriminating evidence.

This Department of Defense has taken foot dragging and obfuscation to new state-of-the-art levels. The bill I am introducing today will make clear that this delinquency will result in serious consequences.

So the legislation I am introducing is very straightforward and to the point. First, it states that the Department of Defense has 7 days from the date of the enactment of this law in which to release all of its supporting data for its realignment and closure decisions. Second, if this 7-day deadline is not met, the entire base-closing process of 2005 is canceled. Third, even if this deadline is met, all the base- closing statutory deadlines are pushed back by the number of days that the Defense Department delayed in producing this data.

This legislation is the full embodiment of fairness and due process. It ensures that those bases in communities attempting to prevent closures or realignment have access to the same facts the Pentagon did, and that failure to provide that information will carry appropriate consequences. And it is our last chance to reverse the egregious decisions made in the closing and realignment process.

The integrity of the base-closing process and of the decisions that are made on individual facilities depends on the accuracy of the data used and on the validity of the calculations and comparisons made using this data. Congress and the base-closing commission simply cannot discharge their responsibilities under the base-closing statute without this most vital information.

It would be bad enough if it were only the Congress and the Commission that were being hindered in carrying out our collective duties with regard to the base-closing process. But it is the communities where these bases are located that are suffering the greatest harm through their inability to find out what the basis of the Department's decision to close these installations was.

These towns and cities that have supported these bases for decades-- or in some cases, like Kittery, ME, and Portsmouth, NH; Brunswick Air Station in Limestone, ME, for centuries--are being harmed through DOD's continued delay in making this data available. The community groups are handicapped in their efforts to understand the Department's base- closing analysis, assumptions, and conclusions therefore in their efforts to provide accurate rebuttal arguments or information to the Commission that the Department of Defense may not have considered.

So the communities not only have suffered the shock of potentially losing what is in most cases the single most important economic engine in their communities, but to add insult to injury, have not been given the full picture of why these installations they rely upon and that relied upon them was among those chosen to close. That cannot be allowed to stand.

Indeed, I am certain DOD will realize it cannot continue to withhold this information and will ultimately get to the bottom of this. We will then be able to see the weaknesses in the Navy's arguments with respect to the facilities in Maine. We will see that the facts indisputably prove there is no way to reasonably conclude this Nation should forfeit the long and distinguished history embodied in these facilities in a critical report like Kittery-Portsmouth Naval Shipyard or Brunswick Naval Air Station that are unequal in their performance.

We will also make sure the base-closing commission has the information with respect to the role that the Defense Accounting Services has played in Limestone, ME, the very anchor for the conversion of the former Loring Air Force Base closed in one of the last rounds of 1991 that certainly devastated that area and the State of Maine when we lost more than 10,000 that led to the outmigration of more than 20,000 in our northern county. It really was devastating to also learn that the Department of Defense decided to select Defense Accounting Services not only in Limestone but across this country. It was the very anchor for conversion to help mitigate the loss of this most crucial base up in northern Maine.

We will see that the facts undisputedly prove that the Navy ignored aspects of the base-closing criteria that I happen to believe can only lead to a finding that Brunswick Naval Air Station, as the only remaining fully operational airfield in the Northeastern United States, plays a singular, critical role in this Nation's homeland security and homeland defense posture and must continue to do so in the future. It really was inconceivable to me that the Department of Defense would also recommend closing Kittery-Portsmouth Naval Shipyard, the finest shipyard of its kind in the U.S. Navy.

In fact, the day before the base-closing list was announced on May 13, the Secretary of the Navy issued a Meritorious Unit Commendation to Kittery-Portsmouth Naval Shipyard for, in its words, ``superbly and consistently performing its missions,'' establishing benchmarks above and beyond both the public and private sector, having established, in their words, again, ``a phenomenal track record'' when it came to cost and quality and schedule and safety.

In fact, it had just been awarded the top safety award--the only facility in the Department of Defense and the only facility in the Navy, and only the second in the Department of Defense. That is a remarkable track record.

It also saves money for the taxpayers, and it saves time and money for the Navy. In fact, when it comes to refuelings at Kittery- Portsmouth Naval Shipyard, it saves $75 million on average compared to the other yards that do the same work. It saves $20 million when it comes to overhauls

compared to the other yards that do the same work. It saves 6 months in time in sending the ships back to sea sooner on refuelings compared to the other yards that do the same work. And it saves 3 months in time on overhauls compared to other yards that do the same work.

So one would argue, and certainly would ask the question, as I did of the Secretary of the Navy, what message does that send to the men and women of that shipyard when they are the overachievers, doing the best work and told they are No. 1 of its kind in its category, and we are saying, well, we are going to transfer that work elsewhere, to those who have not performed the equivalent result when it comes to time and money.

They are No. 1. But we are sending a message to those who are the best, we tell them the next day, well, you know what. You are doing such a great job that we have decided to close.

When it comes to Brunswick Naval Air Station, it is the only remaining active military airfield in the Northeast. The Northeast is home to 18 percent of America's population. It was, obviously, the region that received the most devastating attack on American soil on September 11.

And now we hear from the Defense Department that we want to realign this base--essentially, it is tantamount to closure--when it is a state-of-the-art facility, well positioned strategically, with unincumbered airspace of 63,000 miles--space of which to expand many times over--well positioned on our coastline for conducting surveillance in the North Atlantic sealane so important to extending the maritime domain awareness of the Coast Guard when it comes to one of the greatest threats facing America; that is, the shipments of weapons of mass destruction. So it raises a number of questions as to why these facilities were designated by the Department of Defense for closure.

What is even more disturbing is that in order to make the case before the base-closing commission, in an extremely limited period of time compared to the four previous base-closing rounds--which I am intimately familiar with, having been part of them in the past; we had 6 months--in this base-closing round, we have 4 months. It is on an expedited timeframe; therefore, it makes it even more difficult, more problematic, to make your case, when every day is going to count, and the Department of Defense is withholding all of the information upon which we have to make our case.

We are required by law to have that information because in order to make your case, you have to prove that the Department of Defense deviated substantially--deviated substantially--from the criteria in the base-closing statute when it comes to military value, operational readiness, the closing costs, the costs of operations of that particular facility, the economic impacts, so on and so on.

Now, it certainly is a mystery to me as to how the Defense Department could have made all these decisions--33 major base closings and another 29 realignments and many more for adjustments--and yet they cannot ensure that the information and the data they utilized is forthcoming. Well, then, it just raises the question, How did they make these decisions in the first place? Why have they not readily turned over the information that we require in order to make our case?

For the Commission to overturn a decision recommendation by the Department of Defense, it requires us to make a case that they deviated substantially from the criteria set forth in the base-closing statute. So it is obvious we need the information because not to have the information they used inhibits us and prohibits us from making the documentations that are required under the law.

I think it is a fundamental flouting of the law. We have insisted, day in and day out, we need this information. We deserve to have this information. The men and women who work at these military facilities who serve our country deserve to have this information. It is important to our national security interests because we need to know the information upon which this Defense Department predicated its assumptions. And it is not enough just to get their conclusions, it is not enough just to get their assumptions, we need all of the empirical data that was used to make those assumptions and conclusions. How did they arrive at those decisions?

For example, when you look at the force structure of submarines, the new attack submarines, on which the Portsmouth Naval Yard works, those decisions have to be predicated on 55 attack submarines, 55. That was included in the base-closing criteria, 2004. The force structure at that time was 55 attack submarines--still is--but the Department of Defense is changing their force structure after they already made the recommendations. How can they make a recommendation based on 55 attack submarines but then decide, well, maybe a year later we can reduce that number? We have already made the decision.

It raises a considerable number of questions about the flawed information and the flawed process. Yet we have not had an opportunity to evaluate it. We have lost a critical 2 weeks in this process and, again, as I said, on a very expedited timeframe in which to make these decisions, to evaluate the information, and to submit our case before the base-closing commission in the scheduled hearings over this next month.

If the Department of Defense does not provide this information in a timely manner, then this round of base closings is fundamentally flawed and is designed to close critical military infrastructure at a time when our Nation faces a changing, unpredictable threat environment, and, therefore, it should be brought to an end. If they cannot provide this information in a timely fashion, that is exactly what should occur.

I believe it does really underscore the integrity and the lack of the integrity in this process because it certainly stands to reason, and certainly it is a fair assumption to make, that the Department of Defense should be able to turn over instantaneously all of the information they used to make these critical decisions. After all, they have had a considerable period of time in which to make these decisions. So, therefore, it should not be very difficult to provide that information. But we continue to get the consistent stonewalling and obfuscation that is preventing us from evaluating these decisions in order to do what is required under the law to demonstrate how these decisions are faulty and to evaluate the information. We deserve no less than that.

So I thank my colleagues for joining me in this effort to compel the Department of Defense to stand up and be accountable for this decisionmaking process and to release the data that we deserve that led to these decisions with respect to base closings so we understand exactly how they arrived at their decisions that are so critical and central to our national security.

I regret we are in this position in the first place. I opposed this base-closing process. It certainly should have been deferred. We should have considered the overseas base closings before we looked at domestic installations. In fact, that certainly was an issue in the overseas base-closing report that was issued recently. So we do not have an overall structure in which to consider the macroplans. That is what should have been done. We should be looking at all these issues in a totality because we are in a very different environment than we were even pre-September 11, 2001, and our threat environment has to be looked through an entirely different prism.

In fact, as I mentioned on the floor just about a year ago, in attempting to defer this process until we had a chance to evaluate overseas bases, one of the issues I looked at was the track record of the Department of Defense in terms of ascertaining the future threat environments. What could they anticipate were future threats? I have to say that I was somewhat shocked by the findings because I evaluated the force structure reports and military threat assessments that were required to be accompanied with the base-closing rounds in previous years.

It was interesting. I decided to discern, exactly when did they anticipate a threat of terrorism, asymmetric threats, or threats to our homeland security? And it was a startling and abysmal picture because they had a significantly flawed track record. The first time that a threat to our homeland security was even mentioned was

in the Quadrennial Defense Review of 1997. Mr. President, 1997--that was 4 years before September 11. At that time, with the previous base- closing rounds, these base-closing commissions were required to make a 6-year outlook for the potential threats and anticipated threats--6 years. Now, with this base-closing round, it requires 20 years. But even with 6 years out, they could not even discern a threat to our homeland security. They mentioned it in the Quadrennial Defense Review of 1997, but it was a fourth-tier concern. And that was 4 years out from September 11--4 years out from September 11.

Nineteen days after September 11, we had another quadrennial defense review issued by the Department of Defense. Al-Qaida wasn't even mentioned in that quadrennial defense review. It wasn't even mentioned 19 days after September 11.

So I think that gives you a measure of the understanding that the Department of Defense has not had an accurate or reliable determination of potential threats this country could face--not even 4 years out, not even 19 days after September 11--to the degree that al-Qaida was a threat to this country. That is the problem, Mr. President. We do not have an accurate picture.

This base-closing round is required to ascertain the threat environment and projecting 20 years out. Mind you, over the last more than 10 years, all throughout the nineties, when we had the World Trade Center bombing, Khobar Towers, Kenya, and Tanzania, all throughout that decade--and we had the USS Cole in 2000--there was only one time in that decade there was a mention of homeland security in any fashion. I think that is pretty telling.

So the fact that the Department of Defense cannot bring forward the information that validates or invalidates their assumptions and conclusions is particularly troubling in this threat environment. I regret we are in the situation today of having to beg, plead, and persuade to try to get some glimmer into the insights, into the documentation evaluation they made in reaching these final conclusions. More than anything else, the statute requires those to be making the case before the Base Closing Commission to determine how the Department of Defense deviated substantially from the criteria. How are we to know, if they don't depend upon the very department who makes the decision, has the information, and has yet to transmit them forthwith to all of the respective delegations and officials who are given the opportunity to make the case before the Base Closing Commission?

Mr. President, today I am introducing a measure aimed at curbing wasteful spending. In the face of our ever growing Federal deficit, we must prioritize and eliminate programs that can no longer be sustained with limited Federal dollars, or where a more cost- effective means of fulfilling those functions can be substituted. The measure that I introduce today establishes a means test for large agribusinesses receiving subsidized water from the Bureau of Reclamation.

The irrigation means test provision is drawn from legislation that I have sponsored in previous Congresses to reduce the amount of Federal irrigation subsidies received by large agribusiness interests. I believe that reforming Federal water pricing policy by reducing subsidies is important as a means to achieve our broader objectives of achieving a truly balanced budget. This legislation is also needed to curb fundamental abuses of reclamation law that cost the taxpayer millions of dollars every year.

In 1901, President Theodore Roosevelt proposed legislation, which came to be known as the Reclamation Act of 1902, to encourage development of family farms throughout the western United States. The idea was to provide needed water for areas that were otherwise dry and give small farms, those no larger than 160 acres, a chance, with a helping hand from the Federal Government, to establish themselves. According to a 1996 General Accounting Office report, since the passage of the Reclamation Act, the Federal Government has spent $21.8 billion to construct 133 water projects in the west to provide water for irrigation. Agribusinesses, and other project beneficiaries, are required under the law to repay to the Federal Government their allocated share of the costs of constructing these projects.

As a result of the subsidized financing provided by the Federal Government, however, some of the beneficiaries of Federal water projects repay considerably less than their full share of these costs. According to the 1996 GAO report, agribusinesses generally receive the largest amount of federal financial assistance. Since the initiation of the irrigation program in 1902, construction costs associated with irrigation have been repaid without interest. The GAO further found, in reviewing the Bureau of Reclamation's financial reports, that $16.9 billion, or 78 percent, of the $21.8 billion of Federal investment in water projects is considered to be reimbursable. Of the reimbursable costs, the largest share, $7.1 billion, is allocated to irrigation interests. GAO also found that the Bureau of Reclamation will likely shift $3.4 billion of the debt owed by agribusinesses to other users of the water projects for repayment.

There are several reasons why large agribusinesses continue to receive such significant subsidies. Under the Reclamation Reform Act of 1982, Congress acted to expand the size of the farms that could receive subsidized water from 160 acres to 960 acres. The RRA of 1982 expressly prohibits farms that exceed 960 acres in size from receiving federally subsidized water. These restrictions were added to the Reclamation law to close loopholes through which Federal subsidies were flowing to large agribusinesses rather than the small family farmers that Reclamation projects were designed to serve. Agribusinesses were expected to pay full cost for all water received on land in excess of their 960 acre entitlement.

Despite the express mandate of Congress, regulations promulgated under the Reclamation Reform Act of 1982 have failed to keep big agricultural water users from receiving Federal subsidies. The General Accounting Office and the Inspector General of the Department of the Interior continue to find that the acreage limits established in law are circumvented through the creation of arrangements such as farming trusts. These trusts, which in total acreage well exceed the 960 acre limit, are comprised of smaller units that are not subject to the reclamation acreage cap. These smaller units are farmed under a single management agreement often through a combination of leasing and ownership.

The Department of the Interior has acknowledged that these trusts exist. Interior published a final rulemaking in 1998 to require farm operators who provide services to more than 960 nonexempt acres westwide, held by a single trust or legal entity or any combination of trusts and legal entities, to submit RRA forms to the district(s) where such land is located. Water districts are now required to provide specific information about farm operators to Interior annually. This information is an important step toward enforcing the legislation that I am reintroducing today.

A recent report by the Environmental Working Group examined water

subsidies in the Central Valley Project (CVP) of California and it provides further evidence that this legislation is long overdue. According to EWG, in 2002, the largest 10 percent of the farms in the area got 67 percent of the water, for an average subsidy worth up to $349,000 each at market rates for replacement water. Twenty-seven large farms received subsidies each worth $1 million or more at market rates. Yet, the median subsidy for a Central Valley farmer in 2002 was $7,076 a year, almost 50 times less than the largest 10 percent of farms. One farm in Fresno County received more water by itself than 70 CVP water user districts. Its subsidy alone was worth $4.2 million a year at market rates.

This analysis is significant because the Bureau of Reclamation program is supposed to help small farmers, not large agribusinesses. The CVP analysis is also important because CVP farmers get about one- fifth of all the water used in California, at rates that by any measure are far below market value. In 2002, for example, the average price for irrigation water from the CVP was less than 2 percent what Los Angeles residents pay for drinking water, one-tenth the estimated cost of replacement water supplies, and about one-eighth what the public pays to buy its own water back to restore the San Francisco Bay and Delta. Meanwhile, many citizens in living in the CVP do not have access to clean, safe drinking water. Unfortunately, this situation is pervasive in many other Western communities.

My legislation combines various elements of proposals introduced by other members of Congress to close loopholes in the 1982 legislation and to impose a $500,000 means test. This new approach limits the amount of subsidized irrigation water delivered to any operation in excess of the 960 acre limit that claimed $500,000 or more in gross income, as reported on its most recent IRS tax form. If the $500,000 threshold were exceeded, an income ratio would be used to determine how much of the water should be delivered to the user at the full-cost rate, and how much at the below-cost rate. For example, if a 961 acre operation earned $1 million, a ratio of $500,000, the means-test value, divided by its gross income would determine the full cost rate. Thus the water user would pay the full cost rate on half of their acreage and the below-cost rate on the remaining half.

This means-testing proposal was featured in the 2000 Green Scissors report. This report is compiled annually by Friends of the Earth and Taxpayers for Common Sense and supported by a number of environmental, consumer and taxpayer groups. The premise of the report is that there are a number of subsidies and projects that could be cut to both reduce the deficit and benefit the environment. The Green Scissors recommendation on means-testing water subsidies indicates that if a test is successful in reducing subsidy payments to the highest grossing 10 percent of farms, then the federal government would recover between $440 million and $1.1 billion per year, or at least $2.2 billion over 5 years.

When countless Federal programs are subjected to various types of means tests to limit benefits to those who truly need assistance, it makes little sense to continue to allow large business interests to dip into a program intended to help small entities struggling to survive. Taxpayers have legitimate concerns when they learn that their hard- earned tax dollars are being expended to assist large corporate interests in select regions of the country, particularly in tight budgetary times.

I urge Congress to act swiftly to save money for the taxpayers.

Mr. President, today I am introducing a measure aimed at curbing wasteful spending. In the face of our ever growing Federal deficit, we must prioritize and eliminate programs that can no longer be sustained with limited Federal dollars, or where a more cost- effective means of fulfilling those functions can be substituted. The measure that I introduce today establishes a means test for large agribusinesses receiving subsidized water from the Bureau of Reclamation.

The irrigation means test provision is drawn from legislation that I have sponsored in previous Congresses to reduce the amount of Federal irrigation subsidies received by large agribusiness interests. I believe that reforming Federal water pricing policy by reducing subsidies is important as a means to achieve our broader objectives of achieving a truly balanced budget. This legislation is also needed to curb fundamental abuses of reclamation law that cost the taxpayer millions of dollars every year.

In 1901, President Theodore Roosevelt proposed legislation, which came to be known as the Reclamation Act of 1902, to encourage development of family farms throughout the western United States. The idea was to provide needed water for areas that were otherwise dry and give small farms, those no larger than 160 acres, a chance, with a helping hand from the Federal Government, to establish themselves. According to a 1996 General Accounting Office report, since the passage of the Reclamation Act, the Federal Government has spent $21.8 billion to construct 133 water projects in the west to provide water for irrigation. Agribusinesses, and other project beneficiaries, are required under the law to repay to the Federal Government their allocated share of the costs of constructing these projects.

As a result of the subsidized financing provided by the Federal Government, however, some of the beneficiaries of Federal water projects repay considerably less than their full share of these costs. According to the 1996 GAO report, agribusinesses generally receive the largest amount of federal financial assistance. Since the initiation of the irrigation program in 1902, construction costs associated with irrigation have been repaid without interest. The GAO further found, in reviewing the Bureau of Reclamation's financial reports, that $16.9 billion, or 78 percent, of the $21.8 billion of Federal investment in water projects is considered to be reimbursable. Of the reimbursable costs, the largest share, $7.1 billion, is allocated to irrigation interests. GAO also found that the Bureau of Reclamation will likely shift $3.4 billion of the debt owed by agribusinesses to other users of the water projects for repayment.

There are several reasons why large agribusinesses continue to receive such significant subsidies. Under the Reclamation Reform Act of 1982, Congress acted to expand the size of the farms that could receive subsidized water from 160 acres to 960 acres. The RRA of 1982 expressly prohibits farms that exceed 960 acres in size from receiving federally subsidized water. These restrictions were added to the Reclamation law to close loopholes through which Federal subsidies were flowing to large agribusinesses rather than the small family farmers that Reclamation projects were designed to serve. Agribusinesses were expected to pay full cost for all water received on land in excess of their 960 acre entitlement.

Despite the express mandate of Congress, regulations promulgated under the Reclamation Reform Act of 1982 have failed to keep big agricultural water users from receiving Federal subsidies. The General Accounting Office and the Inspector General of the Department of the Interior continue to find that the acreage limits established in law are circumvented through the creation of arrangements such as farming trusts. These trusts, which in total acreage well exceed the 960 acre limit, are comprised of smaller units that are not subject to the reclamation acreage cap. These smaller units are farmed under a single management agreement often through a combination of leasing and ownership.

The Department of the Interior has acknowledged that these trusts exist. Interior published a final rulemaking in 1998 to require farm operators who provide services to more than 960 nonexempt acres westwide, held by a single trust or legal entity or any combination of trusts and legal entities, to submit RRA forms to the district(s) where such land is located. Water districts are now required to provide specific information about farm operators to Interior annually. This information is an important step toward enforcing the legislation that I am reintroducing today.

A recent report by the Environmental Working Group examined water

subsidies in the Central Valley Project (CVP) of California and it provides further evidence that this legislation is long overdue. According to EWG, in 2002, the largest 10 percent of the farms in the area got 67 percent of the water, for an average subsidy worth up to $349,000 each at market rates for replacement water. Twenty-seven large farms received subsidies each worth $1 million or more at market rates. Yet, the median subsidy for a Central Valley farmer in 2002 was $7,076 a year, almost 50 times less than the largest 10 percent of farms. One farm in Fresno County received more water by itself than 70 CVP water user districts. Its subsidy alone was worth $4.2 million a year at market rates.

This analysis is significant because the Bureau of Reclamation program is supposed to help small farmers, not large agribusinesses. The CVP analysis is also important because CVP farmers get about one- fifth of all the water used in California, at rates that by any measure are far below market value. In 2002, for example, the average price for irrigation water from the CVP was less than 2 percent what Los Angeles residents pay for drinking water, one-tenth the estimated cost of replacement water supplies, and about one-eighth what the public pays to buy its own water back to restore the San Francisco Bay and Delta. Meanwhile, many citizens in living in the CVP do not have access to clean, safe drinking water. Unfortunately, this situation is pervasive in many other Western communities.

My legislation combines various elements of proposals introduced by other members of Congress to close loopholes in the 1982 legislation and to impose a $500,000 means test. This new approach limits the amount of subsidized irrigation water delivered to any operation in excess of the 960 acre limit that claimed $500,000 or more in gross income, as reported on its most recent IRS tax form. If the $500,000 threshold were exceeded, an income ratio would be used to determine how much of the water should be delivered to the user at the full-cost rate, and how much at the below-cost rate. For example, if a 961 acre operation earned $1 million, a ratio of $500,000, the means-test value, divided by its gross income would determine the full cost rate. Thus the water user would pay the full cost rate on half of their acreage and the below-cost rate on the remaining half.

This means-testing proposal was featured in the 2000 Green Scissors report. This report is compiled annually by Friends of the Earth and Taxpayers for Common Sense and supported by a number of environmental, consumer and taxpayer groups. The premise of the report is that there are a number of subsidies and projects that could be cut to both reduce the deficit and benefit the environment. The Green Scissors recommendation on means-testing water subsidies indicates that if a test is successful in reducing subsidy payments to the highest grossing 10 percent of farms, then the federal government would recover between $440 million and $1.1 billion per year, or at least $2.2 billion over 5 years.

When countless Federal programs are subjected to various types of means tests to limit benefits to those who truly need assistance, it makes little sense to continue to allow large business interests to dip into a program intended to help small entities struggling to survive. Taxpayers have legitimate concerns when they learn that their hard- earned tax dollars are being expended to assist large corporate interests in select regions of the country, particularly in tight budgetary times.

I urge Congress to act swiftly to save money for the taxpayers.

Mr. President, today I am pleased to join with Senator McCain to introduce the Southeast Arizona Land Exchange and Conservation Act of 2005. This bill, which facilitates an important land exchange in Arizona, is the product of months of discussion between the United States Forest Service, Bureau of Land Management, State and local officials, community groups, recreational and conservation groups, and other stakeholders. It will allow for the protection of some of the most environmentally sensitive lands in Arizona while providing a much needed economic engine for the people of Superior, AZ and the surrounding communities. An identical companion bill is being introduced today in the House of Representatives by Representative Renzi.

The exchange conveys approximately 3,025 acres of land controlled by the Forest Service to Resolution Copper Company. The acreage to be traded to Resolution Copper will facilitate future exploration, and possible development, of what may be one of the largest deposits of copper ore ever discovered in North America. The 3,025 acres are intermingled with, or lie next to, private lands already owned by Resolution Copper, and are located south and

east of Resolution's existing underground Magma copper mine. Approximately 75 percent of the 3,025 acre Federal parcel is already blanketed by federally authorized mining claims owned by Resolution Copper that give Resolution the right to explore and develop mineral deposits on it. Given the intermingled ownership, the public safety issues that may be associated with mining activities, and the significant financial investment Resolution Copper must make to even determine whether development of a mine is feasible, it makes sense, for Resolution Copper to own the entire mining area.

However, we also recognize that there is public resource value associated with the Federal land that would come into private ownership and, to the extent we can, we should protect and or replace these resources. The Apache Leap Escarpment, a spectacular cliff area comprising approximately 562 acres on the western side of the federal parcel, is an area deserving of protection. To protect the surface of this area from mining and development, the bill requires that a permanent conservation easement be placed on this area. In addition, the bill sets up a process to determine whether additional or enhanced public access should be provided to Apache Leap and, if so, provides that Resolution Copper will pay up to $250,000 to provide such access.

The bill also requires replacement sites for the Oak Flat Campground and the climbing area that are located on the Federal parcel that will be traded to Resolution Copper. The process to locate replacement sites is already under way, and I am told it is going well. Access to these public areas will not immediately terminate on enactment of this legislation: The bill allows continued public use of the Oak Flat Campground for two years after the enactment and it allows for continued rock climbing use for two years after, and use of the land for the annual ``Boulder Blast'' rock climbing competition for five years after enactment. Replacement sites will be designed and developed largely with funding provided by Resolution Copper.

I am also working with Resolution Copper and community groups to determine whether there may be additional climbing areas within the Federal parcel that could continue to be accessible to the public without compromising public safety or the mining operation. I have included a placeholder in the bill for such additional climbing provisions if agreed to.

In return for conveying the Federal land parcel to Resolution Copper, the Forest Service and Bureau of Land Management will receive six parcels of private land, totaling 4,814 acres. These parcels have been identified, and are strongly endorsed for public acquisition, by the Forest Service, BLM, Arizona Audubon Society, Nature Conservancy, Sonoran Institute, Arizona Game and Fish Department, and numerous others.

The largest of the six parcels is the Seven B Ranch located near Mammoth. It runs for 6.8 miles along both sides of the lower San Pedro River--one of the few remaining undammed rivers in the southwestern United States. The parcel also has: one of the largest, and possibly oldest, mesquite bosques in Arizona; a high volume spring that flows year round; and potential recovery habitat for several endangered species, including the southwestern willow flycatcher. It lies on an internationally recognized migratory bird flyway, with roughly half the number of known breeding bird species in North America passing through the corridor. Public acquisition of this parcel will greatly enhance efforts by Federal and State agencies to preserve for future generations the San Pedro River and its wildlife and bird habitat.

A second major parcel is the Appleton Ranch, consisting of 10 private inholdings intermingled with the Appleton-Whittell Research Ranch, adjacent to the Las Cienegas National Conservation Area southeast of Tucson. This acquisition will facilitate and protect the study of southwestern grassland ecology and unique aquatic wildlife and habitat.

Finally, the Forest Service will acquire four inholdings in the Tonto National Forest that possess valuable riparian and wetland habitat, water resources, historic and cultural resources, and habitat for numerous plant, wildlife and bird species, including the endangered Arizona hedgehog cactus.

Although the focus of this bill is the land exchange between Resolution Copper and the United States, it also includes provisions allowing for the conveyance of Federal lands to the Town of Superior, if it so requests. These lands include the town cemetery, lands around the town airport, and a Federal reversionary interest that exists at its airport site. These lands are included in the proposed exchange to assist the town in providing for its municipal needs and expanding its economic development.

Though I have described the many benefits of this exchange, you may be asking why we are legislating this land exchange. Why not use the existing administrative land exchange process? The answer is that this exchange can only be accomplished legislatively because the Forest Service does not have the authority to convey away federal lands in order to acquire other lands outside the boundaries of the National Forest System, no matter how ecologically valuable.

Of primary importance to me is that the exchange have procedural safeguards and conditions that ensure it is an equal value exchange that is in the public interest.

I will highlight some of the safeguards in this legislation: First, it requires that all appraisals of the lands must follow standard Federal practice and be performed in accordance with appraisal standards promulgated by the U.S. Department of Justice. All appraisals must also be formally reviewed, and approved, by the Secretary of Agriculture. Second, to ensure the Federal Government gets full value for the Federal parcel it is giving up, the Federal parcel will be appraised to include the minerals and appraised as if unencumbered by the private mining claims that detract from the fair market value of the land. These are important provisions not required by Federal law. They are especially significant given that over 75 percent of the Federal parcel is covered by mining claims owned by Resolution Copper and the bulk of the value of the Federal parcel is expected to be the minerals. Third, it requires that the Apache Leap conservation easement not be considered in determining the fair market value of the Federal land parcel. I believe by following standard appraisal practices and including these additional safeguards in the valuation process, the United States, and ultimately the taxpayer, will receive full fair market value for both the land and the minerals it contains.

In summary, with this land exchange we can preserve lands that advance the important public objectives of protecting wildlife habitat, cultural resources, the watershed, and aesthetic values, while generating economic and employment opportunities for State and local residents. I hope we approve the legislation at the earliest possible date. It is a winning scenario for our environment, our economy, and our posterity.

Mr. President, I rise to introduce a bill that aims to redefine and enhance the relationship between the People's Republic of China and the United States of America.

At this point in our history we stand at the threshold of a new era in American Foreign policy and indeed of world history. For the first time ever an economic and military superpower is about to emerge without war or catastrophe: Asia's middle kingdom: the People's Republic of China, stands at the precipice of becoming one of the two most influential nations on Earth.

I have always held that our foreign policy is best conducted when our values as a Nation form the basis of our policies. With that in mind, I stand before you today to introduce legislation that will deepen the scope and breadth of America's relationship with China through the reaching out of our Nation's hand in friendship.

We introduce this with a bit of humility because history constantly shows us that the more things change, the more they stay the same. Fortunately American history is filled with good ideas to guide us.

Back in 1871, President Ulysses S. Grant told Congress that trade imbalances with China were threatening the viability of key United States' industries and warned that federal intervention might be needed to restore the balance of trade.

That is true today and I am both sponsoring and supporting legislation to fairly revalue the Yuan so that U.S. industries and workers enjoy a fair playing field in the global market.

But Grant also thought many problems with China could be solved if we just better understood Chinese language and culture. He proposed sending at least four American students a year to China to study the language and culture and who would then act as effective translators for business and government officials.

Grant's idea was never acted on and years of unfortunate history separated China from the rest of the world anyway.

But China is back and so are the challenges.

Those versed in international affairs and trade are fully aware of China's emerging influence. However, our present education system is not equipped to supply the number of skilled professionals required to constructively interact with China. According to the 2000 Census there are about 2.2 million Americans that speak Chinese. Of that 2.2 million, approximately 85-95 percent are Americans of Chinese descent. According to several studies there is a dearth of knowledge among college-bound students regarding Chinese cultural pillars like Mao Zedong in the United States. China, on the other hand, mandates English instruction beginning in--what we would call--the third grade. For every student we send to China to study there, they send 25 to study here.

If you combine these findings with the fact that well over half of the 500 largest companies are currently invested in China, with many more drawing up plans to do so, it becomes clear to me that the talent pool for future American-produced leaders with expertise in Chinese affairs is woefully inadequate. If you take a look at China's top ten trading partners, seven of those have a trade surplus with China and most importantly, five of those seven have a significant population with deep-seated knowledge of Chinese language and culture. America needs more people with the expertise to transact with China in international affairs and

to increase the number of professionals that will assist both nations in growing and balancing our economic interdependency.

The future repercussions of our lack of knowledge about Chinese culture are immense. The Chinese have just begun to compete with U.S. firms for precious natural resources to feed the exponential growth of their economy. China is the world's biggest consumer of steel and in another decade will be the biggest consumer of petroleum. Currently, China's middle class is the fastest growing anywhere in the world. Over 400 of the world's Fortune 500 companies are invested in China's economy, which will soon be the largest consumer market in the world. Already, our trade with Asia is double that with Europe and is expected to exceed one trillion dollars annually before 2010. China, soon to be the biggest economic power in Asia, will play a large role in that growth. Consequently, the one in six U.S. jobs that are currently tied to international trade will grow substantially. If the U.S. is to grab a significant piece of China's burgeoning consumer market, we must begin by engaging China as experts of their culture.

The United States-China Cultural Engagement Act of 2005 authorizes $1.3 billion over the five years after its enactment. This is a symbolic gesture for the recent birth of China's one billion three hundred millionth citizen. One may argue that is too much given other important--under-funded--national priorities. However, the dividend from this investment in our future business and government leaders pays for itself a hundred or even a million times over in opportunities for economic growth and in potential foreign crises that will be averted.

In this legislation, I propose to significantly enhance our schools and academic institutions' ability to teach Chinese language and culture from elementary school through advanced degree studies. This act will expand student physical exchange programs with China as well as create a virtual exchange infrastructure for secondary school students that study Chinese. Initiatives were included, that offer the Department of State more flexibility in granting visas to Chinese scientists to come here and study at American academic institutions. For American businesses, I seek a substantial increase in Foreign Commercial Service officers stationed in China to uncover and facilitate more American export opportunities. For non-corporate entrepreneurs, provisions that provide for the expansion of state specific export centers and greater Small Business Administration outreach were also included.

Engaging China as an ally in international affairs and as a partner in building economic prosperity is of the utmost importance to the United States. Only if we succeed in fostering this relationship can we have a future that is as bright as our past. Education experts, corporate leaders, and even some government officials have talked for sometime about the convergence of economic, demographic, and national security trends that require our young people to attain a greater level of international knowledge and skills to be successful as workers and citizens in our increasingly dynamic American economy.

The rise of China comes with a whole set of challenges. But the ability to talk to and understand each other should not be among them.

The United States-China Cultural Engagement Act sets forth a strategy for achieving that level of understanding and cooperation with China, I urge my colleagues to look favorably upon this measure.